INTEGRATEDREPORT 2 0 1 9
Ye a r e n d e d March 3 1 , 2 0 1 9

Try &DiscoverT&D Insurance Group’s Corporate Philosophy
Meaning of the T&D Insurance Group’s existenceWith our “Try & Discover” motto
for creating value, we aim to be a group that
contributes to all people and societies.

T&D Insurance Group’s Management Vision
Vision and direction aimed over medium- and long-term

From the customersʼ point of view

We aim to be the top insurance company in terms of customer
satisfaction by providing the best products and services.
From the shareholdersʼ, investorsʼ, and marketʼs point of view

We aim to be an insurance group witha strong market presence by increasing our corporate value
in a steady and sustainable manner by taking on
new challenges toward growth.

Brand Message
Towards a New Dimension of Insurance.
What we want to create is not only
insurance.
What we want to create is something
beyond insurance—a future in which
everybody can expand their potential
without fear of risk.
A society in which everybody can embrace their hopes, regardless of thechanging times.

Each individual, filled with the spiritof Try & Discover, attempting one newthing after another.
We in the T&D Insurance Group cansurely achieve it.

Contents

Editorial Policy
This report was created for the purpose of describing in an easy-tounderstand way how the businesses and initiatives of the T&D InsuranceGroup (the “Group”) are linked to its medium- and long-term growthand creating value for its stakeholders, from the perspective of ESG(Environmental, Social and Governance).
Specifically, it reports the results of the Group’s previous medium-term
management plan, “Try & Discover for the Next Stage — A Three-Year
Period for Expanding Our Growth Areas —,” which ended in March 2019,
along with corporate governance and social and environmental initiatives.
In addition, it also describes the policies and strategies of the Group’s
new medium-term management plan, “Try & Discover 2021 — Creation of
Shared Value —,” which started in April 2019, as well as specific businessstrategies for Group companies based on this plan.
• Period Covered by This Report: April 1, 2018 to March 31, 2019 (This report also includes some
information outside this period.)• Scope of This Report: T&D Holdings, Inc., and its subsidiaries and affiliated companies• Reference Guidelines: “The International Integrated Reporting Framework” issued by theInternational Integrated Reporting Council (IIRC) and “Guidance for Integrated Corporate
Disclosure and Company-Investor Dialogues for Collaborative Value Creation” formulated by
Japan’s Ministry of Economy, Trade and Industry

WHO WE ARE
2 History of the T&D Insurance Group
4 Message from the President
10 Overview of the Life Insurance Market
13 T&D Insurance Groupʼs Industry Position
14 T&D Insurance Groupʼs Value Creation Process
16 The Year at T&D Insurance Group
18 Financial Highlights
20 Non-financial Highlights

Try & Discover for
Creation of Shared Value
22 FY2019-FY2021 T&D Insurance Group
Medium-Term Management Plan
34 Special Feature
Ms. Mari Yoshitaka X President Hirohisa Uehara
40 Business Overview
42 Taiyo Life Insurance Company
46 Daido Life Insurance Company

Role of the 2019 Integrated Report

50 T&D Financial Life Insurance Company

This report provides a summary of key financial, company, and ESG
information to enable our shareholders and investors to understand the
T&D Insurance Group.

54 T&D Asset Management Co., Ltd.
55 Pet & Family Insurance Co., Ltd.
56 Group Companies

Annual Securities
ReportDisclosure Report

Financial Information
Financial closing information, etc.

Integrated
ReportFoundations Supporting
the Creation of Shared Value
58 Interview with Chair of the Nomination andCompensation Committee
60 Corporate Governance

Company Information

ESG Information

68 ERM (Enterprise Risk Management)

Corporate governance,internal controls,
management strategies, etc.

Initiatives for society,the environment,
and our employees

70 Management Organization

Corporate Governance
ReportSustainability
ReportNon-financial Information

ESG Index Status (as of July 1, 2019)• FTSE4Good Index Series• MSCI ESG Leaders Indexes• FTSE Blossom Japan Index• MSCI Japan ESG Select Leaders Index• MSCI Japan Empowering Women Index (WIN)73 IR Activities
74 CSR Activity Priority Themes
76

CSR Priority Theme 1 Promote healthy and abundant lives for all people78

CSR Priority Theme 2 Provide workplace environments that enable all80

CSR Priority Theme3 Help mitigate and adapt to climate change81

CSR Priority Theme4 Invest to help build a sustainable society

people to participate actively

Supplementary Materials
82 Status of Stock Holdings
92 Glossary

Corporate Data
96 Selected Financial Data
100 Consolidated Financial Statements
108 Notes to Consolidated Financial Statements
154 Independent Auditorʼs Report
155 Stock Information
156 Corporate Overview
157 Websites
T&D Holdings INTEGRATED REPORT 20191

WHO WE ARE

History of the T&D Insurance Group

2002 The Group’s asset management companies
were concentrated.

1902 founded

Taiyo Life former head office (Tokyo)
Construction completed in 1930

Daido Life was foundedthrough the merger of thenAsahi Life Insurance Co.
(which was operated by
Kajimaya and is a separate
company from the current
Asahi Mutual Life Insurance
Company), with Gokoku Life
Insurance Co. in Tokyo and
Hokkai Life Insurance Co. in
Hokkaido.

1893 founded
Taiyo Life’s predecessor company, Nagoya Life InsuranceCo., Ltd., was established in
fourth of the existing life insurance companies in Japan.

Broad business alliance
between Taiyo Lifeand Daido LifeIn January 1999, Taiyo
Life and Daido Lifeannounced a broadbusiness alliance and decided the Group name tobe the “T&D Life Group”
in June of the same year.
The group name changed
from“T&D Life Group” to“T&D Insurance Group,”(2019).

大同生命旧肥後橋本社（大阪府）
1925（大正14）年竣工

Daido Life former Higobashi head office(Osaka) Construction completed in 1925

2001 joined T&D Life Group
Taiyo Life and Daido Life jointly acquired
shares of T&D Financial Life (former Tokyo Life
Insurance Company), which started operations
as a member of the T&D Life Group.

Creation of shared value at the T&D Insurance Group aimed at social issues and needs
2008
Taiyo Life

Initiatives for the Japaneselife insurance market, in whichneeds are diversifying alongwith the declining birthrate
and an aging population

October
Launch of Hoken Kumikyoku Best,a pioneering insurance that allows
customers to freely combine thecoverage they need, and which
overturned the conventional wisdomof the industry

Construction of a networkwith overseas life insurancecompanies, aimed at medium- and long-term growth2

T&D Holdings INTEGRATED REPORT 2019

2010

2012

T&D Financial Life April

T&D Financial Life AugustStart of level premium protection-type
product sales

Launch of Shogai Premium, theindustry’s first cash flow-type, single-premium whole life insurance
Daido Life October

Launch of the J-type product, a
new insurance for covering therisk of critical illnesses, aimed
at business owners to ensurebusiness continuity

T&D Financial Life September
Expansion into insurance shop
agent channels

2014
Taiyo Life April
Start of the Best Senior Service, an initiative aimed at enhancing conveniencefor senior customers

2013
Daido Life December
Capital and business alliance with
the German life insurance company, Nuernberger BeteiligungsAktiengesellschaft; collaboration
through joint investment in funds
and referrals

(Early years of the Group)

Period of recovery from financial crisis
Ensuring financial soundness
Recovery of earnings
Establishment of ERM framework
September 2008
Collapse of
Lehman Brothers

Period for strengthening
business platform

Full
implementationof ERM

Three years for expanding growth areas

Medium-term manageMedium-term
ment plan FY2014-FY2015 management plan FY2016-FY2018

March 2011
Great East Japan
Earthquake
December 2012 Start of Abenomics

February 2016
Introduction ofnegative interest rate policy

2007 was made a subsidiary (Transition from a small-amount short-term insurance provider to a non-life insurance company in April 2019)

Group MCEVAs of March 31, 2019

¥2,370.6 billion

Establishment of
T&D Holdings, Inc.

(¥billion)

2,500

In April 2004, T&D Holdings, Inc.
(the “Company”) was established as
Japan’s first holding company centered on the life insurance business.
It was listed on the Tokyo Stock
Exchange and Osaka Securities
Exchange (current Osaka Exchange).

Head offices of three Group companies (T&D Holdings,
Taiyo Life, and Daido Life) were relocated to Nihonbashi,
Chuo-ku, Tokyo in 2016.

1,500

500
0
Mar.31, 2004

Mar.31, 2010

Mar.31, 2015

Mar.31, 2019

Note: Values up to March 31, 2006 are based on TEV (Traditional Embedded Value), those from March 31, 2007 on EEV (European Embedded Value), and those from March 31, 2012 on Group MCEV.
The ultimate forward rate (UFR) is not applied.

2016
Taiyo LifeMarch
Launch of the industry-first Himawari
Dementia Treatment Insurance
Taiyo Life April
Start of the Kaketsuke-Tai Service, withthe aim of being the most considerate
and useful life insurance company for our
senior customers
Taiyo Life June
Start of Taiyo’s GENKI Project for energizing employees, customers, and society

2016
Taiyo Life

October
Memorandum concluded* with the stateowned Myanmar Insurance* April 2012: Taiyo Life becomes the first foreign life
insurance company to establish a representative office in
Myanmar. Work is underway to develop and spread theinsurance business in Myanmar.
* August 2019: Taiyo Life completes investment in
Capital Life Insurance, a life insurance company basedin Myanmar, making it an affiliated company (currently
Capital Taiyo Life Insurance Limited).

2017

2018

Daido Life January

Taiyo Life October
Launch of Himawari Dementia
Prevention Insurance

Start of the DAIDO KENCO ACTION
initiatives to disseminate Health andProductivity Management*
Daido Life July
Launch of the HAL Plus Rider forcovering the treatment of certain
intractable diseases, with the robot
suit HAL for Medical Use (Lower
Limb Type)*T he Japanese term for “Health and Productivity
Management” refers to a corporate management
style of paying additional attention to employees’
health and strategically implementing policies
aimed at employees’ health management andmaintenance, and is a registered trademark of
the Workshop for the Management of Health on
Company and Employee, a non-profit organization.

2018

2018

Daido Life June

T&D Holdings November
Memorandum concluded with the U.S.
asset management company, Payden &Rygel. Cooperation includes sophisticationof life insurance asset management, theasset management business, and humanresource training.

Capital participation and cooperation agreements with the Australian life insurance company,
Integrity Group Holdings Limited. The experienceand know-how for launching a life insurance business will be utilized in the future.
T&D Holdings June
Basic agreement concluded with the Swiss digital
health company, dacadoo AG. Collaboration wasundertaken to advance the domestic life insurance
business by utilizing health care-related digitaltechnology and infrastructure.

T&D Holdings INTEGRATED REPORT 20193

WHO WE ARE

Message from the President

Try &DiscoverCapturing changes in the environment,
we will aim for sustainable growth throughour “Try & Discover” motto.
Representative Director and President

Hirohisa Uehara
4

T&D Holdings INTEGRATED REPORT 2019

Looking Back on the First Year in Office̶ Future Vision of the Group ̶
Since becoming President in April 2018, I have been working on management while remaining aware of making decisions with speed. The environment surrounding our Group is changing rapidly, and I believe that it is essential to respond quickly to such changes.
In the economic environment, stock markets continue to remain unstable, as U.S. long-term
interest rates have started to decline against the backdrop of an unstable international situation. Furthermore, Japanese interest rates are under further downward pressure. In the life
insurance industry, the standard mortality table was revised in April 2018, while the tax treatment of term life insurance was revised in June 2019. Together with recognizing the increasing
opacity of the current environment surrounding the Group, in the past year I have also keenly
felt the need to accelerate forward-looking initiatives.

The tax treatment of termlife insurance was revised▼ P.47
Revisions to the tax treatmentof term life insurance incorporate policies

Looking ahead at the next 10 years, the decreasing birthrate and aging population willcontinue to advance, and the population will continue to decline. For our Group, which also
targets seniors, an increase in the number of elderly presents new opportunities. However,from a long-term perspective, we must also prepare for the subsequent decline of the elderly
population. In addition, advances in medical technology and digital innovations, including theuse of big data and artificial intelligence, are progressing at speeds beyond our imagination.

The decreasing birthrate
and aging population willcontinue to advance, andthe population will continue
to decline.
▼ P.11
Estimated future population
by gender and age group

In light of the above situation, some stakeholders have expressed concerns regarding theindustry’s future. However, the life insurance business creates new markets through innovation, while responding rapidly to changes in social structures. No matter how Japanese society changes, I believe that it will be possible to discover the seeds of the next generation andconvert them into business opportunities.
My first year in office as President has also been a year of formulating our medium-term
management plan.
While formulating the medium-term management plan, I have also reorganized the future visionof the Group. As awareness regarding sustainability and coexistence with society increases, alongwith increasing social uncertainty, the perspective of social value creation is becoming even more
important for the Group—the core business of which is Japanese domestic life insurance.
Corporate value is the sum of social and economic values. A company that can grow overthe medium- to long-term is a company that contributes to the development of society
through its business, while generating a reasonable profit through such business. In otherwords, it is a company that generates value for society and the economy. This, I believe, isexactly the vision for the Group.
While reorganizing our vision in the above way, I also felt that it could be necessary to revisit
our corporate philosophy. The T&D Insurance Group’s corporate philosophy is that, “With our‘Try & Discover’ motto for creating value, we aim to be a group that contributes to all people
and societies.” In accordance with this philosophy, in the medium-term management plan, weare aiming for sustainable growth by “creating shared value,” or, in other words, by creating“value for society” and “value for the enterprise” through our business.

T&D Holdings INTEGRATED REPORT 20195

WHO WE ARE

Message from the President

Medium-Term Management
Plan (FY2019-FY2021)

Medium-Term Management Plan (FY2019-FY2021)▼ P.22Medium-Term Management
Plan (FY2019-FY2021)

The core business of the Group is Japanese domestic life insurance. The Group has achieved
growth through each of its affiliates—Taiyo Life, Daido Life, and T&D Financial Life—by deploying and refining their unique business models in their respective markets, products,
and channels.
In the medium-term management plan, these three companies will pursue specialized
strategies by delving deep into their respective areas. In anticipation of the impacts from thesegmentation and personalization of insurance risks arising from an accelerated decline in
the working-age population, an increase in the proportion of later-stage elderly people, andthe evolution of technology, the three companies will respond flexibly to new customer needs
and environmental changes. Enhancing their profitability of insurance underwriting by securing market advantages, we want to further strengthen the Group’s earnings base.

Closed book business

Meanwhile, in order to achieve further growth as a Group, we will work towards the diver-▼ P.29Investment in closed bookbusinesssification of our business portfolio. First, we will aim to increase revenue from our existing
businesses other than life insurance—T&D Asset Management and Pet & Family Insurance. In
addition, based on an affinity with the core life insurance business, we will promote strategic

Strategic map of medium-term management plan

(Area with a high affinity to life insurance business)

Diversification of Business Portfolio

Diversification ofrevenue sources

Assetmanagementbusiness

Synergies

Closed bookbusiness

Synergies

Pet insurance
business(non-life)

Strengthening of Core Businesses(further raising profitability of insurance underwriting)

Synergies between
life insurance businessand digital insurance business(New specific markets)
Building new channels for domestic life
insurance business

Synergies

Taiyo Life

Daido Life

T&D Financial
Life

Households market

SME market

Independent insurance
agent market

Senior segment(approximately 35 million people)

SMEs(approximately 1.90 million)

Senior segment(to expand between now to 2040s)

6

T&D Holdings INTEGRATED REPORT 2019

Affluent segment(upper mass market and higher,
about 11.7 million households)

Digital insurance
business

Millennial segment(to become half of working-age
population by 2025)

investments in closed book and asset management businesses, with the aim of accelerating
the diversification of our revenue sources. Furthermore, looking ahead to future growth, wewill also work towards developing the digital insurance business, in order to capture the millennial generation.
In April 2019, we saw the 20th Anniversary of the T&D Insurance Group, as well as the 15th
Anniversary of T&D Holdings. In the medium-term management plan, we will further advancethe integrated management of the Group.
First, as a symbol of the above, we have established T&D United Capital—a strategic subsidiary under T&D Holdings. By consolidating specialized human resources, theCompany will effectively invest the capital of the Group. In addition, it will work towards
the further mutual supply and sales of each company’s products, effectively demonstrating
the Group’s synergies.
The Group was the first to form and list a holding company in the life insurance industry.
Such advanced ideas and challenging spirit are the strengths of our Group. Expressing our
deeply ingrained Group culture through the brand message, “Towards a New Dimension of
Insurance” during the medium-term management plan, we will strengthen and diversify ourbusiness portfolio, and further promote the integrated management of the Group.

Towards Improved Capital Efficiency

Adjusted Net Income

As the financial strategy of the medium-term management plan, we will promote “management balancing economic value and financial accounting,” “efficient utilization of Group
capital,” and “shareholder returns that take into account capital efficiency,” and enhance thecapital efficiency of the Group. In addition, we plan to undertake systematic reductions in

We define adjusted net income as profit for shareholder
returns, which is calculated
by adding net income andadditional internal reserves inexcess of the legal standard
requirements related toreserves for contingency andprice fluctuations (after taxes).

cross-shareholdings.
In the previous medium-term management plan, with regard to shareholder returns, we set
a total payout ratio of over 40% of the adjusted net income, and worked towards stable cash
dividends and flexible share buybacks.
In the shareholder return policy of the medium-term management plan, we have incorporated new reference indices that are aware of capital efficiency while maintaining the policy
framework of the previous medium-term management plan. Specifically, we reference cash
dividends with Adjusted DOE and share buybacks with EPS growth rate. We will comprehensively judge the total payout ratio while taking into consideration Adjusted ROE of approx-

Adjusted DOE/
Adjusted ROE
While ROE and DOE are
generally defined as the ratioof net income and dividends
against capital, we set thedenominator as shareholders’ capital, which does notinclude a valuation difference on available-for-salesecurities.

imately 8% in the final year of the medium-term management plan, in addition to 40% andabove of adjusted net income.
Listening to the voices of our shareholders and investors, we will implement shareholder
returns that are aware of capital efficiency.

T&D Holdings INTEGRATED REPORT 20197

WHO WE ARE

Message from the President

Contributing to the Development ofa Sustainable World
Casting an eye on developments in the wider world, understanding is progressing from CSR as
social contribution activities performed by companies, to that of CSR as the creation of value
for society and initiatives for corporate growth through such creation. This way of thinking
SDGs
Goals adopted at theUnited Nations Sustainable
Development Summit 2015,
for realizing global sustainable development throughcooperation between all
people, across the globe.

is aligned with our corporate philosophy that, “With our ‘Try & Discover’ motto for creating
value, we aim to be a group that contributes to all people and societies,” which we have consistently held since the inception of the Group. It can be said that our thoughts and the expectations of companies around the world are facing the same direction.
For the Group—which places “creating shared value” as the pillar of our medium-term management plan—the results of our actions must be tied to contributions to the SDGs, which
aim for a better world. Accordingly, prior to formulating the medium-term management plan,

Four CSR Priority Themes▼ P.74
Priority themes for CSR
activities

we extracted the social issues that our Group can utilize its strengths to contribute to solving,from among the 17 SDG goals and 169 targets, and selected four Group CSR priority themes.
Linking these four priority themes with the six business themes indicated in the medium-term
management plan, we will create shared value, and lead the Group with sustainable growth

Six Business Themes▼ P.15Six business themes

and contributions toward a sustainable world.
In 2015, our Group endorsed the philosophy of the UN Global Compact, and participatesin activities in order to act responsibly as a Group. These include T&D Holdings representing

UN Global Compact

the Group as a signatory to a document addressed to the Secretary-General of the United

Voluntary initiatives forparticipating in the creationof a global framework forachieving sustainable growth,through responsible andcreative leadership by companies and organizations acting
as good members of society

Nations endorsing ten principles in the four fields of human rights, labor, environment, andanti-corruption. In addition, the Group is also working as a whole, towards contributing to
the realization of a sustainable world in the field of ESG investment, starting with Taiyo Life
becoming the first Japanese life insurance company to sign the Principles for Responsible
Investment (PRI) in 2007, followed by T&D Asset Management (2012) and Daido Life (2016).
Moreover, we are also promoting initiatives that contribute to mitigation and adaptation to

Principles for Responsible
Investment (PRI)▼ P.81
Invest to help build a sustainable society

climate change, and respecting diversity as well as creating a healthy and safe working environment, in relation to human rights. Going forward, we will continue to promote activities
towards the development of a sustainable world.
Corporate Actions

Initiatives that contribute to
mitigation and adaptation
to climate change▼ P.80Help mitigate and adapt toclimate change

Realizing value
creation/Goals
Environmental protection

CSR

Social contributions
Humanrights responses
GovernanceUtilizing
human resources

Actions that
contribute tosolving social issues

Provision of products andservices

Business

8

T&D Holdings INTEGRATED REPORT 2019

Creating
shared value
Enhancing
corporate value

Fifteen years after our inception,
T&D Holdings will run together with the Group,
under the brand message of“Towards a New Dimension of Insurance.”

Improving the Efficiency and Transparency of
our Management System
The continuous enhancement of corporate governance is essential for enhancing the efficiency andtransparency of our management system, while steadily promoting our strategies for growth.
As a Group that has three life insurance companies with different business models, the Groupclarifies the respective roles and responsibilities of T&D Holdings and its directly owned subsidiaries. T&D Holdings, as a holding company, fulfills the roles of increasing the Group’s corporate value and promoting the overall business management of the Group through a strong
governance system. In turn, the subsidiaries fulfill the role of maximising business revenue by
determining marketing strategies in accordance with their strengths and operating businesses.
By aiming for a continuous improvement of corporate governance, we will work towards sustainable growth and the medium- to long-term increase of corporate value.
In addition, there have been increasing demands from the wider world regarding information disclosure in recent years. The Group is also aiming to further enhance disclosures and,
together with increased transparency, will realize further constructive dialogue with its shareholders and investors.

Conclusion

Directly Owned Subsidiaries
The directly owned subsidiaries of
T&D Holdings comprise the following
six companies:• Taiyo Life Insurance Company• Daido Life Insurance Company• T&D Financial Life Insurance
Company• T&D United Capital Co., Ltd.
• T&D Asset Management Co., Ltd.
• Pet & Family Insurance Co., Ltd.
There have been increasing
demands from the wider
world regarding information
disclosure in recent years.
In addition to traditional
financial information, requests
for disclosure of non-financial
information are also increasing, due to the promotion of
ESG investment by the GPIF,
as well as moves to include
corporate initiatives on
climate change in investment
decisions.

The Group’s core business, the Japanese domestic life insurance business, has the characteristic of protecting customers over the long term, and requires continued healthy growth.
A company that grows sustainably is a company that, irrespective of the era, is widely trusted
by society and recognized as necessary. In our society, which is changing at a dizzying speed,social issues are also constantly changing. By always facing social issues and continuing toprovide the value needed by society through our business, we aim to be an insurance groupthat grows sustainably along with society.
In closing, I would like to express my gratitude for the continued support of all of our shareholders and investors.
T&D Holdings INTEGRATED REPORT 20199

WHO WE ARE

Overview of the Life Insurance Market
1. Market Scale
In fiscal 2018, life insurance companies in Japan* had asecond largest market in the world, following that of thetotal of ¥35.2 trillion in income from insurance premiums.

U.S. According to the latest research, the life insurance

Following gradual growth from fiscal 2002 onwards, thishousehold participation rate is 88.7%, and nine out of ten

amount declined for two consecutive years in fiscal 2016

households have taken out some form of life insurance,

and fiscal 2017, but began to increase in fiscal 2018.

making Japan an “insurance superpower.”

Moreover, Japan’s life insurance industry boasts theTrend in the income from insurance premiums

Domestic share of premium income (Year 2018)(¥ trillions)

40

35.2

20

0
2000

2005

2010

* There are a total of 41 Japanese life insurance companies. (As of March 31, 2019)

2015

2018

(Fiscal Year)

Source:	Compiled by T&D Holdings based on “The summary of Life Insurance Business inJapan” published by the Life Insurance Association of Japan
Note: Excluding the numerical value of former postal life insurance up to fiscal 2007.

Rank

Country

Premium income(100 millions USD)

1

United States

5,933

21.04 %

2

Japan

3,342

11.85 %

3

China

3,133

11.11 %

4

United Kingdom

2,355

8.35 %

5

France1,650

5.85 %

6

Italy

1,253

4.44 %

7

Taiwan1,020

3.62 %

8

Korea

980

3.48 %

9

Germany964

3.42 %

10

India

737

2.61 %

Others6,834

24.23 %

World total

28,201100.00 %Share

Source: Compiled by T&D Holdings based on Swiss Re, Sigma No3/2019 WORLD INSURANCE

2. Diversification of Customers’ Life Insurance Needs
Changes in household composition due to such factors as the declining birthrate, aging population, and late marriage
have decreased the need for large death benefits aimed at heads of households. Meanwhile, the needs for third sector
insurance such as medical and nursing care products are increasing.
Policy Amount in Force and Number of Policies in Force
The policy amount in force, which is the total death benefit amount of individual insurance policies held by life

Trend in the policy amount and the number of policies in force forindividual insurance

insurance companies, was ¥848 trillion in fiscal 2018, downfrom the peak of ¥1,495 trillion in fiscal 1996.Meanwhile,the number of policies in force, which is the number of(Million policies)(¥ trillions)

2,000

Policy amountin force (left)
1,495

Number of policies
in force (right)

1,000

200

181

100

848

individual insurance policies held by life insurance companies, was 181.29 million in fiscal 2018,marking the 11th
straight year of increase.
Numbers of Individual Policies in Force by Type

0

0

1995
2000
2005
2018 (Fiscal Year)
2010
2015
Source:	Compiled by T&D Holdings based on the summary of Life Insurance Business inJapan published by the Life Insurance Association of Japan
Note: Excluding the numerical value of former postal life insurance up to fiscal 2007.

Turning to the breakdown of numbers of policies in force

Number of policies in force for individual insurance by typeby type, the proportion of policies taken by medical and(Fiscal Year)cancer insurance has increased significantly, from 20% in

2000*1

fiscal 2000 to 35% in fiscal 2018. The number of policies

sector products.

35％

39.00 million

Term life

Medical/Cancer insurance

20％

22.79 million

10％

Endowment
insurance

14％

11.25
15.62 million
million

Other

21％

24.04 million

Total: 112.71 million

has also increased 2.8 times, from 22.79 million to 63.51
million, indicating increasing customer needs for third

Whole life*2

2018

30％

53.86 million

35％

63.51million

14％

7％

14％

13.23
24.78million million 25.89million

Total: 181.29 million
Source:	Compiled by T&D Holdings based on the summary of Life Insurance Business inJapan published by the Life Insurance Association of Japan*1 Excluding the numerical value for former postal life insurance in fiscal 2000.
*2 Whole life insurance is the sum of whole life insurance, fixed-term whole life insurance
and variable interest type savings-type whole life insurance.

10

T&D Holdings INTEGRATED REPORT 2019

Number of Individual Annuity Insurance Policies in ForceIn fiscal 2018, there were 21.42 million individual annuity

Trend in the number of policies in force for individual annuity insurance(10,000 policies)

2,400

2,142

insurance policies in force. Full-scale sales of individual
annuity insurance began in October 2002, when the ban
on OTC sales at banks was lifted. Since then, the number

1,200

of policies has increased steadily, in part due to increasingneeds for stable financing after retirement.
0
2002

2005

2010

2015

2018

(Fiscal Year)

Source:	Compiled by T&D Holdings based on “The summary of Life Insurance Business inJapan” published by the Life Insurance Association of Japan
Note: Excluding the numerical value of former postal life insurance up to fiscal 2007.

3. Diversification of Sales Channels
The sales channels of life insurance companies are growing more diverse with, in addition to the in-house sales representative channel, a recently increasing presence of OTC insurance sales at banks, and agent channels including insurance shops.
Sales channels of private life insurers*1(Fiscal Year)

Insurance agents Place of
employment/
Labor union

OTC at banks/
Bank staff 2％
Mail order sales

Others*4

Trend in the number of new contracts at insurance shops*5(10,000 policies)

211

200

2003
Survey*26％Life insurance sales representatives 72％

7％ 6％ 8％100

2018
Survey*3

54％

7％ 5％

3％ 13％

18％

0
2012

Source: C ompiled by T&D Holdings based on the results of the Corporation Sample Survey
on Life Insurance (FY2003 and FY2018) of Japan Institute of Life Insurance.
*1 Excluding Japan Post Insurance Co., Ltd.
*2 Policies taken out during 1998-2003. *3 Policies taken out during 2013-2018.
*4 Including those policies through indistinct channels.

2013

2014

2015

2016

2017
2018 (Fiscal Year)(Prospect) (Forecast)

Source: Survey on Insurance Shop Market 2018, Yano Research Institute Ltd.
*5 The number of new contracts at independent insurance agents involved in the businesscooperation with several insurance companies with insurance shops. Prospect andforecast values as of June 2018.

4. The Future of the Japanese Life Insurance Market
In Japan, it is certain that the declining birthrate and aging

Meanwhile, as the social insurance premium burden is ex-

population will continue to progress, going forward. As thepected to increase as the number of young people declines,

future financial burden of social security will become eventhe inclusion of young people has become an important

greater, it is possible that the role played by private life

issue for life insurance companies.

insurance will increase further in the future, with a focus onseniors, as private security that complements public security.
Estimated Future Population by Gender and Age Group(Unit: 1,000 Persons)

Outlook for Social Security Benefits（23.8〜24.0％）(aggregate)

121.3

17,137（21.5%）

14,995
11,336

9,913

9,031

8,650

8,261

7,036

9,346

6,572
7,792

6,543

6,256

5,755

8,424

7,776

OthersMale(¥ trillions)

188.2〜190.0

140.2〜140.6

25.8（3.3%）

15.3（2.4%）①：66.7（8.4%）②：68.5（8.7%）（21.7〜21.8％）

10.7（1.9%）
39.2（7.0%）①：47.8（7.4%）②：47.4（7.3%）

56.7（10.1%）

59.9（9.3%）

2018

2025(Plan)

Child / Child-raising
Nursing-care(age group)

0〜17

Female
9,436

18〜34

6,694
10,862

35〜44

7,895
8,790

45〜54

5,509
8,530

55〜64

6,001
7,927

65〜74

6,521
9,258

75〜

65〜

13,666
19,5902016
2026 (no numerical display)Age group heading for seniors(Will increase in the next 10 years)

Senior age group(Continues to increase)21,9092036 (no numerical display)
2046

Source: C ompiled by T&D Holdings based on “Estimated Future Population of Japan (2017
Estimates)” (birth median (death median) estimates), by the National Institute ofPopulation and Social Security Research.

73.2（9.3%）

Pension
2040 (Fiscal Year)(Plan)

564.3 trillions

645.6 trillions

790.6 trillions

Insurance
premium burden

12.4%

12.6%

13.4〜13.5%

Publicexpenditureburden8.3%

9.0%

10.1〜10.2%

GDP

8,243
10,332

Medical care

Note:	For medical care, two assumptions regarding unit price growth rates are set, and two
benefit costs ( and ) are indicated.
* Figures inside ( ) are percentages compared to GDP. Insurance premium and public expenditure burdens are each expressed as a percentage compared to GDP.
Source:	Compiled by T&D Holdings based on “Environment Surrounding Social Security
around 2040” by the Ministry of Health, Labour and Welfare.

T&D Holdings INTEGRATED REPORT 201911

WHO WE ARE

Overview of the Life Insurance Market

Reference: Types of Life Insurance
There are three main types of life insurance :death insurance, pure endowment insurance, and accident
and sickness insurance.

Deathinsurance

Insurance benefits are paid when the insured individual dies. Typical products include term life insurance
and whole life insurance.

Pure
endowment
insurance

Insurance benefits are paid when the insured individual remains alive after a certain period of time. A typical
product is individual annuity insurance.

Accidentand sickness
insurance

Insurance benefits are paid when the insured individual becomes ill, falls into certain conditions due
to diseases or accidents, or dies from an accident.
Typical products include medical insurance and cancer
insurance.

These insurance are sold not only as single products but invarious combinations in accordance with customer needs andso forth.
In the Japanese insurance industry, insurance related to aperson’s life and death are called “First Sector” insurance
and only life insurance companies are allowed to sell theseproducts. In contrast, insurance which compensate damages
caused by a fortuitous accident are called “Second Sector”
insurance and only non-life insurance companies are allowed
to sell these products. Death insurance and pure endowment
insurance mentioned above are included in the First Sector.

Types of life insurance

Death
insurance
Term life insurance,
whole life
insurance, etc.

Pure
endowment
insurance
Individual annuity
insurance, etc.

Accident andsickness
insurance
Medical insurance,cancer insurance, etc.

Types of insurance

First Sector

Third Sector

Second Sector

Life insurance

Accident andsickness insurance

Non-life
insurance

Life insurancecompanies

Non-life insurancecompanies

Accident and sickness insurance do not belong to either of
the First Sector or Second Sector insurance categories, andare called “Third Sector” insurance. Both life insurance companies and non-life insurance companies can sell Third Sector
products. A typical Third Sector insurance product sold by
non-life insurance companies is “accident insurance,” which
insures against injuries.

Special Characteristics of Life Insurance Accounting
Due to the long-term nature of life insurance policies, misalignments in the recognition of revenue and expenses occur,as shown on the right.
In single fiscal year accounting, profits decline due to increased costs when sales results are good, while profits increase due to decreased costs when results are not good.
Meanwhile, from a long-term perspective, an increase in thepolicy amount in force leads to an increase in future revenue
sources, while a decrease in the policy amount in force is afactor in future profit decline.
Accordingly, as life insurance accounting has special
characteristics, we use economic values such as Embedded
Value (EV*) when representing life insurance company corporate value.
* Please see page 92 for more details on embedded value (EV).

12

T&D Holdings INTEGRATED REPORT 2019

General Life Insurance Income and Expenditure
Revenue generated

ProfitPolicydate(Term)
Costs are incurred intensively at the
beginning of the policy,
such as sales commissions andmedical examination costs.

Loss

Costs incurredT&D Insurance Group’s Industry Position
T&D Insurance Group Market Share Rising Steadily
T&D Insurance Group’s market share (total of Taiyo Life, Daido Life and T&D Financial Life) based on policy amount inforce was 7.2% as of March 31, 2019. The Group’s market share has steadily expanded compared with the combined shareof the three life insurance companies as of March 31, 2004, prior to the establishment of T&D Holdings, Inc. in April 2004.
Policy Amount in Force*
As of March 31,
2004 actualCompany i 2.1%

Others9.6%

Company h 3.1%
Company g 3.3%

Company I 3.3%

Total for Life
Insurance Companies

Company f 4.5%

Company e
5.1%¥1,222.2
trillion

Company d
13.8%

T&D 4.8%(Sixth Place)

Total for Life
Insurance Companies

Company H 3.4%
Company b
16.6%

Company A
18.9%

Others19.1%

As of March 31,
2019 actualCompany a
22.8%¥962.0Company G 5.2%

trillion

Company F
5.8%

Company c
14.4%

Company B
12.2%

CompanyE
7.8%

T&D 7.2%(Sixth Place)

Company C
8.7%
CompanyD
8.6%

Source: C ompiled by T&D Holdings based on Summary of Life Insurance Business in Japan, Life Insurance Association of Japan, and the financial reports of each company.
* Policy amount in force is the total of individual insurance and individual annuities, together with the insurance amounts of J-type product, T-type product and the nursing-care insurance amounts of
Kaigo Relief and so forth.

T&D Insurance Group‘s Trend in Sales Performance (Reference)
The graph below compares the trend in the sales performance (third sector annualized premiums of new policies andtotal policies) of the T&D Insurance Group (the total of Taiyo Life, Daido Life and T&D Financial Life), and the sales performance of the life insurance industry as a whole. The three life insurance companies have maintained their competitive
advantage in their specialty markets, and sales performance has been trending firmly.
Third Sector Annualized Premiums of New Policies*
T&D

Third Sector Annualized Premiums of Total Policies*

283.4

T&D

124.8

184.4

100.0

118.3

2014

112.5

137.8

110.0
2015

120.3

124.3

2017

139.1

2018 (Fiscal Year)

114.5

105.5
100.0

Life insurance industry
2016

148.5

Mar. 31,
2015

120.1

109.2
104.1
Mar. 31,2016

Life insurance industry
Mar. 31,2017

Mar. 31,2018

Mar. 31,2019

Source: Compiled by T&D Holdings based on Summary of Life Insurance Business in Japan, Life Insurance Association of Japan, and the financial reports of each company.
* The Annualized Premiums of new policies of fiscal 2014 and The Annualized premiums of total policies for the year ended March 31, 2015 in the third sector are assumed to be 100.0 (base year).

Soundness of T&D Insurance GroupThe Group’s ability to pay insurance claims has been highly evaluated by various rating agencies, indicating sufficient financial soundness.
Rating Agency *Solvency margin ratio

Japan Credit Rating
Agency, Ltd. (JCR)

Rating and Investment
Information, Inc. (R&I)

Standard & Poor's (S&P)

T&D Holdings

AA-

̶

̶

1,093.1%

Taiyo Life

AA-

AA-

A

849.7%

Daido Life

AA-

AA-

A

1,271.9%

T&D Financial Life

AA-

AA-

̶

1,101.7%*Long-term issuer rating for T&D Holdings and insurance claims paying ability ratings for the three life insurance companies.

As of February 14, 2019

As of March 31, 2019

T&D Holdings INTEGRATED REPORT 201913

WHO WE ARE

T&D Insurance Group’s Value Creation Process (conceptual diagram)

Social issues tackled by
T&D Insurance Group(CSR priority themes)

Help mitigate and adapt toclimate change

Invest to help build
a sustainable society

Changes in thesocial environment• Further decline in birthrate, aging
population, and population decline• Increasing need to make self-provision forpension, medical care, and nursing care
• Increasing social inequality• Increasingly diverse households

Unique features andstrengths of the Group

Creating shared value through17 goals
169 targets

Provide workplace environmentsthat enable all people toparticipate actively

Business domains

SDGs

Priority issues

Promote healthy and abundant
lives for all people

the strengths of the T&D Insurance Group

Creation ofshared value

six business themes leveraging

Ever-changing issues facedby people and society

Each Group company① integrally offers
unique products andservices② in a specialized market

Household market

Technological innovation• Increase in sophistication of IT• Advance in medical technology

Financial strategy

Strategic corporate management (ERM)

14

T&D Holdings INTEGRATED REPORT 2019

Achieving
Shared Value

Diversifying revenue sources in areas
with high affinity to core businessesof the T&D Insurance Group

Customers
Shareholders
and investors

6. Contributing to a moresustainable society throughinvestment

5. Asset formation matchedto customer life plans

Tie-uporganizations

1. Enriching the lives ofsenior citizens

Strengthening
domestic life
insurance business

Healthy andabundant lives

2. Developing the SMEs
that support Japan

4. Enhancing future
vitality with digital
innovation

Small and medium enterprises market

3. Healthy and fulfilling
lifestyles for more diversehouseholds

Independent insurance agent market

Enhancement of
human resources capabilities

Shared value(core business)

Employment
and jobsatisfaction

Sustainableglobalenvironment

Employees
Business
partners

Robust corporate governance

Local
communities/societies

T&D Holdings INTEGRATED REPORT 201915

WHO WE ARE

The Year at T&D Insurance Group
Major topics in fiscal 2018
T&D Holdings T&D Holdings

April

Taiyo Life

Taiyo Life

May

June

Taiyo Life

Daido Life

T&D Financial Life

T&D Financial Life

July

AugustSeptember

Taiyo Life

Full renewal of the Dementia Prevention APP

Products and Services

Daido Life

Kaketsuke-Tai Service used more than 50,000 times

 Taiyo Life Expansion of coverage
Renewal of insurance to protect against loss of
income, Hatarakenakunatta Toki No Hoken

The Kaketsuke-Tai
Service mascot, “Ikana-Cat”

T&D Financial Life

T&D Financial Life

Further enhancement of coverage related to
specific diseases
Renewal of Kakei Ni Yasashii Shunyuhosho

Launch of the single-premium annuity, Choju PremiumCollaboration initiated with Shinshu
University to support Health and Productivity
Management for SMEs
Daido Life

Conclusion of capital participation and cooperation agreements with the newly
established Australian life insurance company, Integrity Group Holdings Limited
 T&D Holdings Conclusion of a basic agreement oncollaboration with the Swiss digital
health company, dacadoo AG

Daido Life

Awards and External
Evaluation

Collaborations and Partnerships

Daido Life

Received the Excellence Award at “Best Customer
Support of the Year 2018”

Other

 T&D Holdings 
Selected for various indexes

16

T&D Holdings INTEGRATED REPORT 2019

OctoberNovember

December Taiyo Life
A first in the life insurance industry
Launch of the Himawari Dementia Prevention Insurance

January

February

March

T&D Financial Life

New rates set for “health”
Renewal of Kakei Ni Yasashii Shushin Iryo

T&D Financial Life

Industry-first Currency Diversification Course added
Renewal of Minna Ni Yasashii Shushin Hoken
 T&D Holdings 
Memorandum signed on cooperation with
the U.S. asset management company,
Payden & Rygel
Taiyo Life

Joint research utilizing walking speed data with
the Tokyo Metropolitan Geriatric Medical Center
Taiyo Life

Research on dementia with Shiga University,
Shiga University of Medical Science, and JMARI** Japan Medical Association Research Institute

Daido Life

Agreement on a business alliance in the sales field with Resona Bank

Taiyo Life

The policy application procedure screen of the next generation
portable terminal, Taiyo Life Concierge received the Special
Award at the “UCDA Award 2018”

Taiyo Life

Obtained the highest
rating of three stars in the
HDI benchmark assessment under the Customer
Support rating and Web
Support rating categories.

Taiyo Life

Daido Life

T&D Financial Life

Recognized as a “Certified Health andProductivity Management Organization” by
the Ministry of Economy,
Trade and Industry* Taiyo Life/Daido Life have beenrecognized three years in a row.

T&D Holdings INTEGRATED REPORT 201917

WHO WE ARE

Financial Highlights
Despite the harsh environment, including the low levels of long-term interest rates, the targets for the key
performance indicators (Group MCEV, value of new business, and adjusted net income) under the three-year,
medium-term management plan (April 2016 to March 2019) were generally achieved.

Key Performance Indicators
Group MCEV*

Value of New Business*

2,370.6 billions

Target: End of March 31, 2019: 2.4 trillion yen ¥(¥billions)(¥billions)
2,500

140.3 billions¥

Target: FY2018: 100 billion yen

2,298.0

2,000

2,290.5

2,406.7

2,370.6

150

1,893.7
100

1,500
1,000

140.3

129.4

119.5
93.0

56.3

50

500
0

0
Mar. 31, 2015

Mar. 31, 2016

Mar. 31, 2017

Mar. 31, 2018

Mar. 31, 2019

2014

2015

2016

2017

2018
(Fiscal Year)*Please see page 92 for more details on embedded value (EV). Ultimate forward rate is not applied.

*Please see page 94 for more details on the value of new business. Ultimate forward rate is not applied.

As of March 31, 2019, the Group MCEV was ¥2,370.6 billion, which represents a decrease of ¥36.1 billion from the previous fiscal year-end. Thiswas mainly due to a decline in domestic interest rates and a drop in domestic stock prices, despite an accumulation of value of new business.

In fiscal 2018, the value of new business was ¥140.3 billion, which represents
an increase of ¥10.8 billion from the previous fiscal year, due to an increasein sales, despite decreasing factors including a lowering of the premiums ofcertain products in conjunction with the revision of the standard mortality
table in April 2018, and a decline in domestic interest rates.

Key Performance Indicators

Return to Shareholders

Adjusted Net Income*Target: A round 85.0 billion yen(Three-year average) ¥for three years

Fiscal 2018(¥billions)(¥billions)84.5 billions

100

94.2

91.7
83.3

83.3

80

50

78.5

38.7 billions

Total Return to Shareholders ¥Share buyback

30

40

20

30.0

20

10

16.6

0

0

¥25.0

2014

2015

2016

2017

2018
(Fiscal Year)

Dividend per share

46.6

40

60

Cash dividend

2014

38.4

37.5

19.0

17.0

19.4

20.5

¥30.0

¥32.5

2015

2016

40.3

38.7

17.0

13.0

23.3

25.7

¥37.5

¥42.0

¥44.0

2017

2018

2019 (forecast)(Fiscal Year)* “Adjusted net income” is calculated by adding net income and additional internal reserves in excess of
the legal standard requirements related to reserves for contingency and price fluctuations (after taxes).

In fiscal 2018, although adjusted net income decreased from the previous
fiscal year to ¥78.5 billion, the three-year average was ¥84.5 billion, against
the target of roughly ¥85.0 billion for the three years of the medium-term
management plan.

18

T&D Holdings INTEGRATED REPORT 2019

In fiscal 2018, the Company paid a cash dividend of ¥42.0 per share, which
is an increase of ¥4.5 from the previous fiscal year, and represents anincrease in dividends for four consecutive terms.
In addition, the Company conducted a share buyback of ¥13.0 billion,
providing a total return to shareholders of ¥38.7 billion.

Consolidated Results of Operations
Ordinary Revenues

2,140.1 billions¥

Fiscal 2018(¥billions)

Ordinary Profit

Ordinary Revenues (left)

146.9 billions¥

Fiscal 2018

Ordinary Profit (right)

Profit Attributable to Owners of Parent

72.8 billions¥

Fiscal 2018(¥billions)

Profit Attributable to Owners of Parent (right)

3,000.0

300.0
2,412.1

2,000.0

2,025.9188.9

1,000.0

1,975.7
171.4

94.2

2,140.1

1,928.3
157.2

156.4

146.9

200.0

122.0
100.0

72.8

77.5

75.1

72.5

2,110.0

64.0

0

0
2014

2015

2016

2017

2018

2019 (forecast)(Fiscal Year)[Consolidated Results of Operations] Ordinary profit decreased by ¥9.5 billion to ¥146.9 billion, due to the negative effect of an increase in losses from derivatives, resulting from high currency hedging costs, despite an increase in interest, dividends, and income from real estate for rent. Profit attributable to ownersof parent also decreased by ¥4.7 billion year-on-year to ¥72.8 billion.
[Full-year Earnings Forecasts] Ordinary revenues are projected to decrease slightly. In addition, ordinary profit and profit attributable to owners of parent are
projected to decrease, at ¥122.0 billion and ¥64.0 billion, respectively, in light of the uncertainty of the financial environment.

Fiscal 2019 Full-year Earnings Forecasts (Three Life Insurance Companies)
Taiyo Life
Fiscal 2018 (actual)

Ordinary revenues
Ordinary profit
Net income
Sales performance indicators*1
New policy sales results
Policy in force sales results
Income from insurance premiums
Core profit
Positive spread(¥billions)

Daido Life

Fiscal 2019 (forecasts)

Fiscal 2018 (actual)

917.6
840.0
54.1
37.0
25.5
15.0
Protection-type annualized premiums*2
17.2
17.0
154.7
155.0
715.1
640.0
51.8
54.0
19.6
27.0

T&D Financial Life

Fiscal 2019 (forecasts)

1,045.5
89.2
45.5
Policy amount*3
8,474.8
47,146.0
828.0
99.2
36.7

Fiscal 2018 (actual)

1,010.0
84.0
49.0

Fiscal 2019 (forecasts)

150.7
2.0
1.0
Annualized premiums
11.5
115.2
127.8
(1.4)
(2.0)

3,760.0
46,910.0
830.0
115.0
34.0

230.0
0.0
(1.0)
22.0
130.0
210.0
(3.0)
(2.0)

*1 Sales performance indicators represent the total amount of individual insurance and individual annuities. In addition, the new policy sales results include a net increase from conversions.
*2 A performance indicator of Taiyo Life, which is the sum of the protection portion of the annualized premiums, mainly excluding savings-type products.
*3 Fiscal 2018(actual) includes the individual insurance and individual annuities, the insurance amounts of J-type product (non-participating critical illness insurance), T-type product (non-participating
disability protection insurance) and the nursing-care insurance amounts of Kaigo Relief (non-participating whole life nursing-care insurance) and Kaigo Teiki Hoken (non-participating nursing-care
term life insurance).
	Fiscal 2019(forecast) includes the individual insurance and individual annuities, the insurance amounts of J-type α product, T-type α product and the nursing-care insurance amounts of Kaigo Relief
α (non-participating whole life nursing-care insurance) and so forth.

Financial Soundness
Consolidated Solvency Margin Ratio*

ESR*

1,093.1 %End of March 31, 2019
(%)

(%)

1,500

250
1,220.7

159 %End of March 31, 2019

217
1,155.8

1,105.1

1,061.8

1,093.1

1,000

200
162

175

168

159

Mar. 31, 2017

Mar. 31, 2018

Mar. 31, 2019

150
100

500

50
0

0
Mar. 31, 2015

Mar. 31, 2016

Mar. 31, 2017

Mar. 31, 2018

Mar. 31, 2019

Mar. 31, 2015

Mar. 31, 2016

*Please see page 94 for more details on solvency margin ratio.

*Please see page 92 for more details on ESR. Ultimate forward rate is not applied.

The solvency margin ratios in fiscal 2018 were 1,093.1% for T&D Holdings
on a consolidated basis, 849.7% at Taiyo Life, 1,271.9% at Daido Life, and1,101.7% at T&D Financial Life, indicating sufficient financial soundness.

The economic solvency ratio, which represents economic value based on
capital adequacy, decreased by 9 percentage points from the previous
fiscal year-end to 159%, due to a decrease in surplus as a result of low
domestic interest rate levels and a drop in stock prices, despite an accumulation of new policies and policies in force.

T&D Holdings INTEGRATED REPORT 201919

WHO WE ARE

Non-financial Highlights
Promoting a Diverse Workforce

Environmental Initiatives

T&D Insurance Group has been promoting to nurture a
corporate culture where diverse human resources can feel
job satisfaction and reach their potential.
Given that women represent the majority of the Group’s
employees, the active participation of female employees isrecognized as a crucial management priority. To this end,
each Group company is working to revise their respective
personnel and compensation systems, as well as introducing
various support systems to enhance work-life balance.
The Group is striving to expand various employment
opportunities for persons with disabilities, and is engagedin efforts to build a comfortable workplace. We have implemented initiatives to introduce specialized computers andmake considerations regarding commuting routes.

Since most of our CO2 emissions derive from electricity use
at the T&D Insurance Group, the Group has establishedtargets for electricity use, and is striving to reduce energy
consumption.
The Group is also engaged in initiatives to reduce the environmental burden by reducing the consumption of office
paper through the promotion of paperless meetings, andalso by promoting “Green Purchasing,” which gives priority
to products that are compliant with the Green Purchase Act
and to Eco Mark products when procuring offices stationery and other supplies. In April 2019, the Group has expressed its support for the “Task Force on Climate-related
Financial Disclosures (TCFD),” and is pushing forward withfurther initiatives.

Number of Employees

Electricity Consumption(person)Male

Female20,00018,31918,40918,543

18,394(MWh)
100,000

17,97915,00075,00010,00050,0005,000

25,000096,34897,70596,486

2014

2015

2016

2017

2018

123

127

130

2016

2017

2018

0
Mar. 31, 2015

Mar. 31, 2016

Mar. 31, 2017

Mar. 31, 2018

Mar. 31, 2019

Ratio of Female Managers(%)

98,92995,866

Office Paper Consumption

Ratio of female managers (left)

Number of female managers (right)

18
14.5

14.9

15.8

13.0
12
311

341

(Fiscal Year)

355

387

16.2

405

(Total)

(t)

600

200

150

160

151

400
100

6

200
50

0

0
Mar. 31, 2015

Mar. 31, 2016

Mar. 31, 2017

Mar. 31, 20182014

Ratio of Employees with Disabilities
(%)

5

427

3
2

367

321

336

328

2.20

2.27

2.22

2.42

2.56

(Total)

(%)

500

100

400

Mar. 31, 2018

Mar. 31, 2019

* The number of employees, the ratio of female managers, and the ratio of employees withdisabilities above are calculated based on the aggregate data of three life insurance companies. The ratio of female managers is calculated based on the data as of April 1, the monthfollowing each fiscal year end.

20

T&D Holdings INTEGRATED REPORT 2019

95.9

96.0

95.7

94.5

2014

2015

2016

2017

2018

75

50

0

0
Mar. 31, 2017

96.0

300

100

Mar. 31, 2016

(Fiscal Year)

200

1Mar. 31, 2015

2015

Green Purchasing Ratio

Ratio of employees with disabilities (left)
Number of employees with disabilities (right)

40Mar. 31, 2019

25

0
(Fiscal Year)Tr y & Disc ov er fo r
Creat ion of Shared Val ue

T&D Holdings INTEGRATED REPORT 201921

Try & Discover for Creation of Shared Value

Title

FY2019-FY2021 T&D Insurance Group Medium-Term Management Plan

Try & Discover 2021 — Creation of Shared Value —In the new three-year medium-term management plan, whichbegan in April 2019, the Group will expand its corporate value bycontinuing to take on challenges for new growth towards the“creation of shared value,” based on the business platform thatit has strengthened and expanded to date.

