japan insurance market 2010

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The Toa Reinsurance Company, Limited

Japan’s Insurance Market 2010



To Our Clients

Hiroshi Fukushima

President and Chief Executive, The Toa Reinsurance Company, Limited 1

1. Trends in Japan’s P&C Insurance Market and Sompo Japan’s Business Strategy Kengo Sakurada

President and Chief Executive Officer, SOMPO JAPAN INSURANCE INC. 2

2. New Developments in the Regulation and Supervision of Japan’s Non-Life Insurance Industry

Naohiko Matsuo

Attorney-at-law, Admitted In Japan & New York Nishimura & Asahi

(Former Director for Financial Instruments and Exchange Act and General Counsel of the Financial Services Agency of Japan) 8

3. Challenges of the Major Japanese General Insurance Groups in Promoting Global OperationsKatsuo Matsushita

Special Advisor and Liaison Officer for Japan and East Asia of the Geneva Association 15

4. A Foreign Insurer’s Perspective on Japan

Neil C. A. Smith

Regional President, ACE Far East

(Vice Chairman, & Past Chairman, of Foreign Non-Life Insurance Association of Japan) 19

5. Trends in Japan’s Non-Life Insurance Industry

Underwriting & Planning Department

The Toa Reinsurance Company, Limited 26

6. Trends in Japan’s Life Insurance Industry

Life Underwriting & Planning Department

The Toa Reinsurance Company, Limited 31

Supplemental Data: Results of Japanese listed non-life insurance groups (company)

for fiscal 2009, ended March 31, 2010 (Non-Consolidated Basis) 40

Japan’s Insurance Market 2010

Contents Page

©2010 The Toa Reinsurance Company, Limited. All rights reserved. The contents may be reproduced only with the written permission

of The Toa Reinsurance Company, Limited.



1

Hiroshi Fukushima President and Chief Executive,The Toa Reinsurance Company, Limited

To Our Clients

It gives me great pleasure to have the opportunity to welcome you to our brochure, ‘Japan’s

Insurance Market 2010.’ It is encouraging to know that over the years our brochures have been well

received even beyond our own industry’s boundaries as a source of useful, up-to-date information about

Japan’s insurance market, as well as contributing to a wider interest in and understanding of our domes-

tic market.

During fiscal 2009, the year ended March 31, 2010, the Japanese economy remained generally

lackluster. Although personal consumption picked up thanks to the government’s economic stimulus

package and exports increased, centering on those for emerging economies, the situation regarding

employment and personal income remained sluggish and deflation continued.In the non-life insurance industry in Japan, all lines of businesses were adversely affected by the sluggish

economy; in particular, a decline in logistics led to lower premium income from marine insurance. In the life

insurance industry in Japan, the tough situation continued, centering on death benefit products, reflecting the

declining population owing to the low birth rate and also the lackluster economy.

The reinsurance market, after hardening mainly because of decreases in reinsurers’ capital amid the

financial crisis, softened somewhat in line with the recovery of capacity in the second half of fiscal 2009.

Far-reaching changes in the operating environment of the Toa Re Group are in prospect owing to

climate change, the increasing size and complexity of risks, and revisions to international regulations and

systems for reinsurance.

In order to respond to these changes in the business environment in a timely and effective manner,

and to achieve sustainable growth of the Toa Re Group, we recognize that the provision of high added

value services to our customers and the reinforcement of risk management and other internal control

systems throughout the Group are important issues. With the aim of promoting the development of the

entire Group and enhancing our corporate value, we formulated a medium-term management plan,

“Crescendo 2011.” Inspired by this vision, the Toa Re Group is making a concerted effort to achieve the

goals set in this plan.

By endeavoring to act as an exemplary reinsurance company, we are resolved to fulfill our mission:

“Providing Peace of Mind.”

In conclusion, I hope that our brochure will provide a greater insight into the Japanese insurancemarket and I would like to express my gratitude to all who kindly contributed so much time and effort

towards its making.



2

As of April 1, 2009, Japan’s property and casualty (P&C) insurance industry

comprised 51 P&C insurance companies, including 5 reinsurance companies. This

industry provided P&C insurance products and services through approximately

220,000 agencies, 33 insurance brokers, and direct sales.

Direct premiums written in the P&C insurance industry totaled ¥7,980.1

billion1, making Japan the world’s fourth largest P&C insurance market after the

United States, Germany and the United Kingdom. Until now, the P&C insurance

industry has grown in step with Japanese economic growth, but the impact of fac-

tors such as population decline and deflationary trends in recent years has caused

growth in direct premiums written to falter.However, as the size of the P&C insurance market correlates closely with

GDP, direct premiums written are expected to rise gradually as Japan’s economy

emerges from deflation and embarks on a moderate recovery.

Net claims paid were ¥4,399.5 billion1, the industry loss ratio was 66.6 per-

cent1 and the industry combined ratio was 101.7 percent1.

Note 1: Figures for fiscal 2008 based on the 26 member companies of the General Insurance

Association of Japan.

(1) Improving Operational Efficiency

In Japan, individual needs have become more diverse in recent years aslifestyles have changed. And prompted by government moves to protect con-

sumers, the market entry of direct insurance sellers, the P&C insurance industry’s

recent inadequate claims payment issue, and other developments, consumers are

becoming much more careful in selecting insurance products.

1. Kengo Sakurada President and Chief Executive Officer, SOMPO JAPAN INSURANCE INC.

Trends in Japan’s P&C Insurance Market andSompo Japan’s Business Strategy

2. Tasks for Japan’s

P &C Insurance Industry

1. Overview of Japan’s P &C Insurance

Market



3

The Toa Reinsurance Company, Limited — Japan’s Insurance Market 2010

Customers are placing increased quality demands on P&C insurance compa-

nies. They expect, for example, products that are easy to understand and rationally

priced, thorough policy explanations, and prompt, fair claims payment.

Companies must raise the quality of their operations to meet the needs and expec-

tations of customers.

(2) Enhancing Profitability in the Japanese Market

Amid a declining birthrate, societal aging and population decline in Japan,

the markets for automobile and fire insurance, which account for approximately 75 percent of direct premiums written, are maturing and rapid growth in premi-

ums seems doubtful.

However, Japan’s ¥8 trillion P&C insurance market is unlikely to contract

sharply. So a key issue for Japanese P&C insurance companies is to enhance the

quality of their operations to garner customer support while also enhancing opera-

tional efficiency, using information and communication technologies (ICT) in

order to raise profitability.

(3) Business Development in Foreign Countries

In the meantime, each Japanese P&C insurance company is expanding its

overseas business, as it is regarded as a growing field. An important part of future

growth strategy for Japan’s major P&C insurance companies will be to enter busi-

ness in countries in which further economic growth is expected and the penetra-

tion rate of insurance is still low, such as China, India and ASEAN nations. This is

significant from the perspective of contributions to develop in these regions and to

people’s higher quality of life through the benefit of insurance.

(4) Dealing with Environmental Issues

Japan has always been prone to natural catastrophes such as earthquakes and

typhoons. Extreme weather caused by recent climate change has made natural

catastrophes more intense and frequent, and awareness of environmental issues is

increasing.

Society will adapt globally and rapidly to environmental issues in various

ways, such as accelerating research and development of environmental technolo-

gies, expanding the use of electric vehicles and wind power generation, and creat-

ing financial mechanisms to mitigate the effects of climate change.

In light of these circumstances, not only will Japan’s P&C insurance industry

need to deal with risks by improving methods for quantifying natural catastrophe

risks, increasing underwriting capacity, and hedging through reinsurance. The



4

industry must also seize society’s environmental needs as business opportunities

and proactively deal with environmental issues by providing products and services

that help decrease environmental loads.

(1) Emergence of Three Mega Groups

As mentioned above, Japan’s P&C insurance industry must enhance opera-

tions’ quality and efficiency. Companies in the industry, primarily major players,continue to restructure to realize both of these objectives and to efficiently deploy

resources in areas of high growth potential. On April 1, 2010, Sompo Japan

Insurance Inc. and Nipponkoa Insurance Co., Ltd. established a joint-holding

company for business integration, as did Mitsui Sumitomo Insurance Co., Ltd.,

Aioi Insurance Co., Ltd. and Nissay Dowa General Insurance Co., Ltd. This her-

alds a new era of fierce competition mainly among three mega groups – the NKSJ

Group, the MS&AD Group and the Tokio Marine Group – whose combined

market share is approximately 90 percent.

(2) NKSJ Group’s Vision and Strategy

Sompo Japan and Nipponkoa established NKSJ Holdings, Inc., a joint hold-

ing company in April 2010. Aiming to contribute to society as a corporate group,

the NKSJ Group makes all value judgements from the customer’s perspective and

provides customers with absolute security and services of the highest quality.

The NKSJ Group will build a well-balanced business portfolio by further

enhancing profitability in its domestic P&C insurance business, a profit driver,

and shifting management resources generated as a result to promising areas such as

its domestic life insurance (especially medical insurance) and overseas insurance

businesses. The NKSJ Group will then expand its businesses through a sustained

growth cycle whereby increased earnings from multiple profit drivers are reinvested

in growing businesses.

The NKSJ Group is targeting adjusted profit of ¥160.0 billion and adjusted

ROE of 7 percent in fiscal 2014.

1. Trends in Japan’s P&C Insurance Market and Sompo Japan’s Business Strategy

3. Industry Reorganization and

the NKSJ Group




5

The advent of the three mega groups will intensify competition in the P&C

insurance industry. Sompo Japan Group will harness its retail sector strength to

enhance its profitability in the domestic P&C insurance business while effectively

and efficiently redeploying the management resources generated as a result to grow

and expand its businesses.

