[PDF] - Summary of Consolidated Business Results of Tokio Marine Holdings, PDF Document

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Summary of Consolidated Business Results of Tokio Marine Holdings, Inc. under Japanese GAAP for the fiscal year ended March 31, 2019

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Contents of Appendix

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(1) Consolidated Results of Operations for the fiscal year 2018

During the fiscal year 2018, the world economy as a whole progressed gradually due to the economic expansion in the U.S. In contrast, concerns about an economic downturn escalated towards the end of the fiscal year as the economy in Europe and China slowed down, reflecting the intensifying trade friction between the U.S. and China and the increasing uncertainty over the withdrawal of the UK from the EU. In Japan, economic growth slowed down compared with the previous year due to the impact of natural disasters although the economy gradually improved mainly due to domestic demand such as consumer spending and capital expenditures. Under these circumstances, as a result of our efforts to expand our business, which is centered on non-life insurance and life insurance, our consolidated results of operations for the fiscal year 2018 were as follows: Ordinary income increased by 77.6 billion yen to 5,476.7 billion yen from the previous fiscal year, the main components

expenses increased by 6.2 billion yen to 5,060.3 billion yen from the previous fiscal year, the main components of which were Underwriting expenses of 4,079.7 billion yen, Investment expenses of 90.2 billion yen, and Operating and general administrative expenses of 861.3 billion yen. As a result, Ordinary profit increased by 71.3 billion yen to 416.3 billion yen from the previous fiscal year. Net income attributable to owners of the parent, composed of Ordinary profit plus Extraordinary gains minus Extraordinary losses and Total income taxes, decreased by 9.6 billion yen to 274.5 billion yen from the previous fiscal year. Results by our reportable segments are as follows: In the Domestic non-life insurance business, Ordinary income increased by 168.2 billion yen to 2,847.1 billion yen from the previous fiscal year. Ordinary profit composed of Ordinary income minus Ordinary expenses such as Net claims paid decreased by 14.1 billion yen to 228.3 billion yen from the previous fiscal year. In the Domestic life insurance business, Ordinary income decreased by 39.3 billion yen to 779.3 billion yen from the previous fiscal year. Ordinary profit composed of Ordinary income minus Ordinary expenses such as Life insurance claims increased by 16.4 billion yen to 40.2 billion yen from the previous fiscal year. In the Overseas insurance business, Ordinary income increased by 89.0 billion yen to 1,972.0 billion yen from the previous fiscal year. Ordinary profit composed of Ordinary income minus Ordinary expenses such as Net claims paid increased by 70.2 billion yen to 141.6 billion yen from the previous fiscal year.

(2) Consolidated Financial Conditions as of March 31, 2019

As of March 31, 2019, consolidated total assets was 22,531.4 billion yen, a decrease of 398.5 billion yen from that as of March 31, 2018, mainly due to the exclusion of Tokio Millennium Re AG and Tokio Millennium Re (UK) Limited from the scope of consolidation, despite the expansion of our domestic and international insurance businesses. Cash flows for the fiscal year 2018 were as follows: Net cash provided by operating activities increased by 29.4 billion yen to 945.4 billion yen compared to the previous fiscal year, mainly due to an increase in premium income. Net cash used in investing activities decreased by 207.0 billion yen to 566.7 billion yen, mainly due to a decrease in proceeds from collection of loans. Net cash used in financing activities decreased by 252.5 billion yen to 379.0 billion yen, mainly due to the impact of a decrease in cash collateral under securities lending transactions for procurement of funds in the previous fiscal year.

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As a result, Cash and cash equivalents at end of year was 1,023.3 billion yen, a decrease of 5.4 billion yen from that as of March 31, 2018.

(3) Consolidated Business Forecasts for the fiscal year 2019

The Company's consolidated business forecasts for the fiscal year 2019 are 455.0 billion yen for Ordinary profit and 325.0 billion yen for Net income attributable to owners of the parent. The forecasts are based on the following assumptions:

respectively, based on the Company's own projections taking the business results for previous years into consideration.

Fire Insurance Co., Ltd. and 2.5 billion yen for Nisshin Fire & Marine Insurance Co., Ltd., taking the actual results for previous years into consideration.

conditions from those as of March 31, 2019. The above forecasts are prepared based on the aforementioned assumptions and information available to the Company as

To enhance international comparability of the Company's financial information and to unify accounting policies within the Group, the Company is considering adopting International Financial Reporting Standards ("IFRS") while conducting preparatory work. The Company will determine the timing of adoption based on the development of discussions surrounding IFRS17 "Insurance Contracts" and other factors.

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(1) Consolidated Balance Sheet

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(2) Consolidated Statement of Income and Consolidated Statement of Comprehensive Income

(Consolidated Statement of Income)

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(Consolidated Statement of Comprehensive Income)

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(3) Consolidated Statement of Changes in Shareholders' Equity

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(4) Consolidated Statement of Cash Flows

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(5) Notes regarding going concern assumption

Not applicable.

(6) Changes in significant matters related to consolidated financial statements

(Changes in significant subsidiaries during the fiscal year 2018) Tokio Millennium Re AG and Tokio Millennium Re (UK) Limited were excluded from the scope of consolidation due to the sale of the Company's interest. HCC Insurance Holdings (International) Limited was also excluded due to liquidation.

(7) Changes in presentation

The company has made a change in presentation to the consolidated financial statements since the fiscal year 2018 due to changes in actuarial processes and structures in its overseas subsidiaries during the fiscal year 2017 and 2018, which enabled to achieve improved categorization of their actuarial reserves. As a result, JPY 19,738 million of "Outstanding claims" as of March 31, 2018, and JPY 19,481 million of "Outstanding claims" as of March 31, 2019 are reclassified to "Underwriting reserves".

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(8) Notes to Consolidated Financial Statements

(Segment information)

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(Per share information)

(Business Combinations and Other Matters)

The Company acquired 98.6% of the outstanding shares of Safety Insurance Public Company Limited ("Safety"), a non-life insurance company in Thailand (hereinafter referred to as "the Acquisition") through the Company’s wholly

(1) Outline of the business combination

Safety Insurance Public Company Limited

Non-life insurance company

Through the Acquisition, Tokio Marine Group (the "Group") will become the third largest non-life insurance group in Thailand, which is the largest insurance market in Southeast Asia. The non-life insurance market in Thailand has high growth potential as a large number of Japanese companies enter into business in this country. The Group aims to expand its international insurance business in emerging countries by expanding its business in Thailand.

August 31, 2018

Share purchase of which the consideration is cash

Safety Insurance Public Company Limited

98.6%

TMNF is the controlling company, as TMNF acquired 98.6% of voting rights of Safety.

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(2) Period for which the acquiree’s operating results are included in the consolidated statement of income of the Company The fiscal year end of the acquiree is December 31, which is different from that of the Company. The Company uses the financial statements as of the acquiree’s latest fiscal year end for consolidation purposes since the intervening period does not exceed three months from the Company’s fiscal year end. As the acquisition date is deemed to be September 30, 2018, the acquiree’s operating results from October 1 to December 31, 2018 are included in the consolidated statement of income for the fiscal year 2018. (3) Acquisition cost and breakdown by class of consideration Consideration for Safety’s shares acquired Cash 42,747 million yen Acquisition costs 42,747 million yen (4) Description and amount of major acquisition-related cost Advisory fee and others 429 million yen (5) Amount, reason for recognition, period and method of amortization of goodwill

24,088 million yen

The acquisition cost of the acquiree, which was calculated by taking into account projections of the acquiree’s future revenue as of the valuation date, exceeded the net amount of assets acquired and liabilities assumed, and the difference is recognized as goodwill.

10 years using the straight line method (6) Amount of assets acquired and liabilities assumed on the date of the business combination and its main components Total assets: 43,552 million yen Cash and bank deposits 9,529 million yen Investment securities 14,714 million yen Total liabilities: 23,863 million yen Insurance liabilities 16,313 million yen (7) Approximate impact on the consolidated statement of income and its calculation methods, assuming that the business combination took place on the first day of the fiscal year 2018 Ordinary income 14,918 million yen Ordinary profit (3,355) million yen Net income attributable to owners of the parent (2,983) million yen (Calculation methods for approximate impact) These amounts of approximate impact represent the difference between the hypothetical amounts of ordinary income, ordinary profit and net income attributable to owners of the parent calculated assuming that the business combination was completed at the beginning of the fiscal year 2018, and their corresponding amounts on consolidated statement of income of the Company for the fiscal year 2018. The amortized amount of goodwill is included in the calculation by assuming that the entire goodwill arising from the business combination was recognized at the beginning of the fiscal year 2018. These amounts of the approximate impact and its calculation methods have been unaudited.

The company sold 100% of the shares of Tokio Millennium Re AG ("TMR") and Tokio Millennium Re (UK) Limited ("TMR(UK)"), owned by TMNF, to RenaissanceRe Holdings Ltd., a reinsurance company in Bermuda. (1) Outline of the business divestiture

RenaissanceRe Holdings Ltd.

Tokio Millennium Re AG, Tokio Millennium Re (UK) Limited and their subsidiaries, dedicated to reinsurance business

The Group established TMR in 2000 as a subsidiary to write overseas reinsurance risks. TMR and TMR(UK) have contributed to Group profits and more recently have broadened the classes of business written into non- catastrophe exposed classes of business. However, the global reinsurance market has recently undergone various changes such as continuing soft market environment driven by steady inflow of capital from outside the reinsurance industry, which has been causing impact on the return earned from the business.

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From 2007 onwards, through the significant acquisitions of overseas insurance companies, the Group has created a diversified global portfolio focusing primarily on specialty insurance classes of business. As a result of this, the contribution of reinsurance business in profit terms to our international operations has reduced significantly over the decade. Through the divestment of the reinsurance activities of TMR and TMR(UK), the Group's strategic focus will continue to be on primary insurance business in developed countries as well as emerging markets, and the Group will optimize its global portfolio to current market environment and to its overseas insurance business strategy.

March 22, 2019

Share transfer of which the consideration is cash and shares of the recipient (2) Outline of accounting treatment applied

Losses on sales of investment in subsidiaries and affiliates 22,504 million yen

components Total assets: 550,726 million yen Investment securities 247,615 million yen Other assets 180,990 million yen Total liabilities: 428,681 million yen Insurance liabilities 326,876 million yen

The difference between the consolidated carrying amount and selling price of TMR, TMR(UK) and their subsidiaries is recognized as Losses on sales of investment in subsidiaries and affiliates in Extraordinary losses. (3) Reportable segment to which the divested business belonged Overseas insurance business (4) Approximate amounts of profits or losses related to the divested business which is included in the consolidated statement of income for fiscal year 2018 Ordinary income 141,709 million yen Ordinary profit 14,409 million yen (Subsequent events) On May 20, 2019 the Company's board of directors resolved repurchases of its own shares, pursuant to Article 156 of the Companies Act which is applicable in accordance with Article 165, paragraph 3 of the Companies Act, as detailed below.

The Company intends to repurchase its own shares in order to implement flexible capital policies.

Common stock of the Company

Up to 6,250,000 shares

Up to 25 billion yen

From June 1, 2019 through September 20, 2019

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(1) Summary of Consolidated Business Results

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(2) Premiums written and claims paid by lines of business

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(3) Securities

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(4) Derivative transactions