Expanding our growth areas• Strengthening initiatives for the senior market

Increase corporate value based on thestrengthened business platform

Business platform strengthening period• Expand coverage such as Third Sector anddisability benefit insurance
Established ERM structure

Increased value of new business2014.42016.4

Medium-Term Management Plan (FY2014-FY2015)
TargetActual(FY2015/Mar.31, 2016)(FY2015/Mar.31, 2016)

Corporate Value(EV)¥ 2.2 trillion
and above¥ 1,893.7 billion

Profit(Adjusted Net
Income*1)¥ 77.0 billion
and above¥ 83.3 billion

New policy sales
results (policy
amount in force*2)¥ 63 trillion
and above¥ 62,998.1 billion*1 A djusted net income is calculated by adding net income and additional internal reserves in excessof the legal standard requirements related to reserves for contingency and price fluctuations(after taxes).
*2 The policy amount in force includes individual insurance, individual annuities and Daido Life’s
J-type product, T-type product, and Kaigo Relief.

22

T&D Holdings INTEGRATED REPORT 20192019.4

Medium-Term Management Plan (FY2016-FY2018)

Corporate
Value
(EV)

Profit(Financial
accounting)TargetActual(FY2018/Mar.31, 2019)(FY2018/Mar.31, 2019)

Group
MCEV

¥ 2.4 trillion¥2,370.6 billion

Valueof NewBusiness¥ 100 billion¥ 140.3 billion

Adjusted
Net
Income*1

Around¥85.0 billion forthree years

Three-year
average¥84.5 billion

Challenge for new growth towards
the creation of shared value
To become an
insurance groupthat shares its
values withsociety and grows
sustainably

Expansion of corporate value based on ourbusiness platform, which was strengthened
and expanded during the previous
medium-term management plan

2022.3Medium-Term Management Plan (FY2019-FY2021)
TargetMedium- to long-term target levels

Value of New Business

FY2021: 170.0 billion yen and above[Core ROEV: 5% and above for three years]

Group
MCEV

Next medium-term management plan: 4.0 trillion yen[ROEV: Stable and sustainable growthover 7.5% in the medium- to long-term]

Net Income

FY2021: FY2018 levels(73.0 billion yen) or higher

Net
IncomeNext medium-term management plan:
100.0 billion yen

T&D Holdings INTEGRATED REPORT 201923

Try & Discover for Creation of Shared Value

2019年度〜2021年度
保険グループ中期経営計画
FY2019-FY2021
T&DT&D
Insurance
Group Medium-Term Management Plan

Try & Discover 2021 —Creation of Shared Value—
Review of the Previous Medium-Term Management Plan

Progress of Key Performance Indicators
In a business environment characterized by a revision of the standard mortality table and continued low interest rates, the Group’s
profitability on an economic value basis grew steadily through measures such as developing a flexible product/sales strategy andproperly controlling interest rate risk. In addition, accounting profit almost reached the target, despite negative factors such as
strong sales results causing an increase in the provision for standard policy reserve, and higher currency hedging costs.
Value of new businessCorporate value (Group MCEV)Profit (Adjusted net income*)

Target: FY2018: 100 billion yen

Target: End of March 31, 2019: 2.4 trillion yen

Target: Around 85.0 billion yen for three years(Trillions of yen)(Billions of yen)(Billions of yen)

140.3
119.5

(¥2.4 trillion)

2.40

129.4
2.29

(¥100.0 billion)
93.0

2.29

(¥85.0 94.2
billion)

83.3

91.7

1.89

56.3

2014

2.37

2015

2016

2017

Mar. 31, 20152018 (Fiscal Year)

83.3

78.5

Three-year average
84.5 billion yen

Mar. 31, 2016

Mar. 31, 2017

Mar. 31, 2018

Mar. 31, 2019

2014

2015

2016

2017

2018 (Fiscal Year)*Adjusted net income = Net income + Additional internal
reserves in excess of legal standard requirements related toreserves for contingency and price fluctuations (after taxes)

Results of Major Strategies

Transformation of the Product Portfolio

Taiyo Life

Daido Life

T&D Financial Life

Approx. 40% increase*1 in Third Sector annualized premiums of new policies, through a focus
on dementia and disability benefit insurance

Approx. 40% increase*1 in new policy amountthrough the promotion of disability benefit products such as J-type product and T-type product,in addition to death benefit products

Approx. 20% increase*1 in policy amount inforce, due to a multi-line approach (saving andprotection) to the product lineup

Annualized premiums of new policies
in the Third Sector

New policy amount (J-type product + T-type
product + Nursing Care*2)(Billions of yen)

1,023.8

16.3
13.4
9.4

(Billions of yen)

1,143.2

2,172.9
2,052.7
1,848.5657.0

1,806.4 1,808.7

1,879.3

472.8

6.7

2014

1,089.8

827.0

13.3

11.5

2013

Policy amount in force(Billions of yen)

2015

2016

2017

2013

2018 (Fiscal Year)

2014

2015

2016

2017

2018 (Fiscal Year)

Mar. 31, 2014 Mar. 31, 2015 Mar. 31, 2016 Mar. 31, 2017 Mar. 31, 2018 Mar. 31, 2019*1 Compared to the fiscal year ended March 31, 2016, the final year of the medium-term management plan before the previous plan *2 Shunyu Relief + Kaigo Relief

Results of Major Strategies

Strengthening Initiatives for the Senior Market

Provided products and services that
preempt needs in an integrated manner,such as Himawari Dementia Prevention
Insurance and the Kaketsuke-Tai Service

Survey on the image of dementia:

New policy amount for SME owners:

Industry No. 1

Up 15%*4*3 L ife insurance companies that support the prevention and treatment of dementia (March
2019 Macromill survey)*4 Rate of increase of new policy amount from the fiscal year ended March 31, 2016 (final yearof the medium-term management plan before the previous plan) to the fiscal year ended
March 31, 2019 (final year of the previous medium-term management plan)*3

24

Enhanced products and services to meetinheritance and business succession needs
and nursing care needs, in response toprogression of the aging of SME owners

T&D Holdings INTEGRATED REPORT 2019

Business Environment and Issues

Awareness of the Environment in Formulation of the Medium-Term Management Plan
In addition to prolonged low interest rates, various trends
with an impact on the profitability and competitive advantage of the domestic life insurance business are expected to continue, going forward, including a declining
population and the progress of digitalization. Facing suchchanges in the environment head on, the expansion of
new growth areas is becoming increasingly important,
together with enhancing the profitability of each Group
company. Based on this awareness, in the medium-term
management plan that began in April 2019, we will

expand our corporate value by taking on new growthstrategy challenges, based on the business platform that
we have strengthened and expanded to date.
Specifically, we will expand the revenue base of theGroup, by bolstering this base through an expansion andstrengthening of the domestic life insurance business,and diversifying our revenue sources. We believe that thisapproach will lead to reliable future growth, through thesteady accumulation of new business value.

Social environment• Further decline in birthrate, aging population, and population decline• Increasing need to make self-provision for pension, medical care, and nursing care

Economic andfinancial environment• Continued low interest rates, as well as risk of future interest rate increases

Industry andregulatory environment• Revision of standard mortality table, introduction of financial soundness indicators based on
economic value

Technology innovation• Advances in medical technology, and digital innovations, including the use of big data andartificial intelligence (AI)Priority Issues for Medium-Term Management Plan

Strengthening ofCore Businesses• Respond appropriately to the needs of customers and of society, and drive evolution in products, services and sales channels• Raise profitability of insurance underwriting to deal with an environment of prolonged low
interest rates• Utilize new information technology, etc. to improve production efficiency

Diversification ofBusiness Portfolio• Build new, specific markets and channels within the domestic life insurance market• Expand into new business areas that have an affinity to the life insurance market, to capture
external growth

Promotion ofIntegrated GroupManagement• Efficient utilization of Group capital• Leverage Group synergies further

T&D Holdings INTEGRATED REPORT 201925

Try & Discover for Creation of Shared ValueFY2019-FY2021 T&D Insurance Group Medium-Term Management Plan

Try & Discover 2021 —Creation of Shared Value—
Future Vision of the Group“Creation of Shared Value” through the Implementation of T&D Insurance Group’s Corporate Philosophy
With our “Try & Discover” motto for creating value, theT&D Insurance Group aims to be a group that contributes to all people and societies. Based on this corporate
philosophy, the Group will contribute to resolution of theever-changing issues faced by people and society, withthe aim of being a corporate group that grows sustainably
together with society. In the medium-term management

Creation of
Shared Valueplan, we will strongly promote the implementation of thiscorporate philosophy, as well as the “creation of sharedvalue,” in which value is created for both society and businesses, by responding further to the resolution of social
issues, such as an extension of healthy life expectancy
and SME business continuity in the respective specialty
markets of each Group company.

• The Group sees ever-changing issues faced by people and society as business challenges tobe tackled• From the perspective of resolving social issues, by means of our business we will create both
(1) values to society, and (2) values to the company

Major themes in “Creation of Shared Value”
that leverage the strengths of the T&D Insurance Group

Creation of Shared Value
Areas with a high affinity to the core businessof the T&D Insurance Group6. Contributing to amore sustainable society
through investments

5. Asset formation
matched tocustomer life plans

1. Enriching the lives ofsenior citizens

Strengthening
2. Developing the SMEs
domestic lifethat support Japaninsurance business(core business)

4. Enhancing future
vitality withdigital innovation

26

T&D Holdings INTEGRATED REPORT 2019

Increase satisfaction
for all stakeholders

Customers

Shareholders/investors

Tie-uporganizations

Employees

Local communities/societies

Business
partners

Healthy and abundant lifestyles
Employment and job satisfaction

3. Healthy and fulfilling
lifestyles for morediverse households

Sustainable global environment

Basic Strategies of the Medium-Term Management Plan

Realizing the Future Vision of the Group with Four Basic Strategies
The medium-term management plan consists of fourbasic strategies. The first is to strengthen our core businesses by pursuing specialized strategies that leverage
the strengths of the Group companies (mainly the life
insurance companies). The second is to diversify ourbusiness portfolio by investing in new business areas thathave an affinity to the domestic life insurance business.

Furthermore, as strategies to support the realization ofthese two growth strategies, we have also established thebasic strategies of evolving the Group’s financial strategy,
with the aim of further improving capital efficiency, andpromoting the integrated management of the Group, inorder to achieve the effective and efficient utilization ofGroup management resources.

1. Strengthening of Core Businesses

2. Diversification of Business Portfolio

3. E
 volution ofGroup Financial Strategy

4. Promotion ofIntegrated Group Management

1. Strengthening ofCore Businesses

2. Diversification ofBusiness Portfolio

Pet & Family Insurance

Strategy
Keywords

Supporting customers in living
longer, healthier lives

Evolving a full-range of protection
integrating both corporations andindividuals

Raising its presencein the independent insurance
agent channel

Strengthening and enhancing
Group synergies

Products

Survival benefit products such as
prevention insurance

Death benefit products
Disability benefit products

Savings-type productsProtection-type products

Simple and easy-tounderstand products

Services

Face-to-face services
Integrated products and services

Management and health support
related services
Senior and affluent segment services

Simple and highly convenient services through the utilization of IT

High quality services throughthe utilization of IT

Channels

In-house sales representatives andagents+New channels responding tocustomer needs

In-house sales representatives/tax
accountant agents+
New schemes combining thestrengths of each channel

Mega banks
Influential regional banks
Insurance shops

Pet shops
Online/mail-order shopping

Household market

SME market

Independent insurance agent market

Senior segment(approximately 35 million people)

SMEs(approximately 1.9 million)

Affluent segment(upper mass market and higher,
about 11.7 million households)

Main Market
Core
Customer
Segments

3. Evolution of Group Financial Strategy

AssetManagement
Business

Closed Book
Business

Pet owner segment(dogs and cats;roughly 18.5 million)

4. Promotion of Integrated Group Management

T&D Holdings INTEGRATED REPORT 201927

Try & Discover for Creation of Shared ValueFY2019-FY2021 T&D Insurance Group Medium-Term Management Plan

Try & Discover 2021 —Creation of Shared Value—
1. Strengthening of Core Businesses

Strengthening of Core Businesses — Overall SchematicIn the domestic life insurance business, which is our corebusiness, we will refine the strengths of the products/
services/sales channels of each of our life insurance companies, with the aim of establishing an unassailable top
brand in the respective specialty business areas of eachGroup company, and strengthening the revenue base of
the Group.
Taiyo Life will further promote the establishment of top
brands in the senior market by utilizing its product development capabilities such as dementia insurance, which
are ahead of the times, along with integrated products
and services, such as the Kaketsuke-Tai Service.
By regarding various changes in the environment as
growth opportunities, and taking up the challenge ofstructural transformation that transcends the current
frameworks in various business areas, Daido Life willrefine its approach of providing a full-range of protection
integrating both corporations and individuals, in order tobecome a life insurance company that leads the next eraof corporate coverage.
T&D Financial Life will enhance the Group’s presence
and results in the independent insurance agent market,
by further expanding its sales networks of bank agentsand promoting its highly flexible product development
capabilities.
In addition, in order to respond to the insurance needsof the millennial generation, we will establish new specialty markets through the use of digital platforms.

Strengthening of Core Businesses — Overall Schematic• The three core life insurance companies aim to build the top brand in their respective specific markets.
• Strengthen the core domestic life insurance business further by raising profitability of insurance underwriting,and building new, specific markets.

HouseholdmarketStrengths and differentiators

Raising profitability of insurance
underwriting

Building the top brand in
the senior market[Total core profit of the three life insurance companies]• Product development capabilities
that stay ahead of the curve• Integrated products and services

Leading a new era ofcorporate coverage
SME market

Independent
insurance
agent market• Solid relationships with the sales
platform• Specific channels for SME market(Billions of yen)Pursuing a specialized strategy

Three core life insurance companies

Specific markets

5-6 years
from now
Forecast
166.0
148.4 149.6(Medium-term
management plan)• Bank agent network• Flexibility of product development

New life
insurancechannel2017

28

Alliances
M&A

Millennial
marketT&D Holdings INTEGRATED REPORT 2019

2018

2019

2020

2021

•B
 uild specific markets that utilize digital platforms to respond to the insurance needs ofthe millennial generation

2. Diversification of Business Portfolio

Initiatives towards New Business Domains
The aim of initiatives targeting the diversification of ourbusiness portfolio is to achieve a multi-line model forrevenue sources, through the development of businessin new areas in which we can utilize our knowledge andresources in the life insurance business, and through theincorporation of external growth. When establishing new
business areas, we will proceed with the establishment ofsuitable business management systems, for businesses

with a high affinity to the life insurance business, that are
expected to contribute to Group consolidated profit andachieve high future growth.
Currently, we are specifically considering mainly theclosed book, asset management, and digital insurance
businesses. Moreover, in June 2019, we established T&D
United Capital Co., Ltd., as a subsidiary that handles strategies for business portfolio diversification.

— Initiatives in the medium-term management plan —Closed book business

Asset management business

Digital insurance business

Establishment of T&D United Capital (June 2019)
By consolidating Group management resources, we are establishing an effective and efficient integrated Group organizational
structure, based on demonstration of expertise, a proper management of risk and return, and speedy decision making.

Investment policy/capital allocation

Directly
owned subsidiary
Bringing together ofmanagement resources
Investment A

Investment in Closed Book Business
Through T&D United Capital, we will invest in the closed
book business, in which income is generated by obtaining
and consolidating blocks of policies in force for productsthat are no longer sold by an insurance company (closedbook), and enhancing their value. With a view toward acquiring new investment income and the future expansionof domestic business, we will accumulate business knowhow by building relationships with investment targets.

Investment B

SellerInvestment C

Strategic investments inclosed book business,
asset managementbusiness, etc.

Insurance Company A

Insurance Company B

Insurance Company C

Closed Book a

Closed Book b

Closed Book c

Closed Book a/b/c
Buyer

Closed Book Business Insurance Company
Investment

T&D United Capital

T&D Holdings INTEGRATED REPORT 201929

Try & Discover for Creation of Shared ValueFY2019-FY2021 T&D Insurance Group Medium-Term Management Plan

Try & Discover 2021 —Creation of Shared Value—
2. Diversification of Business Portfolio

Growing profits in the asset management businessoverseas asset management companies will also contribute to a strengthening of the asset management
capabilities at each Group life insurance company, as wellas Group consolidated profits. As a specific initiative, in
September 2019, we concluded a capital and businessalliance agreement with the French asset managementcompany, Tikehau Capital SCA, in which T&D United
Capital is investing. Based on this agreement, T&D AssetManagement will provide asset management products ofa subsidiary of Tikehau Capital to Japanese pension funds.

We aim to continue to expand the asset managementbusiness in the medium- and long-term, as the businessarea with the highest affinity with the life insurance business. In November 2018, with the aim of advancing asset
management and enhancing the asset managementbusiness, we concluded a cooperation agreement with
Payden & Rygel in the United States.
In addition, while contributing to profitability by enhancing the product structuring capabilities of T&D
Asset Management, capital and business alliances with
Growing profits in the asset management business• Aim to expand our asset management business as a core Group business, second only to the domestic life insurance
business, over the medium term.
• Utilize our strengths as a life insurance-group asset management company, and build a differentiated business model.
• Strengthen management of overseas assets, and make contributions to Group profits and life insurance asset management.

Strategy 1): g row T&D Asset Management profits• Grow assets under management by leveraging ourstrengths in structuring of products• Utilize network of domestic and overseas asset management companies• Contribute to more sophisticated asset management of the Group life insurance companies

Strategy 2): s trategic investments in overseas
asset management companies, etc.
Synergistic effects• Use business/capital alliances with overseas asset
management companies, etc., to strengthen productstructuring capabilities and the Group’s life insurance asset management capabilities• Contribute to Group consolidated profits
Levels to aim at 5-6 years from now

T&D Asset Management investment trust assets under management
More than 1.2 trillion yen(Trillions of yen)

1.18
1.06

Approximately 1.4 trillion yen

Stable,sustained expansion

1.14

0.73
0.61

2014

2015

2016

2017

2018

2019

2020

2021

Establishment of a New Specialized Market (The Millennials)
In order to capture the insurance needs of the young
millennial generation, which the Group has not heretofore sufficiently focused on, we will create alliances with
providers of digital platforms, and build new specialized30

T&D Holdings INTEGRATED REPORT 2019

markets. As the channels available for purchasing insurance policies become increasingly diverse, we will provide
new products and services through the use of digital marketing, in order to expand our customer contact points.

3. Evolution of Group Financial Strategy

Promote financial strategy (capital management) and growth strategy (bolstering core businesses anddiversifying business portfolio) as two sides of the same coin, in order to improve Group capital efficiency.

Growth strategy

Financial strategy(strengthen core businesses/diversify business portfolio)(capital management)
Investment

Pursuit of specialized strategies
by life insurance companies

ReturnInvestment

Building of
new life insurance channels

ReturnInvestment

Business investment aimed atdiversifying revenue sources

ReturnProcurementof funds• Management balancing
economic value andfinancial accounting• Efficient utilization ofGroup capital

Returns• Shareholder return that take
into account capital efficiency• Systematic reductions incross-shareholdings

Information
disclosure

Higher Group capital efficiency

to diversify our business portfolio, we will efficiently utilize
the Group’s capital, through combinations with optimal
selections of external capital. Furthermore, we will proceed with a systematic reduction of cross-shareholdings.

Financial markets (shareholders, creditors, etc.)

By promoting integrated Group ERM, and based on an
expansion of our corporate value (embedded value), theGroup is performing business management that considers
the balance with financial accounting. In addition, in order

Shareholder Return Policy
The basic framework incorporates new reference indicators, while maintaining the previous medium-term management plan. We will implement shareholder returns
that contribute to an even further improvement in capital efficiency.
Regarding cash dividends, we will strive to provide
stable dividend returns, such as an Adjusted DOE of 3%

as reference. In addition, we will implement flexible sharebuybacks that take the EPS growth rate into consideration. Accordingly, we will comprehensively determine thetotal payout ratio, while taking into account an Adjusted
ROE of approximately 8% by the final year of the medium-term management plan, in addition to ensuring aratio of 40% or more of net income.

• Total payout ratio to be set flexibly, taking into account capital efficiency (Adjusted ROE). (However, to be 40% and above of profit available for shareholder return)• The objective for cash dividends is stable, sustainable increases, using Adjusted DOE as reference.
• The value of share buybacks will take into account the amount of total payout, and the level of EPS.

<Basic approach>Total payout ratio

Cash dividends

Share buybacks

Adjusted ROE
Around 8% in final fiscal year

Adjusted DOE
Around 3%

EPS growth[Net income / stockholders’ equity][Total dividends / stockholders’ equity][Net income per share](40% and above of profit available
for shareholder return)[Referenceindicators]

T&D Holdings INTEGRATED REPORT 201931

Try & Discover for Creation of Shared ValueFY2019-FY2021 T&D Insurance Group Medium-Term Management Plan

Try & Discover 2021 —Creation of Shared Value—
4. Promotion of Integrated Group Management

Promotion of Integrated Group Management to Steadily Implement Growth Strategies
In order to steadily implement the growth strategiesof the medium-term management plan, we will further
promote integrated Group management. As a first step,
we have established the strategic subsidiary, T&D United
Capital. We will proceed by consolidating Group management resources, such as personnel and funds.
In addition, we plan to further leverage synergies within
the Group, such as by mutually supplying products between Group companies, and through the sharing andproper allocation of Group management resources.
In terms of cultivating human resources and building
awareness, based on the new brand message of “Towards
a New Dimension of Insurance,” we will demonstrate theGroup’s comprehensive capabilities to create innovation
through our innovative and challenging Group culture. In
addition, we will further promote integrated Group social
activities, with the aim of creating shared value.

Taiyo Life

Daido Life

Pet & Family
Insurance

T&D
Financial Life

T&D Asset
Management

Bringing together ofmanagement resources(strategic subsidiary)• Integrated Group promotionof diversification of businessportfolio• Establish strategic subsidiary, andbring together Group resources

T&D
United Capital

Leveraging synergies
within the Group• Further promotion of mutual
supplying of products• Sharing and appropriate allocation of Group management
resources (personnel, funds,
know-how)• Bringing together of specialized personnel in strategic subsidiary, allocation of Group capital• Exchange of personnel between Group
companies, sharing of best practices• Cooperation with T&D AssetManagement in order to strengthen
asset management

32

T&D Holdings INTEGRATED REPORT 2019

Penetrating Group culture• New brand message“Towards a New Dimension of Insurance.”—> Integration of Try & Discover DNA into
the Group and using it to appeal externally• Integration of Group social
activities aimed at creation ofshared value•P romotion of initiatives based onGroup CSR Activity priority themes

Medium-Term Management Plan Targets

T&D Insurance Group‘s Medium-Term Management Plan targets (consolidated)
In fiscal 2021, which is the final year of the medium-term
management plan, we aim for ¥170.0 billion or more invalue of new business, and a fiscal 2018 level (¥73.0 billion) or more in net income, through steady growth in the
results of the three core life insurance companies.
The steady accumulation of policies in force and the
securing of stable investment income, which mainly comprises interest, dividends, and income from real estate
for rent, form the basics of the business management of
the Group, the core business of which is domestic life
insurance. In fiscal 2019, the first year of the medium-term
management plan, we forecast a decline to ¥64.0 billion

in net income, due to a cautious outlook arising from thecurrent economic and financial environment.
However, through various strategies, such as a strengthening of our core businesses and the diversification of
our business portfolio, we aim for net income of ¥100.0
billion during the next medium-term management plan.
In addition, we have set Group MCEV, which was a key
performance indicator of the previous medium-term management plan, at a medium- and long-term target levelof ¥4.0 trillion, based on a continued recognition of its
importance as an indicator of the corporate value of thelife insurance business.

T&D Insurance Group‘s Medium-Term Management Plan targets (consolidated)

Medium-Term
Management
Plan targets(Reference)
Medium- tolong-term
target levels

Economic
value

Value of new
business• FY2021: 170.0 billion yen and above

Financialaccounting

Net income• FY2021: FY2018 levels (73.0 billion yen) or higher

Economic
valueGroup MCEV

Financialaccounting

Net income[Core ROEV*1: 5% and above for three years]•	Next medium-term management plan: 4.0 trillion yen(As of end of March 2019: 2.6 trillion yen)

[ROEV*2: Stable and sustainable growth over 7.5% in the medium- to long-term]• Next medium-term management plan: 100.0 billion yen

Note: The ultimate forward rate (UFR) has been applied to both the ESR measurement model and the MCEV calculation, beginning with the medium-term management plan. The aim of this change
is to further increase the sophistication of our measurement models, so that they can assist in management decision-making over the medium- to long-term, taking into account discussions
regarding the international regulation of capital, and the comparability of disclosure.
The UFR has been applied to both medium-term management plan targets based on economic value and medium- and long-term target levels (value of new business, Group MCEV).
*1: (Embedded Value of new business + Expected existing business contribution from risk free rate) / Average of EV *2: Annual increase in EV (less capital movements) / Annual average of EV

T&D Holdings INTEGRATED REPORT 201933

Try & Discover for Creation of Shared Value

Special Feature
Chief Environmental and Social Strategist
Environmental Strategy Advisory Division
Mitsubishi UFJ Morgan Stanley Securities Co., Ltd.
Part-time Lecturer at Keio University Graduate School

Representative Director and President
T&D Holdings, Inc.

Mari Yoshitaka

Hirohisa Uehara

Creating Shared Valueby the T&D Insurance GroupWe invited an expert to exchange opinions on the initiatives of the T&D Insurance Groupon the theme of “creating shared value” in the Medium-Term Management Plan.

34

T&D Holdings INTEGRATED REPORT 2019

1. Changes in the roles of companies expected by society
Yoshitakaimprovement in corporate value in the future.

I have been involved with environmental finance-related

Ueharabusinesses for many years, and I received requests aroundWe were listed 15 years ago as an insurance holding

2014 or 2015 from institutional investors who wanted

company, a first for a life insurance company. The Group’s

to study topics related to the environment. My job has

corporate philosophy is “With our ‘Try & Discover’ mottochanged significantly since then. I remember being

for creating value, we aim to be a group that contrib-

surprised because I did not initially expect financial insti-

utes to all people and societies.” This philosophy does

tutions to turn their attention to environmental issues so

not seem outdated and is really well matched with ourquickly. I get the impression your company incorporated

current times. I do not think it will change in the future

the perspective of what is now called “ESG” in your busi-

either. Since I assumed the role of President in April ofness at a relatively early stage.

last year, we have carefully considered the new Medium-

UeharaTerm Management Plan while holding detailed talks overWe have a pioneering spirit in areas where others have yet

the past year. Something that I also realized when I wasto venture, for example, the Group was the first company

appointed President is that corporate philosophy is reallyin the life insurance industry to become listed. When I was

important. We often hold dialogues with shareholders

involved in asset management at Taiyo Life and managing

and investors on profits. Going back to our origins, weinsurance premiums entrusted by customers, I decided it

realize that having a relationship with customers over an

was necessary to incorporate ESG issues within the fidu-

extremely long period of time is the business model ofciary duty in the investment and lending decision-making

a life insurance company. For that reason, the mission ofprocess, and so I studied qualitative standards. Because

a life insurance company is to continue healthy growth

the PRI (Principles for Responsible Investment) provided

as a corporation. In light of the business characteristic of

us with a field to consider these issues, in 2007 we became

having to sustain business so we can make payments tothe first Japanese life insurance company to sign the PRI

customers without fail when they are in need, we renewed

to serve as qualitative standards for investment and lend-

our focus on this corporate philosophy and incorporated

ing that could be incorporated in asset management. The

it in our new Medium-Term Management Plan, thus mak-PRI have recently spread among institutional investors ining the creation of shared value as the theme. However,Japan as well at considerable speed.

this may not seem like something new for you because

Yoshitakacreating shared value (CSV*2) is something that has been

I think that evaluations of businesses based on theiraround a while from your perspective.

efforts to improve social issues through the core businessYoshitaka

are finally beginning to take root in Japan. While I think in

I do not think concepts like CSV have spread that muchmany cases Japanese companies were founded with anyet. CSR activities are just something conducted by en-

aspiration to resolve social issues, this type of information

vironment-related departments, and I do not think there

disclosure has been neglected because it is so obvious.

are many companies where it has really been instilled

I believe this is beginning to change. What Japaneseamong each and every employee as a part of the DNA

companies really need to do now is something that is onlyof the company. There are still many executives who arenatural: to go back to the origin of why they were found-primarily focused on how ESG initiatives will affect theed in the first place. You often say that the “the future isstock price, so I think it is a really good thing to again go

not an extension of the present,” and I think that such an

back to the origins.

era has really come now. When I look at materials includ-

Ueharaing your company’s CR Report*1, I feel that information

We have a long history of over 100 years with our three

is being communicated with a focus on the perspective

main subsidiaries: Taiyo Life, Daido Life, and T&D

of resolving social issues through the core business. I am

Financial Life*3. A company’s development and the history

personally really interested in seeing how this leads to anof growth is vertical change and horizontal continuation.

*1 Name changed to the “Sustainability Report” for reports issued from fiscal 2019. *2 Stands for “creating shared value,” a management strategy of using the strengths of a company to resolve
social issues, and in doing so, contributing to its sustainable growth. *3 Including the era of the predecessor, Tokyo Life.

T&D Holdings INTEGRATED REPORT 201935

Try & Discover for Creation of Shared Value

The horizontal continuation is the company history, andthings they can do, and they do not communicate much ofvertical changes are in the economic and capital en-a message on their resilience in response to these kinds ofvironments and the needs of customers at that time. I

vertical changes that you mentioned. I think these are thebelieve that conducting management while responding

types of message that are needed in society now.

to change leads to continuity. The driving force for this is

Ueharathe Group’s tangible and intangible corporate value andWhen I visit investors on IR visits, they often ask me about

its individuality, which is a part of this value. Furthermore,

how Japanese life insurance companies will survive andlooking at the companies that were able to survive thegrow as the population constantly decreases, due to de-financial crisis, I feel they were ones that society recog-

clining birthrates and an aging population. Indeed, while

nized as having existential value and that companies

the population will fall and the number of elderly people

without such value were weeded out. Considering this, I

will rise, this presents opportunities with the Group’s

think that the starting point may be being a company thatbusiness model. For example, managers of SMEs are theis required by society as a necessary presence.

main customers of Daido Life, and there may be various

Yoshitakabusiness opportunities for us if we face and help to re-

Although Japanese companies work with sincerity in thesolve current social issues with them, such as the lack ofvarious things they do, they only tend to disclose thebusiness successors when they come of age.

2. Efforts aimed at creating shared value
UeharaYoshitakaOver a decade ago, CSR mainly consisted of social-con-

I agree. For CSR, in many cases companies communicate

tribution and volunteer activities. While volunteer ac-

information to society at large about what a good com-

tivities are extremely important, there were not manypany they are, and as you mentioned, I think it is good to

discussions about how to achieve an affinity with the core

think about CSR in terms of business opportunities. Frombusiness from the perspective of a listed company. This

this viewpoint, I think the SDGs are a really good commu-

has changed recently, and I think the time has come for

nication tool. They have been truly incorporated in thecompanies to clearly indicate what they are aspiring to

new Medium-Term Management Plan.

and their approach to those aspirations.

UeharaWe are not able to cover all of the SDGs from the viewpoint of the characteristics of our business and ourmanagement strategy. At any rate, we have actively
incorporated and discussed those that are closely related
to needs that broadly involve the life insurance business,
which is our core business. We have also been able todemonstrate the linkage with SDGs in the new MediumTerm Management Plan.
Yoshitaka
The other day, more than 80 people participated in an
SDGs seminar for institutional investors that we held. I
think it was when the Government Pension Investment
Fund (GPIF) signed the PRI in 2015 that we first got involved with ESG in Japan. Although it seems that ESG
investors are now evaluating companies on the resolutionof SDGs issues, there are companies that have not really36

T&D Holdings INTEGRATED REPORT 2019

addressed the SDGs up until now. They often consult withme because they are not sure where they should start andwhat they should do. I believe that SDGs will become atool for communication with all stakeholders going forward, and I also believe that how information on SDGs iscommunicated will differ depending on who is being communicated to, for example, whether the person is an investor or a student. For instance, the other day when I was
talking with a student I teach at the university, the student
told me about how excited they were when a company
told them that “this company will grow through the SDGs”
during student job-hunting activities. For this reason, SDGs
could be effective from the perspective of appealing tohuman resources newly entering the job market.
Ueharasophisticated products and services to customers.

I think that SDGs are an extremely good tool for facilitat-

Taiyo Life became the first company in the industry to

ing a back-and-forth communication with stakeholders.

release dementia insurance three years ago*4. It has been

However, it should be done in a manner so that it does

said that one in seven people age 65 and above are at

not become a mere formality.

risk for dementia. Over 500,000 people are currently

Yoshitaka

enrolled in dementia insurance, and it has proven to be

I have the same view. While the SDGs run to 2030, yourvery popular. If you enroll in this insurance, you can use

company will continue doing business 30 and 50 years

your smartphone to automatically measure the number

from now. The other day, I told some investors that whatof steps you take and walking speed, and share this data

they have to evaluate goes beyond SDGs projects.

with registered family members. In this manner, insurance

Ueharaproducts are making a shift to protecting health and

The life insurance business is a field that involves people’s

preventing disease through means, such as the provision

lives. There are issues that have to be addressed nonstop,of tools for health management and prevention together

such as health and supporting seniors. In light of this, wewith services.

are working to contribute to SDGs that match the busi-

Yoshitaka

ness model and characteristics of each Group company,

That is a great idea. Because everyone is focused as awhile linking together the relatively wide area of SDGs toprofessional, you know a lot about those types of needs.

our actual work.

I have held a lot of seminars on ESGs and SDGs for SMEs

Yoshitaka

recently. What kind of initiatives for SMEs is your company

The life insurance industry itself is related to SDGs, andinvolved with?

I think the relation makes them very effective tools. For

Ueharaexample, “Himawari Dementia Prevention Insurance,”

It has been said that if employees including managers

released by Taiyo Life, can help with prevention of theare healthy as a result of health and productivity manage-

condition if people know about it from a relatively young

ment, that company will be more productive and moreage. I would like you to continue communicating new

profitable as well. However, things are not so easy forideas like this in the future.

SMEs with limited numbers of employees. Their healthUeharaefforts may only consist of a health examination once a

One characteristic of the Group is that it has three ex-

year. Daido Life is offering a comprehensive program*5

tremely independent and specialized life insurance com-that includes health-examination record management,

panies as subsidiaries, which have completely different

encouraging employees to get a health examination, andmarkets, products, and channels. Our business model

health-risk analysis in an effort to ensure that employees

is to deploy management resources to the segment ofstay healthy.

the market that is being focused on, and provide more

In addition, in response to the issue of business*4 “Himawari Dementia Treatment Insurance” was launched in March 2016. It is the first insurance product covering dementia in the life insurance industry as a relaxed-underwriting type product(based on research by Taiyo Life).
*5 Daido Life’s “KENCO SUPPORT PROGRAM”

T&D Holdings INTEGRATED REPORT 201937

Try & Discover for Creation of Shared Value38

succession, we are working to protect SMEs throughsomething I have thought of since becoming President ismeans that also go beyond insurance including busi-

that management with a social focus by companies leads

ness-succession support in cooperation with external in-to sustainable growth. I believe we are ultimately able tostitutions. We approach marketing, product development,

produce profits and major benefits for shareholders by

and service from the perspective of the customers, based

providing products and services that really meet needson our knowledge and experience up until now and thewhile valuing our employees, business partners, and cus-needs of the customers, so that we can meet their needs

tomers. From this perspective, it is extremely important for

more quickly than other companies.

employees to feel happy and healthy in their work. For thisYoshitakareason, Group companies are pursuing substantial mea-

“Quickly” is an important point. Japanese companies aresures rather than mere formalities in personnel systems,

not really that good at being quick.

work style reforms, and the active participation of women.

UeharaFor example, the retirement age was extended at Taiyo

Social issues are also customer needs. As a life insuranceLife last year in April, and it is now possible to work up

company with a business model specialized on suchto age 70. I think this is a particularly significant point inissues, we work to design specific products and services

terms of improving productivity as the working popula-and offer them as quickly as possible. Going forward, wetion decreases.

can expand our share in the Japanese life insurance in-

Yoshitaka

dustry and achieve sufficient growth in Japan. We also be-

There has been a lot of data from overseas that demon-

lieve it is necessary to grow while co-existing with society.

strates a correlation between companies that are actively

Yoshitakapromoting the participation of women and stock priceIf there are no challenges, then no services will be born toperformance. Indices that incorporate this have also been

respond to them. While it would be ideal for all challeng-

started. I think it is great that this is not only a priority

es to disappear, that is not very realistic. You mentioned

theme for your company’s CSR, but also a human resourc-

earlier that overseas investors sometimes ask you about

es initiative. When speaking of ESG, G is fundamental anddeclining birthrates and the aging population in Japan.

while E and S are not necessarily parallel, the importance

Related to this, there has been an increase in foreign work-of the elements of ESG differs by industry. I think that yourers. Has the company done anything in response to this?

company is really working to address the themes that are

Ueharaimportant for your company. I do not think it will be too

Daido Life has started policy procedures enabling for-far in the future when various indices overseas evaluate

eign employees to enroll. It has been difficult until now

the relationship between performance and ESG. I think it

for foreign workers and other Japan residents who areis very important how ESG initiatives are communicated,not capable of speaking Japanese to enroll in insurance

and this is something that applies to all companies.

in Japan. However, Daido Life made it possible to enroll

Ueharausing eight languages from June of this year and it is

We do not make things that are clearly visible, so weproviding services that make people feel more reassured

really have to be engaged in development and training

about working in Japan. I think it is important to keep on

to improve the skills of our employees. How the Groupmaking small steps like these to support the vitality andcommunicates with society is also important.

management of SMEs that are fundamental for Japan.

Yoshitaka

Yoshitaka

What points are being focused on in the new Medium-

I agree. I think the “S” part of ESG, particularly diversity,

Term Management Plan?

will be a major point for organizations so that Japanese

Ueharacompanies can flexibly respond to dramatic changes

We intend to grow our business domains and businessincluding declining birthrates and the aging population

model by working on six business themes aimed at cre-going forward. What kind of initiatives are there for inter-ating shared value. We will diversify our business port-

nal diversity while supporting the diversity of customers?

folio because it might not be possible to respond to the

Ueharachallenges faced through our existing businesses alone.

While this may diverge a bit from the topic of diversity,

However, this diversification will only include businesses

T&D Holdings INTEGRATED REPORT 2019that have some affinity to life insurance-related busi-

business themes and CSR priority themes. I talked about

ness in Japan for which collaboration is possible. For

the Medium-Term Management Plan in a conceptual

businesses required as life insurance-related businesses

manner at the beginning, and we have already imple-

in Japan in the future other than those covered by ourmented concrete measures to a degree. By articulating

three life insurance companies, active investments will bethese measures internally and externally, I would like tomade mainly by the holding company. We will work to

make a strong appeal for the direction and approach of

create shared value while mutually connecting these six

the Group.

3. “Creating shared value” in the future
Yoshitaka

I hope your company takes the lead in demonstrating

Investors in the U.S. are trying to use ESG as a tool for

corporate growth through the SDGs.

creating a new market, and they have made signifi-

Ueharacant progress in stock price research related to this.

According to one paper, people who feel happy are

Meanwhile, there are many people in Europe who areabout 30% more productive at work than those who arefocused on sustainability. Furthermore, because there arenot, and they are also three times as creative. The sum

few disasters in Europe, many people have felt a sense ofof the “psychological capital” of workers can determine

crisis toward climate change recently and there is begin-

a company’s rise and fall. People feel satisfaction andning to be a change in sentiment. I think that ESGs will

fulfillment by contributing and being necessary to soci-become increasingly important in Japan in the future. I

ety. If you make employees happy, it makes the company

think there should be more information disclosure be-happy, and this makes society happy. This happiness hascause if there is nothing to compare such as the status ofa very positive effect on the economic environment andefforts, it is difficult for it to be reflected in the stock price.

leads to sustainable growth. I intend to continue working

Ueharahard at “creating shared value” in the future.

I think it will be important in the future whether companies that are making society better can demonstratestrong leadership. According to one study, when asked
about the meaning for the “existence of companies,”
more people from the millennial generation responded“to make society better” than “to produce profits.” I thinkthat ideas about what companies should be doing are
beginning to change.
From the perspective of making society better, I thinkthat disclosing information on efforts to the market will
become more and more important for understanding andverifying the state of corporate management from theviewpoint of ESG and improving transparency. Although
our Group’s business may not be very flashy, I think that
we are a serious and honest company in this aspect. I
would like to make a strong appeal for these qualities.
YoshitakaI think that is a good idea. I hope you are a company forthe next generation that achieves the creation of sharedvalue. Young people are losing their sense of excitement.

T&D Holdings INTEGRATED REPORT 201939

Try & Discover for Creation of Shared ValueBusiness Overview

P.42

Become an insurance company that supports secure andfulfilling lives for even more customers, by proactively
providing to households the best products and services
for the Centenarian Age.
Taiyo Life’s in-house sales representatives make individual home visits, listen to customers’ needs and provide
the necessary coverage.
By developing products that preempt theCentenarian Age and enhancing our sales capabilities
through the utilization of IT, we will help more customers to live longer, healthier lives.
MarketHouseholds

Sales channel

Products

In-house sales
representatives

Comprehensive
coverage including
death benefit andmedical/nursing
care products

P.46

Bringing the greatest peace of mind and utmost satisfaction
to small and medium enterprise (SME) customers
Daido Life provides rational coverage responding to
the various risks and necessary funding preparations ofeach enterprise in order to protect enterprises from a
range of risks and contribute to the stability and development of their business.
The company is building a solid sales structure
through business tie-ups with SME-related organizations and CPTA organizations, etc.
MarketSmall andmediumenterprises(SMEs)

40

T&D Holdings INTEGRATED REPORT 2019

Sales channel

Products

In-house sales
representatives,
Agents(tax accountants,
etc.)

Term
life insurance,
disability
benefit, etc.

P.50

Offering distinctive products and services whichmeet the diversifying needs of customers
T&D Financial Life provides savings-type products
differentiated by types of benefits, and protection-type
products with competitive pricing and benefits throughindependent insurance agents (financial institutions
and insurance shops), which handle products from anumber of insurers.
MarketSales channel

Products

Independent
insurance agent
marketIndependent
insurance agents(financial
institutions andinsurance shops)

Savings-type
products(foreign-currency
linked type, etc.)
Protection-type
products (Income
protection
insurance, etc.)

P.54

Aiming to stay one step ahead on all fronts as an
asset management company, and to create further
value from that point
T&D Asset Management conducts investment trust
business by offering investment trusts through financial institutions, and investment advisory business bymanaging the funds of pension funds and institutional
investors.
Investment
trust business

Provide a wide array of prime investment
products mainly to a broad range of investors
through sales companies (securities firms, etc.)

Investment
advisorybusiness

Provide adequate investment solutions todomestic and overseas pension funds andinstitutional investors

P.55

Pet & Family Insurance
Aiming to serve the needs of all pet owners regarding veterinary care expenses
Pet & Family Insurance provides pet insurance to coverveterinary care expenses mainly through pet shops,
where many prospective pet owners meet their pets forthe first time.
MarketPets market

Sales channel

Products

Agents(pet shops, etc.)

Compensation
insurance for petveterinary careexpenses

T&D Holdings INTEGRATED REPORT 201941

Try & Discover for Creation of Shared Value

Taiyo Life Insurance Company“Healthy, Long Life, Taiyo Life”— Becoming a life insurance company
that supports secure and fulfilling lives —Outlook for Sales Performance Indicators Fiscal 2019
Protection-type annualized
premiums of new policies*

17.0 billion¥

Protection-type annualized
premiums of total policies*

155.0 billion¥*A performance indicator of Taiyo Life which is the sum of protection portion of theannualized premiums mainly excluding savings-type products.

Representative
Director and President

Business Model

Strengths of Taiyo Life

Taiyo Life’s core business is sales of life insurance in thehousehold market. In-house sales representatives visit
homes directly and propose the appropriate coverage foreach household. The mainstay product, Hoken Kumikyoku
Best, allows customers to freely combine the coverage
they need. This enables the company to propose coverage which meets the needs of each household.
The company has thus established a business model ofoffering comprehensive coverage to households by taking advantage of its strengths in the household market.

Taiyo Life’s strength is the capability of its sales representatives to sell protection-type products. It has continued
to grow through “Combination Activity” where sales representatives form pairs on visit to individual households
and developing new customers.
The company leverages its strong ties to households
to propose protection-type products amid the recently
growing demand for coverage for medical care, nursing
care, pensions, disabilities, and other areas in response tosuch trends as a rapidly aging population and a spread of
nuclear families.
The company also sells products that preempt the changes of the times, such as Himawari Dementia Prevention
Insurance, maintaining its pre-eminence in the market byoffering coverage that meets its customers’ needs.

Strengths

Taiyo Life

• Solid foundation in the household market built by the continual
development of new customers through “Combination Activity” where
sales representatives form pairs on visit to individual households

Focused on metropolitan areas/
major regional cities■

In-house sales representatives

Direct home visits

Households

Flexibly designed products
matched to the needs ofcustomers such as for death
benefit, medical and nursing
care protection■

Make coverage proposals
according to the life stageof customers based on
customer information■

Sales representatives workin pairs to provide
meticulous service

Enclose households starting with housewives
Solid customer base: Number of policies
in force is about 8 million

42

Naoki Soejima

T&D Holdings INTEGRATED REPORT 2019

• Offering products that preempt the changes of the times and meetcustomers’ needs• Senior-friendly customer service

Opportunities• Growth of senior population• Growing needs to make self-provision for pension, medical care, andnursing care
• Extension of health span and growing awareness of health promotion
among seniors

Review of the Previous Medium-Term Management Plan (FY2016-FY2018)
Under the previous Medium-Term Management Plan,
Taiyo Life worked to build the top brand in the seniormarket, and to expand business results through triune
sales promotion consisting of “improving services,”“enhancing products,” and “strengthening sales capabilities.” These efforts were based on a vision of “aiming to
be a life insurance company that offers households thebest products and services that preempt the changes of
the times.”
Taiyo Life launched Himawari Dementia Treatment
Insurance in March 2016, as a product that enables customers to live their senior years with peace of mind, andlaunched Himawari Dementia Prevention Insurance in
October 2018, which combines preventative services withcoverage. Taiyo Life also began the Kaketsuke-Tai Service,in which office workers with specialized knowledge personally visit customers’ homes and provide customized

support to ensure that benefits are paid swiftly andsmoothly. Currently, the company is working to enhance
the payment of insurance benefits by developing mobile
terminals, so that in-house sales representatives can perform the same benefit procedures as office workers.
In fiscal 2018, the final year of the previous medium-term
management plan, protection-type annualized premiumsof new policies increased by 5.3% year-on-year to ¥17.2
billion. Among these, Third Sector annualized premiumsof new policies increased by 22.9% year-on-year, due tostrong sales of relaxed-underwriting type products, such
as Himawari Dementia Prevention Insurance. In addition,
MCEV increased by ¥31.1 billion from the previous fiscal
year-end to ¥856.2 billion, mainly due to the accumulationof value of new business. Value of new business increased
year-on-year to ¥55.3 billion due to solid sales results.

Protection-type Annualized Premiums of New Policies

Third Sector Annualized Premiums of New Policies(¥ billions)20(¥ billions)
20

15

14.8

15.5

17.0

16.3

17.2

16.3

15

10

10

5

5

0

13.4

13.3

2016

2017

11.5
9.4

0
2014

2015

2016

2017

2014

2018

2015

(Fiscal Year)

MCEV(¥ billions)
900

2018
(Fiscal Year)

Value of New Business
868.6
725.7

777.5

825.0

856.2

(¥ billions)
60

55.3
44.2

40

600

40.9

32.5
300

20

0

18.1

0
Mar. 31, 2015

Mar. 31, 2016

Mar. 31, 2017

Mar. 31, 2018

Mar. 31, 2019

2014

2015

2016

2017

2018
(Fiscal Year)T&D Holdings INTEGRATED REPORT 201943

Try & Discover for Creation of Shared Value

Taiyo Life’s Medium-Term Management Plan (FY2019-FY2021)
Vision of the Medium-Term Management Plan

Become an insurance company that supports secure and fulfilling lives for even more customers,by proactively providing to households the best products and services for the Centenarian Age.

Going forward, as the total population of Japan declines,
the population in the over-65 senior segment will continue to increase, and in 10 years will account for 30% of thetotal population. It is said that one in five of over-65s will
have dementia by 2025. In addition, with the highlightingof the financial difficulties of the social security system(public pension, medical care, and nursing care), it is expected that preparations towards “longevity risk” will be
required, such as in retirement and failing health, throughfurther self-help efforts. Against such a social backdrop,
it is expected that the senior segment will expand in thehousehold market, which is the main market of Taiyo Life.
In anticipation of such changes in the environment, in its
medium-term management plan, the company will makefurther efforts to build the top brand in the senior market,
based on its vision to “Become an insurance company

that supports secure and fulfilling lives for even more customers, by proactively providing to households the bestproducts and services for the Centenarian Age.”The company has established an environment in which it
can focus on creating new value through a significant reduction in office work, due to previous business reforms,
and an enhancement of operating efficiency via the Taiyo
Life Concierge, a new mobile terminal introduced inAugust 2018. Through the medium-term management
plan, the company will strive towards the realization of ahealthy society where people can enjoy their long lives,
under its catchphrase of “Healthy, Long Life, Taiyo Life.”
As a life insurance company that strives to stay close to
the lives of its customers, the company will realize support
for a healthy and long life for even more customers.

In-house sales
representatives➤ Product evolution

・Provide products for the Centenarian
Age ahead of the curve➤ Strengthen sales capabilities

・Strengthen sales capabilities throughuse of Concierge
・Expand the in-house sales representative organization by reinforcing the
education system

AgentsGroup insurance➤ Providing survival benefits
ahead of the times➤ Higher sales efficiency at agents➤ Utilization of information
technology (paperless,Internet, etc.)➤ Enhanced education andtraining for agents recruited➤ Proposing new benefit systems
based on the Centenarian
Age and work-style reforms➤ Open up new/growth markets➤ Deep cultivation of existing
policyholders and close
relationships

VisionAchieving
goals

Increase incustomernumbers

Services supporting sales (Kaketsuke-Tai Service, integrated products and services, etc.)
Increase inpremium
incomeAsset Management Strategy
expand investment income through more sophisticated asset management.
Expand credit investment/alternative investment, control hedge costs and diversify capital resources, strengthen management system

Organization andhuman resource strategy
Enhancing HR development, restructuring its branch andhead office organization

44

T&D Holdings INTEGRATED REPORT 2019

Increases incore profit
Management platform strategy
Capital, IT, business, and governance structures

Increase Corporate Value

Sales Strategy

Helping more customers live longer, healthier lives

Overall Strategy of Medium-Term Management Plan

Sales Strategy
Helping more customers live longer, healthier lives
In the medium-term management plan, in addition to having in-house sales representatives visit households in pairs,
which is one of Taiyo Life’s strengths, the company will strengthen the sales structure for its agents and corporate insurance, and provide new products and services that leverage their characteristics. During the medium-term management
plan, the company will continue to develop new growth markets that capture the needs of society, while working to deliver peace of mind to even more customers.
In-house Sales Representatives
Products that preempt the Centenarian Age
Taiyo Life has developed products that preempt thechanges of the times. While for many years, the company
focused on savings-type products targeting the householdmarket, it has recently shifted to protection-type products.
Following this shift, in light of the fact that customers in
the household market will also age due to the progressof the aging society, it launched Himawari Dementia
Treatment Insurance in March 2016 to capture the needsof seniors. In October 2018, the company launched
Himawari Dementia Prevention Insurance, and has developed its products, as well as the provision of prevention
insurance, in addition to treatment of diseases.
As we head into the Centenarian Age, providing prevention of nursing care and diseases is becoming extremely
important, together with the provision of coverage fordementia, in order to support the healthy longevity of its
customers. Taiyo Life is working to enhance survival benefits, such as medical and nursing care benefits, as well
as benefits and services to prevent dementia and otherdiseases.
Strengthening sales by utilizing IT
In 2012, Taiyo Life introduced the Insurance Policy
Support System. This system realized paperless policy
applications, enabling insurance policy applications to becompleted by customers who have signed on to mobile
terminals carried by in-house sales representatives. In
addition, in August 2018, the company introduced the
Taiyo Life Concierge (hereinafter, the “Concierge”), whichis equipped with new functions that enable on-the-spot
responses to a variety of customer requests, realizing
enhanced operating efficiency as well as the evolution of
its customer service.
In the medium-term management plan, the company will work toward the further development of various
functions of the Concierge, such as by advancing its sales
support functions, and will also aim to strengthen thecompany’s sales capabilities from an IT perspective.

