Tokio Marine Holdings, Inc. Tokio Marine Holdings

Tokio Marine HoldingsTokio Marine Holdings2009 Annual Report

http://www.tokiomarinehd.com/

Pr inted in Japan

An

nu

al Rep

ort 2009

Tokio

Marin

e Ho

ldin

gs, In

c.

Member of Financial Accounting Standards Foundation

Tokio Marine Nichido Building Shinkan,

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

Tokyo 100-0005, Japan

phone: +81-3-6212-3333

On the Cover: Mangrove Afforestation ProjectTokio Marine is committed to reducing environmental impact as one of its major corporate social responsibility activities. In 1999 we started our mangrove afforestation

project in South East Asia and over the last ten years have planted 5,901 hectares (14,582 acres) of forests in six countries. An additional 2,300 hectares (5,683 acres) will

be added over the next fi ve years under the project, which is being undertaken in partnership with the following nongovernmental organizations: Action for Mangrove

Reforestation (ACTMANG), the Organization for Industrial, Spiritual and Cultural Advancement-International (OISCA) and the International Society for Mangrove

Ecosystems (ISME).

Mangrove trees help prevent global warming by absorbing large volumes of carbon dioxide and can serve as bulwarks to protect people from tsunamis and other

hazards. In the tsunami that occurred in the Indian Ocean as a result of the earthquake off the coast of Sumatra in December 2004, villages situated behind mangrove

plantations were protected from the tsunami. In addition, by providing fi shery, forestry and other resources essential to local residents’ lifestyles, mangrove trees contribute

to sustainable development in the areas in which they are planted. This, in turn, stabilizes and improves the lives of these residents.

Note: The forecasts appearing on this Annual Report are based on information available as of the publication date of the Report. Actual results may differ materially due to

various factors.

Tokio Marine Group Corporate PhilosophyWith customer trust as the foundation for all its activities, Tokio Marine Group continually strives

to raise corporate value.

• Through the provision of the highest quality products and services, Tokio Marine Group aims to

deliver safety and security to all our customers.

• By developing sound, profi table and growing businesses throughout the world, Tokio Marine

Group will fulfi ll its mandate to shareholders.

• Tokio Marine Group will continue to build an open and dynamic corporate culture that enables

each and every employee to demonstrate his or her creative potential.

• Acting as a good corporate citizen through fair and responsible management, Tokio Marine

Group will broadly contribute to the development of society.

Overseas offi ces: Located in 399 cities in 36 countries and regions• Expatriate staff: 173 • Local staff: Approx. 14,600 • Claims agents: Located in 250 countries and regions

Middle & Near East U.A.E. � Dubai� Tokio Marine Middle East Limited (Dubai)� Al-Futtaim Development Services Co. (Dubai)

Saudi Arabia � Jeddah, Riyadh and Al Khobar� Hussein Aoueini & Co., Ltd. (Jeddah, Riyadh and Al Khobar)� Tokio Marine Saudi Arabia Limited (to be established)

Bahrain � The Arab-Eastern Insurance Co. Ltd E.C. (Manama)Turkey � Allianz Sigorta A.S. (Istanbul)

� Allianz Hayat ve Emeklilik A.S. (Istanbul)

Oceania & Micronesia Australia � Sydney and Melbourne� Tokio Marine Management (Australasia) Pty. Ltd. (Sydney, Melbourne and Adelaide)

New Zealand � IAG New Zealand Insurance Limited (Auckland)Guam � Guam

� Tokio Marine Pacifi c Insurance Limited (Guam)� Tokio Marine Pacifi c Insurance Limited c/o Nanbo Guam, Ltd. (Guam)� Tokio Marine Pacifi c Insurance Limited c/o Calvo’s Insurance Underwriters, Inc. (Guam)

Commonwealth of the Northern Mariana Islands

� Pacifi ca Insurance Underwriters, Inc. (Saipan)� Calvo’s Insurance Underwriters (CNMI), Inc. (Saipan)

Asia Korea � Seoul Sub-branchPeople’s Republic of China

� Beijing, Tianjin, Dalian, Chengdu, Nanjing, Suzhou, Hangzhou, Guangzhou and Shenzhen� The Tokio Marine & Nichido Fire Insurance Company (China) Limited (Shanghai)� Zhongsheng International Insurance Brokers Co., Ltd. (Beijing)� Sino Life Insurance Co., Ltd. (Shenzhen, Shanghai and 20 other cities)

Hong Kong � Hong Kong� The Tokio Marine and Fire Insurance Company (Hong Kong) Limited (Hong Kong)

Taiwan � Taipei� Tokio Marine Newa Insurance Co., Ltd. (Taipei and 25 other cities)

Philippines � Malayan Insurance Co., Inc. (Manila and 27 other cities)Vietnam � Vietnam International Assurance Company (Hanoi and Ho Chi Minh City)Thailand � The Sri Muang Insurance Co., Ltd. (Bangkok and 16 other cities)

� Millea Life Insurance (Thailand) Public Co., Ltd. (Bangkok)Malaysia � Tokio Marine Insuranse (Malaysia) Berhad (Kuala Lumpur and 19 other cities)

� TM Asia Life Malaysia Bhd. (Kuala Lumpur and 15 other cities)� Tokio Marine Global Re Limited (Labuan)

Singapore � Tokio Marine Asia Pte. Ltd. (Singapore)� Tokio Marine Insurance Singapore Ltd. (Singapore)� TM Asia Life Singapore Ltd. (Singapore)� Tokio Marine Retakaful Pte. Ltd. (Singapore)� TM Claims Service Asia Pte. Ltd. (Singapore)

Brunei � Tokio Marine Insurance Singapore Ltd. (Bandar Seri Begawan)� TM Asia Life Singapore Ltd. (Bandar Seri Begawan)

Indonesia � P.T. Asuransi Tokio Marine Indonesia (Jakarta and 7 other cities)India � New Delhi

� IFFCO-TOKIO General Insurance Co. Ltd. (New Delhi and 110 other cities)Myanmar � Yangon

� Branches of Tokio Marine & Nichido� Representative and Liaison Offi ces of Tokio Marine & Nichido� Underwriting Agents of Tokio Marine & Nichido� Subsidiaries and Affi liates

127

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Tokio Marine Holdings Annual Report

2009

1

Contents

01 INTRODUCTION

At a Glance 2Topics 4

02 MANAGEMENT

President Message 8Directors & Auditors 10

02 BUSINESS REVIEW

Business Highlights 11Business Overview 15

03 CORPORATE STRATEGY AND PROFILE

Corporate Strategy 20Special Feature: International Business 24Profi le of the Tokio Marine Group 28

04 MANAGEMENT SYSTEM

Basic Policies for Internal Controls 33Corporate Governance 35Compliance 36Information Management 38Risk Management 39Corporate Social Responsibility 41Internal Audit 44Disclosure and Investor Relations 45

05 PERFORMANCE

Change in Key Business Indicators (Consolidated Basis) 48Financial Information 49Solvency Margin Ratio 103Interest-rate Sensitivity of ALM Surplus Value 106Embedded Value 107Statutory Reserve 112

06 CORPORATE DATA

Stock Information 114List of Directors and Corporate Auditors 117Organizational Chart 122Tokio Marine Holdings and Its Subsidiaries 123Major Subsidiaries 124History of the Tokio Marine Group 125Worldwide Network of the Tokio Marine Group 126

2 Tokio Marine Holdings, Inc. 2009 Annual Report

01

Overview of Fiscal 2008 Results

• For the fi scal year ended March 31, 2009, consolidated ordinary income amounted to 3,503,102 million yen, of which underwrit-

ing income made up 3,130,076 million yen. Ordinary expenses totaled 3,518,230 million yen, which included underwriting

expenses of 2,232,902 million yen. Ordinary profi t declined 194,199 million yen from the previous fi scal year for a loss of 15,128

million yen and net income fell 85,624 million yen, to 23,141 million yen.

• In the property and casualty insurance business, Tokio Marine & Nichido’s underwriting profi t totaled 73,812 million yen, up

34,435 million yen from the previous fi scal year, although ordinary profi t and net income both declined as a result of turmoil in the

fi nancial markets. Similarly, underwriting profi t at Nisshin Fire amounted to 3,231 million yen, up 3,868 million yen. However, both

ordinary profi t and net income resulted in losses due to the unsettled fi nancial markets.

• In the life insurance business, Tokio Marine & Nichido Life recorded 15,914,400 million yen in policies in force for individual insur-

ances and individual annuities, up from 14,739,863 million yen a year earlier. Likewise, Tokio Marine & Nichido Financial Life’s poli-

cies in force totaled 2,642,299 million yen, higher than the 2,335,997 million yen last year.

I N T R O D U C T I O N

Consolidated Business Results(Yen in millions)

FY2008 FY2007Difference

Amount Percentage Amount Percentage

Ordinary income 3,503,102 100.00 3,710,066 100.00 (206,963)

Underwriting income 3,130,076 89.35 3,312,472 89.28 (182,396)

Investment income 306,664 8.75 342,121 9.22 (35,457)

Other ordinary income 66,361 1.89 55,471 1.50 10,890

Ordinary expenses 3,518,230 100.43 3,530,994 95.17 (12,764)

Underwriting expenses 2,232,902 63.74 2,683,605 72.33 (450,702)

Investment expenses 726,659 20.74 326,884 8.81 399,775

Operating and general administrative expenses 519,928 14.84 482,160 13.00 37,767

Other ordinary expenses 38,739 1.11 38,344 1.03 395

Ordinary profi t (loss) (15,128) (0.43) 179,071 4.83 (194,199)

Extraordinary gains 83,761 2.39 31,199 0.84 52,562

Extraordinary losses 21,696 0.62 35,683 0.96 (13,987)

Net income 23,141 0.66 108,766 2.93 (85,624)

(As of July 1, 2009)

Rating agency Type Tokio Marine Holdings

Tokio Marine & Nichido Nisshin Fire Tokio Marine &

Nichido Life

Tokio Marine & Nichido Financial

LifeS&P Insurer Financial Strength Rating — AA / Stable A+ / Stable AA / Stable —

Moody’s Insurer Financial Strength Rating — Aa2 / Stable — — —

Fitch Ratings Insurer Financial Strength Rating — AA- / Negative — — —

A.M. Best Best’s Rating — A++ / Stable — — —

Rating and Investment Information (R&I)