Human resources and systems will be the engines of growth. Sompo Japan’s

moves to promote human resources development include reforms to its employ-

ment framework in July 2010 to broaden the range of opportunities and chal-

lenges available to employees. Sompo Japan is also pursuing greater operational

quality and efficiency by taking full advantage of ICT, a key example being its

Retail Market Business Model Reform Project (PT-R).

(1) Further Improving Quality in the Domestic P&C

Insurance Business

To enhance its retail sector strength, Sompo Japan Group needs to become a

true service company group by reviewing all service processes from the customer’s

perspective. Through full implementation of PT-R and other means, Sompo Japan

Group is working to raise the quality of its operations at all customer contact

points to enable it to continuously grow its customer base.

Sompo Japan has already launched initiatives aimed at realizing an innovative

business model. One example is the Claims Support Desk (launched in December

2009), which provides claims services 24 hours a day, 365 days a year. Another is

contract process reforms (February 2010) that enable agencies and customers to

access Sompo Japan’s network via agencies’ systems to make contract procedures

more accurate, simpler and quicker.

4. Sompo Japan’s Business Strategy



6

(2) Enhancing the Profitability of the Domestic P&C

Insurance Business

Sompo Japan will work assiduously to improve profitability while providing

high-quality products and services through high-quality operations. Specific efforts

include expanding market share by strengthening its sales network and customer

relationships, reducing business expenses by raising businesses’ operating efficiency,

improving its loss ratio by enhancing its underwriting operations, and bolstering

investment capabilities.

Sompo Japan aims to rapidly capitalize on the synergistic effects of itsbusiness integration with Nipponkoa and increase profitability. The group will

establish a highly productive, cost-competitive administrative structure whereby

products and administrative systems are integrated, infrastructure is shared, and

procurement is handled jointly.

(3) Strengthening and Diversifying Sources of Earnings

through Growth in Group Businesses

While strengthening the profitability of its domestic P&C insurance business,

Sompo Japan Group will also continue shifting management resources into

growth areas to expand other areas such as its domestic life insurance (especially

medical insurance) and overseas insurance businesses.

Sompo Japan Group continues to grow steadily in the life insurance business,

backed by strong customer support for Sompo Japan Himawari Life Insurance’s

medical insurance product, for instance. Himawari Life will continue to pursue

growth and plans to merge with Nipponkoa Life in October 2011.

In its overseas insurance business, Sompo Japan Group intends to expand

earnings by using mergers, acquisitions, and alliances to develop business in local

markets in countries such as the BRICs, which promise strong growth and prof-itability. Sompo Japan Group will also strengthen its reinsurance business in over-

seas markets.

* Sompo Japan Group is engaged in broad-ranging P&C insurance business activities in China

through four locations in Liaoning Province, Shanghai, Guangdong Province and Jiangsu

Province. Sompo Japan Group has established a Regional Headquarters in Singapore to fur-

ther develop business in the ASEAN countries, where it employs more than 800 high-caliber

staff across 7 countries.

In India, Sompo Japan Group has established Universal Sompo General Insurance, a joint

venture with local banks and other companies. Universal Sompo is now selling insurance

products through 4,800 bank branches and other marketing channels.

Sompo Japan Group entered the Brazilian P&C insurance business through a subsidiary 50years ago, and has subsequently expanded its business by, for example, acquiring Marítima

Seguros S.A. in 2009.

Sompo Japan Group plans to continue expanding its reinsurance business in Asia and the

Middle East by utilizing its excellent credit ratings and offering long-term stable reinsurance

capacity.

1. Trends in Japan’s P&C Insurance Market and Sompo Japan’s Business Strategy




7

(4) CSR and Environmental Initiatives

To achieve sustained growth together with society, the Sompo Japan Group

must meet stakeholders’ diverse expectations by bringing its insurance business

strengths to bear in helping to solve societal issues, with each and every employee

thinking and acting with initiative.

The Sompo Japan Group is actively working on four material CSR issues:

adaptation to and mitigation of climate change; risk management for safety and

security; CSR financing; and community involvement. For example, Sompo Japan

Group has developed a weather index insurance scheme for farmers in northeastThailand to help them counter the effects of climate change. The product is

offered as an option to bank loan customers. Sompo Japan Group also has devel-

oped eco-funds, continuously holds public seminars on the environment, and pro-

motes Eco-safe Driving, a program that helps to protect the environment and pre-

vent accidents.

These activities have attracted domestic and international recognition. For

example, Sompo Japan was recently selected for the second consecutive year as one

of the Global 100 Most Sustainable Corporations in the World, announced annu-

ally at the Davos World Economic Forum.

Financial industry performance languished in fiscal 2008 amid global eco-

nomic turmoil triggered by Lehman Brothers’ collapse. The effects have eased in

fiscal 2009 and the outlook for the business environment is less gloomy. However,

concern about sovereign risk sparked by Greece’s financial woes has spread and

circumstances remain unpredictable.

While the operating environment is challenging, Sompo Japan Group will

strive to be the best insurance group in Japan in three respects by developinghuman resources and using ICT while upholding its customer-first principle,

which it has consistently adhered to for more than 120 years since inception.

Specifically, Sompo Japan Group will strive to achieve the greatest customer satis-

faction, employ the best talent in terms of employees and agencies, and provide

the quickest, simplest and easiest to understand services. By being the best in these

areas, Sompo Japan Group hopes to be the most trusted and most familiar services

industry group, its ultimate aim being to achieve sustained growth and continu-

ously enhance corporate value.

5. Conclusion



8

2 . Naohiko Matsuo Attorney-at-law, Admitted In Japan & New York

Nishimura & Asahi (Former Director for Financial Instruments and Exchange Act and

General Counsel of the Financial Services Agency of Japan)

New Developments in the Regulation andSupervision of Japan’s Non-Life InsuranceIndustry

More than 18 months have passed since events, including the collapse of

the U.S. company Lehman Brothers on September 15, 2008 and the bail out of

U.S. company American Insurance Group (AIG) the following day, that

touched off a global economic crisis. This market-driven financial crisis high-

lighted the systemic risk to which non-bank financial institutions such as secu-

rities and insurance companies are exposed. The third summit of G20 leaders

held in the United States on September 24 and 25, 2009 agreed on the orienta-

tion of strengthening global financial regulation and supervision, including key

financial institutions within the non-bank system, and this commitment was

reaffirmed at the fourth G20 summit held in Canada on June 26 and 27, 2010.

Japan is strengthening regulation and supervision of non-life insurance

companies as part of the process of strengthening global financial regulation

and supervision. Moreover, on September 16, 2009 a major political develop-

ment took place as a multi-party coalition centered on the Democratic Party

assumed the reins of government in Japan. A House of Councilors election held

on July 11, 2010 put the Democratic Party in a minority position at the House,

which would further complicate the process of policy development.

This paper examines new developments in the regulation and supervision

of Japan’s non-life insurance companies as a result of these significant changes

occurring in Japan and around the world.

(1) Policy-Making during Liberal Democratic Party

Administrations

Japan has a parliamentary system of government, in which the ruling party

forms a cabinet. The Liberal Democratic Party (LDP) had been in power con-

tinuously, with the exception of the period from August 1993 to June 1994,

from its formation in 1955 until the regime change of September 2009.

The key characteristic of the policy-making process during the LDP era

was that bureaucrats and the ruling party dominated policy. Undeniably, this

characteristic strongly influenced Cabinet and ministerial agendas.

For example, the typical process for planning and drafting amendments to

the Insurance Business Law regulating the insurance industry was 1) in July of a

particular year Financial Services Agency (FSA) officials studied potential

amendments following a personnel reshuffle; 2) from around September the

Financial System Council, an advisory body of experts and interested parties,

studied potential amendments and summarized them in a report in or around

December; 3) during this time, FSA officials negotiated with related ministries,

industries, consumer representatives and other interested parties to formulate a

draft bill and received a preliminary review from the Cabinet Legislation

Bureau; 4) in January and February FSA officials received a formal review from

1. Introduction

2. Changes in the Policy-Making Process in Japan’s Financial Sector




9

the Cabinet Legislation Bureau, conducted ongoing negotiations as needed with

interested parties, and obtained the approval of the administration by explain-

ing the subject amendments to the administration (administrative review) and

revising them as necessary; and 5) on or around March 10, the Cabinet

approved the amendments and presented them to the Diet.

The key characteristics of this policy-making process during the LDP era

were that first, FSA officials handled planning, proposals and policy coordina-

tion; secondly, the Financial System Council which was open to public provid-

ed a forum for policy coordination; and thirdly, on a political level, the

approval of the ruling party was more important than that of the Cabinet.

(2) Policy-Making under the New Regime

In contrast, the multi-party coalition led by the Democratic Party advo-

cates a policy-making process in which politicians, not bureaucrats, draft initia-

tives, and parties are unified within the government.

First, the three leaders of each ministry - the minister, vice minister and

secretary, each of whom are politicians in the government, - propose, coordi-

nate and decide their political agenda and provide guidance and oversight of

bureaucrats. In a related move, the Financial System Council has been suspend-

ed. On the other hand, bureaucrats with the required expertise mainly execute

and administer policy in accordance with relevant laws and regulations, and

provide advice on proposals, coordination and decisions by politicians.

Secondly, all of the functions of the ruling Democratic Party’s Policy Research

Council have shifted to the Cabinet, and ministerial policy councils chaired by

vice ministers at which the vice minister and bureaucrats confer with ruling-

party members have become the mechanism for exchanging views.

On March 9, 2010 the Cabinet finalized a partial revision of the Financial

Instruments and Exchange Act and submitted it to the Diet. This act included

proposed revisions to the Insurance Business Law that came before the Diet on

May 12, 2010 and were promulgated on May 19, 2010 (Act No. 32 of 2010).

The policy-making process leading up to the promulgation of this act is

clearly different. 1) On November 13, 2009 the three leaders of the FSA

announced the fundamental process for “Development of Institutional

Frameworks Pertaining to Financial and Capital Markets”; 2) on December 17,

2009 the FSA announced the proposed “Draft Blueprint for the Development

of Institutional Frameworks Pertaining to Financial and Capital Markets” and

began soliciting public comments; 3) on December 24 and 25, 2009, the FSA

exchanged views with interested organizations and experts; 4) on January 21,

2010 the FSA announced the “Development of Institutional Frameworks

Pertaining to Financial and Capital Markets”; and 5) the FSA Policy Council

exchanged views on amendments over the course of three meetings held on

January 22, February 25 and March 2, 2010.



10

This new policy-making process for the financial sector is still in its forma-

tive stage, and judgment would be premature. However, this writer sees three

key features. First, at the political level the government, rather than the ruling

party, has been driving the policy-making process. It should be noted, on the

other hand, that the Policy Research Council of the Democratic Party would

play an important role in policy-making under the new Prime Minister who

took office on June 8, 2010, and the ministerial policy councils would be abol-

ished. Secondly, due to the suspension of the public Financial System Council,

the fundamental philosophy and overall policy direction of financial reform has

not been well clarified, the transparency of the policy-making process has not

been well ensured, and the opinions of interested parties from the private sector

have not been sufficiently reflected in policy-making. Thirdly, reflecting the

new policy-making process, the influence of the three leaders of the FSA and

the FSA bureaucrats is now rather greater than in the past.

(3) Trends in Financial Administration and Management

under the New Government

No particular changes have appeared in the management of enforcement

(financial inspection and supervision and market oversight) as a result of finan-

cial administration under the new government. Decisions by officials of the

FSA, Securities and Exchange Surveillance Commission continue to set a politi-

cally neutral administrative agenda.

Moreover, the three leaders of the FSA from the new administration have

not mentioned the so-called “better regulation,” or qualitative improvements to

financial regulation, proposed by the commissioner of the FSA under the for-

mer administration in July 2007. The Financial Services Authority of Great

Britain, the originator of the term “better regulation,” has focused exclusively

on strengthening financial regulation and supervision following the financial

crisis and has also stopped mentioning better regulation.

In this regard, under the new administration FSA officials have not deviated

from their noteworthy efforts to further define and promote better regulation.

The first pillar of better regulation is optimum integration of rule-based and

principle-based supervision. Clarity and predictability in the application of regula-

tions are important in Japan’s legal environment, and principle-based regulation is

unfamiliar. Given this background, methods for enforcing financial regulation in

Japan are influenced by the inspection- and inspector-based supervisory approach of

the U.S. rather than the supervisory approach of the British model.

(4) Legal Foundation of Financial Regulation

Financial management and administration in Japan rel ies more on

“Supervisory Guidelines” and “Inspection Manuals” than on laws and regula-

2. New Developments in the Regulation and Supervision ofJapan’s Non-Life Insurance Industry



11

tions as the source of regulatory supervision. Supervisory Guidelines and

Inspection Manuals are akin to guidebooks for the staff of government agencies,

and technically are not legally binding on financial firms. In actual practice,

however, the points of supervision and inspections indicated in Supervisory

Guidelines and Inspection Manuals have de facto binding force on financial

firms, which manage their operations accordingly.

Supervisory Guidelines and Inspection Manuals are easier to understand

than laws and regulations, and allow flexible revision as required by changing

circumstances. Moreover, they offer transparency in the process of formulation

because they are established after being open to public comment. On the other

hand, recent financial administration has in substance revived a kind of admin-

istrative ordinances by using “detailed refinement” of Supervisory Guidances

and Inspection Manuals and expanding elements of administrative guidance.

A pattern of reviving administrative ordinances has emerged in the area of

insurance regulation. Insurance companies must now provide potential cus-

tomers with a contract summary, key reminders, and a written acknowledge-

ment of intention. Except for the written contract summary and key reminders

that are legally required prior to the conclusion of a contract for insurance

products with high emphasis on investment such as variable insurance products

and foreign currency denominated insurance products (specified insurance con-

tracts), these documents do not have a clear legal basis and are practically based

on the FSA’s supervisory guidelines for insurance companies. Their nature is

policies for administrative guidance.

This kind of administration seems to be of a different nature from the per-

spective of the thorough application of fair and transparent financial administra-

tion based on clear rules. A duty of providing these documents should be clearly

stipulated in the Insurance Business Act and its regulations. However, the new

government has not seemed to hold this view, and the reliance on the use of

Supervisory Guidelines and Inspection Manuals does not seem likely to change.

(1) Basic Philosophy

The basic philosophy underlying Japan’s response to the global financial

crisis did not come from the administration, but from the suspended Financial

System Council and the report of its Roundtable Committee on Fundamental

Issues of the Financial System Council, “Designing the Japanese Financial

System in Light of the Global Financial Cris is” (December 9, 2009;

“Roundtable Report”).

At the start of the twenty-first century, Japan intended to move to a two-

track financial system that includes the industrial finance model of financial

intermediation through bank deposits and loans but centers on the market

3. Japan’s Administrative Response to the Global Financial Crisis




12

financing model of market-based financial intermediation. Given the concen-

tration of risk in the banking sector, the worsening problem of non-performing

loans, and the increasingly challenging real economy, it was assumed that the

market financing model could broadly diffuse risk with choices of numerous

market participants.

In this regard, the Roundtable Report made three key points.

First, it stated that while maintaining the two-track financial system con-

tinues to be a key challenge for Japan’s financial system, because the global

financial crisis originated in the markets, it is important that a two-track finan-

cial system does not excessively depend on market-based finance but is based on

the right balance between market-based finance and financing made through

deposit-taking and lending in the banking sector.

Second, it pointed out challenges for the financial services industry, saying

financial institutions must properly perform their social responsibility, and

must engage in financing that supports the creation of value by companies,

rather than a business model that depends on “arbitrage transactions” focusing

on the distortion of the price system and price volatility. It also indicated the

importance of seeking to achieve the development of the financial industry by

supporting the creation of value of domestic and foreign companies.

Third, the Roundtable Report said that the “3S” approach is important to

efforts to design the future financial system: i.e., (1) ensuring the suitability to

the ac tua l c i rcumstances o f the marke t s and the f inanc ia l indust ry

(“Suitability”), (2) supporting the sustainable functioning of financial interme-

diation and sustainable economic growth (“Sustainability”) and (3) securing the

stability of the financial system (“Stability”).

(2) Policy Responses and Measures

In the current global financial crisis Japan’s financial system is compara-

tively stable, and Japan’s policy responses and measures will therefore be based

on the “3S” approach. An examination of relevance to the non-life insurance

sector follows.

First, while the consolidated regulatory and supervisory framework has

been established with regard to insurance companies and insurance holding

companies under the Insurance Business Act, in May 2010 the Diet passed

amendments to the Insurance Business Act that include a standard for consoli-

dated financial soundness using the consolidated solvency margin. The

Roundtable Report stated that through the current financial crisis, “It has also

become clear that, in the insurance sector as well, imbalances that could trigger

a financial crisis may be accumulated through group companies.” The subse-

quent G20 summit debate on the Financial Stability Board (FSB) and the

International Association of Insurance Supervisors (IAIS), and the EU’s pro-

2. New Developments in the Regulation and Supervision ofJapan’s Non-Life Insurance Industry



13

posed introduction of the Solvency II standards in 2012 also served as the basis

for the Diet’s amendments. The new amendments must be put into effect on a

date to be specified by a Cabinet Order within two years of the date the amend-

ed law comes into force, meaning no later than May 18, 2012.

Second, the FSA has announced that on April 9, 2010 it revised the solvency

margin used as an indicator in assessing the financial soundness of insurance com-

panies. The revision includes the changes of a risk coefficient and margin items,

and it will go into force on March 31, 2012. The FSA also plans to study the

future introduction of solvency assessment based on economic value.

Third, on March 4, 2010 the FSA revised Supervisory Guidelines to

include the compensation structure of insurance and other companies with

operations such as overseas bases. This revision was based on the FSF Principles

for Sound Compensation Practices (April 2, 2009) of the Financial Stability

Forum (FSF) and the FSB Principles for Sound Compensation Practices -

Implementation Standards (September 25, 2009) of the FSB. Thus regulation

of compensation systems in Japan is the result of supervisory measures rather

than legal amendment. This revision appears to indicate that the compensation

system of Japanese insurance companies is not generally recognized as a cause of

excessive risk-taking among executives and employees.

Fourth, the Supervisory Guidelines for Insurance and Other Companies of

August 18, 2009 for FSA’s fiscal year ending June 30, 2010 stressed that insur-

ance companies must enhance the sophistication of risk management in light of

the financial crisis. On June 8, 2009, the FSA revised Supervisory Guidelines to

add items including comprehensive risk management, the use of stress testing,

management of the risk of investing in securitized financial instruments and

management of the risk of financial guarantee insurance and credit default swap

transactions as central tenets of supervisory guidance.

It is important to recognize that the Cabinet decision on June 18, 2010

regarding “The New Growth Strategy-Blueprint for Revitalizing Japan”

includes “financial strategy” as one of the seven strategic areas. The Japanese

Government will set out to take concrete steps immediately in 2010 with a view

to build a “new financial market-based nation,” which will play a significant

role as an Asian financial center in the growth process of the global economy

driven by Asian and other emerging economies. In view of the eagerness of the

non-life insurance companies in Japan to expand their businesses in Asia, such

policy approach is greatly welcomed from the viewpoint of enhancing interna-

tional competitiveness of Japan’s financial markets and financial industry

including non-life insurance industry.




15

3. Katsuo Matsushita Special Advisor and Liaison Officer for Japan and East Asia of

the Geneva Association

Challenges of the Major Japanese GeneralInsurance Groups in Promoting GlobalOperations

In order to address challenges caused by the financial crisis, a series of regulatory

initiatives have been undertaken by international forums such as the G20, FSB

(Financial Stability Board), Basel Committee, IOSCO and IAIS with the main focus

on the prevention of systemic risk.

In the wake of the Greek sovereign crisis, how to deal with an excessive budget

deficit and government debt in developed countries has been the focal point of dis-

cussion at the G20 Summit held in Toronto in late June, 2010.

Also, the risk landscape has been constantly evolving, including the volcanic

eruption suspending the international supply chain and the huge oil spill in the Gulf

of Mexico causing devastating environmental damage. It continues to be a tough

time for both governments and markets, for regulator and the regulated. Against this economic and regulatory backdrop, major Japanese general insur-

ance groups (MS&AD Holdings, NKSJ Holdings and Tokio Marine Holdings) have

been promoting international operations. I would like to discuss briefly the chal-

lenges and opportunities in their pursuit of strategic achievement.

There are three main reasons for strategic operations beyond the national market.

(1) To respond to the global operations of Japanese companies and their insuranceneeds, general insurance groups are expanding insurance and risk management

service networks globally as well. Given the recent trend where not only major

multinational companies but also SMEs are also investing and participating in

international supply-chain, cross border insurance service networks have become

an ever more important competitive edge.

(2) While we cannot predict exactly to what extent diversification credit will be

allowed under the international solvency framework now discussed in the IAIS, it

is desirable and prudent to make the insurance portfolio more geographically

diversified through international primary and reinsurance undertaking.

(3) Like any other global insurance group, for major Japanese general insurance

groups, the search for opportunities for sustainable growth is one of the drivers

for investment beyond national borders, especially into emerging markets.

Japanese insurers do not intend to develop international networks from scratch.

They will activate the existing international networks and business models as a lever

(when appropriate) to upgrade services and evolve themselves into truly international

service providers. Let me introduce the following:

(1) A current international service network: The three groups, combined, now have

more than 100 subsidiaries, affiliated companies and branches in around 30

countries with national staff around 30,000.

2. Rationale of Global

Operations

1. Introduction

3. Lever and Stepping Stones for Global Operations



16

(2) A relatively strong financial buffer and ratings assigned by international rating

agencies which remain at a comparable level with other insurers with multina-

tional presence.

(3) A competitive Japanese insurance market and demanding customers have been

encouraging Japanese insurers to develop risk solutions tailored to each risk prob-

lem and risk situation of customers through combining risk financing and loss

prevention/risk management services.

(4) On the retail side or personal lines of insurance, Japanese insurers are competing

through various types of sales channel such as agents, banks and direct marketingto meet the needs of segmented customers. Also, cross selling of general and life

insurance products through various channels has been promoted. These experi-

ences will be worth applying in host markets with appropriate, customized modi-

fication.

(5) While agents remain the main communication line between customers and

insurers, Japanese insurers have also been putting emphasis on direct communi-

cation and feedback from customers in order to strengthen their commitment to

the quality of services and product/service development.

After the financial crisis, the G20, the political forum, initiated a stronger push

for reform and the FSB (Financial Stability Board) has increased its influence over

the global regulatory agenda, assigning a mandate to international standard setters,

including the IAIS, to deliver internationally consistent regulation and its timely

implementation.

Regulatory focus has shifted from micro-prudential supervision to macro-

prudential supervision, from solo-entity to group-wide supervision aiming at the

prevention of the recurrence of systemic risk.

As a lesson from the financial crisis, the IAIS recognized that a coherent, com-

prehensive and effective policy/regulatory response is called for to address the grow-

ing presence of insurance groups and insurance-related conglomerates. This is a clear

paradigm shift in insurance regulation and the Executive Committee of the IAIS

decided to build ComFrame (Common Framework for the Supervision of

Internationally Active Insurance Groups, IAIGs) in January 2010. According to a

leading member of the IAIS subcommittee in charge of this initiative, ComFrame is

designed to address holistically the risks arising in groups and to provide a global

supervisory approach with an expected building phase from 2010 to 2013.

Insurance industry associations and insurance companies have been presenting

their respective positions to minimize the possibility of overly burdensome regulation

(especially excessive capital requirement) being introduced. The Geneva Association

with membership of around 80 CEOs from the world’s top (re)insurance companies

4. Overview of Recent Regulatory Landscape

3. Challenges of the Major Japanese General Insurance Groups in Promoting Global Operations



17


sent letters to the G20, FSB and the IAIS, advocating that while they welcome the

right regulation, it is highly important that any solutions designed to increase the

resilience of the financial system appropriately acknowledge the difference in character-

istics of insurance from other financial services such as banks. Three Japanese insurance

groups are sharing this position as members of the Geneva Association. International

insurance communities, especially in developed markets, are also reiterating the promo-

tion of regulatory harmonization and convergence (when appropriate) to bring effi-

ciency to insurance markets and, ultimately, lower prices to consumers.

To address the new, economic value-based (risk-based) solvency framework

now discussed in the international forum is a “must” for the successful deployment

of strategic insurance operations. This is because solvency is not just a capital

requirement. It is more about risk management, especially an upgrade of ERM

(Enterprise Risk Management), and ultimately quality of management. Without

this, a competitive credit rating may be hard to maintain. Enhancement of ERM

needs change in corporate culture as well, for example, from silo to holistic, and a

shift to simple and agile communications with operating entities and employees

located in many jurisdictions.

While adapting to the risk-based, group-wide solvency framework is a big chal-lenge, Japanese insurance groups are responding to this challenge by recognizing pos-

itive momentum in the process of its adaptation. Namely, momentum for: (A)

Strategic shift toward more focus on quality of management and services rather than

quantity, (B) Enhanced risk management across the organization, group companies,

(C) Efficient capital allocation, including the integration of reinsurance purchase

policy into capital management.

Policyholders’ increasing concern about the security of insurers and the cost of

insurance in the difficult economic climate, empowered consumers and increasing

responsibility of management along with a shift to principle-based regulation are the

driving forces toward a focus on ERM and quality management.

One of the most critical challenges is how to translate the risk-based, risk-sensi-

tive solvency framework into truly risk-based underwriting (pricing, terms and con-

ditions, etc.) and strategic capital allocation. This is an essential pre-condition to

build and maintain a sustainable insurance market, providing availability and afford-

ability of basic insurance cover throughout benign and tough economic situations.

To this end, the insurance industry has to address regulatory barriers in some juris-

dictions that will hinder risk-based underwriting. An important aspect of risk-based

pricing is that it will eventually provide insurance purchasers with an incentive to

improve their risk, for example, through more careful driving behavior and abiding

by a stricter building code, thus making our society safer and more resilient against

natural disasters and any other type of risk. Sharing this view, one of the US regula-

tors emphasized in the recent Geneva Association’s General Assembly held in Zurich

that providing these incentives is a part of the social responsibility of insurers.

5. Challenges Ahead under Risk-Based Solvency Regime



18

To help host countries achieve these, Japanese insurers are expected to con-

tribute in providing experience and know-how in order to build an industry database

on top of business activities.

Insurance is and will continue to be a human-related and communication-

driven business. Insurance begins with caring for people and empathy with people,

especially those exposed to hazards, potential catastrophes and victims or injured

persons as a result of the occurrence of accidents or disasters. For the sustainable and

sound management of an insurance group, team spirit, fair evaluation and an

open-communication culture are critical. Human resource development and

appropriate assignment throughout the whole group are one of the key success

factors.In line with group-wide ERM, effective internal control and financial reporting

system, and an IT platform that will support agile communication and information

sharing covering the global operation are an indispensable part of core competence.

Despite the geographical location of Japan, so prone to natural hazards such as

earthquake and typhoon, our market has been developing in a sustainable way and

insurers have been keeping a resilient financial position to date. We have a built-in

system which supports this. For example, an earthquake insurance scheme for resi-dential houses, public and private sector partnership to protect households against

earthquake risk, has been providing a kind of template to other countries in disaster-

prone areas.

Another example is catastrophe reserve provision against large-scale risks. While

booking this reserve as liability may not be allowed under the current discussions of

the international accounting standard, given the repeated emphasis by the G20 and

FSB on the importance of building a financial buffer during benign times and diffi-

culty of raising capital in the capital market shortly after a large-scale disaster, the

necessity of this type of reserve is worth refocusing and serious discussion in jurisdic-

tions exposed to catastrophic risks. Japanese insurers are expected to provide hands-

on information and experience of such a scheme to host markets.

Our experience and common sense tell us that there is a strong linkage between

prevention of natural disasters and environmental preservation. Let us remember the

serious risk of flood and landslide caused by devastating deforestation. What is bad

for the environment is also bad for disaster prevention. Japanese insurers have been

putting an emphasis on environmental protection and the realization of a low carbon

society by declaring them as part of core corporate values. It is confidently expected

that they will continue to promote these values through their corporate social activi-

ties in host communities.

(The views expressed in this article are those of the author and do not represent the

official position of the organization he is engaged in.)

3. Challenges of the Major Japanese General Insurance Groups in Promoting Global Operations

6. Contribution toCommunity, Society

and Insurance Market in Host Countries



19

4 . Neil C. A. Smith Regional President, ACE Far East

(Vice Chairman, & Past Chairman, of Foreign Non-Life Insurance Association of Japan)

A Foreign Insurer’s Perspective on Japan

As a foreigner originally setting foot on these shores almost 17 years ago I

promised myself that I would never utter the words “Japan is different” during

my tenure in the land of the rising sun. In time, however, I learnt that the non-

life insurance marketplace and business practices are indeed quite different to

what we generally face in many countries around the world (and I’ve worked in

many different markets). When you add in language and cultural differences

you now have a mix that clearly requires a great deal of patience and unique

skills if you are to effectively operate and be successful in this market. This is

the first lesson foreign companies quickly learn when operating here.

Since the early 1990’s, Japan has gone through a continued process of

deregulation as it endeavors to shake off the shackles of the past so it can be

more competitive and hold its head up high in the international insurance fast

lane. This process has freed up certain market sectors (notably the 3rd sector)

and allowed greater product flexibility and improved access to distribution

channels.

The recent industry focus on providing increased customer protection and

improving corporate governance has, however, uncovered a range of poor

industry business practices needing immediate attention and eradication. These

include claims non-payment of fringe benefit covers and incorrect premium

charges for certain products. Whilst companies immediately responded and

addressed these issues, it nonetheless tarnished the image of the industry and it

will take some time to fully restore consumer confidence in the industry.

The revision this past April of Japan’s archaic insurance contract law is the

latest step toward better governance and restoring consumer confidence. These

revisions include insurance contracts and promotional materials with plain and

simple wording, improved guidelines on claims payments, more stringent con-

sumer protection and measures to help consumers better understand insurance

products. We’re also seeing plans to substantially strengthen the quality and

expertise of insurance agents and solicitors, improve the agency examination

process and introduce strong renewable agent accreditation. These actions will

significantly help strengthen the ability, quality and capabilities of the entire

insurance industry. New regulations have been introduced for the Kyosai busi-

ness which have improved and strengthened controls on this previously unregu-

lated industry, but additional improvements are still needed to ensure there’s a

level playing field for everyone. This applies equally to the recently privatized

Japan Post Insurance subsidiary whose broad based distribution network and

business should be governed by the same rules as other competitors within the

non-life insurance industry.

Introduction

Two Decades of Change



20

Japan is a highly regulated environment with restricted freedom around

price and form flexibility. The Non-Life Rating Insurance Organization sets

“pure” premium rates on major lines which the industry follows, and companies

are required to file and get regulatory approval fo r their products. The market is

large and complex and the three largest Japanese companies have around 90%

market share. This is supported by strong historical relationships and all too

often cross shareholdings between major corporations. This situation makes it

difficult for foreign competitors to gain access to large customers.

When measured by gross written premium, Japan’s non-life insurance mar-

ket is the fourth largest in the world representing 5.78%. This is surpassed only

by the United States, Germany and the United Kingdom. Premium levels, how-

ever, have been decreasing year-on-year in all major lines, with auto, personal

accident and marine most severely affected during the last fiscal year. This was

exacerbated by poor economic conditions driven by the global financial crisis,

sluggish automobile sales, declining exports, less insurance demand and changing

consumer buying habits. The industry has also been seriously impacted by poor

investment returns and a series of catastrophic events. It is interesting to note that

the last time Japan saw real premium growth in the non-life insurance market was

back in fiscal 2002. There are signs of improvement and most companies are

bouncing back into the black. The impact of underwriting and investment losses

over the past few years, however, will linger on for some time.

The Market


Global Non-Life Premium Volume

Rank Country Premium Volume 2008 ($M) Share of World Market 2008 (%)

1 United States 661,240 37.12

2 Germany 131,807 7.40

3 United Kingdom 109,515 6.15

4 Japan 103,022 5.78

5 France 92,996 5.22

6 Netherlands 75,706 4.25

7 Italy 58,066 3.26

8 Canada 57,658 3.24

9 Spain 46,645 2.62

10 PR China 44,987 2.53

11 Russia 38,013 2.13

12 South Korea 30,046 1.69

13 Australia 28,254 1.59

14 Brazil 26,452 1.48

15 Switzerland 22,012 1.24

World 1,781,358 100.00Source: Swiss Re, sigma No 3/2009, updated December 2009



21


The 23 foreign companies now operating in Japan currently enjoy a 6%

market share, primarily in niche specialty areas cultivated over many years.

Personal accident and auto are major business lines, although commercial and

specialty P&C as well as Chintai (renters contents insurance) are targeted

growth areas. The foreign company share of Japan’s market compares rather

unfavorably with foreign company shares in other major insurance markets.

Best estimates of market shares has foreign companies at 57% in the UK

(excluding Lloyds), 26% in France, and 14% in Australia. Germany is a notable

exception at around 3%.

Numerous challenges are associated with managing the complex human

resources environment here in Japan where the concept of “jobs for life” is still

prevalent and compensation plans often require protracted negotiations with

relevant parties. Restructuring and re-tooling an organization is not that simple.

Finding skilled bilingual staff prepared to work for a foreign company with a

different management style and approach is in itself a challenge. Replacing poor

performers can be especially troublesome, with the attraction of huge redundan-

cy packages often being the only means to bring about change.

Securing appropriate and cost-effective distribution remains the challenge

for foreign insurance companies. Distribution in Japan primarily centers on the

agency channel that controls 90% of the market premium. A constant frustra-

tion and thorn in the side with the agency channel is the “Noriai” process.

Captive or exclusive agents represent one insurance company; however an inde-

pendent agent wishing to represent more than one company must register with

their primary insurance company and then seek approval from them to repre-

sent another carrier. This approval is often not given, so in effect the distribu-

tion is “tied”, which does not foster an environment where the consumer has

access to the best price and product ava ilable.

In March 2009, 217,000 registered agents in Japan employed in excess of

2.1 million staff. Captive agents represent around 75% of the total agency

number. Over the past few years the number of registered agents has declined

rapidly – down from 323,000 in March 2003 – as alternate distribution has

taken a much stronger foothold in the market. Whilst direct marketing and

telemarketing is pretty well established in Japan, the past few years have seen

the real emergence of the “direct” underwriters, especially in the automobile

UK 57%

France26%

Australia14%

Japan6%

Germany 3%

Foreign Company Share of Non-Life Markets



arena. Many of these direct writers are foreign companies. This direct sales

channel now has around 7% market share – still well below the 32% direct sales

share of the UK personal lines market and the 12.6% direct response share in

the USA, so there’s still plenty of room for this channel to grow.

Another channel still in its infancy and with huge potential is the broker

channel. Brokers represent the customer/client, but at this juncture they are

limited to providing consultative services. If and when their role is expanded

along the lines of the rest of the world, this channel will play a much more

important role within the overall distribution channel mix.

The following tables of distribution in the UK, split between personal and

commercial business, reflect how the various channels of distribution influence

and drive market sales.

22


Tables for Channels of Distribution in the UK and Japan



23


Market Attractiveness

As stated earlier, expanded governance has resulted in significantly more

requirements for companies. These include improving claims service, increased

documentation, cross checking, the introduction of the new insurance contract

law, the establishment of new alternative dispute resolution (ADR) capabilities,

enhancing customer protection and generally improving overall compliance.

This has increased the expense and cost structure for small foreign companies

not having the breadth and scale of large Japanese competitors.

Despite all the difficulties and potential barriers to entry, the Japanese

market-place remains attractive. As a player on the global insurance stage one

simply cannot afford not to be part of this important market and help drive

change over the coming years.

Areas that specifically stand out as attractive include the following:

• The stability of the market which means there’s less volatil ity in terms of pric-

ing.

• The quality of risk is good as evidenced by loss ratios in chosen sectors/

segments.

• Improving and heightened risk management. The way of managing risk

will likely be enhanced with more emphasis on the risk manager role and

responsibilities.

• Financial crises and subsequent market consolidation over time will drive

increased flight to quality via fewer competitors. Customers will seek more

choice as they look to spread their risk.

• Foreign companies delivering new products and added value services will

prosper. Knowledge transfer from overseas markets to Japan is critical as dif-

ferentiation will eventually win the day.

• Japanese companies are increasingly becoming more global and/or seeking

global partners as evidenced by the activities of Nippon Ita Garasu, Nomura

Securities, Sony Corporation, Japan Tobacco and more recently some of the

large Japanese insurers. Global expansion, fuelled by lack of domestic

demand, will undoubtedly bring new ideas, products and management tech-

niques to Japan. Many large traditional Japanese corporations have already

recruited foreign leaders and senior management to supplement their existing

management structure.



This complex, mature market has historically been slow to change; however it

is clearly catching up and embracing new ideas and learning from other market

experiences. The question constantly on our minds is how quickly will full

deregulation (products and pricing) be introduced, if ever. I believe the real

process of change is already long under way and this cannot and will not be

allowed to regress over the coming years. Old, outdated practices will disappear.

Major challenges, however, remain. These include the following:

• Market domination by large Japanese insurance companies

• Keiretsu and cross shareholdings

• Real freedom of product and price

• Noriai practice

• Brand recognition and strong customer loyalty to large traditional Japanese

carriers

• Access to cost effective distribution

• Low awareness of corporate risk management needs

• Expense management and containment

• Management of catastrophic risk

ACE has operated in Japan (under the banners of AFIA, INA, CIGNA and

now ACE) for close to 90 years, although our current market presence and size

may not adequately reflect the effort we have exerted over this period. We have

established a good market niche for our chosen products and services and built

an appropriate infrastructure to support this business. We are now focusing on

developing a medium- to long-term plan that will harness the power of the

global ACE platform and look to grow in this stagnant market. This effectively

means the introduction of new products to the market, expanding our presence

(where we have strong capabilities) in areas where we’re not currently active,

building world class operational and claims centers of excellence, promoting

customer protection and delivering sustainable growth and profit to ACE

Limited shareholders.

ACE Japan has a strong and important role to play in being an active

member in this unique and strategically important insurance market.

24


Market Challenges

The ACE Direction



25


Looking Ahead The road ahead will undoubtedly be challenging. To affect meaningful

change in Japan’s non-life insurance industry, a number of things need to take

place:

• The government must first tackle its responsibilities around economic reform

and financial stimulation.

• The insurance market needs a period of stability to once again earn customer

trust and respect.

• Mega mergers and consolidations should be reined in.

• Regulators should continue their good work along the path of continued

deregulation to further free up the market.

• Archaic practices must be stamped out in order to level the playing field for

all entrants and competitors.

• Japanese companies should accelerate globalization efforts and introduce new

leadership and best practices to the market.

• Foreign companies should be encouraged to expand their presence and inject

new energy – and capital – into their Japan businesses so that they become

even more strategically important to their global platforms.

After so many years and two assignments here, I now have to admit that

Japan is indeed different. Nevertheless, when you understand and appreciate

how this part of the world ticks, I truly believe that foreign companies can be

successful and help to make a difference. Those who develop the right business

model, the right distribution mix, and who employ correct risk and capital

management strategies and have underwriting discipline as their core competen-

cy will certainly prosper in the future. And of course it goes without saying that

without strong leadership, no one will survive.



26

5 . Underwriting & Planning Department The Toa Reinsurance Company, Limited

Trends in Japan’s Non-Life Insurance Industry

(1) Domestic Market

Net premium income of the 9 major domestic non-life insurance companies

decreased in Fiscal 2009 for the third consecutive year. This was because of a decline

in motor insurance, a mainstay product, as well as in marine insurance resulting

from a decline in marine freight due to the global economic recession.

In the previous year, these companies posted a significant fall in ordinary profit

due to large losses on revaluation of securities associated with the financial crisis.

However, their ordinary profit increased in Fiscal 2009 due to the recovery in the

equity market.

(2) Industry Reorganization

Two new holding companies have been established in the non-life insurance

market in April 2010: MS&AD Insurance Group Holdings, Inc. (incorporating

Mitsui Sumitomo Insurance Group Holdings, Inc., Aioi Insurance Co., Ltd. and

Nissay Dowa General Insurance Co., Ltd.) and NKSJ Holdings, Inc. (incorporating

Sompo Japan Insurance Inc. and NIPPONKOA Insurance Co., Ltd.). As a result,

the non-life insurance market is dominated by three major groups including Tokio

Marine Holdings (incorporating Tokio Marine & Nichido Fire Insurance Co., Ltd.

and Nisshin Fire & Marine Insurance Co., Ltd.). By group, MS&AD Insurance

Group Holdings took the leading position in terms of net premium income in all

lines of business, followed by NKSJ Holdings. Tokio Marine Holdings, which had

maintained the top position for a long time, slipped to third position.

1. Market Trend

< April 2010 onwards >



27

(3) Business Expansion into Overseas Markets

Given that growth in the non-life insurance market in Japan has peaked, non-

life insurance companies have been expanding their overseas businesses mainly in

Asia, where higher growth is expected.

Recent major overseas initiatives are summarized as follows:

(4) Insurance Products

In 2009, the Non-Life Insurance Rating Organization of Japan raised its refer-

ence loss cost rate for motor and personal accident insurance. The reference loss cost

rate, which is the advisory pure risk premium rate the non-life insurance companies

refer to in calculating premium rates, is calculated for fire, motor and personal acci-

dent insurance, etc., by the Non-Life Insurance Rating Organization of Japan.

The increase in the reference loss cost rate is due to the deterioration of underwriting result, which is primarily attributed to an increase in insurance claims payout

Date Company Name Recent Overseas Initiatives

April 2009

April 2009

April 2009

May 2009

July 2009

August 2009

November 2009

November 2009

December 2009

March 2010

March 2010

March 2010

Aioi Insurance Co., Ltd.

NIPPONKOA

Insurance Co., Ltd.

Mitsui SumitomoInsurance Co., Ltd.

Mitsui SumitomoInsurance (China)Company Limited

Sompo JapanInsurance Inc.

NIPPONKOA Insurance Co., Ltd.

Tokio Marine

Holdings, Inc.Tokio Marine &Nichido Fire InsuranceCompany (China)Limited

Sompo Japan Insurance(China) Co., Ltd.



Mitsui Sumitomo

Insurance Co., Ltd.

Started business operations at a local subsidiary in China

Became the largest shareholder of Navakij

Insurance PCL in Thailand

Established a joint venture in Laos

Obtained in-principle approval to establish abranch in Beijing

Acquired stock in Maritima Seguros S.A. inBrazil

Started business operations at a local subsidiary in China

Announced the establishment of a life insur-

ance joint venture in IndiaObtained in-principle approval to establish abranch in Shanghai, China

Obtained in-principle approval to establish abranch in Jiangsu, China

Business alliance with OJSC IC ROSNOin Russia

Acquired all stock of Tenet Insurance inSingapore

Obtained approval to establish a branch in

Slovakia




resulting from the improvement of payment practices among the non-life insurance

companies following the problem of unpaid insurance claims. In addition, the

increase was influenced by the following factors: a decline in motor insurance premi-

um income due to a rise in the number of compact cars with low premium rates, an

increase in the number of policy holders with highly discounted accident-free rates, a

decline in the number of young drivers with high premium rates, and an increase in

personal accident insurance claims payout due to the rise in permanent disability

benefit payments, mainly to elderly people, as well as because of the extended num-

ber of days for insurance benefit for outpatients.

Following the increase in the reference loss cost rate, the non-life insurance

companies announced an increase in premiums for motor and personal accident

insurance.

(5) Distribution Channels

The non-life insurance companies are striving to increase sales through tie-ups

with communications companies.

In June 2009, Tokio Marine Holdings, Inc. established “E.design Insurance

Co., Ltd.” with NTT FINANCE CORPORATION. The joint venture has started

business operations. In March 2010, Tokio Marine & Nichido Fire Insurance Co.,

Ltd. announced a business alliance with NTT DOCOMO, Inc. and Aioi Insurance

Co., Ltd. announced the establishment of a joint venture with KDDI Corporation.

Through distribution channels such as mobile phones and the Internet, these new

companies offer products characterized by substantial reductions in the procedural

requirements and time required to buy a product in comparison with doing so

through an insurance agent.

These companies aim to acquire young customers, many of whom are mobile

phone and Internet users.

(6) Regulations on Co-operatives

In accordance with implementation of the revised Insurance Business Law in

2006, the unregulated co-operative sector, which had not been controlled under a

specific law, has also become subject to regulations under the Insurance Business

Law. However, many co-operatives found it difficult to respond to the regulations

and maintain their co-operative business.

In May 2010, the government submitted to the Diet the drafting amendments

of the Insurance Business Law, which would permit the co-operatives conducting

business before 2006 (when the revised Insurance Business Law came into effect) to

conduct business as an “authorized specific insurance business” if they meet certain

requirements. When it comes before the Diet, the Financial Services Agency (FSA)

28

5. Trends in Japan’s Non-life Insurance Industry



29


estimates that about 700 co-operatives will fall within the scope of the remedial

measures. The future position of these co-operatives will be examined as the meas-

ures are regarded as provisional until the introduction of a new law.

The 27 companies in the General Insurance Association of Japan suffered from

a fall in net premium income in Fiscal 2009 mainly due to a change in premium

rates and weak economy. Ordinary profit and net income moved into the black from

the deficit in the previous fiscal year.

Net premium income was 6,971.1 billion yen, down 190.7 billion yen on a

year-on-year basis. Income declined in all lines of businesses on a year-on-year basis

including a 83.7 billion yen decline in Compulsory Automobile Liability Insurance,

where the premium rate cut in 2008 still has negative effects, and a 50.8 billion yen

decline in marine and transit insurance owing to the weak economy.

Net claims paid also declined 31.6 billion yen on a year-on-year basis to

4,367.9 billion yen due to a decrease in Compulsory Automobile Liability Insurance

and marine and transit insurance.

Operating and general administrative expenses related to insurance underwrit-

ing were 1,220.0 billion yen, down 48.4 billion yen on a year-on-year basis, because

of completion of investments to improve systems for business operations. As a result,

the net expense ratio decreased 0.1% to 35.0%.

Net underwriting profit was 54.3 billion yen, up 38.0 billion yen on a year-on-

year basis, due to reduction in outstanding claims, decreased operating and general

administrative expenses and lower net claims paid in spite of lower net premium

income.

Ordinary profit (including return on asset investments) was 350.5 billion yen,

up 608.5 billion yen from the previous year, owing to decline in the losses on revalu-

ation of securities resulting from recovery of equity markets, and net income was

206.8 billion yen, up 287.8 billion yen on a year-on-year basis.

(1) Review of the Method for Calculating the Solvency Margin

Ratio

FSA announced that in 2011 it would raise the standard for calculating the sol-

vency margin ratio, an indicator of insurance companies’ financial health. The

change includes an increase of the confidence level for risk coefficients from 90% to

95% for each risk, a component of the denominator of the solvency margin ratio,

and a calculation of earthquake risk based on insurance companies’ own risk models.

Previously the earthquake risk has been calculated by a specific formula, based on

premiums and the sum insured. In addition, restrictions are imposed on components

3. Insurance Regulations

2. Overview of Results for Fiscal 2009



of the margin, the numerator of solvency margin ratio.

The Insurance Business Law was also revised in May 2010. As a result, it was

decided to introduce a standard for calculating the solvency margin ratio on a consoli-

dated basis, replacing the current standard on a non-consolidated basis.

Losses from major natural disasters during Fiscal 2009 were as follows.

(1) Earthquake

Name of Loss Date of Loss Claims Paid (JPY Million)*Earthquake (Origin: Suruga Bay) August 11, 2009 3,800

(2) Wind and Flood Damage

Name of Loss Date of Loss Claims Paid (JPY Million)

Heavy rain in Chugoku and North Kyusyu in

July 2009

Typhoon “Melor”, the 18th typhoon in 2009

July 19, 2009 -

July 26, 2009

October 6, 2009 -

October 9, 2009

15,300

62,700

*Claims paid for earthquake insurance

30

5. Trends in Japan’s Non-life Insurance Industry

4. Fiscal 2009 Data onLosses from Major

Natural Disasters



31

Life Underwriting & Planning Department The Toa Reinsurance Company, Limited

Trends in Japan’s Life Insurance Industry

6 .The population of Japan has dropped for three consecutive years, with the pace

of decline increasing year by year.

The annual estimate in “Demographic Statistics 2009” published by the

Ministry of Health, Labour and Welfare indicates that the natural change in the

number of Japanese residents in Japan (number of births less number of deaths) is

minus 75,000, an all-time record decline.

The number of births, a growth factor for population, decreased by 22,000

year-on-year to 1,069,000, mainly due to a decline in the number of women of

child-bearing age and the recent economic slowdown. The number of deaths, a

reduction factor for population, increased by 2,000 year-on-year to 1,144,000 due to

the aging population, an all-time high since statistics were first published in 1947.

In addition to this environment, a survey conducted by the Japan Institute of

Life Insurance suggests that the percentage of households with life insurance which

peaked at 95% in 1994, declined to 86% in 2009 (76% for private life insurance

companies other than Japan Post Insurance Co., Ltd., etc.). In the domestic life

insurance market, the unpopularity of life insurance has not yet come to an end.

This trend made some domestic life insurance companies take steps to find

solutions by expanding their business overseas, particularly in Asia. Within the

region, China, Vietnam and India are expected to offer enormous potential for

growth given their market growth indicators of population and GDP per capita.

Major and traditional life insurance companies including Nippon Life Insurance Co.

(Nippon Life), the Dai-ichi Life Insurance Co. (Dai-ichi Life) and Sumitomo Life

Insurance Co. (Sumitomo Life), as well as Taiyo Life Insurance Company (Taiyo

Life) and Sony Life Insurance Co., Ltd. (Sony Life) are promoting international

activities including the establishment of life insurance joint ventures through tie-ups

with major local financial institutions, the formation of subsidiaries through M&A,

the opening of local representative offices, and equity participations in local financial

institutions.

However, domestic insurance companies have little historical record of business

expansion overseas. It is likely that important future tasks for them will be to engage

in product development and marketing based on economic development and educa-

tional levels in their host countries and cultural and on linguistic gaps between coun-

tries, to recruit and develop employees with professional skills, and to gain the confi-

dence of local citizens.

(1) Three Companies under AIG

American International Group, Inc. (AIG), which was under the control of the

US government because of financial difficulties, announced in 2008 that three

Japanese life insurance subsidiaries – the Japan branch of American Life Insurance

Company (Alico Japan), AIG Star Life Insurance Co., Ltd. (AIG Star Life) and AIG

1. Demographic change and

Japanese life insurance companies’ business expansion in Asiaresulting fromcontracting domestic market

2. Trends among Life Insurance

Companies



32

Edison Life Insurance Company (AIG Edison Life) – would be offered for sale.

Recently, it marked the end of a long wait for disclosure of a specific proposal for the

three life insurance companies.

For Alico Japan, given the March 2010 announcement of the sale of the US

Alico headquarters to Metropolitan Life Insurance Company, the Japanese branch is

also likely to be sold to Metropolitan Life Insurance Company.

For AIG Star Life and AIG Edison Life, it was announced that they would drop

plans to dispose of them in October 2009 before the Alico sale was made public.

This was because gains generated from holding shares will exceed those generated on

the sale of shares, with an improvement in AIG’s balance sheet. Some consider this

as showing that a failure to negotiate with potential buyers forced AIG to come to

this conclusion.

Therefore, following the decision on a buyer for Alico, speculation is mounting

that the two companies whose disposal has already been suspended may be offered

for sale once again.

(2) Merger of Subsidiary Life Insurance Companies (Sompo

Japan Himawari Life and NIPPONKOA Life, and Mitsui

Sumitomo Kirameki Life and Aioi Life) under Parent Non-

Life Insurance Companies Groups Implementing

Management Integration (NKSJ and MS&AD)

Two major non-life insurer groups, “NKSJ group” and “MS&AD insurance

group”, which were formed as a result of management integration in April 2010,

both announced mergers of life insurance subsidiaries under their groups in October

2011.

The merging life insurance companies are Sompo Japan Himawari Life

Insurance Co., Ltd. (Sompo Japan Himawari Life) and NIPPONKOA Life

Insurance Company, Limited (NIPPONKOA Life), as well as Mitsui Sumitomo

Kirameki Life Insurance Co., Ltd. (Mitsui Sumitomo Kirameki Life) and Aioi Life

Insurance Co., Ltd. (Aioi Life) (the new merged companies are hereinafter referred

to as the “new merged company under NKSJ” and the “new merged company under

MS&AD”, respectively).

Both new merged companies pointed to a merger objective of accelerating

group growth by developing their business bases in life insurance operations. Both

companies see life insurance operations as growth area.

In terms of management policy, the new merged company under NKSJ aims to

establish its brand with a corporate image of a “life insurance company with a promi-

nent presence”, while the new merged company under MS&AD indicates that it will

formulate the best business model among life insurance companies affiliated with

non-life entities.

In terms of numerical targets after management integration, the new merged




33


company under NKSJ is targeting annual growth in enterprise value of 50 billion

yen (for Fiscal Year 2014), while the new merged company under MS&AD is aim-

ing for annual profit from domestic life insurance operations of 15 billion yen (net

income after deducting gain or loss on the sale of stocks) (for Fiscal Year 2013).

In terms of overseas operations, the MS&AD insurance group said that it

would expand profit from 12 billion yen (for Fiscal Year 2009) to 30 billion yen (for

Fiscal Year 2013) as a whole and strengthen its life insurance operations (joint

ventures with local companies, etc., mainly in China and India), which are currently

behind non-life insurance operations.

(3) Operations Commenced at Medicare Life, a Joint Venture

between Sumitomo Life and Mitsui Life

Sumitomo Life and Mitsui Life Insurance Company Limited (Mitsui Life),

major and traditional life insurance companies, have formed Medicare Life Insurance

Co., Ltd. (Medicare Life), a medical care insurance specialist, through a joint invest-

ment (with equity positions of 80% and 20%, respectively). The company started

operations in April 2010 and launched a whole life medical insurance policy as its

first product.

To pursue their objective of establishing Medicare Life, both Sumitomo Life

and Mitsui Life indicated that they had decided to establish a separate company in

order to grasp the changes in customer needs correctly and immediately and offer

products on a timely basis as an increasing number of customers, mainly from

younger generations, who are used to buying insurance through new distribution

channels including over-the-counter insurance stores, internet and the mail order

services of credit card companies rather than via the traditional distribution channel

of sales representatives.

In contrast, parent companies Sumitomo Life and Mitsui Life decided to allo-

cate separate distribution channels for the parent company and subsidiary by main-

taining a system whereby most insurance contracts are procured through the sales

representative channel.

(4) Demutualization and Listing of Dai-ichi Life

Dai-ichi Life, the first mutual company established in Japan, became the first

joint stock corporation among major Japanese life insurance companies by demutu-

alization in April 2010 and listed its shares at the same time.

In terms of business prospects, Dai-ichi Life said that it would turn its manage-

ment focus to developing a business base for its core domestic businesses while build-

ing a life insurance group that is the equal of European or American life insurance

companies in terms of product quality, viability, scale and enterprise value in the

medium to long term.



34


The insurer sees sales representatives as its main distribution channel and focuses

on advisory-type sales of products with death benefits, while promoting activities

aimed at growing its presence in areas including over-the-counter sales at banks and

overseas markets such as Vietnam and India.

In contrast with the demutualization route taken by Dai-ichi Life, Nippon Life

intends to maintain its status as a mutual company.

Nippon Life, the leading traditional life insurance company in Japan, indicated

that demutualization had the advantages of funding flexibility and strengthening

governance, thereby enabling it to satisfy the need for outsiders in meeting its disclo-

sure obligations, while also having the disadvantage of the potential problems arising

in protecting policy holders’ rights, including the fairness and equitability of profit

sharing with policy holders via dividend policy due to shareholders becoming stake-

holders.

The insurer added that the mutual company form was the most appropriate

because of the necessity of maintaining stable management over the long term in

order to prioritize the benefits of policy holders and ensure they are paid out for

insurance claims.

(5) Establishment of Holding Company by Prudential and

Business Expansions through M&A

Insurance holding company Prudential Holdings of Japan, Inc. was established

in April 2009. The Prudential Life Insurance Co., Ltd. (Prudential Life) and the

Gibraltar Life Insurance Co., Ltd. (Gibraltar Life) became subsidiaries under the

holding company.

One of the objectives of establishing a holding company is to disentangle the

complexity of an equity relationship. Prudential Life, the first company to expand

into Japan within the group, was part of the overseas division of its US headquarters,

while Gibraltar Life, which took over the operations of the failed former Kyoei Life

Insurance Co., was directly under its US headquarters.

In addition, the Prudential Group indicated that it would plan a strategy to

optimize the whole group through the formation of a holding company and would

aim to maximize enterprise value by strengthening management bases of group com-

panies such as internal control, risk management and compliance, as well as by gen-

erating synergies among group members.

The group is also attempting to acquire other life insurance companies. It

acquired the failed former Yamato Life Insurance Company (currently The

Prudential Gibraltar Financial Life Insurance Co., Ltd.) via Gibraltar Life in October

2008 and was likely to join the final bidding round in negotiations over the acquisi-

tion of AIG Star Life and AIG Edison Life after October 2008. (As mentioned in (1)

above, the deal was cancelled in October 2009). It has adopted an aggressive M&A

strategy.



35


(6) The Government is Considering Expanding the Business

Scope of Japan Post Insurance Including an Increase in the

Maximum Insured Amount and Lifting the Ban on Offering

Third Sector Insurance as Part of the Postal Reform.

As part of the postal reform initiatives, the government is considering expand-

ing the business scope of Japan Post Insurance Co., Ltd. (Japan Post Insurance),

which was privatized in 2007, subject to the Japan Post Group’s obligation to offer

universal services and the government commitment (equity contribution and provi-

sion of benefits, etc.). Specifically, the government is considering to increase the

maximum insured amount from 13 million yen to 25 million yen, to lift the ban on

offering its own cancer insurance products, and to replace the authorization system

for new operations to a registration system.

The Life Insurance Association of Japan has expressed its opinion that the pre-

condition is designed to ensure fair competition between Japan Post Insurance and

other private entities (so-called equal footing) if such an expansion of business scope

is discussed.

The life insurance industry association put forward arguments against an expan-

sion in the scope of business conducted by Japan Post Insurance, stating there was

little need to increase the maximum insured amount in a contracting market for

death benefits and pointing to the credit enhancement provided to Japan Post

Insurance by the government.

The government insisted that the assets and policy numbers of Japan Post

Insurance were expected to decline, mainly due to the fact that endowment insur-

ance policies, which account for the majority of policies in force, are reaching matu-

rity, and management of the company would become more difficult if its business

scope was not expanded. Against this, the industry association urged the government

to give sufficient consideration to the business scope expansion proposal based on

actual conditions in the life insurance market, as Japan Post Insurance posts basic

profit (an indicator of profit from core business) and maintains a solvency margin

ratio equal to those of private life insurance companies, and has retained its top rank-

ing in terms of total assets around the world.

The fiscal year 2009 results for 45 life insurance companies in Japan (excluding

Japan Post Insurance) were as follows:

• Total Amount of New Contracts

During fiscal year 2009, the total insured amount of new individual insurance

contracts for all 45 companies decreased 1.3% from the previous fiscal year to

53.4 trillion yen due to continued sluggish sales of death benefit products.

Regarding individual annuities, the total insured amount of new contracts

3. Trends in Business Performance



36


increased 2.6% from the previous year to 7.4 trillion yen owing to a certain recov-

ery in sales of fixed annuity products through the Bancassurance channel.

• Total Amount of In-force Contracts

As of the end of fiscal year 2009, the total insured amount of in-force individ-

ual insurance contracts decreased 4.3% from the previous fiscal year to 890.6 tril-

lion yen, due to the sluggish performance of major and traditional companies and

many foreign-affiliated companies, against continued solid results at subsidiaries

of non-life insurance companies. On the other hand, sales of individual annuities

were 92.7 trillion yen, up 4.9% from the previous fiscal year, representing the sev-

enth consecutive annual increase. While life insurance companies relying on a

Bancassurance channel for variable annuities suffered a decline in their sales,

major and traditional life insurance companies steadily improved their perform-

ance. Group insurance contracts in force decreased 0.6% from the previous fiscal

year to 373.1 trillion yen though group annuities in force increased 0.5% from

the previous fiscal year to 31.3 trillion yen.

• Annualized Premiums

The total of annualized premiums from new contracts increased 17.2% from

the previous year to 2.6 trillion yen as a result of an increase in both individual

insurance and individual annuities. As for in-force contracts, annualized premi-

ums totaled 20.1 trillion yen, up 2.5% from the previous fiscal year, due to an

increase in individual annuities despite a drop in individual insurance.

• Premiums Revenues / Total Assets

Total premium revenues increased 1.4% to 27.6 trillion yen for all 45 life

insurance companies, the first rise in four years. Due to the improvement in the

investment environment, total assets for all companies excluding six companies

were above that of the previous fiscal year. Overall, total assets rose 6.2% from the

previous year to 217.4 trillion yen.

Fiscal Year 2009 was marked by the launch of new third sector insurance prod-

ucts, particularly in the medical area. For variable annuities, the amount insured by

new policies (accumulated capital at the inception of annuity payments) decreased

by 19.7% from the previous year due to the suspension of variable annuity sales. The

2008 financial crisis set the scene for the suspension of sales of variable annuities by

companies that play a significant role in the variable annuity market such as

Hartford Life Insurance K.K., ING Life Insurance Company, Ltd. and Sumitomo

Life. In contrast, sales of fixed annuities increased, backed by a shift in policy hold-

ers’ focus toward safety. For new fixed annuity policies, the sum insured increased by

17.3% from the previous year.

4. Product Trends



37


New products launched in the medical area in Fiscal Year 2009 are character-

ized by the simplicity of benefit payments: these include product types that pay lump

sum benefits regardless of the number of days spent in hospital (Dai-ichi Life’s

“Nyuin ichijikin kyufu D” (“lump sum benefits for hospitalization D”) and

Sumitomo Life’s “Nyuin hosyou jujitsu tokuyaku” (“hospitalization rider guaran-

tee”)) and products aimed at consolidating benefits systems for existing products

(“Shin EVER” (“New Ever”) and “Kyukyutai KING” (“emergency and rescue team

KING”)). Products with complex payment requirements have disappeared due to

the problem of non-payment of insurance claims and benefits.

Given the aging of the population, simplified issue products are increasingly

being developed and targeted at aged people with heightened concerns over health.

Among such products, Sumitomo Life launched “Senkyaku Banrai” (“welcome all

visitors”) in 2005, though only a few insurance companies followed suit due to con-

cerns over underwriting risk and prices. However, the number of co-operatives deal-

ing with these products has recently increased to a remarkable extent. Typical exam-

ples of these products include “Jukunen gata” (“product for middle-aged people”)

offered by the large co-operative association Zenkoku Kyosai Ren, “Iki-iki ouen”

(“life support”) offered by ZENROSAI, National Federation of Workers and

Consumers Insurance Cooperatives, and a simplified issue product for children

offered by Co-op Kyosai. This shows that co-operatives are accelerating their devel-

opment of advanced products.

In addition, Alico Japan has shifted its product focus from guaranteed issue

products without health declaration to simplified issue products following the launch

of “Zutto smile” (“smile forever”) in 2007 and “Zutto Anatato” (“forever with you”)

in 2009. The insurer became popular with “Hairemasu” (“insurance available to pur-

chase by anyone”), the first guaranteed issue product without health declaration in

Japan.

Given the failure of Yamato Life Insurance in October 2008 and the financial

crisis that began in autumn of the same year, the Financial Services Agency (FSA)

decided to review the method of calculating the solvency margin ratio. This revision

seems to be a short-term review. The FSA is planning to replace the method of

reviewing solvency valuation by economic value-based solvency II over the medium

term.

The FSA said that revisions of the implementing regulations for the Insurance

Business Law related to the above review will be put into effect at the end of March

2012 and that solvency margin ratio disclosure requirements will come into force at

the end of March 2011, a year earlier than the implementation date for the Act.

This review will allow for components of the numerator and denominator of

the solvency margin ratio to be measured more rigidly and accurately. Specifically,

for risk, a component of the denominator, the reliability level will be increased for

5. Insurance Regulations



38


each risk factor (from 90% to 95%). For margin, a component of the numerator, a

limit will be imposed on the inclusion of surpluses such as premium reserves in margin.

The FSA expects that the solvency margin ratios of major life insurance compa-

nies will be decreased to a large extent by this review, but explained that the review is

aimed at setting standards and will not result in any deterioration in their balance

sheets. It added that it will take time for the measures implemented to promote

understanding of the review among policy holders and markets and that it will take

steps to enhance the credibility of the solvency regulations while making efforts to

exercise appropriate supervision from the perspective of policy holder protection.



39




40

S u p p l e m

e n t a l D a t a : R e s u l t s o f

J a p a n e s e l i s t e d n o n - l i f e

i n s u r a n

c e g r o u p s ( c o m p a n y ) f o r f i s c a l 2 0 0 9 , e n d e d M a r c h 3 1 ,

2 0 1 0

( N o n - C o n s o l i d a t e d B a s i s )



The Toa Reinsurance Company, Limited

h t t p : / /www . t o a r e . c o . j p

6, Kanda-Surugadai 3-chome, Chiyoda-ku, Tokyo 101-8703, Japan

japan insurance market 2010

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