AgentsProvision of simple survival benefits
In the agent channel, Taiyo Life has enhanced sales efficiency while responding to customer needs, by providing
simple and easy-to-understand products at the reception desks of financial institutions. In the medium-term
management plan, the company will continue to provide products that match the market environment andcharacteristics of financial institutions as agents, such asprotection-type products for dementia and other diseases
and wealth-accumulation products, while responding tocustomer needs. In addition, the company will increase
sales volumes by expanding its agents and enhancing
sales efficiency.
Group Insurance
Provision of new welfare systems
With the raising of the retirement age and increases in
the number of non-regular employees, the environment
surrounding the corporate insurance market is changing.
Taiyo Life aims to develop untapped markets and industries that are expected to grow in the future, throughthe provision of new welfare systems that are based on
the Centenarian Age and work style reforms. In addition,
Taiyo Life will enhance convenience for existing customers, simplifying enrollment processes through the utilization of IT.

Utilizing the Taiyo Life Concierge

T&D Holdings INTEGRATED REPORT 201945

Try & Discover for Creation of Shared Value

Daido Life Insurance Company
Leading a New Era of Corporate Coverage
Outlook for Sales Performance Indicators Fiscal 2019
Policy amount in force*

New policy amount*¥¥

46,910.0 billion

3,760.0 billion* Includes the individual insurance and individual annuities, the insurance amounts of J-type
α product (non-participating critical illness insurance), T-type α product (non-participating
disability protection insurance) and the nursing-care insurance amounts of Kaigo Relief α(non-participating whole life nursing-care insurance) and so forth.

Minoru Kudo

Representative
Director and President

Business Model

Strengths of Daido Life

Daido Life is a life insurance company that specializes in
the SME market, with contracts with some 370,000 corporate clients. The company has focused on developing andselling term life insurance since the 1970s, considering
it to be the optimal product for companies as it secures
greater coverage at a lower premium.
Specifically, the company, which ties up with SMErelated organizations and CPTA (Certified Public Tax
Accountant) organizations, positions the offering of its
products and services designed according to the organization’s characteristics (partner-specific products) as itscore business. The company has established a uniquebusiness model of offering these products and services asa benefit and welfare system for the SMEs, through twochannels of in-house sales representatives and agents.

Daido Life’s strengths are the superiority of its businessmodel, which has numerous points of contact with SMEs
and their owners, as well as its full lineup of corporate
products, and its management resources suited to market
development, including the know-how to promote protection-type products based on the standard coverage*
accumulated over many years.
Additionally, the insurance needs not only of corporations but their owners as individuals are growing andbecoming more diverse due to such factors as aging
population, and the company will solidify its position as aleading company for the life insurance business targeting
the SME market by steadily offering a “proposal of total
protection integrating both corporations and individuals.”National
Federation of
Corporate Taxpayers
Associations
Tax Payment
Associations

Main welfare systems
outsourced to Daido LifeTKC National
Federation

Daido
Life

CPTA
Cooperative
Associations

Keieisha Ogata Sogo
Hosho Seido, of NFCTA

Guide to welfare systems
In-house sales representatives(approx. 3,700)
Agents(approx. 14,000)

Chambers ofCommerce andIndustry and Similar
Organizations

Enterprises(customers)

Establishment ofrisk management

Daido Life has contracts
with approximately

370,000 corporate clients**As of March 31, 2019

Strengths• Superiority of business model

Keieisha Ogata Sogo
Hosho Seido, of TPA• Accumulation of management resources suited to developing thecorporate market

TKC Kigyo Boei Seidoof the TKC National
Federation• High-quality customer-support framework• Comparatively sound finances

The Comprehensive Business
Security Plan of CPTA
Cooperative Associations

Opportunities*Standard coverage
If an SME owner or officer becomes unable to work due to death or critical illness, someamount of money is expected to be required by the enterprise and family. Daido Life calls
such amount “standard coverage” and calculates it in terms of both the amount needed
to protect the enterprise (business defense reserve) and the amount needed to protect thefamily (corporate officer retirement benefit reserve).

46

T&D Holdings INTEGRATED REPORT 2019

• Growing and increasingly diverse customer needs- Growing need for disability benefit due to aging population andother factors- Growing need for business succession and inheritance measuresdue to tax reforms and other factors• Increasing awareness of health promotion• Progress in digital technologies enabling new operational innovations

Review of the Previous Medium-Term Management Plan (FY2016-FY2018)
Under the previous medium-term management plan,
Daido Life aimed to steadily and sustainably increase its
corporate value. To this end, it evolved its core businessby enhancing its disability benefit field in the corporate
market (“further penetrating core markets”), and developed the SME owner and individual business ownermarket (“creating and expanding new markets”). In
addition, it also improved customer service, productivity,and efficiency through operational innovations in its sales
activities and administration.
In fiscal 2018, the final year of the previous medium-term
management plan, there were major changes in both theindustry and the regulatory environment. These included
a revision of the standard mortality table (April 2018), as
well as considerations (February 2019) regarding revisions
to the tax treatment of term life insurance in corporate
policies (see Topics below).
In terms of the sales results for fiscal 2018, the newpolicy amount was ¥8,474.8 billion (162.0% compared tothe previous fiscal year) and the policy amount in force

was ¥47,146.0 billion (110.1% compared to the previous
fiscal year-end). This was mainly due to favorable sales ofrenewal-type individual term life insurance (R-type product) and income guarantee insurance (Shunyu Relief ), therates of which were lower due to premium rate revisions
accompanying the revision of the standard mortality
table, as well as increases in Kaigo Teiki Hoken(nursing-care term life insurance) launched in October
2017. In response to the tax review policy, although Daido
Life suspended sales of term life insurance with surrender
value from February 2019, the impact on the sales results
for the full year was not significant.
MCEV decreased by ¥55.4 billion from the previous fiscal
year-end to ¥1,417.7 billion, due to a decline in domestic
interest rates. Value of new business was ¥84.8 billion, on
par with the previous year. This reflects the increase in
new policies that offset a fall in profitability resulting frompremium rate revisions, and negative factors, especiallythe decline in interest rates.

New Policy Amount

Policy Amount in Force(¥ billions)
9,000(¥ billions)
50,000

New policy amount
Share of disability benefit products and nursing-careinsurance products*

8,474.8

Policy amount in force
Share of disability benefit products and nursing-careinsurance products*
42,803.5
40,992.2
39,205.9
38,156.7

47,146.0

6,000
5,231.4

5,121.1

5,299.5

4,315.5

4,063.8

25,0003,000
10,0002,647.6
0

657.0
2014

2015

10,387.9

1,023.8

827.0
2016

0
2017

* Disability benefit products are the sum of J-type product and T-type product; nursing-care insurance products are the sum of Shunyu Relief, Kaigo
Relief, and Kaigo Teiki Hoken.

2018(Fiscal Year)

MCEV

1,764.3
Mar. 31, 2015

3,288.8

2,455.9

Mar. 31, 2016

Mar. 31, 2017

5,652.9

Mar. 31, 2018

Mar. 31, 2019

* Disability benefit products are the sum of J-type product and T-type product; nursing-careinsurance products are the sum of Shunyu Relief, Kaigo Relief, and Kaigo Teiki Hoken.

Value of New Business(¥ billions)
1,500

1,417.4

1,306.7

1,473.2

1,417.7

84.2

84.8

2017

2018

74.3
1,078.0

1,000(¥ billions)
90

60

500

58.1

34.6

30

0

0
Mar. 31, 2015

Mar. 31, 2016

Mar. 31, 2017

Mar. 31, 2018

Mar. 31, 2019

2014

2015

2016

(Fiscal Year)

Topics

Revisions to the tax treatment of term life insurance in corporate policies

In June 2019, the National Tax Agency partially revised the “Establishment of the Fundamental Directive of Corporation Income
Tax” (directive on interpretation of laws). Accordingly, the tax treatment regarding insurance payments of term life insurance has
been changed, and a new tax treatment is applied to policies with a policy date on or after July 8, 2019.
Daido Life suspended sales of some products from February 2019, when the review policy was presented by the National Tax
Agency. From July 11, the company began sales of the new L-type α, J-type α, and T-type α products, which are able to respond to
the diverse needs of customers under the new tax treatments.
T&D Holdings INTEGRATED REPORT 201947

Try & Discover for Creation of Shared Value

Daido Life’s Medium-Term Management Plan (FY2019-FY2021)
Basic Policy of Medium-Term Management Plan

By viewing environmental changes as a growth opportunity, and taking up the challenge of structural transformation that transcends current frameworks in various business domains, we will refine ourapproach of “providing a full-range of protection integrating both corporations and individuals” tobecome an insurance company that leads the next era of corporate coverage.
Daido Life’s medium-term management plan, “Go Beyond
Daido 2021” is a three-year plan to establish an unshakable
presence (market share) in the SME market, under the new
tax treatments.
As a result of the large-scale entry of major life insurancecompanies into the SME market in recent years, and thesubsequent review of the tax treatment for term life insurance, the sales and competition environment of Daido Life’score market has changed dramatically. In addition, the number of SMEs is decreasing along with the decrease in theworking-age population. In order to expand contact withsuch SMEs, there is a growing need for the integrated reform of products, services, and channels, as well as increases in production efficiency through the utilization of digitaltechnologies. Meanwhile, with increasing interest in disease

prevention and health promotion, the role to be played by
Daido Life is expanding further, such as a diversification ofmanagement issues for SMEs, including labor shortages.
Based on the above, Daido Life will further solidify thesustainability of its core business through a structural transformation that transcends current frameworks in various
business domains, including sales, insurance underwriting,and office work, while strengthening its core strategy of“providing a full-range of protection integrating both corporations and individuals.”
In addition, through co-creation with various partners, thecompany will provide products and services that respondto the social issues faced by SMEs of the Centenarian Ageand their owners, and contribute to the permanent development of SMEs.

Overview of the Medium-Term Management Plan

GrowthStrategy
Structuraltransformationand supporting
innovations

Innovation in products,
services, and underwriting

Innovation in sales channels

Fundamental
reform inhead office work

Innovation in its
customer-support
framework

Fundamental
reform inbranch office work

Bold shift of personnel into growth areas by enhancing
the productivity of office organization

Open innovation and digital innovation

Management
Platform

Development of human resources andcultivating a challenge culture

Implementation of health and productivity
management

Sophistication and diversification ofasset management

Promotion of ERM management

Integrated Group governance

Formation of the corporate brandCreating shared value with society by contributing
to achievement of the SDGs

48

T&D Holdings INTEGRATED REPORT 2019

Increasing the satisfaction of all stakeholders

Strengthening its ability to deliver a full-range of protection

Leading a new era of corporate coverage

Market expansion

Sales Strategy
With further penetration of the disability benefit field and development of the SME owner and individual business ownermarket as its pillars for growth, the company will refine its approach of providing a full-range of protection integrating
both corporations and individuals, and lead a new era of corporate coverage.
Innovation in Products and Services
In order to respond quickly to the diverse needs of its
SME customers under the new tax treatments, in July
2019, Daido Life, as a leading company in the SME market, launched the new L-type α, J-type α, and T-type α
products. These are industry-first insurance products thatenable the made-to-order tailoring of insurance amounts,
insurance periods, and the balance between premium andsurrender value. Going forward, the company will further
develop its main term life insurance, through the development of health-promoting insurance that supports the
Health and Productivity Management of SMEs. In addition,
the company will work to develop a multi-line model for its
product portfolio, by strengthening responses to disability
benefit needs and enhancing the lineup of products forindividuals, such as nursing care benefits.
In addition, the company will further enhance its ancillary services that support the resolution of the social
issues faced by SMEs. As part of these efforts, from April
2019, the company started providing, free-of-charge forpolicyholders who fulfill certain requirements, the new
Safety Confirmation System, which enables confirmations of employee safety when natural disasters such aslarge earthquakes occur, as well as the Corporate Value
Calculation Service, which can be used as judgment

materials for business management, such as in businesssuccession and M&As.
Going forward, the company will develop services that provide new value through “insurance + extras,” with a focus on
health care and nursing care, management issue support,
and senior and affluent segments, and will push forward with
the integrated promotion of products and services.
Transformation and Innovation in Sales Channels
In addition to strengthening the sales system of existing
channels of in-house sales representatives and agents,
going forward, the company will expand sales channels
that allow for the implementation of high-quality consulting services, such as the establishment of new collaborative schemes that combine the strengths of each channel,
as well as the development of new channels such as
banks and financial institution agents.
Expansion of Markets
By strengthening its capabilities to deliver a full-range ofprotection through the above efforts, the company will
aim to steadily expand its markets, through penetration of
its core markets by further penetrating the disability benefit field and developing the SME owner and individual
business owner market, and through the development of
new markets by strengthening responses to the needs ofthe senior segment.

✔ Strengthening product development that preempts coming eras andneeds (disability benefits and health-promoting insurance for corporations)✔ Enhancing a product lineup that utilizes Group synergies✔ Enhancing management and health support as well as services for thesenior segment✔ Promotions that integrate products and services

Sales Channels

Evolution of the “capability”
to deliver to customers✔ Fundamental organizational reform that allows in-house sales
representatives to play an active and long role, with peace of mind
✔ Establishment of collaborative schemes that combine the strengths of
in-house sales representatives and tax accountant agents✔ Establishment of new financial institution channels through collaborations
with existing channels (in-house sales representatives and tax accountant agents)✔ Transformation of the quality of sales activities through the utilization ofdigital technologies

Markets

Expansion of customers
to protect
Further penetration of thedisability benefit field

Developing the market for
SME owners and individual
business owners
Development of new markets•Senior and affluent segments(inheritance and businesssuccession)•Health promotion segment•Corporate employee market

Expansion of business results(policy amount in force and Embedded Value)

Enhancement of “value”
delivered to customers

Sustainable development by “strengthening our ability
to protect SMEs”

Products andServices

Strengthening its ability to deliver a full-range ofprotection through the integrated reform of
product, service, and sales channels

Overview of Sales Strategy

T&D Holdings INTEGRATED REPORT 201949

Try & Discover for Creation of Shared Value

T&D Financial Life Insurance Company
Aim for sustainable growth by capturing
increasingly diverse customer needs throughleveraging our flexibility in product development.
Outlook for Sales Performance Indicators Fiscal 2019
Annualized premiums of
new policies*

Annualized premiums of
total policies*¥¥

22.0 billion

Masafumi Itasaka

130.0 billion* Sales performance indicators changed to annualized premiums from policy amount, starting fiscal 2019.

Business Model

Strengths of T&D Financial Life

T&D Financial Life specializes in providing insurance
products through independent insurance agents including financial institutions and insurance shops, whichhandle products from multiple insurers.
The company is promoting the further expansion of agent
networks, the speedy development of products differentiated by type of benefit and added value, and cost efficiencies, in order to enhance its presence in life insurance sales
through the independent insurance agent channel.

Against a backdrop of a declining birthrate, rapidly aging
population, and increase in the number of single-personhouseholds, senior customers have growing needs forpost-retirement asset formation and medical benefits.
Needs among customers who are working and/or raisingchildren are rising for death and disability benefits.
T&D Financial Life focuses on the independent insurance agent market. This business is expanding as insurance sales increase at banks, which want to secure profits
due to prolonged low interest rates. Opportunities arealso growing for insurance shops to utilize younger demographics. The company will expand its sales network inthis expanding market and will aim for sustainable growthby offering competitive products that take advantage of
its strength in product development.

Strengths

Customers• Concentrates management resources on the independent insurance
agent channel, owns predominant agent channels of financial
institutions, etc.

Providing insurance products
Financial institutions, insurance shops, etc.

• Strength in product development to create unique products

Sales channel• Streamlined system

Providing products compatible withchannel characteristics

Opportunities

Agent support

Customer support

Product and marketing training byagent support staff (wholesalers)Marketing support from support
desk operations
IT-based agent support system• Increasing needs for asset formation and medical benefits due to an
aging population

Customer support
through call center• Changes in the market, such as emerging new sales channels (e.g.,
OTC sales at banks and insurance shops), and entry of new players
from different industries into the insurance shop field

T&D Financial Life Insurance

50

Representative
Director and President

T&D Holdings INTEGRATED REPORT 2019

Results of the Previous Medium-Term Management Plan (FY2016-FY2018)
Under the previous medium-term management plan,
T&D Financial Life worked toward the “diversification of
product lineup,” “expansion of sales network of insurance
agents,” and “improvement of customer service” as thepillars of its growth.
The strains on the independent insurance agent market
have been growing year after year, due to an increase in
the number of new entrants. However, the company has
provided a lineup of both single-premium and level-premium products and has expanded its agent network interms of banks and insurance shops. In addition, in termsof services, the company began offering paperless newpolicy applications at some agents, from the standpoint of
improving customer convenience, and worked to enhance
its insurance payment assessment system, in order tomake insurance and other payments accurate and swift.
In fiscal 2018, the final year of the previous medium-term

management plan, new policy amount decreased by¥40.5 billion year-on-year to ¥314.1 billion. This was theresult of a fall from the previous fiscal year in single-premium products, which continued to face a severe competitive environment, and came despite a 3.3% increase
in income protection insurance (level premium protection-type products) from the previous fiscal year. The
policy amount in force increased by ¥120.2 billion year-onyear to ¥2,172.9 billion.
In addition, the value of new business was ¥0.1 billion
and MCEV was ¥98.5 billion in fiscal 2018, down from theprevious fiscal year.
As of the end of fiscal 2018, the number of sales agentsof both financial institution and insurance shop agentswas 145, an increase of three from the previous fiscal
year-end.

New Policy Amount

Policy Amount in Force

Reference: Number of sales agents(¥ billions)400(¥ billions)
2,400(Total)
160

354.7
300

322.6
236.2

314.1

1,800

1,808.7

1,806.4

1,879.3

2,052.7

2,172.9

120

1,200

80

100

600

40

0

0
2015

134

137

142

145

130

Mar. 31,2015

Mar. 31,2016

Mar. 31,2017

Mar. 31,2018

Mar. 31,
2019

235.4

200

2014

Financial institutions*1
Insurance shops*2

2016

2017

2018

0
Mar. 31,2015(Fiscal Year)

Mar. 31,2016

Mar. 31,2017

Mar. 31,2018

Mar. 31,2019*1 Financial institutions include banks, securities firms, andcredit associations.
*2 Including franchises.

MCEV

Value of New Business(¥ billions)120(¥ billions)
4
95.8

93.4

97.4

102.6

4.2
3.5

98.5
3

80
2

2.3

40
1

0

0.9

0.1

0
Mar. 31,2015

Mar. 31,2016

Mar. 31,2017

Mar. 31,2018

Mar. 31,
2019

2014

2015

2016

2017

2018
(Fiscal Year)T&D Holdings INTEGRATED REPORT 201951

Try & Discover for Creation of Shared Value

T&D Financial Life’s Medium-Term Management Plan (FY2019-FY2021)
Basic Policy

Realizing further growth through expanding business performance with the aim of raising its presence in the independent insurance agent channel by prioritizing the development and introductionof savings-type products, the proactive introduction of services for customers and agents, and theutilization of information technology.
With no signs of major changes to the low-interest environment, it is expected that banks will continue to place
an emphasis on service revenues from sales of investment
trusts and insurance. It is possible that the scale of themarket could remain roughly the same or expand further
depending on changes in the yen interest-rate environment. In addition, with the insurance shop market presently continuing to grow at a pace of 6% to 7% annually,
the independent insurance agent market, which is T&D
Financial Life’s primary market, is also expected to continue to expand. Meanwhile, the competitive environmentis getting more severe year by year due to an increase in
the number of new entrants into the market.
In addition, needs are diversifying regarding the statusof assets, income, employment, health, and householdcomposition, as well as accompanying financial services,
due to people living longer. Amid these circumstances,various needs suitable for insurance risk coverage are also
expected to increase.
Under the aforementioned environment, in the medium-term management plan, T&D Financial Life will expand its business performance with the aim of raising its
presence in the independent insurance agent market. The
company will prioritize the development and introductionof savings-type products, proactively introduce services
for customers and agents, and utilize information technology. Under this policy, the company will work towardfurther growth by flexibly responding to changes in theenvironment as a company specialized in the independent insurance agent business.

Financial institutions and other agents

Insurance shop agents

Capture increasingly diverse customer needs by leveraging
flexibility in product development

Products

Main target

Main target• Retirement generation (upper mass segment
aged 60s and over)• Working and parenting generation (20s-40s)

Concept

Concept• Savings-type products differentiated bytype of benefit

Growingsales share• Protection-type products that are competitivein terms of pricing and benefits, etc.

Pursue convenience and efficiency by utilizing IT, etc.
Services• Utilize IT, etc. to create more sophisticated services and administration that contribute to convenience
for the customer• Build simple, low-cost services by streamlining customer procedures and making them more efficient.

Improve support for agents by bolstering sales systems
Sales
structure52• Develop and expand agents• Deep cultivation/revitalization by strengthening support for agents in ways that take into accounttheir special features

T&D Holdings INTEGRATED REPORT 2019Key
managementtargets

Expand policy
in force

Improving
efficiency ofoperatingexpenses

Expand presence in the independent agent market

Overview of the Medium-Term Management PlanTopline Strategy
Product Strategy
When products mature in the independent insurance
agent market, sales share tends to decline without certain
levels of price competitiveness.
T&D Financial Life has launched products that meet theneeds of its customers. During the current medium-term
management plan, the company will continue to launchdifferentiated products in a timely manner that consistently deliver price competitiveness.
Development of savings-type products that meet
diversifying needs
T&D Financial Life has launched well-received productsthat share the features of “increase,” “use,” and “bequeath,” such as Shogai Premium Japan (a non-participating whole life insurance) and Shogai Premium World (anon-participating foreign exchange rate-linked whole life
insurance). During the current medium-term management
plan, the company will promote prioritizing the development and revision of products based on marketing.
Product development responding to channel expansion
Along with developing products that meet the needs ofcustomers who visit financial institutions and insurance
shops, the company will go ahead with offering products suitable to each channel via product revisions andadditions of functions and services through post-launchfollow-ups.
Service Strategy
T&D Financial Life has been promoting paperless newpolicy applications. During the current medium-term
management plan, the company will work to further
enhance convenience for its customers by promoting thefurther utilization and application of IT. From a customer-oriented perspective, the company will promote thesimplification of insurance conservation and insurance
benefit payment procedures, in addition to new policy
applications. Moreover, the company will further enhance
its internet and agent support services. Through these
initiatives, T&D Financial Life aims to enhance customer
satisfaction and become the chosen insurance companyof its customers and agents.

Sales Strategy
Development and expansion of agents
Minna Ni Yasashii Shushin Hoken, revised in October
2018, is a product equipped with a unique currency diversification function that mixes together yen and foreign
currencies. The number of agents adding this product totheir lineups is increasing, as it has been well-received
by customers and agents. In this way, T&D Financial Lifeis aiming to develop and expand its agents through its
distinctive products that capture the needs of its customers and through products that combine consistent pricecompetitiveness with differentiated characteristics.
Strengthening of agent support system
During the previous medium-term management plan,
T&D Financial Life worked to increase agent support staff(wholesalers) in order to enhance its agent support system. In the current medium-term management plan, thecompany will work to raise the number of visits and training frequency for recruiters and enhance training tools, inorder to realize more extensive support.
In addition, by utilizing IT, the company will promote thestrengthening of a comprehensive support system. This
includes working to enhance office services relating tosales support.

Shogai Premium Japan 4

Shogai Premium World 5

Cost Operation Strategy
In the current medium-term management plan, the company is aiming to promote topline initiatives and administrative
efficiency and enhance its revenue base through improved productivity.
The company will push forward with cost reductions, such as by cost-center efficiency through the digitalization of documents
used in procedures and the proactive utilization of internet services, as well as by restructuring administrative operations.

T&D Holdings INTEGRATED REPORT 201953

Try & Discover for Creation of Shared Value

T&D Asset Management Co., Ltd.
One Step Forward, Together
with Our Clients
Outlook for Full-Year Key Performance Indicator Fiscal 2019
Adjusted operating income

3.25 billion

Chikahiro Tsuboi¥

Representative
Director and President

Review of the Previous Medium-Term
Management Plan

Going Forward

T&D Asset Management has worked to expand assets
under management, focusing on managing the assets ofdomestic and overseas pension-fund clients and sales ofinvestment trusts to institutional investors.
In the previous medium-term management plan (FY2016FY2018), the company grew steadily by developing andproviding investment products through alliances with overseas investment institutions, in addition to strengthening
its in-house investment capabilities. This was against the
backdrop of the normalization of negative interest rates,
as various asset owners suffered investment difficulties.
Adjusted operating income and the balance of assets
under management fell in fiscal 2018 from the previous
fiscal year-end, due to the impact of a decrease in public
investment trusts as a result of declines in emerging markets. However, the balance of assets under management
saw a net increase of ¥500.0 billion or more from the startof the previous medium-term management plan (fiscal
2015), as an increase in the balance of privately placed investment trusts throughout the three years drove growth.
Adjusted Operating Income (by Business)(¥ millions)

Investment trust business

Investment Trust AUM

Investment advisory business(¥ billions)

4,000
3,000

The severe competitive environment is expected tocontinue in the investment trust and advisory industry
going forward, as fierce competition takes places within
investment management. However, the market can besaid to be promising for the future, due to growing needs
in Japan for post-retirement asset management alongwith the rapidly aging society, in addition to a significant
expansion in the scale of the market as a global glut ofmoney continues apace.
Under these circumstances, in its medium-term management plan (FY2019-FY2021), the Group is aiming for further growth of its asset management business in order todiversify its business portfolio, in addition to strengthening its life insurance business, the T&D Insurance Group’s
core business. T&D Asset Management, positioned toplay a central role in the above, is aiming to expand its
business while collaborating with other Group companies.

Public investment trusts

2,935
781

2,000

2,484
702

2,589

3,220

3,163

634

592

2,154

1,976

731.3

600

2015

2016

2,586

2,571

613.4

2017

2018

300

0

0
2014

(Fiscal Year)T&D Holdings INTEGRATED REPORT 2019

823.2

936.9

952.5

410.2

275.9

203.2

240.8

245.9

192.7

Mar. 31,2015

Mar. 31,2016

Mar. 31,2017

Mar. 31,2018

Mar. 31,
2019

Please see page 30 for details of asset management business initiatives in the Group’s medium-term management plan (FY2019-FY2021).

54

1,145.3

900

612

1,782

1,182.9
1,064.0

455.4

1,000

Privately placed investment trusts

1,200Pet & Family Insurance Co., Ltd.
Bringing peace of mind to a full life withpets who are members of the family
Outlook for Full-Year Key Performance Indicator Fiscal 2019
Number of policies in force

Number of new policies

162,000

34,000Masao Mikame

Representative
Director and President

Review of the Previous Medium-Term
Management Plan
Pet & Family Insurance Co., Ltd. provides pet insurance
through pet shops. In April 2019, the company transitioned
from a small-amount short-term insurance company toa non-life insurance company. Under the previous medium-term management plan (fiscal 2016-2018), we focusedon development and expansion of pet shops, the corechannel, while working to diversify sales channels through amulti-line approach using online and mail order shopping.
In fiscal 2018, the company had 31,549 new policies(compared to 31,283 in the previous fiscal year), backed
by greater recognition of pet insurance. As a result, thenumber of policies in force increased steadily, to 146,104(from 131,024 policies as of the end of fiscal 2017).
Reflecting these sales results, net premium income roseby ¥700 million to ¥5,100 million, roughly 1.8 times thelevel before the start of the previous medium-term management plan (fiscal 2015).

Towards the Future
Japan’s pet insurance market is expanding (on a premium income basis) year by year. However, many owners
enroll in insurance when buying a pet at a pet shop, andincreasing the recognition of such insurance among existing pet owners will be a focal point for future growth.
The Group’s medium-term management plan (fiscal
2019–2021) aims at synergies between the pet insurance
business and the domestic life insurance and digital
insurance businesses. In addition to expanding sales
in existing channels, the company will consider sales
through the Group’s life insurance in-house sales representative channels and building new channels though
digitalization. Furthermore, the company will work gradually to develop products according to customer needs
and channel characteristics.

Number of Policies in ForceNet Premium Income (Pet Insurance)(thousand)(¥ millions)

146

150

6,000

5,163

131
115

100

4,455

4,000

96

3,571

76

2,943

50

2,000

2,312

0

0
Mar. 31,2015

Mar. 31,2016

Mar. 31,2017

Mar. 31,2018

Mar. 31,
2019

2014

2015

2016

2017

2018

(Fiscal Year)T&D Holdings INTEGRATED REPORT 201955

Try & Discover for Creation of Shared Value

Group Companies
As of September 30, 2019

The T&D Insurance Group comprised the holding company, 17 consolidated subsidiaries, and 4 affiliatedcompanies as of September 30, 2019. Centered on the life insurance business, the T&D Insurance Group’s
operations are outlined below:

Insurance & Insurance-related
Businesses

Investment-related
Businesses[8 companies][8 companies]

Insurance■	Taiyo Life Insurance Company(Life insurance business)■	Daido Life Insurance Company(Life insurance business)■	T&D Financial Life Insurance
Company(Life insurance business)■	Pet & Family Insurance Co., Ltd.
(Nonlife insurance Business)● Capital Taiyo Life Insurance Limited(Life insurance Business)

Insurance-related■	T&D Confirm Ltd.
(Policyholder confirmation services)■	Toyo Insurance Agency Co., Ltd.
(Insurance agent)■	Daido Management Service Co., Ltd.
(Insurance agent)

Investment Management andAdvisory, etc.
■	T&D Asset Management Co., Ltd.
(Investment advisory and investment
trust services)

Other Investment-related■	T&D United Capital Co., Ltd.
(Principal investment, Investment
management [administration])■	T&D Lease Co., Ltd. (Leasing)■	Taiyo Credit Guarantee Co., Ltd.
(Credit guarantee services)● Alternative Investment Capital Ltd.
(Investment in private equity funds)	Other subsidiaries and affiliatedcompanies, etc.: 3 companies

Administration-related
Businesses[5 companies]

Administration-related■	T&D Customer Services Co., Ltd.
(Life insurance policy clerical services,
including drafting, amendment, custody and distribution of documents,
and delivery of securities)

General Affairs andCalculation-related■	T&D Information Systems, Ltd.
(Computer software and systemservices)■	Nihon System Shuno, Inc.
(Premium collection)■	Zenkoku Business Center Co., Ltd.
(Premium collection)● Thuriya Ace Technology Company
Limited (Designing and developing
information technology, information
technology systems, software solutions and business solutions for the
insurance industry)

Companies marked by ■ are consolidated subsidiaries, and companies marked by ● are affiliated companies accounted for by the equity method.

56

T&D Holdings INTEGRATED REPORT 2019

Foundat ions Supporting
the Creat ion of Shared Value

T&D Holdings INTEGRATED REPORT 201957

Foundations Supporting the Creation of Shared Value

Chair of the Nomination and Compensation Committee

Interview with Outside Director
Haruka Matsuyama
Currently, there is a particular need for the strengthening ofmonitoring functions.
The strengthening of monitoring refers to the evaluation ofbusiness execution and results, which can be said to be theessence of the Nomination and Compensation Committee.
Outside Director

Haruka Matsuyama

Q1.	It is becoming increasingly important to strengthen
governance in order to enhance sustainable corporate value. Could you tell us about the current roleof the Nomination and Compensation Committee?
While the two functions of management and monitoring
are sought after in governance, there is currently a particular need for the strengthening of monitoring functions.
The strengthening of monitoring refers to the evaluation ofbusiness execution and results, which can be said to be theessence of the Nomination and Compensation Committee.
Because outside directors are not necessarily familiar
with a company’s business or internal circumstances, they
are generally not suitable for management that decides
matters regarding the execution of important business.
Rather, I believe that they should play the role of strengthening monitoring functions or processes related to theappointments, dismissals, and compensation of directors,
Audit & Supervisory Board members, and executive officers, as outside directors with independent viewpoints.
The Nomination and Compensation Committee plays
the role of strengthening monitoring functions through its
independent involvement in nomination and compensation decision processes, from a position in which outside
directors comprise the majority.
Q2.	Could you tell us about the matters you keep
in mind as the chair of the Nomination andCompensation Committee?
I took office as the chair of the Nomination andCompensation Committee in July 2018. T&D Holdings(the “Company”) has remained ahead of other companies in terms of its initiatives, such as by establishing theNomination and Compensation Committee in January 2015.
In 2002, the system of a Company with Committees(the current system of a Company with a Nominating
Committee, etc.) was introduced in Japan. Initially, thissystem was not very popular, possibly due to resistanceagainst discussing nominations or compensation with58

T&D Holdings INTEGRATED REPORT 2019

external persons. Subsequently, with the establishmentof Japan’s Corporate Governance Code, there has beena gradual rise in the number of companies that haveestablished Nomination and Compensation Committees.
However, due to the lack of available model cases, companies have had to proceed by trial and error, with regard
to what matters should be discussed.
Information regarding the nomination process represents some of the most confidential information for
any company. Such information is not disseminated eveninternally, and naturally, information regarding other companies is also unavailable.
While I think that each company has its own balancesand rules, which have been shaped over many years,
these are not written down, as might be expected.
It is most important for us to share information in the
Nomination and Compensation Committee through frank
discussions to some extent about the topics which havenot been openly talked about in the past. Otherwise,discussions would not progress beyond mere statement ofpublic stances.
As the chair of the Committee, I strive to ensure that its
discussions have an atmosphere that is conducive to theparticipants expressing their true opinions, rather thanmere formalities. I believe that the members of the T&D
Holdings Nomination and Compensation Committee all
share their thoughts frankly.
Q3. Specifically, what kind of discussions take place at
the Nomination and Compensation Committee?
We are discussing the current challenges faced by T&D
Holdings, specifically the vision that we should aim forover the next few years based on the medium-term management plan, and how to choose or nurture the rightpeople to undertake this vision.
Above all, regarding the succession of top management, if the current president does not properly develop a successor, it will result in a situation in which theCompany lacks a suitable candidate available at the timeof succession. The president has many important duties;
however, developing a successor and ensuring that business can be transferred smoothly are significant tasks forthe president. We are holding discussions from the earliest possible stage, and proceeding while taking advice
from external persons with experience in management.
Japanese companies follow the custom of life-longemployment, and since officers are often appointed fromamong employees, there is a gap between internal andexternal parties with respect to information regarding
candidates. As this situation is not conducive to discussions, it is necessary to share information, to some extent,with persons outside of the company. However, as it isdifficult to share all information, I think that perhaps every
company is currently concerned about how and what kindof information they should receive and discuss.
Regarding the roles of the Nomination andCompensation Committee, I believe that it is essential toproperly seek explanations regarding how candidates areevaluated internally and what is considered in the selection of such candidates, in addition to checking to confirm that there are no irrationalities in such explanations.
The most recent change of president that I was involved
in, as a member of the Nomination and Compensation
Committee, was the April 2018 succession from theformer President Kida to the current President Uehara.
When making that decision, I believe that we were able
to engage in frank discussions, while hearing about whatkind of ideas each candidate had, and what kind of experienced human resources will be required to steer

Nomination and Compensation
Committees are organizations that holddiscussions with transparency.
We will continue to develop, while making
changes to meet the needs of the times.

T&D Holdings going forward.
Many meetings of the Nomination and Compensation
Committee are held from the beginning of autumn tothe following May. Since the Committee discusses theappointments of directors, Audit & Supervisory Board
members, and executive officers of direct subsidiaries, inaddition to those of the Company, numerous meetings
are held. While many companies have held Nomination
and Compensation Committee meetings annually or
semi-annually up until now, I believe that companies
should invest their time accordingly, if nominations andcompensation are to be practically discussed.
Q4.	The Nomination and Compensation Committeeof the Company has reached its fifth anniversary.
Could you please tell us your evaluation of the current Nomination and Compensation Committee,
and your opinions on how this Committee shouldbe, going forward?
I feel that there has been an earnest inclination at T&D
Holdings to invigorate the Nomination and Compensation
Committee, with succession for top management being
discussed in meetings from an early stage.
However, going forward, new themes and issues canbe expected to appear rapidly, as Nomination andCompensation Committees in Japan have finally reachedtheir formative stage.
For example, while Nomination and Compensation
Committees must monitor results in order to performtheir role, it appears that Japanese companies have not
performed rigorous performance evaluations up until
now. Such evaluations include grading management regarding the year’s business management, reflecting theseevaluations in the amount of each person’s compensation, and asking those with good results to remain in theirpositions for the following year. However, as officers ofJapanese companies are promoted from among fellow
employees, it is probably difficult to highly evaluate somewhile negatively evaluating others. There is the impression that nearly everyone is likely to be assigned a B,
when people are asked to grade others from A to D.
However, while it may be a high hurdle, the proper evaluation of the results of each individual is essential in themonitoring processes, and I believe that this is where wehave to start changing.
As Nomination and Compensation Committees are organizations that hold discussions with transparency, I believe there are many things that should change. While theCompany is also working hard, the way that Nomination
and Compensation Committees ought to be will change
along with transformations in society. Accordingly, we willcontinue to develop our Nomination and Compensation
Committee, while making the necessary changes in linewith such transformations.

T&D Holdings INTEGRATED REPORT 201959

Foundations Supporting the Creation of Shared Value

Corporate GovernanceT&D Holdings, Inc. (the “Company”) has been enhancing its corporate governance on the basic approach of
creating efficient and transparent management systems to facilitate flexible and cohesive group operations.
The Company values the purport of the Japan’s Corporate Governance Code (the “Code”), which applies tolisted companies, and has established the Basic Policy on Corporate Governance* as an initiative in response to
the major principles.
*Please see the Company’s website for more detail of the Basic Policy on Corporate Governance.

https://www.td-holdings.co.jp/en/company/governance/

Promoting Group Management
The Company, as a holding company, fulfills the roles ofAsset Management and Pet & Family Insurance.

deciding on the strategy of the T&D Insurance Group (theThe directly owned subsidiaries, with their own unique“Group”), appropriately allocating the Group’s businessbusiness strategies, aim to expand the Group’s corporate

resources and formulating capital strategies. Along withvalue by maximizing their uniqueness and specialization

this, the Company shall strive to establish a Group businessthrough determining marketing strategies and operating

management system through such means as rigorously en-

businesses in line with their strengths.

forcing Group-wide risk-return management by accurately

In this way, the Group is promoting flexible andgrasping the business risks borne by its six directly owned

cohesive group management by clarifying the respective

subsidiaries, centered on affiliates Taiyo Life, Daido Life,

roles and responsibilities of the Company and its directly

T&D Financial Life, as well as T&D United Capital, T&D

owned subsidiaries.

History of T&D Holdings’ Corporate Governance
2004

2006

2010

2012

2013

2015

2017

2018

April
• Establishment of
T&D Holdings,
Inc.

June
• Introduction of
the executive
officer system,
clarified the
responsibilities
for oversight andexecution.

June• Designation of
all Outside
Directors/
Auditors as
Independent
Directors/
Auditors.

June• Introduction ofstock compensation-type stock
options as an
executive compensation system.

June• The number ofoutside directors
increased from
one to two.

January• Establishment of
the Nomination
andCompensation
Committee.
August• Commencementof the evaluationof the effectiveness of the Boardof Directors.
October• Establishment
and announcement of the Basic
Policy on
Corporate
Governance.

June• The number ofoutside directors
increased fromtwo to three.

June• Introduction oftrust-type stockcompensation(the Board
Incentive Plan
(BIP) Trust) as
an executive
compensation
system.

2

2

2019

* Abolition of stockcompensationtype stock options.

3

3

3

1

1

1

1

(1)

(1)

(1)

(1)

(1)

2

2

2

2

2

2

2

2

2

9

9

10

11

11

12

12

12

4

4

4

4

4

4

Total number of directors

8

Total number of Audit & Supervisory Board members

44Outside directors (No. of people)

60

4of which; female outside directors (No. of people)

T&D Holdings INTEGRATED REPORT 2019

Outside Audit & Supervisory Board members (No. of people)

Corporate Governance System
The Company makes decisions on important businessfor oversight and execution, the Company strengthens thematters and oversee the execution of business throughgovernance function of the Board of Directors.

its Board of Directors. The Company is a “Company with

Furthermore, the Company has established a

Board of Auditors.” Accordingly, the Company shall audit

Nomination and Compensation Committee as an ad-

the performance of directors’ duties through its Audit &visory body to the Board of Directors for the purpose

Supervisory Board and Audit & Supervisory Board mem-of discussing the fairness and appropriateness of thebers, which are independent of the Board of Directors.

appointment, dismissal and compensation of directors

In addition, the Company has introduced an executive

and Audit & Supervisory Board members, among otherofficer system for the purpose of bolstering its business ex-

related issues, as well as for ensuring the transparency of

ecution capabilities. By sharply delineating responsibilities

management and enhancing accountability.

Corporate Governance Framework
1 Shareholders’ Meeting
Appointment
Dismissal

Appointment
Dismissal

Appointment
Dismissal
Reporting

2 Board of Directors

Reporting

3 Audit & Supervisory

Board Members
Audit & Supervisory Board

Auditing

Group Compliance Committee
Group SDGs Committee

Assess the relevance of the financial audit

Audit & Supervisory
Board Members’ Office

Cooperating

President

4 Executive Committee

5 Group Management Committee

Group ERM Committee

Group Management Promotion Committee

Group Risk Management Committee

Group Information Technology Committee

Organizational UnitsGroup Planning Department, Business Development Department, Group Finance & Accounting Department,
Public Relations Department, General Affairs Department, Risk Management Department

Internal
auditing

External auditing

Offering
opinions

6 Independent Auditor

Reporting

Nomination and Compensation
Committee

Internal Auditing
Department

1 Shareholders’ Meeting

The Shareholders’ Meeting is the highest decision-making entity of the Company. At the meeting, reports are madeon the Group’s business and consolidated/non-consolidated financial statements, and resolutions are made on important issues, which are stipulated in laws and ordinances and the Articles of Incorporation, such as the appropriation ofretained earnings and election of officers. The Ordinary General Meeting of Shareholders is held once a year.

2 Board of Directors

Number of meetings held: 20
The Board of Directors makes resolutions on important issues related to the business execution of the Company, andoversees the performance of directors and executive officers.

3 Audit & Supervisory Board

Number of meetings held: 17
The Audit & Supervisory Board members audit the performance of duties by directors, and give proposals, advice, andsuggestions to directors and the Board of Directors to ensure the sound management of the Company.
The Audit & Supervisory Board reports on important issues regarding audits performed by each Audit & Supervisory
Board member, which are then deliberated and resolved.

Members
Audit & Supervisory Board

4 Executive Committee

Number of meetings held: 57
The Executive Committee consists of the chairman, the president and executive officers. The Executive Committee
discusses important issues such as strategies related to the business management of the Group.

5 Group Management

Committee

Number of meetings held: 19
The Group Management Committee consists of members including the president of the Company and the presidentsof the three life insurance companies. The Group Management Committee discusses important issues such as theGroup’s cross-sectional strategies.

Committees

Committees discuss the strategies and matters of the Company or those common to the Group.

6 Information related to

the Independent Auditor(FY2018)

Remuneration for audit certification services (¥ millions)

Remuneration for non-audit services (¥ millions)

Submitting company

Category

188

16

Consolidated subsidiaries

208

13

Total

396

30

T&D Holdings INTEGRATED REPORT 201961

Foundations Supporting the Creation of Shared Value

Corporate Governance

Roles of the Board of Directors
The Board of Directors shall make decisions on importantbusiness matters and oversee the execution of businessin accordance with laws and ordinances, the Articles ofIncorporation, and the Company’s relevant rules.
The Board of Directors has entrusted all authority related to the execution of business, other than matters stipulated in the preceding paragraph, to the representative

director and president. Furthermore, the representative
director and president delegates authority related to the
execution of business to executive officers in charge ofbusiness operations for the purpose of separating oversight functions and business execution functions. This
framework is designed to facilitate decision-making forbusiness execution matters.

Composition of the Board of Directors
The number of directors shall be no more than 12 as
stipulated by the Articles of Incorporation. The Board of
Directors shall be made up of individuals representing abalance of knowledge, experience and skills, and having
diverse backgrounds as befitting the expansive range ofbusiness domains in the life insurance business.
Moreover, the Company shall appoint two or more
directors who concurrently serve at the Company and its
directly owned subsidiaries, including the presidents ofthe three life insurance companies. This shall be done
from the standpoint of facilitating adequate communication and rapid decision-making within the Group, alongwith bolstering Group-wide governance.
Furthermore, the Company shall appoint two or more
outside directors to appropriately reflect the opinions
of individuals with extensive experience and knowledge
in their capacity as outside corporate managers, legal
experts and so forth in the Group’s management policies
and development of internal controls and other systems
as well as in the oversight of the execution of business.
Directors at T&D Holdings: 12
Inside directors: 9

Outside directors: 3(all independent officers)

Effectiveness Evaluation of the Board of Directors
To ensure the effectiveness of the Board of Directors, theCompany conducts an annual performance review of theBoard of Directors as a whole based on the self-evaluations of individual directors. The performance review
examines whether the Board of Directors is functioning
appropriately and producing results, and how the Boardof Directors is contributing to increasing the Company’s
corporate value over the medium- to long-term.
Based on the assessment of effectiveness and otherinformation, the Company will work to further improve thesupervisory functions and the decision-making process of
the Board of Director.

Summary of the Evaluation of the Effectiveness of the Board of Directors as a Whole in Fiscal 201862

1. Evaluation procedures

The Company conducted an analysis and assessment of the effectiveness of the Board of Directors as a wholein fiscal 2018, based on self-evaluations (questionnaires) and interviews of the directors and Audit & Supervisory
Board members.

2. Evaluation items (5 items)(i) Function of the Board of Directors(ii) Composition of the Board of Directors(iii) Operation of the Board of Directors(iv) Provision of information to Outside Directors/Audit & Supervisory Board members(v) Overall assessment

3. Overall assessment

The Company considers the Board of Directors of the Company is generally performing its roles and responsibilities effectively as a whole, through the enforcement of advance measures prior to actual discussions at the Boardof Directors and the improvement of the operation of the Board of Directors, etc.

4. Improvement status of issues recognized in the previous evaluation

Issues recognized in the evaluation for fiscal 2017 (dealing with the time restrictions of discussions at the Board of
Directors [the necessity of setting up a forum for discussions other than the meetings of the Board of Directors],
further improvement of meeting materials, devising the contents of the report and so forth) have generally been
improved.

5. Issues and initiatives going
forwardIssues:	Regarding the development of a framework for enhancing the effectiveness of the Board of Directors,
the Company continues to recognize the necessity for improvement.
Initiatives: • The Company will further reinforce its monitoring functions as a holding company in groupmanagement.
• The Company will improve and devise the explanations of the contents of deliberations at theNomination and Compensation Committee, and in order to deepen and activate the deliberations at
the Board of Directors, improve and devise the meeting materials and explanations.

T&D Holdings INTEGRATED REPORT 2019

Status of activities of outside directors and outside Audit & Supervisory Board members
Outside directors and outside Audit & Supervisory Board
members engage in activities including periodic “exchanges of opinions with the representative directors,” “exchanges of opinions with an independent auditor,” “exchanges of opinions with the heads of each department,”“exchanges of opinions with the directors and executive
officers of the major subsidiaries,” “exchanges of opinionswith the outside directors and outside Audit & Supervisory

Board members of the major subsidiaries,” and “visits tothe business offices of the major subsidiaries.”
Based on knowledge regarding the current status of, andthe issues facing the Group acquired through such activities, the outside directors and outside Audit & Supervisory
Board members express their opinions, as necessary, fromtheir respective professional perspectives, and activate thedeliberations at the Board of Directors.

Nomination and Compensation Committee
A non-mandated Nomination and Compensation Committee
was established as an advisory body to the Board of Directors
for the purpose of discussing the fairness and appropriateness of the appointment/dismissal and compensation of
directors, Audit & Supervisory Board members, and executive
officers as well as ensuring the transparency of management

and enhancing accountability (established in January 2015).
The Committee comprises the president and outside directors, with the majority of its members appointed from among
outside directors, with a view toward ensuring independence
and neutrality. In addition, the Committee is chaired by anoutside director elected from among its members.

Nomination and Compensation Committee (held seven times in fiscal 2018)
Fiscal 2018 Nomination andCompensation Committee

Deliberation and reporting matters

1st Nomination andCompensation Committee• Introduction of a stock compensation system for directors and executive officers• Amendment to the Articles of Incorporation, in conjunction with a shortening of the directors’
term of office

2nd Nomination andCompensation Committee• Appointment of directors, Audit & Supervisory Board members, and substitute Audit &Supervisory Board members• Changes of officers at directly owned subsidiaries

3rd Nomination andCompensation Committee• Evaluation of the effectiveness of officers for fiscal 2017
• Establishment of company officer regulations concerning executive compensation

4th Nomination andCompensation Committee• Succession plan
• Measures associated with the revision of the Corporate Governance Code

5th Nomination andCompensation Committee• Changes of officers at directly owned subsidiaries

6th Nomination andCompensation Committee• Appointment of executive officers• Changes of officers at directly owned subsidiaries

7th Nomination andCompensation Committee• Amendment to company officer regulations concerning executive benefit• Disclosure of information such as the executive compensation system, in line with the amendment to the Cabinet Office Ordinance on the Disclosure of Corporate Affairs, etc.

Involvement in the appointment/dismissal of the Representative Director and President, and other senior
management staff
The Committee deliberates on the results of individual officer evaluations of the Representative Director and other senior
management staff, based on an evaluation of corporate performance and the evaluation of a division in charge. As for theappointment/dismissal (reappointment or non-reappointment) of the Representative Director and other senior management staff, individual officer evaluations as well as qualifications are reviewed and deliberated. The results of the deliberation are reported to the Board of Directors along with the Committee’s recommendations, as necessary.
Involvement in succession planning for the Representative Director and President
As for succession planning, the Committee deliberates on matters such as the validity of the plan and the periodical
review of candidates. The results of the deliberation are reported to the Board of Directors along with the Committee’s
recommendations, as necessary.

T&D Holdings INTEGRATED REPORT 2019

63

Foundations Supporting the Creation of Shared Value

Corporate Governance

Determination of compensation
Policies on determining compensation
The Company’s executive compensation system has been
designed to function as a sound incentive for the Groupto enhance its performance and corporate value over the
medium- to long-term. The system is deliberated at theNomination and Compensation Committee, to be finalized at the Board of Directors.
Compensation for directors (excluding part-time

directors, such as outside directors) comprises three parts:
1) monthly compensation, 2) bonuses, and 3) trust-type
stock compensation (excluding non-residents of Japan),which uses a trust to deliver the Company’s shares, etc. todirectors. Compensation for part-time directors, including
outside directors comprises monthly compensation.

Monthly compensation
and bonuses

Trust-type stock compensation

Variable according to roles andbusiness performance

Linked to the Company’s share price• Individual evaluations of each officer are reflected in the assessment ranking for determinationof monthly compensation and bonuses.
• Individual evaluations of officers are carried out based on an evaluation of corporate
performance and the evaluation of a division in charge, according to the evaluation criteria, as
determined by the Board of Directors. The evaluation results are subjected to detailed studies
that are deliberated at the Nomination and Compensation Committee and by the
Representative Directors, to be finalized by the President.

• A compensation system that can work as an incentive for the Group to enhance its businessperformance and corporate value over the medium- to long-term, and to promote the sharing ofan awareness of common interest with shareholders.
• Stock and cash are delivered based on the number of points granted, commensurate withexecutive ranking, within the limit established by the resolution of the Shareholders’ Meeting.

Policies on determining the ratios of the compensation types
The ratio between performance-linked compensation(monthly compensation and bonuses) and trust-type stockcompensation is established, based on the responsibilities of each executive position.
Performance-linked compensation varies according to
the individual officer’s performance evaluation, by using
the standard performance evaluation as a benchmark(within the range from approximately +5% and -5% formonthly compensation, and from approximately +40%
and -40% for bonuses).

Trust-type
stock compensation
10% to 22%

Performance-linked
compensation (bonuses)
14% to 21%

Performance-linked
compensation(monthly compensation)
57% to 74%

Reasons for the selection of indicators for determining performance-linked compensation,and method for determining the amount of compensation
The evaluation of corporate performance is determinedadjusted net income, along with the share price flucbased on the key performance indicators established untuation rate by a factor commensurate with the target
der the Group’s medium-term management plan, in orderachievement rate.
to ensure a clarified evaluation commensurate with the
As for the evaluation of a division in charge, an evaluation regarding the progress of the execution plan at eachactual progress toward achieving targets. Specifically, it isdivision is carried out, and points are calculated based ondetermined based on the points calculated by multiplying
the achievement against divisional targets.
a number of performance indicators including corporate value (EV), value of new business, and consolidated

64

T&D Holdings INTEGRATED REPORT 2019

Total compensation by officer category and type of compensation
Monthly compensation

Trust-type stock compensation, the Board Incentive
Plan (BIP) Trust

Reserve for bonuses

Category
Numberreceivingcompensation

Amount(¥ millions)

Numberreceivingcompensation

Amount(¥ millions)

Numberreceivingcompensation

Amount(¥ millions)

Total compensation
Numberreceivingcompensation

Amount(¥ millions)

Directors (excluding outside directors)

11

184

6

55

6

58

11

299

Audit & Supervisory Board members (excluding outside Audit & Supervisory Board
members)

3

56

0

—

0

—

3

56

Outside directors

4

28

0

—

0

—

4

28

Outside Audit & Supervisory Board
members

2

19

0

—

0

—

2

19

Total

20

289

6

55

6

58

20

403

(Notes) 1. T he annual compensation limit established at a shareholders’ meeting is ¥500 million for directors and ¥130 million for Audit & Supervisory Board members. Bonuses are included in theamount for directors. Apart from the above annual compensation limit for directors, the maximum aggregate amount of trust fund to be contributed for the trust-type stock compensationis ¥500 million for the three fiscal years from the fiscal year ended March 31, 2019 to the fiscal year ending March 31, 2021. The total number of points to be granted to directors each year
shall not exceed 215,000 points (one point is equivalent to one share in the Company).
2. T he abovementioned payments include three directors and one Audit & Supervisory Board member who stepped down from their posts, as of the close of the fourteenth Ordinary General
Meeting of Shareholders held on June 27, 2018. As of March 31, 2019, the Group had twelve directors and four Audit & Supervisory Board members.

Indicator targets and actual achievements with respect to the performance-linked compensation for the mostrecent fiscal year
The key performance indicator targets and actual achievements with respect to the performance-linked compensation are
as follows. Apart from the indicators in the table below, share price fluctuation rate (rate of fluctuation of the Company’s
share price, as well as the rate of its deviation from the rate of price fluctuation of the shares in the listed life insurancecompanies), along with the evaluations of corporate performance at the Group companies are also used as indicators.
Key performance indicator targets and actual results for fiscal 2018
Key performance indicators

ActualTargetAchievement ratio

Corporate value (EV)¥2,342.7 billion¥2,666.6 billion

87.8%

Value of new business¥140.3 billion¥137.0 billion

102.4%

Consolidated adjusted net income (Note)¥78.5 billion¥84.5 billion

92.8%(Note)	Consolidated adjusted net income is calculated by adding net income and additional internal reserves in excess of the legal standard requirements related to reserves for contingency andprice fluctuations (after taxes).

 ctivities of the Board of Directors and the Nomination and Compensation Committee in the process ofAdetermining amounts of compensation
Main deliberations at the Nomination and Compensation
Committee
The Nomination and Compensation Committee deliberated on matters such as the “Introduction of the trust-type
stock compensation system for officers” at the Company
and its direct subsidiaries, which is intended as an incentive to enhance corporate value and to promote the sharing of an awareness of common interest with shareholders,
and the “Evaluation results of directors and executive
officers for fiscal 2017,” which serves as the basis for determining the compensation of individual officers.

Main resolutions at the Board of Directors
The Board of Directors has resolved matters such as“Guidelines for implementing the corporate performance
evaluation system for fiscal 2018” and “Results of thecorporate performance evaluation for fiscal 2017.” The
Board of Directors has also resolved agendas concerning compensation, including the “Introduction of thetrust-type stock compensation system for officers” and“Determination of amounts of executive bonuses for fiscal
2017, as well as the monthly compensation for fiscal 2018of directors and executive officers.” All of these matterswere resolved based on recommendations made by the
Nomination and Compensation Committee.

T&D Holdings INTEGRATED REPORT 201965

Foundations Supporting the Creation of Shared Value

Corporate Governance

Cross-shareholdings
At the Group, Taiyo Life and Daido Life engage in cross-shareholdings. As of March 31, 2019, the balance* of such holdings was ¥266.1 billion (41 stocks) at Taiyo Life and ¥254.4 billion (176 stocks) at Daido Life. The companies will continue towork on a planned reduction of these holdings.
* Balance sheet amount of investment stocks stated in the “YUHO Report,” held for purposes other than pure investment

Purpose of Cross-shareholdings• Maintaining and expanding long-term, stable business relationships• Maintaining and strengthening business partnerships• Reaping medium- to long-term benefits by an increase in equity value and receiving dividends and so forth
Verification of the property and Reduction of Cross-shareholdings
The Boards of Directors of the Company and each Group company with cross-shareholdings are verifying shareholdings
by specifically scrutinizing each individual cross-shareholding annually in regard to (1) the suitability of the purpose for theholdings and (2) whether the benefits or risks concerned with the holdings are worth the cost of capital. Sale is considered
for cross-shareholdings that are deemed to be less significant as a result of this verification. The verifications’ content isdisclosed annually.
*T aiyo Life and Daido Life exercise voting rights in regard to cross-shareholdings similarly to stocks held for purely investment purposes, based on the Japanese version of the Stewardship Code.
Please see page 81 for initiatives regarding the Principles for Responsible Institutional Investors (the Japanese version of the Stewardship Code).

Risk Management
In light of the important social role played by its life insurance business, the Group considers the accurate assessment
and control of risk to be one of the top management priorities for ensuring sound and appropriate management. Under
the supervision of the Company, each Group company carries out appropriate risk management based on the principleof self-responsibility. Furthermore, the Group conducts integrated risk management through such means as utilizing risk
management indicators based on economic value, which values assets and liabilities on a mark-to-market basis.
The following risks are considered to be significant in regard to the businesses of the Company and the Group.

Business risks
Underwriting risk

Risks as a holding company

Investment risk

Risk related to reliance on the performance ofthe life insurance business

Liquidity risk

Risk related to dividend income

Operational risk

Risk related to expanding scope of operations

Reputational risk

Risk related to regulatory changes

Affiliate and other entity risk
The Company is responding to risks as a holding company as described on the following page (that gives examples
of initiatives).

66

T&D Holdings INTEGRATED REPORT 2019

Risk Related to Reliance on the Performance of the Life Insurance Business
The Group is heavily reliant on the performance of its three life insurance companies. Therefore, if the business circumstancesof any of the three life insurance companies change, and/or the roles or positions of any of the three life insurance companies
change, the Group’s performance and financial condition could be adversely affected.
(Responses)• The Board of Directors gives the necessary advice and support on the performance of the three companies, together with
monitoring budget variance management and progress of the medium-term management plan.
• The diversification of business portfolio is promoted as a pillar of the growth strategy in the medium-term management plan.

Risk Related to Expanding Scope of Operations
The Group is considering expanding the scope of its operations outside of the life insurance business by leveraging the advantages of its holding company structure within legal and regulatory boundaries. The Group may have little or no experiencein such operational expansion. If expansion does not progress or if the operations concerned are unprofitable, the Group’s
performance and financial condition could be adversely affected.
(Responses)• When expanding the scope of operations, areas that have an affinity with the life insurance business are targeted. Businesses arealso promoted through alliances and collaboration with organizations and companies with experience in the relevant business.
• The implementation plan is verified in advance and monitored as necessary following implementation, and adequate risk
control is conducted.
* Please see the Company’s website for more detail of the risk management.

https://www.td-holdings.co.jp/en/company/governance/risk.html

Compliance
Basic Compliance Policies
The Group has formulated the T&D Insurance Group CSR
Charter, the T&D Insurance Group Compliance Code of
Conduct, and the T&D Insurance Group Basic Policy forStrengthening the Compliance Structure. The Group ensures that corporate officers and employees are conversant with these basic compliance policies and standards
to promote rigorous Group-wide compliance efforts.
*Please see the Company’s website for more detail of the Compliance Promotion System.

https://www.td-holdings.co.jp/en/company/governance/compliance.html

Basic Policy for Responding to Antisocial Forces
In its Group Compliance Code of Conduct, the Groupdefines its policy toward antisocial forces as to “reject andstringently respond to any antisocial forces which threaten
the order and safety of the civil society.” In accordancewith this policy, the Group has formulated “T&D InsuranceGroup Basic Policy for Responding to Antisocial Forces,”and has announced this on the Company’s website.
* Please see the link below for the Basic Policy for Responding to Antisocial Forces.
(Japanese only)

Accountability
The Company works to disclose information in line with thebasic concept of striving to increase the transparency ofmanagement by appropriately and timely disclosing corporate information, including appropriate financial information and non-financial information regarding management
strategies, management priorities and other matters.
In specific terms, the Company strives to provide
easy-to-understand disclosure based on the fair disclosure rules of timeliness, fairness and accuracy in order tomaintain and reinforce trust among all of its stakeholders,
including customers, shareholders, employees, insurance
agents, business partners, and local communities, and toincrease the level of management transparency.
In releasing information, the Company strives to disclose information to as many people as possible using
various media.
Furthermore, the Company is actively engaged in IR
activities based on its IR Policy (see page 73), while ensuring that briefings are provided by members of senior
management, in principle.

https://www.td-holdings.co.jp/information/antisocial-forces.html

T&D Holdings INTEGRATED REPORT 201967

Foundations Supporting the Creation of Shared Value

ERM (Enterprise Risk Management)
Increasing
Corporate
Value (EV)ERM (Enterprise Risk Management) is a strategic management
method used to achieve managerial goals such as raising corporate
value (EV) and maximizing earnings, through the integrated man-

In tagement of capital, profit and risk. As its major feature, it quantifies
capital, profit and risk with the same criteria to make them “visi-

egr

ate d M an a gemCapital

en

t

Risk

ble,” and by integrally managing them and making management
decisions, it enables us to pursue profit by controlling soundness

Profitthrough a comparison between risks and management strengths.

Organizational Structure
The Group has organized the Group ERM Committee to

Board of Directors

conduct ERM on a Groupwide basis. The committee leads
efforts to promote ERM throughout the Group, aiming to
improve its soundness while achieving stable and sustainable increases in corporate value.

Board Committee,
of Directors etc.
Executive
Executive
Committee,
etc.and capital efficiency
Integrated managementof capital
adequacy
Integrated managementof capital
adequacy and capital efficiencyGroup
ERM Committee
T&D Holdings
T&D HoldingsGroup Finance &Secretariat
Risk Management
Accounting
Holdings
GroupT&D
ERM
Committee
Department
T&D
Holdings
Department
T&D HoldingsGroup Planning Department
Group
Finance &Secretariat
Risk Management
Accounting
T&D Holdings
Department
Department
Group Planning Department
Soundness
Profitability(Capital Adequacy)
Soundness(Capital Adequacy)Core life insurancecompanies
risk management
Corelife insurance
departments
companies
risk management
departments(Capital Efficiency)

ERM Committees of corelife insurance companies
Secretariat
ERM
Committees
of coreplanning
departmentsoflife
insurancecompanies
core life insurancecompanies
Secretariat
planning departments ofcore life insurance companies

Profitability(CapitalCore
Efficiency)
life insurancecompanies
actuarial andCoreaccounting
life insurancecompanies
departments
actuarial andaccounting
departments

PDCA Cycle
Under ERM, the process of realizing the growth of corporate value is the PDCA cycle. It leads the management
toward achieving goals, while repeating PLAN (formulating the management plan), DO (implementing planned
initiatives), CHECK (monitoring progress), and ACTION

PLAN
PLAN

The Group evaluates capital, profit and risk on an eco-

Implementing
planned initiatives
Profitability(Capital Efficiency)

CapitalCapitalIntegrated
Management

nomic value basis and sets standards for soundness andIntegrated
RiskManagementProfit

profitability as the Group Risk Appetite. Then, it promotes

Risk

ERM through the above PDCA cycle in order to meet theGroup Risk Appetite.
Group risk appetite standard
Soundness

Minimum level of ESR

133% and above

Profitability

Neutral level of ESR

Around 185%

ROEV

7.5% and above (in themedium- to long-term)Core ROEV

68

Implementing
planned initiatives

Formulating
management planSoundness(Capital Adequacy)
Soundness(Capital Adequacy)(reviewing the management plan).

DO
DO

Formulating
management plan

T&D Holdings INTEGRATED REPORT 20195.0% and above (in themedium- to long-term)

ACTIONACTION

Profitability(Capital Efficiency)

Profit

CHECK
CHECK

Reviewing
management plan

Monitoring progress

Reviewing
management plan

Monitoring progress* UFR has been applied to the ESR measurement model and to the MCEV calculation, beginning withthe medium-term management plan.
* ESR = Surplus (capital) ÷ EC (risk)* ROEV = Annual increase in EV (less capital movements) / Annual average of EV (Group basis)* Core ROEV = (Embedded value of new business + Expected existing business contribution from risk
free rate) / Annual average of EV (total for three core life insurance companies)

Achieve a Balance of Both High Soundness (Capital Adequacy) and Profitability (Capital Efficiency)
Soundness Indicator: ESR
The Group has introduced ESR (Economic Solvency Ratio)
as a soundness indicator based on economic value, andby controlling ESR within a set range, the Group works tomaintain financial soundness and capital adequacy.
The minimum level of ESR of 133% represents the capital level needed to cover VaR 99.93%.

Profitability Indicator: ROEV and Core ROEVAs a profitability (capital efficiency) indicator, considering the specificities of the life insurance accounting, theCompany uses “ROEV (Return on Embedded Value),”which is calculated using EV, and Core ROEV, which iscentered on the increase in EV as a result of an acquisitionof new policies.

Status of ESR

Profitability (Capital Efficiency) Indicator
ROEV

217%

175%
162%

178%
168%

167%

Core ROEV

Medium- tolong-term
target level: 7.5%
163%

159%

5-year simple
average: 5.9%

21.5%

16.7%

6.7%

Mar. 31,2015

Mar. 31,2017

Mar. 31,2018

Jun. 30,
2018

Sep. 30,
2018

Dec. 31,2018

Mar. 31,
2019

6.9%

5.6%

0.3%
Mar. 31,
2016

6.5%

6.9%

Minimum level of ESR 133%5-year simple
average: 5.6%

Medium- tolong-term
target level: 5.0%

3.9%

17.3%
2014

ESR is calculated by dividing net assets based on economic value (surplus) by the risk volume(EC: economic capital) quantified using an internal model.

2015

2016

2017

2018

2014

2015

2016

2017

(Fiscal Year)2018(Fiscal Year)

Results of ERM Management:
Increase in the Value of New Business Due to Transformation of the Product Portfolio
As the external environment changes, such as diversification of customer needs and revision of the standard
yield rate and standard mortality table, we strategicallyutilized ERM to flexibly manage capital, profit and risk
for the Group as a whole. There was a steady increasein the value of new business even in a low interest rateenvironment.

Trends in Value of New Business(¥ billions)

150

140.3

20-year JGB yield
119.5

100

129.4

93.0

56.3

50

1.20%
0.66%

0.45%

0
FY2014 /Mar.31,’15

FY2015 /Mar.31,’16

0.54%

0.36%

FY2016 /Mar.31,’17

FY2017 /Mar.31,’18

FY2018 /Mar.31,’19

6.3%

8.5%

7.1%

New business margin*

Total of all products* New business margin = Value of new business ÷ Present value of new business premiums

Application of Ultimate Forward Rate (UFR)
Starting from the current medium-term management
plan, the UFR has been applied to the ESR measurement
model and to the MCEV calculation. This was based oninternational capital regulation discussions and the comparability of disclosure, and it aims to further enhancemeasurement models to be able to further contributeto management decisions from a medium- to long-term
perspective. In addition, indicator values are as shown on
the right when UFR is applied to fiscal 2018 and the fiscal
year-end.

Indicator values with UFR*1 applied
Fiscal 2018 andthe fiscal year-end*2
Group MCEV

¥2,605.1 billion

MCEV¥2,577.2 billion

Value of New Business

ESR*3¥162.1 billion

189%*1	The applied UFR has been set referring to the Insurance Capital Standard (ICS) which theInternational Association of Insurance Supervisors (IAIS) is considering as an international
capital regulation for insurance companies.
	Forward rates from 31-year onwards are extrapolated to converge to the level of UFR of 3.8%
at 60-year.
*2 Not reviewed by third party specialists.
*3 Subordinated debt was included in surplus, in addition to application of UFR.

T&D Holdings INTEGRATED REPORT 201969

Foundations Supporting the Creation of Shared ValueManagement Organization
Board of Directors (as of July 1, 2019)

Representative Director and Chairman

Representative Director and President

Director and Senior Managing Executive Officer

Tetsuhiro Kida

Hirohisa Uehara

Koichi Seike

Personal history

Personal history

Personal history

Apr. 1976 Joined Daido Life
Mar.1999 General Manager of Planning Department of Daido Life
Jul. 2000 Director of Daido Life
Apr. 2003 Managing Director of Daido Life
Jun. 2006 Managing Executive Officer of Daido Life
Apr. 2007	Director of T&D Financial Life,
Director of T&D Asset Management,
Managing Executive Officer of T&D Holdings
Jun. 2007	Director and Managing Executive Officer of T&D Holdings
Apr. 2008	Director and Senior Managing Executive Officer of T&D
Holdings
Apr. 2010	Representative Director and President of Daido Life,
Director of T&D Holdings
Apr. 2015	Representative Director and Chairman of Daido Life,
Representative Director and President of T&D Holdings
Apr. 2018	Representative Director and Chairman of T&D Holdings(current)
Jun. 2019	Director of Daido Life (current)

Significant concurrent positions
Director of Daido Life

Number of the Company’s share held*
Attendance to the Board of Directors’ meetings

Apr. 1984 Joined Taiyo Life
Jan. 2005	General Manager of Investment Planning Department of
Taiyo Life
Feb. 2005 Director of T&D Asset Management
Apr. 2007	General Manager of Group Planning Department of
		 T&D Holdings
Apr. 2010 Director of T&D Asset Management
Apr. 2011	Executive Officer and General Manager of Group Planning
Department of T&D Holdings
Apr. 2012 Director of T&D Financial Life
Apr. 2014 Executive Officer of Taiyo Life
Jun. 2014 Director and Executive Officer of Taiyo Life
Apr. 2015 Director and Managing Executive Officer of Taiyo Life
Apr. 2016 Director and Senior Managing Executive Officer of Taiyo Life
Apr. 2017	Director of Taiyo Life,
		 Executive Vice President of T&D Holdings
Jun. 2017	Director of T&D Financial Life, Representative Director andExecutive Vice President of T&D Holdings
Apr. 2018	Representative Director and President of T&D Holdings(current)

28,003

Number of the Company’s share held*

20,21620 / 20

Attendance to the Board of Directors’ meetings

20 / 20

Apr. 1980 Joined Daido Life
Apr. 2003	General Manager of Profit Management andActuarial Department of Daido Life
Jun. 2006 Executive Officer of Daido Life
Apr. 2010 Managing Executive Officer of Daido Life
Jun. 2011 Director and Managing Executive Officer of Daido Life
Apr. 2014 Managing Executive Officer of T&D Holdings
Jun. 2014 Director and Managing Executive Officer of T&D Holdings
Apr. 2016	Director and Senior Managing Executive Officer of Daido
Life (current), Director and Senior Managing Executive
Officer of T&D Holdings (current)

Significant concurrent positions

Director and Senior Managing Executive Officer of Daido Life
Number of the Company’s share held*

23,782

Attendance to the Board of Directors’ meetings

20 / 20

Director and Senior Managing Executive Officer

Director and Managing Executive Officer

Director and Managing Executive Officer

Mitsuhiro Nagata

Yasuro Tamura

Yoshihisa Tanaka

Personal history

Personal history

Personal history

Apr. 1985 Joined Daido Life
Apr. 2008	General Manager of Profit Management and Actuarial
Department of Daido Life
Apr. 2011 Executive Officer of Daido Life
Apr. 2015 Managing Executive Officer of Daido Life
Jun. 2015 Director and Managing Executive Officer of Daido Life
Apr. 2017 Managing Executive Officer of T&D Holdings
Apr. 2018	Director of Daido Life (current),
		 Senior Managing Executive Officer of T&D Holdings
Jun. 2018	Director of T&D Financial Life (current),		Director and Senior Managing Executive Officer of
T&D Holdings (current)
Jul. 2019	Director of T&D United Capital (current)

Significant concurrent positions

Apr. 1987 Joined Taiyo Life
Jul. 2009 General Manager of Planning Department of Taiyo Life
Apr. 2014 Executive Officer of Taiyo Life
Jun. 2015 Director and Executive Officer of Taiyo Life
Apr. 2017	Director and Managing Executive Officer of Taiyo Life(current)
Apr. 2018 Managing Executive Officer of T&D Holdings
Jun. 2018	Director and Managing Executive Officer of
T&D Holdings (current)

Significant concurrent positions

Director and Managing Executive Officer of Taiyo Life
Number of the Company’s share held*
Attendance to the Board of Directors’ meetings

Director of Daido Life
Director of T&D Financial Life
Director of T&D United Capital

5,405
15 / 15

Nov.1989 Joined Taiyo Life
Apr. 2011 General Manager of Public Relations Department of Taiyo Life
Apr. 2014	Director of T&D Financial Life,
		 Director of T&D Asset Management,		 General Manager of Group Planning Department of
		 T&D Holdings
Apr. 2015	Executive Officer and General Manager of Group Planning
Department of T&D Holdings
Apr. 2019	Director of Pet & Family Insurance, Managing Executive
Officer of T&D Holdings
Jun. 2019	Director of T&D Financial Life (current),
		 Director of Taiyo Life (current),		Director and Managing Executive Officer of T&D Holdings(current)
Jul. 2019 Director of T&D United Capital (current)

Significant concurrent positions

Number of the Company’s share held*

16,651

Director of T&D Financial Life
Director of Taiyo Life
Director of T&D United Capital

Attendance to the Board of Directors’ meetings

15 / 15

Number of the Company’s share held*
Attendance to the Board of Directors’ meetings

70

T&D Holdings INTEGRATED REPORT 2019

4,320
—

Outside Director

Outside Director

Outside Director

Haruka Matsuyama

Naoki Ohgo

Seiji Higaki

Personal history

Personal history

Personal history

Apr. 1995 Assistant Judge to the Tokyo District Court
Jul. 2000 Registered as an Attorney
Jun. 2013 Director of T&D Holdings (current)

Apr. 1985 Joined McKinsey & Company, Inc.
Jul. 1999 Partner of McKinsey & Company, Inc.
Jul. 2005	Executive Officer of GE Consumer Finance K.K.
(current Shinsei Financial Co., Ltd.)
Aug.2008 Representative Director of Root F Co., Ltd. (current)
Jun. 2017 Director of T&D Holdings (current)

Significant concurrent positions

Attorney at Law
Audit & Supervisory Board Member of MITSUI & CO., LTD.
Director of Mitsubishi UFJ Financial Group, Inc.
Director of Restar Holdings Corporation

Significant concurrent positions
Representative Director of Root F Co., Ltd.
Director of Orient Corporation

Reasons for selection

Ms. Haruka Matsuyama has sophisticated expertise and extensive
insight as an attorney at law specialized in corporate legal affairs. She
has been selected as an Outside Director because she is expected toserve her role as an Outside Director in making key management decisions and supervising the execution of operations from a perspectiveof protecting general shareholders by capitalizing on her knowledge
and experience.
Number of the Company’s share held*
Attendance to the Board of Directors’ meetings

2,488
19 / 20

Reasons for selection

Mr. Naoki Ohgo has sophisticated expertise and extensive insightbased on his experience in providing consulting services mainly in thefinancial field, as Representative Director of Root F Co., Ltd., following
his career as a partner (business partner) of a foreign consulting
company, capitalizing on his global perspective and high-level insight.
He has been selected as an Outside Director because he is expected toserve his role as an Outside Director in making key management decisions and supervising the execution of operations from a perspectiveof protecting general shareholders by capitalizing on his knowledge
and experience.
Number of the Company’s share held*
Attendance to the Board of Directors’ meetings

636
20 / 20

Apr. 1975 Joined The Daiwa Bank, Ltd.
Jun. 2003 Executive Officer of Resona Bank, Ltd.
Jun. 2005 Executive Officer of Resona Holdings, Inc.
Jun. 2006 Director of Resona Holdings, Inc.
Jun. 2007	Director, President and Representative Executive Officer ofResona Holdings, Inc.
Apr. 2009	Representative Director and Executive Officer ofResona Bank, Ltd.
Jun. 2011 Director and Vice Chairman of Resona Bank, Ltd.
Apr. 2013 Director of Resona Holdings, Inc.
Jun. 2013 Chairman of Resona Research Institute Co., Ltd.
Jun. 2018 Director of T&D Holdings (current)

Reasons for selection

Having served as Director, President and Representative Executive
Officer of a bank holding company and Representative Director andExecutive Officer of a bank, Mr. Seiji Higaki has a wealth of knowledge
and experience in corporate management. He has been selected as
an Outside Director because he is expected to serve his role as an
Outside Director in making key management decisions and supervising
the execution of operations from a perspective of protecting generalshareholders by capitalizing on this knowledge and experience.

Attendance to the Board of Directors’ meetings

Director

Director

Director

Naoki Soejima

Minoru Kudo

Masafumi Itasaka

Personal history

Personal history

Personal history

Apr. 1981 Joined Taiyo Life
Oct. 2008	General Manager of Marketing Planning Department of
Taiyo Life
Apr. 2009 Executive Officer of Taiyo Life
Apr. 2011 Managing Executive Officer of Taiyo Life
Jun. 2011 Director and Managing Executive Officer of Taiyo Life
Apr. 2014	Representative Director and Senior Managing Executive
Officer of Taiyo Life
Apr. 2016	Representative Director and Executive Vice President of
Taiyo Life
Apr. 2019 Representative Director and President of Taiyo Life (current)
Jun. 2019 Director of T&D Holdings (current)

Significant concurrent positions

Apr. 1978 Joined Daido Life
Apr. 2005	General Manager of General Marketing Department of
Daido Life
Jun. 2005 Director of Daido Life
Jun. 2006 Executive Officer of Daido Life
Apr. 2008 Managing Executive Officer of Daido Life
Jun. 2009 Director and Managing Executive Officer of Daido Life
Apr. 2011	Director and Senior Managing Executive Officer ofDaido Life
Apr. 2014	Representative Director and Executive Vice President of
Daido Life
Apr. 2015 Representative Director and President of Daido Life (current)
Jun. 2015 Director of T&D Holdings (current)

Number of the Company’s share held*

Representative Director and President of Daido Life
Corporate Auditor of Ezaki Glico Co., Ltd.

Significant concurrent positions

Representative Director and President of Taiyo Life

Attendance to the Board of Directors’ meetings

15,007—384

Number of the Company’s share held*

Jun. 2004 Joined Daido Life
Sep.2007	General Manager of Business Development Department of
T&D Financial Life
Apr. 2011 Executive Officer of T&D Financial Life
Apr. 2015 Managing Executive Officer of T&D Financial Life
Jun. 2015	Director and Managing Executive Officer of
T&D Financial Life
Apr. 2017	Representative Director and President of T&D Financial Life(current)
Jun. 2017 Director of T&D Holdings (current)

Significant concurrent positions

Representative Director and President of T&D Financial Life

4,271

Number of the Company’s share held*
Attendance to the Board of Directors’ meetings

Number of the Company’s share held*

42,886

Attendance to the Board of Directors’ meetings

20 / 20

15 / 1520 / 20*As of May 31, 2019

T&D Holdings INTEGRATED REPORT 201971

Foundations Supporting the Creation of Shared ValueManagement Organization
Audit & Supervisory Board Members (as of July 1, 2019)

Audit & Supervisory Board Member

Audit & Supervisory Board Member

Junichi Yanai

Yasuo Teraoka

Personal history

Personal history

Apr. 1984 Joined Taiyo Life
Apr. 2017	Deputy General Manager of General Affairs Department of
Taiyo Life
Jun. 2017	Audit & Supervisory Board Member of Taiyo Life (current),
Audit & Supervisory Board Member of T&D Holdings(current)

Significant concurrent positions

Audit & Supervisory Board Member of Taiyo Life
Number of the Company’s share held*
Attendance to the Board of Directors’ meetings
Attendance to Audit & Supervisory Board meetings

3,716
20 / 20
17 / 17

Oct. 2000 Joined Daido Life
Apr. 2011	General Manager of Market & Alternative Investment
Department of Daido Life
Apr. 2013 Executive Officer of Daido Life
Apr. 2015 Executive Officer of T&D Holdings
Jun. 2018	Audit & Supervisory Board Member of Daido Life (current),
Audit & Supervisory Board Member of T&D Holdings(current)
Jul. 2019	Audit & Supervisory Board Member of T&D United Capital(current)

Significant concurrent positions

Audit & Supervisory Board Member of Daido Life
Audit & Supervisory Board Member of T&D United Capital
Number of the Company’s share held*

19,855

Attendance to the Board of Directors’ meetings

20 / 20
10 / 10

Attendance to Audit & Supervisory Board meetings

Outside Audit & Supervisory Board Member

Outside Audit & Supervisory Board Member

Shigekazu Iwai

Yuichi Ozawa

Personal history

Personal history

Apr. 1972 Registered as an Attorney
Apr. 1991 Vice President of the Tokyo Bar Association
Apr. 2004	President of the Tokyo Bar Association,
Vice President of the Japan Federation of Bar Associations
Jun. 2012	Audit & Supervisory Board Member of Daido Life,
Audit & Supervisory Board Member of T&D Holdings(current)

Significant concurrent positions
Attorney at Law

Reasons for selection

Mr. Shigekazu Iwai has deep, special knowledge and extensive
insight as an attorney at law, holding vital responsibilities in the legal
community, including president of the Tokyo Bar Association and vicepresident of the Japan Federation of Bar Associations. He has been
selected as an Outside Audit & Supervisory Board Member because
he can be expected to capitalize on this knowledge and experience
to serve his role as an Outside Audit & Supervisory Board Member
in auditing the execution of duties of Directors from a perspective ofprotecting general shareholders.
Number of the Company’s share held*
Attendance to the Board of Directors’ meetings
Attendance to Audit & Supervisory Board meetings

3,024
20 / 20
17 / 17

Apr. 1969 Registered as an Attorney
May1985	Organizer, Commercial Law Subcommittee of the Legislative
Council of the Ministry of JusticeApr. 1991	Professor of Legal Training and Research Institute, Supreme
Court of Japan (Defense of Civil Cases)
Jan. 1998	Member of National Bar Examination Committee(Commercial Law)
Jun. 2007 Audit & Supervisory Board Member of Taiyo Life
Jun. 2013	Audit & Supervisory Board Member of T&D Holdings(current)

Significant concurrent positions
Attorney at Law

Reasons for selection

Mr. Yuichi Ozawa has deep, special knowledge and extensive insightas an attorney at law. He has been selected as an Outside Audit &Supervisory Board Member because he can be expected to capitalizeon this knowledge and experience to continue to serve his role as an
Outside Audit & Supervisory Board Member in auditing the executionof duties of Directors from a perspective of protecting generalshareholders.
Number of the Company’s share held*

17,277

Attendance to the Board of Directors’ meetings

20 / 20
17 / 17

Attendance to Audit & Supervisory Board meetings*As of May 31, 201972

T&D Holdings INTEGRATED REPORT 2019

IR Activities
T&D Holdings, Inc. (the “Company”) strives to promote investor relations (IR) activities based on the core
principles of timeliness, fairness, and accuracy, with the aim of garnering the trust of and proper evaluation fromshareholders, investors, and so forth. In this section, we highlight the Company’s FY2018 major initiatives andoutline its IR policy.

Major Initiatives
The Company conducts highly communicative investor
relations (IR) activities, on the principle that its top management is responsible for all IR statements.
In addition to holding regular financial results meetings
for institutional investors and analysts, the Company holds
one-on-one on-site meetings with investors in Japan andoverseas, and shares views obtained through dialog broadly with management and employees in the Group.
The Company also publishes corporate information ina timely manner through its IR site, and has been rated
highly by external assessment organizations.
Scenes from an IR meeting for institutional investors and analysts

Meetings held in FY2018

Evaluations by External Assessment Organizations

Financial results meetings for institutional
investors and analysts

2

Financial results telephone conferences for
institutional investors and analysts

4

Conferences sponsored by securities firms

3One-on-one meetings
Information meetings for individual investors•	2018 Internet IR Award (Daiwa Investor Relations Co. Ltd.)	Evaluated 3,782 listed companies*	Selected as one of 36 winners of the “Excellence Award”
for the second consecutive year Overall ranking 21st
• FY2018 All Japanese Listed Companies’ Website Ranking

Total 177
3

(Nikko Investor Relations Co., Ltd.)

Evaluated all 3,785 listed companies*	Selected as one of 179 companies with grade AAA
websites in the Overall ranking for the second
consecutive year Overall ranking 31st
* The number of evaluated companies differs depending on the timing ofsurveys, etc.

T&D Holdings IR POLICY
1. Purpose of IR Activities
T&D Holdings, Inc. (the “Company”) strives to promote investor relations(“IR”) activities based on the core principles of timeliness, fairness andaccuracy, with the aim of garnering the trust of and proper evaluation fromshareholders, investors, and so forth.
2. Basic Policy
The Company strives to clearly and continuously provide informationon the T&D Insurance Group’s business environment and management
strategies, financial condition, and performance to shareholders, investors,
and so forth. The Company will disclose information stipulated in the
Financial Instruments and Exchange Act, the Insurance Business Act, otherrelated laws and ordinances, and the rules of the Tokyo Stock Exchange ina timely, appropriate and fair manner.
3. IR Information
The Company provides the following IR-related information in addition
to statutory and mandatory reporting requirements (including financial
statements, Annual Securities Report (“YUHO Report”), earnings releases,“TANSHIN Report,” and other timely information).
•M aterials of IR events (conferences, financial results meetings, IR fairs,etc.) for investors and analysts.
• Annual Reports and other IR-related booklets/publications.

The IR information described above will be posted appropriately on the
Company’s website, including pages for shareholders, investors, and so forth.
4. Structure Related to IR Activities
The Company’s top management is in principle responsible for all IR
activities and statements. However, employees in charge of IR may act onbehalf of the management depending on the nature of the IR event, its
scale, or other factors.
The department in charge of IR handles all inquiries from shareholders,investors, and so forth concerning the Company’s IR activities.
5. Feedback to Management
Information gathered from shareholders, investors, and so forth throughIR activities is fed back appropriately to the management and reported
regularly to the Board of Directors and other committees.
6. Silent Period
In order to ensure fairness and prevent the unauthorized disclosure offinancial information, the Company maintains a “Silent Period” in its IR
activities for three weeks prior to the announcement of quarterly financial results. During this period, the Company refrains from commenting
on financial results, and, in principle, from participating in IR events andmeetings.

T&D Holdings INTEGRATED REPORT 201973

Foundations Supporting the Creation of Shared Value

Toward building the foundation for creating shared value

CSR Activity Priority Themes
We are working to create shared value, while mutually linking the six business themes with
the CSR activity priority themes.

T&D Insurance Group’s CSR Priority Themes
CSR Priority
Theme

Promote healthy andabundant lives for all people

Importance to society

1
CSR Priority
Theme

Provide workplaceenvironments that enable all
people to participate actively

2
CSR Priority
Theme

Help mitigate and adapt toclimate change

3
CSR Priority
Theme

Invest to help build asustainable society

4

Relevance to the Groupʼs business
T&D Insurance Group’s
Value Creation Process(CSR priority themes)

Provide workplace environmentsthat enable all people toparticipate actively
Help mitigate and adapt toclimate change

Invest to help build
a sustainable society

Changes in thesocial environment• Further decline in birthrate, aging
population, and population decline• Increasing need to make self-provision forpension, medical care, and nursing care
• Increasing social inequality• Increasingly diverse households

Unique features andstrengths of the Group

Creating shared value through17 goals
169 targets

Business domains

SDGs

Priority issues

Promote healthy and abundant
lives for all people

the strengths of the T&D Insurance Group

Creation ofshared value

Achieving
Shared Value

Diversifying revenue sources in areas
with high affinity to core businessesof the T&D Insurance Group

Customers
Shareholders
and investors

6. Contributing to a moresustainable society throughinvestment

5. Asset formation matchedto customer life plans

Tie-uporganizations

1. Enriching the lives ofsenior citizens

Strengthening
domestic life
insurance business

Healthy andabundant lives

2. Developing the SMEs
that support Japan(core business)

4. Enhancing future
vitality with digital
innovation

3. Healthy and fulfilling
lifestyles for more diversehouseholds

Shared value

Social issues tackled by
T&D Insurance Groupsix business themes leveraging

Ever-changing issues facedby people and society

Employment
and jobsatisfaction

Each Group company① integrally offers
unique products andservices② in a specialized market

Household market

Small and medium enterprises market

Independent insurance agent market

Sustainableglobalenvironment

Technological innovation• Increase in sophistication of IT• Advance in medical technology

Financial strategy

Enhancement of
human resources capabilities

Employees
Business
partners

Strategic corporate management (ERM)74

T&D Holdings INTEGRATED REPORT 2019

Robust corporate governance

Local
communities/societies

Process for Selecting Priority Themes

Process

Process

1

2

Categorizing Social Issues with High Relevance to the Group’s BusinessWe considered various social issues to target,

targets, which are aimed at developing a

based on what society expects of us as a Groupsustainable world, and recognized the issues

engaged mainly in the insurance business, as

we need to contribute. We then added issues

well as how we can help develop a sustain-

derived from the T&D Insurance Group CSR

able society.

Charter that need to be addressed, and classi-

In our considerations, we looked at the SDGs

fied these into 40 social issues to address.

Prioritizing Issues
We evaluated the importance of each issue
based on both a) importance to society, andb) relevance to the Group’s business (influ-

Process

Process

3
4

in administrative reports (white papers ofgovernment ministries and agencies)b) R elevance to the Group’s business:ence on social issues). We then clarified the

Evaluation based on relationship withpriority of initiatives for the Group to pursue.

business themes cited under the Medium-a) Importance to society: Evaluation based

Term Management Plan, and relationshipon ISO26000, assessment agency evalua-with policies and actions defined in thetion items, and items frequently taken up

T&D Insurance Group CSR Charter

Selecting Priority Themes
From high-priority social issues, we extracted

we selected CSR priority themes, which showcommon themes, and organized each issues

how we can create value for society throughinto theme groups. Based on those themes,

our businesses.

Verifying the Adequacy of Priority Themes
We engaged in dialogue and exchanged

priority evaluation. In addition, we received

views on the selection process of priority

approval from the Group CSR Committee

themes with a qualified third party, then(reorganized to Group SDGs Committee in

confirmed the adequacy of social issues

April 2019) and reported to the Executive

to be targeted and the validity of our

Committee and Board of Directors.

Progress Management and Verification of Initiatives
The Group SDGs Committee formulates annual plan for priority theme activities, and regularly checks progress with its
implementation. Those developments are regularly reported to the Board of Directors.

T&D Holdings INTEGRATED REPORT 201975

Foundations Supporting the Creation of Shared ValueCSR Priority
Theme

1

Promote healthy and abundant lives for all people
Offering Products and Services That Address Society Needs
The provision of products and services that contribute to solving various risks faced by our customers that arise due tochanges in the social environment, such as the declining birthrate and aging population, is the most basic social responsibility that the Group should fulfill, and is regarded as an opportunity for our Group.
Initiatives by Taiyo LifeJapan’s rapidly aging society, the so-called “Centenarian

where office workers with specialized knowledge makeAge” is about to get fully underway. Taiyo Life is striving

personal visits to customers and their families, and pro-to provide high-quality products and services so thatvide support forcustomers in the senior market can enjoy greater peace

procedures such asof mind. In October 2018, Taiyo Life launched Himawari

benefits claims.

Dementia Prevention Insurance, which provides support

Since its launch in April 2016,
the service has been used atleast 71,000 times (as of theend of March 2019).

for the prevention of dementia. In addition, the company
is rolling out services such as the Kaketsuke-Tai Service,
Initiatives by Daido Life
Daido Life assists SMEs in implementing the health andcircle of collaboration with companies and organizations

productivity management. The aims are to contribute tothat provide support for SMEs in practice of the healthcreating a society where SMEs and their employees canand productivity management. The com-

actively perform and to solving issues faced by Japan’s

pany has also developed and provided therapidly aging society. The company will endeavor to

Daido Life KENCO SUPPORT PROGRAM

establish a system through which the health and produc-to SMEs in collaboration with a multitude oftivity management can become prevalent and take root incompanies that possess specialized tech-as many companies as possible. For that, it will widen the

nology and know-how.

Initiatives by T&D Financial LifeTo respond to diversifying customer needs, T&D Financial

and/or raising children, the company offers protec-

Life enriches its product lineup and provides products intion-type products at an affordable price.

a timely manner through banks and other financial institutions as well as insurance shops. For senior customers,
the company provides wealth-accumulation products to
support a comfortable retirement life by preparing forpost-retirement expenditures and the need for protection
for bereaved families. For customers who are working

76

T&D Holdings INTEGRATED REPORT 2019

Level-premium income protection insurance
Kakei Ni Yasashii Shunyuhosho launched in
April 2018.

Improving Customer Satisfaction
Systems to Respond to Customer Feedback
Customer feedback collected from daily sales activities

System to utilize customer feedback in management

The three life insurance companies collect a variety of

The Group’s three life insurance companies have set up

customer feedback through daily sales activities to re-dedicated departments and committees with external

spond to the changing needs of society through themembers in charge of customer satisfaction manage-

provision of better products and services. We have set

ment. We developed a total system ensuring customer

up a number of points of contact with customers, such as

satisfaction at all stages of interaction with customers,

sales representatives, sales agents, call centers (customer

from making contracts to payment of insurance claims

service centers), and the Internet to collect as much cus-

and benefits, based upon a clearly stated policy for cus-

tomer feedback as possible. In addition, the company is

tomer satisfaction and specific guidelines for the handlingconducting customer satisfaction surveys to inquire aboutof customer complaints. All the feedback collected fromthe level of satisfaction provided by our products, services

customers is input into a centrally managed databaseand after-sale services.

and shared by the relevant units for the development andquality improvement of products and services, as well as
for the improvement of business practices.

Initiatives by Taiyo Life
Initiatives for ISO 10002
In March 2008, Taiyo Life declared the introduction of ISO

following on from March 2018, we obtained a third-party

10002, an international standard for handling complaints

opinion on ISO 10002 compliance that recognized ouras regards quality management, customer satisfaction andcomplaint management system as complying with ISO

guidelines for complaints handling in organizations, and10002 and functioning effectively. The company has been

since then has been committed to continually enhancing

working to improve its business processes based on ISO

customer-oriented service and operations by utilizing

10002 and educate employees through training programs.

customer feedback (including complaints). In March 2019,
Initiatives by Daido Life
Customer Satisfaction Surveys
Conducting surveys is useful in identifying hidden issues

representatives and the understandability of application

related to Daido Life’s business that are difficult to uncoverforms and other documents, as well as customer satisfac-

by passively receiving customer opinions and requests.

tion surveys filled out by business owners/managers that

Major examples include the new policy procedures survey

inquire about the level of satisfaction provided by ourfilled out by new policyholders after the completion of the

products, services and after-sale services.

contract procedures, with a focus on the attitudes of sales
Initiatives by T&D Financial Life
Customer Survey
T&D Financial Life conducts a customer satisfaction sur-the Customer Service Center staff and understandability

vey to proactively reflect customer feedback in customer

of application forms and documents involved in various

service and operational quality improvements. This survey

procedures. Results of customer surveys are available on

includes questions about the quality of call handling by

its website.

T&D Holdings INTEGRATED REPORT 201977

Foundations Supporting the Creation of Shared ValueCSR Priority
Theme

2

Provide workplaceenvironments that enable all
people to participate actively

The T&D Insurance Group has been promoting to nurture a corporate culture where diverse human resources canfeel job satisfaction and reach their potential.
Active Participation of Women
The three life insurance companies are working to revise
their respective personnel management and treatment
systems, as well as introducing various support systems toenhance the work-life balance. By fostering Group-wide
collaboration to reduce total working hours and encourage male employees to take childcare leave, we arepromoting the creation of workplace environments where
everybody is motivated to play an active role.
To steadily advance these measures to promote theactive participation of woman, the three life insurancecompanies formulated their action plans based on theirrespective business models.
Employment of People with Disabilities
We have put in place several measures designed to create a comfortable workplace for employees with disabilities. As a pre-hire initiative, we encourage the attendanceof a placement support worker at job interviews, so thatjob candidates can go through the screening process
without worry. We also hold workplace tours for candidates. After hiring, we strive to provide the employment
support in the entire Group, through measures such as
preparing a comfortable working environment by introducing dedicated personal computers and consideringcommuting paths. In addition, work adaptation supporters who specialize in support for employees with disabilities are dispatched to the company, and a placement support worker holds interviews together with the employee
and his or her supervisor, and offers advice.

LGBT-friendly
The T&D Insurance Group’s CSR Charter calls for “Respectfor Human Rights,” and the Group is striving to develop
a workplace environment where each employee can fully
demonstrate their abilities. Regarding the LGBT community (a sexual minority) from the perspective of diversity,
Group companies are advancing initiatives such as implementing training and establishing consultation desks.
Comfortable Workplace Environment
Work-Life Balance
T&D Insurance Group companies have been strengthening various efforts such as enhancing systems such as
childcare leave and a reduction of total working hours,
aimed at enabling employees to demonstrate their capabilities and improve their performance at work whileat the same time fulfilling their responsibilities at homeincluding housework, childcare and nursing care.
Utilization and Development of Human Resources
Initiatives to Provide Opportunities for Growth
The three life insurance companies conduct education andtraining, primarily through OJT (on-the-job training), grouptraining, and support for personal development. These companies encourage autonomous career development by each
employee, by actively helping them to acquire qualifications
and offering a diverse curriculum, including correspondence
education. In addition, systematic rotation is implemented
to provide employees with a variety of business experience,
allowing them to be more capable of carrying out work froma broad, company-wide perspective.

Reference: Status of taking leaves in the three life insurance companies
Number of employees taking maternity leave (persons)
Number of employees eligible to take childcare leave (persons)
Men
Women
Number of employees taking childcare leave (persons)
Men
Women
Number of employees taking nursing care leave (persons)
Men
Women

78

T&D Holdings INTEGRATED REPORT 2019

FY2015FY2016FY2017

290
432
142
290
406
140
266

328
462
134
328
450
133
317

333
455
122
333
444
121
323

FY2015FY2016FY2017

8
0
8

12
0
12

20
1
19

FY2018
383
483
100
383
465
100
365
FY20186
0
6

 orking Group Comprising Young and Mid-CareerW
Employees from Group Companies
In fiscal 2011, we started the Working Group for the
Active Participation of Women, an initiative to plan andpropose group-wide measures to promote active participation of women. In fiscal 2016, this initiative wasrenamed the Working Group on Work Style Reform,and comprises both men and women. In fiscal 2018, thegroup conducted surveys and research on the theme of
A Positive Cycle of Health Promotion and Productivity
Improvements, and proposed various health promotion
measures. One of these proposals involved the use ofannual paid leave as health leave, along with the joint
utilization of health promotion measures among Group
companies. These proposals were promoted in fiscal 2019
at Group companies, leading to the further support ofhealth promotion for employees.

Overseas Job Assignments and Overseas MBA
Taiyo Life
Taiyo Life is dispatching young employees to a numberof companies for approximately three months in order todevelop personnel capable of successfully working on a
global level. In addition, it dispatches a number of employees to the operational companies overseas to acquire
high-level asset management knowledge.
Daido Life
In order to nurture global talent through diverse experiences, Daido Life offers all employees the opportunity
to build their careers as the Career Challenge Systemthrough internships at overseas companies and MBA
studies overseas.

Health and Productivity Management
Group companies aim to realize workplaces where all employees can work enthusiastically with a sound mind and bodyunder the principles of health and productivity management.
Initiatives by Taiyo LifeThe company promotes Taiyo’s GENKI Project*, an initiative aimed at energizing and promoting the health of
employees, customers and society. This project provides
various forms of support to encourage employees to behealthy, with the aim of preventing lifestyle diseases. In
addition to conducting in-house anti-smoking campaigns,
the company also cooperates with Kaminoyama City in
Yamagata Prefecture to offer Kurort Health Walking andSmart Life Stay, accommodation packages that incorporate the government’s specified health guidance, throughthe Kaminoyama Onsen Kurort (health resorts) Program.
The company’s health and productivity management initiatives have also included an increase in the subsidy forcancer screening since 2017, and MCI screening is performed along with regular health checkups to diagnose
the risk of future dementia.

* Taiyo’s GENKI Project is being promoted with the President as its leader and all executive officers as members.

Initiatives by Daido LifeThe company introduced the KENCO SUPPORT PROGRAM
for executives and employees in an effort to promote
employee health and improve health literacy. The programprovides wearable devices that measure personal statusduring everyday activities, such as heart rate and numberof steps taken, and organizes talks on the company-wide
non-smoking policy and other health topics. The company

is strengthening its efforts to reduce working hours, prevent disease, and promote mental health. In addition, by
expanding these initiatives on a company-wide basis, under the title, “DAIDO KOKO-KARA,” the company fosters
a corporate culture as a company that practices health andproductivity management.

Initiatives by T&D Financial Life
T&D Financial Life has implemented initiatives to promote
employee health, with a management initiative of creatinga workplace where employees can feel job satisfaction.
These include initiatives to reduce working hours, such as
establishing a “No Overtime Day” and a “Go Home Early
Day,” as well as automatically shutting down computersused for work, fully implementing regular health checkups,

conducting stress checks, abolishing in-house smoking
areas and prohibiting smoking during working hours, andsubsidizing the costs of engaging in sports through inhouse club and other activities. In addition, the company isalso engaged in specified medical check-ups and provisionof health guidance based on Data Health Plans, in collaboration with the Health Insurance Association.

T&D Holdings INTEGRATED REPORT 201979

Foundations Supporting the Creation of Shared ValueCSR Priority
Theme

3

Help mitigate and adapt to climate change
The T&D Insurance Group formulated the T&D Insurance Group Environmental Policy to clarify the Group’s stance on theenvironment and to publicize the policy among executives and employees. The T&D Insurance Group has announced thatits policy is to carry out business activities with full awareness of the importance of environmental concerns and will give sufficient consideration to global environmental protection. Based on the above environmental policy, the Group has set out its
Green Purchasing Standards and Detailed Rules and gives priority to the purchase of products and services that help reduce
its environmental impact in procurement. While climate change on a global scale is a risk for the continuity of the Group’sbusiness activities, at the same time, the Group considers it to represent an opportunity to undertake new activities.
* Please see our Sustainability Report for more details.

https://www.td-holdings.co.jp/en/csr/report/

Disclosure of Climate-related Financial Information Based on the TCFD
The Task Force on Climate-related Financial Disclosure

The effects of climate change have significant impacts on(TCFD), established by the Financial Stability Board (FSB),

the lives of people, through changes in economic behav-

formulated its recommendations for clarified, compara-iors and society worldwide. The T&D Insurance Group has

ble, and consistent information disclosure regarding theexpressed its support for the TCFD recommendations,risks and opportunities posed by climate change. Theseand is actively committed to disclosing climate-related

recommendations were announced in June 2017. Climate

financial information in an easy-to-understand manner.

change is a challenge to be addressed on a global scale.
Risks and Opportunities
The Group recognizes the following risks and opportunities relating to climate change.
[Physical risks]• Financial impacts from the possibility of an increasing frequency
and severity of natural disasters (deterioration of underwriting
profitability, increased costs of measures for business continuity atGroup companies)• Impact on the morbidity rate and average life expectancy related
to insurance accident rates, as a result of an increase in the average temperature	An increase in the average temperature and associated changes
in the morbidity rate and average life expectancy are likely toprogress gradually, over a long period of time. Therefore, it is assumed to be possible to maintain adequately calculated premium
rates by accurately evaluating and analyzing the changing data.
[Transition risks]• Laws, regulations, and technological advances may affect thebusinesses of investees and borrowers of the Group, and there is arisk that the value of assets related to the Company’s investments
and lending may fluctuate.
• Risks of increased investment costs, due to the requirement toimprove the environmental performance of real estate for rent
• If the Group’s management framework is inadequate to meetsocial demands in the form of laws, regulations, and economic
policies, the Group may fail to achieve the level of conduct and80

T&D Holdings INTEGRATED REPORT 2019

information disclosure expected of a leading listed company
group. This may give rise to the risk that the Group’s social credibility and brand image may be compromised, adversely affecting
its share price, financial results, and business activities.
[Opportunities]•O pportunities to increase insurance revenue by expanding andproviding a wider scope of protection
Changes in the morbidity rate and average life expectancy associated with the progress of global warming are expected to give rise toneeds for protection (involving death, annuities, and medical care)against emerging risks.
• Opportunities to enhance the value of investment assets andexpand investment returns stably over the long term
As an institutional investor, it is assumed that we will lend and invest
in the expanding clean energy development and energy conservation businesses, and also own and manage real estate with superior
environmental performance.
• Opportunities to expand business domains andincrease revenue
As a business operator, rather than as an institutional investor, it isassumed that we will develop or enter into new business domains
related to the mitigation of and adaptation to climate change.

CSR Priority
Theme

4

Invest to help build a sustainable society
The T&D Insurance Group operates the life insurance business as its core business, which is highly social and public innature. Contributing to realizing a sustainable society through investment is one of the most fundamental roles of theGroup. The sustainable and stable growth of society is essential in securing long-term stable profit through investment.
The Group focuses on the impact that the investment activities of the institutional investors who manage long-term funds
have on efforts to realize a sustainable world. The Group will contribute to the realization of a sustainable society throughinvestment activities undertaken in consideration of the environment, society and corporate governance.
Signing the Principles for Responsible Investment
The three companies: Taiyo Life, Daido Life, and T&D Asset Management have become signatories of the Principles for
Responsible Investment (PRI)*, which are supported by the United Nations. The status of each Group company’s PRI initiatives is reported in PRI Transparency Report.
https://www.unpri.org/signatories/transparency-reports-2019/4506.article/* The Principles for Responsible Investment (PRI) are a code of conduct for the global financial industry that was proclaimed by Kofi Annan, the secretary- general of the United Nations in 2006. A
commitment to these principles has been signed by over 2,200 financial institutions worldwide, and by 75 in Japan (as of August 2019).

The Principles for Responsible Institutional Investors (the Japanese Version of the Stewardship Code)The three companies: Taiyo Life, Daido Life and T&D

Taiyo Life Insurance Company (Japanese only):

Asset Management, endorsed and expressed their commitment to the Principles for Responsible Institutional
Investors (the Japanese version of the Stewardshiphttps://www.taiyo-seimei.co.jp/company/activity/ssc.html
Daido Life Insurance Company (Japanese only):https://www.daido-life.co.jp/company/csr/investor/ssc/
T&D Asset Management Co., Ltd. (Japanese only):https://www.tdasset.co.jp/company/principles/stewardship/Code) in May 2014. Details of each company’s basic
policies, policy on exercising voting rights and status of
exercising voting rights with respect to the Principles for* Since T&D Financial Life does not operate with listed stocks, and does not plan to do so in
the future, there are no plans to announce support for the Stewardship Code.

Responsible Institutional Investors are disclosed on thecompanies’ respective websites (Japanese).
Reference: Status of exercising voting rights at Taiyo Life and Daido Life
Taiyo Life and Daido Life reject proposals in cases where problems are not rectified despite constructive dialogue, cases where shareholder
value is highly likely to be impaired and in certain other circumstances.
The summary of results of voting rights exercised at general meetings of shareholders held by domestically listed companies between July 2018
and June 2019 are as follows.
Taiyo Life

Daido Life

Approve

RejectAbstainCarte
blancheTotal
agendaitems

Approve

RejectAbstainCarte
blancheTotal
agendaitems

Company
proposals

177

—

—

—

177

350

5

1

—

356

Shareholder
proposals

—

7

—

—

7

—

23

—

—

23

Total

177

7

—

—

184

350

28

1

—

379

Type

T&D Holdings INTEGRATED REPORT 201981

Supplementary Materials

Status of Stock Holdings
I. Standards and ways of thinking by category in investments
The Group holds investment stocks for the purpose of pure investment in order to reap earnings by an increase in equity value
and by receiving dividends and so forth. In addition, the Group holds investment stocks for purposes other than pure investment
purposes (hereinafter “non-pure investment stocks”). The purposes of holding non-pure investment stocks are to maintain andto expand long-term, stable business relationships, to maintain and to strengthen business partnerships, and to reap medium- tolong-term earnings by an increase in equity value and by receiving dividends and so forth.

II. Holdings stocks on Taiyo Life Insurance Company
Of the Company and its consolidated subsidiaries, Taiyo Life is the consolidated subsidiary with the largest balance of investment stock. The status of Taiyo Life’s stock holding is as follows:

1. Non-pure investment stocksa.	Policies to hold shares, the rationality to hold shares, verification contents at the Board of Directors meetings about theappropriateness to hold individual companies
Every year, the boards of directors of the Company and Taiyo Life Insurance Company shall verify the propriety of holding
individual non-pure investment stocks by concretely examining the adequacy of the holdings, whether the benefits and risks arecommensurate with the capital costs, and other factors.
b.	The number of stocks and the amounts on Balance Sheets
Total of balance sheet
amount (¥ millions)

The number of stocks

Unlisted stocks

5

Stocks other than unlisted stocks

36

¥

2,871
263,292(Stocks with increased number of shares in this fiscal year)
The number of stocks

Unlisted stocks
Stocks other than unlisted stocks

Total of acquisition costs
related to the increasein the number of shares(¥ millions)

0

¥

2

—

3,611

(Stocks with decreased number of shares in this fiscal year)
The number of stocks

82

Unlisted stocks0

Stocks other than unlisted stocks

1

T&D Holdings INTEGRATED REPORT 2019

Total of sale pricerelated to the decreasein the number of shares(¥millions)¥

The reasons forincreasing the number of shares—
644

For additional purchase as the purpose of expectation of the quantitative effectiveness to hold thestocks by further enhancement with the long-termand stable business relationships

c.	The information about the number of the stocks and balance sheet amount for Specified Investment Shares andRegarded as Holding Shares
Specified Investment SharesYear ended
March 31, 2018
StocksYear ended
March 31, 2019

The number of shares

Holding purposes, quantitative effects to hold stocks,
and reasons to increase the number of stocks.

Y=Yes/N=No

Balance sheet amount ¥millions
5,862,032

5,862,032¥ 26,642¥ 41,913

7,411,520

7,411,520

22,17523,716

8,096,575

8,096,575

20,901

22,52814,350,000

14,350,000

24,416

20,4128,566,559

9,566,559

Keio Corporation

SHIMADZU CORPORATION

Mitsui Fudosan Co., Ltd.

Mitsubishi Electric Corporation

Tokyu Corporation
14,203

18,492

31,140,000

31,140,000

21,134

16,7847,700,000

7,700,000

13,84815,442

18,838,372

18,838,372

Daiwa Securities Group Inc.

Mitsubishi Estate Co., Ltd.

Mitsubishi Chemical Holdings
Corporation

19,412

14,682

17,798,316

3,559,663

15,41314,0607,160,800

8,160,800

Tsubakimoto Chain Co.

MITSUI & CO., LTD.
13,05014,024

2,661,820

2,661,820

11,397

10,90815,220,718

15,220,718

Sompo Holdings, Inc.

Mitsubishi UFJ Financial
Group, Inc.

10,6088,371

Whether the counterpart
company holds theCompany’s share

The purpose holding the stocks is to maintain and expand long-term and stable business
relationships, and to reap medium- to long-term earnings by an increase in equity value andby receiving dividends and so forth. The figures on the effect of holdings have not been
disclosed as it contains the transaction information to the counterpart company. It’s been
quantitatively periodically examined whether the effectiveness and risks to hold stocks havebeen commensurate with the capital costs.

Y

The purpose holding the stocks is to maintain and expand long-term and stable business
relationships, and to reap medium- to long-term earnings by an increase in equity value andby receiving dividends and so forth. The figures on the effect of holdings have not been
disclosed as it contains the transaction information to the counterpart company. It’s been
quantitatively periodically examined whether the effectiveness and risks to hold stocks havebeen commensurate with the capital costs.

Y

The purpose holding the stocks is to maintain and expand long-term and stable business
relationships, and to reap medium- to long-term earnings by an increase in equity value andby receiving dividends and so forth. The figures on the effect of holdings have not been
disclosed as it contains the transaction information to the counterpart company. It’s been
quantitatively periodically examined whether the effectiveness and risks to hold stocks havebeen commensurate with the capital costs.

Y

The purpose holding the stocks is to maintain and expand long-term and stable business
relationships, and to reap medium- to long-term earnings by an increase in equity value andby receiving dividends and so forth. The figures on the effect of holdings have not been
disclosed as it contains the transaction information to the counterpart company. It’s been
quantitatively periodically examined whether the effectiveness and risks to hold stocks havebeen commensurate with the capital costs.

Y

The purpose holding the stocks is to maintain and expand long-term and stable business
relationships, and to reap medium- to long-term earnings by an increase in equity value andby receiving dividends and so forth. The figures on the effect of holdings have not been
disclosed as it contains the transaction information to the counterpart company. It’s been
quantitatively periodically examined whether the effectiveness and risks to hold stocks havebeen commensurate with the capital costs.
For the expectation to receive high quantitative effect of holding benefits through thereinforcement with the long-term and stable business relationships, the number of stocks
has been increased.

Y

The purpose holding the stocks is to maintain and expand long-term and stable business
relationships, and to reap medium- to long-term earnings by an increase in equity value andby receiving dividends and so forth. The figures on the effect of holdings have not been
disclosed as it contains the transaction information to the counterpart company. It’s been
quantitatively periodically examined whether the effectiveness and risks to hold stocks havebeen commensurate with the capital costs.

Y

The purpose holding the stocks is to maintain and expand long-term and stable business
relationships, and to reap medium- to long-term earnings by an increase in equity value andby receiving dividends and so forth. The figures on the effect of holdings have not been
disclosed as it contains the transaction information to the counterpart company. It’s been
quantitatively periodically examined whether the effectiveness and risks to hold stocks havebeen commensurate with the capital costs.

Y

The purpose holding the stocks is to maintain and expand long-term and stable business
relationships, and to reap medium- to long-term earnings by an increase in equity value andby receiving dividends and so forth. The figures on the effect of holdings have not been
disclosed as it contains the transaction information to the counterpart company. It’s been
quantitatively periodically examined whether the effectiveness and risks to hold stocks havebeen commensurate with the capital costs.

N*notice1

The purpose holding the stocks is to maintain and expand long-term and stable business
relationships, and to reap medium- to long-term earnings by an increase in equity value andby receiving dividends and so forth. The figures on the effect of holdings have not been
disclosed as it contains the transaction information to the counterpart company. It’s been
quantitatively periodically examined whether the effectiveness and risks to hold stocks havebeen commensurate with the capital costs.
Due to the stock integration, the number of the stocks has been decreased. So there isvirtually no change in the number of shares.

Y

The purpose holding the stocks is to maintain and expand long-term and stable business
relationships, and to reap medium- to long-term earnings by an increase in equity value andby receiving dividends and so forth. The figures on the effect of holdings have not been
disclosed as it contains the transaction information to the counterpart company. It’s been
quantitatively periodically examined whether the effectiveness and risks to hold stocks havebeen commensurate with the capital costs.
For the expectation to receive high quantitative effect of holding benefits through thereinforcement with the long-term and stable business relationships, the number of stocks
has been increased.

Y

The purpose holding the stocks is to maintain and expand long-term and stable business
relationships, and to reap medium- to long-term earnings by an increase in equity value andby receiving dividends and so forth. The figures on the effect of holdings have not been
disclosed as it contains the transaction information to the counterpart company. It’s been
quantitatively periodically examined whether the effectiveness and risks to hold stocks havebeen commensurate with the capital costs.
The purpose holding the stocks is to maintain and expand long-term and stable business
relationships, and to reap medium- to long-term earnings by an increase in equity value andby receiving dividends and so forth. The figures on the effect of holdings have not been
disclosed as it contains the transaction information to the counterpart company. It’s been
quantitatively periodically examined whether the effectiveness and risks to hold stocks havebeen commensurate with the capital costs.

N*notice2

N*notice3

T&D Holdings INTEGRATED REPORT 201983

Supplementary Materials

Status of Stock Holdings

Year ended
March 31, 2018
StocksYear ended
March 31, 2019

The number of shares

Holding purposes, quantitative effects to hold stocks,
and reasons to increase the number of stocks.

Y=Yes/N=No

Balance sheet amount ¥millions
5,486,400

5,486,400

6,386

6,111

3,282,010

3,282,010

5,933

4,621

1,400,000

1,400,000

5,901

4,459

2,734,500

2,734,500

3,002

4,079

1,085,040

1,085,040

2,910

2,925

700,000

700,000

3,150

2,723

1,885,000

1,885,000

2,835

2,599

760,000

760,000

2,149

2,587

573,805

573,805

1,968

2,168

2,817,987

2,817,987

1,933

1,823

1,209,075

1,209,075

2,447

1,760

422,029

422,029

1,468

1,420

678,347

678,347

1,325

1,208

949,088474,544828

792

Obayashi Corporation

KURARAY CO., LTD.

TS TECH Co.,Ltd.

RAITO KOGYO CO., LTD.

Electric Power Development
Co., Ltd. (J-POWER)

Showa Denko K.K.

Tsukishima Kikai Co., Ltd

Sotetsu Holdings, Inc.

Tsubakimoto Kogyo Co., Ltd.

Hokuetsu Corporation

Kurimoto, Ltd.

Taikisha Ltd.

Takasago Thermal Engineering
Co., Ltd.

Toppan Printing CO., LTD.

84

T&D Holdings INTEGRATED REPORT 2019

Whether the counterpart
company holds theCompany’s share

The purpose holding the stocks is to maintain and expand long-term and stable business
relationships, and to reap medium- to long-term earnings by an increase in equity value andby receiving dividends and so forth. The figures on the effect of holdings have not been
disclosed as it contains the transaction information to the counterpart company. It’s been
quantitatively periodically examined whether the effectiveness and risks to hold stocks havebeen commensurate with the capital costs.

Y

The purpose holding the stocks is to maintain and expand long-term and stable business
relationships, and to reap medium- to long-term earnings by an increase in equity value andby receiving dividends and so forth. The figures on the effect of holdings have not been
disclosed as it contains the transaction information to the counterpart company. It’s been
quantitatively periodically examined whether the effectiveness and risks to hold stocks havebeen commensurate with the capital costs.

Y

The purpose holding the stocks is to maintain and expand long-term and stable business
relationships, and to reap medium- to long-term earnings by an increase in equity value andby receiving dividends and so forth. The figures on the effect of holdings have not been
disclosed as it contains the transaction information to the counterpart company. It’s been
quantitatively periodically examined whether the effectiveness and risks to hold stocks havebeen commensurate with the capital costs.

Y

The purpose holding the stocks is to maintain and expand long-term and stable business
relationships, and to reap medium- to long-term earnings by an increase in equity value andby receiving dividends and so forth. The figures on the effect of holdings have not been
disclosed as it contains the transaction information to the counterpart company. It’s been
quantitatively periodically examined whether the effectiveness and risks to hold stocks havebeen commensurate with the capital costs.

Y

The purpose holding the stocks is to maintain and expand long-term and stable business
relationships, and to reap medium- to long-term earnings by an increase in equity value andby receiving dividends and so forth. The figures on the effect of holdings have not been
disclosed as it contains the transaction information to the counterpart company. It’s been
quantitatively periodically examined whether the effectiveness and risks to hold stocks havebeen commensurate with the capital costs.

Y

The purpose holding the stocks is to maintain and expand long-term and stable business
relationships, and to reap medium- to long-term earnings by an increase in equity value andby receiving dividends and so forth. The figures on the effect of holdings have not been
disclosed as it contains the transaction information to the counterpart company. It’s been
quantitatively periodically examined whether the effectiveness and risks to hold stocks havebeen commensurate with the capital costs.

Y

The purpose holding the stocks is to maintain and expand long-term and stable business
relationships, and to reap medium- to long-term earnings by an increase in equity value andby receiving dividends and so forth. The figures on the effect of holdings have not been
disclosed as it contains the transaction information to the counterpart company. It’s been
quantitatively periodically examined whether the effectiveness and risks to hold stocks havebeen commensurate with the capital costs.

Y

The purpose holding the stocks is to maintain and expand long-term and stable business
relationships, and to reap medium- to long-term earnings by an increase in equity value andby receiving dividends and so forth. The figures on the effect of holdings have not been
disclosed as it contains the transaction information to the counterpart company. It’s been
quantitatively periodically examined whether the effectiveness and risks to hold stocks havebeen commensurate with the capital costs.

Y

The purpose holding the stocks is to maintain and expand long-term and stable business
relationships, and to reap medium- to long-term earnings by an increase in equity value andby receiving dividends and so forth. The figures on the effect of holdings have not been
disclosed as it contains the transaction information to the counterpart company. It’s been
quantitatively periodically examined whether the effectiveness and risks to hold stocks havebeen commensurate with the capital costs.

Y

The purpose holding the stocks is to maintain and expand long-term and stable business
relationships, and to reap medium- to long-term earnings by an increase in equity value andby receiving dividends and so forth. The figures on the effect of holdings have not been
disclosed as it contains the transaction information to the counterpart company. It’s been
quantitatively periodically examined whether the effectiveness and risks to hold stocks havebeen commensurate with the capital costs.

Y

The purpose holding the stocks is to maintain and expand long-term and stable business
relationships, and to reap medium- to long-term earnings by an increase in equity value andby receiving dividends and so forth. The figures on the effect of holdings have not been
disclosed as it contains the transaction information to the counterpart company. It’s been
quantitatively periodically examined whether the effectiveness and risks to hold stocks havebeen commensurate with the capital costs.

Y

The purpose holding the stocks is to maintain and expand long-term and stable business
relationships, and to reap medium- to long-term earnings by an increase in equity value andby receiving dividends and so forth. The figures on the effect of holdings have not been
disclosed as it contains the transaction information to the counterpart company. It’s been
quantitatively periodically examined whether the effectiveness and risks to hold stocks havebeen commensurate with the capital costs.

Y

The purpose holding the stocks is to maintain and expand long-term and stable business
relationships, and to reap medium- to long-term earnings by an increase in equity value andby receiving dividends and so forth. The figures on the effect of holdings have not been
disclosed as it contains the transaction information to the counterpart company. It’s been
quantitatively periodically examined whether the effectiveness and risks to hold stocks havebeen commensurate with the capital costs.

Y

The purpose holding the stocks is to maintain and expand long-term and stable business
relationships, and to reap medium- to long-term earnings by an increase in equity value andby receiving dividends and so forth. The figures on the effect of holdings have not been
disclosed as it contains the transaction information to the counterpart company. It’s been
quantitatively periodically examined whether the effectiveness and risks to hold stocks havebeen commensurate with the capital costs.
Due to the stock integration, the number of the stocks has been decreased. So there isvirtually no change in the number of shares.

YYear ended
March 31, 2018
StocksYear ended
March 31, 2019

Holding purposes, quantitative effects to hold stocks,
and reasons to increase the number of stocks.

The number of shares

Y=Yes/N=No

Balance sheet amount ¥millions
365,500

365,500

724

671

375,000

375,000

506

389

260,000

260,000

356

342

200,643

200,643344

298

150,000

150,000

238

228

210,120

210,120278

225

216,800

216,800

251

222

205,220

205,220

134

114

22,584

22,584143

102

50,00050,000117

77

457,500—

581—

705,869—

414—

Advance Create Co., Ltd.

Daiwa Motor Transportation
Co., Ltd.

Sanwa Holdings Corporation

TOYO WHARF&WAREHOUSE
CO., LTD.

Meito Sangyo Co., Ltd.

MEIWA INDUSTRY CO., LTD.

MAEZAWA KASEI INDUSTRIESCO., LTD.

Mitsubishi Paper Mills Limited

NKK SWITCHES CO., LTD.

San ju San Financial Group,
Inc.

Nisshin Steel Co., Ltd.
Concordia Financial Group,
Ltd.

Whether the counterpart
company holds theCompany’s share

The purpose holding the stocks is to maintain and strengthen business partnerships in insurance, and to reap medium- to long-term earnings through by an increase in equity value
and by receiving dividends and so forth. The figures on the effect of holdings have not been
disclosed as it contains the transaction information to the counterpart company. It’s been
quantitatively periodically examined whether the effectiveness and risks to hold stocks havebeen commensurate with the capital costs.

N

The purpose holding the stocks is to maintain and expand long-term and stable business
relationships, and to reap medium- to long-term earnings by an increase in equity value andby receiving dividends and so forth. The figures on the effect of holdings have not been
disclosed as it contains the transaction information to the counterpart company. It’s been
quantitatively periodically examined whether the effectiveness and risks to hold stocks havebeen commensurate with the capital costs.

Y

The purpose holding the stocks is to maintain and expand long-term and stable business
relationships, and to reap medium- to long-term earnings by an increase in equity value andby receiving dividends and so forth. The figures on the effect of holdings have not been
disclosed as it contains the transaction information to the counterpart company. It’s been
quantitatively periodically examined whether the effectiveness and risks to hold stocks havebeen commensurate with the capital costs.

Y

The purpose holding the stocks is to maintain and expand long-term and stable business
relationships, and to reap medium- to long-term earnings by an increase in equity value andby receiving dividends and so forth. The figures on the effect of holdings have not been
disclosed as it contains the transaction information to the counterpart company. It’s been
quantitatively periodically examined whether the effectiveness and risks to hold stocks havebeen commensurate with the capital costs.

Y

The purpose holding the stocks is to maintain and expand long-term and stable business
relationships, and to reap medium- to long-term earnings by an increase in equity value andby receiving dividends and so forth. The figures on the effect of holdings have not been
disclosed as it contains the transaction information to the counterpart company. It’s been
quantitatively periodically examined whether the effectiveness and risks to hold stocks havebeen commensurate with the capital costs.

Y

The purpose holding the stocks is to maintain and expand long-term and stable business
relationships, and to reap medium- to long-term earnings by an increase in equity value andby receiving dividends and so forth. The figures on the effect of holdings have not been
disclosed as it contains the transaction information to the counterpart company. It’s been
quantitatively periodically examined whether the effectiveness and risks to hold stocks havebeen commensurate with the capital costs.

Y

The purpose holding the stocks is to maintain and expand long-term and stable business
relationships, and to reap medium- to long-term earnings by an increase in equity value andby receiving dividends and so forth. The figures on the effect of holdings have not been
disclosed as it contains the transaction information to the counterpart company. It’s been
quantitatively periodically examined whether the effectiveness and risks to hold stocks havebeen commensurate with the capital costs.

Y

The purpose holding the stocks is to maintain and expand long-term and stable business
relationships, and to reap medium- to long-term earnings by an increase in equity value andby receiving dividends and so forth. The figures on the effect of holdings have not been
disclosed as it contains the transaction information to the counterpart company. It’s been
quantitatively periodically examined whether the effectiveness and risks to hold stocks havebeen commensurate with the capital costs.

Y

The purpose holding the stocks is to maintain and expand long-term and stable business
relationships, and to reap medium- to long-term earnings by an increase in equity value andby receiving dividends and so forth. The figures on the effect of holdings have not been
disclosed as it contains the transaction information to the counterpart company. It’s been
quantitatively periodically examined whether the effectiveness and risks to hold stocks havebeen commensurate with the capital costs.

Y

The purpose holding the stocks is to maintain and expand long-term and stable business
relationships, and to reap medium- to long-term earnings by an increase in equity value andby receiving dividends and so forth. The figures on the effect of holdings have not been
disclosed as it contains the transaction information to the counterpart company. It’s been
quantitatively periodically examined whether the effectiveness and risks to hold stocks havebeen commensurate with the capital costs.

N*notice4

Taiyo Life Insurance Company used to have the stocks to maintain and expand long-termand stable business relationships, and to reap medium- to long-term earnings by anincrease in equity value and by receiving of dividends and so forth.

N

Taiyo Life Insurance Company used to have the stocks to maintain and expand long-termand stable business relationships, and to reap medium- to long-term earnings by anincrease in equity value and by receiving of dividends and so forth.

N*notice1 The subsidiary Mitsubishi Chemical Corporation holds stocks.
*notice2 The subsidiary Sompo Japan Nipponkoa Insurance Inc. holds stocks.
*notice3 The subsidiary MUFG Bank, Ltd. holds stocks.
*notice4 The subsidiary THE MIE BANK,LTD. holds stocks.

Regarded as Holding Shares
Not applicable.

T&D Holdings INTEGRATED REPORT 201985

Supplementary Materials

Status of Stock Holdings

2. Stocks for which the holding purpose is pure investment
Fiscal 2017

Fiscal 2018

The number of stocks

Total of balance sheet
amount (¥ millions)

The number of stocks

Total of balance sheet
amount (¥ millions)

Unlisted stocks

42¥ 19,415

42¥ 19,200

Stocks other than unlisted stocks

20

224,02120

181,362

Fiscal 2018 (¥millions)
Total dividends received

Unlisted stocks
Stocks other than unlisted stocks

¥

110
6,446

Total gains (losses)
on sales¥Total of valuation gains (losses)
Net unrealized gains(losses)23¥ 1,824¥ —10,18038,830168

3. Change in investment purpose during fiscal 2018
a. Stocks of which the holding purpose has been changed from pure investment to non-pure investment
Not applicable.
b. Stocks of which the holding purpose has been changed from non-pure investment to pure investment

Concordia Financial Group, Ltd.

86

T&D Holdings INTEGRATED REPORT 2019

Valuation losses

The number of shares

Balance sheet amount¥millions

705,869¥ 301

III. Holdings stocks on Daido Life Insurance Company
Of the Company and its consolidated subsidiaries, Daido Life is the consolidated subsidiary with the second largest balance ofinvestment stock. The status of Daido Life’s stock holding is as follows:

1. Non-pure investment stocksa.	Policies to hold shares, methods to verify the rationality to hold shares, verification contents at the Board of Directors
meetings about the appropriateness to hold individual companies
Every year, the boards of directors of the Company and Daido Life Insurance Company shall verify the propriety of holding
individual non-pure investment stocks by concretely examining the adequacy of the holdings, whether the benefits and risks arecommensurate with the capital costs, and other factors.
b. The number of Stocks and the amounts on Balance Sheets
Total of balance sheet
amount (¥ millions)

The number of stocks

Unlisted stocks

98

Stocks other than unlisted stocks

78

¥

5,605
248,880(Stocks with increased number of shares in this fiscal year)
The number of stocks

Total of acquisition costs
related to the increasein the number of shares(¥millions)

The reasons for increasing the number of shares

Unlisted stocks

2¥ 1,441

For new and additional purchase as the purpose of
new construction on business relationships

Stocks other than unlisted stocks

2

1,823

For new and additional purchase as the purpose offurther enhancement on business relationships(Stocks with decreased number of shares in this fiscal year)
The number of stocks

Unlisted stocks

4

Stocks other than unlisted stocks

12

Total of sale pricerelated to the decreasein the number of shares(¥millions)¥20
21,687

T&D Holdings INTEGRATED REPORT 201987

Supplementary Materials

Status of Stock Holdingsc.	The information about the number of the stocks and balance sheet amount for Specified Investment Shares andRegarded as Holding Shares
Specified Investment SharesYear ended
March 31, 2018
StocksYear ended
March 31, 2019

The number of shares

Holding purposes, quantitative effects to hold stocks,
and reasons to increase the number of stocks.

Y=Yes/N=No

Balance sheet amount ¥millions
64,168,770
Mitsubishi UFJ Financial
Group, Inc.

64,168,770¥ 44,725¥ 35,292

3,500,400

3,500,400

19,497

20,3725,000,000

5,000,000

20,50017,595

7,607,000

7,607,000

18,85016,0581,552,936

1,727,036

14,492

15,165

6,549,500

6,549,500

21,574

14,20528,590,000

28,590,000

Ezaki Glico Co., Ltd.

Daiwa House Industry Co., Ltd.

Kansai Paint Co., Ltd.

Nuernberger
BeteiligungsAktiengesellschaft

ONO PHARMACEUTICAL
CO., LTD.

Resona Holdings, Inc.
16,067

13,714

627,300

313,700

27,017

13,0272,569,046

2,569,046

11,123

10,391

6,684,000

6,684,000

13,9299,852

9,040,518

9,040,518

8,244

9,845

3,656,550

3,656,550

4,998

5,967

SMC Corporation

TKC Corporation

FUJI CORPORATIONKONICA MINOLTA, INC.

The Kansai Electric Power
Company, Incorporated

88

T&D Holdings INTEGRATED REPORT 2019

Whether the counterpart
company holds theCompany’s share

The purpose holding the stocks is to maintain and expand long-term and stable business
relationships, and to reap medium- to long-term earnings by an increase in equity value andby receiving dividends and so forth. The figures on the effect of holdings have not been
disclosed as it contains the transaction information to the counterpart company. It’s been
quantitatively periodically examined whether the effectiveness and risks to hold stocks havebeen commensurate with the capital costs.

N*notice1

The purpose holding the stocks is to maintain and expand long-term and stable business
relationships, and to reap medium- to long-term earnings by an increase in equity value andby receiving dividends and so forth. The figures on the effect of holdings have not been
disclosed as it contains the transaction information to the counterpart company. It’s been
quantitatively periodically examined whether the effectiveness and risks to hold stocks havebeen commensurate with the capital costs.

Y

The purpose holding the stocks is to maintain and expand long-term and stable business
relationships, and to reap medium- to long-term earnings by an increase in equity value andby receiving dividends and so forth. The figures on the effect of holdings have not been
disclosed as it contains the transaction information to the counterpart company. It’s been
quantitatively periodically examined whether the effectiveness and risks to hold stocks havebeen commensurate with the capital costs.

Y

The purpose holding the stocks is to maintain and expand long-term and stable business
relationships, and to reap medium- to long-term earnings by an increase in equity value andby receiving dividends and so forth. The figures on the effect of holdings have not been
disclosed as it contains the transaction information to the counterpart company. It’s been
quantitatively periodically examined whether the effectiveness and risks to hold stocks havebeen commensurate with the capital costs.

Y

The purpose holding the stocks is to maintain and strengthen business partnerships in insurance products/services and asset management, and to reap medium- to long-term earnings
by an increase in equity value and by receiving dividends and so forth. The figures on theeffect of holdings have not been disclosed as it contains the transaction information to thecounterpart company. It’s been quantitatively periodically examined whether the effectiveness and risks to hold stocks have been commensurate with the capital costs.
For the reinforcement of the business partnerships, the number of stocks has been increased.

Y

The purpose holding the stocks is to maintain and expand long-term and stable business
relationships, and to reap medium- to long-term earnings by an increase in equity value andby receiving dividends and so forth. The figures on the effect of holdings have not been
disclosed as it contains the transaction information to the counterpart company. It’s been
quantitatively periodically examined whether the effectiveness and risks to hold stocks havebeen commensurate with the capital costs.

Y

The purpose holding the stocks is to maintain and strengthen business partnerships inthe sales, and to reap medium- to long-term earnings by an increase in equity value andby receiving dividends and so forth. The figures on the effect of holdings have not been
disclosed as it contains the transaction information to the counterpart company. It’s been
quantitatively periodically examined whether the effectiveness and risks to hold stocks havebeen commensurate with the capital costs.

N*notice2

The purpose holding the stocks is to maintain and expand long-term and stable business
relationships, and to reap medium- to long-term earnings by an increase in equity value andby receiving dividends and so forth. The figures on the effect of holdings have not been
disclosed as it contains the transaction information to the counterpart company. It’s been
quantitatively periodically examined whether the effectiveness and risks to hold stocks havebeen commensurate with the capital costs.

Y

The purpose holding the stocks is to maintain and strengthen partnerships to support thecontinuation and development of small and medium enterprises, and to reap medium- tolong-term earnings by an increase in equity value and by receiving dividends and so forth.
The figures on the effect of holdings have not been unveiled as it contains the transaction
information to the counterpart company. It’s been quantitatively periodically examined
whether the effectiveness and risks to hold stocks have been commensurate with the capitalcosts.

Y

The purpose holding the stocks is to maintain and expand long-term and stable business
relationships, and to reap medium- to long-term earnings by an increase in equity value andby receiving dividends and so forth. The figures on the effect of holdings have not been
disclosed as it contains the transaction information to the counterpart company. It’s been
quantitatively periodically examined whether the effectiveness and risks to hold stocks havebeen commensurate with the capital costs.

Y

The purpose holding the stocks is to maintain and expand long-term and stable business
relationships, and to reap medium- to long-term earnings by an increase in equity value andby receiving dividends and so forth. The figures on the effect of holdings have not been
disclosed as it contains the transaction information to the counterpart company. It’s been
quantitatively periodically examined whether the effectiveness and risks to hold stocks havebeen commensurate with the capital costs.

Y

The purpose holding the stocks is to maintain and expand long-term and stable business
relationships, and to reap medium- to long-term earnings by an increase in equity value andby receiving dividends and so forth. The figures on the effect of holdings have not been
disclosed as it contains the transaction information to the counterpart company. It’s been
quantitatively periodically examined whether the effectiveness and risks to hold stocks havebeen commensurate with the capital costs.

YYear ended
March 31, 2018
StocksYear ended
March 31, 2019

The number of shares

Holding purposes, quantitative effects to hold stocks,
and reasons to increase the number of stocks.

Y=Yes/N=No

Balance sheet amount ¥millions

Electric Power Development
Co., Ltd. (J-POWER)

1,993,680

1,993,680

5,347

5,374

2,344,000

2,344,000

5,620

5,027

8,660,000

8,660,000

5,507

3,559

3,824,000

3,824,000

3,846

3,223

4,032,700

4,032,700

2,915

3,012

633,800

633,800

2,078

2,950

2,115,700

2,115,700

3,182

2,917

1,000,000

1,000,000

2,581

2,782

1,400,000

1,400,000

2,718

2,564

618,525

618,525

2,648

2,534

705,600

705,600

3,316

2,205

790,760

790,760

2,506

2,127

Mitsubishi Pencil Co., Ltd.

OKASAN SECURITIES GROUP
INC.

THE SHIZUOKA BANK, LTD.

MEISEI INDUSTRIAL CO., LTD.

Keihan Holdings Co., Ltd.

Tsukishima Kikai Co., Ltd

Mitsui Fudosan Co., Ltd.

Sekisui House, Ltd.

Sompo Holdings, Inc.

Daishi Hokuetsu Financial
Group, Inc.

MOS FOOD SERVICES, INC.

Whether the counterpart
company holds theCompany’s share

The purpose holding the stocks is to maintain and expand long-term and stable business
relationships, and to reap medium- to long-term earnings by an increase in equity value andby receiving dividends and so forth. The figures on the effect of holdings have not been
disclosed as it contains the transaction information to the counterpart company. It’s been
quantitatively periodically examined whether the effectiveness and risks to hold stocks havebeen commensurate with the capital costs.

Y

The purpose holding the stocks is to maintain and expand long-term and stable business
relationships, and to reap medium- to long-term earnings by an increase in equity value andby receiving dividends and so forth. The figures on the effect of holdings have not been
disclosed as it contains the transaction information to the counterpart company. It’s been
quantitatively periodically examined whether the effectiveness and risks to hold stocks havebeen commensurate with the capital costs.

Y

The purpose holding the stocks is to maintain and expand long-term and stable business
relationships, and to reap medium- to long-term earnings by an increase in equity value andby receiving dividends and so forth. The figures on the effect of holdings have not been
disclosed as it contains the transaction information to the counterpart company. It’s been
quantitatively periodically examined whether the effectiveness and risks to hold stocks havebeen commensurate with the capital costs.

Y

The purpose holding the stocks is to maintain and expand long-term and stable business
relationships, and to reap medium- to long-term earnings by an increase in equity value andby receiving dividends and so forth. The figures on the effect of holdings have not been
disclosed as it contains the transaction information to the counterpart company. It’s been
quantitatively periodically examined whether the effectiveness and risks to hold stocks havebeen commensurate with the capital costs.

Y

The purpose holding the stocks is to maintain and expand long-term and stable business
relationships, and to reap medium- to long-term earnings by an increase in equity value andby receiving dividends and so forth. The figures on the effect of holdings have not been
disclosed as it contains the transaction information to the counterpart company. It’s been
quantitatively periodically examined whether the effectiveness and risks to hold stocks havebeen commensurate with the capital costs.

Y

The purpose holding the stocks is to maintain and expand long-term and stable business
relationships, and to reap medium- to long-term earnings by an increase in equity value andby receiving dividends and so forth. The figures on the effect of holdings have not been
disclosed as it contains the transaction information to the counterpart company. It’s been
quantitatively periodically examined whether the effectiveness and risks to hold stocks havebeen commensurate with the capital costs.

Y

The purpose holding the stocks is to maintain and expand long-term and stable business
relationships, and to reap medium- to long-term earnings by an increase in equity value andby receiving dividends and so forth. The figures on the effect of holdings have not been
disclosed as it contains the transaction information to the counterpart company. It’s been
quantitatively periodically examined whether the effectiveness and risks to hold stocks havebeen commensurate with the capital costs.

Y

The purpose holding the stocks is to maintain and expand long-term and stable business
relationships, and to reap medium- to long-term earnings by an increase in equity value andby receiving dividends and so forth. The figures on the effect of holdings have not been
disclosed as it contains the transaction information to the counterpart company. It’s been
quantitatively periodically examined whether the effectiveness and risks to hold stocks havebeen commensurate with the capital costs.

Y

The purpose holding the stocks is to maintain and expand long-term and stable business
relationships, and to reap medium- to long-term earnings by an increase in equity value andby receiving dividends and so forth. The figures on the effect of holdings have not been
disclosed as it contains the transaction information to the counterpart company. It’s been
quantitatively periodically examined whether the effectiveness and risks to hold stocks havebeen commensurate with the capital costs.

Y

The purpose holding the stocks is to maintain and expand long-term and stable business
relationships, and to reap medium- to long-term earnings by an increase in equity value andby receiving dividends and so forth. The figures on the effect of holdings have not been
disclosed as it contains the transaction information to the counterpart company. It’s been
quantitatively periodically examined whether the effectiveness and risks to hold stocks havebeen commensurate with the capital costs.
The purpose holding the stocks is to maintain and expand long-term and stable business
relationships, and to reap medium- to long-term earnings by an increase in equity value andby receiving dividends and so forth. The figures on the effect of holdings have not been
disclosed as it contains the transaction information to the counterpart company. It’s been
quantitatively periodically examined whether the effectiveness and risks to hold stocks havebeen commensurate with the capital costs.
The purpose holding the stocks is to maintain and expand long-term and stable business
relationships, and to reap medium- to long-term earnings by an increase in equity value andby receiving dividends and so forth. The figures on the effect of holdings have not been
disclosed as it contains the transaction information to the counterpart company. It’s been
quantitatively periodically examined whether the effectiveness and risks to hold stocks havebeen commensurate with the capital costs.

N*notice3

N*notice4

Y

T&D Holdings INTEGRATED REPORT 201989

Supplementary Materials

Status of Stock Holdings

Year ended
March 31, 2018
StocksYear ended
March 31, 2019

Whether the counterpart
company holds theCompany’s share

Holding purposes, quantitative effects to hold stocks,
and reasons to increase the number of stocks.

The number of shares

Y=Yes/N=No

Balance sheet amount ¥millions
PERSOL HOLDINGS CO., LTD.

GLORY LTD.

TEIJIN LIMITED

1,200,000

—

3,714

—

700,000

—

2,656

—

1,225,000

—

2,451

—

Daido Life Insurance Company used to have the stocks to maintain and expand longterm and stable business relationships, and to reap medium- to long-term earnings by anincrease in equity value and by receiving of dividends and so forth.

N

Daido Life Insurance Company used to have the stocks to maintain and expand longterm and stable business relationships, and to reap medium- to long-term earnings by anincrease in equity value and by receiving of dividends and so forth.

Y

Daido Life Insurance Company used to have the stocks to maintain and expand longterm and stable business relationships, and to reap medium- to long-term earnings by anincrease in equity value and by receiving of dividends and so forth.

N*notice1 The subsidiary MUFG Bank, Ltd. holds stocks.
*notice2 The subsidiary Resona Bank, Limited. holds stocks.
*notice3 The subsidiary Sompo Japan Nipponkoa Insurance Inc. holds stocks.
*notice4 The subsidiary The Daishi Bank, Ltd. holds stocks.

Regarded as Holding Shares
Not applicable.

2. Stocks for which the holding purpose is pure investment
Fiscal 2017

Fiscal 2018

The number of stocks

Total of balance sheet
amount (¥ millions)

The number of stocks

Total of balance sheet
amount (¥ millions)

Unlisted stocks

15¥ 9,16413¥ 4,826

Stocks other than unlisted stocks

21

35,81823

41,013Fiscal 2018 (¥millions)
Total dividends received

Unlisted stocks
Stocks other than unlisted stocks

Total gains (losses) on
sales

Total of valuation gains (losses)
Net unrealized gains(losses)¥ 1,568¥ —(¥ 189)

¥ 369

506

341

5,902

—

3. Change in investment purpose during fiscal 2018
Stocks of which the holding purpose has been changed from pure investment to non-pure investment
Not applicable.
Stocks of which the holding purpose has been changed from non-pure investment to pure investment
Not applicable.

90

T&D Holdings INTEGRATED REPORT 2019

Valuation losses

IV. T&D Holdings, Inc.
The status of the Company’s stock holding is as follows:

1. Non-pure investment stocksa.	Policies to hold shares, the rationality to hold shares, verification contents at the Board of Directors meetings about theappropriateness to hold individual companies
Not applicable.
b. The number of Stocks and the amount on Balance Sheets
Not applicable.
(Stocks with increased number of shares in this fiscal year)
Not applicable.
(Stocks with decreased number of shares in this fiscal year)
Not applicable.
c.	The information about the number of the stocks and the balance sheet amount for Specified Investment Shares andRegarded as Holding Shares
Specified Investment Shares
Not applicable.
Regarded as Holding Shares
Not applicable.

2. Stocks for which the holding purpose is pure investment
Not applicable.

3. Change in investment purpose during fiscal 2018
Stocks of which the holding purpose has been changed from pure investment to non-pure investment
Not applicable.
Stocks of which the holding purpose has been changed from non-pure investment to pure investment
Not applicable.

T&D Holdings INTEGRATED REPORT 201991

Supplementary Materials

GlossaryA
Annualized premiums

An adjusted figure for premiums paid using monthly, annual, or lump-sum payment methods showing total premiums paid on an annual basis.

Assumed business expense rate

One of the forecast rates used in the calculation of insurance premiums. It is the rate used to include business
expenses necessary for administering insurance policies.

Assumed investment yield

One of the forecast rates used in the calculation of insurance premiums. It is the predetermined discount rate
based on the expected earnings from the investment of insurance premiums.

C
Contingency reserve

A reserve included as part of the policy reserve to account for the risk of insurance payment events occurring at ahigher-than-expected rate due to higher-than-expected mortality and morbidity rates, and the risk of actual investment yields being lower than the assumed investment yields related to outstanding policies.
Contingency reserve can be classified into:
Contingency reserve I Corresponds to insurance risk
Contingency reserve II Corresponds to assumed investment yield risk
Contingency reserve III Corresponds to minimum guarantee risk relating to variable annuity and others
Contingency reserve IV Corresponds to insurance risk of Third Sector insuranceCore profit

An indicator showing core period earnings of life insurance companies, made up of insurance income and expenses (which include income from insurance premiums and insurance benefits and business expenses), and investment
income and expenses (which include mainly interest, dividends and income from real estate for rent). It is not an
item on the Company’s statement of operation, but is calculated by deducting capital gains, such as gains (losses)
on sales of securities and other one-time gains (losses), from ordinary profit.

E
ERM (Enterprise Risk Management)

A strategic management method used to achieve managerial goals such as raising corporate value and maximizing
earnings, through the integrated management of capital, profit and risk.

ESG investment

Selective investments focused on companies that pay adequate attention to the environmental, social and governance factors.

ESR (Economic Solvency Ratio)

An indicator of capital adequacy based on economic value, calculated by dividing net assets based on economic
value (surplus), by the risk volume (economic capital (EC)) quantified using the internal model. An ESR of 100%means that capital and risk are equal. The higher the ESR, the greater the amount of capital secured relative to risk.
Although ESR is widely used mainly in Europe, there is no standardized calculation method. Each life insurancecompany calculates ESR individually based on its internal models.

EV (Embedded Value)

Generally, life insurance policies extend over significantly long durations, resulting in a time gap between therecognition of revenues and expenses. EV is a concept used for measuring the corporate value of a life insurancecompany in consideration of this gap. EV (embedded value) refers to the amount of net assets after tax, which isconsidered to be attributable to shareholders, and is the sum of adjusted net assets calculated based on balance
sheets, etc., and the value of in-force business calculated based on policies in force.
<Specific nature of life insurance accounting>From the perspective of financial accounting, a life insurance company successfully acquiring new business in a year
apparently shows a decrease in profit for the corresponding period, due to a heavier burden of initial costs, such as
sales commissions. While there is a constant inflow of premiums each year, expenses gradually decrease over time,
which results in the accumulation of earnings over longer periods.

Typical Life Insurance Earnings Image
Earnings Incurred
Contact Date
(Period)
Incurrence of costs such as salescommissions and medical examination
costs concentrated at start of contract

Cost Incurred92

T&D Holdings INTEGRATED REPORT 2019

G
General account

The aggregate of a life insurer’s assets, other than those allocated to separate accounts. General account assets
are invested by a company to meet fixed guaranteed rates of return for policyholders, and that company bears theinvestment risk on such assets.

J
Japan’s Corporate Governance Code

Guidelines for corporate governance drafted by the Financial Services Agency and the Tokyo Stock Exchange,
which indicate a “a structure for transparent, fair, timely and decisive decision-making by companies, with due
attention to the needs and perspectives of shareholders and also customers, employees and local communities,” inthe form of a code of conduct to be observed by a listed company.

Japan’s Stewardship Code

Code of conduct for behavior for institutional investors setting out the principles as “responsible institutional investors,” designed to prompt sustainable growth of corporations through investment and dialogue.

L
Level-premium products

A type of insurance where the amount of the premium is constant from inception to the expiry of the premium
payment period.

M
MCEV (Market Consistent EV)

MCEV refers to Market Consistent EV, which is a method for evaluating EV in consistency with financial markets.
MCEV is an EV calculated based on the MCEV Principles established in June 2008 by the CFO Forum (an organization of major European insurance companies), whereby a market consistent evaluation method was applied with aview to further unify the calculation standards.

Mortality rate

Rates of death, varying by such parameters as gender, age, and health, used in pricing and computing liabilities for
future policyholder benefits for life insurance and annuity products.

N
Non-participating policy

Policies under which the policyholder receives no policyholder dividends. Non-participating policies generally
feature lower premiums than participating or semi-participating policies.

P
Participating policy

Policies under which the policyholder is eligible to share in the divisible surplus of a company—calculated based on
the mortality rate margin, investment yield margin, and business expence margin—through the receipt of annual
policyholder dividends.

Policy amount

Aggregate sum insured by a life insurance company. The total of policy amount at the end of a fiscal year is called
the “policy amount in force.” The total policy amount of policies (including converted policies) sold in a year iscalled the “new policy amount.”

Policy reserve

A reserve established for the fulfillment of insurance claims and other payments related to a company’s outstanding
policies that are expected to be paid in the future. The policy reserve consists of a premium reserve, an unearned
premium reserve, a repayment reserve, and a contingency reserve. A company uses the net level premium method
to calculate the amount it sets aside each year as a policy reserve. The policy reserve is one of the three reserves
comprising the reserve for policy and other reserves.

Positive spread/Negative spread

The state in which actual investment earnings exceed the expected return based on the assumed investment
yield is referred to as a “positive spread.” A “negative spread” is when actual investment earnings are below the
expected return.
Positive spread (Negative spread denoted in bracket) =(Investment yield on core profit – Average assumed investment yield) × Policy reserve in general account• “Investment yield on core profit” is calculated by dividing the numerator as investment earnings in general account included in core profit less the provision for interest portion of reserve for dividends to policyholder by thedenominator as policy reserve in general account.
• “Average assumed investment yield” is calculated by dividing the numerator as assumed interest by the denominator as policy reserve in general account.
• “Policy reserve in general account” represents the policy reserve in general account less contingency reserve
calculated by the following method.
Policy reserve in general account =(Policy reserve at beginning of fiscal year + Policy reserve at the end of fiscal year – Assumed interest) × 1/2

T&D Holdings INTEGRATED REPORT 201993

Supplementary Materials

Glossary

R
Reserve for policyholder dividends

A reserve used to fund the payment of policyholder dividends. The reserve for policyholder dividends is one of thethree reserves comprising the reserve for policy and other reserves. For a mutual life insurance company, a transfer
to reserve for policyholder dividends is treated as a disposition of net surplus. For a joint stock corporation, provision for reserve for policyholder dividends is treated as an expense.

Reserve for price fluctuations

Pursuant to provisions of the Insurance Business Act, companies maintain reserves to cover losses due to price fluctuations in assets subject to market price volatility, particularly investments in domestic and foreign stocks, yen-denominated bonds, and foreign currency-denominated bonds. This reserve may be used only to reduce deficits
arising from price fluctuations of those assets.

ROEV/Core ROEVROEV stands for Return on Embedded Value, which is an indicator for measuring capital efficiency by assuming
an increase in EV as profit in consideration of the specialty of life insurance accounting. Core ROEV is an indicatorusing an increase in EV mainly through the acquisition of new business.

S
Separate account

Assets related to variable insurance and variable annuity products, as well as some group pension products (including employee pension fund insurance and national pension fund insurance), are managed in a separate accountfor the purpose of directly returning investment results to policyholders. The investment results, less asset management fees, of the separate account assets are attributable to all policyholders so that the insurance company bears
limited or no investment risk on such assets.

Single-premium insurance

A type of insurance where the premium is paid in lump-sum at the conclusion of the policy which covers the entire
insurance period.

Small amount andshort term insurance businessType of insurance businesses that solely underwrite protection-type insurance products, involving small insured
amounts and policy periods within one year (two years for second sector) within a specified scale of operation.

Social bond

Bond issued to raise funds for contributing to solutions to global social issues, such as support for emerging countries and measures against global warming.

Solvency margin ratio

A risk indicator calculated as the total solvency margin (including net assets, the reserve for price fluctuations,contingency reserve, reserve for possible loan losses, etc.) divided by 1/2 of total risk, which includes such factors as
insurance risk due to a major earthquake or other disaster, investment risk, and various other risks. If a life insurancecompany’s solvency margin ratio falls below 200%, the regulatory authorities will require management to introduce
corrective measures to quickly return the company to soundness.

Standard mortality table

A table used by an insurance company for calculating “standard policy reserve,” required to be set aside subject tothe standards set out under the Insurance Business Act, which summarizes the data including the mortality rate andaverage life expectancy (average longevity into the future), by gender and age. Life insurance companies use thestandard mortality table as a guideline for insurance premiums.

Standard yield rate

A rate which is required by the supervisory authorities to be applied in calculating the “standard policy reserve (apolicy reserve required to be set aside from the standpoint of ensuring the business soundness of life insurancecompanies and protecting policyholders).”

Surrender and lapse amountThe total amount of money reimbursed on the surrender or lapse of insurance policies in a given fiscal year.
Surrender occurs when policyholders choose to discontinue their policies. Lapse occurs when the deadline forpayment of premiums that are in arrears is exceeded.

T
Third sector insurance

In the Japanese insurance industry, life insurance products and non-life insurance products are called “First Sector”
and “Second Sector” insurance products, respectively, and insurance products which have intermediate characteristics of both products are called “Third Sector” insurance products. Examples include medical care, cancer,
accident, and nursing care insurance.

U
Ultimate Forward Rate (UFR)

A very long-term interest rate level that is thought to be realized macroeconomically. The Group begins interest
rate extrapolation from 31 years and sets the convergence point for the ultimate forward rate level at 60 years.

V
Value of new business

94

T&D Holdings INTEGRATED REPORT 2019

The value of distributable earnings to shareholders expected to be generated in the future from insurance policies(including converted policies) sold in a year, converted to a present value as at the valuation date.

Cor por at e D ata

T&D Holdings INTEGRATED REPORT 201995

Corporate Data

Selected Financial Data

T&D HOLDINGS¥ millions

Years ended March 31

2015

2016

2017

2018

2019

Statement of Operation Data:
Ordinary revenues:¥1,958,055¥1,574,506¥1,505,234¥1,483,719¥1,676,184

Investment income

384,223

379,707402,709372,753

393,901

Other ordinary income

69,847

71,66567,83871,81370,076

2,412,165

2,025,925

1,975,784

1,928,359

2,140,162

Insurance claims and other payments

1,401,534

1,302,899

1,160,357

1,146,175

1,141,636

Provision for policy and other reserves

485,139

194,387

259,134

262,894

469,615

Investment expenses

66,427

77,477130,277

96,288112,285

Operating expenses

199,435

198,999

197,600

202,366

201,563

Other ordinary expenses

70,68680,727

71,18664,15968,0862,223,222

1,854,490

1,818,556

1,771,884

1,993,213

Income from insurance premiums

Total ordinary revenues
Ordinary expenses:

Total ordinary expenses

188,943

171,434

157,227

156,475

146,949

Net extraordinary gains (losses)(8,105)(29,274)(35,067)(16,485)(17,890)

Provision for reserve for policyholder dividends

32,55531,92025,37430,331

27,144

Income before income taxes

148,281110,239

96,786109,657

101,915

Current

44,14746,07533,316

34,10632,383

Deferred

9,755(8,561)(11,895)(2,044)(3,316)53,90337,513

21,421

32,061

29,066

Ordinary profit

Income taxes:

Total income taxes
Profit attributable to non-controlling interests
Profit attributable to owners of parent

163¥

94,215

179¥

72,547

177¥

75,18722

19¥77,577¥

72,825¥ millions

2015

2016

2017

2018

2019

¥14,664,705¥14,674,207¥14,891,167¥15,262,398¥15,794,711

12,707,957

12,892,482

13,139,218

13,395,725

13,859,097

13,319,755

13,460,145

13,794,395

14,109,362

14,635,123

Total shareholders’ equity

749,436775,208

794,554

833,779

863,933

Total accumulated other comprehensive income

592,301

435,331

298,302313,645

289,181¥ 1,344,950¥ 1,214,061¥ 1,096,772¥ 1,153,036¥ 1,159,588

2015

2016

2017

2018

2019

Policy amount in force¥62,117,777¥62,998,174¥64,612,813¥66,010,749¥69,264,639

New policy amount

7,227,221

6,685,973

7,441,437

7,273,000

9,985,762

Surrender and lapse amount

3,752,457

3,789,522

3,837,734

3,884,453

4,625,021

As of March 31

Balance Sheet Data:
Assets:Total assets
Liabilities:
Policy reserves
Total liabilities
Net assets:

Total net assets* The above figures are calculated based on the prevailing accounting standards of each fiscal year.
¥ millions

Years ended March 31

Policy Results *:* The total of individual insurance, individual annuities and Daido Life’s J-type product, T-type product, Kaigo Relief, and Kaigo Teiki Hoken. The new policy amounts include net increases from conversions.

Other Data:
Core profit¥ 182,766¥ 153,097¥ 159,985¥ 148,466¥ 149,638

Group MCEV *2,298,000

1,893,700

2,290,500

2,406,700

2,370,600

Consolidated solvency margin ratio

1,220.7%

1,155.8%

1,105.1%

1,061.8%

1,093.1%* Group MCEV is shown in terms of hundreds of millions of yen.

96

T&D Holdings INTEGRATED REPORT 2019

TAIYO LIFE
¥ millions

Years ended March 31

2015

2016

2017

2018

2019

Statement of Operation Data:
Ordinary revenues:
Income from insurance premiums¥865,232¥657,185¥654,379¥511,900¥715,120

Investment income

176,370

202,909

228,058

189,495

190,444

Other ordinary income

19,544

13,792

15,51737,31912,044

1,061,146

873,887

897,955

738,716

917,610

Insurance claims and other payments

566,446604,261535,387

522,746

521,457

Provision for policy and other reserves

281,973

39,86099,991

885

183,693

Investment expenses

31,89336,54083,10945,292

52,386

Operating expenses

77,60676,424

77,18976,69876,730

Other ordinary expenses

35,61937,67635,63530,301

29,147

993,539794,763

831,312675,925

863,41354,196

Total ordinary revenues
Ordinary expenses:

Total ordinary expenses
Ordinary profit

67,606

79,124

66,642

62,790Net extraordinary gains (losses)(5,249)(20,251)(18,995)(4,254)(5,370)

Provision for reserve for policyholder dividends

18,093

18,135

11,73815,664

13,138

Income before income taxes

44,26440,73635,90942,87035,687

Current

12,827

17,624

11,120

10,238

10,798Deferred

3,482(3,722)(4,178)

2,151

(657)

16,30913,902

6,941

12,39010,140Net income¥ 27,954¥ 26,834¥ 28,967¥ 30,480¥ 25,547

As of March 31

2015

2016

2017

2018

2019

¥7,217,901¥7,084,800¥7,188,371¥7,219,463¥7,411,864

6,279,589

6,318,824

6,410,781

6,389,235

6,569,075

6,658,543

6,603,082

6,807,381

6,810,776

6,996,551

Total shareholders’ equity

259,537

279,336

279,765

290,945304,203

Total valuation and translation adjustment

299,819

202,382

101,224

117,742

111,109¥ 559,357¥ 481,718¥ 380,989¥ 408,687¥ 415,312

2015

2016

2017

2018

2019

Policy amount in force¥22,154,564¥21,983,504¥21,741,191¥21,154,486¥19,945,620

New policy amount

2,840,754

2,134,199

2,084,818

1,686,796

1,196,690

Surrender and lapse amount

1,270,225

1,255,956

1,255,824

1,236,078

1,240,097

5.88%

5.67%

5.71%

5.69%

5.86%

Income taxes:

Total income taxes¥ millions

Balance Sheet Data:
Assets:Total assets
Liabilities:
Policy reserves
Total liabilities
Net assets:

Total net assets* The above figures are calculated based on the prevailing accounting standards of each fiscal year.
¥ millions

Years ended March 31

Policy Results *:Surrender and lapse rate

* The total of individual insurance and individual annuities. The new policy amounts include net increases from conversions.

Other Data:
Core profit¥ 68,188¥ 53,812¥ 53,464¥ 48,547¥ 51,859

MCEV *

868,600

725,700

777,500

825,000

856,200

Solvency margin ratio

993.9%

890.6%

848.6%

835.1%

849.7%

8,432

8,631

8,902

8,942

8,440

Number of in-house sales representatives* MCEV is shown in terms of hundreds of millions of yen.

T&D Holdings INTEGRATED REPORT 201997

Corporate Data

Selected Financial Data

DAIDO LIFE
¥ millions

Years ended March 31

Statement of Operation Data:
Ordinary revenues:
Income from insurance premiums
Investment income
Other ordinary income
Total ordinary revenues
Ordinary expenses:
Insurance claims and other payments
Provision for policy and other reserves
Investment expenses
Operating expenses
Other ordinary expenses
Total ordinary expenses
Ordinary profit
Net extraordinary gains (losses)
Provision for reserve for policyholder dividends
Income before income taxes
Income taxes:
Current
Deferred
Total income taxes
Net income

2015

2016

2017

2018

2019

¥792,715
169,016
19,320981,052¥748,914
165,153
21,671
935,739¥766,336
154,066
24,029944,431¥790,852
171,830
25,387
988,070¥ 828,003
191,065
26,492
1,045,561

494,272
231,264
39,12899,152
19,770883,588
97,464(2,653)
14,46280,348502,896
181,357
34,443
102,531
24,203
845,431
90,307
4,413
13,78880,932484,881
204,770
48,244
103,099
20,739861,736
82,695(12,450)
13,63656,608496,329
232,739
46,233
103,602
19,767
898,672
89,397(11,698)
14,66863,031

510,573
259,032
61,342
103,883
21,458956,290
89,270(11,956)
14,00563,30828,104
1,064
29,168¥ 51,180

29,351(2,896)
26,455¥ 54,476

20,777(7,286)
13,491¥ 43,116

22,854(4,396)
18,458¥ 44,572

21,414(3,634)
17,77945,528

2015

2016

2017

2018

2019

¥5,977,975¥6,152,026¥6,298,188¥6,573,924¥6,843,179

5,125,125
5,297,596

5,301,162
5,488,203

5,501,639
5,654,175

5,729,754
5,913,402

5,986,450
6,180,746

388,865
291,513¥ 680,379

433,499
230,323¥ 663,823

448,016
195,996¥ 644,013

466,141
194,380¥ 660,521

489,267
173,165¥ 662,433

2015

2016

2017

2018

2019

¥38,156,747
33,209,130
1,764,379
4,063,816
3,228,184
657,0032,378,329
6.38%¥39,205,952
33,673,604
2,415,881
4,315,542
3,426,632
786,6092,472,006
6.48%¥40,992,241
34,772,475
3,166,600
5,121,169
4,088,485
934,940
2,525,540
6.44%¥42,803,504
34,724,011
5,426,922
5,231,498
2,944,065
2,523,252
2,582,199
6.30%¥47,146,055
35,305,536
10,057,448
8,474,888
4,128,641
5,085,094
3,295,771
7.70%¥¥ millions

As of March 31

Balance Sheet Data:
Assets:Total assets
Liabilities:
Policy reserves
Total liabilities
Net assets:
Total shareholders’ equity
Total valuation and translation adjustment
Total net assets* The above figures are calculated based on the prevailing accounting standards of each fiscal year.
¥ millions

Years ended March 31

Policy Results *:Policy amount in force
Individual term life insurance
J-type product, T-type product, Kaigo Relief and Kaigo Teiki Hoken
New policy amountIndividual term life insurance
J-type product, T-type product, Kaigo Relief and Kaigo Teiki Hoken
Surrender and lapse amount
Surrender and lapse rate

* The total of individual insurance, individual annuities, J-type product, T-type product, Kaigo Relief, and Kaigo Teiki Hoken. The new policy amounts include net increases from conversions.

Other Data:
Core profit
MCEV *
Solvency margin ratio
Number of in-house sales representatives
Number of agents* MCEV is shown in terms of hundreds of millions of yen.

98

T&D Holdings INTEGRATED REPORT 2019

¥ 107,654
1,306,700
1,363.7%
3,790
13,675¥ 104,829
1,078,000
1,341.9%
3,867
13,793¥ 105,677
1,417,400
1,252.6%
3,843
13,878¥ 100,781
1,473,200
1,206.2%
3,714
13,992¥

99,245
1,417,700
1,271.9%
3,786
14,132

T&D FINANCIAL LIFE
¥ millions

Years ended March 31

2015

2016

2017

2018

2019

Statement of Operation Data:
Ordinary revenues:¥297,755¥165,436¥ 80,918¥176,474¥127,853

Investment income

46,366

14,232

23,041

12,982

17,221Other ordinary income

37,98938,36551,874

7,036

5,683

382,110

218,035

155,834

196,492

150,758

Insurance claims and other payments

339,700

194,324

138,311

124,953

106,894

Provision for policy and other reserves

1,440

2

0

50,164

26,791

Investment expenses

1,814

7,950

213

4,888

1,941

Operating expenses

14,422

12,705

9,745

12,34911,453

Income from insurance premiums

Total ordinary revenues
Ordinary expenses:

2,275

1,840

1,363

1,592

1,612

359,653

216,822

149,634

193,948

148,694

22,457

1,212

6,199

2,543

2,064

(174)

(621)

(3,612)

(461)

(552)

(0)

(3)

(1)

(1)

0

22,282

593

2,587

2,083

1,511

Current

2,411(1,735)

874

199

(456)

Deferred

5,225

1,837

(427)

295

956

7,636

101

446

494

Other ordinary expenses
Total ordinary expenses
Ordinary profit
Net extraordinary gains (losses)
Provision for (Reversal of) reserve for policyholder dividends
Income before income taxes
Income taxes:

Total income taxes

500
¥

1,011

Net income¥ 14,645

As of March 31

2015

2016

2017

2018

2019

¥1,387,624¥1,359,879¥1,313,747¥1,365,878¥1,438,819

1,301,958

1,270,904

1,224,914

1,274,376

1,300,935

1,319,425

1,289,619

1,242,846

1,292,955

1,361,498

67,39467,88670,027

71,616

72,627

804

2,373

874

1,306

¥

492

¥

2,141

¥

1,588

¥ millions

Balance Sheet Data:
Assets:Total assets
Liabilities:
Policy reserves
Total liabilities
Net assets:
Total shareholders’ equity
Total valuation and translation adjustment
Total net assets¥

68,198¥70,260¥70,901¥

72,922

4,693¥

77,321* The above figures are calculated based on the prevailing accounting standards of each fiscal year.
¥ millions

2015

2016

2017

2018

2019

¥1,806,465¥1,808,717¥1,879,380¥2,052,758¥2,172,963

1,091,312

1,156,568

1,280,606

1,506,435

1,676,228

New policy amount322,651

236,231

235,449

354,705

314,183

Surrender and lapse amount

103,90261,55956,36866,17489,152

Surrender and lapse rate

5.62%

3.41%

3.12%

3.52%

4.34%

Core profit (loss)¥ 6,923¥ (5,545)¥

MCEV *

95,80093,40097,400102,600

98,5001,271.9%

1,260.7%

1,295.6%

1,258.3%

1,101.7%

Years ended March 31

Policy Results *:Policy amount in force
Sales through independent insurance agents* The total of individual insurance and individual annuities.

Other Data:

Solvency margin ratio

843

¥

(863)

¥

(1,466)* MCEV is shown in terms of hundreds of millions of yen.

T&D Holdings INTEGRATED REPORT 201999

Corporate Data

Consolidated Financial Statements

Consolidated Balance Sheet
As of March 31,

2018¥ millions

US$ thousands

2019

2019

Assets:Cash and deposits

776,510¥824,241$

7,426,263

10,539

1,037

9,343

Monetary claims purchased

117,578

126,905

1,143,391

685,819

765,4816,896,849

Securities (Notes 8, 13 and 14)

11,377,032

11,735,384

105,733,705

Loans (Notes 3 and 7)

1,648,600

1,669,989

15,046,303

363,245

369,465

3,328,816

Land (Note 2 (14))

202,010207,148

1,866,368

Buildings

155,308

149,916

1,350,719

605

435

3,919

Construction in progress

1,237

6,655

59,968Other tangible fixed assets

4,082

5,309

47,841

Monetary trusts

Tangible fixed assets (Note 4)

Lease assets

26,862

28,467

256,490

Software25,39527,080243,986

Lease assets

298

221

1,996

1,169

1,166

10,506

740

691

6,232

Intangible fixed assets

Other intangible fixed assets
Due from agencies
Due from reinsurers

3,136

2,271

20,464

Other assets (Note 14)

209,171

217,452

1,959,204

Deferred tax assets

44,75354,925494,869

Reserve for possible loan losses(1,591)(1,599)(14,412)¥15,262,398¥15,794,711$142,307,522

Total assets

100¥

Call loans

T&D Holdings INTEGRATED REPORT 2019As of March 31,¥ millions

US$ thousands

2018

2019

2019

¥13,395,725¥13,859,097$124,867,980

67,74969,554

626,673

13,239,086

13,706,879

123,496,522

88,88982,663744,783

Liabilities:
Policy reserves
Reserve for outstanding claims
Policy reserve
Reserve for policyholder dividends (Note 6)
Due to agencies

658

408

3,684

Due to reinsurers

1,539

1,432

12,905

Short-term debentures

6,000

6,000

54,058

Bonds (Note 9)

87,065

117,035

1,054,464

Other liabilities (Notes 10 and 14)342,252

359,214

3,236,456

Provision for bonuses to directors and audit & supervisory board members

276

273

2,466

Provision for share-based remuneration

—

336

3,034

50,76451,038459,849

56

65

594

Reserves under the special laws

219,695

235,098

2,118,191

Reserve for price fluctuations

219,695

235,098

2,118,191

13

15

139

5,316

5,106

46,012

14,109,362

14,635,123

131,859,840

Net defined benefit liability
Provision for directors’ and audit & supervisory board members’ retirement benefits

Deferred tax liabilities
Deferred tax liabilities on land revaluation (Note 2 (14))
Total liabilities
Net assets:
Capital stock

207,111207,111

1,866,040

Capital surplus

156,785

156,740

1,412,204

Retained earnings

516,585564,9445,090,048

Treasury shares(46,703)(64,863)(584,409)

Total shareholders’ equity

833,779

863,933

7,783,885

Valuation difference on available-for-sale securities

353,590

328,020

2,955,404

Deferred gains (losses) on hedging instruments(4,320)(2,987)(26,917)

Land revaluation (Note 2 (14))(35,637)(35,869)(323,180)

11

18

169
2,605,474

Foreign currency translation adjustments
Total accumulated other comprehensive income

313,645

289,181

Subscription rights to shares

1,216

1,081

9,742

Non-controlling interests

4,395

5,391

48,5791,153,036

1,159,588

10,447,682¥15,262,398¥15,794,711$142,307,522

Total net assets
Total liabilities and net assets
See notes to consolidated financial statements.

T&D Holdings INTEGRATED REPORT 2019101

Corporate Data

Consolidated Statement of Operation¥ millions

US$ thousands

Years ended March 31,

2018

2019

2019

Ordinary revenues¥1,928,359¥2,140,162$19,282,482

1,483,719

1,676,184

15,102,122

372,753

393,901

3,548,984

285,496

295,858

2,665,628

—

5,240

47,219

Income from insurance premiums
Investment income
Interest, dividends and income from real estate for rent
Gains from monetary trusts, net

—

25

229

78,48788,897800,954

Gains on redemption of securities

—

1,168

10,529

Reversal of reserve for possible loan losses

86

—

—

Other investment income

2,734

2,452

22,095

Gains on separate accounts, net

5,948

258

2,328

71,81370,076

631,375

Gains on investments in trading securities, net
Gains on sales of securities

Other ordinary income
Equity in earnings of affiliates
Ordinary expenses

72

—

—

1,771,884

1,993,213

17,958,492

1,146,175

1,141,636

10,285,940

Insurance claims

334,188326,575

2,942,387

Annuity payments

281,915

271,440

2,445,632

Insurance benefits

148,099

147,057

1,324,966

Surrender payments

330,019

340,505

3,067,891

Insurance claims and other payments

Other payments
Provision for policy and other reserves

51,95156,056505,062

262,894

469,6154,231,155

—

1,804

16,259262,874

467,792

4,214,730

19

18

165

Investment expenses

96,288112,285

1,011,674

Interest expenses

637

907

8,180

Losses from monetary trusts, net

285

—

—

Losses on investments in trading securities, net

195

—

—

18,097

16,894

152,212

Provision for reserve for outstanding claims
Provision for policy reserve
Interest portion of reserve for policyholder dividends

Losses on sales of securities
Devaluation losses on securities

6,193

3,128

28,189Losses from derivatives, net

45,68065,619591,223

Foreign exchange losses, net

3,900

1,775

15,997—36

325

Provision for reserve for possible loan losses
Write-off of loans
Depreciation of real estate for rent

1

9

86

5,027

6,219

56,033

16,26917,694

159,426

Operating expenses

202,366

201,563

1,816,053

Other ordinary expenses

64,15968,086

613,450

Other investment expenses

Equity in losses of affiliates
Ordinary profit

—

24

218

¥ 156,475¥ 146,949$ 1,323,990(continued)

102

T&D Holdings INTEGRATED REPORT 2019¥ millions

Years ended March 31,

Extraordinary gains¥

28

US$ thousands

2019

2018

¥

699

2019

$

6,301

Gains on disposal of fixed assets

13

650

5,860

State subsidy

15

42

381

Other extraordinary gains

—

6

59

16,513

18,589167,488

Extraordinary losses
Losses on disposal of fixed assets

953

870

7,844

Impairment losses (Note 16)

744

2,113

19,03914,80015,402

138,777

15

202

1,826

Provision for reserve for price fluctuations
Other extraordinary losses
Provision for reserve for policyholder dividends

30,331

27,144

244,566

Income before income taxes

109,657

101,915

918,237

Income taxes (current)

34,10632,383291,768

Income taxes (deferred)(2,044)(3,316)(29,883)

Total income taxes

32,061

29,066

261,884

Profit

77,596

72,848656,352

19

22

204

¥ 77,577¥ 72,825$656,148¥ millions

US$ thousands

Profit attributable to non-controlling interests
Profit attributable to owners of parent

Consolidated Statement of Comprehensive Income
2018

2019

2019

¥77,596¥ 72,848$ 656,352

14,764(25,590)(230,566)

883

1,332

12,005

Foreign currency translation adjustments

(0)

(0)

(0)

Share of other comprehensive income of associates accounted for using the equity method

(6)

5

52

15,640(24,252)(218,509)¥93,236¥ 48,596$ 437,842¥93,202¥48,595$ 437,833

33

1

9

Years ended March 31,

ProfitOther comprehensive income:
Valuation difference on available-for-sale securities
Deferred gains (losses) on hedging instruments

Total other comprehensive income (Note 17)
Comprehensive income(Breakdown)Comprehensive income attributable to owners of parent
Comprehensive income attributable to non-controlling interests
See notes to consolidated financial statements.

T&D Holdings INTEGRATED REPORT 2019103

Corporate Data

Consolidated Statement of Changes in Net Assets¥ millions
Shareholders’ equity

Accumulated other comprehensive income

Year ended March 31, 2018

Capital stock

CapitalsurplusRetainedearnings

Total
Treasury shareholders’equitysharesBalance at the beginning of the year

¥207,111¥194,522¥460,683¥(67,763) ¥794,554

Dividends(21,958)(21,958)

Profit attributable to ownersof parent

77,577

Valuationdifference
Deferredon available- gains (losses)
for-sale on hedging
securities instruments¥338,842

Land
revaluation¥(5,203) ¥(35,354)

Total
Foreign accumulatedothercurrencytranslation comprehenadjustments sive income¥17¥298,302

Subscription
rights toshares¥1,178

Noncontrollinginterests

Total net
assets¥2,737 ¥1,096,772

Changes in the period:

Purchase of treasury shares(21,958)

77,577

77,577(17,018)(17,018)(17,018)

Disposal of treasury shares

(106)

377

271

271

Retirement of treasury shares(37,700)

37,700——Change in ownership interest ofparent due to transactions with
non-controlling interests

70
282

Reversal of land revaluation

70

70

282

282

Net changes of items other thanshareholders’ equity
Total changes in the period
Balance at the end of the year

¥207,111(37,736)

55,901¥156,785¥516,585

14,748

883

(282)

(5)

15,34238

1,657

17,03839,225

14,748

883

(282)

(5)

15,34238

1,657

56,263¥(46,703) ¥833,779¥353,590¥(4,320) ¥(35,637)¥11¥313,645¥1,216

21,059¥4,395 ¥1,153,036¥ millions
Shareholders’ equity

Accumulated other comprehensive income

Year ended March 31, 2019

Capital stock

CapitalsurplusRetainedearnings

Total
Treasury shareholders’equitysharesBalance at the beginning of the year

¥207,111¥156,785¥516,585¥(46,703) ¥833,779

Dividends(24,699)(24,699)

Profit attributable to ownersof parent

72,825

Valuationdifference
Deferredon available- gains (losses)
for-sale on hedging
securities instruments

Land
revaluation¥353,590¥(35,637)¥(4,320)

Total
Foreign accumulatedothercurrencytranslation comprehenadjustments sive income¥11¥313,645

Subscription
rights toshares

Noncontrollinginterests

Total net
assets¥1,216¥4,395¥1,153,036

Changes in the period:

Purchase of treasury shares(45)

Disposal of treasury shares

72,82572,825(18,348)(18,348)(18,348)

188

143

143

232

232

232

Reversal of land revaluation
Net changes of items other thanshareholders’ equity
Total changes in the period
Balance at the end of the year

104

¥207,111(45)

48,358¥156,740¥564,944

T&D Holdings INTEGRATED REPORT 2019(24,699)(25,570)

1,332

(232)

7

(24,463)

(135)

996

30,153(25,570)

1,332

(232)

7

(24,463)

(135)

996

6,552

¥(64,863) ¥863,933¥328,020¥(2,987)¥(35,869)¥18¥289,181¥1,081¥5,391¥1,159,588(18,159)(23,601)

US$ thousands
Shareholders’ equity

Year ended March 31, 2019

Capital stock

CapitalsurplusRetainedearnings

Accumulated other comprehensive income

Total
Treasury shareholders’equitysharesLand
revaluation

Total
Foreign accumulatedothercurrencytranslation comprehenadjustments sive income

Subscription
rights toshares

Noncontrollinginterests$(38,923) $(321,083)$105 $2,825,886$10,959$39,599 $10,388,648

Valuationdifference
Deferredon available- gains (losses)
for-sale on hedging
securities instruments

Balance at the beginning of the year $1,866,040 $1,412,611 $4,654,343 $(420,792) $7,512,203 $3,185,787

Total net
assetsChanges in the period:
Dividends(222,540)

Profit attributable to ownersof parent

656,148

Purchase of treasury shares
Disposal of treasury shares(406)(222,540)
656,148

656,148(165,313)(165,313)(165,313)

1,697

1,290

1,290

2,097

2,097

2,097

Reversal of land revaluation
Net changes of items other thanshareholders’ equity
Total changes in the period
Balance at the end of the year(406)

435,704(222,540)(163,616)

271,681(230,383)

12,005(2,097)63(220,412)(1,216)

8,980(212,648)(230,383)

12,005(2,097)63(220,412)(1,216)

8,980

59,033$169 $2,605,474$ 9,742$1,866,040 $1,412,204 $5,090,048 $(584,409) $7,783,885 $2,955,404$(26,917) $(323,180)$48,579 $10,447,682

T&D Holdings INTEGRATED REPORT 2019105

Corporate Data

Consolidated Statement of Cash Flows
Years ended March 31,¥ millions

US$ thousands

2018

2019

2019

Cash flows from operating activities:¥ 109,657¥ 101,915

Depreciation of real estate for rent

5,027

6,219

56,033

Depreciation

10,762

11,892

107,149

744

2,113

19,039

Income before income taxes

Impairment losses
Increase (decrease) in reserve for outstanding claims
Increase (decrease) in policy reserve
Interest portion of reserve for policyholder dividends
Provision for reserve for (reversal of) policyholder dividends$

918,237(2,315)

1,804

16,259262,874

467,792

4,214,730

19

18

165

30,331

27,144

244,566
167

(162)

18

Increase (decrease) in provision for bonuses to directors and audit & supervisory board members

13

(2)

(25)

Increase (decrease) in provision for share-based remuneration

—

336

3,034

(5,783)

274

2,470

2

9

86

Increase (decrease) in reserve for possible loan losses

Increase (decrease) in net defined benefit liability
Increase (decrease) in provision for directors’ and audit & supervisory board members’
retirement benefits

14,80015,402

138,777

Interest, dividends and income from real estate for rent

(285,496)(295,858)(2,665,628)

Losses (gains) on investment securities(59,949)(70,327)(633,638)

637

907

8,180

Increase (decrease) in reserve for price fluctuations

Interest expenses

3,463

1,174

10,583Losses (gains) on disposal of tangible fixed assets

888

(193)

(1,738)Equity in losses (income) of affiliated companies

(72)

24

218

Decrease (increase) in amount due from agencies

16

48

435

Decrease (increase) in amount due from reinsurers

364

858

7,730

(14,043)(12,223)(110,133)

Increase (decrease) in amount due to agencies

324

(249)

(2,245)

Increase (decrease) in amount due to reinsurers

(242)

(106)

(963)

99

7,266

65,469Foreign exchange losses (gains)

Decrease (increase) in other assets (excluding investment activities-related and financing
activities-related)

Increase (decrease) in other liabilities (excluding investment activities-related and financing
activities-related)
Others, net

60,03275,796

682,908

Subtotal

131,995

342,056

3,081,871

Interest, dividends and income from real estate for rent received

295,876

303,8882,737,985

(550)

(912)

(8,221)(34,469)(33,435)(301,250)

Interest paid
Policyholder dividends
Others, net
Income taxes paid
Net cash provided by (used in) operating activities

2,107(1,948)(17,556)(24,832)(32,690)(294,537)¥ 370,127¥ 576,958$ 5,198,289(continued)

106

T&D Holdings INTEGRATED REPORT 2019Years ended March 31,

2018¥ millions

US$ thousands

2019

2019

Cash flows from investing activities:
Net decrease (increase) in cash and deposits¥

Investments in monetary claims purchased

(50)

¥

Proceeds from sales and redemption of monetary claims purchased
Investments in monetary trusts(400)(14,440)(2,000)$(3,603)(130,105)

25,454

13,728

123,689(137,658)(92,532)(833,701)

35,470

10,15791,517Purchase of securities(1,643,451)(1,826,000)(16,451,936)

Proceeds from sales and redemption of securities

1,265,588

1,509,010

13,595,915

Investments in loans(397,753)(370,968)(3,342,358)

435,667

350,823

3,160,858

Proceeds from monetary trusts

Collection of loans
Others, net

5,560(39,418)(355,154)

Subtotal(413,173)(460,040)(4,144,879)

Total of net cash provided by (used in) operating activities and investment transactions as above(43,045)

116,918

1,053,410

Purchase of tangible fixed assets(53,658)(19,914)(179,426)

Proceeds from disposal of tangible fixed assets

247

1,570

14,147

Others, net

(574)

(300)

(2,705)(467,159)(478,684)(4,312,863)

3,000

—

—

Net cash provided by (used in) investing activities
Cash flows from financing activities:
Net increase (decrease) in short-term debenture
Proceeds from issuance of debt

22,80012,500112,622

Repayments of debt

(12,331)(41,927)(377,759)

Proceeds from issuance of bonds

37,00050,000450,491—(20,000)(180,196)

Proceeds from share issuance to non-controlling shareholders

2,147

1,040

9,374

Redemption of bonds
Repayments to non-controlling shareholders

(405)

—

—

Payment of lease obligations

(527)

(450)

(4,057)Purchase of treasury shares(17,018)(18,348)(165,313)

0

5

53

(21,926)(24,622)(221,839)

(48)

(44)

(403)

0

0

1

12,690(41,846)(377,027)

Proceeds from disposal of treasury shares
Dividends paid
Dividends paid to non-controlling interests
Others, net
Net cash provided by (used in) financing activities(2,387)(908)(8,188)Net increase (decrease) in cash and cash equivalents(86,728)

55,518500,209

Cash and cash equivalents at the beginning of the year

885,267

Effect of exchange rate changes on cash and cash equivalents

Cash and cash equivalents at the end of the year (Note 19)¥

798,538¥

798,538

7,194,691

854,057$ 7,694,901

See notes to consolidated financial statements.

T&D Holdings INTEGRATED REPORT 2019107

Corporate Data

Notes to Consolidated Financial Statements
Note 1

Notes on Going-Concern Assumption

Not applicable.
Note 2

Summary of Significant Accounting Policies(1) Basis of presentation(2) Principles of consolidation

On April 1, 2004, T&D Holdings, Inc. (the “Company”) was es-

a. Matters related to the scope of consolidation

tablished as a life insurance holding company, of which Taiyo Life(i) Number of consolidated subsidiaries: 16

Insurance Company (“Taiyo Life”), Daido Life Insurance Company

		Names of main consolidated subsidiaries are stated in(“Daido Life”) and T&D Financial Life Insurance Company (“T&D
Financial Life”) (hereafter, the “Three Life Insurance Companies”)“Group Companies” of the Annual Report.
(ii) Names of main non-consolidated subsidiaries, etc.: none

became wholly owned subsidiaries through share transfers.
The business combination was accounted for as a pooling ofinterests.
The Company, including its domestic consolidated subsidiaries(the “T&D Insurance Group”), maintains its accounting records

b. Matters related to the application of the equity method(i)	Number of non-consolidated subsidiaries accounted forunder the equity method: none(ii)	Number of affiliates accounted for under the equity

and prepares its financial statements in Japanese yen in accor-

method: 3

dance with the provisions of the Insurance Business Act of JapanThe affiliates accounted for under the equity method(the “Insurance Business Act”) and in conformity with generally

are Alternative Investment Capital Limited, Thuriya Ace

accepted accounting principles and practices in Japan.

Technology Company Limited and one other company.

The accompanying consolidated financial statements are com-(iii)	Names of non-consolidated subsidiaries and affiliates not

piled from the financial statements prepared by the Company asaccounted for under the equity method, etc.: none

required by the Financial Instruments and Exchange Act of Japan.

(iv)	For the companies accounted for under the equity

In preparing the consolidated financial statements, certain items

method for which the closing date is different from thepresented in the original financial statements have been reclas-

consolidated closing date, the financial statements ofsified and summarized for readers outside Japan. These consol-

each company’s fiscal year are used.

idated financial statements have been prepared on the basis ofgenerally accepted accounting principles and practices in Japan,c.	Matters related to the fiscal year of consolidated subsidiaries, etc.

which are different in certain respects from the application and	The closing date of some consolidated subsidiaries isdisclosure requirements of International Financial Reporting

December 31. In preparing the consolidated financial state-

Standards. In addition, the accompanying footnotes include in-ments, financial statements as of that date are used andformation that is not required under generally accepted account-necessary adjustments are made on consolidation to reflect

ing principles and practices in Japan, but is presented herein as

significant transactions that occurred between the closing

additional information to the consolidated financial statements.

date and the consolidated closing date.

The translations of Japanese yen amounts into U.S. dollar
amounts are included solely for the convenience of the readers(3) Foreign currency translationand have been made, as a matter of arithmetical computation

Foreign currency assets and liabilities are translated into Japanese

only, at the rate of 1 U.S. dollar = 110.99 Japanese yen, which

yen at the prevailing foreign exchange rates at the consolidated

was the approximate rate prevailing at the end of March, 2019.

balance sheet date.

The translations should not be construed as representations that

Assets, liabilities, revenues and expenses of the Company’s

such yen amounts have been, could have been or could in theaffiliates located outside Japan are translated into Japanese yen

future be converted into U.S. dollars at that or any other rate.

at the exchange rates in effect at the respective balance sheet

Amounts of less than one million Japanese yen and one thou-in net assets as foreign currency translation adjustments orand U.S. dollar totals shown herein do not necessarily agree with

non-controlling interests.

the sum of the individual amounts.

108

date. Translation differences of foreign currencies are included

sand U.S. dollars have been eliminated. As a result, Japanese yen

T&D Holdings INTEGRATED REPORT 2019

(4) Accounting policy for measuring significant assets

insurance policies are identified and classified as a sub-segment.

a.	Evaluation criteria and evaluation method for securities (in-– All policies except for group insurance products segment, othercluding cash and deposits/monetary claims purchased which

insurance product segment, non-participating currency specif-

are equivalent to securities and securities invested as trust

ic-type single-premium individual annuity insurance, etc., in theproperties in monetary trusts)

general asset segment(i)	Trading securities		– Fair value method (costs of securities sold are calculated based on the moving average method)(ii) Held-to-maturity bonds
		– Amortized cost method based on the moving averagemethod (straight-line method)(iii) Policy-reserve-matching bonds
		– Amortized cost method based on the moving average– All non-participating currency specific-type single-premium
individual annuity insurance policies by currency in the general
asset segment– All defined contribution corporate pension insurance policies
and all group pure endowment insurance in the group annuity
insurance asset segment– All insurance policies in the single-premium whole life/annuity
insurance asset segment

method (straight-line method)(iv) Available-for-sale securities[Daido Life]		– Securities with market value are valued by the fair value

Managed by setting the investment policy fully considering themethod (costs of securities sold are calculated based

characteristics and the risk tolerance of insurance products inon the moving average method) based on the market

order to ensure the fulfillment of future obligations.

price, etc., of the last day of the consolidated fiscal year		– Securities deemed extremely difficult to determinewith the characteristics of the insurance products are set andmarket value, which are public and corporate bonds

bonds held in the attempt to control the duration within each(including foreign bonds), for which the difference

sub-segment are classified as policy-reserve-matching bonds. The

between the purchase price and face value is recog-

sub-segments are set as follows:

nized as an interest rate adjustment are valued by the– Individual insurance/individual annuity insurance in the generalamortized cost method based on the moving averagemethod (straight-line method)		

Based on this investment policy, sub-segments in accordance– Securities other than the above are valued by the cost

asset segment– Individual insurance/individual annuity insurance in the
non-participating insurance asset segment (subjects are themethod based on the moving average method

cash flows likely to occur in the period of over 5 years andValuation differences on available-for-sale securities arewithin 30 years in the future)included in net assets.
For some of the consolidated subsidiaries, translation– Group annuity insurance in the group annuity insurance
asset segment

differences of bonds in foreign currency-denominatedavailable-for-sale securities are treated as follows: the[T&D Financial Life]

translation differences from foreign currency fair value

Sub-segments are set in accordance with the characteristics of thefluctuations are recorded as “net unrealized gains

insurance products and the asset management policy is formulat-(losses)” and the remaining differences as “foreign

ed considering each sub-segment in order to manage interest rateexchange gains (losses).”risk appropriately. Further, the matching of the duration of policy
reserves and policy-reserve-matching bonds within constant width

The overview of the risk management policies of policy-re-are verified regularly. The sub-segments are set as follows:

serve-matching bonds– Individual insurance (the portion of the future payout at the[Taiyo Life]certain attained age and above of the subject insurance type)Managed by setting the investment policy of attempting to– Accumulation rate type individual insurance

effectively reduce the risk of the whole portfolio by asset mix– Accumulation rate type fixed annuity insurance

which is based on a balanced-type ALM aiming at exceeding

Note that some insurance types and benefits are excluded.

medium- and long-term liability cost.
Taking into account this investment policy and based on the

Evaluation criteria and evaluation method of derivative transactionsb.	“Temporary Treatment of Accounting and Auditing Concerning

Evaluation of derivative transactions is processed based on

Policy-Reserve-Matching Bonds within the Insurance Industry”

the fair value method.

(JICPA, Industry Audit Committee Report No. 21), the following
T&D Holdings INTEGRATED REPORT 2019109

Corporate Data

(5) Processing method for deferred assets(8) Funding method for policy reserve

Bond issuance costs are processed as expenses in full amount

Policy reserves of the Three Life Insurance Companies arewhen incurred.

reserves pursuant to requirements under Article 116 of the
Insurance Business Act. The premium reserve is calculated based(6) Reserve for possible loan losseson the following methods.

The reserve for possible loan losses of the Three Life Insurance– For policies subject to standard policy reserve, the method es-

Companies is allocated in accordance with the self-assessment

tablished by the Commissioner of the Financial Services Agency

criteria and amortization/provision criteria of assets in order to(Notification No. 48 of the Ministry of Finance (1996))

provide for losses due to irrecoverable credits, as follows:
For loans to borrowers who are in a state of legal/formal bank-– For policies not subject to standard policy reserve, net level
premium method

ruptcy such as bankruptcy and civil rehabilitation, or in a state of

In addition, Daido Life is funding additional policy reserves

substantial bankruptcy, the remaining amount of the loan afterin accordance with Article 69, Paragraph 5 of the Ordinancedirectly deducting the amount stated below, less the estimatedfor Enforcement of the Insurance Business Act, for certain

amount collectible from collateral and guarantees is recorded.

individual annuity insurance for which the annuity payment

For loans to borrowers who are not yet bankrupt but highly

has been initiated.

likely to fall into bankruptcy, the amount deemed necessary fromthe overall assessment of the borrowers’ solvency is recorded
from the remaining amount of the loan after deducting the estimated amount collectible from collateral and guarantees.
For loans other than the above (performing loans and doubtful(9)	Provision for bonuses to directors and audit &supervisory board members
To provide for payment of bonuses to directors and audit & supervisory board members, a provision for the directors’ and audit

loans), historical loan-loss ratio calculated from the loan losses& supervisory board members’ bonuses is recorded based on thefrom the fixed period in the past, multiplied by the loan amount,

expected amount to be paid in the year ended March 31, 2019.

etc., is recorded.
All loans are subject to asset assessment by the related division(10) Provision for share-based remuneration

based on the self-assessment criteria of the assets. The reserve

To provide for delivery of stock of the Company to directors

mentioned above is implemented based on the assessment

and audit & supervisory board members, the estimated amountresults, after the asset auditing division independent from theof share benefit obligations based on the internal rules of therelated division audits the assessment results.

Company and Three Life Insurance Companies is recorded in

For collateralized or guaranteed loans to borrowers subject

provision for share-based remuneration.

to bankruptcy or substantial bankruptcy, the amount of loans
exceeding the estimated value of collateral or guarantees,
which were deemed uncollectible, was directly deducted from(11) Provision for directors’ and audit & supervisoryboard members’ retirement benefits

the amount of loans in the amounts of ¥379 million and ¥372

To provide for directors’ and audit & supervisory board members’

million [$3,358 thousand] for the years ended March 31, 2018

retirement benefits, the Company sets up a provision for direc-

and 2019, respectively.

tors’ and audit & supervisory board members’ retirement benefits

Consolidated subsidiaries other than the Three Life Insurance

based on the internal rules of certain consolidated subsidiaries,

Companies allocate reserves for possible loan losses, in accor-

which is recorded in the amount recognized to have accrued as

dance with criteria equivalent to the above, based on the resultsof March 31, 2019.

of the assessment which is implemented in the scope deemednecessary considering the importance.

(12) A ccounting method for employees’ retirement benefits
For the calculation of retirement benefit obligations, the method(7) Allocation method for reserve for price fluctuations

for attributing the expected retirement benefit amount to eachReserves for price fluctuations of the Three Life Insurance

period up to the current fiscal year-end is based on the benefit

Companies are allocated in order to provide for losses due toformula standard.

price fluctuations, which is pursuant to requirements under
Article 115 of the Insurance Business Act.

Actuarial gains and losses, past service costs and losses relating
to changes in accounting policies are expensed in the fiscal year
which they accrue.

110

T&D Holdings INTEGRATED REPORT 2019(13) D epreciation method for significant depreciation assets

treatment, and allocation treatment is applied for currency

a. Tangible fixed assets (except for lease assets)	Depreciation of tangible fixed assets (except for lease assets)

swap transactions qualifying for allocation treatment.
(ii) Hedging instrument and hedged item

is mainly calculated under the declining-balance method.

		

Depreciation of buildings (except for building and acces-

			 Hedged item:

sories, and structures) acquired on and after April 1, 1998,

		

and building and accessories, and structures acquired on

			 Hedged item:

and after April 1, 2016, is calculated under the straight-line		method. The main durable years are as follows:			 Hedged item:– Buildings, building and accessories, and structures: 2-50 years		– Furniture and fixtures: 2-20 years

			 Hedged item:	domestic and foreign stocks,

1) Hedging instrument: interest rate swap
loans and bonds

2) Hedging instrument: currency swap
foreign currency-denominated loans3) Hedging instrument: foreign exchange contract
foreign currency-denominated assets

4) Hedging instrument: option
domestic and foreign-listed
investment trusts, domestic bonds

b. Intangible fixed assets (except for lease assets)	Depreciation of software used in-house is calculated under
the straight-line method over a useful life of five years.

		5) Hedging instrument: credit transaction

			 Hedged item:	domestic and foreign stocks,
domestic and foreign-listed
investment trustsc. Lease assets
	For the depreciation of lease assets, lease assets with respect		

to ownership-transfer finance leases are calculated under the			 Hedged item:	domestic and foreign stocks,

same method for self-owned tangible fixed assets, and leasedomestic and foreign-listed

assets with respect to non-ownership-transfer finance leases areinvestment trusts

calculated under the straight-line method over the lease period.

6) Hedging instrument: forward contract(iii) Hedging policy
Based on internal rules, etc., in accordance with the risk

(14) L and revaluation

management policy concerning asset management, cash

Taiyo Life revalued its land for operating purposes based on Act

flow and price fluctuation risks related to hedged items

on Revaluation of Land (Act No. 34 of 1998). Regarding thevaluation differences between the previous and the revalued

are hedged within a certain range.
(iv) Evaluation method for hedge effectivenessamounts, the tax equivalent to this valuation differences has

Hedge effectiveness is evaluated semi-annually by meth-

been recorded in Liabilities section as “Deferred tax liabilities on

ods such as ratio analysis which compares the cumulative

land revaluation” and the amount after deducting the tax equiv-

total of market fluctuations or cash flow fluctuations

alent from the valuation differences is recorded in Net Assets asof hedged items and hedging instruments. However,“Land revaluation.”

evaluation of hedge effectiveness is omitted for interest– The method of revaluation provided for in Article 3, Paragraphrate swap transactions under special treatment, etc.,

3 of the same law
The amount is rationally adjusted and calculated based on thecurrency swap transactions under allocation treatment,
contracts in which both the hedged item and the hedg-

listed land price value as prescribed in Article 2, Item 1 of theing instrument are denominated in the same currency,

Order for Enforcement of the Act on Revaluation of Land (Actoption transactions in which hedged items are domestic/

No. 119 of 1998), the benchmark land price as prescribed inforeign stocks and domestic/foreign-listed investment

Article 2, Item 2 of the same, and an appraisal by the real estate

trusts, credit transactions and forward contracts, andappraisers as prescribed in Article 2, Item 5 of the same, etc.

option transactions in which domestic bonds are the– Date of revaluation: March 31, 2002(15) Method for significant hedge accounting
a. Hedge accounting method for Taiyo Life(i) Method for hedge accounting

hedged item.
b. Hedge accounting method for Daido Life(i) Method for hedge accounting		Fair value hedge treatment is adopted for the method forDeferral hedge treatment and fair value hedge treatment

hedge accounting. Allocation treatment is adopted forare used in hedge accounting. Special treatment is applied

foreign exchange contract transactions hedging foreign

for interest rate swap transactions qualifying for special

currency fixed deposits qualifying for allocation treatment.

T&D Holdings INTEGRATED REPORT 2019111

Corporate Data(ii) Hedging instrument and hedged item

Step 3: Calculate the transaction price.

		Hedging instrument: foreign exchange contract

Step 4: Allocate the transaction price to the performance		

Hedged item:	foreign currency-denominatedavailable-for-sale securities andfixed deposits(iii) Hedging policy		Based on internal rules, etc., concerning asset management, foreign exchange fluctuation risks of hedged items
are hedged within a certain range.

obligations of the contract.
Step 5: Recognize the revenue at the time when the performance obligations are fulfilled or as the performanceobligations become fulfilled.
b. Scheduled date of application
	Scheduled to be applied from the beginning of the fiscal year
starting April 1, 2021.

(iv) Evaluation method for hedge effectivenessc. Effect of the application of the accounting standards

		Hedge effectiveness is evaluated by ratio analysis which

	The amount of the impact is under evaluation at the time

mainly compares the fair value fluctuation of hedgedof preparing the consolidated financial statements for theitems and hedging instruments.

consolidated fiscal year ended March 31, 2019.

However, the evaluation is omitted if the material conditions of the hedged item and the hedging instrument[Additional information]

are the same and hedge effectiveness is high.

The Company has introduced a trust type stock compensation
system(the “System”), the Board Incentive Plan (BIP) Trust, which(16) Accounting treatment for consumption taxes

uses a trust to deliver the Company’s shares, etc. to directors (ex-The accounting treatment of consumption tax and local con-cluding those who are part-time directors such as outside direc-

sumption tax is based on the tax exclusion method. However,tors and non-residents in Japan) and executive officers (excluding

non-deductible consumption tax on assets, etc., which is pre-those who are non-residents in Japan, and together with direc-

scribed in the tax law as deferred consumption tax, etc., istors, referred to as “Directors” ) of the Company and Three Life

recorded in other assets and amortized over a 5-year period on a

Insurance Companies, with an aim to enhance the motivation ofstraight-line basis, whereas tax other than deferred consumption

Directors to contribute to improving business performance andtax is expensed in the fiscal year in which it accrues.

enhancing corporate value over the medium-to long-term.

(17) S cope of cash and cash equivalents in the

Solution on Transactions of Delivering the Company’s Own Stock

The accounting treatment of the System is based on “Practicalconsolidated statements of cash flows
Cash and cash equivalents in the consolidated statements of

to Employees etc. through Trusts” (ASBJ Practical Issues Task
Force (PITF) No. 30, March 26, 2015)

cash flows consist of cash, deposits withdrawable at any timeand readily convertible into cash, and short-term investments

a. Summary(term deposits, call loans, commercial paper, treasury discount	Based on the internal rules of the Company and Three Lifebills, etc.) with insignificant risk of price fluctuations and with a

Insurance Companies, the points are granted to Director

maturity of 3 months or less at the time of acquisition.

and they are delivered and provided through a trust of theCompany’s shares equivalent to accumulated points upon(18) Unadopted accounting standards, etc.

retirement and a monetary equivalent of the substitution[Accounting Standard for Revenue Recognition, etc.]

value of the Company’s shares. The Company’s shares to be– “Accounting Standard for Revenue Recognition” (ASBJ

delivered to Directors will be acquired in advance by money

Guidance No. 29, issued on March 30, 2018)– “Implementation Guidance on Accounting Standard for
Revenue Recognition” (ASBJ Guidance No. 30, issued on
March 30, 2018)

in trust by the Company.
b. The Company’s shares remaining in BIP Trust	For the Company’s shares remaining in BIP Trust, the carrying value in the trust is recorded as the treasury share in net
asset (excluding ancillary expenses). The carrying value anda. Summary

the number of treasury share in the Trust as of March 31,

	A comprehensive accounting standard for revenue recognition.

2019 was ¥1,322 million [$11,913 thousand] and 827,900

Revenue will be recognized applying the following five steps.
Step 1: Identify the contract with a customer.
Step 2: Identify the performance obligations of the contract.

112

T&D Holdings INTEGRATED REPORT 2019

shares respectively.

Note 3Loans

The amounts of delinquent loans of the Company and its consolidated subsidiaries are as follows:¥ millions

As of March 31,

Loans to bankrupt companies
Past due loans
Loans overdue for three months or more
Restructured loans
Total

Loans to bankrupt companies are loans to borrowers that are

US$ thousands

2018

2019

2019

¥ 194

¥ 138

$ 1,250

384

287

2,591

2,178

1,738

15,667

21

21

191

¥2,779¥2,186$19,700

Loans overdue for three months or more are loans other thansubject to bankruptcy, corporate reorganization or rehabilitation

those categorized as loans to bankrupt companies or past due

or other similar proceedings on which the Company and its

loans for which principal and/or interest are overdue for three

consolidated subsidiaries have stopped accruing interest aftermonths or more beginning the day after the agreed due date.

determining that collection or repayment of principal or interest

Restructured loans are loans other than those categorized as

is unlikely due to a significant delay in payment of principal orloans to bankrupt companies, past due loans or loans overdue

interest or for some other reason.

for three months or more for which agreements have been madePast due loans are loans, other than those categorized as

between the relevant parties to provide a concessionary interest

loans to bankrupt companies and loans for which due dates for

rate, rescheduling of due dates for interest and/or principal pay-interest payments have been rescheduled for purposes of restruc-ments, waiver of claims and/or other terms in favor of the bor-turing or supporting the borrower, on which the Company andrower for purposes of restructuring or supporting the borrower.

its consolidated subsidiaries have stopped accruing interest basedon self-assessment.

The direct write-downs of estimated uncollectable loans are
as follows:¥ millions

US$ thousands

As of March 31,

2018

2019

2019

Loans to bankrupt companies

¥ 74

¥ 72

$655

Past due loans

101

103

933

¥ millions

US$ thousands

Note 4

Accumulated Depreciation of Tangible Fixed Assets

The amounts of accumulated depreciation of tangible fixed assets are as follows:
Years ended March 31,

Accumulated depreciation of tangible fixed assets

Note 5

2018

2019

2019

¥236,200¥235,919$2,125,594

Separate Account Assets

The amounts of separate account assets as provided in Article 118, Paragraph 1 of the Insurance Business Act are as follows. The amountsof liabilities are equal to the amounts of assets.
¥ millions

Years ended March 31,

Separate account assets as provided in Article 118, Paragraph 1 of the Insurance Business Act

Note 6

US$ thousands

2018

2019

2019

¥64,224¥50,994$459,448¥ millions

US$ thousands

Reserve for Policyholder Dividends

The changes in reserve for policyholder dividends included in policy reserves are as follows:
2018

2019

2019

Balance at the beginning of the year

¥ 92,942¥ 88,889$ 800,880

Policyholder dividends

Years ended March 31,(34,469)(33,435)(301,250)

Increase in interest

19

18

165

Increase due to other reasons

65

46

421

30,331

27,144

244,566¥ 88,889¥ 82,663$ 744,783

Provision for reserve for policyholder dividends
Balance at the end of the year

T&D Holdings INTEGRATED REPORT 2019113

Corporate Data

Note 7

Unused Loan Balance under Loan Commitments

The unused loan balance under loan commitments is as follows:¥ millions

Years ended March 31,

Total amount of loan commitments
Balance of loans outstanding
Balance

Note 8

US$ thousands

2018

2019

2019

¥24,143¥31,301$282,022

6,800

10,97598,884¥17,342¥20,326$183,138¥ millions

US$ thousands

Lending Securities for Loan Agreements

The lending securities for loan agreements are as follows:
Years ended March 31,

Lending securities for loan agreement

Note 9

2018

2019

2019

¥449,505¥746,444$6,725,333

Bonds

Bonds include subordinated bonds, of which the payment priority is subordinated to other debts. The amounts are as follows:¥ millions

US$ thousands

Years ended March 31,

2018

2019

2019

Subordinated bonds¥57,000¥87,000$783,854

Note 10

Other Liabilities

Other liabilities include subordinated borrowings, of which the payment priority is subordinated to other debts. The amounts are as follows:¥ millions

Years ended March 31,

Subordinated borrowings

Note 11

US$ thousands

2018

2019

2019

¥43,000¥13,000$117,127

Future Contributions to the Life Insurance Policyholders Protection Corporation of JapanThe amounts of the Three Life Insurance Companies’ future contributions to the Life Insurance Policyholders Protection Corporation ofJapan, which are estimated in accordance with Article 259 of the Insurance Business Act, are as follows. The contributions are recordedon the consolidated statement of operation as an operating expense when contributed.
¥ millions

Years ended March 31,

Contributions to the Life Insurance Policyholders Protection Corporation

Note 12

US$ thousands

2018

2019

2019

¥21,597¥20,685$186,375

Organizational Change Surplus

The amounts of the organizational change surplus prescribed in Article 91 of the Insurance Business Act, are as follows:¥ millions

US$ thousands

2018

2019

2019

Taiyo Life Insurance Company¥63,158¥63,158$569,045

Daido Life Insurance Company

10,836

10,836

97,633¥ millions

US$ thousands

Years ended March 31,

Note 13

Stocks of Affiliated Companies

Stocks of affiliated companies included in securities are as follows:

114

Years ended March 31,

2018

2019

2019

Stocks of affiliated companies

¥410

¥615

$5,548

T&D Holdings INTEGRATED REPORT 2019

Note 14

Assets Pledged as Collateral and Secured Debts

Assets pledged as collateral are as follows:¥ millions

Securities (Japanese government bonds)

US$ thousands

2018

2019

2019

¥140,025¥256,056$2,307,021

Years ended March 31,

Securities (Corporate bonds)—

21,670195,244

Securities (Foreign securities)

370,941

567,489

5,112,977

871

125

1,126

¥511,837¥845,340$7,616,369

Cash collateral pledged for financial instruments
Balance

Of these assets, securities are mainly pledged as a substitute for the overdraft limit of the exclusive account of real-time gross settlementof government bonds with the Bank of Japan, bond-lending transactions secured by securities, and margin for futures contracts, etc.
Secured debts¥ millions

Cash collateral received for bond-lending transactions

Note 15

2019

2019

¥109,943¥161,672$1,456,636

Fair Value of Financial Assets Received as Collateral with Free Right of Disposal¥ millions

Financial Assets Received as Collateral with Free Right of Disposal

US$ thousands

2018

2019

2019

¥70,441¥34,988$315,236

Years ended March 31,

Note 16

US$ thousands

2018

Years ended March 31,

Impairment Losses on Fixed Assets

The items regarding impairment losses on fixed assets are as follows:(1) Grouping of assets(2)	Circumstances which led to the recognition of
impairment losses

The Three Life Insurance Companies’ group real estate owned for
insurance operations, etc., as a single asset group and other as-

For some rental properties, etc., carrying amount was reduced tosets such as rental property and unused real estate are grouped

the recoverable amount and the reduced amount was recorded

separately by each property.

in extraordinary losses as impairment losses because of a signifi-

Each of the consolidated subsidiaries other than the Company
and the Three Life Insurance Companies, groups real estate heldcant drop in the market price and a decline in profitability due tothe stagnant rental income level, etc.

for its own operations as a single category.

(3) Impairment losses recognized by asset group and the breakdown of the amounts of impairment losses by fixed asset type
Year ended March 31, 2018

¥ millions

Asset

LocationLand

Buildings, etc.

Total

Rental properties, etc.

Inazawa City, Aichi Prefecture, etc. (16 assets)

¥509

¥234

¥744

Asset

LocationLand

Buildings, etc.

Total

Total

Rental properties, etc.

Tokushima City, Tokushima Prefecture, etc. (29 assets)¥1,359¥753¥2,113$19,039

Year ended March 31, 2019¥ millions

US$ thousands

T&D Holdings INTEGRATED REPORT 2019115

Corporate Data(4)	Method for calculating the recoverable amountthe fiscal year 2018. In principle, the net realizable value for real

The recoverable amount is based on the value in use or net real-estate owned for rental properties is calculated by subtracting

izable value for rental properties, etc.

the estimated costs of disposal from the appraisal value calculat-

The value in use for real estate owned for rental properties,

ed in accordance with the real estate appraisal standard.

etc., is calculated by discounting future cash flows by 5.30% forNote 17

Consolidated Statement of Comprehensive Income

Reclassification adjustments and tax effects regarding other comprehensive income are as follows:
Years ended March 31,¥ millions

US$ thousands

2018

2019

2019

Valuation difference on available-for-sale securities:
Amount occurred during the year

¥ 67,882¥ 33,929$ 305,698

Reclassification adjustments(47,131)(67,100)(604,565)

Amount before tax effect

20,751(33,171)(298,867)

Tax effect(5,987)

7,580

68,300

Valuation difference on available-for-sale securities

14,764(25,590)(230,566)———

Reclassification adjustments

1,226

1,850

16,673

Amount before tax effect

1,226

1,850

16,673Tax effect

(343)

(518)

(4,668)Deferred gains (losses) on hedging instruments

883

1,332

12,005

(0)

(0)

(0)

Deferred gains (losses) on hedging instruments:
Amount occurred during the year

Foreign currency translation adjustments:
Amount occurred during the year
Share of other comprehensive income of associates accounted for using the equity method:Amount occurred during the year

(6)

5

52

Total other comprehensive income¥ 15,640¥(24,252)$(218,509)

Note 18

Consolidated Statement of Changes in Net Assets

For the year ended March 31, 2018

(1) Type and number of issued shares and treasury sharesYear ended March 31, 2018

Number of sharesat the beginning of the fiscal year

Number of shares increasedin the fiscal year

Number of shares decreasedin the fiscal year

Number of sharesat the end of the fiscal year

681,480,000—

26,480,000

655,000,000

48,925,774

10,623,176

26,746,490

32,802,460

Issued shares:
Common stock
Treasury shares:
Common stock

Notes:
1. Issued shares of common stock decreased due to the following reason:– Retirement of treasury shares based on the resolution made at a board of directors meeting held on August 9, 2017: 26,480,000 shares
2. Treasury shares of common stock increased due to the following reasons:– Purchase of treasury shares based on the resolution made at a board of directors meeting held on May 15, 2017: 10,612,300 shares– Purchase of odd-lot shares: 10,876 shares
3. Treasury shares of common stock decreased due to the following reasons:– Retirement of treasury shares based on the resolution made at a board of directors meeting held on August 9, 2017: 26,480,000 shares– Exercise of stock option: 266,400 shares– Purchase request of odd-lot shares: 90 shares(2) Subscription rights to shares
Category

Breakdown of subscription rights to shares

Balance at the end of the fiscal year
¥ millions

The Company

116

Share subscription rights as stock options

T&D Holdings INTEGRATED REPORT 2019

¥1,216

(3) Shareholder dividends
a. Shareholder dividends paid
Date of resolution

Type of shares

Amount of shareholder dividends

Shareholder dividends per share¥ millions¥

Record date

Effective dateJune 29, 2017

Ordinary General Meeting of
Shareholders held on June 28, 2017

Common stock¥11,069¥17.5

March 31, 2017

Board of directors meeting held on
November 13, 2017

Common stock¥10,888¥17.5

September 30, 2017 December 5, 2017b.	Shareholder dividends whose record date was in the fiscal year ended March 31, 2018, while their effective date is in the fiscal year
ending March 31, 2019
Date of resolution

Amount ofshareholder dividends

Type of shares

Shareholder
dividends per share

Underlying assets¥ millions

Ordinary General Meeting of
Shareholders held on June 27, 2018

Common stock¥12,443

Record date

Effective date¥

Retained earnings¥20.0

March 31, 2018 June 28, 2018

For the year ended March 31, 2019(1) Type and number of issued shares and treasury sharesYear ended March 31, 2019

Number of sharesat the beginning of the fiscal year

Number of shares increasedin the fiscal year

Number of shares decreasedin the fiscal year

Number of sharesat the end of the fiscal year

655,000,000——

655,000,000

32,802,460

10,366,001

126,770

43,041,691

Issued shares:
Common stock
Treasury shares:
Common stock

Notes:
1. Treasury shares of common stock increased due to the following reasons:– Purchase of treasury shares based on the resolution made at a board of directors meeting held on May 15, 2018: 9,522,000 shares– Purchase of odd-lot shares: 11,301 shares– Purchase by the BIP (Board Incentive Plan) Trust: 832,700 shares
2. Treasury shares of common stock decreased due to the following reasons:– Exercise of stock option: 121,700 shares– Purchase request of odd-lot shares: 270 shares– Decrease by the BIP Trust: 4,800 shares
3. The number of treasury shares of common stock includes 827,900 shares of the Company’s treasury share owned by the BIP Trust as of the end of the fiscal year. (0 share as of beginning of the fiscal year)(2) Subscription rights to shares
Category

The Company

Breakdown of subscription rights to shares

Balance at the end of the fiscal year

Share subscription rights as stock options¥ millions

US$ thousands¥1,081$9,742(3) Shareholder dividends
a. Shareholder dividends paid
Date of resolution

Type of shares

Amount of shareholder dividends

Shareholder dividends per share¥ millions

US$ thousands¥

US$

Record date

Effective dateJune 28, 2018

Ordinary General Meeting of
Shareholders held on June 27, 2018

Common stock¥12,443$112,117

¥20.0

$0.18

March 31, 2018

Board of directors meeting held on
November 14, 2018

Common stock¥12,255$110,422

¥20.0

$0.18

September 30, 2018 December 7, 2018

Note: T he total amount of shareholder dividends, which based on the resolution made at the board of directors held on November 14, 2018, includes ¥16 million of the dividends for the Company’streasury share owned by the BIP Trust.

b.	Shareholder dividends whose record date is in the fiscal year ended March 31, 2019, while their effective date is in the fiscal year
ending March 31, 2020
Date of resolution

Ordinary General Meeting of
Shareholders held on June 26, 2019

Type of shares

Common stock

Amount ofshareholder dividends¥ millions

US$ thousands¥13,481$121,464

Underlying
assetsRetainedearnings

Shareholder
dividends per share
¥

US$

¥22.0

$0.19

Record date

Effective date

March 31, 2019 June 27, 2019

Note: The total amount of shareholder dividends includes ¥18 million of the dividends for the Company’s treasury share owned by the BIP Trust.

T&D Holdings INTEGRATED REPORT 2019117

Corporate Data

Note 19

Consolidated Statement of Cash FlowsThe following table provides a reconciliation of cash and cash equivalents in the consolidated statement of cash flows to cash and cash
deposits as stated in the consolidated balance sheet.
¥ millions

As of March 31,

Cash and deposits

US$ thousands

2018

2019

2019

¥ 776,510¥ 824,241$ 7,426,263(44,238)

Less: deposits with an original maturity of more than three months(4,510)(4,910)Call loans

10,539

1,037

9,343

Monetary claims purchased

117,578

126,905

1,143,391

Less: monetary claims purchased other than cash equivalents(101,578)(101,905)(918,149)

Monetary trusts

685,819

765,4816,896,849

Less: monetary trusts other than cash equivalents(685,819)(756,791)(6,818,559)

Cash and cash equivalents¥ 798,538¥ 854,057$ 7,694,901

Note 20

Lease Transactions[As lessee](1) Finance leases
a. Ownership-transfer finance leases(i) Details of lease assets
		– Intangible fixed assets: software(ii) Depreciation method for lease assets
		The same depreciation method applied to self-owned fixed assets is applied.

b. Non-ownership-transfer finance leases(i) Details of lease assets
		– Tangible fixed assets: office appliances such as computer servers

		– Intangible fixed assets: software(ii) Depreciation method for lease assets		Straight-line method over the lease period is applied.

(2) Operating leases
Future lease payments under non-cancellable operating leases are as follows:
As of March 31,

Due within one year

¥ millions

US$ thousands

2018

2019

2019

¥6

¥3

$35

Due after one year

1

1

16

Total

¥8

¥5

$52

[As lessor](1) Details of lease investment assets
Other assets¥ millions

US$ thousands

2018

2019

2019

Lease income receivables¥34,681¥39,081$352,120

Estimated residual value

473

83

756

(2,837)(3,115)(28,070)¥32,318¥36,050$324,805

As of March 31,

Other:

Interest income
Total lease investment assets

118

T&D Holdings INTEGRATED REPORT 2019

(2)	Projected collection amounts of lease income receivables related to lease receivables and lease investment assets
after the consolidated closing dates
Other assets¥ millions

As of March 31, 2018

Lease receivables

Lease investment assets

Due within one year

¥1,762¥8,758Due after one year through two years

1,515

7,282

Due after two years through three years

1,200

5,913

Due after three years through four years

882

4,605

Due after four years through five years

631

3,233

Due after five years

1,060

4,887

As of March 31, 2019

Lease receivables

Lease investment assets

Lease receivables

Lease investment assets

Due within one year

¥1,759¥9,436$15,852$85,024

Due after one year through two years

1,441

8,016

12,98972,227

Due after two years through three years

1,110

6,672

10,00960,115Due after three years through four years

850

5,277

7,667

47,552

Due after four years through five years

614

3,924

5,538

35,355

1,052

5,754

9,484

51,845¥ millions

Due after five years

Note 21

US$ thousands

Tax-Effect Accounting(1) Breakdown of the accrual of deferred tax assets and liabilities by main causes
As of March 31,¥ millions

US$ thousands

2018

2019

2019

Deferred tax assets:¥ 61,432¥ 65,736

Policy reserves

63,984

63,913575,853

Net defined benefit liability

29,89729,968270,013

Devaluation losses on securities

15,355

14,881

134,076

Deferred losses on disposal of fixed assets

5,485

5,335

48,070

Provision for bonuses

2,120

2,284

20,580Tax loss carry-forward

1,257

1,121

10,100

464

464

4,186

13,835

12,731

114,708

Subtotal

193,835

196,437

1,769,866

Valuation allowance(16,535)(16,179)(145,770)

Total deferred tax assets

177,300

180,258

1,624,096(128,756)(121,175)(1,091,769)(2,262)(2,599)(23,424)Deferred gain on reduction of carrying amount of real estate

(624)

(715)

(6,445)

Others

(916)

(857)

(7,728)

Total deferred tax liabilities(132,560)(125,348)(1,129,367)

Net deferred tax assets (liabilities)¥ 44,739¥ 54,910$

Reserve for price fluctuations

Reserve for possible loan losses
Others$592,274

Deferred tax liabilities:
Valuation difference on available-for-sale securities
Accrued dividend income

494,729(2)	Breakdown of important differences between the statutory effective tax rate and the corporate tax rate, etc., after
applying tax-effect accounting by main item of the causes
2018

2019

28.2%

28.0%

Valuation allowance

(0.0)

(0.2)

Permanent non-deductible items including entertainment expense, etc.

0.6

0.4

Others

0.4

0.3

29.2%

28.5%

Years ended March 31,

Statutory tax rate
(Adjustments)

Effective tax rate

T&D Holdings INTEGRATED REPORT 2019119Corporate Data

Note 22

Financial Instruments(1) Matters related to the condition of financial instrumentsa. Policy for handling financial instruments

Stringent risk management is in place for derivative transactions, by clearly defining tolerable allowances in terms of

T&D Insurance Group’s main business is life insurance busi-

the details, hedged items and trading limits of the transac-

ness. The Group underwrites various classes of life insurance

tions as well as by properly controlling their status.

and invests the money collected as insurance premiums infinancial assets including securities and loans.

Hedge accounting is appropriately practiced in interest rate
swap agreements for loans and forward exchange contracts

In order to efficiently invest the insurance premiums trust-for foreign currency-denominated assets, under the internal

ed to us by the policyholders, the Group’s asset management

rules clearly defining qualifications, applicable types of trans-

policy aims to build a portfolio which ensures long-term

actions, methods of evaluation of its effectiveness and meth-stable returns considering the characteristics of obligations

ods of its designation. Effectiveness of hedging is determined

involved in life insurance policies, based on the concept ofby ratio analysis methodology comparing the movements of

ERM which integrally manages capital, profit, and risk, and atfair values of the hedged items and hedging instruments.

the same time, paying adequate attention to the soundness
and public nature of the investments.
Derivative financial instruments are used to hedge fluctua-

c. Risk management system for financial instruments(i) Overall risk management systemtion risks involved in our investment in financial instruments,

The Group, in consideration of the social and public

as well as partially complement physical assets.

nature of the life insurance business which is its main

Furthermore, in order to pursue greater financial sound-business, defines precise identification and management

ness, the Group has been financing the subordinated-classof risks as one of the crucial management tasks forcapital (bonds and borrowings).

ensuring the soundness and adequacy of management,
where the Company, as the Group’s holding company,

b. Details and risks of financial instruments
Financial assets held by the Group mainly comprise securities

sets out the basic risk management philosophy within

and loans.

the Group and provides the risk management structure

Securities include public and corporate bonds, stocks andaccording to the business characteristics and risk pro-investment trusts offered at home and abroad that are held

files of each of the Company including the Three Lifeon a long-term basis for the purpose of investment geared

Insurance Companies.

to market prospects to ensure stable returns. These finan-

As an organizational structure, the Group Riskcial instruments are exposed to credit risks of the issuingManagement Committee has been established for theentities and market risks associated with fluctuations in

purpose of coordinated management of risks within theinterest rate, exchange rates and stock prices, as well asGroup, and has a clear understanding of the status ofmarket liquidity risks.

various risks at each company including the Three Life

Loans here include policy loans for policyholders andInsurance Companies, through reports prepared on a reg-commercial loans (non-policy loans) provided mainly toular or as-needed basis at each company using the unified

domestic businesses and individuals. Commercial loans,risk management criteria. Further, the Company provides

though intended to ensure stable returns, are exposed to

guidance and advice as appropriate to companies includ-credit risks of borrowers’ default. A policy loan is provided

ing the Three Life Insurance Companies, to carry out thor-

within the surrender value of each insurance policy, thus its

ough risk management at each company and strengthen

credit risk is minimal.

the Group’s entire risk management system.

Derivative transactions including stock index futures120

has developed a “Group Risk Management Policy” which

At each of the Three Life Insurance Companies, acontracts, forward exchange contracts and interest rate swap

committee has been established to supervise compa-

agreements are used primarily to hedge price fluctuation

ny-wide risk management at an enhanced level, whilerisks of our financial assets, and partially to complement

a mutual check-and-balance system is in place underphysical assets by, for example, providing a solution to thethe internal organizational arrangement including thetime constraint prior to the inclusion of physical assets into

separation of the investment and loan execution function

our portfolio. Accordingly, the Group does not enter intofrom the administration function within the investment

those transactions for speculative purposes.

division, independence of the credit check function and

T&D Holdings INTEGRATED REPORT 2019

implementation of the internal audits by the Internal
Auditing Department.

(iv) Management of liquidity risk
Liquidity risks are managed by ensuring a constant

Furthermore, the Group has established the ERM com-

amount of liquidity based on the Risk Management

mittee to manage risks integrally with profit and capital

Department’s precise understanding of the latest risk

on an economic value basis. Through the promotion andinformation, including the share of highly liquid assets,enhancement of ERM, the Group aims for steady andcash flow situation, trends of the general financial/securi-sustainable growth in its corporate value.

ties markets and the status of individual financial instru-(ii) Management of market risk
Market risks are properly controlled according to thements, as well as by developing a management structurethat enables smooth liquidation of assets for financing.

risk characteristic of each asset based on a precise
understanding of the sensitivity of investment assetsd.	Supplementary notes concerning the matters related to fairto parameters reflecting changes in the investment

value, etc., of financial instruments

environment, including interest rate, stock prices andFair value is based on market price or rationally estimated fairexchange rates, as well as by reviewing asset allocation

value if the market price is not readily available.

and risk hedging based on identification of the overall

Estimation of fair value requires the use of certain assump-risk of the portfolio using the Value at Risk criterion

tions, etc. Therefore, the use of different assumptions, etc.

(hereafter referred to as “VaR”).

may lead to a different value.

(iii) Management of credit risk

In addition, notional amounts of derivative financial

Credit risk of the entire portfolio is identified and con-

instruments shown in “(2) Matters related to fair value,

trolled through its quantification by the use of VaRetc., of financial instruments” do not represent exposure to

based on an internal rating for individual borrowers.

market risks.

Meanwhile, the aggregate amount of investment andloans is capped by each industry sector or by group ofcompanies according to the corresponding risks, whereby concentration of loans to specific industry sectors orgroups of companies is restrained.

T&D Holdings INTEGRATED REPORT 2019121

Corporate Data

(2) Matters related to fair value, etc., of financial instruments
The following tables show consolidated balance sheet amounts, fair values and differences. Financial instruments deemed extremely
difficult to determine fair value are not included. (See Annotation 2.)¥ millions

As of March 31, 2018

Cash and deposits

Consolidatedbalance sheet amount¥Treated as securities

776,510¥

Fair value

Difference

776,510¥—18,00018,000—18,00018,000—

Others758,510758,510—Call loans

10,53910,539—

Monetary claims purchased

117,578

120,140

2,561

Treated as securities

116,405

118,799

2,393

Held-to-maturity bonds

33,33235,726

2,393

Available-for-sale securities

83,072

83,072

—

1,172

1,340

167
37,502Available-for-sale securities

OthersMonetary trusts

685,819

723,322

Monetary trusts for trading purposes

5,312

5,312

—

Monetary trusts for held-to-maturity purposes

38,291

38,443151

Monetary trusts for policy reserve-matching purposes

605,469

642,820

37,351

Monetary trusts for other than trading, held-to-maturity or policy reserve-matching purposes

36,74536,745—

11,194,328

11,874,881

680,553

64,07964,079—Held-to-maturity bonds

1,253,563

1,458,766

205,203

Policy reserve-matching bonds

2,930,644

3,405,994

475,350

Available-for-sale securities

6,946,040

6,946,040—

1,647,361

1,700,288

52,926

122,143

136,005

13,8691,526,456

1,564,282

39,056

Securities
Trading securities

Loans
Policy loans*1
Commercial loans*1
Reserve for possible loan losses*2
Total assets(1,238)——14,432,137

15,205,681

773,544

Short-term debentures

6,000

6,000

—

Bonds

87,06587,882

817

Cash collateral received for bond-lending transactions within other liabilities

109,943

109,943—

Borrowings within other liabilities

75,07275,244172

278,081

279,070989

Total liabilities
Derivative financial instruments*3:
Hedge accounting not applied

8,723

8,723

—

Hedge accounting applied

33,43834,331

892

Total derivative financial instruments¥

42,162¥

43,054*1. Difference indicates the difference between the amount after deducting the reserve for possible loan losses recorded in the consolidated balance sheet and its current fair value.
*2. Reserve for possible loan losses for loans is deducted.
*3. Assets and liabilities arising from derivative transactions are shown at net value. In the case of net liabilities, amounts are shown in parentheses.

122

T&D Holdings INTEGRATED REPORT 2019¥892

¥ millions

As of March 31, 2019

Cash and deposits

Consolidatedbalance sheet amount¥824,241¥

33,000Treated as securities

Fair value

Difference

824,241¥—

33,000—33,00033,000—

Others791,241

791,241—

Call loans

1,037

1,037

—

Monetary claims purchased

126,905

129,326

2,421

Treated as securities

125,789

128,0412,251

Held-to-maturity bonds

33,18235,4342,251

Available-for-sale securities

92,60792,607

—

1,115

1,284

169

765,481

831,445

65,963

5,161

5,161

—

Available-for-sale securities

OthersMonetary trusts
Monetary trusts for trading purposes
Monetary trusts for held-to-maturity purposes

29,86731,357

1,490

Monetary trusts for policy reserve-matching purposes

669,708

734,182

64,47360,74460,744—

11,547,017

12,327,376

780,359

50,20450,204—

Held-to-maturity bonds

1,235,192

1,453,594

218,402

Policy reserve-matching bonds

3,152,683

3,714,640

561,957

Available-for-sale securities

7,108,936

7,108,936—

1,668,798

1,722,734

53,935

Monetary trusts for other than trading, held-to-maturity or policy reserve-matching purposes
Securities
Trading securities

Loans
Policy loans*1
Commercial loans*1
Reserve for possible loan losses*2
Total assets
Short-term debentures

118,989

132,528

13,5471,550,999

1,590,205

40,388(1,190)——14,933,480

15,836,160

902,680

6,000

6,000

—
669

Bonds

117,035

117,704

Cash collateral received for bond-lending transactions within other liabilities

161,672

161,672—

Borrowings within other liabilities

45,64445,766

121

330,352

331,143

791

Hedge accounting not applied

11,942

11,942—Hedge accounting applied

7,804

8,676

872

Total liabilities
Derivative financial instruments*3:

Total derivative financial instruments¥

19,747¥

20,619¥872*1. Difference indicates the difference between the amount after deducting the reserve for possible loan losses recorded in the consolidated balance sheet and its current fair value.
*2. Reserve for possible loan losses for loans is deducted.
*3. Assets and liabilities arising from derivative transactions are shown at net value. In the case of net liabilities, amounts are shown in parentheses.

T&D Holdings INTEGRATED REPORT 2019123

Corporate Data

US$ thousands

Consolidatedbalance sheet amount

As of March 31, 2019$

Cash and deposits

7,426,263

Fair value$

297,324

Treated as securities

7,426,263

Difference$—

297,324—

297,324

297,324—

Others7,128,939

7,128,939—

Call loans

9,343

9,343

—

Monetary claims purchased

1,143,391

1,165,206

21,814Treated as securities

1,133,343

1,153,630

20,286

Held-to-maturity bonds

298,968

319,255

20,286

Available-for-sale securities

834,374

834,374—

10,048

11,575

1,527

6,896,849

7,491,172

594,323

46,50146,501—

Available-for-sale securities

OthersMonetary trusts
Monetary trusts for trading purposes
Monetary trusts for held-to-maturity purposes
Monetary trusts for policy reserve-matching purposes
Monetary trusts for other than trading, held-to-maturity or policy reserve-matching purposes
Securities
Trading securities

269,097

282,524

13,427

6,033,952

6,614,848

580,895

547,298547,298—

104,036,555

111,067,453

7,030,898

452,330

452,330—

Held-to-maturity bonds

11,128,862

13,096,627

1,967,765

Policy reserve-matching bonds

28,405,115

33,468,248

5,063,133

Available-for-sale securities

64,050,246

64,050,246—

15,035,577

15,521,527

485,949

Loans
Policy loans*1

1,072,073

1,194,061

122,056

Commercial loans*1

13,974,229

14,327,465

363,892

Reserve for possible loan losses*2
Total assets
Short-term debentures(10,726)——

134,547,981

142,680,966

8,132,985

54,05854,058

—
6,031

Bonds

1,054,464

1,060,496

Cash collateral received for bond-lending transactions within other liabilities

1,456,636

1,456,636—

411,252

412,350

1,097

2,976,412

2,983,542

7,129

Hedge accounting not applied

107,603

107,603—

Hedge accounting applied

70,31578,174

7,858

Borrowings within other liabilities
Total liabilities
Derivative financial instruments*3:

Total derivative financial instruments$

177,919$

185,778$

7,858*1. Difference indicates the difference between the amount after deducting the reserve for possible loan losses recorded in the consolidated balance sheet and its current fair value.
*2. Reserve for possible loan losses for loans is deducted.
*3. Assets and liabilities arising from derivative transactions are shown at net value. In the case of net liabilities, amounts are shown in parentheses.

Annotation 1c.	Monetary claims purchased: Those which are deemed appro-

Matters relating to the calculation method for the fair value ofpriate to treat as securities are recorded in the same way asfinancial instruments as well as securities and derivative transactions.

securities, while others which are deemed appropriate to treat

Assetsas loan receivable are recorded in the same way as loans.

a.	Cash and deposits: mainly recorded in carrying amounts astheir fair values are proximate to the carrying amounts.

d.	Monetary trusts: Monetary trusts which are mainly invested
in securities are recorded in the same way as securities, whileb.	Call loans: recorded in carrying amounts as these are settled

monetary trusts which have similar nature with cash and de-in a short period, thus their fair values are proximate to theposits are recorded in carrying amounts. In addition, currency

carrying amounts.

options and stock index option contracts, etc., are used inmonetary trusts where their fair values are calculated basedon prices quoted by the counterparty financial institutions.

124

T&D Holdings INTEGRATED REPORT 2019e.	Securities: Fair values of securities are mainly based on their

to consolidated balance sheet amounts less uncollectableprices quoted on the stock exchange concerned, while thoseamounts at the consolidated closing date. These valuesof bonds are based on the statistics for reference publishedare recorded as fair values.

by the Japan Securities Dealers Association or on the prices

However, for compound financial instruments, fair val-

quoted by the underwriting financial institutions. Fair values ofues are based on their prices quoted by the underwriting

investment trusts are based on the published base prices, etc.

financial institutions.

See “Note 23 Securities” for notes related to securities byholding purposes.

Liabilitiesa.	Short-term debentures: Fair values are recorded in carryingf.

Loans:

amounts. Fair values are proximate to carrying amounts(i)	Policy loans: Fair value is calculated by discounting the

because these are settled in a short period.

expected future cash flow derived from the repayment
rate based on the past actual repayment performance by
the risk-free rate.
(ii)	Commercial loans: A variable interest rate loan reflectsb.	Bonds: Fair values are based on the statistics for reference
published by the Japan Securities Dealers Association or on
the prices quoted by the underwriting financial institutions or

the market interest rate in a short period. Therefore, it iscalculated by discounting the total of principal and interest

basically recorded at carrying amount as its fair value is

by risk-free rates weighted by credit risks involved.

proximate to the carrying amount unless the borrower’s
credit standing significantly changes after the loan isprovided.

c.	Cash collateral received for bond-lending transactions: Fairvalues are recorded in carrying amounts. Fair values are

Fair value of fixed interest rate loans is calculated bydiscounting the total of principal and interest by risk-freeproximate to carrying amounts because these are short-termtransactions.

rates weighted by credit risks involved.
For loans to bankrupt companies, loans to effectivelyd.	Borrowings: Fair values are calculated by discounting thebankrupt companies and loans to potentially bankrupt

total of principal and interest by risk-free rates weighted bycompanies, since estimated uncollectable amounts are

credit risks involved.

calculated based on the present value of the estimatedfuture cash flows or estimated amounts recoverable

Derivative transactions: see “Note 25 Derivative Transactions.”

through pledge or guarantee, fair values are proximate

Annotation 2
The balance sheet amounts of financial instruments deemed extremely difficult to determine fair value, which are not included in “e.
Securities” of “Assets” are summarized as follows:¥ millions

As of March 31,

¥

615

2019

$

5,548

Investments in affiliates¥

Available-for-sale securities

182,294

187,750

1,691,602

Unlisted stocks *1, *2

19,523

16,820151,554

Foreign securities * * *145,140

149,110

1,343,463

Other securities *2, *3

17,63021,818

196,584

1,

2,

3

410

US$ thousands

2019

2018

*1. Unlisted stocks are exempt from disclosure of fair value because fair value is considered extremely difficult to obtain due to the lack of market value.
*2. Impairment losses:– For the year ended March 31, 2018: foreign securities of ¥5,818 million and other securities of ¥369 million.
– For the year ended March 31, 2019: foreign securities of ¥932 million [$8,402 thousand], other securities of ¥200 million [$1,802 thousand] and unlisted stocks of ¥0 million [$0 thousand].
*3. Investment in capital of partnership is exempt from disclosure of fair value because the partnership assets comprise financial instruments deemed extremely difficult to determine fair value such as
unlisted stocks.

T&D Holdings INTEGRATED REPORT 2019125

Corporate Data

Annotation 3
Scheduled redemption amounts after the consolidated closing date for monetary claims and fixed-maturity securities are as follows:¥ millions

As of March 31, 2018

Due in one year
or less

Due after one year
through five years¥—

Due after five years
through ten years¥—

Due after ten years

Deposits¥776,310

Call loans

10,539

—

—

¥

—
—

Monetary claims purchased

16,057

950

293

93,395

Securities:
Held-to-maturity bonds:
Government bonds

19,256456,563

45,916

551,771

Municipal bonds—

13,495

4,564

25,502

Corporate bonds

1,631

36,265

20,59595,560

Policy reserve-matching bonds:
Government bonds

59,153

34,772

263,734

1,580,414

Municipal bonds

9,036

6,710

41,200137,530

Corporate bonds

26,16071,58094,230567,100

Foreign securities

—

—

6,250

8,835

Government bonds

100

75,39077,204434,943

Municipal bonds

32,77553,20018,55522,524

Corporate bonds

156,468

340,236

254,725

215,053

Foreign securities

83,395637,355

1,302,771

533,654

1

3

1

—

183,036

615,172

534,666

193,358

Available-for-sale fixed maturity securities:

Other securities
Loans* Securities without contractual maturity dates in the amount of ¥ 868,722 million are not included. In addition, loans without contractual maturity dates such as policy loans in the amount of ¥ 122,321
million are not included.

¥ millions

As of March 31, 2019

Due in one year
or less

Due after one year
through five years¥—

Due after five years
through ten years¥—

Due after ten years

Deposits¥824,100

Call loans

1,037

—

—

¥

—
—

Monetary claims purchased

25,486235

4,293

90,230Government bonds

183,063

290,504

37,863543,846

Municipal bonds

13,495664

3,510

25,844

Corporate bonds

2,600

54,260—96,207

Securities:
Held-to-maturity bonds:

Policy reserve-matching bonds:
Government bonds

8,583

115,110

252,842

1,639,056

Municipal bonds

2,800

14,19336,766160,190

Corporate bonds

16,80099,680110,501

638,100

Foreign securities

—

1,043

19,66912,550388,844

Available-for-sale fixed maturity securities:—

90,39052,566

Municipal bonds

42,684

17,397

21,601

16,006

Corporate bonds

122,084

340,245

312,892

199,898

Foreign securities

107,298

830,354

1,092,135

461,693

Government bonds

Other securities
Loans

126

T&D Holdings INTEGRATED REPORT 2019

—

7

1

—

169,024

615,230

536,497

220,338

US$ thousands

Due in one year
or less

As of March 31, 2019

$7,424,994

Deposits

Due after one year
through five years$—

Due after five years
through ten years$

Due after ten years

—

$

—

9,343

—

—

—

229,627

2,118

38,681

812,959

Government bonds

1,649,364

2,617,396

341,1444,899,962

Municipal bonds

121,595

5,985

31,624

232,854

Corporate bonds

23,425

488,877—

866,813

Call loans
Monetary claims purchased
Securities:
Held-to-maturity bonds:

Policy reserve-matching bonds:
Government bonds

77,331

1,037,120

2,278,061

14,767,600

Municipal bonds

25,227

127,879

331,260

1,443,284

Corporate bonds

151,364

898,098

995,6025,749,166

Foreign securities

—

9,400

177,216

113,074

Available-for-sale fixed maturity securities:—

814,397473,6113,503,420

Municipal bonds

384,575

156,751

194,628

144,214

Corporate bonds

1,099,958

3,065,547

2,819,102

1,801,046

Foreign securities

966,738

7,481,345

9,839,948

4,159,772

—

66

11

—

1,522,882

5,543,117

4,833,743

1,985,209

Government bonds

Other securities
Loans* Securities without contractual maturity dates in the amount of ¥ 1,096,334 million [$9,877,778 thousand] are not included. In addition, loans without contractual maturity dates such as policy loans in
the amount of ¥ 129,083 million [$1,163,021 thousand] are not included.

Annotation 4
Scheduled repayment amounts after the consolidated closing date for bonds, borrowings, and other liabilities are as follows:¥ millions

As of March 31, 2018

Due in one year
or less

Short-term debenture¥

Due after one year
through two years

Due after two years
through three years

¥

¥

6,000

Bonds

—

—
—

—

Due after three years
through four years¥

30,000—Due after four years
through five years

¥

—

—

Due after five years¥——
57,000Cash collateral received for bond-lendingtransactions within other liabilities

109,943

—

—

—

—

—

Borrowings within other liabilities

11,175

8,933

5,838

3,159

1,447

44,520Due in one year
or less

Due after one year
through two years

Due after two years
through three years

Due after three years
through four years

Due after four years
through five years¥ millions

As of March 31, 2019¥

Short-term debenture

6,000

¥

—

Bonds

—

¥

30,000

—

¥

—

—

¥

—

—

Due after five years¥——
87,000Cash collateral received for bond-lendingtransactions within other liabilities

161,672

—

—

—

—

—

Borrowings within other liabilities

11,283

8,113

5,384

3,497

2,237

15,128Due in one year
or less

Due after one year
through two years

Due after two years
through three years

Due after three years
through four years

Due after four years
through five years

Due after five years

$

$

$

$

US$ thousands

As of March 31, 2019

Short-term debenture
Bonds
Cash collateral received for bond-lendingtransactions within other liabilities
Borrowings within other liabilities$

54,058—$—270,294

—
—

—
—

—
—

—
783,854

1,456,636

—

—

—

—

—

101,662

73,10048,51331,511

20,159136,305

T&D Holdings INTEGRATED REPORT 2019127

Corporate Data

Note 23

Securities(1) Trading securities¥ millions

As of March 31,

Valuation difference included in earnings (losses) of the consolidated fiscal year

US$ thousands

2018

2019

2019

¥(2,651)¥(4,940)$(44,514)(2) Held-to-maturity bonds¥ millions

As of March 31, 2018

Consolidatedbalance sheet amount

Fair value

Difference

Fair value exceeding consolidated balance sheet amount:
Domestic bonds¥1,249,167¥1,454,655¥205,487

Government bonds

1,050,936

1,221,587

170,650

Municipal bonds

44,01351,881

7,868

Corporate bonds

26,968154,217

181,186

Other securities

33,33235,726

2,393

Total

1,282,500

1,490,382

207,881

4,395

4,111

(284)

Fair value not exceeding consolidated balance sheet amount:
Domestic bonds
Government bonds

4,395

4,111

(284)

Municipal bonds

—

—

—

Corporate bonds

—

—

—

—

—

—

Other securities
Total
Grand total

4,395

4,111

(284)

¥1,286,895¥1,494,493¥207,597

Note: Other securities include beneficiary trust certificates (consolidated balance sheet amount of ¥33,332 million) which are represented as monetary claims purchased in the consolidated balance sheet.

¥ millions

As of March 31, 2019

Consolidatedbalance sheet amount

Fair value

Difference

Fair value exceeding consolidated balance sheet amount:¥1,233,526¥1,452,021¥218,495

Government bonds

1,036,381

1,217,484

181,102

Municipal bonds

43,92652,422

8,496

Corporate bonds

153,217

182,11428,897

Domestic bonds

Other securities

33,18235,434

2,251

Total

1,266,708

1,487,455

220,746

1,666

1,573

(93)

1,666

1,573

(93)

Municipal bonds

—

—

—

Corporate bonds

—

—

—

—

—

—

1,666

1,573

(93)

¥1,268,374¥1,489,028¥220,653

Fair value not exceeding consolidated balance sheet amount:
Domestic bonds
Government bonds

Other securities
Total
Grand total

128

T&D Holdings INTEGRATED REPORT 2019

US$ thousands

As of March 31, 2019

Consolidatedbalance sheet amount

Fair value

Difference

Fair value exceeding consolidated balance sheet amount:$11,113,850$13,082,454$1,968,603

Government bonds

9,337,615

10,969,314

1,631,699

Municipal bonds

395,772

472,320

76,547

Corporate bonds

1,380,462

1,640,819

260,356

Other securities

298,968

319,255

20,286

Total

11,412,819

13,401,710

1,988,890

15,011

14,173(838)

15,011

14,173(838)

Municipal bonds

—

—

—

Corporate bonds

—

—

—

—

—

—

15,011

14,173(838)$11,427,831$13,415,883$1,988,052

Domestic bonds

Fair value not exceeding consolidated balance sheet amount:
Domestic bonds
Government bonds

Other securities
Total
Grand total

Note: O ther securities include beneficiary trust certificates (consolidated balance sheet amount of ¥33,182 million [$298,968 thousand]) which are represented as monetary claims purchased in the
consolidated balance sheet.

(3) Policy reserve-matching bonds¥ millions

As of March 31, 2018

Consolidatedbalance sheet amount

Fair value

Difference

Fair value exceeding consolidated balance sheet amount:
Domestic bonds¥2,748,210¥3,235,719¥487,509

Government bonds

1,913,755

2,262,255

348,499

Municipal bonds

169,333

195,120

25,787

Corporate bonds

665,121778,343

113,222

4,956

5,008

52

Foreign securities
Foreign bonds
Total

4,956

5,008

52

2,753,166

3,240,727

487,561Fair value not exceeding consolidated balance sheet amount:
Domestic bonds

165,583

153,690(11,893)

Government bonds

41,76439,030(2,733)

Municipal bonds

25,317

23,055(2,261)

Corporate bonds

98,50191,603(6,898)Foreign securities

11,895

11,577(317)

Foreign bonds

11,895

11,577(317)

177,478

165,267(12,211)¥2,930,644¥3,405,994¥475,350

Total
Grand total

T&D Holdings INTEGRATED REPORT 2019129

Corporate Data

¥ millions

As of March 31, 2019

Consolidatedbalance sheet amount

Fair value

Difference

Fair value exceeding consolidated balance sheet amount:¥3,010,248¥3,574,433¥564,185

Government bonds

1,997,598

2,399,162

401,564

Municipal bonds

197,457

227,815

30,357

Corporate bonds

815,191

947,455

132,263

30,61831,971

1,352

Domestic bonds

Foreign securities
Foreign bonds
Total

30,61831,971

1,352

3,040,866

3,606,405

565,538

Fair value not exceeding consolidated balance sheet amount:
106,240

102,688(3,551)Government bonds

33,21032,729(481)

Municipal bonds

17,32816,469(858)

Corporate bonds

55,70153,489(2,212)Foreign securities

5,577

5,547

(29)

Foreign bonds

5,577

5,547

(29)

111,817108,235(3,581)¥3,152,683¥3,714,640¥561,957

Domestic bonds

Total
Grand total

US$ thousands

Consolidatedbalance sheet amount

Fair value

Difference$27,121,795$32,205,008$5,083,213

Government bonds

17,998,006

21,616,027

3,618,021

Municipal bonds

1,779,060

2,052,578

273,517

Corporate bonds

7,344,728

8,536,402

1,191,674

Foreign securities

275,863

288,053

12,189Foreign bonds

275,863

288,053

12,18927,397,659

32,493,062

5,095,403

As of March 31, 2019

Fair value exceeding consolidated balance sheet amount:
Domestic bonds

Total
Fair value not exceeding consolidated balance sheet amount:

957,207925,206(32,000)

Government bonds

299,220294,886(4,333)

Municipal bonds

156,123

148,388(7,734)

Corporate bonds

Domestic bonds

501,862

481,930(19,931)

Foreign securities

50,24849,979(269)

Foreign bonds

50,24849,979(269)

1,007,456

975,186(32,269)$28,405,115$33,468,248$5,063,133

Total
Grand total

130

T&D Holdings INTEGRATED REPORT 2019

(4) Available-for-sale securities¥ millions

As of March 31, 2018

Consolidatedbalance sheet amount

Acquisition cost

Difference

Consolidated balance sheet amount exceeding acquisition cost:
Domestic bonds¥1,473,666¥1,374,322¥ 99,343

Government bonds

316,322275,741

40,580

Municipal bonds

124,319

116,024

8,294

Corporate bonds

1,033,024

982,555

50,468Domestic equities

779,252

434,490344,761

Foreign securities

1,472,951

1,380,250

92,700Foreign bonds

1,031,284

967,819

63,465

Foreign equities

8,012

7,244

768

433,654405,186

28,467

Foreign other securities
Other securities

357,148

302,41254,736

Total

4,083,017

3,491,475

591,542

Consolidated balance sheet amount not exceeding acquisition cost:
Domestic bonds

590,219

619,818(29,598)

Government bonds

340,763

357,961(17,198)

Municipal bonds

10,46911,497(1,028)

Corporate bonds

238,987

250,359(11,371)

Domestic equities

27,15929,693(2,533)Foreign securities

2,286,982

2,399,934(112,952)

Foreign bonds

1,697,972

1,795,296(97,323)

Foreign equities

17,023

17,761(738)

Foreign other securities

571,986

586,876(14,890)

Other securities

59,73460,567

(833)

Total

2,964,096

3,110,014(145,917)

Grand total¥7,047,113¥6,601,489¥ 445,624

Note: Other securities include certificates of deposit (consolidated balance sheet amount of ¥18,000 million) which are represented as cash and deposits, commercial paper (consolidated balance sheet amountof ¥15,999 million) and beneficiary trust certificates (consolidated balance sheet amount of ¥67,073 million) which are represented as monetary claims purchased in the consolidated balance sheet.

¥ millions

As of March 31, 2019

Consolidatedbalance sheet amount

Acquisition cost

Difference

Consolidated balance sheet amount exceeding acquisition cost:¥1,640,657¥1,558,632¥ 82,024

Government bonds

393,375

364,191

29,184

Municipal bonds

91,70086,3595,341

Corporate bonds

1,155,581

1,108,082

47,499Domestic bonds

Domestic equities

613,820

366,806

247,013

Foreign securities

2,761,123

2,628,793

132,330

Foreign bonds

1,691,049

1,605,881

85,168Foreign equities

2

1

0

1,070,071

1,022,910

47,161

Foreign other securities
Other securities

242,924

211,237

31,686

Total

5,258,526

4,765,470

493,055

Consolidated balance sheet amount not exceeding acquisition cost:
394,703407,473(12,770)

Government bonds

205,167

211,926(6,759)Municipal bonds

10,937

11,601(663)

Corporate bonds

178,598

183,945(5,347)

Domestic bonds

Domestic equities

105,693

117,426(11,733)

Foreign securities

1,277,237

1,329,233(51,995)

Foreign bonds

1,014,024

1,059,768(45,744)

Foreign equities

16,811

17,472(661)

Foreign other securities

246,402

251,993(5,590)

Other securities

198,383

204,238(5,854)

Total

1,976,017

2,058,372(82,354)

Grand total¥7,234,544¥6,823,842¥410,701

T&D Holdings INTEGRATED REPORT 2019131

Corporate Data

US$ thousands

As of March 31, 2019

Consolidatedbalance sheet amount

Acquisition cost

Difference

Consolidated balance sheet amount exceeding acquisition cost:$14,782,029$14,043,002$ 739,027

Government bonds

3,544,239

3,281,295

262,943

Municipal bonds

826,206

778,081

48,125

Corporate bonds

10,411,583

9,983,625

427,958

Domestic bonds

Domestic equities

5,530,415

3,304,865

2,225,550

Foreign securities

24,877,227

23,684,953

1,192,274

Foreign bonds

15,236,051

14,468,700

767,351

Foreign equities

20

15

5

9,641,155

9,216,237

424,917

Foreign other securities
Other securities

2,188,707

1,903,213

285,493

Total

47,378,380

42,936,035

4,442,345

Consolidated balance sheet amount not exceeding acquisition cost:
3,556,205

3,671,263(115,057)

Government bonds

1,848,520

1,909,421(60,900)

Municipal bonds

98,547

104,523(5,975)

Corporate bonds

1,609,137

1,657,318(48,181)

Domestic bonds

Domestic equities

952,275

1,057,992(105,717)

Foreign securities

11,507,684

11,976,156(468,471)

Foreign bonds

9,136,174

9,548,321(412,146)

Foreign equities

151,464

157,421(5,957)2,220,046

2,270,414(50,368)

Foreign other securities
Other securities

1,787,399

1,840,151(52,751)

Total

17,803,564

18,545,563(741,998)

Grand total$65,181,945$61,481,598$3,700,346

Note: O ther securities include certificates of deposit (consolidated balance sheet amount of ¥33,000 million [$297,324 thousand]) which are represented as cash and deposits, commercial paper (consolidated balance sheet amount of ¥24,999 million [$225,242 thousand]) and beneficiary trust certificates (consolidated balance sheet amount of ¥67,607 million [$609,131 thousand]) which are
represented as monetary claims purchased in the consolidated balance sheet.

(5) Sales of securities classified as held-to-maturity bonds¥ millions

As of March 31, 2018

Cost of sales

Proceeds of sales

Gross gains

Gross losses¥8,263¥11,109¥2,845¥—

8,263

11,1092,845—

Municipal bonds

—

—

—

—

Corporate bonds

—

—

—

—

¥8,263¥11,109¥2,845¥—

Domestic bonds
Government bonds

Total

Reason for the sales: At Taiyo Life Insurance Company, investment policy was changed from the ALM standpoint considering that a certain period had passed since the suspension of sales of single-premium individual annuity insurance which belongs
to single-premium whole life/annuity insurance asset segment. As a result, some of held-to-maturity bonds in thisasset segment were sold before their maturity dates.
There were no sales of securities classified as held-to-maturity bonds for the year ended March 31, 2019.

132

T&D Holdings INTEGRATED REPORT 2019(6) Sales of securities classified as policy reserve-matching bonds¥ millions

Year ended March 31, 2018

Proceeds of sales

Gross gains

Gross losses¥27,075¥4,250¥12

20,9853,156

12

Municipal bonds

—

—

—

Corporate bonds

6,089

1,094

—

¥27,075¥4,250¥12

Proceeds of sales

Gross gains

Gross losses¥9

Domestic bonds
Government bonds

Total¥ millions

Year ended March 31, 2019¥44,933¥3,125Government bonds

38,1212,621

9Municipal bonds

1,473

107

—

Domestic bonds

5,338

396

—

¥44,933¥3,125¥9

Proceeds of sales

Gross gains

Gross losses$404,842$28,161$85

Government bonds

343,464

23,61885

Municipal bonds

13,279968—

Corporate bonds

48,0983,574—$404,842$28,161$85

Proceeds of sales

Gross gains

Gross losses

Corporate bonds
Total

US$ thousands

Year ended March 31, 2019

Domestic bonds

Total(7) Sales of securities classified as available-for-sale securities¥ millions

Year ended March 31, 2018

Domestic bonds¥ 89,834¥ 5,455

Government bonds

66,621

4,608

¥

948

Municipal bonds

503

0

—

Corporate bonds

22,709

846

109

838

Domestic equities

91,52135,048

1,195

Foreign securities

502,277

21,595

15,926

Foreign bonds

453,942

17,19915,775

Foreign equities

253

1

7

48,081

4,395

142

Foreign other securities
Other securities

60,908

9,290

14

Total

¥744,541¥71,390¥18,084

Proceeds of sales

Gross gains

Gross losses¥116,947¥24,489

79,976

15,559—Municipal bonds

9,757

2,181

—

Corporate bonds

27,213

6,748

1

Domestic equities

71,54133,881173

Foreign securities

691,627

16,411

16,708Foreign bonds

592,996

6,399

14,647

Foreign equities

8,983

1,136

4

Foreign other securities

89,647

8,875

2,056

¥ millions

Year ended March 31, 2019

Domestic bonds
Government bonds¥

1

Other securities

45,278

10,9900

Total¥925,395¥85,772¥16,884

T&D Holdings INTEGRATED REPORT 2019133

Corporate Data

US$ thousands

Year ended March 31, 2019

Proceeds of sales

Gross gains

Gross losses$1,053,678$220,645$

Government bonds

720,576

140,186

Municipal bonds

87,912

19,652—

Corporate bonds

245,189

60,806

16

Domestic bonds

16—

Domestic equities

644,579

305,265

1,561

Foreign securities

6,231,436

147,862

150,544

Foreign bonds

5,342,790

57,657

131,974

Foreign equities

80,938

10,24138

Foreign other securities

807,707

79,962

18,531Other securities

407,951

99,0194

Total$8,337,645$772,792$152,126(8) Impairment of securities

fiscal years ended March 31, 2018 and 2019, respectively.

The Company and its consolidated subsidiaries recognized ¥5

The Company and its consolidated subsidiaries recognize im-

million and ¥1,996 million [$17,984 thousand] as impairment

pairment losses on the securities if fair value as of the end of thelosses for the available-for-sale securities with fair value for the

fiscal year declines by 30% or more from their acquisition cost.

Note 24

Monetary Trusts(1) Monetary trusts for trading purposes¥ millions

US$ thousands

As of March 31,

2018

2019

2019

Valuation difference included in earnings (losses) of the consolidated fiscal year

¥720

¥840

$7,572(2) Monetary trusts for held-to-maturity purposes¥ millions

As of March 31, 2018

Monetary trusts

Consolidatedbalance sheet amount

Fair value

Difference¥38,291¥38,443¥151¥ millions

As of March 31, 2019

Monetary trusts

Consolidatedbalance sheet amount

Fair value

Difference¥29,867¥31,357¥1,490

US$ thousands

As of March 31, 2019

Monetary trusts

134

T&D Holdings INTEGRATED REPORT 2019

Consolidatedbalance sheet amount

Fair value

Difference$269,097$282,524$13,427

(3) Monetary trusts for policy reserve-matching purposes¥ millions

As of March 31, 2018

Monetary trusts

Consolidatedbalance sheet amount

Fair value

Difference¥605,469¥642,820¥37,351¥ millions

As of March 31, 2019

Monetary trusts

Consolidatedbalance sheet amount

Fair value

Difference¥669,708¥734,182¥64,473

US$ thousands

As of March 31, 2019

Monetary trusts

Consolidatedbalance sheet amount

Fair value

Difference$6,033,952$6,614,848$580,895(4) Monetary trusts for those other than trading, held-to-maturity or policy reserve-matching purposes¥ millions

As of March 31, 2018

Monetary trusts

Consolidatedbalance sheet amount

Acquisition cost

Difference¥36,745¥37,609¥(863)¥ millions

As of March 31, 2019

Monetary trusts

Consolidatedbalance sheet amount

Acquisition cost

Difference¥60,744¥60,819¥(74)

US$ thousands

As of March 31, 2019

Monetary trusts

Consolidatedbalance sheet amount

Acquisition cost

Difference$547,298$547,971$(673)

T&D Holdings INTEGRATED REPORT 2019135

Corporate Data

Note 25

Derivative Transactions(1) Derivative financial instruments for which hedge accounting is not applied
a. Currency-related transactions¥ millions

Notional amount
As of March 31, 2018

Total

Over one year

Fair value

Valuation gains(losses)Over-the-counter transactions:
Foreign exchange contracts:
Sold¥50,147

¥—

¥ 697

¥ 697

U.S. dollar

30,576

—

314

314

Euro

12,597

—

138

138

British pound

4,541

—

78

78

Canadian dollar

289

—

22

22

Australian dollar

2,141

—

143

143

Bought

5,331

—

(6)

(6)

U.S. dollar

3,797

—

(3)

(3)

Euro

1,497

—

(3)

(3)

35

—

(0)

(0)

1,860

—

1

1

1,860

—

1

1

18,765

—

(931)

(931)

735

—

(38)

(38)

18,030

—

(893)

(893)

Australian dollar
Currency swaps:
Receive yen/pay foreign currency
Brazilian real
Receive foreign currency/pay yen
U.S. dollar
Australian dollar
Total¥(239)

Notes:
1. Calculation method of fair value
Forward exchange rates are used for the consolidated fiscal year-end foreign exchange rates.
Currency swaps are carried out using management trusts and the fair value is calculated based on the price obtained from the trustee companies.
2. Assets and liabilities denominated in foreign currencies, which have fixed settlement amounts in yen under forward exchange contracts and are disclosed in yen amounts in the consolidated balance
sheet, are not subject to this disclosure.
¥ millions

Notional amount
As of March 31, 2019

Total

Over one year

Fair value

Valuation gains(losses)¥ 84

Over-the-counter transactions:
Foreign exchange contracts:¥90,962¥—¥ 84

U.S. dollar

53,087

—

55

55

Euro

15,200

—

132

132
(52)

Sold

British pound

4,253

—

(52)

Canadian dollar

716

—

27

27

Australian dollar

17,703

—

(78)

(78)

7,442

—

31

31

U.S. dollar

383

—

0

0

Euro

10

—

0

0

7,048

—

30

30

10

(10)

BoughtAustralian dollar
Currency options:
Bought
Put
Euro

9,657

—

[20]

[—]

9,657

—

[20]

[—]

10

(10)
516

Currency swaps:
14,944—

516

Brazilian real

9,634

—

681

681

Indian rupee

5,310

—

(165)

(165)

16,579

—

(261)

(261)

714

—

(5)

(5)

15,864

—

(256)

(256)

Receive yen/pay foreign currency

Receive foreign currency/pay yen
U.S. dollar
Australian dollar
Total

136

T&D Holdings INTEGRATED REPORT 2019¥ 360

US$ thousands

Notional amount
As of March 31, 2019

Over-the-counter transactions:
Foreign exchange contracts:
Sold
U.S. dollar
Euro
British pound
Canadian dollar
Australian dollar
BoughtU.S. dollar
Euro
Australian dollar
Currency options:
BoughtPut
Euro
Currency swaps:
Receive yen/pay foreign currency
Brazilian real
Indian rupee
Receive foreign currency/pay yen
U.S. dollar
Australian dollar
Total

Total

Over one year

$819,555
478,312
136,957
38,327
6,454
159,503
67,051
3,455
91
63,504

$—
—
—
—
—
—
—
—
—
—

87,013[184]
87,013
[184]

—
[—]
—
[—]

134,651
86,802
47,848149,3786,440
142,937

—
—
—
—
—
—

Fair value

$

759
498
1,190
(472)
246
(703)
282
5
0
276

Valuation gains(losses)

$

759
498
1,190
(472)
246
(703)
282
5
0
276

94

(90)

94

(90)

4,652
6,140
(1,488)(2,358)(45)(2,312)

4,652
6,140
(1,488)(2,358)(45)(2,312)$ 3,245

Notes:
1. Calculation method of fair value
Forward exchange rates are used for the consolidated fiscal year-end foreign exchange rates.
Currency options are calculated based on prices obtained from counterparty financial institutions.
Currency swaps are carried out using management trusts and the fair value is calculated based on the price obtained from the trustee companies.
2. Assets and liabilities denominated in foreign currencies, which have fixed settlement amounts in yen under forward exchange contracts and are disclosed in yen amounts in the consolidated balance
sheet, are not subject to this disclosure.
3. Figures in square brackets for “Notional amount” represent option premiums that are reported on the consolidated balance sheet.

b. Interest-related transactions¥ millions

Notional amount
As of March 31, 2018

Over-the-counter transactions:Interest rate swaps:
Receive fixed/pay floating
Total

Total

Over one year

Fair value¥17,731¥16,778¥8,962

Valuation gains(losses)¥8,962¥8,962

Note: Calculation method of fair value
Fair value of interest rate swaps is calculated by discounting future cash flows to the present value based on the interest rate at the consolidated fiscal year-end or based on prices obtained fromcounterparty financial institutions.
¥ millions

Notional amount
As of March 31, 2019

Over-the-counter transactions:Interest rate swaps:
Receive fixed/pay floating
Total

Total

Over one year

Fair value¥16,213¥15,317¥11,561

Valuation gains(losses)¥11,561¥11,561
US$ thousands

Notional amount
As of March 31, 2019

Over-the-counter transactions:Interest rate swaps:
Receive fixed/pay floating
Total

Total

Over one year

Fair value$146,076$138,010$104,166

Valuation gains(losses)$104,166$104,166

Note: Calculation method of fair value
Fair value of interest rate swaps is calculated by discounting future cash flows to the present value based on the interest rate at the consolidated fiscal year-end or based on prices obtained fromcounterparty financial institutions.

T&D Holdings INTEGRATED REPORT 2019137

Corporate Data

c. Stock-related transactions
The Company held no stock-related derivative instruments as of March 31, 2018.
¥ millions

Notional amount
As of March 31, 2019

Total

Over one year

¥10,381

¥—

[34]

[—]

Fair value

Valuation gains(losses)Market transactions:
Stock exchange transactions
Bought:
Put

0

(33)
¥(33)

Total

US$ thousands

Notional amount
As of March 31, 2019

Total

Over one year

$93,535

$—

[307]

[—]

Fair value

Valuation gains(losses)Market transactions:
Stock exchange transactions
Bought:
Put

6

(300)
$(300)

Total
Notes:
1. Calculation method of fair value
Fair value is based on prices obtained from counterparty financial institutions.
2. Figures in square brackets for “Notional amount” represent option premiums that are reported on the consolidated balance sheet.

T&D Financial Life uses monetary trusts to execute derivative transactions. The following tables show a summary of the notional amountand fair value of derivative financial instruments.
¥ millions

Notional amount
As of March 31, 2018

Total

Over one year

2,636

1,985

Fair value

Valuation gains(losses)

228

(422)

163

(240)

65

(181)

53

35

Over-the-counter transactions:
Currency options:
Bought:
Put

[651]

[505]

U.S. dollar

1,505

1,128

[403]

[313]

Euro

1,130

857

[247]

[192]

Stock-related transactions:
Stock index options:
Bought:
Call
Put

56

32

[18]

[10]

13,675

10,321[3,541][2,646]

Total
Notes:
1. Calculation method of fair value
Fair value is based on the price obtained from counterparty financial institutions.
2. Figures in square brackets for “Notional amount” represent option premiums that are reported on the consolidated balance sheet.

138

T&D Holdings INTEGRATED REPORT 2019301

(3,239)¥(3,626)¥ millions

Notional amount
As of March 31, 2019

Total

Over one year

1,985

1,438

[505]

[371]

1,128

786

[313]

[223]

857

652

[192]

[148]

32

10

Fair value

Valuation gains(losses)

147

(357)

89

(223)

58

(133)

31

21

Over-the-counter transactions:
Currency options:
Bought:Put
U.S. dollar
Euro
Stock-related transactions:
Stock index options:
Bought:
Call
Put

[10]

[2]

10,321

2,845[2,646]

[604]

190

(2,456)¥(2,792)

Total

US$ thousands

Notional amount
As of March 31, 2019

Total

Over one year

17,891

12,958[4,553][3,350]10,167

7,084[2,823][2,015]

7,723

5,874

[1,730][1,335]

Fair value

Valuation gains(losses)

1,330(3,222)807(2,016)523(1,206)284

191

Over-the-counter transactions:
Currency options:
Bought:Put
U.S. dollar
Euro
Stock-related transactions:
Stock index options:
Bought:
Call
Put

288

90

[92]

[25]

92,99225,640[23,847][5,445]

Total

1,719

(22,128)$(25,159)

Notes:
1. Calculation method of fair value
Fair value is based on prices obtained from counterparty financial institutions.
2. Figures in square brackets for “Notional amount” represent option premiums that are reported on the consolidated balance sheet.

T&D Holdings INTEGRATED REPORT 2019139

Corporate Data

(2) Derivative financial instruments for which hedge accounting is applied
a. Currency-related transactions¥ millions

Notional amount
As of March 31, 2018

Hedged item

Total

Over one year

Fair value

Recognition of valuation gains/losses on hedged items:
Foreign exchange contracts:
Sold

Foreign currencydenominated assets—¥30,986

1,877,531—

16,849Euro542,632—

6,554

British pound

181,572—

1,504

Canadian dollar

121,750—

4,442

Australian dollar

59,671—

1,606

Mexican peso

1,702

—

(20)

New Zealand dollar

22,014—(116)

U.S. dollar

Polish zloty
BoughtU.S. dollar¥2,811,894

¥

5,019

—

166

13,258—(3)

13,258—(3)

Allocation treatment for foreign exchange contracts, etc.:
Foreign exchange contracts:
Sold

Certificates of deposit inforeign currencies

50,000——U.S. dollar

5,000

—

—

Australian dollar

45,000——32,29732,297—32,29732,297

Currency swaps:
Receive yen/pay foreign currency

Foreign currencydenominated loans

U.S. dollar
Total—¥30,983

Notes:
1. Calculation method of fair value
Forward exchange rates are used for the consolidated fiscal year-end foreign exchange rates.
2. Fair value of foreign exchange contracts, etc., with allocation treatments are included in the relevant certificates of deposit in foreign currencies and foreign currency-denominated loans because they are
the hedged assets for each of these contracts and the assets are treated as a unit.

¥ millions

Notional amount
As of March 31, 2019

Hedged item

Total

Over one year

Fair value

Recognition of valuation gains/losses on hedged items:
Foreign exchange contracts:
Sold

Foreign currencydenominated assets¥3,352,034¥—¥ 7,785

2,247,783—(9,394)

Euro729,658—

15,119British pound

146,229—

667

Canadian dollar

97,428—(98)

Australian dollar

114,012—

1,352

New Zealand dollar

U.S. dollar

14,027—

136

Polish zloty

767

—

1

Danish krone

1,644

—

2

Singapore dollar

483

—

(1)

227,620—

178

227,620—

178

BoughtU.S. dollar
Allocation treatment for foreign exchange contracts, etc.:
Foreign exchange contracts:

40,000——10,000——Australian dollar

30,000——37,93737,937—37,93737,937

Currency swaps:
Receive yen/pay foreign currency
U.S. dollar
Total

140

Certificates of deposit inforeign currencies

U.S. dollar

Sold

T&D Holdings INTEGRATED REPORT 2019

Foreign currencydenominated loans—¥ 7,964

US$ thousands

Notional amount
As of March 31, 2019

Hedged item

Total

Over one year

Fair value

Recognition of valuation gains/losses on hedged items:
Foreign exchange contracts:
Sold

Foreign currencydenominated assets$30,201,228$—$ 70,147

U.S. dollar

20,252,127—(84,645)Euro

6,574,088—

136,223

British pound

1,317,501

—

6,018

Canadian dollar

877,813—(886)

Australian dollar

1,027,233—

12,186

New Zealand dollar

1,233

126,382—

Polish zloty

6,912

—

9

Danish krone

14,813—21

Singapore dollar
BoughtU.S. dollar

4,355

—

(13)

2,050,823

—

1,612

2,050,823

—

1,612

Allocation treatment for foreign exchange contracts, etc.:
Foreign exchange contracts:

Certificates of deposit inforeign currencies

360,392——

U.S. dollar

90,098——Australian dollar

270,294——

341,809341,809—341,809341,809

Sold

Currency swaps:
Receive yen/pay foreign currency

Foreign currencydenominated loans

U.S. dollar—$ 71,759

Total

Notes:
1. Calculation method of fair value
Forward exchange rates are used for the consolidated fiscal year-end foreign exchange rates.
2. Fair value of foreign exchange contracts, etc., with allocation treatments are included in the relevant certificates of deposit in foreign currencies and foreign currency-denominated loans because they are
the hedged assets for each of these contracts and the assets are treated as a unit.

b. Interest-related transactions¥ millions

Notional amount
As of March 31, 2018

Hedged item

Total

Over one year

Fair value¥49,960¥45,298¥892

Special treatment for interest rate swaps:
Interest rate swaps:
Receive fixed/pay floating

Loans

Total

¥892

Note: Calculation method of fair value
Fair value of interest rate swaps is calculated by discounting future cash flows to the present value based on the interest rate at the consolidated fiscal year-end or prices obtained from counterparty
financial institutions.

¥ millions

Notional amount
As of March 31, 2019

Hedged item

Total

Over one year

Fair value¥44,987¥33,137¥872

Special treatment for interest rate swaps:
Interest rate swaps:
Receive fixed/pay floating

Loans

¥872

Total

US$ thousands

Notional amount
As of March 31, 2019

Hedged item

Total

Over one year

Fair value$405,332$298,566$7,858Special treatment for interest rate swaps:
Interest rate swaps:
Receive fixed/pay floating
Total

Loans

$7,858

Note: Calculation method of fair value
Fair value of interest rate swaps is calculated by discounting future cash flows to the present value based on the interest rate at the consolidated fiscal year-end or prices obtained from counterparty
financial institutions.

T&D Holdings INTEGRATED REPORT 2019141

Corporate Data

c. Stock-related transactions¥ millions

Notional amount
As of March 31, 2018

Hedged item

Total

Over one year

Fair value¥45,100¥—¥2,455

Recognition of valuation gains/losses on hedged items:
Forward contracts:
Domestic equities

Sold
Total

¥2,455

Note: Calculation method of fair value
Fair value is calculated based on prices obtained from counterparty financial institutions.

¥ millions

Notional amount
As of March 31, 2019

Hedged item

Total

Over one year

Fair value¥44,614¥—¥(160)

Recognition of valuation gains/losses on hedged items:
Forward contracts:
Domestic equities

Sold¥(160)

Total

US$ thousands

Notional amount
As of March 31, 2019

Hedged item

Total

Over one year

Fair value$401,965$—$(1,443)

Recognition of valuation gains/losses on hedged items:
Forward contracts:
Domestic equities

Sold$(1,443)

Total
Note: Calculation method of fair value
Fair value is calculated based on prices obtained from counterparty financial institutions.

Note 26

Employees’ Retirement Benefits(1) Overview of the retirement benefit plan adopted by the T&D Insurance Group
Domestic consolidated subsidiaries have defined benefit retirement plans such as a defined benefit corporate pension plan, a retirement
pension plan, and a retirement lump-sum payment plan. Further, certain subsidiaries have defined contribution pension plans as theirdefined contribution retirement plan as well as retirement benefit trusts.

(2) Defined benefit retirement plana. Reconciliations of the beginning- and end-of-the-year balances of retirement benefit obligations are as follows:¥ millions

2019

2019

¥155,716¥154,239$1,389,671

Service cost

6,369

6,361

57,317

Interest cost

876

800

7,216

Balance at the beginning of the year

Actuarial gains and losses

1,959

3,136

28,261Retirement benefit paid

(7,172)(7,437)(67,013)

Accrual of past service costs(3,510)——

Balance at the end of the year

¥154,239¥157,101$1,415,452

Note: Retirement benefit expense for consolidated subsidiaries using the simplified method is recorded in service cost.

142

US$ thousands

2018

Years ended March 31,

T&D Holdings INTEGRATED REPORT 2019b. Reconciliations of the beginning- and end-of-the-year balances of pension plan assets are as follows:¥ millions

Years ended March 31,

Balance at the beginning of the year

US$ thousands

2018

2019

2019

¥ 99,168¥103,475$932,292

Expected return on plan assets

920

1,121

10,103

Net actuarial gains and losses

1,347

1,154

10,398

Employer contribution

7,440

6,000

54,059Benefit obligation paid

(5,402)(5,688)(51,252)¥103,475¥106,062$955,602

Balance at the end of the yearc.	Reconciliations of retirement benefit obligations and pension plan assets to net defined benefit liabilities and net defined benefit
assets stated in the consolidated balance sheet are as follows:¥ millions

US$ thousands

2018

2019

2019

Retirement benefit obligations for funded plans¥ 127,383¥ 130,463$1,175,450

Plan assets(103,475)(106,062)(955,602)[(62,124)][(63,321)][(570,518)]

As of March 31,

Employee pension trusts

23,907

24,400219,847

Retirement benefit obligations for unfunded plans

26,856

26,637240,002

Net amount of defined benefit liability and defined benefit asset stated in the consolidated balance sheet

50,76451,038459,849

50,76451,038459,849———¥ 50,764¥ 51,038$ 459,849¥ millions

US$ thousands

Defined benefit liability
Defined benefit asset
Net amount of defined benefit liability and defined benefit asset stated in the consolidated balance sheetd. Components of retirement benefit expense are as follows:
Years ended March 31,

Service cost

2018

2019

2019

¥ 6,369¥ 6,361$ 57,317

Interest cost

876

800

7,216

Expected return on plan assets(920)(1,121)(10,103)

612

1,982

17,862

Recognized past service costs(3,510)——Retirement benefit expense relating to defined benefit retirement plan

¥ 3,427¥ 8,023$ 72,291

Recognized actuarial gains and losses

Note: Retirement benefit expense for consolidated subsidiaries using the simplified method is included in service cost.

e. Matters related to pension plan assets(i) Components of pension plan assets are as follows:
2018

2019

Bonds

72.8%

72.0%

General account

11.2%

11.4%

Foreign securities

8.4%

8.0%

Stocks5.3%

4.8%

Cash and deposits

1.5%

2.8%

Joint assets

0.7%

0.9%

Others

0.0%

0.0%

Total

100.0%

100.0%

As of March 31,

Note: The total includes 60.0% and 59.7% of employee pension trusts set up for corporate pension plans for the fiscal years ended March 31, 2018 and 2019, respectively.

(ii) The setting method for long-term expected rate of return
The long-term expected rate of return on pension plan assets is set by considering the present and the prospective asset allocation of pension plan assets, as well as the present and the expected long-term rate of return arising from various assets thatcomprise the plan assets.

T&D Holdings INTEGRATED REPORT 2019143

Corporate Dataf.

Matters related to actuarial basis
2018

2019

Discount rate

0.11%–0.80%(0.01)%–0.80%

Expected long-term rate of return on plan assets

0.26%–2.11%

0.24%–3.46%

Years ended March 31,(3) Defined contribution retirement plan
The required contribution for the defined contribution retirement plan of the Company and its consolidated subsidiaries amounted to¥267 million and ¥268 million [$2,418 thousand] for the fiscal years ended March 31, 2018 and 2019, respectively.

Note 27

Stock Options(1) Amount of expenses related to stock options¥ millions

US$ thousands

Years ended March 31,

2018

2019

2019

Operating expenses

¥309

¥—

$—

(2) Details, size and status of stock options
a. Details of stock options
T&D Holdings, Inc. stock subscription rights (1st series)

Title and number of grantees

Directors (excluding outside directors) and executive officers of the Company: 7
Directors (excluding outside directors) and executive officers of subsidiaries of the Company: 40

Number of stock options by class*Common stock: 449,600 shares

Grant dateJuly 31, 2012

Conditions for vesting

Stock options are vested on the grant date.

Requisite service period

Not applicable

Exercise period

August 1, 2012 to July 31, 2042

* Translated to the number of common stock.

T&D Holdings, Inc. stock subscription rights (2nd series)

Title and number of grantees

Directors (excluding outside directors) and executive officers of the Company: 7
Directors (excluding outside directors) and executive officers of subsidiaries of the Company: 39

Number of stock options by class*Common stock: 235,500 shares

Grant dateAugust 1, 2013

Conditions for vesting

Stock options are vested on the grant date.

Requisite service period

Not applicable

Exercise period

August 2, 2013 to August 1, 2043

* Translated to the number of common stock.

T&D Holdings, Inc. stock subscription rights (3rd series)

Title and number of grantees

Directors (excluding outside directors) and executive officers of the Company: 6
Directors (excluding outside directors) and executive officers of subsidiaries of the Company: 41

Number of stock options by class*Common stock: 231,300 shares

Grant dateAugust 1, 2014

Conditions for vesting

Stock options are vested on the grant date.

Requisite service period

Not applicable

Exercise period

August 2, 2014 to August 1, 2044

* Translated to the number of common stock.

144

T&D Holdings INTEGRATED REPORT 2019

T&D Holdings, Inc. stock subscription rights (4th series)

Title and number of grantees

Directors (excluding outside directors) and executive officers of the Company: 15
Directors (excluding outside directors) and executive officers of subsidiaries of the Company: 43

Number of stock options by class*Common stock: 170,700 shares

Grant dateAugust 3, 2015

Conditions for vesting

Stock options are vested on the grant date.

Requisite service period

Not applicable

Exercise period

August 4, 2015 to August 3, 2045

* Translated to the number of common stock.

T&D Holdings, Inc. stock subscription rights (5th series)

Title and number of grantees

Directors (excluding outside directors) and executive officers of the Company: 10
Directors (excluding outside directors) and executive officers of subsidiaries of the Company: 48

Number of stock options by class*Common stock: 379,800 shares

Grant dateAugust 1, 2016

Conditions for vesting

Stock options are vested on the grant date.

Requisite service period

Not applicable

Exercise period

August 2, 2016 to August 1, 2046

* Translated to the number of common stock.

T&D Holdings, Inc. stock subscription rights (6th series)

Title and number of grantees

Directors (excluding outside directors) and executive officers of the Company: 10
Directors (excluding outside directors) and executive officers of subsidiaries of the Company: 47

Number of stock options by class*Common stock: 208,200 shares

Grant dateAugust 1, 2017

Conditions for vesting

Stock options are vested on the grant date.

Requisite service period

Not applicable

Exercise period

August 2, 2017 to August 1, 2047

* Translated to the number of common stock.

T&D Holdings INTEGRATED REPORT 2019145

Corporate Datab. Size and status of stock options
	For stock options which existed during the consolidated fiscal year ended March 31, 2019, the number of stock options is translated
to the number of common stock.
(i) Number of stock options
T&D Holdings, Inc.
stock subscription rights (1st series)

T&D Holdings, Inc.
stock subscription rights (2nd series)

T&D Holdings, Inc.
stock subscription rights (3rd series)

Before vesting:
At the end of previous fiscal year

—

—

—

Granted———Forfeited———

Vested———Outstanding

—

—

—

181,600 shares

120,000 shares

144,400 shares

—

—

—

24,400 shares

17,400 shares

20,600 shares

After vesting:
At the end of previous fiscal year
VestedExercised
Forfeited
Exercisable

—

—

—

157,200 shares

102,600 shares

123,800 shares

T&D Holdings, Inc.
stock subscription rights (4th series)

T&D Holdings, Inc.
stock subscription rights (5th series)

T&D Holdings, Inc.
stock subscription rights (6th series)

Before vesting:
At the end of previous fiscal year

—

—

—

Granted———Forfeited———

Vested———Outstanding

—

—

—

121,700 shares

298,900 shares

206,100 shares

After vesting:
At the end of previous fiscal year
VestedExercised———

12,400 shares

28,500 shares

18,400 shares

Forfeited
Exercisable

—

—

—

109,300 shares

270,400 shares

187,700 shares

T&D Holdings, Inc.
stock subscription rights (1st series)

T&D Holdings, Inc.
stock subscription rights (2nd series)

T&D Holdings, Inc.
stock subscription rights (3rd series)(ii) Unit price information

Exercise price
Average stock price at the time of exercise
Fair value at the granted date

Exercise price

1 yen

1 yen

1 yen

1,441 yen

1,511 yen

1,457 yen

685 yen

1,143 yen

1,153 yen

T&D Holdings, Inc.
stock subscription rights (4th series)

T&D Holdings, Inc.
stock subscription rights (5th series)

T&D Holdings, Inc.
stock subscription rights (6th series)

1 yen

1 yen

1 yen

Average stock price at the time of exercise

1,403 yen

1,651 yen

1,739 yen

Fair value at the granted date

1,708 yen

918 yen

1,485 yen(3) Method for estimating the number of stock options vested
Only the actual number of forfeited stock options is reflected because it is difficult to rationally estimate the actual number of stock
options that will be forfeited in the future.

146

T&D Holdings INTEGRATED REPORT 2019

Note 28

Asset Retirement Obligations

Asset retirement obligations recorded in the consolidated balance sheet are as follows:(1) Overview of the asset retirement obligations
Asbestos removal obligations for office buildings and rental properties are recorded as asset retirement obligations.
(2) Calculation method for the amount of the asset retirement obligations
For the estimation of the present value of asset retirement obligations, 50 years from the acquisition of buildings is used as an estimated period before the cost will accrue and 2.11% as a discount rate.
(3) Increase or decrease of the total amount of the asset retirement obligations¥ millions

Years ended March 31,

Balance at the beginning of the year
Time progress adjustment
Balance at the end of the year

Note 29

US$ thousands

2018

2019

2019

¥1,957¥1,998$18,008

41

42

380

¥1,998¥2,041$18,389

Real Estate for Rent

Some subsidiaries own real estate for rent, consisting mainly of office buildings in major cities in Japan. Their balance sheet amount, net
increase or decrease and fair value at the end of the year are as follows:
Years ended March 31,¥ millions

US$ thousands

2018

2019

2019

¥202,753¥248,005$2,234,488

Balance sheet amount:
Balance at the beginning of the year
Net increase (decrease)45,252

8,229

74,147

Balance at the end of the year

248,005

256,235

2,308,636

Fair value at the end of the year

¥307,523¥335,797$3,025,472

Notes:
1. Balance sheet amount represents acquisition cost less accumulated depreciation and accumulated impairment losses. Balances at the end of the year for the years ended March 31, 2018 and 2019
include amounts related to asset retirement obligations of ¥113 million and ¥79 million [$718 thousand], respectively.
2. For the year ended March 31, 2018, the increase mainly consisted of purchase of real estate totaling ¥ 45,926 million and the decrease mainly consisted of depreciation totaling ¥4,285 million.
For the year ended March 31, 2019, the increase mainly consisted of purchase of real estate totaling ¥ 13,947 million [$125,664 thousand] and the decrease mainly consisted of depreciation totaling¥5,502 million [$49,575 thousand].
3. Fair value at the end of the year of major properties is calculated based on their appraisal value by external real estate appraisers. The value of other properties is calculated in-house based on the posted price.

Gains (losses) on real estate for rent are as follows:¥ millions

US$ thousands

2018

2019

2019

Ordinary revenues¥15,719¥17,568$158,288

Ordinary expenses

10,245

11,926

107,453

Ordinary profit

5,474

5,642

50,834

Other losses

(474)

(550)

(4,960)Years ended March 31,

Notes:
1. Ordinary revenues and ordinary expenses constitute income from lease and corresponding expenses, such as depreciation, repair expenses, insurance expenses and taxes. These amounts are recorded ininvestment income and investment expenses.
2. Other losses were mainly losses on disposal of fixed assets for the year ended March 31, 2018, and impairment losses for the year ended March 31, 2019. These amounts are recorded in extraordinary losses.

T&D Holdings INTEGRATED REPORT 2019147

Corporate Data

Note 30

Segment Information(1) Overview of reportable segments

Daido Life Insurance Company segment and the T&D Financial

The reportable segments of the Company are components of theLife Insurance Company segment.

Company for which separate financial information is available.

Each of the Three Life Insurance Companies focuses on differ-

These segments are subject to regular review by the Company’s

ent markets. Taiyo Life focuses on the households market, Daido

Board of Directors to determine the allocation of business re-Life focuses on the small and medium enterprises market andsources and evaluate business performances.

T&D Financial Life focuses on independent insurance agents mar-

The Company is a holding company which manages life

ket and each company has different products under its uniqueinsurance companies and other subsidiaries in accordance withmarketing strategy.

the Insurance Business Act. Under the Company, the Three Life
Insurance Companies, with unique product strategies and sales(2)	Method for calculating ordinary revenues, income or loss,

strategies, operate life insurance business which is the Group’s

assets and liabilities, and others by reportable segment
The method for the accounting treatment of the reportable seg-core business.

ments is the same as described in “Note 2. Summary of Significant

The Company’s operations are therefore segmented by each of

Accounting Policies.”

the life insurance companies and the Company’s three reportablesegments are the Taiyo Life Insurance Company segment, the(3) Information on ordinary revenues, income or loss, assets and liabilities, and others by reportable segment¥ millions

Reportable segments

Year ended March 31, 2018

Ordinary revenues

T&D
Financial Life

Taiyo Life

Daido Life

¥ 737,487¥ 987,614

1,229

456

—

1,685

69,30070,986(70,986)—

738,716

988,070

196,492

1,923,279

101,066

2,024,346(95,986)

1,928,359

Intersegment transfers
Total
Segment income (loss)

OthersSubtotal¥ 196,492 ¥ 1,921,593

Total

Amount on
consolidated
financialstatements¥ 31,766 ¥ 1,953,360

Adjustments¥ (25,000) ¥ 1,928,359

62,79089,397

2,543

154,732

47,895

202,627(46,152)

156,475

Segment assets

7,219,463

6,573,924

1,365,878

15,159,267

921,034

16,080,302(817,903)

15,262,398

Segment liabilities

6,810,776

5,913,402

1,292,955

14,017,134

148,847

14,165,982(56,619)

14,109,362

Depreciation of real estate for rent

2,648

2,407

—

5,056

—

5,056

(28)

5,027

Depreciation

6,033

4,070

54

10,158644

10,803(40)

10,762

Provision for (reversal of) policy reserve(20,409)

232,72250,164262,476

398

262,874—

262,874

Provision for (reversal of) reserve forpolicyholder dividends

15,664

14,668(1)

30,331—30,331—30,331

Interest, dividends and income from realestate for rent

Others:137,721

141,8407,409

286,971

46,099333,070(47,573)285,496

Interest expenses

638

16

0

656

31

687

(49)

637

Equity in earnings (losses) of affiliates

—

—

—

—

—

—

72

72

Extraordinary gains

26

55

—

82

15

97

(68)

28

Extraordinary losses

4,280

11,754461

16,49617

16,513(0)

16,513

Impairment losses

744

—

—

744

—

744

—

744

Provision for reserve for pricefluctuations
Taxes
Investments in affiliated companies
Increase in tangible fixed assets andintangible fixed assets

¥

3,251

11,089459

14,800—14,800—14,80012,39018,458494

31,343724

32,068(6)

32,061

49

100

—

149

—

149

—

149

1,065 ¥

63,734531 ¥

64,266(117) ¥

64,14846,298¥16,370¥¥¥Notes:
1. Ordinary revenues instead of net sales are presented here.
2. Adjustments are as follows:(1) The adjustment of ¥(25,000 million) to ordinary revenues is the transferred amount which mainly consists of reversal of policy reserve of ¥20,409 million and provision for retirement benefits of¥3,627 million which are included in ordinary expenses of the consolidated statement of operation as provision for policy reserves and reversal of provision for retirement benefits, respectively.
(2) The adjustment of ¥(46,152 million) to segment income (loss) is mainly due to the elimination of dividends from subsidiaries and affiliates.
(3) The adjustment of ¥(817,903 million) to segment assets is mainly due to the elimination of investments in stocks of subsidiaries and affiliates.
(4) The adjustment of ¥(56,619 million) to segment liabilities is mainly due to the elimination of intersegment receivables and payables.
3. Segment income (loss) is adjusted to align with the ordinary revenues set forth in the consolidated statement of operation.

148

T&D Holdings INTEGRATED REPORT 2019¥ millions

Reportable segments

Year ended March 31, 2019

Ordinary revenues

T&D
Financial Life

Taiyo Life

Daido Life¥ 916,451¥1,044,933

1,158

627

—

1,786

59,684

61,471(61,471)—917,610

1,045,561

150,758

2,113,929

92,3012,206,231(66,068)

2,140,162

Intersegment transfers
Total

OthersSubtotal¥ 150,758 ¥ 2,112,143

Total

Amount on
consolidated
financialstatements

Adjustments¥ 32,616 ¥ 2,144,759¥(4,597) ¥ 2,140,162

54,19689,2702,064

145,531

36,478

182,009(35,060)

146,949

Segment assets

7,411,864

6,843,179

1,438,819

15,693,864

976,507

16,670,371(875,659)

15,794,711

Segment liabilities

6,996,551

6,180,746

1,361,498

14,538,796

207,081

14,745,878(110,754)

14,635,123

Depreciation of real estate for rent

3,594

2,653

—

6,247

—

6,247

(28)

6,219

Depreciation

6,787

4,216

256

11,260675

11,935(43)

11,892

Provision for (reversal of) policy reserve

182,709258,111

26,791

467,612180

467,792—

467,792

Provision for (reversal of) reserve forpolicyholder dividends

13,13814,005

027,144—

27,144—

27,144

Interest, dividends and income from realestate for rent

Segment income (loss)

Others:143,579

145,486

8,322

297,388

35,299332,688(36,830)

295,858

Interest expenses

934

16

2

953

323

1,277

(369)

907

Equity in earnings (losses) of affiliates

—

—

—

—

—

—

(24)

(24)

Extraordinary gains

152

497

—

650

48

699

—

699

Extraordinary losses

5,522

12,454552

18,52950

18,580918,589Impairment losses

1,574

538

—

2,113

—

2,113

—

2,113

Provision for reserve for pricefluctuations
Taxes
Investments in affiliated companies
Increase in tangible fixed assets andintangible fixed assets

¥

3,606

11,244552

15,402—

15,402—

15,402

10,14017,779500

28,420639

29,0596

29,066

94

365

—

459

—

459

—

459

938 ¥

29,181552 ¥

29,733(124) ¥

29,60814,425¥

13,817¥¥¥

US$ thousands

Reportable segments

Year ended March 31, 2019

Ordinary revenues

T&D
Financial Life

Taiyo Life

Daido Life

$ 8,257,060$ 9,414,664

10,441

5,656—

16,098537,745553,844(553,844)—

8,267,502

9,420,321

1,358,305

19,046,129

831,617

19,877,747(595,264)

19,282,482(315,885)

1,323,990

Intersegment transfers
Total

OthersSubtotal$ 1,358,305 $ 19,030,030

Total$ 293,871 $ 19,323,902

Adjustments

Amount on
consolidated
financialstatements$(41,419) $ 19,282,482

488,298

804,315

18,5981,311,212

328,662

1,639,875

Segment assets

66,779,570

61,655,821

12,963,509

141,398,902

8,798,154

150,197,056(7,889,534) 142,307,522

Segment liabilities

63,037,678

55,687,414

12,266,857

130,991,951

1,865,766

132,857,717(997,877) 131,859,840

Depreciation of real estate for rent

32,38423,903—56,288—56,288(254)

56,033

Depreciation

61,15637,9882,311

101,456

6,083

107,539(389)

107,149

Provision for (reversal of) policy reserve

1,646,177

2,325,541

241,388

4,213,107

1,623

4,214,730—

4,214,730

Provision for (reversal of) reserve forpolicyholder dividends

118,374

126,1893

244,566—

244,566—

244,566

1,293,627

1,310,805

74,9852,679,418

318,0432,997,462(331,833)

2,665,628

8,419

147

25

8,592

2,918

11,511(3,331)

8,180

—

—

—

—

—

—

(218)

(218)

Extraordinary gains

1,374

4,486

—

5,860

441

6,301

—

6,301

Extraordinary losses

49,760112,215

4,975

166,950455

167,40582

167,488

Impairment losses

14,1894,849—

19,039—19,039—19,039Provision for reserve for pricefluctuations

32,489101,312

4,975

138,777—

138,777—

138,777

91,363

160,191

4,505

256,060

5,763

261,82360

261,884

849

3,292

—

4,141

—

4,141

—

4,141

8,451 $

262,916

4,975 $

267,891(1,124) $266,766

Segment income (loss)

Others:Interest, dividends and income from realestate for rentInterest expenses
Equity in earnings (losses) of affiliates

Taxes
Investments in affiliated companies
Increase in tangible fixed assets andintangible fixed assets$

129,968$

124,496$$$

Notes:
1. Ordinary revenues instead of net sales are presented here.
2. Adjustments are as follows:(1) T he adjustment of ¥ (4,597 million) [$(41,419 thousand)] to ordinary revenues is the transferred amount which mainly consists of gains from derivatives, net of ¥2,286 million [$20,603 thousand],reversal of provision for retirement benefits of ¥1,254 million [$11,304 thousand] and foreign exchange gains, net of ¥854 million [$ 7,701 thousand] which is included in ordinary expenses of theconsolidated statement of operation as losses from derivatives, net, provision for retirement benefits and foreign exchange losses, net, respectively.
(2) The adjustment of ¥ (35,060 million) [$(315,885 thousand)] to segment income (loss) is mainly due to the elimination of dividends from subsidiaries and affiliates.
(3) The adjustment of ¥ (875,659 million) [$(7,889,534 thousand)] to segment assets is mainly due to the elimination of investments in stocks of subsidiaries and affiliates.
(4) The adjustment of ¥ (110,754 million) [$(997,877 thousand)] to segment liabilities is mainly due to the elimination of intersegment receivables and payables.
3. Segment income (loss) is adjusted to align with the ordinary profit set forth in the consolidated statement of operation.

T&D Holdings INTEGRATED REPORT 2019149

Corporate Data

[Related information]
For the year ended March 31, 2018

1. Information by product and service
Sales to external customers¥ millions

Year ended March 31, 2018

Taiyo Life

Daido Life

T&D Financial Life

Others

Total

Income from insurance premiums¥511,900¥790,852¥176,474¥4,492¥1,483,719

Insurance premiums

511,514789,337

176,158

4,492

1,481,502

Individual insurance and individual annuities

417,790

727,193

175,998—

1,320,982

Group insurance

31,46923,897——55,366

Group annuities

61,04837,200138—

98,386

Others

1,206

1,046

21

4,492

6,767

Ceded reinsurance recoveries

¥

386

¥

1,514

¥

316

¥

—

¥

2,217

Note: Income from insurance premiums instead of net sales is presented here.

2. Information by geographic area
(1) Net sales(2) Tangible fixed assets

Information by geographic area is omitted, as net sales (ordinary

Information by geographic area is omitted, as the amount ofrevenues) to external customers in Japan exceed 90% of net sales

tangible fixed assets in Japan exceeds 90% of the amount of(ordinary revenues) in the consolidated statement of operation.

tangible fixed assets in the consolidated balance sheet.

3. Information by major customer
Information by major customer is omitted, as there are no customers to whom sales exceed 10% of net sales (ordinary revenues) toexternal customers in the consolidated statement of operation.
For the year ended March 31, 2019

1. Information by product and service
Sales to external customers¥ millions

Year ended March 31, 2019

Taiyo Life

Daido Life

T&D Financial Life

Others

Total

Income from insurance premiums¥715,120¥828,003¥127,853¥5,206¥1,676,184

714,627

826,576

127,7655,206

1,674,175

Individual insurance and individual annuities

606,517

767,359

127,611—1,501,487

Group insurance

29,781

22,211——

51,992

Group annuities

77,13935,936134—

113,210

Others

1,189

1,069

19

5,206

Insurance premiums¥

Ceded reinsurance recoveries

493

¥

1,427

¥

87

¥

—

7,485
¥

2,008

US$ thousands

Year ended March 31, 2019

Income from insurance premiums

Daido Life

T&D Financial Life

OthersTotal$6,443,109$7,460,167$1,151,934$46,910$15,102,122

6,438,663

7,447,305

1,151,143

46,91015,084,023

5,464,611

6,913,768

1,149,753—

13,528,133

Group insurance

268,323

200,119——

468,443

Group annuities

695,010

323,784

1,210—

1,020,005

Others

10,717

9,632

179

46,910790$

Insurance premiums
Individual insurance and individual annuities

Ceded reinsurance recoveries
Note: Income from insurance premiums instead of net sales is presented here.

150

Taiyo LifeT&D Holdings INTEGRATED REPORT 2019

$

4,446

$

12,861$—

67,440$18,099

2. Information by geographic area
(1) Net sales(2) Tangible fixed assets

Information by geographic area is omitted, as net sales (ordinary

Information by geographic area is omitted, as the amount ofrevenues) to external customers in Japan exceed 90% of net sales

tangible fixed assets in Japan exceeds 90% of the amount of(ordinary revenues) in the consolidated statement of operation.

tangible fixed assets in the consolidated balance sheet.

3. Information by major customer
Information by major customer is omitted, as there are no customers to whom sales exceed 10% of net sales (ordinary revenues) toexternal customers in the consolidated statement of operation.

[Information on impairment losses on fixed assets by reportable segment]
For the years ended March 31, 2018 and 2019
Information on impairment losses on fixed assets by reportable segment is disclosed in “Note 30. Segment information.”[Information on amortization of goodwill and unamortized balance of goodwill by reportable segment]
For the years ended March 31, 2018 and 2019: Not applicable.

[Information on gains on negative goodwill by reportable segment]
For the years ended March 31, 2018 and 2019: Not applicable.

[Related party information]
1. Related party transactions
For the years ended March 31, 2018 and 2019: Not applicable.

2. Notes on the parent company or any important affiliated company
For the years ended March 31, 2018 and 2019: Not applicable.

T&D Holdings INTEGRATED REPORT 2019151

Corporate Data

Note 31

Per Share Information¥

US$

Years ended March 31,

2018

2019

2019

Net assets per share¥1,844.15¥1,884.30$16.97

Net income per share

124.23118.501.06

Net income per share (fully diluted)

121.81116.161.04

Note: A summary of the net assets per share, the net income per share and the net income per share (fully diluted) computations is as follows:(1) Net income per share and net income per share (fully diluted)
Years ended March 31,¥ millions

US$ thousands

2018

2019

2019

¥77,577¥72,825$656,148———¥77,577¥72,825$656,148

624,468,759

614,581,825

Net income per share:
Profit attributable to owners of parent
Amount not attributable to common shareholders
Profit attributable to owners of parent attributable to common shareholders

Shares

Weighted-average number of common stocks outstanding

Years ended March 31,

2018¥ millions

US$ thousands

2019

2019

Net income per share (fully diluted):
Adjusted profit attributable to owners of parent

¥(20)

¥(20)

$(187)

Amortization of bond premium (after tax)

¥(20)

¥(20)

$(187)

12,215,498

12,206,787

Convertible Bond

11,152,830

11,230,066

Subscription rights to shares

1,062,668

976,721——

SharesIncrease in common stock

Summary of potential shares that are not included in computation of net income per share(fully diluted) due to lack of dilution effect(2) Net assets per share¥ millions

US$ thousands

2018

2019

2019

¥1,153,036¥1,159,588$10,447,682

5,611

6,473

58,322

Subscription rights to shares

1,216

1,081

9,742

Non-controlling interests

4,395

5,391

48,579Net assets available to common shareholders¥1,147,424¥1,153,115$10,389,359

The number of common stock outstanding

622,197,540

611,958,309

As of March 31,

Net assets
Deduction from net assets

Shares(3) The Company’s shares remaining in the BIP (Board Incentive

152

total number of outstanding shares at the end of the fiscal year.

Plan) Trust, which are recorded as treasury shares in sharehold-Accordingly, the average number of shares of the treasuryers’ equity, are included in treasury shares to be deducted in theshares deducted for calculation of net income per share and net

calculation of the average number of shares during the period

income per share (fully diluted) is 479,035 for the year ended

for calculation of net income per share and net income per share

March 31, 2019 and the number of year-end shares of the(fully diluted). Also, for the calculation of net assets per share, ittreasury shares deducted for calculation of net assets per share isis included in the number of treasury shares deducted from the827,900 for the year ended March 31, 2019.

T&D Holdings INTEGRATED REPORT 2019

Note 32

Significant Subsequent Events

The Company has resolved at its board of directors meeting held on May 15, 2019, the purchase of treasury shares under the provisionin Article 156 of the Companies Act of Japan, as applied pursuant to Article 165, Paragraph 3 of the same.

(1) Reasons for the purchase of treasury shares
To enhance shareholder return and improve capital efficiency.

(2) Details of the purchasea. Type of shares to be purchased: Shares of common stockb. Number of shares to be purchased : Up to 16,000,000 sharesc. Total amount of purchase: Up to ¥13,000 million [$117,127 thousand]d. Period of purchase: From May 16, 2019 to August 30, 2019e. Method of purchase: Open-market repurchase by the trust method(3) Results of the purchasea. Total number of purchased shares: 11,469,900 sharesb. Total cost of purchase: ¥12,999 million [$117,118 thousand]c. Period of purchase: From May 16, 2019 to June 4, 2019, on the basis of execution date

T&D Holdings INTEGRATED REPORT 2019153

Corporate Data

Independent Auditor’s Report

154

T&D Holdings INTEGRATED REPORT 2019

Stock Information
As of March 31, 2019BASIC INFORMATION
Stock Exchange Listings
Industry and Security Code
Trading Unit
Number of Shares of Common Stock
Fiscal Year-End
Ordinary General Meeting of Shareholders
Date of Record
Public NoticeTransfer Agent
Number of Shareholders

Tokyo Stock Exchange
Insurance, 8795
100 shares
Authorized: 1,932,000,000
Issued: 655,000,000
March 31 every year
June every year
Ordinary General Meeting of Shareholders March 31 every year
Dividends March 31 every year (interim dividend, when paid, on September 30)• Electronic public notice (Japanese only)• URL: https://www.td-holdings.co.jp/information/public.html/• If the Company is unable to issue an electronic public notice due to an accident or any other unavoidable
reason, a public notice will be issued in the Nihon Keizai Shimbun (daily newspaper).
Mitsubishi UFJ Trust and Banking Corporation
4-5, Marunouchi 1-Chome, Chiyoda-ku, Tokyo, Japan
URL: https://www.tr.mufg.jp/english/
224,311

PRINCIPAL SHAREHOLDERS

Thousand Shares, %Name of Shareholders

Number of Shares Held

Percentage of Total Shares Outstanding

37,34334,70913,334
11,966
11,751
11,434
10,325
9,117
8,628
7,994

6.09
5.66
2.18
1.95
1.92
1.87
1.68
1.49
1.41
1.30

The Master Trust Bank of Japan, Ltd. (Trust Account)
Japan Trustee Services Bank, Ltd. (Trust Account)
SSBTC CLIENT OMNIBUS ACCOUNT
Japan Trustee Services Bank, Ltd. (Trust Account5)
Japan Trustee Services Bank, Ltd. (Trust Account7)
Japan Trustee Services Bank, Ltd. (Trust Account9)
MUFG Bank, Ltd.
STATE STREET BANK WEST CLIENT – TREATY 505234
JP MORGAN CHASE BANK 385151
Japan Trustee Services Bank, Ltd. (Trust Account1)

Note: In addition to the above, the Company holds 42,213 thousands of shares in treasury shares, which are excluded from the principal shareholders stated above.
Further, the percentage of total shares outstanding is calculated after deducting the treasury shares.

COMPOSITION OF SHAREHOLDERS AND SHARES
Proportion of Shares Held (%)
Non-life Insurance
Companies

Composition of Shareholders (%)

Life Insurance Companies
Other
Financial Institutions

Banks

Financial Instruments
Business Operators

Financial Instruments
Business Operators
Individuals andOthers
Other
Corporations

Banks
Trust BanksLife Insurance Companies
Other Financial Institutions

Regional Distribution of Shares Held (%)

Non-life Insurance
Companies

OthersAsia-Pacific

Foreign Corporations, etc.
U.S.
Foreign
Corporations,
etc.

Other
Corporations

Europe (including British
Overseas Territories), theMiddle East and Africa

Individuals andOthers

Japan

Trust
Banks

Foreign Corporations, etc.
Trust Banks
Other Corporations
Individuals and Others
Financial Instruments Business Operators
Banks
Non-life Insurance Companies
Life Insurance Companies
Other Financial Institutions
Governments and Local Public Bodies

38.88
22.22
17.67
12.10
3.86
3.23
1.68
0.28
0.08
—

Individuals and Others
Other Corporations
Foreign Corporations, etc.
Financial Instruments Business Operators
Banks
Trust BanksLife Insurance Companies
Other Financial Institutions
Non-life Insurance Companies
Governments and Local Public Bodies

65.29
34.34
0.31
0.02
0.01
0.01
0.01
0.01
0.00
—

Japan
Europe (including British Overseas
Territories), the Middle East and Africa
U.S.
Asia-Pacific
Others

61.12
22.77
14.90
1.21
0.00

T&D Holdings INTEGRATED REPORT 2019155

Corporate Data

Corporate Overview
As of March 31, 2019

Company Name

T&D Holdings, Inc.

Date of Establishment

April 1, 2004

Location of Headquarters

2-7-1, Nihonbashi, Chuo-ku, Tokyo 103-6031, Japan
Tel: +81-(0)3-3272-6110 Fax: +81-(0)3-3272-6552

Type of Business

Management control of life insurance subsidiaries under the Insurance BusinessAct of Japan and other laws and regulations, and other businesses associated with theabove

Paid-in Capital

207,111.86 million yen

Security Code8795

Stock Exchange Listings

Tokyo Stock Exchange (First Section)

Number of Common
Stocks Issued

655,000,000 shares

Number of Employees

107

Organizational Structure
As of April 1, 2019

Shareholders’ Meeting
Audit & Supervisory
Board Member
Audit & Supervisory Board

Nomination and Compensation
Committee

Board of Directors
Audit & Supervisory
Board Member’s OfficeGroup Compliance Committee
PresidentGroup SDGs Committee

Group Management
Committee

Executive Committee

Group ERM Committee

Group Management
Promotion Committee

Group Risk Management
Committee

Group Information
Technology Committee

Group Planning
Department

156

Business
Development
Department

T&D Holdings INTEGRATED REPORT 2019

Group Finance &Accounting
Department

Public Relations
Department

General Affairs
Department

Risk
Management
Department

Internal Auditing
Department

Websites
For more detailed information on the contents of this report, please see the Company’s websites.

Website of T&D Holdings, Inc.

Investor Relations

Corporate Responsibility

https://www.td-holdings.co.jp/en/

https://www.td-holdings.co.jp/en/ir/

https://www.td-holdings.co.jp/en/csr/

Forward-looking Statements
This report contains forward-looking statements about T&D Holdings’
future revenue plan, strategy, philosophy, and earnings forecasts which
involve factors of risk and uncertainty. Such statements are based on
the Company’s current expectations which could cause actual results
to differ materially from those described in the forward-looking statements. Factors which could influence the actual results include, but
are not limited to, (I) general economic conditions, in particular, conditions in the life insurance market on which the T&D Insurance Group
centers, (II) financial market trends, (III) levels and trends in mortality

rate and morbidity rate, (IV) persistency rate, (V) interest rate levels,(VI) fluctuation in currency exchange rates, (VII) other general competitive factors, (VIII) changes in laws and regulations, including the tax
treatment of insurance premiums, and (IX) changes in the policies of
the government and/or regulatory authorities. The Company, therefore, wishes to caution readers not to place undue reliance on theseforward-looking statements. Furthermore, the Company undertakes
no obligation to update any forward-looking statements as a result of
new information, future events, or other developments.
Contact: T&D Holdings, Inc. Group Planning Department
Investor Relations Division
Telephone: +81-(0)3-3272-6103

T&D Holdings INTEGRATED REPORT 2019157

7-1, Nihonbashi 2-chome,
Chuo-ku, Tokyo 103-6031, Japan
Tel: +81 3 3272-6110 Fax: +81 3 3272-6552
https://www.td-holdings.co.jp/en/