Senior Long-term Credit Rating — AA+ / Stable AA / Stable — —

Insurance Claims Paying Ability — — — AA+ / Stable AA+ / Stable

Japan Credit Rating Agency (JCR)

Long-term Rating AAA / Stable AAA / Stable — — —

Insurance Claims Paying Ability — — — AAA / Stable —

Tokio Marine Group’s Credit Ratings

At a Glance

01

3

Assets, Liabilities and Shareholders’ Equity (Consolidated)(Yen in millions)

FY2008 FY2007 Difference

Assets 15,247,223 17,283,242 (2,036,018)

Liabilities 13,607,708 14,703,902 (1,096,194)

Net assets 1,639,514 2,579,339 (939,824)

Total liabilities and net assets 15,247,223 17,283,242 (2,036,018)

(Yen in millions)

Tokio Marine & Nichido Nisshin Fire

FY2008 FY2007 FY2008 FY2007

Profi

tab

ility

Net income 71,104 122,992 (10,315) 1,962

Ordinary profi t (loss) 69,624 183,974 (16,179) 2,622

Loss ratio 67.4% 61.6% 62.6% 61.4%

Expense ratio 34.6% 31.5% 38.4% 37.1%

Combined ratio 102.1% 93.1% 101.0% 98.5%

Underwriting balance ratio -2.1% 6.9% -1.0% 1.5%

Underwriting profi t 73,812 39,376 3,231 (637)

Soun

dnes

s

Total net assets 1,435,527 2,326,624 64,483 86,549

Solvency margin ratio 696.8% 957.8% 737.9% 899.3%

Gro

wth

pote

ntia

l

Change in net premiums written -5.2% -0.8% -4.1% -2.1%

Scal

e Net premiums written 1,813,412 1,912,180 135,916 141,684

Direct premiums written (including deposit premiums from policyholders) 2,032,131 2,126,746 149,735 155,696

Notes: 1. Loss ratio = (Net claims paid + Loss adjustment expenses) ÷ Net premiums written x1002. Expense ratio = (Agency commissions and brokerage + operating and general administrative expenses) ÷ Net premiums written x1003. Combined ratio = Loss ratio + Expense ratio 4. Underwriting balance ratio = 100% - Combined ratio5. Solvency margin ratio

• Property and casualty insurance companies maintain reserves for paying claims when events covered by insurance issued occur and for the payout of funds at maturity for savings-type insurance. It is also necessary for them to maintain suffi cient resources to cover payments in the event of either a major disaster or an unexpected crisis, such as a major decline in the price of assets owned by an insurance company.

• Calculated in accordance with the Insurance Business Law, the solvency margin ratio is an indicator that compares the claims payment ability provided by the capital and reserves owned by a property and casualty insurance company against the total amount of risk in a situation that exceeds expectations.

6. Net premiums written: Direct and assumed premiums written, less ceded insurance premiums7. Direct premiums written: Direct premiums, less canceled direct refunds and other direct refunds (including deposit premiums)

Major Indicators for the Property and Casualty Insurance Business

(Yen in millions)

Tokio Marine & Nichido Life Tokio Marine & Nichido Financial Life

FY2008 FY2007 FY2008 FY2007

Insurance premiums and others 437,688 407,697 452,289 518,869

Annualized new premiums 43,131 36,615 44,288 50,602

Ordinary profi t (loss) 5,555 6,025 10,099 (6,422)

Net income 0 0 10,078 (6,478)

Core operating profi t 522 427 (827) (6,105)

Solvency margin ratio 2,596.7% 2,766.7% 1,057.5% 1,157.5%

Policy amount in force 15,914,400 14,739,863 2,642,299 2,335,997

New policy amount 2,450,159 2,106,742 443,071 508,282

Notes: 1. Additional transfer 19,822 million yen (in fi scal 2007) and 11,095 million yen (in fi scal 2008) to Tokio Marine & Nichido Life’s policy reserves were made on top of its provi-sions to policy reserves calculated based on the fi ve-year Zilmer method. These amounts were included in basic expenses (policy reserve provision) within core profi ts.

2. Annualized new premium: Annual premium calculated by dividing total paid premiums for the entire term of new policies for individual insurance and annuities by the number of years in the insurance term.

3. Core operating profi t: An indicator of earnings potential in insurance operations, calculated by deducting gains on the sale of securities and other capital gains as well as one-time profi ts from ordinary profi t.

4. Policy amount in force, new policy amount: Total of new policies and policies in force for individual insurances and individual annuities

Major Indicators for the Life Insurance Business


01

Acquisition of Philadelphia Consolidated, a U.S. P&C Insurance Group

Through its subsidiary Tokio Marine &

Nichido Fire Insurance Co., Ltd., Tokio

Marine Holdings acquired Philadelphia

Consolidated Holding Corp. (PHLY),

a U.S. P&C insurance holding company,

and its group companies on

December 1, 2008.

PHLY is a leading insurance group

with a highly competitive business model

based on excellent product development

capabilities mainly in specialty products

focused on targeted commercial markets,

disciplined operations and marketing

expertise utilizing a variety of distribution

channels. It has achieved far superior

growth and profi tability than its peers in

the U.S. P&C insurance industry.

By combining PHLY’s product develop-

ment capabilities and strong marketing

skills with Tokio Marine’s superior credit

rating, fi nancial strength, large under-

writing capacity and a global network,

PHLY will expand operations further and

develop new businesses.

Establishment of E. design Insurance Co., Ltd.

Tokio Marine Holdings established

E. design Insurance Preparatory

Co., Ltd. through a business and

capital tie-up with NTT Finance

Corporation, a subsidiary of

Nippon Telegraph and Telephone

Corporation, in January 2009.

After it acquired a non-life insur-

ance permit from the Financial

Services Agency, the company

name was changed to E. design

Insurance Co., Ltd. and began

operating on June 13, 2009,

primarily selling automobile insur-

ance through mobile phone net-

works and the internet.

Topics: Tokio Marine Holdings

JOC Sponsor Contract Signed

Tokio Marine Holdings became

a Gold Partner in an agreement

with the Japanese Olympic

Committee (JOC). A JOC Gold

Partner is the highest level of

sponsorship for Japanese sports

under the JOC Partnership

Program.

Tokio Marine Holdings

continues to support sports in

Japan by contributing to the JOC

and other athletic groups that

represent Japan in international

tournaments and competitions.


01

5

Launch of Secom Home Security Tokio Marine Package

Tokio Marine & Nichido Fire Insurance

Co., Ltd. forged an agreement with

Secom Co., Ltd., the most widely

recognized brand name in home

security in Japan, and began to

exclusively sell at its main agents the

Secom Home Security Tokio Marine

Package, a home security system

jointly developed specifi cally for the

Tokio Marine Group.

The Secom Home Security Tokio

Marine Package is an exclusive line-

up of affordably priced entry-level

products with basic features

designed as a home security system

for families to help prevent crime

and respond during fi res and other

emergencies.

By offering customers the safety

to prevent accidents through this

home security system, coupled with

reassurance through insurance to

cover accidents, Tokio Marine &

Nichido is able to improve the con-

sulting abilities of its agents while

improving communication with and

trust from its customers.

The Tokio Marine & Nichido Fire Insurance Company (China) Limited Starts Operations

On November 1, 2008, The Tokio

Marine & Nichido Fire Insurance

Company (China) Limited began

operations. This Chinese subsidiary

has taken over the operations of the

Tokio Marine & Nichido Shanghai

branch, which has steadily expanded

business since its foundation in

September 1994.

The establishment of this local

subsidiary is part of a reorganization

effort designed to enable an expan-

sion of the service and marketing area

through branch offi ces development.

This will allow Tokio Marine Holdings

to reassure its customer base with

better services through these offi ces.

At fi rst, The Tokio Marine &

Nichido Fire Insurance Company

(China) Limited will open a string of

new branch offi ces in southern, east-

ern and northern China and expand

the areas in which it can directly

underwrite insurance. These efforts

will improve the quality and speed of

our services in these regions, and are

a part of our plans to create a net-

work of offi ces that cover the entire

country.

Topics: Group Companies

Carbon Neutral Certifi cation

Tokio Marine & Nichido has

received third-party certifi cation for

going carbon neutral at all of its

business offi ces in Japan as of the

end of fi scal 2007. This certifi ca-

tion was the result of efforts to

reduce CO2 emissions pertaining to

the Company’s business activities,

procure green electricity and offset

emissions. To offset emissions, the

Company purchases emission

credits and plants mangrove trees

to absorb CO2. Tokio Marine &

Nichido is the fi rst fi nancial institu-

tion in Japan to receive carbon

neutral certifi cation for all of its

domestic offi ces from an external

organization.

Through ongoing efforts to

reduce environmental impact, the

Tokio Marine Group aims to

become carbon negative on a

global basis over the medium-

and long-term.

Note: Carbon neutral means

that a company offsets its CO2

emissions from business activities

by planting trees, using renewable

energy and purchasing emission

credits. Carbon negative means

that a company offsets more CO2

than is emitted from its business

activities.

Tokio Marine & Nichido’s CO2

emissions in fi scal 2007 were

65,401 tons, and the Company

offset 65,555 tons of CO2.


01

Topics: Group Companies

Consulting Services Combat New Infl uenza Outbreaks

After the SARS outbreak in 2003,

Tokio Marine & Nichido Risk

Consulting Co., Ltd. began helping

companies plan for infl uenza out-

breaks. The company provides con-

sulting services focused on disease

(such as new infl uenza strains) and

business continuity planning and

support. In October 2008, the

company created a handbook for

dealing with new infl uenza out-

breaks. Complete with checklists

and an indexed manual, the hand-

book covers essential information

to help companies prepare for and

deal with new infl uenza outbreaks.

More than 30,000 copies of the

handbook were distributed for free

to companies through Tokio

Marine & Nichido’s marketing divi-

sion. Moreover, updates are mailed

to customers in a web magazine

format. Tokio Marine & Nichido Risk

Consulting Co., Ltd. will continue to

support its corporate customers

with advanced risk consulting

services in line with their needs.

Launch of New Service for Protecting Customers from Cancer

With the introduction of Cancer

Treatment Support Insurance in

September 2007, Tokio Marine &

Nichido Life Insurance Co., Ltd. has

promoted awareness campaigns

across the country to protect its

customers from cancer. Going beyond

the traditional framework of economic

support, through these campaigns

we seek to offer more comprehensive

assistance that ranges from mental

and emotional health support to

services and information on cancer

prevention and risk reduction.

From October 2008, as a part

of these campaigns, Tokio Marine &

Nichido Life has introduced affi liated

medical facilities for the early discov-

ery of cancer. Customers are sup-

plied with appointment and

preferred price information for

health checkups. Also available are

PET scans, cancer consulting and

advice services that dispatch profes-

sional advisors to help customers

address their needs and concerns.

Commemorating 100 Years of Business

To commemorate its 100th year of

operation, Nissin Fire & Marine

Insurance Co., Ltd. donated 250 sets

of fi re extinguishers and commemo-

rative gift boxes to the Kyoto Ancient

Culture Preservation Association, in

order to protect valuable cultural arti-

facts at shrines and temples in Japan

from fi re. Nisshin Fire published the

One Hundred Year History of Nisshin

Fire & Marine Insurance Co., Ltd. on

July 1, 2008. On this occasion, the

company collected and matched

individual donations from employees

and retired employees. The donations

will be distributed to temples and

shrines in Kyoto requiring additional

fi re extinguishers and equipment, in

accordance with the wishes of the

association.

The company also held the

Nisshin Fire 100-Year Commemorative

Photo Contest, with the theme the

“Reassurance and Comfort.” We

received 2,971 photographs from 1,415

people. The winning prize was awarded

to a photo titled “Ohirune” (afternoon

nap), taken by Ms. Yuki Inaba.


0202MANAGEMENT

President Message 8

Directors & Auditors 10

BUSINESS REVIEW

Business Highlights 11

Business Overview 15

�


02M A N A G E M E N T

02

9

President Message

the foundation for future earnings growth. One of these ini-

tiatives has been the creation of leading business processes

throughout Japan that are highly competitive and robust.

Overseas, our sights are set upon increasing our earnings

while diversifying business globally. I am pleased that Kiln

Group in the U.K. and Philadelphia Consolidated Holding in

the U.S. have joined us, placing Tokio Marine in an excellent

position to implement its strategy to develop a signifi cant

portfolio of international business.

Looking ahead to fi scal 2009, we expect challenging

business conditions to continue in the insurance market

given the persistence of the current economic environment.

Nevertheless, we have worked hard to steadily strengthen

our competitiveness especially during this time of market

turmoil. Tokio Marine will endeavor to rapidly achieve the

objectives of its three-year management plan that began in

fi scal 2009 and deliver improved results to shareholders.

Achieving this will require the concerted efforts of our

33,000 employees located in 36 countries around the world,

as well as the continued cooperation of our insurance

agencies and brokers to whom we extend our gratitude.

Furthermore, I deeply appreciate the support and

unwavering assistance that Tokio Marine has received from

its shareholders.

July 2009

Shuzo Sumi

President

Dear Shareholders

Since its creation 130 years ago, Tokio Marine has been

witness to some of the most signifi cant economic and social

crises in global history. The recent turmoil in the fi nancial

markets and the consequent unavoidable economic down-

turn rank among the most severe events I have ever person-

ally experienced. Tokio Marine, however, has weathered

much worse crises and will once again emerge even stronger

as a result of recent events.

Despite the upheaval, Tokio Marine posted a profi t while

maintaining a strong balance sheet. We did not, however,

escape completely unscathed. In the fi scal year ended March

31, 2009 (fi scal 2008), revenues decreased due to the

decline in overall economic activity. On the asset side, we

recorded a valuation loss of approximately ¥230 billion,

mainly on marketable securities.

Maintaining a sound fi nancial foundation is our foremost

responsibility to both our customers and shareholders. In

this challenging business environment, our efforts remain

focused on the preservation of our healthy asset base – this

ensures that our ability to pay claims remains strong even

under the most extreme of circumstances. To date, we have

had no defaults on our assets, including those that were

marked down as valuation losses. Moreover, the valuations

of these assets have begun to improve in line with the recent

market recovery.

There are many lessons to be learned from the fi nancial

crisis that should serve to promote improved management

of all fi nancial markets in the future. Although market vola-

tility has increased in step with the globalization of the world

economy, it is my belief that markets of the future will

become healthier and more transparent. I also believe that

enterprise risk management will continue to be a signifi cant

area of focus for Tokio Marine as we work towards striking a

rewarding balance between risk and return, capital effi ciency

and fi nancial soundness.

At our major business centers around the world, we have

taken steps to cope with the fi nancial crisis and have laid


02M A N A G E M E N T

Chairman of the Board

Kunio Ishihara(Chairman of the Board, Tokio Marine & Nichido)

President

Shuzo Sumi(President, Tokio Marine & Nichido)

Executive Vice Presidents

Toshiro Yagi

Daisaku Honda

Senior Managing Directors

Hiroshi Amemiya(Senior Managing Director, Tokio Marine & Nichido)

Shin-Ichiro Okada(Senior Managing Director, Tokio Marine & Nichido)

Directors

Minoru Makihara(Senior Corporate Advisor, Mitsubishi Corporation)

Masamitsu Sakurai(Chairman of the Board, Ricoh Company, Ltd.)

Tomochika Iwashita(President, Tokio Marine & Nichido Life)

Hiroshi Miyajima(President, Nisshin Fire)

Kunio Ito(Professor, Graduate School of Commerce and Management, Hitotsubashi University)

Standing Corporate Auditors

Yasuo Yaoita

Tetsuo Kamioka

Corporate Auditors

Shigemitsu Miki(Senior Advisor, The Bank of Tokyo-Mitsubishi UFJ, Ltd.)

Hiroshi Fukuda(Attorney-at-law)

Yuko Kawamoto(Professor, Waseda Graduate School of Finance, Accounting and Law)

I

Kunio ItoDirector

J

Tomochika IwashitaDirector

K

Minoru MakiharaDirector

L

Hiroshi AmemiyaSenior Managing Director

M

Shigemitsu MikiCorporate Auditor

N

Tetsuo KamiokaStanding Corporate Auditor

O

Hiroshi FukudaCorporate Auditor

P

Daisaku HondaExecutive Vice President

A

Toshiro YagiExecutive Vice President

B

Yuko KawamotoCorporate Auditor

C

Kunio IshiharaChairman of the Board

D

Shuzo SumiPresident

E

Shin-Ichiro OkadaSenior Managing Director

F

Yasuo YaoitaStanding Corporate Auditor

G

Masamitsu SakuraiDirector

H

Hiroshi MiyajimaDirector

Directors & Auditors

02

11

02B U S I N E S S R E V I E W

Overview of Fiscal 2008 Results

During fi scal 2008, ended March 31, 2009, net premiums writ-

ten in the non-life insurance business declined 4.9% from the

previous fi scal year to 2,134.2 billion yen. This performance

came despite full-term contribution from the Kiln Group, which

was acquired in March 2008. The decline in net premiums writ-

ten was primarily attributable to a reduction of more than 25%

in premium rates for compulsory automobile liability insurance,

as well as lower income at two Japanese non-life insurance

subsidiaries owing to the global economic recession.

In the life insurance business, premiums slid 5.4% to

746.0 billion yen. This decrease was mainly due to a reduction

in income from variable annuities at Tokio Marine & Nichido

Financial Life that resulted from deterioration in the investment

environments.

Although ordinary losses totaled 15.1 billion yen, a marked

deterioration of 194.1 billion yen from the previous fi scal year,

Tokio Marine Holdings secured net income of 23.1 billion yen,

a decline of 85.6 billion yen, as the price fl uctuation reserve

was used to offset substantial valuation losses.

Below is a discussion of the business strategies utilized by

each segment to cope with these strenuous times.

Competitive Strategy for Non-Life Insurance Business

in Japan

In order to achieve sustainable growth in earnings, the Tokio

Marine Group must execute a clear competitive strategy. The

overall size of Japan’s non-life insurance market presents limit-

ed prospects for growth. In light of this, a key point is to bol-

ster the activities of agents, the main sales conduit for

insurance in Japan. On this front, Tokio Marine & Nichido has

been upgrading both IT system infrastructure and business pro-

cesses to increase its competitiveness.

Japan’s non-life insurance sector was under strict regulatory

oversight until 1998, when it was liberalized. Prior to this, most

insurance companies designed and marketed products in near

lockstep. When Tokio Marine & Nichido introduced a new

insurance product, other companies quickly followed suit.

Competition heated up after the liberalization of the insur-

ance sector began in 1998. Insurance companies sought to

diversify their products by offering a wide variety of special

clauses and supplementary services. Meanwhile, procedural

requirements became more stringent, both for compliance

purposes and to ensure each customer’s wishes were

honored precisely.

While the adoption of this type of business structure among

Japanese insurers led to more stable premium revenues, business

processes became increasingly bogged down by a business model

catering to intricate customer needs while fulfi lling obligations to

explain policies in suffi cient detail. As a result, internal processes

between insurance companies and agents came to occupy more

than half of total work volume. As insurance companies began to

engage in rate competition, conditions became more challeng-

ing, making it imperative for companies to drastically reduce

their cost structures by increasing business process effi ciency.

Early on, Tokio Marine & Nichido became aware of this

impending crisis and in fi scal 2004 initiated the Business

Renovation Project to undertake a sweeping review of all busi-

ness processes and IT systems. Management realized that

everything was at stake unless the Tokio Marine Group was

able to rapidly develop and conveniently offer products and

services to customers with a high level of transparency. After

fi ve years of changes and upfront investment, the fi rst line of

services was launched in May 2008 for systems infrastructure

and a new agency system “TNet”.

This system was designed to reduce agency workload by

10-30%, increase time spent with customers, enhance plan-

ning and lead to even more compelling proposals. Already, the

results of this system and other initiatives undertaken are

steadily appearing.

The decision to drastically change business processes and

products brought about requirements for thorough reexamina-

tion and forward-looking investment. Now, even if competitors

bring similar products to market, they will not easily be able to

imitate Tokio Marine & Nichido’s business processes enabled by

the new IT infrastructure. This is the kind of competitive

capability Tokio Marine & Nichido believes tomorrow’s market-

place demands.

Some insurance companies have sought to increase their

top line through mergers and acquisitions (M&A). It is only

afterwards that they begin to integrate competitive capabilities.

Tokio Marine & Nichido, on the other hand, has made all-out

efforts to comprehensively increase competitiveness. This

investment has fi nally begun to pay off and Tokio Marine &

Nichido is now fi rmly positioned to expand its market share.

Business Highlights



The Tokio Marine Group is already several steps ahead of its

rivals in carving out a competitive strategy for the future. The

Tokio Marine Group aims to further increase its competitive-

ness, derived from robust business processes, through initia-

tives to create a slimmer structure.

Improving Margins in the Non-Life Insurance Business

in Japan

An urgent task at hand is lowering the combined ratio

(loss ratio + expense ratio) in the non-life insurance business

in Japan.

Over the past few years, the combined ratio has increased

for several reasons. Premium income, the denominator in the

equation, has declined even as loss and expense expanded. The

latter included upfront investment in the Business Renovation

Project, the hiring of compliance personnel to deal with the

improper nonpayment of insurance claims, an increase in agen-

cy commissions for incentives to switch to cashless payments,

other higher business expenses and a rise in insurance claims

due in part to the occurrence of major accidents.

While raising premium rates, Tokio Marine & Nichido plans

to keep expenditures for the Business Renovation Project within

the amount of cost reductions achieved in fi scal 2011, the fi nal

year of its mid-term corporate strategy, and limit increases in

personnel costs to the hiring of compliance professionals.

Assuming several major incidents do not occur, the

Company aims to get the combined ratio back down to a sta-

ble range of 90-95% by fi scal 2011, the end of the mid-term

corporate strategy. Moreover, Tokio Marine & Nichido has set

its sights on restoring profi tability in the Japanese non-life

insurance business through top-line growth.

Sustained Growth in the Life Insurance Business in Japan

Tokio Marine & Nichido Life, which began operations in 1996,

has steadily expanded the amount of policies in force, even as

other major Japanese life insurance companies endured seem-

ingly inexorable declines in their policies in force as they suf-

fered increased policy cancellations and struggled to attract

new customers.

Coming to the market later brings certain advantages and

Tokio Marine & Nichido Life leveraged these to introduce inno-

vative products the market had never seen. Over a short period

of time, Tokio Marine & Nichido Life was able to rise to its posi-

tion as a second-tier insurance company because it directly

addressed customer concerns with a consulting-style approach

while cross-selling life insurance at its network of non-life insur-

ance agents. From an early stage, Tokio Marine & Nichido Life

concentrated on endowment insurance products that are

destined to form the core of the life insurance business as the

Japanese population ages. Success has also stemmed from the

strong sense of security the Tokio Marine brand conveys

throughout the Japanese insurance market.

In October 2009, Tokio Marine & Nichido Life plans to

release new medical insurance products targeting the expand-

ing third-sector market for medical, cancer and nursing care

insurance, a growing fi eld as Japanese society ages.

The other life insurance subsidiary, Tokio Marine & Nichido

Financial Life, focuses on the variable annuities market. As

almost all variable annuities sold in Japan have GMDB

(Guaranteed Minimum Death Benefi t) or GMAB (Guaranteed

Minimum Accumulation Benefi t), the fi nancial turmoil led

insurance companies to take signifi cant risks which required

soaring costs and additional reserves for hedging purposes.

As a result, several competitors, mostly foreign-affi liated com-

panies, have withdrawn from the variable annuities market.

In fi scal 2008, Tokio Marine & Nichido Financial Life turned

a profi t for the fi rst time since its founding on a fi nancial

accounting basis, mainly because of the reversal of policy

reserves brought by ceding the minimum guarantee risk. In real

terms, however, earning conditions worsened owing to a

decline in special account assets due to deteriorating market

conditions and lower revenues.

Given the declining population, an aging society and

growing/ongoing distrust in the public pension system, Tokio

Marine & Nichido Financial Life expects demand to expand for

fi nancial products like investment trusts and variable annuities in

the long-term, although this demand will naturally fl uctuate

with changes in market conditions. While monitoring current

conditions, Tokio Marine & Nichido Financial Life will continue to

market products under the assumption that it will be able to

adequately control risks unique to its business. The Tokio

Marine Group will enhance prospects for growth by reinforcing

its relationships with partner fi nancial institutions.

02

13

International Insurance Business

Since around 2000, Tokio Marine Holdings has actively been

developing its international insurance business in the reinsur-

ance markets, where it can maximize its underwriting expertise

and capital strength, and in the emerging insurance markets

such as BRICs and other Asian countries, where it can expect to

establish a long-lasting foundation for future growth.

In such emerging insurance markets, it is essential to fl exibly

adjust to rapidly changing regulatory systems and competitive

environments and to implement effective business strategies

that envision future market directions.

Additionally and more importantly, Tokio Marine Holdings

has focused on, and achieved success in, fi nding local partners

having familiarity with local markets, localized marketing

capabilities and commercial networks supported by high

business ethics.

In 2008, Tokio Marine Holdings faced unprecedented global

economic turmoil when it was striving to set its business in

emerging insurance markets on a strong growth track. However,

some regions still produced record profi ts even in such challenging

business environments, which gave Tokio Marine Holdings the

confi dence to achieve further growth in emerging insurance

markets while enhancing its risk management structure.

On one hand, in order to be a global top-tier insurance

company, it is also essential to build a strong position in the

European and US insurance markets which represent 80 percent

of the world’s insurance market. Tokio Marine Holdings has been

engaged in locating excellent partners in Europe and the US that

will help the Tokio Marine Group to achieve its strategic goals.

There are three indispensable qualities required to join the

Tokio Marine Group, namely a sound business management

capability, a strong business model and a high growth potential.

In other words, each partner must have the ability to increase

its own corporate value and contribute to the overall growth

of the Tokio Marine Group.

In Europe, Tokio Marine Holdings invited the Kiln Group, a

well-respected player in the Lloyd’s insurance market, to

become a Tokio Marine Group company. The Kiln Group is one

of the top-ranked insurance groups in the Lloyd’s insurance

market in term of its underwriting capacities. The Kiln Group

has been earning respect and recognition for its competitive

commercial line products and prominent underwriting discipline.

For more than four decades, the Tokio Marine Group and

the Kiln Group have fostered mutual respect through a business

relationship focused on reinsurance. Finally in March 2008, the

Kiln Group joined the Tokio Marine Group through a friendly

acquisition.

The acquisition of the Kiln Group captured the attention of

the US insurance market and the interest of Philadelphia

Consolidated Holding Corp. (PHLY), a leading medium-sized US

insurance group which has consistently achieved exemplary

growth and earnings since its foundation in 1962.

After confi rming that PHLY and the Tokio Marine Group

share important business philosophies and strategies, they

jointly announced that PHLY had joined the Tokio Marine Group

through a friendly acquisition completed in December 2008.

Tokio Marine Holdings is convinced that it will be able to

advance its growth strategy in European and US insurance

market in combination with the Kiln Group and PHLY, and such

growth strategy in international insurance markets overall with

other member companies worldwide.

In fi scal 2008, earnings results in the international insurance

business of the Tokio Marine Group were adversely affected by

the turbulence in fi nancial markets and the rapid appreciation

of the yen, which has reduced yen-denominated profi ts

generated overseas. Nevertheless, the Tokio Marine Holdings

expects its international insurance business to account for 30

percent of the total adjusted earnings of the Tokio Marine

Group by fi scal 2011. (In fi scal 2009, management expects its

international insurance business to account for roughly 50 per-

cent of the total adjusted earnings due to the projected slow

recovery of its domestic insurance business.)

The Kiln Group was included in the scope of consolidation

from fi scal 2008, contributing 7.4 billion yen in net income of

the Tokio Marine Group. Kiln is striving to enhance its perfor-

mance by taking advantage of the pricing improvement in the

reinsurance market.

Earnings of PHLY will also be included in the scope of

consolidation beginning with fi scal 2009. In fi scal 2008, PHLY

achieved growth in the challenging business environment in

the US insurance market and is expected to continue showing

a favorable performance in fi scal 2009.

The Tokio Marine Group will continue to consider M&A

opportunities if it can fi nd partners that possess the three indis-



pensable qualities described above and that can help to expand

the overall corporate value of the Tokio Marine Group.

Forecasts for Fiscal 2009 and Shareholder Return Policy

Amid uncertainty prevailing in the global economy and fi nan-

cial markets, management has formulated the following fore-

casts for fi scal 2009.

It is expected that ordinary income will reach 3,320 billion

yen, a decrease of 183.1 billion yen. This is due primarily to a

decline in income from variable annuity premiums at Tokio

Marine & Nichido Financial Life, and comes despite an increase

in income from net premiums written with the addition of

Philadelphia Consolidated to the scope of consolidation in

fi scal 2009.

Ordinary profi t and net income are expected to increase to

125 billion yen and 80 billion yen, respectively, on improvement

in investment income based on the assumption that market

conditions will remain unchanged from the end of March 2009.

In order to maintain a solid capital basis, Tokio Marine

Holdings has ceased share repurchases. Its management will

consider resuming share repurchases when a stable rebound

takes root in fi nancial markets, but in the meantime the distri-

bution of dividends will take priority.

Corporate Social Responsibility

Tokio Marine Holdings has proactively engaged in corporate

social responsibility initiatives worthy of a global corporation.

Global warming will have a major impact on future genera-

tions. Tokio Marine & Nichido announced its “Comprehensive

Program Concerning Global Warming” in November 2007,

making a commitment to reduce the environmental impact of

its business activities while developing and providing products

and services that respond to climate change.

In addition, since 1999, the Tokio Marine Group has been

involved in the mangrove afforestation project, planting 5,901

hectares of mangrove trees in Southeast Asia. The mangrove

trees absorb large amounts of carbon dioxide, helping to pre-

vent global warming. They also support the economies in

which the trees are planted, and form a natural barrier that

protects people from tidal waves and other natural disasters.

For the past twenty years, Tokio Marine & Nichido has been

an active supporter of youth activities by sponsoring swimming

competitions. It also contributes to society through other activi-

ties, such as breast cancer awareness campaigns.

In Conclusion

From early on, Tokio Marine Holdings understood that it would

not be easy to increase return on equity (ROE) solely through

the Japanese non-life insurance business which requires consid-

erable reserves in case of such natural disasters as typhoons

and earthquakes. Accordingly, the business portfolio is being

strengthened with the addition of Japanese life insurance and

international insurance operations. With the understanding

and approval of its shareholders, the Tokio Marine Group aims

to increase capital effi ciency and pursue a management strate-

gy targeting global growth.

At an early stage, a robust business model was sought

allowing management to achieve the highest effi ciency in

resource allocation. In fi scal 2002, a holding company

structure was adopted and Tokio Marine Holdings again

became a pioneer. Following suit, other companies in the insur-

ance industry soon adopted holding company structures of

their own.

The global fi nancial crisis in fi scal 2008 and 2009 was an

extraordinary event that led to a profound slump in the global

economy and disrupted the balance of the business portfolio.

However, management believes the current mid-term corporate

strategy will lead to a restoration of profi tability in Japanese

non-life and life insurance businesses by fi scal 2011. The Tokio

Marine Group aims to recreate a solid, high-margin business

portfolio that is well suited to the new global insurance market.

Since its establishment 130 years ago, The Tokio Marine

Group has taken a pioneering role in offering new products

and services that advance the insurance business to new fron-

tiers. This ability to innovate on its own accord has become an

inseparable part of the DNA of all employees in the Tokio

Marine Group. Together, we aim to increase our competitive-

ness under the guidance of the management strategy outlined

above, and embark on a new growth trajectory.

02

15

(From April 1, 2008 to March 31, 2009)

Business Overview

During the fi scal year ended March 31, 2009, the Japanese

economy showed more serious signs of deterioration as turbu-

lence in the fi nancial markets triggered a global recession and a

decline in exports and sluggish consumer spending caused cor-

porate earnings to decrease signifi cantly.

In the insurance industry, property and casualty insurance

premiums decreased primarily because of lower automobile

sales volume, rate cut in compulsory automobile liability insur-

ance and decreased goods fl ow. In the life insurance sector, the

amount of newly signed insurance policies decreased due in

part to the declining birthrate and aging population.

In this environment, the Tokio Marine Group (the “Group”)

has striven to be a “global corporate group offering quality that

customers select.” While refl ecting upon previous errors found

in connection with insurance underwritings and claim pay-

ments, the Group has thoroughly carried out initiatives that

ensure proper operations and improve quality of business in

accordance with its three-year “Stage Expansion 2008” busi-

ness plan which ended in the fi scal year ended March 31, 2009.

Despite this effort, Tokio Marine Holdings, Inc. (“Tokio Marine

Holdings” or the “Company” or “We”) reported a signifi cant

underachievement of its consolidated business results. As

described below, this was mainly due to impairment losses on

securities resulting from turbulence in the fi nancial markets and

declines in stock markets.

On a consolidated basis, ordinary income amounted to

3,503.1 billion yen, a decrease of 206.9 billion yen from the

previous fi scal year. The main components of ordinary income

were underwriting income of 3,130.0 billion yen and invest-

ment income of 306.6 billion yen.

Ordinary profi t decreased by 194.1 billion yen to -15.1 bil-

lion yen. Net income was 23.1 billion yen for the fi scal year

ended March 31, 2009, a decrease of 85.6 billion yen from the

previous fi scal year.


On a non-consolidated basis, Tokio Marine Holdings, the hold-

ing company for the Group, received business management

fees amounting to 6.5 billion yen and dividends totaling 130.0

billion yen from its subsidiaries and affi liates, resulting in operat-

ing income of 136.5 billion yen, ordinary profi t of 130.4 billion

yen, and net income of 117.1 billion yen.

The Company seeks to enhance the management of subsid-

iaries by optimizing the allocation of management resources

and strengthening risk management and compliance through-

out the Group.

In addition, the Company changed its corporate name to

Tokio Marine Holdings, Inc. in July 2008 and has been pushing

forward with the Group growth strategies on a global basis

under the brand name of “Tokio Marine,” which we believe to

have wide recognition at home and abroad, aimed at increasing

overall corporate value.

Property and Casualty Insurance Business

In the property and casualty insurance business, premiums writ-

ten decreased in a diffi cult business environment. Profi tability of

investments also fell signifi cantly due to turbulent market condi-

tions caused by aggravation of the fi nancial crisis and worsen-

ing of the real economy.

The following represents the operating results of Tokio

Marine & Nichido Fire Insurance Co., Ltd. (“Tokio Marine &

Nichido”) for the fi scal year ended March 31, 2009. Net premi-

ums written were 1,813.4 billion yen, a year-on-year decrease

of 5.2 percent. Ordinary profi t was 69.6 billion yen, a decrease

of 114.3 billion yen, and net income was 71.1 billion yen, a

decrease of 51.8 billion yen from the previous fi scal year.

With respect to the operating results of Nisshin Fire &

Marine Insurance Co., Ltd. (“Nisshin Fire”) for the fi scal year

ended March 31, 2009, net premiums written were 135.9 bil-

lion yen, representing a decrease of 4.1 percent from the previ-

ous fi scal year. Ordinary profi t was -16.1 billion yen, a decrease

of 18.8 billion yen, and net income was -10.3 billion yen, a

decrease of 12.2 billion yen.

Major initiatives introduced in the property and casualty

insurance business in the fi scal year ended March 31, 2009

were as follows.



Tokio Marine & Nichido aims to maintain growth by offering

quality that customers select by ensuring its competitiveness

through the improvement of the quality of products and servic-

es, the enhancement of customer contacts in the course of

insurance solicitation to claim payments and the realization of

customer-friendly business processes as a whole.

Tokio Marine & Nichido focused on a new business renova-

tion project named “Drastic Reform of Business Processes” and

an establishment of “Multi-access.” The purpose of the new

business renovation project is to provide high-quality services

and enhance business effi ciency and customer-friendliness by

streamlining insurance products, restructuring the system infra-

structure and renovating business processes. As the fi rst step of

this project, Tokio Marine & Nichido substantially simplifi ed auto

insurance, the core product of Tokio Marine & Nichido, and

transferred the administration of auto insurance policies to a

new system infrastructure. Additionally, Tokio Marine & Nichido

reconfi gured its agency system in May 2008. In order to

enhance its customer contacts in full cooperation with agents,

Tokio Marine & Nichido is engaged in an establishment of a fun-

damental infrastructure called “Multi-access” that utilizes call

centers and websites for insurance solicitation.

Furthermore, to improve the service quality of agents

offered to customers, Tokio Marine & Nichido promoted the use

of TNet, a new agency system, and reinforced support to its

agents by utilizing “Agent Compass,” which helps agents

assess their managerial issues to be solved. Tokio Marine &

Nichido also supported its agents to improve the quality of their

risk consulting services by an alliance with Secom Co., Ltd.

where Tokio Marine & Nichido and Secom Co. Ltd. developed

an original home security system exclusively for customers of

Tokio Marine & Nichido. The home security system is offered as

part of the service menu of Tokio Marine & Nichido agents’ risk

consulting service that provides its customers with a preventa-

tive measure to ensure safety and security in combination with

insurance, which ensure an assurance for post-accidents.

Nisshin Fire also continues to focus on improving its insur-

ance underwriting and claim payments to enhance business

quality in the same manner as Tokio Marine & Nichido.

In January 2009, the Company entered into a business and

capital alliance agreement with NTT FINANCE CORPORATION,

a subsidiary of NIPPON TELEGRAPH AND TELEPHONE

CORPORATION, and established “E. design Insurance

Preparatory Co., Ltd.” Upon approval of business commence-

ment from the Financial Services Agency of Japan, this company

changed its name to “E. design Insurance Co., Ltd.” and

launched business operations in June 2009.

Life Insurance Business

With regard to the life insurance business, sales of whole-life

insurance and cancer insurance remained robust. However, sales

of variable annuity insurance declined mainly due to diminished

risk tolerance for investments caused by turbulence in the fi nan-

cial markets.

As of March 31, 2009, Tokio Marine & Nichido Life

Insurance Co., Ltd. (“Tokio Marine & Nichido Life”) recorded

19,074.5 billion yen in the amount of life insurance-in-force, an

increase of 1,076.7 billion yen from March 31, 2008, while the

amount of newly signed life insurance was 2,506.1 billion yen,

a year-on-year increase of 15.8 percent. Ordinary profi t amount-

ed to 5.5 billion yen, a decrease of 0.4 billion yen

from the previous fi scal year. Tokio Marine & Nichido Life con-

tinued to set aside additional amounts into underwriting

reserve, seeking to meet the standard underwriting reserve

required under the Insurance Business Law of Japan. As a result,

net income amounted to 0 billion yen.

As of March 31, 2009, Tokio Marine & Nichido Financial Life

Insurance Co., Ltd. (“Tokio Marine & Nichido Financial Life”)

recorded 2,642.2 billion yen in the amount of life insurance-in-

force, an increase of 306.3 billion yen from March 31, 2008,

although the amount of newly signed life insurance decreased

12.8 percent from a year earlier to 443.0 billion yen. Ordinary

profi t and net income amounted to 10.0 billion yen, an increase

of 16.5 billion yen from the previous fi scal year, respectively.

Major initiatives introduced in the life insurance business in

the fi scal year ended March 31, 2009 were as follows.

02

17

Tokio Marine & Nichido Life has been advancing the

“Second Inauguration Project,” centering on (1) reinforcement

of sales channels in response to the change in business environ-

ment, (2) renovation of business processes and (3) increased

promotion campaigns to gain wider recognition. It has also

sought to provide improved customer support through a pro-

gram called “Cancer Prevention Campaign” offering medical

checkups to customers to detect cancer at early stages.

Tokio Marine & Nichido Financial Life strengthened alliances

with fi nancial institutions on over-the-counter sales of variable

annuity insurance and has sought to ensure sound business

management by utilizing reinsurance to enhance its risk

management framework.


Major initiatives taken in the International insurance business in

the fi scal year ended March 31, 2009 were as follows:

The Company acquired Philadelphia Consolidated Holding

Corp. (“PHLY”), a U.S. property and casualty insurance group,

and made it a subsidiary of Tokio Marine & Nichido in December

2008. For the fi scal year ended December 31, 2008, PHLY

achieved steady revenue growth and recorded 145.1 billion yen

in net earned premiums, an increase of 15.3 percent from the

previous fi scal year. Through this acquisition, the Tokio Marine

Group has expanded the scale and earnings of its international

insurance business and established a solid foundation to oper-

ate an extensive insurance business in the U.S., the largest prop-

erty and casualty insurance market in the world.

In December 2008, the Company established through Tokio

Marine & Nichido a syndicate that assumes a principal role in

insurance underwriting in the Lloyd’s insurance market in the U.K.

We will strive to further develop our insurance business in Lloyd’s

through this syndicate in close cooperation with the Kiln Group, a

U.K. insurance group the Company acquired in March 2008.

Upon receiving an approval from the Chinese insurance

authorities in November 2008, Tokio Marine & Nichido estab-

lished a Chinese insurance subsidiary by reorganizing its

Shanghai Branch. The subsidiary plans to set up branches and

expand its insurance business in China.

In March 2009, for 26.6 billion yen, the Company sold to

Banco Santander S.A. all its shares of a life insurance and pen-

sion affi liate in Brazil that were held through its Brazilian prop-

erty and casualty insurance subsidiary.

Asset Management, Financial Services Business

and Other Businesses

During the fi scal year ended March 31, 2009, Tokio Marine &

Nichido closely evaluated individual investment cases in its man-

aged assets and carefully carried out risk management to main-

tain a sound fi nancial base. In addition, in order to meet

payment obligations such as insurance claims and maturity

refunds, Tokio Marine & Nichido continued its efforts to

strengthen its asset liability management and ensure the fi nan-

cial security and liquidity of its assets.

However, in the fi scal year ended March 31, 2009, the Tokio

Marine Group recorded large losses due to turbulence in the

fi nancial markets and the decline in stock markets.

Specifi cally, the Company’s subsidiaries recorded impairment

losses on securities of 98.8 billion yen, the major components of

which were impairment losses on domestic stocks of 37.0 bil-

lion yen and impairment losses on foreign securities, including

fund-related investments, of 53.3 billion yen. Impairment losses

on securities recorded in the Company’s consolidated fi nancial

statements were 162.2 billion yen, which includes an adjust-

ment amount of 63.3 billion yen, recorded only for consolida-

tion accounting purposes in accordance with the purchase

method of accounting adopted for past business combinations.

Besides these impairment losses on securities, impairment

losses relating to credit default swaps (CDS) and asset-backed

securities (ABS) amounted to 14.2 billion yen and 38.4 billion

yen, respectively.

The Company expanded its fi nancial services business, cen-

tered on the asset management business. As for other business-

es, the Company mainly engaged in risk consulting, elderly care

and health related businesses. While all these businesses faced a

diffi cult business environment amid the global fi nancial crisis

and recession in the fi scal year ended March 31, 2009, all group

companies will seek to further strengthen their risk manage-

ment measures.



Under its management philosophy to place “customer trust

at the base of all its activities,” the entire Tokio Marine Group

will endeavor to achieve further growth as a corporate group,

seeking growth characterized by high profi tability, sustainability

and soundness.

Note 1: Throughout this Business Overview, all amounts (including numbers of shares)

are truncated and all ratios are rounded.

Note 2: The yen-denominated amounts of net earned premiums of PHLY are calculated

at the exchange rate as of the end of December 2008. The business results of

PHLY are not included in the consolidated statement of income of the Company

for the fi scal year ended March 31, 2009, since PHLY became a consolidated

subsidiary of Tokio Marine Holdings in December 2008.

Note 3: The yen-denominated amount of sales price of shares of a life insurance and

pension affi liate in Brazil is calculated at the exchange rate as of the end of

December 2008.

Note 4: The Company’s consolidated fi nancial statements have recorded the securities

held by the acquired companies, including The Nichido Fire and Marine

Insurance Company, Limited, a predecessor company of Tokio Marine & Nichido,

and Nisshin Fire at the fair value as of the respective dates of acquisition in

accordance with the purchase method of accounting.

Consequently, the book value of the relevant securities on the Company’s

consolidated fi nancial statements is greater than those on the two subsidiaries’

individual fi nancial statements, and so are the impairment losses on the

relevant securities.

Initiatives for Prevention of Global Warming

In November 2008, Tokio Marine & Nichido became the fi rst

fi nancial institution in Japan to be verifi ed by a certifi ed third-

party institution as “carbon neutral”. Tokio Marine & Nichido’s

carbon emission levels from its entire domestic operations were

completely offset by its absorption/reduction effect. This refl ects

Tokio Marine & Nichido’s efforts to reduce carbon dioxide emis-

sion from its operations, its purchase of green electricity, a man-

grove afforestation project and its purchase/amortization of

emission rights.

Issues Facing the Tokio Marine Group

In the fi scal year ending March 31, 2010, the Japanese econo-

my is expected to face continued weak domestic and foreign

demand amid the global recession.

Given current economic conditions coupled with a declining

birthrate and aging population, the domestic insurance market

is not expected to grow and it remains an essential task for

insurance companies to ensure profi ts.

Beginning with the fi scal year ending March 31, 2010, the

Company has been implementing a new three-year corporate

strategy “Innovation and Execution 2011,” with a vision of

becoming a “global corporate group maintaining growth by

offering quality that customers select.” In accordance with the

strategy, we aim to realize sustainable earnings growth that

departs from the improvement of quality of products, services

and business processes. We will also focus on the establishment

of an optimal business portfolio by allocating management

resources in business areas with high profi tability and growth

potentials. Furthermore, in order to strengthen our business

management and administration system on a global basis, we

will enhance our risk management structure, including the

establishment of infrastructure necessary for our risk-based

management (through an ERM system), and cope with the

global standardization of accounting principles and risk man-

agement standards.

03

19

03CORPORATE STRATEGY AND PROFILE

Corporate Strategy 20

Special Feature:

International Business 24

Profi le of the Tokio Marine Group 28


03

Corporate Strategy

CORPORATE STRATEGY AND PROFILE

Tokio Marine Holdings strives to increase the corporate value of

group companies through constant growth and development,

simultaneously creating new value for society, customers and

other stakeholders through strategic CSR management of group

companies worldwide.

Guiding the way is Innovation and Execution 2011, a three-

year mid-term group corporate strategy that began in April

2009. In order to continue growing amid challenging business

conditions, Tokio Marine Holdings aims to build a secure posi-

tion from which it can enhance its competitiveness on a global

basis while providing products, services and business processes

through group companies that are selected by customers for

their quality.

Mid-Term Corporate Strategy

Innovation and Execution 20111Outline

In accordance with the mid-term corporate strategy “Innovation and Execution 2011,”

the Tokio Marine Group (the “Group”) will aim to be a “global corporate group maintaining

growth by offering quality that customers select” and seek to maximize corporate value

through two core strategies detailed below.

Quality encompasses all of the business activities of the Tokio Marine Group, extending to quality of products and services (conve-

nience and ease of understanding), quality of business processes (accuracy and speed), and fi nancial quality (fi nancial soundness).

Improving quality is essential to achieving sustainable earnings growth.

Mid-Term Vision (picture targeted for 2011)

Framework for mid-term corporate strategy

A global corporate group maintaining growth by offering quality that customers select Targeted adjusted earnings: 220 billion yen, adjusted ROE: 6% or higher

(1) Maintaining sustainable earnings growth through improvement of quality (2) Enhancing our global management structure

Competitive strategies of the domestic

insurance business

Competitive strategies of the international insurance business

Asset management

Other group-wide strategies

Risk-basedmanagement (ERM*)

Capital strategies

Long-term vision (picture targeted by 2015)

Top-tier global insurance group

Supportingtheoverallstrategy

*ERM: Enterprise Risk Management

03

21

(1) Maintaining Sustainable Earnings Growth Through

Improvement of Quality

In order for the Tokio Marine Group to grow in a sustainable

manner, we expect it will be necessary for all of the Group com-

panies to innovate through the growth cycle illustrated below.

We will endeavor to enhance stakeholder value in a sustainable

manner in this way.

(2) Enhancing Our Global Management Structure

We intend to build and enhance our global management struc-

ture to provide all stakeholders with high value regardless of

their country or their regional location and to more fl exibly uti-

lize management resources available within the Group on a

global basis.

In light of the fact that accounting standards and supervi-

sory regulations covering the insurance business have been

undergoing a process of revision, one of the activities we intend

to place a particular focus on is building the infrastructure need-

ed for enhancing our risk-based management (through an ERM

system).

Increase in customer value

Improvement of quality

Increase in the number of loyal customers

New investment in products and services

Improvement in profitability and capital efficiency

Increase in shareholder valueIn

crea

se in

soc

ial v

alue

Incr

ease

in e

mpl

oyee

val

ue

2Quantitative Vision(Numerical Targets)

Tokio Marine Holdings aims to achieve adjusted earnings of 220 billion yen and adjusted ROE

of 6% or higher by the end of its mid-term corporate strategy in fi scal 2011.

Plans call for the core domestic non-life insurance business to account for more than half

of adjusted earnings, and the expansion of both the international insurance business and

domestic life insurance business. Tokio Marine Holdings will concentrate on building a

business portfolio that strikes a balance among all operations.

(Billions of yen)

Business domains Fiscal 2007 results Fiscal 2008 results Fiscal 2009 projections Fiscal 2011 targets(quantitative vision)

Adju

sted

ear

ning

s

Domestic non-life insurance business 99.4 5.1 38.0 115.0

Tokio Marine & Nichido 100.2 16.9 49.0 115.0

Nisshin Fire (0.8) (10.7) 1.0 5.0

Other — (1.1) (12.0) (5.0)

Domestic life insurance business 15.1 (57.2) 21.0 40.0

Tokio Marine & Nichido Life 29.1 (6.0) 24.0 35.0

Tokio Marine & Nichido Financial Life and others (13.9) (51.2) (3.0) 5.0

International insurance business 29.7 20.8 53.0 60.0

Non-life insurance business 24.6 23.2 53.0 57.0

Direct insurance 8.1 3.3 33.0 40.0

Reinsurance 16.5 19.9 20.0 17.0

Life insurance business 6.5 (0.7) 2.0 6.0

Financial & General businesses (1.0) (21.1) (6.0) 5.0

Group total 143.2 (52.5) 106.0 220.0

Group total ROE 3.5% (1.7%) 4.1% 6% or higherNote: In order to capture and enhance the corporate value of the Tokio Marine Group, targeted earnings and ROE are based on “adjusted earnings” which are calculated as follows.

International insurance business totals exclude corporate expenses.

Defi nition of adjusted earnings*(1) Property and casualty insurance businessAdjusted earnings = Net income + Provision for catastrophe reserves

+ Provision for reserves for price fl uctuations - Gains (losses) from sales or valuations of ALM bonds and interest rate swaps - Gains (losses) from sales or valuations of stocks and proper-ties - Other special factors

*All fi gures are after tax

(2) Life insurance businessAdjusted earnings = Increase in embedded value - Capital transactions (withdrawals)(For some life insurance companies, adjusted earnings is calculated on the same basis as other businesses below, with corporate expenses excluded from earnings)

(3) Other businessesNet income determined following to fi nancial accounting principles

The expansion and growth cycle through improvements of quality


03

(1) Strong Customer Contact

Tokio Marine & Nichido Fire Insurance Co., Ltd. (“Tokio Marine

& Nichido”), the core of our domestic insurance business, has

been implementing the “Business Renovation Project” involving

such activities as streamlining products and back-offi ce work

processes and promoting the introduction of “TNet,” a new

agency system.

Going forward, Tokio Marine & Nichido will seek to provide

its customers with products and services through more customer-

friendly business processes and to strengthen customer contacts.

In order to achieve these goals, Tokio Marine & Nichido intends:

• to introduce a new agent management system “Agent

Compass” to support agents. (See note 1)

• to develop and operate “Multi-access” platforms to diversify

the agents’ solicitation process. (See note 2)

*Note 1 Agent Compass is a management support model that visualizes agent manage-

ment issues by quantitative and objective indicators, diagnoses the issues in line with the

business processes, and formulates effi cient and effective strategies.

*Note 2 “Multi-access” is expected to be a set of platforms offered to Tokio Marine &

Nichido’s agents for use in diversifying the solicitation process. Multi-access is expected

to offer agents a set of platforms, including a call-center, a web-based application plat-

form and a customer-contact database structured using current technology. These plat-

forms are expected to be tailored to Tokio Marine & Nichido’s agents so as to strengthen

customer contacts and improve the quality ultimately offered to Tokio Marine & Nichido’s

customers.

Growth Strategies for Our Main Businesses


1Domestic Insurance Business

With regard to our domestic insurance business, the core business of the Group, we intend to

further enhance our Group strengths. We will seek to achieve growth by gaining support from

customers and strengthening our competitiveness, including improving customer contacts and

maximizing strengths and synergies.

Business Renovation project

Agent management support making the most of the Agent Compass

Multi Access simplifies and improves the speed of services

Tokio Marine & Nichido is innovating and increasing efficiency in its business processes by introducing new agent systems “TNet”and simplifying products and administrative work .

Agent Compass strengthens marketing and sales capabilities by analyzing and proposing solutions to agent management issues.

Multi Access increases customer satisfaction by using the latest in technology, such as contact history databases at call centers and via the internet

Provide safety and security consulting services through agents

Enhance life and non-life insurance integrated management

Enha

nce

cont

act

poin

ts

Gro

wth

thr

ough

exp

ansi

on o

f cu

stom

er s

uppo

rt

(2) Maximizing the Group’s Collective Strength

(including integrated life and non-life insurance offerings)

Our customer needs are increasingly diversifying. More custom-

ers are purchasing insurance based on independent judgment

and full analysis rather than simply accepting insurance recom-

mendations by sales agents. In order to meet our customers’

expectations, we intend to offer an expanded insurance products

and services that will increasingly combine both life and non-life

insurance offerings. We believe the breadth of our insurance

line is one of the strengths of our Group.

As customers’ needs for consulting services relating to secu-

rity and safety and to risk management also will increase, we

expect our Group companies, including Tokio Marine & Nichido

Risk Consulting Co., Ltd. (operating risk consulting business),

Tokio Marine & Nichido Medical Service Co., Ltd. (operating

healthcare business) and Tokio Marine & Nichido Anshin

Consulting Co., Ltd. (operating life planning support business),

to be well positioned to meet the customer needs by utilizing

their own expertise and offering a variety of services with

innovative insurance features.

03

23

2International Insurance Business

Due to the global fi nancial crisis, we expect that insurance customers will be increasingly

inclined to assess the fi nancial soundness of insurance companies in their decision-making.

We believe that the fi nancial soundness our Group maintains will serve as a competitive edge

in expanding and gaining support from customers across the world.

(1) Growth Strategy

Kiln Group and Philadelphia Consolidated Holding

We completed two large strategic acquisitions in 2008—acqui-

sition of Kiln Group and Philadelphia Consolidated Holding

Corp. Currently, our focus is on achieving smooth integration of

these companies into our Group and on achieving their on-

going business plan. As we move forward, we will develop a

synergistic strategy combining the strengths of those companies

with the Tokio Marine Group.

Organic Growth Strategy

• With regard to our non-life insurance business (including rein-

surance and large corporate properties), we intend to revise our

insurance rates and underwrite new policies in line with the

changing business environment, taking account rising market

rates and the tendency of customers to select insurance compa-

nies based on their fi nancial soundness.

• We intend to steadily develop our non-life and life insurance

businesses focused on individuals, including efforts to diversify

our product lineups and distribution networks for individuals in

emerging markets, including Asia and Brazil.

• We intend to continue developing our business with Japanese

companies abroad—which is an important pillar of our interna-

tional insurance business. We will seek to upgrade our capabilities

in responding to the needs of Japanese companies abroad by

close collaboration with domestic insurance business counterparts.

M&A Strategy

To enhance our medium-to-long-term growth potential, we

intend to continue evaluating M&A opportunities by taking the

following three factors into consideration:

(i) sound management

(ii) robust business model; and

(iii) high growth potential.

(2) Further Development and Reinforcement of Management

Structure and Infrastructure

Our international insurance business has undergone substantial

change both in size and quality as a result of the M&A transac-

tions. We also plan to implement a global risk-based manage-

ment system (ERM system) to further upgrade our management

structure and improve our infrastructure.

3Financial and General Businesses

(1) Financial Business

We will pursue initiatives to improve the Group’s business port-

folio and facilitate earnings growth by focusing on developing

the asset management (fee) business and other capital-effi cient

businesses.

(2) General Business

We will seek to actively develop our general businesses further

and create more value for insurance customers by identifying

their continually diversifying needs and by delivering innovative

security and safety-related products and services.

Direction of Strategies

Smooth integration of Kiln and Philadelphia Consolidated and execution of business plans

Enhancement of management control for the entire international insurance business

Timely and adequate response to changes in market environment

To create an international insurance business portfolio with well balanced geographical diversification and sustainable profit growth


03

As the Japanese market matures, international insurance business

has become our key business driver to achieve further growth

and profi tability for the entire Tokio Marine Group. It could be

also considered to be the key driving force for the overall growth

of the Group; a unit which can produce sustainable profi ts

through the establishment of a globally diversifi ed portfolio.

Our international operation started in 1880, the following

year of the Group’s foundation, giving us 129 years of experi-

ence in this business. Today, we have built an extended global

network spanning 399 cities in 36 countries and regions, with

14,600 staff working overseas.

The original focus of the business was on serving Japanese

corporate clients operating in Europe, the U.S. and other parts

of the world. Since 2000, however, we have expanded our

operations to indigenous markets mainly through strategic

acquisitions in the emerging territories such as Asia. The objec-

tive is for us to take advantage of the high potential growth in

both the economy and insurance markets of these regions.

In addition, through taking full advantage of our competi-

tive strengths, such as superior credit rating and large capacity,

we have expanded our international reinsurance business.

Through the foundation of Tokio Millennium Re Ltd. in Bermuda

in 2000 and Tokio Marine Global Ltd. in London in 2005, we

have established a platform to generate profi table business.

Furthermore, in 2008, we completed two major acquisitions,

Kiln and Philadelphia (PHLY), which enabled us to establish a

strong presence in London and the U.S., the two key insurance

markets of the world. These transactions have enabled us to

establish a solid foundation from which to build sustainable

profi ts within a well-balanced business portfolio.

Those initiatives have led to a signifi cant growth in the over-

all contribution that international business makes to our Group.

In 2003, international insurance business accounted for a mere

4% of the Group’s total adjusted earnings. This fi gure has

increased to 6% and 21% in years 2005 and 2007 respectively.

Our target is to grow the share of international insurance busi-

ness to 27% by 2011, the fi nal year of the current mid-term

corporate strategy.

Looking towards the future, the biggest agenda item for our

international insurance business is to continue profi table

growth. The initiatives with the highest priorities are as follows:

• Kiln and PHLY: full execution of their business plans

• Reinsurance / large commercial P&C business:

increase of profi t through timely and adequate response to

changes in market conditions

• Personal lines and life insurance: expansion in emerging

markets through diversifi cation of products and distribution

channels

With respect to M&A opportunities, we will continue to

investigate and take advantage of opportunities which fulfi ll our

criteria. We also regard enhancement of management control

as an important element to maintain and enhance disciplined

operations which are the basis of profi tability and growth. The

areas that are particularly important are underwriting capabilities

and the establishment of ERM (Enterprise Risk Management)

systems, which include full risk quantifi cation expertise.

Through the execution of these initiatives, we expect to

contribute further to the overall growth of the Group.

Special Feature: International Business


Philadelphia 34%

Reinsurance 10%

Asia 12%

Europe 3%

Life Insurance 11%

Kiln 11%

North & Central America 7%

South America 12%

Non-Life Insurance 89%2009 Projections

Non-Life

Life

Shin-Ichiro OkadaMember of the Board

Senior Managing Director

Tokio Marine Holdings, Inc.

4%

27%

2003 2011 Projections

Share of International Insurance Business within the Group

Breakdown of Net Premiums Written from International Insurance Business

03

25

Kiln was founded in 1962 by Robert Kiln, who at that time was

one of the leading lights in the reinsurance market at Lloyd’s. It

is headquartered in London, and all its underwriting is done

within the Lloyd’s insurance market.

In addition to its headquarters in the U.K., Kiln has offi ces in

Hong Kong, Singapore, South Africa and Belgium. There are

330 employees and net premiums written will be £450 million

in 2009.

Kiln is a leading player and one of the largest managing

agents in the Lloyd’s market, providing a specialist underwriting

service based on underwriting expertise and experience.

Under the wing of Kiln Group Limited (the Group’s holding

company ), R J Kiln & Co Limited (the managing agency) is

responsible for decision-making in the underwriting of business

and the management of Kiln’s syndicates at Lloyd’s. Until 2008,

Kiln had four syndicates, all writing specialist insurance. At the end

of 2008, Kiln launched a new syndicate known as 1880, which

is fully capitalized by Tokio Marine, and which brings the num-

ber of syndicates under management to fi ve.

In summary, Kiln is noted for (1) a high degree of profes-

sionalism and highly developed underwriting skills; (2) custom-

er-oriented management responding appropriately and quickly

to customer needs based on long-term relationships with cus-

tomers; and (3) management principles based on continuity,

consistency and integrity. These values, including that of cus-

tomer-oriented management, are values which Tokio Marine

and Kiln hold in common.

The combination of Kiln’s fi rst-class underwriting skills, its

underwriting discipline, and its strong brand in the London

Market, together with the Tokio Marine’s superior credit rating,

large capacity and global network has the clear potential to

achieve a signifi cant strengthening in the underwriting of direct

and reinsurance business in the global corporate fi eld across the

Group, as well as establishing a stronger foundation for the

growth of profi table business.

The launch of Syndicate 1880 within a year of Kiln’s acquisi-

tion by Tokio Marine demonstrates strong evidence of the syn-

ergy that exists between the businesses, combining Kiln’s

superior underwriting expertise with Tokio Marine’s fi nancial

strength and stability. It is expected that further benefi ts of this

synergy will be realized through the exploitation of both com-

panies’ competitive advantages.

Overview of Kiln Group

• Corporate headquarters: London, the U.K.

• Major companies:

Holding company: Kiln Group Limited

Managing agency: R J Kiln & Co Limited

(manages Kiln’s fi ve syndicates)

• Overseas offi ces:

Hong Kong, Singapore, South Africa and Belgium

• Lines of business:

property, reinsurance, marine, aviation, life, accident & health

• Financial highlights (FY2009 Projections):

Net Premiums Written: ¥63.1 billion

Adjusted Earnings: ¥4.8 billion

• Credit rating:

S&P: A+ (as Lloyd’s), A.M. Best: A (as Lloyd’s)

Competitive Advantages

• One of the most prestigious brands in the Lloyd’s market

• A high degree of professionalism and underwriting skills

• Professional underwriters

Kiln Group

Charles FranksGroup Chief Executive Offi cer

The Lloyd’s building in London


03

Philadelphia Insurance Companies (PHLY) was founded in 1962

as a general agency by Mr. James J. Maguire, the current chair-

man. In 1993, it became a public company on NASDAQ. It now

has become the top performer in the U.S. P&C insurance

market, continuously demonstrating profi table growth.

PHLY’s success is founded on a strategy which selects and

focuses the underwriting of a basket of risks for profi table niches

(such as non-profi t social service industry, schools, and religious

organizations). Through adherence to this strategy, PHLY has

achieved dramatic growth with a current network of 48 offi ces

and 1,400 employees. Its net premiums written will be $1.9

billion in 2009.

The fi rst and the most distinguishing characteristic about

PHLY is its talented professionals, who work hard every day

to provide quality products and services. They focus on

providing service to customers at the highest level in the

insurance business.

Secondly, the company has a very good business model. It

has multiple channels of distribution through which its products

are offered and it proactively brings new business into the

company by working in tandem with independent agents

and brokers.

Thirdly, it utilizes advanced technology to provide its

customers with the best quality products and services available

in the market. The business process from marketing through

underwriting and claim service is completely paperless.

In addition, another unique aspect of PHLY is its community

involvement. The spirit of voluntary work has been a part of its

culture since its founding. PHLY is a sponsor of the Philadelphia

Triathlon. Members of the company take part as triathletes, and

the proceeds that they give and raise from these races go to

charities. PHLY is a big supporter of the Children’s Hospital of

Philadelphia, The Leukemia Association, the Red Cross

Association and many other charitable associations.

By becoming a member of the Tokio Marine, superior credit

rating and solid fi nancial ground will allow PHLY to compete

actively with the larger companies in the U.S. market, and pro-

actively expand its business.

Overview of Philadelphia Insurance Companies

• Corporate headquarters: Bala Cynwyd

(suburbs of Philadelphia), Pennsylvania, the U.S.

• Major companies:

Holding company: Philadelphia Consolidated Holdings Corp.

Insurance company: Philadelphia Indemnity Insurance Company

Philadelphia Insurance Company

• Offi ce network:

48 regional and fi eld offi ces across the U.S.

• Line of business:

mainly in mid / small commercial

(specialty products focused on targeted niches)

• Financial highlights (FY2009 Projections):

Net Premiums Written: ¥188.6 billion

Adjusted Earnings: ¥25.4 billion

• Credit rating:

S&P: AA-, A.M. Best: A+

Competitive Advantages

• Designing insurance products with value-added coverages

and services

• Marketing through multiple distribution channels

• Clients less exposed to economic trend as follows;* Non profi t & social service organizations* Schools & medical facilities* Sports facilities* Auto related (rental cars, classic cars, etc.)* Professionals (accountants, etc.)

Philadelphia Insurance Companies

James J. Maguire, Jr.President & Chief Executive Offi cer


Corporate headquarters of PHLY in Bala Cynwyd

03

27

Asia

Tokio Marine has actively expanded in Asian market since 2000,

one of the fastest growing markets in the world, mainly

through strategic acquisitions. In particular, the acquisition of

Asia General Holdings (AGH) Group, which operates non-life

and life insurance business in Singapore and Malaysia, has

signifi cantly enlarged the scale of our Asian operation.

Net premiums written from Asia in 2009 is expected to

reach ¥64.4 billion* from non-life and ¥59.0 billion from life.

Adjusted earnings in 2009 will be ¥6.4 billion* from non-life

and ¥1.5 billion from life, which accounts for 15% of the

international insurance business portfolio.* The fi gures include Oceania.

One of the characteristics of our Asian business is the wide

and diversifi ed network extended throughout Asia, managed

by regional headquarters established in Singapore. Another

unique aspect is that we operate both non-life and life business

in this region, whereas in other parts of the world our operation

is predominantly non-life. Our non-life insurance operations are

in 12 countries and regions including China, India and ASEAN

countries, which focus on both local and Japanese related busi-

ness. Life insurance operation is in 4 countries, namely China,

Thailand, Malaysia and Singapore.

We plan and execute strategies suited to each market

depending on its stages of market development. In China,

which is expected to grow into a huge market in the near

future, we intend to achieve growth and profi tability by expand-

ing branch network through newly established subsidiary in

Shanghai. In India, which is another booming market, we plan

to expand business with emphasis on the bottom-line, consider-

ing the current challenging market conditions mainly caused by

the elimination of tariffs. In Singapore and Malaysia, we will

strive to balance the growth of both non-life and life by utilizing

the platform we acquired from AGH.

While the current size of Asian market is rather small com-

pared to markets in Europe and the U.S., we intend to further

enhance the business development in this region in expectation

of its large growth potential.

Major Operations in Asian Region

Tokio Marine Centre in Singapore (will be completed in 2010)

Non-life Insurance OperationLife Insurance Operation

South Korea

China

Taiwan

Hong KongIndia

PhilippinesVietnamThailand

Malaysia

Indonesia

Singapore

70

35

0

64.4

58.1

2006 2009 projections

7

3.5

0

6.4

3.4


Asia Non-life (JPY in billions)

Net Premiums Written Adjusted Earnings

70

35

0

59.0

14.2


2

0

-2

1.5

-1.8


Asia Life (JPY in billions)

Net Premiums Written Adjusted Earnings

2009 fi gures include intra-group reinsurance accounts.



Tokio Marine Holdings Business Description

Tokio Marine Holdings is responsible for establishing and overseeing

strategies for the entire group, managing the group’s capital, and

preparing consolidated fi nancial statements. In addition, the holding

company oversees subsidiaries to ensure that their compliance, inter-

nal auditing, risk management and other activities are consistent

with the group’s basic policies. As the publicly owned company rep-

resenting the Tokio Marine Group, the holding company also han-

dles investor relations, public relations, and corporate social

responsibility for the group.

The holding company takes the lead in maximizing corporate

value. One way is by establishing medium- and long-term strategies.

The company also allocates resources to business fi elds with the

best prospects for profi tability and growth. Collectively, these activi-

ties drive constant reforms of the group’s business portfolio and

help capture synergies from the various businesses of subsidiaries.

Profile of the Tokio Marine Group

Tokio Marine & Nichido Fire Insurance Co., Ltd.

Nisshin Fire & Marine Insurance Co., Ltd.

E. design Insurance Co., Ltd.

Tokio Marine & Nichido Life Insurance Co., Ltd.

Tokio Marine & Nichido Financial Life Insurance Co., Ltd.

Millea Nihon Kosei SS Insurance Co., Ltd.

Tokio Marine & Nichido Anshin Consulting Co., Ltd.

Tokio Marine & Nichido Career Service Co., Ltd.

Tokio Marine Nichido Samuel Co., Ltd.

Tokio Marine & Nichido Facilities, Inc.

Tokio Marine & Nichido Medical Service Co., Ltd.

Tokio Marine & Nichido Risk Consulting Co., Ltd.

Millea Mondial Co., Ltd.

Tokio Marine Property Investment Management, Inc.

Tokio Marine Seguradora S.A.

Tokio Marine Asia Pte. Ltd.

Tokio Marine Bluebell Re Limited


(listed holding company)

Companies in which Tokio Marine Holdings Directly Invests


03

29


Domestic Non-life

Insurance Business

Domestic Life

Insurance Business

General Business

Financial Business(Investment advisory and investment trust services)

Tokio Marine Asset Management Co., