FY2007 Financial Results FY2007 Financial Results & FY2008 - PowerPoint PPT Presentation

FY2007 Financial Results FY2007 Financial Results & FY2008 Management Policy FY2008 Management Policy Aioi Insurance Company, Limited Aioi Insurance Company, Limited May 29, 2008 May 29, 2008

Table of Contents Table of Contents I. I. FY2007 Financial FY2007 Financial Summary Summary 1. Key Financial Highlight 1. Key Financial Highlights (1) Aioi Insurance Co., Ltd (1) Aioi Insurance Co., Ltd 1 (2) Consolidated Financial Re (2) Consolidated Financial Results sults 3 2. Return to Shareholders 2. Return to Shareholders 4 II. FY2008 Managem Y2008 Management nt Poli Policy cy 1. Basic 1. Basic Strategy trategy 5 2. Revenue Base 2. Revenue Base (1) Auto Insurance (Domestic) (1) Auto Insurance (Domestic) 6 (2) Auto Insurance (Overseas) (2) Auto Insurance (Overseas) 7 (3) Long-Term Fire Insurance (3) Long-Te m Fire Insurance 8 (4) Cross Selling (4) Cross S lling 9 3. Profit Base 3. Profit Base (1) Insurance Business (1) Insurance Business 10 10 (2) Invest (2) Investment Stra ment Strategy tegy 11 11 (3) Group Co (3) Group Companies’ mpanies’ Business Business 13 13 4. FY2008 Business Plan 4. FY2008 Busines Plan 15 15 <Supplementary Informa <Supplementa ry Information> ion> Corpo Co rporate Refo ate Reforms rms 16 16

I. FY2007 Financial Summary I. FY2007 Financial Summary

1. Key Financial Highlights (1) Aioi Insurance Co., Ltd. 1. Key Financial Highlights (1) Aioi Insurance Co., Ltd. Ove Overview of FY2007 Financial Resul view of FY2007 Financial Results Overview of FY2007 Financial Resul Ove view of FY2007 Financial Results Re Reve venue nue growth co owth continued ma ntinued mainl inly d due to e to Reve Re venue nue growth co owth continued ma ntinued mainl inly d due to e to auto insurance growth despite auto insurance growth de spite slow sale low sales FY2006 FY2007 auto insurance growth despite auto insurance growth de spite slow sale low sales activitie activities due to the pr due to the priori ioritiz tizing of corporat ng of corporate e Insura rance ce Un Underwri riti ting Change Ratio activities due to the pr activitie due to the priori ioritiz tizing of corporat ng of corporate e re refo forms. s. Direct Premiums Written 888.2 871.7 -16.4 -1.9% refo re forms. s. Net Premiums Written 851.2 851.8 0.6 0.1% Underwritin Und ting p prof ofit it subst substantially ntially i increas ased ed Underwriting Profit 1.0 10.2 9.2 902.4% Und Underwritin ting p prof ofit it subst substantially ntially i increas ased ed due due to fewer natural to fewer na tural cata atastro trophes, di phes, disa saste sters, s, Ra Ratios due due to fewer na to fewer natural tural cata atastro trophes, di phes, disa saste sters, s, and othe and other ac r accidents. cidents. Net Premium Growth 2.0% 0.1% -1.9P and othe and other ac r accidents. cidents. Net Loss Ratio 62.4% 62.2% -0.2P Investment Inve stment income income decrea decreased ma sed mainly due to inly due to Investment Inve stment income income decreased ma decrea sed mainly due to inly due to Net Expense Ratio 32.7% 33.3% 0.6P unrealized unrealize loss of lo ss of sub subprime rela rime related ted unrealize unrealized lo loss of ss of subprime rela sub prime related ted Invest In stme ments inve invest stment ments. Ri s. Risk expo sk exposure of subpri sure of subprime me invest inve stment ments. Ri s. Risk expo sk exposure of subpri sure of subprime me Interest/Dividend Income 51.2 81.8 30.6 59.8% rela late ted investments s d investments substanti bstantially decrea decreased. rela elate ted investments s d investments substanti bstantially decrea decreased. Investment Income 35.0 0.0 -35.0 -100.0% Ordinary Profit 29.8 4.4 -25.3 -85.1% As a resul a result, ordinar ordinary profi profit and net income and net income As a resul a result, ordinar ordinary profi profit and net income and net income Net Income 18.8 7.1 -11.7 -62.0% dec decrea ease sed. d. dec decrea rease sed. d. Solvency Margin Ratio 1030.4% 862.6% -167.8P So Solv lven ency ma cy marg rgin in ra ratio re rema main ined a at a a h high gh So Solv lven ency ma cy marg rgin in ra ratio re rema main ined a at a a h high gh level le vel of 862.6%. f 862.6%. le level vel of 862.6%. f 862.6%. Increase Ratio of Net Premiums Written FY2006 FY2007 Auto 1.7% 0.1% Fire 7.2% -1.7% Personal Accident -0.1% -2.7% Others 4.3% 4.6% <Note> Net Loss Ratio by Class of Business Unit: Billions of Yen FY2006 FY2007 E/I Loss Ratio of Auto Insurance Auto 61.6% 63.3% 63.1% (-0.6P from FY2006 ） All amounts are truncated. Fire 44.2% 37.3% All figures rounded to one decimal place. Personal Accident 41.0% 45.7% Others 90.2% 80.0% Net loss ratios include loss adjustment expense. 1

1. Key Financial Highlights (1 1. Key Financial Highlights (1) Aioi Insurance Co., Ltd. ) Aioi Insurance Co., Ltd. Invest vestment Position ment Position of Se of Securitized curitized Products Products Invest vestment Position ment Position of Se of Securitized curitized Products Products Investment in Sec Inve stment in Securitie rities Credit Deri Credit Derivatives vatives Unit: Billio Unit: Billions o ns of Ye Yen Unit: Billio Unit: Billions o ns of Ye Yen Total Amount: 75.8 Total Amount: 158.6 SIV, 0.3 CMBS, 7.3 ABS and Corporate RMBS, ABS-CDO, Other, Other, -CDO, 53.6 41.5 29.0 76.0 21.5 CLO, 5.0 Ri Risk exposur sk exposure of subprime rela of subprime related inve ted investments stments Ri Risk exposur sk exposure of subprime rela of subprime related inve ted investments stments substan bstantial ially decrease ased More than 80% of the securit More than 80% of the securities were were dome domest stic ic substan bstantial ially decrease ased More than 80% of the securit More than 80% of the securities were were domest dome stic ic rela late ted. Ta d. Taking c king credi edit standings into account, standings into account, rela late ted. Ta d. Taking c king credi edit standings into account, standings into account, -The notional amount of ABS-C -The notional amount of ABS-CDOs, w s, which ich risk of the securi risk o the securitie ties wa was li s limi mite ted. d. -The notional amount of ABS-C -The notional amount of ABS-CDOs, w s, which ich risk of the securi risk o the securitie ties wa was li s limi mite ted. d. partia part ially cont lly contain sub ain subprime prime rela related loan ted loans, gr s, grea eatly tly partia part ially cont lly contain sub ain subprime prime rela related loan ted loans, gr s, grea eatly tly decrea dec eased in FY20 sed in FY2007. -The percentage of se The percentage of securit curities in inve s in investe sted a assets wa s was s dec decrea eased in FY20 sed in FY2007. -The percentage of se The percentage of securit curities in inve s in investe sted a assets wa s was s -Unrealize -Unrealized lo d loss of A ss of ABS-CDOs wa S-CDOs was 4 s 40.9 b .9 billion yen, illion yen, 3.3%. 3.3%. -Unrealized lo -Unrealize d loss of A ss of ABS-CDOs wa S-CDOs was 4 s 40.9 b .9 billion yen, illion yen, 3.3%. 3.3%. and the loss o and the lo of credi credit derivat derivatives wa ves was 4 s 43.4 bi .4 bill llion ion -Unrealized lo Unrealized loss wa ss was 1.6 billion s 1.6 billion ye yen. n. and the loss o and the lo of credi credit derivat derivatives wa ves was 4 s 43.4 bi .4 bill llion ion -Unrealized lo Unrealized loss wa ss was 1.6 billion s 1.6 billion ye yen. n. yen. yen. -The a The amount of oversea ount of overseas rela related investment ma ted investment made de yen. yen. -The a The amount of oversea mount of overseas rela related investment ma ted investment made de -The tota -The to tal amount of ABS-CDOs grea l amount of ABS-CDOs greatly decrea tly decreased sed up 12.1 billion yen of up 12.1 billion yen of the to the tota tal a l amount of invested ount of invested -The tota -The to tal amount of ABS-CDOs grea l amount of ABS-CDOs greatly decrea tly decreased sed up 12.1 billion yen of up 12.1 billion yen of the to the tota tal a l amount of invested mount of invested to 12.7 billion yen. to 12.7 billion yen. assets of 75.8 billio assets of 75.8 bill ion yen. Unrealized lo n yen. Unrealized loss wa was 1.6 s 1.6 to 12.7 billion yen. to 12.7 billion yen. assets of 75.8 billio assets of 75.8 bill ion yen. Unrealized lo n yen. Unrealized loss wa was 1.6 s 1.6 -The amount of o -The amount of oversea erseas rela related i ted investments wa vestments was s billion yen. llion yen. -The amount of o -The amount of oversea erseas rela related i ted investments wa vestments was s billion yen. illion yen. 84.6 billion yen 84.6 billion yen.( AB ( ABS-CDOs CDOs 53.6 billion 53.6 billion ye yen and n and 84.6 billion 84.6 billion yen yen.( AB ( ABS-CDOs CDOs 53.6 billion 53.6 billion ye yen and n and Corporate-CDOs 31.0 bi Corpora CDOs 31.0 bill llion ion yen) yen) Corpora Corporate-CDOs 31.0 bi CDOs 31.0 bill llion ion yen) yen) 2