[English Translation]
TOKIO MARINE HOLDINGS, INC.
Attachment to the “Notice of Convocation of
the 14th Ordinary General Meeting of Shareholders”
Business Report for the Fiscal Year Ended March 31, 2016
(From April 1, 2015 to March 31, 2016)
1. Matters Concerning the Insurance Holding Company(1) Business Developments and Results for Tokio Marine Group
During the fiscal year ended March 31, 2016, while the U.S. economy continued togradually grow, the world economy grew slowly as a whole due to a declining trend of
economic growth in Europe, and economic slowdown in some developing countries, including
China.
In Japan, economic growth was at a standstill due mainly to weakness in consumer
spending.
In the property and casualty insurance sector, premiums increased overall, especiallyin auto insurance.

In the life insurance sector, the decline in the amount of individual life

insurance in force has been stemmed.
Against this backdrop, the Tokio Marine Group (the “Group”) actively promoted its
business in the first year of the “To Be a Good Company 2017” medium-term business planwith the aim of sustaining profit growth and further enhancing our well-balanced businessportfolio.
Positive factors such as growth in insurance underwriting, and the infrequency ofnatural disasters in foreign countries contributed to the result that the net income attributableto owners of the parent was 254.5 billion yen and record-high profits for four consecutive
years, although incurred claims increased due to natural disasters such as Typhoon No. 15 in
Japan.

22

(Yen in billions, except for %)Year ended March 31,

Year ended March 31,

2015

2016

Rate ofchange(%)

Ordinary income

4,327.9

4,579.0

5.8

Net premiums written

3,127.6

3,265.5

4.4Life insurance premiums

220.4

471.6

114.0

Life insurance premiums

892.8

860.9

-3.6

Ordinary profit

358.1

385.8

7.7

Net income attributable to

247.4

254.5

2.9

(excluding variableannuities)

owners of the parent
Note: “Net income” as expressed in our consolidated financial results until the previous fiscal year has
been changed to “net income attributable to owners of the parent” in accordance with the revisionof the “Accounting Standards for Business Combinations,” etc. (The same shall also apply in thefinancial statements below.)

Ordinary income and ordinary profit for each business segment are as follows:(Yen in billions)
Ordinary income
Business segment
Domestic property

Ordinary profit

Year ended

Year ended

Year ended

Year ended

March 31, 2015

March 31, 2016

March 31, 2015

March 31, 2016

2,572.7

2,739.1

203.9

239.3

327.4

484.2

19.1

28.3

1,423.5

1,428.4

128.7

112.2

74.8

76.2

6.3

5.8

and casualty
insurance
Domestic life
insurance
Overseas
insurance
Financial andotherNote: Figures in this table are shown after adjustments necessary to accurately reflect the actual
situation, such as the exclusion of dividend income from Group companies, which is recorded in
the non-consolidated financial results of each subsidiary.

23

Domestic Property and Casualty Insurance Business
The following is a discussion of Tokio Marine & Nichido Fire Insurance Co., Ltd.’s(“Tokio Marine & Nichido”) operating results for the fiscal year ended March 31, 2016.

The

net premiums written were 2,128.3 billion yen, a year-on-year increase of 4.5 percent, due toincreased premiums overall, especially in auto insurance and fire insurance.

The combined

ratio, a profitability index for the property and casualty insurance business, was 90.6 percent,an improvement of 0.8 points compared to the previous fiscal year, due mainly to increased
net premiums written.
Investment income was 362.0 billion yen, an increase of 159.4 billion yen comparedto the previous fiscal year, due mainly to an increase in dividend income from subsidiaries andaffiliates with the aim of procuring funds for the purchase of overseas insurance companies.
As a result, ordinary profit was 377.2 billion yen, an increase of 113.1 billion yen compared tothe previous fiscal year.

Net income was 301.6 billion yen, an increase of 116.2 billion yen

compared to the previous fiscal year.
Tokio Marine & Nichido has been making efforts to further develop a businessmodel that integrates life insurance and property and casualty insurance by expanding its sales
base and strengthening consulting sales with Super Insurance as its core.

Additionally, Tokio

Marine & Nichido has proactively worked to develop products and services in response tochanges of the social environment.
In consideration of the changes of the social environment such as population aging
and local depopulation, Tokio Marine & Nichido developed a new auto insurance product forNPOs, etc. that provide transportation services using private vehicles in areas where means ofmobility for residents are not easily secured.

In order to cover the risks accompanying theoverseas advance of small and medium-sized companies, Tokio Marine & Nichido expanded
the protection coverage of Overseas PL Insurance (Products/Completed Operations Liability
Insurance).
To harness the capabilities of communication technology for auto insurance, Tokio
Marine & Nichido started a “B-Contact” service for personal policyholders with which a
policyholder’s smartphone automatically detects the occurrence of an accident and displays
contact information, and a “Drive Agent” service for corporate policyholders that provides an24

automatic accident-reporting function for reporting to the insurance company and an
accident-prevention support function.

Additionally, in connection with the expansion of theprotection coverage of cyber risk insurance, Tokio Marine & Nichido started a“Comprehensive Support Service on Cyber Risks,” a service that provides employee
education tools and conducts simple diagnoses of risk management systems.
Regarding asset management, Tokio Marine & Nichido aimed to ensure stableearnings and asset liquidity as part of its efforts to maintain a sound financial base throughrisk management.

To improve capital efficiency, Tokio Marine & Nichido continued its saleof equities held for business relationship-related reasons.
With respect to the operating results of Nisshin Fire & Marine Insurance Co., Ltd.
(“Nisshin Fire”) for the fiscal year ended March 31, 2016, net premiums written were 138.6
billion yen, representing an increase of 1.5 percent from the previous fiscal year, due toincreased premiums mainly in auto insurance.

Ordinary profit was 9.7 billion yen, adecrease of 7.9 billion yen compared to the previous fiscal year, due to decreased
underwriting profits chiefly attributable to an increase in incurred claims related to natural
disasters.

Net income was 6.1 billion yen, a decrease of 6.4 billion yen compared to theprevious fiscal year.

Nisshin Fire has worked to provide products that are simple and easy tounderstand with an aim to become the most familiar and trusted retail property and casualty
insurance company.

Domestic Life Insurance Business
Tokio Marine & Nichido Life Insurance Co., Ltd. (“Tokio Marine & Nichido Life”)
had 119.7 billion yen in annualized premiums of newly signed life insurance, a year-on-yearincrease of 4.9 percent, due to the launch of new medical insurance and cancer insurance
products, strengthened initiatives for the integration of life insurance and property andcasualty insurance, and other efforts.

Annualized premiums of life insurance-in-force were796.5 billion yen, a year-on-year increase of 4.2 percent, with the effects of new policies
concluded exceeding the impact from the cancellations of variable annuities insurance.
Ordinary profit was 29.0 billion yen, an increase of 8.3 billion yen compared to the previous
fiscal year, mainly due to the effects of reversal of provisions due to the cancellation ofvariable annuities insurance.

Net income was 14.7 billion yen, a decrease of 14.0 billion yen

compared to the previous fiscal year, mainly due to a reaction to the tax mitigation effect of25

deferred tax assets recorded in the previous fiscal year.
Tokio Marine & Nichido Life has strengthened sales of its protection-type products
and launched “Cancer Treatment Support Insurance NEO” and “Cancer Insurance R.”“Cancer Treatment Support Insurance NEO” is a product with expanded benefits forpolicyholders undergoing anticancer drug treatment that takes into account the latest medical
treatments.

“Cancer Insurance R” is a product that reimburses a portion of the premiums

paid, equivalent to premiums paid minus any benefits paid, in the form of returns topolicyholders who reach seventy years of age.

Tokio Marine & Nichido Life also launched“Medical KitNEO,” a new medical insurance product that meets various needs of customers
by indemnifying them against hospitalization for short and long periods, home care, inability
to work, etc.

Overseas Insurance Business
The Group actively developed its overseas insurance business with the aims ofoverseas growth and risk diversification.

Combined premium income for life insurance andproperty and casualty insurance increased on a local currency basis, but was 1,191.5 billion
yen following conversion to yen, a decrease of 1.4 percent compared to the previous fiscal
year, due to strengthening of the yen against certain currencies.

Ordinary profit was 112.2

billion yen, a decrease of 16.5 billion yen compared to the previous fiscal year, partially due
to the amount of incurred claims related to natural disasters being small, similarly to theprevious fiscal year.
PHLY, a U.S. property and casualty insurance group, promoted a strategy specializedin specific kinds of business and customer segments.

As a result, PHLY’s net premiums

written was 2.83 billion U.S. dollars (342.3 billion yen), an increase of 5.6 percent comparedto the previous fiscal year.

Delphi, a U.S. insurance group, conducted yieldability-focusedunderwriting of employee benefit-related insurance, and as a result, its combined premiumincome for life insurance and property and casualty insurance was 1.77 billion U.S. dollars(214.1 billion yen), a decrease of 0.4 percent compared to the previous fiscal year.

Tokio

Marine Kiln Group Limited, a U.K. insurance group, recorded an increase of 6.7 percent
year-on-year in net premiums written to 0.78 billion British pounds (141.1 billion yen) for the
fiscal year 2015 amid a downward trend in premium rates, partly due to increased premiums
through expansion of its U.S. business.

Tokio Millennium Re AG, a reinsurance company,

26

recorded an increase of 32.7 percent year-on-year in net premiums written to 1.33 billion U.S.
dollars (161.5 billion yen) for the fiscal year 2015, mainly due to expanding underwriting
risks (excluding natural disasters).
In October 2015, the Company acquired the U.S. insurance holding company HCC
Insurance Holdings, Inc. (“HCC”) through Tokio Marine & Nichido and made it a subsidiary.
HCC is a world leading insurer in specialty insurance, a type of insurance product that often
covers specific risks and requires specific underwriting capability.

HCC’s business portfolio

is highly profitable and diverse, with no significant overlap with the existing operations of theGroup.

The acquisition further diversified the business portfolio and strengthened theGroup’s business foundation, which will enable improvement in capital efficiency andsustainable growth of the Group as a whole.
In emerging markets, the Group increased premium income from property andcasualty insurance mainly due to steady sales of auto insurance in China and Brazil, while
premium income from life insurance decreased mainly due to the termination of sales of someproducts in Singapore.
Regarding business in China, The Tokio Marine & Nichido Fire Insurance Company(China) Limited opened its Zhejiang Branch, its fifth operational base in the country.
addition, the Group sold all of its shares of Funde Sino Life Insurance Co., Ltd.

In

However,the Group intends to continue active development of both its life insurance business andproperty and casualty insurance business through a multi-facted approach, including
investments in multiple companies.

Financial and Other Business
The Group developed its financial services business steadily with a focus on thefee-based asset management business, which offers a stable revenue base.

Such fee-based

business includes the management of pension funds and the management of investment trustsby Tokio Marine Asset Management Co., Ltd.
With respect to other general businesses, the Group continued to engage intemporary staffing services, property management services and other business.

27

CSR
Tokio Marine & Nichido has been continuing research on the risks of earthquakes
and tsunamis, through a collaborative study conducted with Tohoku University, and in March
2016 it held a forum with Tohoku University entitled “Five years after the Great East Japan
Earthquake, a Disaster We Will Never Forget.”

The forum mainly consisted of a panel

discussion on disaster prevention, disaster mitigation, and continuous reconstruction support
toward realization of a disaster-resilient community.

Tokio Marine & Nichido has continued

its initiatives to protect the global environment through mangrove planting activities,
environmental protection activities in Japan, etc.

Issues Facing the GroupIn the fiscal year ending March 31, 2017, we expect that the gradual improvement of
the world economy will continue, centered on the U.S.

At the same time, the slowdown of

the Chinese economy and rising geopolitical risks are matters of concern.
The Japanese economy is expected to gradually recover mainly in personal
consumption and capital investment with impetus from the government’s enhanced monetaryeasing policy, including the negative interest rate policy, amid growing uncertainty regarding
external circumstances.
The need to promote business activities in consideration of the progress of advanced
technology, etc. has been rapidly increasing.
Under these circumstances, the Group aims to further enhance Enterprise Risk
Management (ERM) by promoting investment in businesses with high capital efficiency andby promoting risk diversification on a global scale.

Through these efforts, we intend tomaintain financial soundness, a key strength of the Group, while enhancing profit growth andcapital efficiency in a sustainable manner, toward the achievement of our medium-termbusiness plan “To Be a Good Company 2017.”
In April 2016, the Group changed its management structure to strengthen the
integrated management of the Group.

Under the new management structure, the Group CEO

28

will further increase his commitment to the global management of the Group.

To clarify the

structure of global responsibility for various functions, including capital policy, businessstrategy, asset management, risk management, and personnel affairs, Group Chief Officers
responsible for the Group in charge of each function have been appointed.

Under such

structure, the Group will accelerate its growth by linking the strengths of Group companies
both domestic and overseas, uniting the specialties of the Group, and responding to changes inthe business environment such as technological evolution and the rising risks of natural
disasters.
In our domestic property and casualty insurance business, we will make ourselvesmore attractive to customers as the insurer of choice and will increase our profits by further
refining our business model, integrating life insurance and property and casualty insurance
and turning claims service into our competitive advantage.

We will develop new products

and services by aptly grasping changes in the business environment such as the evolution ofadvanced technology represented by artificial intelligence, big data, and automated driving,along with changes in customer needs.

We intend to secure a combined ratio of less than 95

percent in a stable manner by enhancing disciplined underwriting and effectively using ourbusiness expenses with an aim of sustaining profit growth.
In the domestic life insurance business, we will proceed with our efforts tostrengthen the sale of life insurance by agents specialized in property and casualty insurance
and the integration of life insurance and property and casualty insurance from the customer’s
viewpoint.

We will conduct asset management based on Asset Liability Management (ALM)

under the assumption that low interest rate will persist over the long-term.

We will also

reinforce sales of our protection-type products by promoting our “Life Insurance Revolution
to Protect One’s Living,” which indemnifies for the inability to work, medical treatment, andnursing care.
In the overseas insurance business, the Group will continue to promote a growthstrategy that is well-balanced between developed markets and emerging countries, direct
insurance and reinsurance, property and casualty insurance and life insurance and so forth, byreinforcing internal growth and implementing disciplined and strategic M&A.
The acquisition of HCC enables the Group to utilize its global network to market
specialty insurance, the key strength of HCC, and to expand the underwriting capability of
HCC by utilizing the Group’s solid financial base, etc.

29

Through these efforts, we aim tofurther improve the capital efficiency of the whole Group while increasing profit.

The profit

of HCC will contribute to the Group from the fiscal year ending March 31, 2017 onward.
What underpins each of these businesses is human resources.

The Group endeavors

to have all employees contribute to the growth of the Group by maintaining their good healthand maximizing their abilities.

This year, the Group was selected as a “Health &Productivity Stock” and “Nadeshiko Brand” co-sponsored by the Ministry of Economy, Tradeand Industry and the Tokyo Stock Exchange.

The Group will continue its positive efforts toencourage the success of women in the workplace, develop global human resources, employ
handicapped persons, etc.
The Group sets a basic policy of paying dividends for shareholder returns and willseek to increase dividends by improving profitability.
Under our management philosophy to place “customer trust at the base of all its
activities”, the entire Group will endeavor to achieve further growth as a corporate group,
seeking growth characterized by high profitability, sustainability and soundness.

We plan onbuilding up a “Good Company” that is trusted widely by customers and the society.

Themanagement would like to express its sincere appreciation to all shareholders of Tokio Marine
Holdings for their continued guidance and support.
Note 1:Throughout this Business Report, all amounts (including numbers of shares) are truncatedand all ratios are rounded to one decimal place (hereinafter the same shall apply in thefinancial statement below).

Note 2:

Numbers that appear as ordinary income and ordinary profit for each business segment are
before adjustments made to record ordinary income and ordinary profit in the consolidated
statement of income.

Note 3:The combined ratio is a measure of profitability for a property and casualty insurancecompany.

Specifically, it is the ratio of claims and operating expenses (numerator) topremiums (denominator).

The ratio is 100 percent when the balance of payments is inequilibrium.
Note 4:The yen-denominated amounts of the combined premium income for life insurance andproperty and casualty insurance in overseas insurance business are calculated at exchange
rates in effect as of the end of December 2015.

Note 5:The net premiums written of Tokio Marine Kiln Group Limited includes the net premiums
written of Tokio Marine Underwriting Limited and Tokio Marine Kiln Insurance Limited.

30

(2) Four Year Summary of Assets and Earnings of the Group and the Insurance Holding
Companya. The Group's summary of assets and earnings(Yen in millions)(Fiscal years ended March 31)
2013
2014
2015
2016
Ordinary income
3,857,769
4,166,130
4,327,982
4,579,076
Ordinary profit
207,457
274,386
358,182
385,825
Net income attributable to129,578
184,114
247,438
254,540owners of the parent
Comprehensive income
548,251442,277
997,024-14,543
Net assets
2,363,183
2,739,114
3,609,655
3,512,656
Total assets
18,029,442
18,948,000
20,889,670
21,855,328
b. The Insurance Holding Company's summary of assets and earnings(Yen in millions, except per share amounts)(Fiscal years ended March 31)
2013
2014
2015
2016
Operating income
48,71819,442
149,751
96,736
Dividends received
42,798
13,106
143,701
89,455
Insurance subsidiaries
41,898
11,600142,215
82,782Other subsidiaries
900
1,506
1,486
6,673
Net income
41,86012,384
141,734
57,402
Net income per share of common
54.57
16.14
185.57
76.06
share
yen
yen
yen
yen
Total assets
2,509,192
2,478,082
2,509,565
2,486,765
Share of insurance subsidiaries
2,421,006
2,374,845
2,383,545
2,333,913
Share of other subsidiaries
75,081
81,71880,85780,627(3) The Group's Principal Offices (As of March 31, 2016)
a. The Company
Location
Head Office2-1, Marunouchi 1-chome, Chiyoda-ku, Tokyo, Japan

Established as ofApril 2, 2002

Note: The date shown above is the date of incorporation.

b. Subsidiaries and affiliates
Business
Company
segment
nameDomestic
Tokio Marine
property and & Nichido
casualty
insurance

Office nameLocation

Head Office
Hokkaido
Hokkaido
Branch and 6other branches
TohokuSendai Branch
and 9 otherbranches
Kanto
Tokyo Central
Branch and 31
other branches
Tokai andAichi South
Hokuriku
Branch and 25
other branches

2-1,
Marunouchi 1chome,
Chiyoda-ku,
Tokyo, Japan

31

Established
as ofMarch 20,1944

Kansai

Nisshin Fire

Osaka South
Branch and 24
other branches
Chugoku
HiroshimaandBranch and 14
Shikokuother branches
KyushuFukuoka
Central Branchand 13 otherbranches
Head Office (Tokyo Head
Office), Saitama Head Office3,
Kandasurugadai
2-chome,
Chiyoda-ku,
Tokyo, Japan
2-1,
Marunouchi 1chome,
Chiyoda-ku,
Tokyo, Japan
Bala Cynwyd,
Pennsylvania,
U.S.A.

June 10,1908

Wilmington,
Delaware,
U.S.A.
Dover,
Delaware,
U.S.A.

May 27,
1987

Head OfficeLondon, U.K.

July 11,1994

Head Office

3-1,
Marunouchi 1chome,
Chiyoda-ku,
Tokyo, Japan

December9, 1985

Domestic life
insurance

Tokio Marine& Nichido
Life

Head Office

Overseas
insurance

Philadelphia
Consolidated
Holding
Corp.
Delphi
Financial
Group, Inc.
HCC
Insurance
Holdings,
Inc.
Tokio Marine
Kiln Group
Limited
Tokio Marine
AssetManagement
Co., Ltd.

Head OfficeFinancial andother

Head Office

Head Office

August 6,
1996

July 6,
1981

March 27,
1991

Notes: 1. This table sets forth major subsidiaries and affiliates accounted for by the equity method.
2. "Office name" is the name of the principal office.
3. "Location" is the location of the head office.
4. The dates shown above are the date of incorporation.

(4) The Group's Employees

Business segment
Domestic property andcasualty insurance
Domestic life insurance
Overseas insurance
Financial and other

As of March 31,
2015

As of March 31,
201620,11920,221

102

2,267
9,739
1,661

2,301
12,707
1,673

34
2,968
12

32

Increase(decrease)Total33,78636,902

3,116

Note: The Group's employees as of March 31, 2016 increased from those as of March 31, 2015 due tothe acquisition of HCC Insurance Holdings, Inc. and its subsidiary insurance companies andother businesses, and other factors.

(5) The Group's Principal Lenders (As of March 31, 2016)
Business segment

Company nameDomestic property and
Tokio Marine & Nichido
casualty insurance

LenderThe Bank of TokyoMitsubishi UFJ, Ltd.
Syndicated loan

Balance of loan
146,484 million yen
270,432 million yen

Note: The arranger of the syndicated loan is The Bank of Tokyo-Mitsubishi UFJ, Ltd.

(6) The Group's Financing Activities
Tokio Marine & Nichido raised 2,400 million U.S. dollars (270,432 million yen) through a
syndicated loan arranged by The Bank of Tokyo-Mitsubishi UFJ, Ltd. in order to partiallyfinance the acquisition of HCC Insurance Holdings, Inc. and its subsidiary insurancecompanies and other businesses. In addition, prior to the implementation of the financing
mentioned above, Tokio Marine & Nichido Fire Insurance Co., Ltd. received a short-term
bridge loan of the same amount as above from The Bank of Tokyo-Mitsubishi UFJ, Ltd. andmade a number of refunds, but repaid the amount in full by December 21, 2015.
(7) The Group's Capital Investment Activities
a. Total investment in facilities
Business segment
Domestic property andcasualty insurance
Domestic life insurance
Overseas insurance
Financial and other
Total

Amount10,670 million yen
321 million yen
3,867 million yen
287 million yen
15,147 million yen

Notes: 1. "Amount" is the aggregate amount of investment in facilities for the fiscal year ended March
31, 2016.
2. Yen amounts include certain capital expenditures in other currencies which were converted
into yen based on exchange rates as of the end of December 2015.

b. New construction of major facilities and otherNone.
(8) Parent Company and Major Subsidiaries (As of March 31, 2016)
a. Parent company
None.
b. Major subsidiaries and affiliates accounted for by the equity method
Ratio ofCompany nameLocation

Major business

Paid-in
Tokio
Date ofcapitalMarineNotes
incorporation (Yen in Holdings's
millions) voting
rights33

Tokio Marine & Nichido
Fire Insurance Co., Ltd.

Tokyo,Japan

Property andcasualty
insurance

Mar. 20, 1944

101,994

100.0%-

Nisshin Fire & Marine
Insurance Co., Ltd.

Tokyo,Japan

Property andcasualty
insurance

June 10, 1908

20,389100.0%-

E.design Insurance Co.,Ltd.

Tokyo,Japan

Property andcasualty
insurance

Jan. 26, 2009

24,80390.5%-

Tokio Marine & Nichido
Life Insurance Co., Ltd.

Tokyo,Japan

Life insurance

Aug. 6, 1996

55,000100.0%-

Tokio Marine Millea
SAST Insurance Co., Ltd.

Kanagawa,
Japan

Small-amountshort-term
insurance

Sep. 1, 2003

895

100.0%-

Tokio Marine AssetManagement Co., Ltd.

Tokyo,
Japan

Investment
Dec. 9, 1985
management andInvestment trusts

2,000

100.0%(100.0)-

Tokio Marine North
America, Inc.

Wilmington,
Delaware,
U.S.A

Holding company June 29, 20110

100.0%(100.0)-Philadelphia Consolidated Bala
Holding company July 6, 1981
Holding Corp.
Cynwyd,Pennsylvania,
U.S.A.

0

100.0%(100.0)-Philadelphia Indemnity
Insurance Company

Bala
Property andcasualty
Cynwyd,Pennsylvania, insurance
U.S.A.

Feb. 4, 1927

507

100.0%(100.0)-First Insurance Company
of Hawaii, Ltd.

Honolulu,
Hawaii,U.S.A.

Property andcasualty
insurance

Aug. 6, 1982

481

100.0%(100.0)-

Tokio Marine America
Insurance Company

New York,
New York,
U.S.A.

Property andcasualty
insurance

Aug. 13, 1998

563

100.0%(100.0)-Delphi Financial Group,Inc.

Wilmington,
Delaware,
U.S.A.

Holding company May 27, 19870

100.0%(100.0)-

Safety National Casualty
Corporation

St. Louis,
Missouri,
U.S.A.

Property andcasualty
insurance

Nov. 28, 1942

3,380

100.0%(100.0)-34

Reliance Standard Life
Insurance Company

Chicago,Illinois,
U.S.A.

Life insurance

Apr. 2, 1907

6,310

100.0%(100.0)-

Reliance Standard Life
Insurance Company of
Texas

Houston,Texas,U.S.A.

Life insurance

Aug. 16, 1983

78

100.0%(100.0)-HCC Insurance Holdings,
Inc.

Dover,
Delaware,
U.S.A.

Holding company Mar. 27, 1991

0

100.0%(100.0)-

Houston Casualty
Company

Dallas,Texas,U.S.A.

Property andcasualty
insurance

May 27, 1981

563

100.0%(100.0)-U.S. Specialty Insurance
Company

Dallas,Texas,U.S.A.

Property andcasualty
insurance

Oct. 28, 1986

473

100.0%(100.0)-HCC Life Insurance
Company

Indianapolis,
Indiana,
U.S.A.

Life insurance

Dec. 3, 1980

281

100.0%(100.0)-

Tokio Marine Kiln Group
LimitedLondon,U.K.

Holding company July 11, 1994

163

100.0%(100.0)-

Tokio Marine
Underwriting Limited

London,U.K.

Property andcasualty
insurance

Oct. 27, 20080

100.0%(100.0)-HCC International
Insurance Company PLC

London,U.K.

Property andcasualty
insurance

July 22, 1981

22,466100.0%(100.0)-

Tokio Millennium Re AG

Zurich,Switzerland

Property andcasualty
insurance

Mar. 15, 2000

26,578100.0%(100.0)-

Tokio Marine Asia Pte.
Ltd.

Singapore,
Singapore

Holding company Mar. 12, 1992

50,629100.0%-

Tokio Marine Insurance
Singapore Ltd.

Singapore,
Singapore

Property andcasualty
insurance

July 11, 1923

8,331

100.0%(100.0)-

Tokio Marine Life
Insurance Singapore Ltd.

Singapore,
SingaporeLife insurance

May 21, 1948

2,999

85.7%
(85.7)-

Tokio Marine Insurans(Malaysia) Berhad

Kuala
Lumpur,Malaysia

Property andcasualty
insurance

Apr. 28, 1999

11,658100.0%(100.0)-35Tokio Marine Life
Insurance Malaysia Bhd.

Kuala
Lumpur,MalaysiaLife insurance

Feb. 11, 1998

6,530

100.0%(100.0)-

Edelweiss Tokio Life
Insurance Company
LimitedMumbai,
India

Life insurance

Nov. 25, 2009

4,449

49.0%
(49.0)-

Tokio Marine Seguradora
S.A.

Sao Paulo,
BrazilProperty andcasualty
insurance

June 23, 1937

17,182

97.7%(97.7)-

Notes: 1. This table sets forth major subsidiaries and affiliates accounted for by the equity method.
2. HCC Insurance Holdings, Inc., Houston Casualty Company, U.S. Specialty Insurance
Company, HCC Life Insurance Company and HCC International Insurance Company PLC
are included in the table as they became subsidiaries of the Company as of October 27, 2015.
3. SIG Holdings, Inc., Kiln Underwriting Limited, Tokio Millennium Re (UK) Limited, Tokio
Marine Bluebell Re Limited and Asia General Holdings Limited are not included in this table
due to revision to the standards materiality.
4. The yen amounts of capital in parenthesis have been converted into yen based on thecurrency exchange rate on the closing date of the fiscal year of the Company. For
companies that hold capital in multiple currencies, the amounts are the sum of each currency
converted into yen.
5. Figures in brackets shown under Tokio Marine Holdings's voting rights reflect Tokio Marine
Holdings's indirectly held ownership ratio in the respective subsidiary.

(9) The Group's acquisition and transfer of business
Date of thetransactions
Oct. 27, 2015

Outline of transaction
On October 27, 2015, Tokio Marine & Nichido completed procedures
for acquiring HCC Insurance Holdings, Inc., a U.S. insurance holding
company comprising property & casualty, accident & health and otherspecialty insurance businesses. The acquisition cost was 898,012
million yen. Details of the company acquired and the purpose of theacquisition are as follows.
- Company acquired
Company name: HCC Insurance Holdings, Inc.
Head office: Dover, Delaware, U.S.A.
Business lines: a U.S. insurance holding company comprisingproperty & casualty, accident & health and otherspecialty insurance businesses- Purpose of the acquisition
HCC Insurance Holdings, Inc. has a highly profitable anddiversified business portfolio that has no significant overlap with
the Group’s existing operations. The acquisition will therefore
further diversify the Group’s business portfolio, improve theGroup’s capital efficiency and enable sustainable profit growth of
the Group.

Mar. 18, 2016

Tokio Marine & Nichido Fire Insurance Co., Ltd. and Tokio Marine
Asia Pte. Ltd. have completed the sale of all of the shares of Funde Sino

36

Life Insurance Co., Ltd., a Chinese life insurance company, that bothcompanies had held to Funde Insurance Holdings Co., Ltd. as of March
18, 2016. The sale price was 51,550 million yen.

(10) Other Important Matters Concerning the Current State of the GroupNone.

2. Matters Concerning Directors and Audit & Supervisory Board Members(1) Directors and Audit & Supervisory Board Members (As of March 31, 2016)
Name
Shuzo Sumi

Tsuyoshi Nagano

Masashi Oba

Position and assigned
Other major occupations and other matters
dutiesRepresentative Director
Chairman of the Board of Tokio Marine & Nichido
and Chairman of the Board Director of The Bank of Tokyo-Mitsubishi UFJ, Ltd.
(outside director)
Director of Toyota Industries Corporation(outside director)
Vice Chairman of Japan Association of Corporate
Executives
Representative Director
President & Chief Executive officer of Tokio Marine
and President & Chief& Nichido
Executive Officer
Representative Directorand Executive Vice
President-

Chief Financial Officer(CFO); in charge ofCorporate Planning Dept.
and Domestic Business
Development Dept.
Ichiro Ishii

Representative Director
and Senior Managing
Director

Senior Managing Director of Tokio Marine &NichidoHead of international
insurance business; incharge of International
Business Development
Dept. (management ofNorth America, Latin
America, Asia (excluding
China and East Asia) andOceania)

Hirokazu Fujita

Managing Director

Managing Director of Tokio Marine & Nichido

In charge of Financial
Planning Dept. andCorporate Accounting
Dept.

37

Takayuki Yuasa

Managing Director

Managing Director of Tokio Marine & Nichido

Chief Risk Officer (CRO);in charge of Risk
Management Dept., Legal
Dept., Internal Control
Dept. and Internal Audit
Dept.
Shinichi Hirose

Director

President & Chief Executive Officer of Tokio
Marine & Nichido Life

Akio Mimura

Director(outside director)

Senior Advisor, Honorary Chairman of Nippon Steel& Sumitomo Metal Corporation
Director of Japan Post Holdings Co., Ltd.
(outside director)
Director of Development Bank of Japan Inc.
(outside director)
Director of Innovation Network Corporation ofJapan(outside director)
Director of Nisshin Seifun Group Inc.
(outside director)
Chairman of The Japan Chamber of Commerce andIndustry
Chairman of The Tokyo Chamber of Commerce andIndustry

Mikio Sasaki

Director(outside director)

Senior Corporate Advisor (Soudanyaku) of
Mitsubishi Corporation
Director of Mitsubishi Electric Corporation(outside director)
Director of Mitsubishi Motors Corporation(outside director)
Director of Mitsubishi Research Institute, Inc.
(outside director)

Masako Egawa

Director(outside director)

Professor, Graduate School of Commerce andManagement, Hitotsubashi University
Director of Mitsui Fudosan Co., Ltd.
(outside director)
Director of Asahi Glass Company, Limited(outside director)

Takaaki Tamai

Audit & Supervisory
Board Member (Full-time)-

Takashi Ito

Audit & Supervisory
Board Member (Full-time)-

Yuko Kawamoto

Audit & Supervisory
Board Member(outside audit &supervisory board
member)Professor, Graduate School of Finance, Accounting
and Law, Waseda University
Director of Mitsubishi UFJ Financial Group, Inc.

Akinari Horii

Audit & Supervisory
Board Member

Director and Special Advisor of The Canon Institutefor Global Studies

38

(outside audit &supervisory board
member)Akihiro Wani

Audit & Supervisory
Board Member(outside audit &supervisory board
member)Attorney-at-law

Notes: 1. Outside directors and outside audit & supervisory board members qualify as outside
directors and outside company auditors defined by Article 2, paragraph 3, item 5 of the
Enforcement Regulations of the Companies Act of Japan (hereinafter the same shall apply inthis Business Report).
2. Mr. Akio Mimura, Mr. Mikio Sasaki, Ms. Masako Egawa, Ms. Yuko Kawamoto, Mr. Akinari
Horii and Mr. Akihiro Wani are “independent directors/auditors” as specified by the Tokyo
Stock Exchange, Inc.
3. Mr. Shuzo Sumi assumed his position as the Counsellor of Tokio Marine & Nichido effective
as of April 1, 2016.
4. Mr. Tsuyoshi Nagano assumed his position as the Chairman of the Board of Tokio Marine &Nichido effective as of April 1, 2016.
5. Mr. Mikio Sasaki assumed his position as a Senior Corporate Advisor (Tokubetsukomon) of
Mitsubishi Corporation effective as of April 1, 2016.
6. Mr. Takaaki Tamai, as a director of Tokio Marine Holdings and Tokio Marine & Nichido,
was in charge of accounting department and has extensive insight regarding finance andaccounting matters.
7. Ms. Yuko Kawamoto has many years of experience in research and other activities withrespect to financial institutions and has extensive insight regarding finance and accounting
matters. As of April 1, 2016, Waseda Graduate School of Finance, Accounting and Law,
where she has served as a professor, integrated with another department of the same businessschool to form Waseda Business School (Graduate School of Business and Finance). She is
not engaged in business management at Mitsubishi UFJ Financial Group, Inc.
8. Mr. Akinari Horii, as an executive or a regular employee of Bank of Japan through many
years, has extensive insight regarding finance and accounting matters.
9. Mr. Akihiro Wani has many years of experience in his role as a corporate lawyer acting for
financial institutions on legal matters and has extensive insight regarding finance andaccounting matters.

(2) Remuneration and Other Compensation to Directors and Audit & Supervisory Board
Members

Directors
Audit &
Supervisory
Board
Members
Total

Number of persons to receive
remuneration and othercompensation

Remuneration and other compensation

13 persons

438 million yen

6 persons

101 million yen

19 persons

540 million yen

Notes: 1. “Number of persons to receive remuneration and other compensation” includes three
directors and one audit & supervisory board member who resigned from office at the close of
the 13th ordinary general meeting of shareholders held on June 29, 2015.
2. “Remuneration and other compensation” includes the amounts paid to the directors and theaudit & supervisory board member referred to in Note 1 above.
3. Remuneration in connection with share acquisition rights granted to directors is 92 million
yen.

39

4. Maximum amount of remuneration as determined by the resolution of the general meeting ofshareholders is described below.

Directors

Maximum amount of remuneration as determined by the resolution of the general
meeting of shareholders
Monthly remuneration: 50 million yen per month
Remuneration in connection with share acquisition rights: 140 million yen per year

Audit &
Supervisory
Board
Members

Monthly remuneration: 12 million yen per month

Total

Monthly remuneration: 62 million yen per month
Remuneration in connection with share acquisition rights: 140 million yen per year

(3) Limitation of Liability
Name

Outline of the contract to limit liability

Akio Mimura (outside director)
Mikio Sasaki (outside director)
Masako Egawa (outside director)
Yuko Kawamoto (outside audit & supervisoryboard member)
Akinari Horii (outside audit & supervisoryboard member)
Akihiro Wani (outside audit & supervisoryboard member)

In accordance with the provisions of Article 427,
paragraph 1 of the Companies Act of Japan, the Company
has entered into an agreement with the persons listed inthis table to limit their liability provided for in Article 423,
paragraph 1 of the Companies Act of Japan. The
limitation of liability under the agreement is the higher of
either 10 million yen or the amount provided in Article
425, paragraph 1 of the Companies Act of Japan.

3. Matters Concerning Outside Directors and Outside Audit & Supervisory Board Members(1) Other Assignments (As of March 31, 2016)
Other occupations of outside directors and outside audit & supervisory board members are as
described above in “2. Matters Concerning Directors and Audit & Supervisory Board
Members (1) Directors and Audit & Supervisory Board Members (As of March 31, 2016).”
From among the entities where outside directors and outside audit & supervisory board
members have other occupations, while insurance subsidiaries of the Company conductconsiderable amounts of insurance-related transactions with Nippon Steel & Sumitomo Metal
Corporation, Nisshin Seifun Group Inc., Mitsubishi Corporation, Mitsubishi Electric
Corporation, Mitsubishi Motors Corporation, Asahi Glass Company, Limited and Mitsubishi
UFJ Financial Group, Inc., each outside director and outside audit & supervisory board
member fulfills the Standards for independence for Outside Directors and Outside Audit &Supervisory Board Members set by the Company.
(2) Principal Activities
Current term
Name
in officeAkio Mimura(outside director)

5 years and 9monthsAttendance of board
meetings etc.

Major activities including theremarks made at board meetings etc.

Attended 11 of the 12 boardof directors' meetings held
during the fiscal year ended
March 31, 2016.

He has fulfilled his supervisory
functions by asking for detailed
explanations and making remarks ona timely basis, based on his insight as40

a company manager which has beenacquired through many years ofexperience in a management role.

Mikio Sasaki(outside director)

4 years and 9 Attended all 12 board ofmonthsdirectors' meetings held
during the fiscal year ended
March 31, 2016.

He has fulfilled his supervisory
functions by asking for detailed
explanations and making remarks ona timely basis, based on his insight asa company manager which has beenacquired through many years ofexperience in a management role.

Masako Egawa

9 months

After assuming theposition, attended all 10
board of directors' meetings
held during the fiscal year
ended March 31, 2016.

She has fulfilled her supervisory
functions by asking for detailed
explanations and making remarks ona timely basis, based on her insight
as a specialist in business
management, acquired through many
years of experience in financial
institutions, involvement in academic
activities related to corporate
governance and experience at The
University of Tokyo as an Executive
Vice President.

9 years and 9monthsAttended 11 of the 12 boardof directors' meetings andall 11 audit & supervisoryboard meetings held during
the fiscal year ended March
31, 2016.

She has fulfilled her audit functions
by asking for detailed explanations
and making remarks on a timely
basis, based on her insight onbusiness management which has
been acquired through many years ofexperience as a consultant andinvolvement in academic activities.

4 years and 9monthsAttended all 12 board of
directors' meetings and all
11 audit & supervisoryboard meetings held during
the fiscal year ended March
31, 2016.

He has fulfilled his audit functions
by asking for detailed explanations
and making remarks on a timely
basis, based on his insight acquired
through many years of experience in
his role as an executive or a regular
employee of Bank of Japan.

1 year and 9monthsAttended all 12 board of
directors' meetings and all
11 audit & supervisoryboard meetings held during
the fiscal year ended March
31, 2016.

He has fulfilled his audit functions
by asking for detailed explanations
and making remarks on a timely
basis, based on his insight acquired
through many years of experience in
his role as an attorney-at-law.

(outside director)

Yuko Kawamoto(outside audit &supervisory board
member)Akinari Horii(outside audit &supervisory board
member)Akihiro Wani(outside audit &supervisory board
member)Notes: 1. Current term in office is the length of the term held as of March 31, 2016.
2. Description in the "Attendance of board meetings etc." and "Major activities including theremarks made at board meetings etc." includes matters in connection with the audit &supervisory board meetings as well as the board of directors' meetings.

41

3. Of the 12 board of directors ' meetings held during the fiscal year ended March 31, 2016, 11
were ordinary meetings, 1 was an extraordinary meeting. All of the 11 audit & supervisoryboard meetings held during the fiscal year ended March 31, 2016 were ordinary meetings.

(3) Remuneration and Other Compensation

Total amount of
remuneration andothercompensation

Number of persons toreceive remunerationand other compensation

Remuneration received
from the insurance
holding company

Remuneration received from theparent company, etc. of theinsurance holding company

7 persons

60 million yen-

Notes: 1. “Number of persons to receive remuneration and other compensation” includes one outside
director who resigned from office at the close of the 13th ordinary general meeting ofshareholders held on June 29, 2015.
2. “Remuneration received from the insurance holding company” includes the amounts paid to
one outside director referred to in Note 1 above.
3. Of the "Remuneration received from the insurance holding company," remuneration inconnection with share acquisition rights was 5 million yen.
4. The breakdown of the remuneration is as follows.
- Outside directors: 4 persons, 30 million yen- Outside audit & supervisory board members: 3 persons, 29 million yen(4) Comments of Outside Directors and Outside Audit & Supervisory Board Members
None.

4. Matters Concerning Common Share(1) Number of Shares (As of March 31, 2016)
Total number of shares authorized to be issued: 3,300,000 thousand shares
Total number of the issued shares: 757,524 thousand shares (including 2,839 thousand
treasury shares)(2) Total Number of Shareholders (As of March 31, 2016)
81,811(3) Major shareholders (As of March 31, 2016)
Capital contribution
to the Company
Shareholders
Number ofshares held

Ratio ofshares held

thousand shares%

The Master Trust Bank of Japan, Ltd. (Trust Account)

41,070

5.4

Japan Trustee Services Bank, Ltd. (Trust Account)37,873

5.0

State Street Bank and Trust Company 505001

26,776

3.5

Meiji Yasuda Life Insurance Company

15,7792.1

The Bank of New York Mellon SA / NV 10

12,921

1.7

JP Morgan Chase Bank 385632

12,731

1.7

42Japan Trustee Services Bank, Ltd. (Trust Account 9)

11,823

1.6

State Street Bank and Trust Company 505225

11,101

1.5

The Master Trust Bank of Japan, Ltd. Retirement Benefits
Trust Account for Mitsubishi Corporation

10,832

1.4

State Street Bank West Client - Treaty 505234

10,301

1.4

Notes: 1. The 10,832 thousand shares held by The Master Trust Bank of Japan, Ltd. Retirement Benefits Trust
Account for Mitsubishi Corporation are an asset entrusted by Mitsubishi Corporation for its
retirement benefits trust.
2. The ratio of shares held is calculated after deducting 2,839 thousand treasury shares held by theCompany.

(Composition ratio by type of shareholders)
Financial institutions:
Financial instruments firms:
Other domestic companies:
Foreign companies:
Individuals and others:

35.4%
1.9%
7.7%
42.9%
12.2%

(The number of outstanding shares as of March 31, 2016: 757,524 thousand shares)

5. Matters Concerning Share Acquisition Rights
The following table sets forth the status and outlines of the share acquisition rights issued by the Company
to directors, audit & supervisory board members, and executive officers of Tokio Marine Holdings and its
major subsidiaries as remuneration for the performance of their respective duties as of March 31, 2016:

Number ofshareacquisitionrights (as ofMarch 31,
2016)
July 2005
Share
Acquisition
RightsJuly 2006
Share
Acquisition
RightsJuly 2007
Share
Acquisition
RightsAugust 2008
Share
Acquisition
Rights12

11Class andnumber ofsharesunderlying
shareacquisitionrights (as ofMarch 31,
2016)
6,000
commonsharesAmount to be
paid upon
exercise ofshareacquisitionrightsAmountpayable atissuance-

5,500
commonshares2,013,506 yen
30 years from1 yen per80

163

Exerciseperiod8,000
commonshares491,700 yen

16,300commonshares353,300 yen

share

the allotmentof the shareacquisitionrights43

July 2009
456
45,600237,600 yen
SharecommonAcquisition
sharesRightsJuly 2010
709
70,900234,400 yen
SharecommonAcquisition
sharesRightsJuly 2011
952
95,200219,500 yen
SharecommonAcquisition
sharesRightsJuly 2012
1,383
138,300
181,900 yen
SharecommonAcquisition
sharesRightsJuly 2013
1,464
146,400
332,600 yen
SharecommonAcquisition
sharesRightsJuly 2014
1,673
167,300
310,800 yen
SharecommonAcquisition
sharesRightsJuly 2015
1,529
152,900
500,800 yen
SharecommonAcquisition
sharesRights
Notes: 1. All share acquisition rights are issued by the Company pursuant to a stock-linked
compensation plan.
2. The July 2005 Share Acquisition Rights were issued with especially favorable terms todirectors, audit & supervisory board members, and executive officers , pursuant to Articles
280-20 and 280-21 of the former Commercial Code.
3. Share acquisition rights issued from July 2006 through July 2015 were allotted to directors,
audit & supervisory board members, and executive officers to settle their cash
remuneration claims against their respective companies, pursuant to Article 238, paragraphs
1 and 2 and Article 240 of the Companies Act of Japan.
4. Share acquisition rights held by any of directors, audit & supervisory board members, andexecutive officers that he/she received in his/her capacity as a director, audit &supervisory board member, or executive officer of the relevant entity may only be
exercised after he/she has resigned from any position as a director, audit & supervisoryboard member, or executive officer of such entity.

(1) Share Acquisition Rights held by Directors and Audit & Supervisory Board Membersof the Insurance Holding Company as of the End of the Fiscal Year

Number ofshareacquisitionrightsClass andnumber ofsharesunderlying
shareacquisitionrightsJuly 2007
Share
Acquisition
Rights19

1,900
commonsharesAugust2008 Share
Acquisition
Rights22

2,200
commonsharesDirectors (except outside
directors)
Number of
persons
Number ofholdingshare
share
acquisitionacquisitionrightsrights1 person16

1 person

19

44

Outside Directors
Number of
persons
holdingshareacquisitionrights--Number ofshareacquisitionrights--Audit & Supervisory
Board Members
Number of
persons
Number ofholdingshare
share
acquisitionacquisitionrightsrights1 person3

1 person3

July 2009
Share
Acquisition
Rights39

3,900
commonshares1 person33--

1 person

6

July 2010
Share
Acquisition
Rights55

5,500
commonshares2 persons41

1 person7

1 person

7

July 2011
Share
Acquisition
Rights116

11,600commonshares3 persons76

2 persons

14

1 person

26

July 2012
Share
Acquisition
Rights196

19,600commonshares4 persons117

2 persons18

1 person

61

July 2013
Share
Acquisition
Rights187

18,700commonshares4 persons118

2 persons14

2 persons

55

July 2014
Share
Acquisition
Rights133

13,300commonshares5 persons113

2 persons

12

1 person

8

July 2015
Share
Acquisition
Rights205

20,500commonshares7 persons193

3 persons

12

-

-

Note: As of March 31, 2016, the directors and audit & supervisory board members of the Company have beenallotted the number of share acquisition rights to settle their monetary remuneration claims accrued asconsideration for their service in the respective companies set forth in this table. The directors and audit& supervisory board members of the Company who were also executive officers of the Company ordirectors or executive officers of the Company's major subsidiaries at the time of the issuance of theshare acquisition rights have been allotted the number of share acquisition rights set forth below in theircapacity as directors or executive officers of these companies.
The July 2005 Share Acquisition Rights: 12
The July 2006 Share Acquisition Rights: 8
The July 2007 Share Acquisition Rights: 45
The August 2008 Share Acquisition Rights: 51
The July 2009 Share Acquisition Rights: 92
The July 2010 Share Acquisition Rights: 151
The July 2011 Share Acquisition Rights: 179
The July 2012 Share Acquisition Rights: 169
The July 2013 Share Acquisition Rights: 124
The July 2014 Share Acquisition Rights: 112
The July 2015 Share Acquisition Rights: 92

45

(2) Share Acquisition Rights Allotted to Employees, etc. during the Fiscal Year

Number ofshareacquisitionrightsClass andnumber ofsharesunderlying
shareacquisitionrightsDirectors and employees ofsubsidiaries

Employees
Number of
persons
allottedshare
acquisitionrights8 persons

Number ofshareacquisitionrightsNumber of
persons
allotted shareacquisitionrightsNumber ofshareacquisitionrightsJuly 2015
1,298
129,800181
60 persons
1,117
Share
commonAcquisition
sharesRightsNote: The number of employees' share acquisition rights described in the above table includes the number ofshare acquisition rights allotted to the employees of the Company who were also directors or executive
officers of the Company's major subsidiaries at the time of the issuance of such share acquisition rights tosettle their monetary remuneration claims accrued as consideration for their service in the respective
companies. "Employees" in the above table are executive officers who are not directors of theCompany.

6. Matters Concerning the Independent Auditor(1) Independent Auditor (PricewaterhouseCoopers Aarata)
Name

Remuneration for the fiscal year ended
March 31, 2016

Other matters

132 million yen

Non-audit services (i.e., services
other than those stipulated in
Article 2, paragraph 1 of theCertified Public Accountants Law)provided to the Company by the
independent auditor for a fee:accounting advisory service related
to International Financial ReportingStandards (IFRS), etc.

Designated Partners:
Takashi Sasaki
Susumu Arakawa
Takashi Idesawa

Notes: 1. The Audit & Supervisory Board of the Company has conducted necessary verification on theproperness of the auditor’s audit plan, the performance of the audit and the grounds for theauditor’s estimate of compensation, and has consented to the amount of the auditor’scompensation as set forth in paragraph 1, Article 399 of Companies Act of Japan.
2. The audit engagement letter entered into between the Company and the independent auditor
does not clearly distinguish between the remuneration for audit services required by theCompanies Act of Japan and the remuneration for a part of audit services required by the
Financial Instruments and Exchange Act of Japan for these services are practicallyinseparable.
3. The total amount of cash and other financial benefits payable to the independent auditor by
the Company and its subsidiaries is 1,002 million yen.

(2) Limitation of Liability
None.
(3) Other matters Concerning the Independent Auditor
a. Policy regarding dismissals or decisions not to reappoint an independent auditor
The Company has adopted a policy regarding decisions on dismissing or not reappointing an

46

independent auditor as described below.
The Audit & Supervisory Board shall dismiss an independent auditor if the independent
auditor is deemed to fall under any of the items of Article 340, paragraph 1 of the Companies
Act of Japan, based on the consent of all of the Audit & Supervisory Board members. The
Audit & Supervisory Board comprehensively evaluates the professional knowledge, audit
ability, audit quality, independency from the Company, and other qualifications of an
independent auditor according to the evaluation criteria established by the Audit &Supervisory Board. If the Audit & Supervisory Board finds any problems in thequalification of an independent auditor or otherwise considers it appropriate to dismiss or not
reappoint an independent auditor, the Audit & Supervisory Board shall, by resolution, submit
to the general meeting of shareholders a proposal for the dismissal or non-reappointment of
the independent auditor.
b. Audit of financial statements of major subsidiaries of the insurance holding company
conducted by audit firms other than the independent auditor of the insurance holding
company
The financial statements of overseas subsidiaries and affiliates are audited by audit firms
overseas, including the member firms of PricewaterhouseCoopers which is affiliated with
PricewaterhouseCoopers Aarata.

7. Basic Policy Regarding Persons Who Control the Company's Decisions on Financial
Matters and Business Policies
None.

8. System to assure appropriate business operations(1) Overview of the Resolution on Establishment of a System to Assure Appropriate
Business Operations
The Company has formulated its “Basic Policies for Internal Controls” below pursuant to theCompanies Act and the Ordinance for Enforcement of the Companies Act.
1. System for ensuring proper operations within the Tokio Marine Group (the “Group”)(1) Based upon the "Tokio Marine Group Corporate Philosophy", the Company, as theholding company presiding over the businesses of the Group, by establishing both theGroup's basic policies for the administration of Group companies and a system ofreporting to the Board of Directors, shall implement the Company's management system
for all the Group companies.
a. The Company shall administer the business of Group companies under its direct
management ("Subsidiaries and Others") by concluding business managementagreements with them and through other means.
(a) The Company shall provide Subsidiaries and Others with the Group's basic policies
that form the fundamentals of the Group's management strategies and the Company's
management.
(b) Business strategies, business projects and other important plans by Subsidiaries andOthers shall be subject to the Company's prior approval.
(c) Subsidiaries and Others shall report to the Company their initiatives based on theGroup's basic policies and the progress of their business plans.

47

b. The business management of Group companies other than Subsidiaries and Others shall,in principle, be made through Subsidiaries and Others.
(2) The Company shall establish the Group's basic policies for accounting, grasp its
consolidated financial position and the Group companies' financial positions, andimplement systems for obtaining approval from, and submitting reports to, shareholders
and supervisory organizations and submitting tax returns to authorities in a proper manner.
(3) The Company shall establish the Group's basic policies for internal controls over financial
reporting and implement systems for ensuring the appropriateness and reliability offinancial reporting.
(4) The Company shall establish the Group's basic policies for disclosure, and implement
systems for disclosing information on corporate activities in a timely and proper manner.
(5) The Company shall establish the Group's basic policies for management of intragrouptransactions and implement systems for such transactions.
2. System for ensuring the execution of professional duties in accordance with applicablelaws, regulations and the Articles of Incorporation(1) The Company shall establish the Group's basic policies for compliance and implement
compliance systems.
a. The Company shall establish a department supervising compliance.
b. The Company shall formulate the "Group Code of Conduct" and ensure that all directors
and employees of the Group respect such code of conduct and give top priority tocompliance in all phases of the Group's business activities.
c. The Company shall have Subsidiaries and Others prepare compliance manuals andwidely promote compliance within the Group by means of training on laws, regulations,internal rules and other matters which all directors and employees of the Group must
respect.
d. The Company shall establish reporting rules in the event of a violation of laws,
regulations or internal rules within any of the Subsidiaries and Others and, in addition tousual reporting routes, set up hotlines (an internal whistle-blower system) to an internaland external organization and while keeping all directors and employees of the Group
well informed as to the use of the system.
(2) The Company shall establish the Group's basic policies for the protection of customers'
interests and maintain a customer-oriented policy in all phases of business in order toimplement a system for the protection of customers' interests.
(3) The Company shall establish the Group's basic policies for information security
management and implement such systems.
(4) The Company shall establish the Group's basic policies against antisocial factions andgroups, and in association with lawyers, police and other professionals, implement its
systems against such antisocial factions and groups, and respond to them in an organized
and uncompromising manner by severing relationships with them and refusing unfair
demands.
(5) The Company shall establish an internal audit department separate and independent ofother departments, establish the Group's basic policies for internal audits of the Group andimplement systems for efficient and effective internal audits within the Company andGroup companies.

48

3. System for risk management(1) The Company shall establish the Group's basic policies for risk management andimplement risk management systems.
a. The Company shall establish a department supervising risk management.
b. The Company shall perform risk management by following the basic processes of risk
identification, evaluation and control, contingency planning and assessment of outcomesthrough risk monitoring and reporting.
c. The Company shall have each of the Subsidiaries and Others perform risk management
appropriate to its types of business and its risk characteristics.
(2) The Company shall establish the Group's basic policies for integrated risk management
and perform quantitative risk management across the entire Group to maintain credit
ratings and prevent bankruptcies.
(3) The Company shall establish the Group's basic policies for crisis management andimplement systems for crisis management.
4. System for ensuring efficient execution of professional duties(1) The Company shall formulate a medium-term management plan and an annual plan(including numerical targets, etc.) for the Group.
(2) The Company shall establish rules regarding the exercise of authority and construct anappropriate organizational structure for achieving its business purposes in order to realize
efficient execution of operations through a proper division of responsibilities and a chainof command.
(3) The Company shall formulate rules for and establish a "Management Meeting", composedof directors, executive officers and other relevant persons, that shall discuss and report onimportant management issues.
(4) The Company shall establish an Internal Control Committee that shall formulate various
basic policies and other measures concerning the Group's internal control systems,
evaluate their progress, discuss how to improve them, and promote their implementation.
(5) The Company shall establish the Group's basic policies for IT governance, and implement
systems for achieving IT governance.
(6) The Company shall establish the Group's basic policies for personnel matters with a viewto enhancing productivity and corporate value through comprehensive efforts to enhance
employees' satisfaction and pride in their work and promoting fair and transparent
personnel management linked with proper performance evaluation.
(7) The Company shall establish system for ensuring efficient execution of professional duties
at the Group companies as well as the Company in addition to the above (1) to (6).
5. System for preserving and managing information concerning the execution of directors'
dutiesThe Company shall establish rules for the preservation of documents and other materials.
The minutes of important meetings and documents containing material information
regarding the execution of duties by the directors and the executive officers shall bepreserved and managed appropriately in accordance with such rules.
6. Matters concerning support personnel to the Audit & Supervisory Board Members(1) The Company shall establish the Office of Audit & Supervisory Board under the direct49control of the Audit & Supervisory Board Members for the purpose of supporting them inthe performance of their duties. Upon request of the Audit & Supervisory Board Members,
the Company shall assign full-time employees having sufficient knowledge and ability tosupport the Members in the performance of their duties.
(2) Employees assigned to the Office of Audit & Supervisory Board shall perform duties
ordered by the Audit & Supervisory Board Members and other work necessary forproceeding with audits, and such employees shall have the right to collect informationnecessary for audit purposes.
(3) Performance evaluations, personnel transfers and disciplinary action concerning such
employees shall be made with the approval of the Audit & Supervisory Board Members(Full-time).
7. System of reporting to the Audit & Supervisory Board Members(1) Directors and employees shall regularly report to the Audit & Supervisory Board Members
on management, financial condition, compliance, risk management, internal audits andother matters, and in the event that they detect a material violation of laws, regulations orinternal rules, concerning the execution of operations of the Company or the Group
companies or a fact likely to cause considerable damage to the Company or the Group
companies, they shall immediately report thereof to the Audit & Supervisory Board
Members.
(2) The Company shall establish system to ensure that the Audit & Supervisory Board
Members shall be reported by directors and employees or the ones having received thereport from them, in the event that they detect a material violation of laws, regulations orinternal rules concerning the execution of operations of the Company or the Group
companies, or a fact likely to cause considerable damage to the Company or the Group
companies.
(3) The Company shall establish system necessary as to that directors and employees , whoreported the matters as per above mentioned to the Audit & Supervisory Board Members,
shall not be given any disadvantageous treatment because of the concerned report in the
Company or the Group companies.
(4) Directors and employees shall regularly report to the Audit & Supervisory Board
Members on matters such as how the hot lines (the internal whistle-blower system) areused and reports and consultations made.
8. Other systems for ensuring effective audits by the Audit & Supervisory Board Members(1) The Audit & Supervisory Board Members shall attend meetings of the Board of Directors,
have the right to attend "Management Meetings" and other important meetings andcommittees, and express their opinions.
(2) The Audit & Supervisory Board Members shall have the right to inspect at any time theminutes of important meetings and other important documents relating to decisions
approved by directors and executive officers.
(3) Directors and employees shall, at any time upon the request of the Audit & Supervisory
Board Members, explain matters concerning the execution of their duties.
(4) The Internal Audit Department shall strengthen its coordination with the Audit &Supervisory Board Members by assisting in the audit process and through other means.
(5) The company shall pay all the expense and fees incurred regarding the execution of duties

50

by the Audit & Supervisory Board Members, unless the company proves that they aren't
necessary for the execution.
(2) Overview of Implementation of Internal Control Systema. Internal Control System in General
The Company has formulated its “Basic Policies for Internal Controls” and, in accordancewith these Policies, the Company has established an internal control system for the entire
Group, through which it endeavors to ensure proper operations while raising corporate value.
The Company monitors the status and practical application of the Internal Control System
twice a year, and the Board of Directors confirms the details of the monitoring based on
deliberations at the Internal Control Committee. In addition, the Company continuallystrengthens and improves the Internal Control System in light of the results of thismonitoring.
b. Efforts related to Management Control of Group Companies
The Company has formulated various basic policies that the Group is required to comply
with in order to ensure proper Group operations and to ensure compliance with laws,
regulations and the Articles of Incorporation of the Company. The Company also reviews
the policies each year to determine whether any new policies or revisions to existing policies
are necessary and the Company has revised a part of such basic policies this fiscal year. In
the Group’s basic policies about management of group companies, certain material items
relating to the businesses of the Company’s major group companies for which prior approval
from or report to the Company is required are identified. In accordance with these policies,
the Company gives prior approval to business and other plans of major group companies.
c. Efforts related to Compliance
The Group conducts training each year to inform directors and officers of laws, regulations
and internal rules that directors and officers are required to comply with. The Group has
also installed hotlines for directors and officers to report internally regarding potential
compliance issues, as well as informing them about use of the hotlines through training andother methods and responding to reports. This fiscal year, in light of the expansion of theGroup’s overseas business, the Company utilized outside specialist organizations to evaluate
risks, especially those relating to overseas corruption and economic sanctions. The
Company will work on maintenance and improvement of its management system based on
this risk evaluation.
d. Efforts related to Risk Management
The Company identifies risks that may have material effect on the financial soundness andcontinuity of operations of the Company, establishes countermeasures against such risks,deliberates on the implementation of such countermeasures at the Internal Control
Committee and confirms their effectiveness at board of directors’ meetings. During thisfiscal year, the Company established a common rule applicable to the entire Group regarding
natural disasters such as earthquakes that could have a material effect on the continuity ofGroup operations. In order to maintain credit ratings and forestall bankruptcy, the Board of
Directors conducts a multi-faceted investigation to confirm that the Group’s real net assets
are at a sufficient level compared to the risks the Group faces and confirms that financial
soundness is maintained.
e. Efforts to Ensure Efficient Audits by Audit & Supervisory Board Members
The Company provides information to Audit & Supervisory Board Members sufficient toensure effective audit by the Audit & Supervisory Board Members such as by having themattend meetings of the Board of Directors and other important meetings, as well as providing51

them access to important financial reports, which allows them to evaluate directors’
execution of their duties. The Company’s Internal Audit Department also reports to the
Audit & Supervisory Board Members on the internal audit plan, the outcome of the internal
audit and the review of internal audit plan. In addition, the Company reports to Audit &Supervisory Board Members four times a year on the implementation of the internalreporting hotline.

9. Items related to Specified Wholly-owned Subsidiary(1) Name and Address of the Specified Wholly-owned Subsidiary
Tokio Marine & Nichido Fire Insurance Co., Ltd.
2-1, Marunouchi 1-chome, Chiyoda-ku, Tokyo, Japan(2) The Total Book Value of Shares of Specified Wholly-owned Subsidiary Owned by theCompany and its Wholly-owned Subsidiaries and Other Related Companies
2,086,778 million yen(3) Total Amount Recorded in the Assets Section of the Balance Sheet pertaining to theCompany’s Current Fiscal Year2,486,765 million yen

10. Matters Concerning Transactions with the Parent Company
None.

11. Matters Concerning Accounting Advisers (Kaikei Sanyo)
None.

12. Other Matters
None.

52

Consolidated Balance Sheet as of March 31, 2016
(Yen in millions)
As of March 31, 2016
Assets

1,031,610

Cash and bank deposits

21,000Call loans
Receivables under resale agreements
Receivables under securities borrowing transactions
Monetary receivables bought
Money trusts
Securities
Loans
Tangible fixed assets
Land
Buildings
Construction in progress
Other tangible fixed assets
Intangible fixed assets
Software
Goodwill
Other intangible fixed assets
Other assets
Net defined benefit assets
Deferred tax assets
Customers' liabilities under acceptancesand guarantees

4,999
21,597
1,345,859
63,04915,457,012
878,951
277,413129,017
120,19456
28,145
1,022,112
37,817534,593449,700
1,692,808
12,44033,558
9,026(16,111)21,855,328

Allowance for doubtful accounts
Total assets
Liabilities
Insurance liabilities
Outstanding claims
Underwriting reserves
Corporate bonds
Other liabilities
Payables under securities lending transactions
Other liabilities
Net defined benefit liabilities
Provision for retirement benefits for directors
Provision for employees' bonus
Reserves under special laws

15,144,114
2,663,123
12,480,991
77,677
2,291,591
704,077
1,587,513
242,952
21
57,35588,144
88,144

Price fluctuation reserve

361,960
69,827
9,026
18,342,671

Deferred tax liabilities
Negative goodwill
Acceptances and guarantees
Total liabilities
Net assets
Shareholders' equity

150,000
1,531,072(10,742)
1,670,329

Share capital
Retained earnings
Treasury shares
Total shareholders' equity
Accumulated other comprehensive income
Unrealized gains (losses) on available-for-salesecurities
Deferred gains (losses) on hedge transactions
Foreign currency translation adjustments
Remeasurements of defined benefit plans
Total accumulated other comprehensive income

1,601,187
19,870210,134(16,796)
1,814,395
2,485
25,4453,512,656
21,855,328

Share acquisition rights
Non-controlling interests
Total net assets
Total liabilities and net assets

53

Consolidated Statement of Income for the fiscal year ended March 31, 2016
(Yen in millions)Year ended March 31, 2016
(April 1, 2015 to March 31, 2016)

4,579,076

Ordinary income
Underwriting income
Net premiums written
Deposit premiums from policyholders
Investment income on deposit premiums
Life insurance premiums
Other underwriting income
Investment income
Interest and dividends
Gains on money trusts
Gains on trading securities
Gains on sales of securities
Gains on redemption of securities
Gains on derivatives
Other investment income
Transfer of investment income on deposit premiums
Other ordinary income
Amortization of negative goodwill
Other ordinary income
Ordinary expenses
Underwriting expenses
Net claims paid
Loss adjustment expenses
Agency commissions and brokerage
Maturity refunds to policyholders
Dividends to policyholders
Life insurance claims
Provision for outstanding claims
Provision for underwriting reserves
Other underwriting expenses
Investment expenses
Losses on sales of securities
Impairment losses on securities
Losses on redemption of securities
Investment losses on separate accounts
Other investment expenses
Operating and general administrative expenses
Other ordinary expenses
Interest expenses
Losses on bad debts
Equity in losses of affiliates
Amortization of deferred assets under Article 113of the Insurance Business Act

3,921,369
3,265,578
125,092
51,814
471,666
7,217
555,912386,507345
4,552
163,043488
43,5209,269(51,814)
101,793
10,22991,5644,193,251
3,370,943
1,662,021
127,732
663,787
222,046155
410,957
164,785
108,482
10,974
107,878
20,465
16,555933
35,38734,536697,30917,120
7,465
97
2,421
3,826
3,308
385,825

Other ordinary expenses
Ordinary profit

54

(Yen in millions)Year ended March 31, 2016
(April 1, 2015 to March 31, 2016)
Extraordinary gains
Gains on disposal of fixed assets
Other extraordinary gains
Extraordinary losses
Losses on disposal of fixed assets
Impairment losses on fixed assets
Provision for reserves under special laws
Provision for price fluctuation reserve
Other extraordinary losses
Income before income taxes and non-controlling interests
Income taxes - current
Income taxes - deferred
Total income taxes
Net income
Net income attributable to non-controlling interests
Net income attributable to owners of the parent

55

687
348
339
13,668
1,042
2,215
5,199
5,199
5,210
372,845
107,596
9,268
116,865
255,980
1,439
254,540

Consolidated Statement of Changes in Shareholders' Equity for the fiscal year ended March 31, 2016
(Yen in millions)Shareholders' equity
Retainedearnings

Share capital
Beginning balance as of April 1, 2015

150,000

1,357,846

TreasurysharesTotal shareholders'equity(11,038)

1,496,808

Changes during the year
Dividends(81,124)(81,124)

Net income attributable to owners of theparent254,540

254,540

Purchases of treasury shares

(129)

(129)

425

291

Disposal of treasury shares(133)

Changes inthe scope of consolidation

(130)

(130)

73

73

OthersNet changes in items otherthan shareholders' equity
Total changes during the year
Ending balance as of March 31, 2016

150,000

173,225

295

173,521

1,531,072(10,742)

1,670,329

Accumulated other comprehensive income
Unrealized
Deferred gains
gains (losses)(losses) on
on availablehedge
for-saletransactions
securities
Beginning balance as of April 1, 2015

1,846,908

19,183Foreigncurrencytranslation
adjustments

Remeasurementsof defined benefit
plans

237,201(21,397)

Share
acquisitionrights

Noncontrollinginterests

Total net assets

2,037

28,9153,609,655

Changes during the year
Dividends(81,124)

Net income attributable to owners of theparent254,540

Purchases of treasury shares(129)

Disposal of treasury shares

291

Changes inthe scope of consolidation

(130)
73

OthersNet changes in items otherthan shareholders' equity(245,720)

687(27,066)

4,600

448

(3,469)(270,520)

Total changes during the year

(245,720)

687(27,066)

4,600

448

(3,469)(96,998)

Ending balance as of March 31, 2016

1,601,187

19,870210,134(16,796)

2,485

25,4453,512,656

56

Notes to Consolidated Financial Statements

Significant matters related to consolidated financial statements
1. Scope of consolidation(1) Number of consolidated subsidiaries: 155 companies
Names of major consolidated subsidiaries:
Tokio Marine & Nichido Fire Insurance Co., Ltd.
Nisshin Fire & Marine Insurance Co., Ltd.
E.design Insurance Co., Ltd.
Tokio Marine & Nichido Life Insurance Co., Ltd.
Tokio Marine Millea SAST Insurance Co., Ltd.
Tokio Marine Asset Management Co., Ltd.
Tokio Marine North America, Inc.
Philadelphia Consolidated Holding Corp.
Philadelphia Indemnity Insurance Company
First Insurance Company of Hawaii, Ltd.
Tokio Marine America Insurance Company
Delphi Financial Group, Inc.
Safety National Casualty Corporation
Reliance Standard Life Insurance Company
Reliance Standard Life Insurance Company of Texas
HCC Insurance Holdings, Inc.
Houston Casualty Company
U.S. Specialty Insurance Company
HCC Life Insurance Company
Tokio Marine Kiln Group Limited
Tokio Marine Underwriting Limited
HCC International Insurance Company PLC
Tokio Millennium Re AG
Tokio Marine Asia Pte. Ltd.
Tokio Marine Insurance Singapore Ltd.
Tokio Marine Life Insurance Singapore Ltd.
Tokio Marine Insurans (Malaysia) Berhad
Tokio Marine Life Insurance Malaysia Bhd.
Tokio Marine Seguradora S.A.
Beginning with the fiscal year ended March 31, 2016, HCC Insurance Holdings, Inc., Houston
Casualty Company, U.S. Specialty Insurance Company, HCC Life Insurance Company, HCC
International Insurance Company PLC and other 65 companies are included in the consolidation
due to the acquisition of the shares of HCC Insurance Holdings, Inc., among other reasons.
(2) Names of major non-consolidated subsidiaries
Major subsidiaries:
Tokio Marine & Nichido Adjusting Service Co., Ltd.
Tokio Marine Capital Co., Ltd.

57

Reason the subsidiaries were excluded from the consolidation:
Each of these non-consolidated subsidiaries is small in scale in terms of total assets, sales, net
income or loss for the period and retained earnings. As such non-consolidated subsidiaries are
not considered to materially affect any reasonable determination as to the Group’s financial
condition and results of operations and are excluded from the consolidation.
2. Application of the equity method(1) Number of affiliates accounted for by the equity method: 13 companies
Names of major affiliates accounted for by the equity method:
Edelweiss Tokio Life Insurance Company Limited
IndemCo, LP and one other company have been included in the scope of application of theequity method from the fiscal year ended March 31, 2016, because the Group acquired theshares of HCC Insurance Holdings, Inc.
(2) The non-consolidated subsidiaries (Tokio Marine & Nichido Adjusting Service Co., Ltd., Tokio
Marine Capital Co., Ltd., etc.) and other affiliates (IFFCO-TOKIO General Insurance Co., Ltd.,etc.) have not been accounted for by the equity method because these companies have had a minor
effect on the Company’s consolidated net income or loss for the period and retained earnings andare not considered material as a whole.
(3) The Company owns 30.1% of the total voting rights of Japan Earthquake Reinsurance Co., Ltd.
through Tokio Marine & Nichido and Nisshin Fire. The Company does not consider Japan
Earthquake Reinsurance Co., Ltd. to be its affiliate since it believes that it can not exert asignificant influence on any policy making decisions of Japan Earthquake Reinsurance Co., Ltd.’s
operations given the highly public nature of the company.
(4) With regard to any company accounted for by the equity method that has a different closing datefrom that of the consolidated financial statements, the financial statements of that company for its
fiscal year are used for presentation in the consolidated financial results.
3. Closing date of consolidated subsidiaries
The closing date of the fiscal year for one of the domestic consolidated subsidiaries and 145 overseas
consolidated subsidiaries is December 31. Since the differences in the closing dates do not exceed
three months, the financial statements of the consolidated subsidiaries as of December 31 are used forpresentation in the accompanying consolidated financial statements. As for any significant
transactions taking place during the period between the subsidiaries’ closing dates and the consolidated
closing date, necessary adjustments are made for consolidation purposes.
4. Accounting policies(1) Valuation of securities
a. Trading securities are valued by the mark-to-market method, with the costs of their sales being
calculated on the moving-average method.
b. Bonds held to maturity are recorded by using the amortized cost method (straight-line method)
based on the moving-average method.
c. Bonds earmarked for underwriting reserves are recorded by using amortized cost method58

(straight-line method) based on the moving-average method, in accordance with the Industry
Audit Committee Report No. 21 “Temporary Treatment of Accounting and Auditing Concerning
Securities Earmarked for Underwriting Reserve in Insurance Industry” issued by the JapaneseInstitute of Certified Public Accountants (the “JICPA”), November 16, 2000.
Following is a summary of the risk management policy concerning bonds earmarked forunderwriting reserves.
In order to control interest rate fluctuation risks relating to assets and liabilities, Tokio Marine &Nichido Life divides their underwriting reserves into following subgroups: "dollar-denominatedunderwriting reserve for deferment period of individual annuity insurance (denominated in U.S.
dollars) with floating cancellation refund linked with market interest rates", "underwriting reservefor deferment period of individual annuity insurance with floating interest rates", "underwriting
reserve for lump sum deposit-type whole-life insurance denominated in U.S. dollars with floatinginterest rates", "underwriting reserve for lump sum deposit-type whole-life insurance withfloating interest rates" and "underwriting reserve for lump sum deposit-type individual annuity
insurance". Tokio Marine & Nichido Life maintains the policy to match the duration ofunderwriting reserves of each subgroup and bonds earmarked for the underwriting reserve withincertain time range.
d. Other securities with fair value are recorded by the mark-to-market method based upon themarket price on the closing date.
The total amount of unrealized gains/losses on such securities is directly added to net assets withcosts of sales being calculated on the moving-average method.
e. Other securities for which the fair value cannot be measured reliably are recorded at cost
determined by the moving-average method.
f. Investment in non-consolidated subsidiaries and affiliates that are not accounted for by the equity
method are recorded at cost determined by the moving-average method.
g. Securities held in individually managed money trusts that are invested as trusted assets arerecorded by the mark-to-market method.
(2) Valuation of derivative transactions

Derivative financial instruments are accounted for by the mark-to-market method.
(3) Depreciation method for tangible fixed assets
Depreciation of tangible fixed assets owned by the Company and its domestic consolidated
subsidiaries is computed using the declining balance method. However, depreciation of buildings(excluding fixtures attached to such buildings, etc.) that were acquired on or after April 1, 1998 iscomputed using the straight-line method.
(4) Depreciation method for intangible fixed assets
Depreciation of intangible fixed assets procured through acquisitions of overseas subsidiaries isrecorded over the period of time for which the Company expects such subsidiaries contribute to the59Company, and in accordance with the form of such contribution.
(5) Accounting policies for significant reserves and allowancesa. Allowance for doubtful accounts
In order to provide for losses from defaults, domestic consolidated subsidiaries of the Company
establish allowance for doubtful accounts in accordance with internal asset self-assessment and asset
write-off rules as detailed below.
For claims against any debtor who has legally, technically, or substantially become insolvent (due tobankruptcy, special liquidation or suspension of transactions at draft clearinghouses, etc.), allowance iscalculated based on the amount of any such claim minus the amount expected to be collectible from
disposal of collateral or performance of applicable guarantees.
For claims against any debtor who is likely to become insolvent in the foreseeable future, allowance iscalculated based on the amount of any such claim minus the amount expected to be collectible from
disposal of collateral, performance of applicable guarantees or the relevant debtor himself, taking into
consideration the overall solvency assessment of the relevant debtor.
For claims other than those described above, allowance is provided based on the amount of claims
multiplied by the expected default rate, which is computed based on historical loan loss experience in
certain previous periods.
In addition, all claims are assessed by the asset accounting department and the asset management
department in accordance with the internal rules of asset self-assessment. Subsequently, the asset
auditing department, which is independent from other asset-related departments, audits the results ofassessment by the other asset-related departments. Allowance for doubtful accounts is recorded
based on such assessment results and audits stated above.
b. Retirement benefit obligations for directors
Some domestic consolidated subsidiaries set aside a reserve for retirement benefits for their directors
in the amount considered to be accrued as of the end of the fiscal year ended March 31, 2016, which is
calculated in accordance with their internal remuneration regulations.
c. Provision for employees’ bonus
To provide for payment of bonuses to employees, the Company and its major consolidated domestic
subsidiaries maintain reserves for employees' bonuses based on the expected amount to be paid.
d. Price fluctuation reserve
Domestic consolidated insurance subsidiaries maintain reserves under Article 115 of the Insurance
Business Act in order to provide for possible losses or damages arising from fluctuation of shareprices.
(6) Accounting for retirement benefit
a. Attribution method for projected retirement benefit obligations
In calculating retirement benefit obligations, attribution to the period ended March 31, 2016 is based
mainly on benefit formula criteria.
b. Method to charge actuarial differences and prior service costs

60Actuarial differences are charged to expenses in the subsequent fiscal year in amounts obtained byproportional calculation using the straight-line method over a certain term (5-13 years) within the
average remaining years of service of the employees at the time when the differences were incurredfor each fiscal year.
Prior service costs are charged to expenses in each subsequent fiscal year using the straight-line
method over a certain term (7-13 years) within the average remaining years of service of theemployees at the time when such costs were incurred.
(7) Accounting for consumption tax, etc.
The Company and its domestic consolidated subsidiaries account for consumption tax, etc. by the
tax-excluded method. However, domestic consolidated insurance subsidiaries account for expenses
such as operating and general administrative expenses by the tax-included method.
In addition, any non-deductible consumption tax incurred in connection with assets is included inother assets and is amortized over 5 years using the straight-line method.
(8) Accounting for significant lease transactions
Non-transferrable finance leases of the Company's domestic consolidated subsidiaries commencing
prior to April 1, 2008 are accounted for as operating lease transaction.
(9) Hedge accounting
a. Interest rate
To mitigate interest rate fluctuation risks associated with long-term insurance policies, Tokio Marine &Nichido and Tokio Marine & Nichido Life conduct Asset Liability Management ("ALM") to control
such risks by evaluating and analyzing financial assets and insurance liabilities simultaneously.
As for interest rate swap transactions that are used to manage such risks, Tokio Marine & Nichido andTokio Marine & Nichido Life apply deferred hedge accounting to the swap transactions based upon
the Industry Audit Committee Report No. 26, “Accounting and Auditing Treatments related to
Adoption of Accounting for Financial Instruments in the Insurance Industry” (issued by the JICPA,
September 3, 2002 - hereinafter called “Report No. 26”).
Effectiveness is not evaluated for hedge treatments that are believed to have high hedge effectiveness,because the Company groups hedged insurance liabilities with the interest rate swaps that are thehedge instruments, based on the period remaining for the instruments.
Tokio Marine & Nichido accounts for any deferred gains as of the end of March 2003 that were
calculated based on the Industry Audit Committee’s Report No.16, "Accounting and Auditing
Treatments related to Adoption of Accounting for Financial Instruments in the Insurance Industry"(issued by the JICPA, March 31, 2000), which was applicable prior to the application of Report No. 26,
using the straight-line method over the remaining hedging period (1-17 years). The accounting
treatments for such deferred gains are based on the transitional measures in Report No. 26. Deferredgains (before tax deductions) under this treatment as of March 31, 2016 were 7,739 million yen andthe amount accounted for in the consolidated financial statements for the fiscal year ended March 31,
2016 was 3,463 million yen.

61

b. Foreign exchangeWith regard to some of Tokio Marine & Nichido’s currency swap transactions and currency forward
transactions, which have been entered into for the purpose of hedging foreign exchange risk associatedwith assets denominated in foreign currencies, (a) fair value hedge accounting and/or (b) matchingtreatment are applied. The hedge effectiveness is not evaluated for hedging treatments that are
believed to have high hedge effectiveness, such as in cases where hedging tools and hedged
instruments share the same important characteristics.
Tokio Marine & Nichido applies deferred hedge accounting to foreign currency loans which hedge
foreign exchange risk associated with equity in overseas subsidiaries. Hedge effectiveness isevaluated based on a comparison of the aggregate market fluctuation of the hedged instruments andhedging tools during the period from when the hedge was entered and ending at the time of theevaluation.
(10) Amortization method and amortization period for goodwill
Goodwill recognized as an asset on the consolidated balance sheet is amortized in the following
manner. The goodwill in connection with Philadelphia Consolidated Holding Corp., HCC Insurance
Holdings, Inc. and Tokio Marine Kiln Group Limited, and Delphi Financial Group, Inc. is amortizedover 20 years, 10 years, and 5 years, respectively, using the straight-line method. Other goodwill isamortized over 5 to 15 years using the straight-line method, however when the amount is small it isamortized at one time.
Negative goodwill that arose on or before March 31, 2010 is recognized as a liability on the
consolidated balance sheet and amortized over 20 years using the straight-line method.
(11) Accounting for deferred assets under Article 113 of the Insurance Business Act
The Company evaluated the amount of amortization of deferred assets under Article 113 of the
Insurance Business Act for E.design Insurance Co., Ltd. in accordance with applicable laws andregulations and the Articles of Incorporation of E.design Insurance Co., Ltd.

Notes to changes in the accounting policies(Changes in accounting policies to reflect amendments of accounting standards and related matters)
The Company has applied "Accounting Standard for Business Combinations" (Accounting Standards
Board of Japan, hereinafter ASBJ, Statement No. 21, September 13, 2013), "Accounting Standard forConsolidated Financial Statements" (ASBJ Statement No. 22, September 13, 2013), "AccountingStandard for Business Divestitures" (ASBJ Statement No. 7, September 13, 2013), etc. since thebeginning of the fiscal year 2015. As a result, the method of recording the amount of difference
caused by changes in the Company’s ownership interests in subsidiaries in the case of subsidiaries
under ongoing control of the Company was changed to one in which it is recorded as capital surplus,
and the method of recording acquisition-related costs was changed to one in which they are recognized
as expenses for the fiscal year in which they are incurred. Furthermore, for business combinations
carried out on or after April 1, 2015, the accounting method was changed to one in which the reviewed
acquisition cost allocation resulting from the finalization of the tentative accounting treatment isreflected in the consolidated financial statements for the fiscal year in which the business combination
occurs. In addition, the presentation method of net income was amended. To reflect the change in62presentation, the consolidated financial statements in the previous fiscal year have been reclassified.
The application of these accounting standards, which is subject to the transitional accounting treatment
set forth in Clause 58-2 (4) of the Accounting Standard for Business Combinations, Clause 44-5 (4) of
the Accounting Standard for Consolidated Financial Statements and Clause 57-4 (4) of the AccountingStandard for Business Divestitures, commenced in the beginning of the fiscal year 2015 and willcontinue going forward.
As a result, ordinary profit and income before income taxes and non-controlling interests for the fiscal
year ended March 31, 2016 decreased by 3,571 million yen, respectively.

Additional Information(Amendment of the amounts of deferred tax assets and deferred tax liabilities due to changes in thecorporate income tax rate)“Act for Partial Amendment of the Income Tax Act, etc.” (Act No. 15 of 2016) was enacted in the Diet
session on March 29, 2016 and the corporate income tax rate for fiscal years beginning on and after
April 1, 2016 was decreased. Accordingly, deferred tax liabilities (after deducting deferred tax
assets) decreased by 4,947 million yen and unrealized gains on securities, net of taxes, increased by
17,442 million yen. Income before income taxes increased by 474 million yen and net income
attributable to owners of the parent decreased by 11,867 million yen.
Statutory effective tax rates applied to the Company and Tokio Marine & Nichido for calculation ofdeferred tax assets and deferred tax liabilities regarding temporary differences to be resolved in thefiscal year beginning on and after April 1, 2016 are as follows:a. Tax rates applied to the Company- Before the change: 33.1%- Fiscal years beginning on April 1, 2016 and April 1, 2017: 30.9%- Fiscal years beginning on and after April 1, 2018: 30.6%
b. Tax rates applied to Tokio Marine & Nichido- Before the change: 28.7%- Fiscal years beginning on April 1, 2016 and April 1, 2017: 28.1%- Fiscal years beginning on and after April 1, 2018: 27.9%

Notes to consolidated balance sheet
1. Accumulated depreciation of tangible fixed assets is 346,874 million yen, and deferred capital gain
for tax purpose is 19,012 million yen.
2. Shares and investment in non-consolidated subsidiaries and affiliates are 92,208 million yen and
8,318 million yen, respectively.
3. Of all loans, the total amount of loans to borrowers in bankruptcy, past due loans, loans past due forthree months or more, and restructured loans is 8,549 million yen. The breakdown is set forth
below.
(1) The amount of loans to borrowers in bankruptcy is nil.

63

Loans that are past due for a certain period, or for other reasons, are generally placed on non-accrual
status when substantial doubt is considered to exist as to the ultimate collectibility either of principal
or interest ("Non-accrual status loans"; however, any part of bad debt written-off is excluded.).
Loans to borrowers in bankruptcy represent non-accrual status loans that fall within the definitions
provided in Article 96, paragraph 1, subparagraph 3 (a) to (e) (maximum amount transferable toallowance for doubtful accounts) and subparagraph 4 of the Enforcement Ordinance of the
Corporation Tax Law (Ordinance No. 97, 1965).
(2) The amount of past due loans is 583 million yen.
Past due loans are non-accrual status loans, other than those to borrowers in bankruptcy, and those on
which interest payments are deferred in order to assist business restructuring of the borrowers.
(3) The amount of loans past due for three months or more is 4 million yen.
Loans past due for three months or more are defined as loans on which any principal or interests
payments are delayed for three months or more from the date following the due date. Loansclassified as loans to borrowers in bankruptcy and past due loans are excluded from this category.
(4) The amount of restructured loans is 7,960 million yen.
Restructured loans are loans on which concessions (e.g., reduction of the stated interest rate, deferralof interest payment, extension of the maturity date, forgiveness of debt) are granted to borrowers infinancial difficulties to assist them in their corporate restructuring by improving their ability to repay
creditors. Restructured loans do not include loans classified as loans to borrowers in bankruptcy, past
due loans or loans past due for three months or more.
4. The value of assets pledged as collateral totals 47,340 million yen in savings deposits, 33,583
million yen in monetary receivables bought, 449,133 million yen in securities, 21 million yen inland and 455 million yen in buildings.
Collateralized debt obligations are held to the value of 135,665 million yen in outstanding claims,
126,605 million yen in underwriting reserve, 3,015 million yen in corporate bonds and 78,894
million yen in other debts (including foreign reinsurance related debts, etc.).
5. The amount of non-recourse debt of the consolidated special-purpose company is 3,015 million yen
in corporate bonds. The assets corresponding to the non-recourse debt are 3,015 million yen insecurities.
6. Of securities, etc., received in connection with cash-secured lending transactions and others, thosewith the right to dispose by sale or rehypothecation have a fair value of 42,059 million yen and arewholly held by the Company.
7. Securities include securities lent under loan agreements of 874,638 million yen.
8. The outstanding balance of undrawn committed loans is as follows.
(Yen in millions)
195,161

Total loan commitments

64Balance of drawn committed loans
Undrawn loan commitments

76,792
118,368

9. The amount of both assets and liabilities for special account as prescribed in Article 118 of the
Insurance Business Act totals 1,003,158 million yen.
10. Tokio Marine & Nichido guarantees the liabilities of some of its subsidiaries. The balance of theguarantee to its subsidiaries as of March 31, 2016 is as follows:

Tokio Marine Compaňía de Seguros, S.A. de C.V.
Tokio Marine Pacific Insurance Limited
Tokio Marine Global Re Limited
Total(Yen in millions)
4,324
3,670
9
8,004

11. Other assets include 11,480 million yen of deferred assets under Article 113 of the Insurance
Business Act.

Notes to consolidated statement of income
1. Major components of business expenses(Yen in millions)
Agency commissions, etc.
551,377
Salaries
280,762
Business expenses consist of "Loss adjustment expenses", "Operating and general administrative
expenses" and "Agency commissions and brokerage" as shown in the accompanying consolidated
statement of income.
2. The amount of other extraordinary gains is 339 million yen in gains on liquidation of subsidiaries
and affiliates.
3. The Group recognized impairment losses on the following properties.
Purpose of use
Properties forbusiness use(nursing careservices)

Category

Location

Buildings andothers4 properties
including equipment
attached to buildingsin Yokohama-shi,
Kanagawa
A building in
Aizuwakamatsu-shi,
Fukushima
3 properties
including a training
center in
Shijonawate-shi,
Osaka

Land and
Properties for rent buildings
Idle or potential
disposal
properties

Land andbuildings

65

Impairment loss (Yen in millions)
Land
Building Others
Total
48
239
287

164

88

-

252

1,377

297

-

1,675

1,542

Total

433

239

2,215

Classification of properties: (a) properties used for the insurance business and other businesses aregrouped by each company in consolidation; and (b) other properties including properties for rent andidle or potential disposal properties and properties used for nursing care services are grouped based on
their primary uses on an individual basis.
The total amount of projected future cash flows from properties for business use in the nursing careservices fell below the book values of these properties. Consequently, the Company wrote off theexcess of the book values of such properties over the recoverable values and recognized any such
write off as impairment losses in extraordinary losses. The Company calculates the recoverable
value of the relevant properties by discounting projected future cash flows at a rate of 6.0 percent.
Due mainly to a decline in the real estate market, book values of some properties for rent, or idle orpotential disposal properties fell below the recoverable values. Consequently, the Company wrote off
the excess of the book values of such properties over the recoverable values and recognized such write
offs as impairment losses in extraordinary losses. Recoverable values are either the higher of the net
sales price or the utility value of each property. Net sales price is the market value assessed by realestate appraisers minus anticipated expenses for disposal of the relevant properties. The Company
calculated the utility values of the relevant properties by discounting projected future cash flows at a
rate of 7.5 percent.
With respect to the goodwill pertaining to Edelweiss Tokio Life Insurance Company Limited, a 2,929
million yen impairment loss was recognized in view of the current business environment and isincluded in “Equity in losses of affiliates” of other ordinary expenses.
4. The main component of other extraordinary losses is impairment losses on investment ofsubsidiaries and affiliates of 5,196 million yen

Notes to consolidated statement of changes in shareholders' equity
1. Class and number of issued shares and treasury share
Number ofshares as of April
1, 2015
Issued shares
Common share
Total
Treasury share
Common share
Total

Increase during
the fiscal year
ended March 31,
2016

Decrease during
the fiscal year
ended March 31,
2016(Thousand shares)
Number ofshares as ofMarch 31,2016

757,524757,524--757,524757,524

2,925
2,925

27
27

112
112

2,839
2,839

Notes: 1. The increase of 27 thousand treasury shares of common share is attributable toacquisitions of shares constituting less than one unit of common shares.
2. The decrease of 112 thousand treasury shares of common share is primarily attributable
to allotments of shares in connection with exercises of share acquisition rights which66decreased treasury share by 112 thousand.
2. Share acquisition rights (including those owned by the Company)
Category

Nature of share acquisition rights

Amount as of March 31, 2016
(Yen in millions)

The Company(parent company)

Share acquisition rights as shareoptions

2,485

3. Dividends(1) Amount of dividends

Resolution

Ordinary general
meeting ofshareholders heldon June 29, 2015
Meeting of theboard of directors
held on November
18, 2015

Class ofshare

Total amountof dividends
paid(Yen inmillions)

Amount ofdividends per
share
(Yen)

Record dateCommonshare

41,502

55.00

March 31,2015

June 30,
2015

Commonshare

39,62152.50

September
30, 2015

December 2,
2015

Effectivedate(2) Dividends of which the record date falls within the fiscal year ended March 31, 2016, and of which
the effective date falls on or after April 1, 2016.
The Company intends to obtain approval for the following dividend payment at the 14th Ordinary
General Meeting of Shareholders to be held on June 27, 2016.
Total
Amount ofamount ofSource ofdividends
RecordEffective
Class ofdividends
Resolution
dividends
per share
date
date
share
paid
(Yen)
(Yen inmillions)
Ordinary general
meeting ofCommonRetained
March 31, June 28,
43,39457.50
shareholders to beshareearnings
2016
2016
held on June 27, 2016

Information on financial instruments
1. Qualitative information on financial instruments
The Group's core operation is its insurance business and it generally makes investments based on cash
inflows mainly arising from insurance premiums. Investment assets are managed in two categories,
which are "Assets backing insurance liabilities" corresponding to long-term insurance contracts suchas deposit type insurance and annuity, and "Other".

67With regard to "Assets backing insurance liabilities", ALM is applied in order to ensure future
payments for maturity-refunds and claims. Through ALM, the Group aims to steadily maximize thevalue of surplus ("Investment assets" minus "Insurance liabilities") by controlling the interest rate risks
to which insurance liabilities are exposed and by investing in instruments with some credit risks,
mostly bonds with high credit ratings.
With regard to "Other", the Group works toward diversification of investments and improvement ofinvestment efficiency in order to generate sustainable investment income, while maintaining liquidity
for future claims payments.
In major consolidated subsidiaries, the risk management department, which is independent of trading
departments, quantitatively and qualitatively controls risks in order to deal with such investment risks(market risk, credit risk, market liquidity risk, etc.) pertaining to financial instruments.
Through these approaches, the Group aims to minimize fluctuations in short-term gains and losses,
increase investment income in order to maximize net asset value in the mid-to-long-term, and maintainfinancial soundness.
2. Fair value of financial instruments
The table below shows the fair value of financial instruments excluding unlisted shares and others
without reasonably measured fair value as of March 31, 2016.
(Yen in millions)
Carrying amountshown on balance
Fair value
Difference
sheet
(1)
Cash and bank deposits
1,031,610
1,031,842
231(2)Call loans
21,00021,000(3)
Receivables under resale
4,999
4,999
agreements(4)
Receivables under security
21,597
21,597borrowing transactions(5)
Monetary receivables bought
1,345,563
1,345,563(6)
Money trusts
63,04963,049(7)
Securities
Trading securities
1,210,270
1,210,270
Bonds held to maturity
3,538,490
4,477,954
939,463
Bonds earmarked for
77,07681,315
4,239
underwriting reserves
Available for sale securities
10,408,446
10,408,446
(8)

Loans
Allowance for doubtful
accounts (*1)

769,318-4,201
765,117(9)(10)

770,920

5,803

Corporate bonds (*2)
(77,677)(80,302)(2,624)
Payables under security(704,077)(704,077)
lending transactions (*2)(11) Derivative assets and64,51864,518liabilities (*3)(*1) Allowance for doubtful accounts earmarked for loans are deducted from the carrying amount.
(*2) Items in liabilities are shown with ( ).

68

(*3) Derivative assets and liabilities are presented on a net basis. Debits and credits arising fromderivative transactions are netted.

Notes: 1. Valuation method for financial instruments
With regard to (1) Cash and bank deposits (excluding those defined as securities in"Accounting Standard for Financial Instruments" (ASBJ Statement No. 10, March 10, 2008)),(2) Call loans, (3) Receivables under resale agreements, and (4) Receivables under security
borrowing transactions, the book value is deemed as the fair value in principle since it isscheduled to be settled in a short period of time and the book value approximates the fairvalue.
Regarding (5) Monetary receivables bought, (6) Money trusts and (7) Securities (including
those in (1) Cash and bank deposits that are defined to be securities in "Accounting Standard
for Financial Instruments") with quoted market price, the quoted closing price is used forlisted shares and the price of the over-the-counter transactions is used for bonds. For
securities with no quoted market price, the net present value of the estimated future cash
flows is applied as the fair value.
With regard to floating rate loans in (8) Loans, the book value is deemed as the fair value
unless the borrower's credit standing has materially changed since the execution of the loan
because interest rate changes will be timely reflected in the future cash flows and the bookvalue approximates the fair value. For fixed rate loans, the fair value is measured as the netpresent value of estimated future cash flows. For loans where borrowers are insolvent or inbankruptcy proceedings, the estimated uncollectible debts are deducted from the carrying
amount to get the fair value.
With regard to (9) Corporate bonds, the price of the over-the-counter transactions is the fairvalue.
With regard to (10) Payables under security lending transactions, the book value is deemedas the fair value because it is scheduled to be settled in a short period of time and the bookvalue approximates the fair value.
With regard to (11) Derivative assets and liabilities with quoted market price, the quoted
closing price is used as the fair value. For derivative assets and liabilities with no quoted
market price, the net present value of the estimated future cash flows or the calculated pricebased on an option pricing model is applied as the fair value.
2. Unlisted shares and partnership investments comprised of unlisted shares (Carrying amounton the consolidated balance sheet: 219,413 million yen) are not included in (7) Securities
because the fair value cannot be determined as they have no quoted market price and thefuture cash flow cannot be estimated.
Policy loans (Carrying amount on the consolidated balance sheet: 109,632 million yen) are
not included in (8) Loans because future cash flows cannot be estimated since it is arranged
under insurance policy and the amount is limited within repayment fund for cancellation withno contractual maturity.

Information on investment property

69

1. Some of the consolidated subsidiaries hold office buildings and land mainly in Tokyo, Osaka andNagoya, some of which are leased out.
2. Fair value of investment property(Yen in millions)
Carrying amount shown on balance
sheet as of March 31, 2016

Fair value as of March 31, 2016

66,472

136,666

Notes: 1. Carrying amount is the amount that the accumulated depreciation and the accumulated
impairment losses are deducted from the acquisition cost.
2. Fair value as of March 31, 2016 is primarily based on appraisals by qualified external
valuers.

Per share information

Net assets per share

4,617.45 yen

Net income per share

337.27 yen

Others
1. Business combination by acquisition
Through Tokio Marine & Nichido, a subsidiary of the Company, the Company acquired 100% of theissued shares of HCC Insurance Holdings, Inc. ("HCC"), a U.S. insurance holding company
comprising property & casualty, accident & health and other specialty insurance businesses.
(1) Outline of the business combinationa. Name of the acquiree
HCC Insurance Holdings, Inc.
b. BusinessInsurance group holding company
c. Business combination objectives
HCC’s business portfolio is highly profitable and diverse, with no significant overlap with theexisting operations of the Company. The acquisition will further diversify the Group’s businessportfolio, leading to significant improvement in capital efficiency and sustainable growth of theGroup as a whole, and enable us to aim at establishing a more solid Group business foundation.
d. Date of the business combination
October 27, 2015
e. Form of the business combination
Reverse triangular merger under Delaware business combination laws
f. Name after the acquisition
HCC Insurance Holdings, Inc.

70

g. Voting rights acquired through the business combination
100%
h. Major reasons for decision to acquire the company
Given that Tokio Marine & Nichido obtained control of HCC by acquiring all of its voting rights,
we decided that Tokio Marine & Nichido would be the acquiring company.
(2) Period of the business results of the acquired company included in the consolidated statement ofincome
The account closing date of the acquired company is December 31. As the difference from ourconsolidated account closing date does not exceed three months, we have used the financial
statements as of December 31 to prepare the consolidated financial statements. The acquisition
date was deemed to be December 31, 2015 and therefore the business results of the acquiredcompany are included only in the consolidated balance sheet and excluded from the consolidated
statement of income.
(3) Acquisition cost of the acquired company and breakdown of the consideration by kindConsideration for HCC shares acquired

898,012Acquisition cost

898,012

million yen
in cashmillion yen(4) Major acquisition-related expenses and amounts
Advisory expenses, etc. 3,571 million yen(5) Amount, reason for recognition, method and period of amortization of goodwill
a. Amount of goodwill
339,086 million yen
b. Reason for recognition of goodwill
The acquisition cost of the aquiree, which was calculated by taking into account projections of theacquiree’s future revenue as of the valuation date, exceeded the net amounts of assets acquired andliabilities assumed.
c. Period and method of amortization of goodwill
10 years using the straight line method(6) Assets and liabilities assumed on the date of the business combination and the main components
Total assets(Securities included in total assets
Total liabilities(Insurance liabilities included in total liabilities

1,282,938 million yen
612,993 million yen)735,567 million yen
429,626 million yen)

(7) Approximate amounts of impact on the consolidated statement of income for the fiscal year ended
March 31, 2016 assuming the business combination was completed on the first day of said fiscal
year and the relevant calculation method.
Ordinary income
Ordinary profit

406,929 million yen-6,385 million yen

71Net income attributable to owners of the parent-11,445 million yen(Calculation method of the approximate amount)
The approximate amounts are the differences between ordinary income, ordinary profit and net
income attributable to owners of the parent calculated assuming the business combination wascompleted on the first day of said fiscal year and ordinary income, ordinary profit and net income
attributable to owners of the parent in the consolidated statement of income, respectively.
Goodwill recognized at the time of business combination was amortized assuming the goodwill wasrecognized on the first day of said consolidated fiscal year.
The above approximate amounts of impact were not audited.

72

Non-consolidated Balance Sheet as of March 31, 2016
(Yen in millions)
As of March 31, 2016
AssetsCurrent assets:
Cash and bank deposits
Prepaid expenses
Accounts receivable
OthersTotal current assets
Fixed assets:
Tangible fixed assets
Buildings
Motor vehicles and transport equipment
Office equipment
Total tangible fixed assets
Intangible fixed assets
Telephone right
Total intangible fixed assets
Investments and other assets
Investments in subsidiaries and affiliates
OthersTotal investments and other assets
Total fixed assets
Total assets
Liabilities
Current liabilities:
Accounts payable
Accrued expenses
Accrued income taxes
Accrued business office taxes
Accrued consumption taxes
Deposits received
Provision for employees' bonus
Total current liabilities
Fixed liabilities:
Reserve for retirement benefit
Total fixed liabilities
Total liabilities
Net assets
Shareholders' equity:
Share capital
Capital surplus
Additional paid-in capital
Total capital surplus
Retained earnings
Other retained earnings
General reserve
Retained earnings carried forward
Total retained earnings
Treasury shares
Total shareholders' equity
Share acquisition rights
Total net assets
Total liabilities and net assets

55,1580
16,736
16
71,911

160
18
49
227
0
0
2,414,540
84
2,414,625
2,414,853
2,486,765

503
329
923
11
121
3
452
2,345
188
188
2,534

150,000
1,511,485
1,511,485
831,002332,275
498,726
831,002-10,7422,481,745
2,485
2,484,231
2,486,765

73

Non-consolidated Statement of Income for the fiscal year ended March 31, 2016
(Yen in millions)Year ended March 31, 2016
(April 1, 2015 to March 31, 2016)
Operating income:
Dividends received from subsidiaries and affiliates

89,455

Fees received from subsidiaries and affiliates

7,280

Total operating income

96,736

Operating expenses:
Operating and general administrative expenses

8,932

Total operating expenses

8,932

Operating profit

87,803Non-operating income:Interest income

20

Dividend income

11

Gains on forfeiture of unclaimed dividends
Office work fee

42
15

Other non-operating income

0

Total non-operating income

91

Non-operating expenses:
Losses on sales of securities

842

Miscellaneous expenses

149

Total non-operating expenses

992

Ordinary profit

86,902Extraordinary income:
Gains on sales of fixed assets

1

Extraordinary losses:
Impairment losses on investment of subsidiaries andaffiliates
Losses on disposal of fixed assets

27,331
1

Total extraordinary losses

27,333

Income before income taxes

59,571

Income taxes-current

2,168

Total income taxes

2,168

Net income

57,40274

Non-consolidated Statement of Changes in Shareholders' Equity for the fiscal year ended March 31, 2016
(Yen in millions)Shareholders' equity
Retained earnings
Other retained earnings

Capital surplus
Share capital

Beginning balance as of April 1, 2015

Additional
paid-in capital

150,000

1,511,485

OthersRetainedearnings carriedforwardGeneralreserve-

332,275

522,581

Treasuryshares-11,038

Total
shareholders'equity2,505,305

Changes during the year
Dividends-81,124-81,124

Net income

57,402

57,402

Purchase of treasury shares
Disposal of treasury shares-133

Transfer from retained earnings tocapital surplus

133

-129

-129

425

291

-133

-

Net changes in items other thanshareholders' equity
Total changes during the year
Ending balance as of March 31, 2016

-

-

-

-

-23,855

295-23,559

150,000

1,511,485-

332,275

498,726-10,7422,481,745

ShareacquisitionrightsBeginning balance as of April 1, 2015

2,037

Total net
assets2,507,342

Changes during the year
Dividends-81,124

Net income

57,402

Purchase of treasury shares-129

Disposal of treasury shares

291

Transfer from retained earnings tocapital surplus
Net changes in items other thanshareholders' equity
Total changes during the year
Ending balance as of March 31, 2016

448

448

448

-23,1112,485

2,484,231

75

Notes to Non-consolidated Financial Statements
Significant accounting policies
1. Valuation of securities
Investments in subsidiaries and affiliates are stated at cost determined by the moving-averagemethod.
2. Depreciation for fixed assets
Depreciation of tangible fixed assets other than buildings (excluding fixtures attached to buildings)
is computed using the declining-balance method principally over the following useful lives.
Depreciation of buildings (fixtures facilities attached to buildings) is computed using thestraight-line method.
Fixtures attached to buildings

8 to 18 years

Equipment and furniture

3 to 15 years

3. Reserve(1) To provide for payment of bonus to employees, the Company maintains a reserve for
employees’ bonus based on the expected amount to be paid.
(2) To provide for employees’ retirement benefit payment, the Company maintains a reserve for
employee's retirement benefits equal to the amount deemed to have incurred as of the end of the
fiscal year ended March 31, 2016.
4. Consumption taxes

Consumption taxes and local consumption taxes are accounted for by the tax-excluded method.

Notes to the non-consolidated balance sheet
1. Accumulated depreciation of tangible fixed assets:

264 million yen

2. Monetary claims against and debts owed to affiliates:
Monetary claims receivables

2,310 million yen
332 million yen

Debts payable

Notes to the non-consolidated statement of income
Transactions with affiliates:
Operating transactions

76

Operating income

96,736 million yen

Operating expenses

1,400 million yen

Transactions other than operating transactions

21 million yen

Notes to the statement of changes in shareholders' equity
Class and number of treasury share held by the Company as of March 31, 2016:
Common share
2,839,782 shares

Deferred tax accounting
Major components of deferred tax assets:
Deferred tax assets
Impairment losses on investment in subsidiaries and affiliates
Others37,277 million yen
681 million yen

Subtotal

37,959 million yen

Valuation allowance-37,959 million yen

Total deferred tax assets- million yen

Net deferred tax assets- million yen

Per share information
Net assets per share

3,288.45 yen

Net income per share

76.06 yen77

Copy of Independent Auditor’s Report on Consolidated Financial Statements[English Translation]
Independent Auditor's Report
May 18, 2016
To the Board of Directors
Tokio Marine Holdings, Inc.
PricewaterhouseCoopers Aarata
Takashi Sasaki, CPA
Designated Partner and Engagement
Partner
Susumu Arakawa, CPA
Designated Partner and Engagement
Partner
Takashi Idesawa, CPA
Designated Partner and Engagement
Partner
We have audited, in accordance with Article 444, paragraph 4 of the Companies Act of Japan,
the consolidated financial statements of Tokio Marine Holdings, Inc. (the "Company") for the
fiscal year that began on April 1, 2015 and ended on March 31, 2016. These financial
statements consist of a consolidated balance sheet, a consolidated statement of income, aconsolidated statement of changes in shareholders' equity and notes to consolidated financial
statements.
Management's responsibility for the financial statements:
It is the Management’s responsibility to prepare consolidated financial statements based on
accounting principles generally accepted in Japan and to present these statements appropriately.
This includes establishing and implementing internal control systems that Management deems
necessary to prepare and present the consolidated financial statements without material
misstatement resulting from fraud or error.
Auditor's responsibility:
It is our responsibility to express an opinion on the consolidated financial statements based on
our audit as an independent auditor. We conducted our audit in accordance with auditing
standards generally accepted in Japan. Those standards require that, in order to obtainreasonable assurance about whether the consolidated financial statements are free of material
misstatement, we formulate an audit plan and conduct an audit in accordance therewith.
An audit includes procedures to obtain audit evidence in relation to the amounts and disclosuresin the consolidated financial statements. We select and apply audit procedures based on our
judgment and in accordance with a risk evaluation for material misstatement in the consolidated
financial statements resulting from fraud or error. Although the purpose of our audit is not to
express an opinion on the effectiveness of internal control systems, when conducting the risk
evaluation to determine the proper audit procedures we do review the internal control systems
for the preparation and appropriate presentation of the consolidated financial statements. An
audit includes assessing the accounting principles used by management, including how they areapplied, and the estimates made by management, as well as examining the overall presentationof the consolidated financial statements. We believe that our audit provides a sufficient andappropriate basis for our opinion.

78

Audit opinion:
In our opinion, the foregoing consolidated financial statements present fairly, in all material
respects, the financial position and the results of operations of the Company and its consolidated
subsidiaries for the period covered by the aforementioned financial statements in conformity
with accounting principles generally accepted in Japan.
Conflict of interest:
Our firm and engagement partners do not have any interest in the Company that is required tobe disclosed pursuant to the provisions of the Certified Public Accountants Law of Japan.

79

Copy of Independent Auditor’s Report on Non-consolidated Financial
Statements[English Translation]
Independent Auditor's Report
May 18, 2016
To the Board of Directors
Tokio Marine Holdings, Inc.
PricewaterhouseCoopers Aarata
Takashi Sasaki, CPA
Designated Partner and Engagement
Partner
Susumu Arakawa, CPA
Designated Partner and Engagement
Partner
Takashi Idesawa, CPA
Designated Partner and Engagement
Partner
We have audited, in accordance with Article 436, paragraph 2, item 1 of the Companies Act ofJapan, the non-consolidated financial statements of Tokio Marine Holdings, Inc. (the"Company") for its 14th fiscal year that began on April 1, 2015 and ended on March 31, 2016.
These financial statements consist of a non-consolidated balance sheet, a non-consolidated
statement of income, a non-consolidated statement of changes in shareholders' equity, notes tonon-consolidated financial statements, and supplementary schedules.
Management's responsibility for the financial statements:
It is the Management’s responsibility to prepare non-consolidated financial statements andsupplementary schedules based on accounting principles generally accepted in Japan and topresent these statements and supplemental schedules appropriately. This includes establishingand implementing internal control systems that Management deems necessary to prepare andpresent the non-consolidated financial statements and supplementary schedules without material
misstatement resulting from fraud or error.
Auditor's responsibility:
It is our responsibility to express an opinion on the non-consolidated financial statements andsupplementary schedules based on our audit as an independent auditor. We conducted our
audit in accordance with auditing standards generally accepted in Japan. Those standards
require that, in order to obtain reasonable assurance about whether the non-consolidated
financial statements and supplementary schedules are free of material misstatement, weformulate an audit plan and conduct an audit in accordance therewith.
An audit includes procedures to obtain audit evidence in relation to the amounts and disclosuresin the non-consolidated financial statements and supplementary schedules. We select andapply audit procedures based on our judgment and in accordance with a risk evaluation formaterial misstatement in the non-consolidated financial statements and supplementary schedules
resulting from fraud or error. Although the purpose of our audit is not to express an opinion on
the effectiveness of internal control systems, when conducting the risk evaluation to determine
the proper audit procedures we do review the internal control systems for the preparation andappropriate presentation of the non-consolidated financial statements and supplementaryschedules. An audit includes assessing the accounting principles used by management,

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including how they are applied, and the estimates made by management, as well as examining
the overall presentation of the non-consolidated financial statements and supplementaryschedules. We believe that our audit provides a sufficient and appropriate basis for our
opinion.
Audit opinion:
In our opinion, the foregoing non-consolidated financial statements and supplementaryschedules present fairly, in all material respects, the financial position and the results ofoperations of the Company for the period covered by the aforementioned financial statements
and supplementary schedules in conformity with accounting principles generally accepted inJapan.
Conflict of interest:
Our firm and engagement partners do not have any interest in the Company that is required tobe disclosed pursuant to the provisions of the Certified Public Accountants Law of Japan.

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Copy of the Audit Report of the Audit & Supervisory Board

Audit Report

Based on the audit reports received from each audit & supervisory board member relating to theperformance by the Company's directors of their duties during the fiscal year that began on
April 1, 2015 and ended on March 31, 2016 and after consultations amongst our members, we,the undersigned Audit & Supervisory Board, report as follows:
1. Details of the Methodology of the Audit Performed by Audit & Supervisory Board Members(1) The Audit & Supervisory Board, which has set the auditing policies, the auditing schedules
and related matters, received from each audit & supervisory board member audit reports
detailing the performance of each audit & supervisory board member in audits and theresults thereof. The Audit & Supervisory Board also received from each of the Company's
directors and the Company's independent auditor reports detailing the performance of theirduties and asked for further explanation whenever necessary.
(2) Each audit & supervisory board member, pursuant to the auditing standards, the auditing
policies and the auditing schedules set by the Audit & Supervisory Board, maintained goodcommunications with directors, the internal audit department and other employees;committed himself or herself to gathering information and improving the circumstances of
the audit; and conducted the audits based on the methods described below.
(a) Each audit & supervisory board member attended meetings of the Board of Directors andother important meetings; received reports detailing the performance of their duties fromdirectors and other employees; asked for further explanations whenever necessary andinspected important decision-making documents and thereby investigated the Company's
business activities and financial position. As for subsidiaries of the Company, each audit& supervisory board member maintained good communications and facilitated
information sharing with directors, audit & supervisory board members, the internal audit
department and other employees of the subsidiaries and received reports regarding thebusiness activities of the subsidiaries whenever necessary.
(b) Pursuant to the auditing standards set by the Audit & Supervisory Board for an audit of
the internal control system, each audit & supervisory board member examined the detailsof the resolution of the meeting of the Board of Directors concerning (i) a governanceframework to ensure that the directors' performance of their duties are carried out in
conformity with the laws and the Articles of Incorporation; and (ii) any other governanceframework to ensure appropriate business operations of the company group comprised ofa joint stock company and its subsidiaries, as set forth in Article 100, paragraphs 1 and 3of the Enforcement Regulations of the Companies Act of Japan. Each audit &supervisory board member also monitored and examined the governance framework(internal control system) which was implemented by the Board of Directors based on the
aforementioned resolution.
(c) Concerning the internal control over financial reporting, each audit & supervisory board
member received from directors and PricewaterhouseCoopers Aarata reports regarding82

the results of the assessment and audit of the internal control over financial reporting andasked for further explanations whenever necessary.
(d) Each audit & supervisory board member received a notice from the Company's
independent auditor stating that "a framework to ensure that independent auditors'
performance of duties are carried out properly" (consisting of matters enumerated in theitems of Article 131 of the Regulations for Financial Statements of Corporations) isestablished pursuant to "Quality Management Standards Regarding Audits" (Corporate
Accounting Council, October 28, 2005) and addressing other standards concerned, andasked for further explanations whenever necessary.
Based on the methodology of the audit described above, we examined the business report
and the supplementary schedules, the non-consolidated financial statements (balance sheet,statement of income, statement of changes in shareholders' equity and notes thereto) and the
supplementary schedules thereto, and the consolidated financial statements (balance sheet,statement of income, statement of changes in shareholders' equity and notes thereto) for the
fiscal year ended March 31, 2016.
2. Results of Audit(1) Results of the audit of the business report and others(a) We found the business report and the supplementary schedules to present fairly the state of
the Company in accordance with applicable laws and regulations and the Articles ofIncorporation of the Company.
(b) In connection with the performance by directors of their duties, we found no dishonest act
or violation of applicable laws, regulations or the Articles of Incorporation of theCompany.
(c) We found the resolution of the meeting of the Board of Directors with respect to theinternal control system to be appropriate. In addition, we have nothing to report on the
directors' performance of their duties in connection with the internal control system,
including the internal control over the financial reporting.
(2) Results of the audit of the non-consolidated financial statements and the supplementaryschedules thereto
We found the methodologies and the results of the audit conducted by the independent
auditors, PricewaterhouseCoopers Aarata, to be appropriate.
(3) Results of the audit of the consolidated financial statement
We found the methodologies and the results of the audit conducted by the independent
auditors, PricewaterhouseCoopers Aarata, to be appropriate.
May 19, 2016
Audit & Supervisory Board,
Tokio Marine Holdings, Inc.

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Takaaki Tamai, Audit & Supervisory Board Member (Full-time)
Takashi Ito, Audit & Supervisory Board Member (Full-time)
Yuko Kawamoto, Audit & Supervisory Board Member
Akinari Horii, Audit & Supervisory Board Member
Akihiro Wani, Audit & Supervisory Board Member
Note: Ms. Yuko Kawamoto, Mr. Akinari Horii and Mr. Akihiro Wani are the outside audit &supervisory board members, fulfilling the position prescribed by Article 2, item 16 of theCompanies Act of Japan.

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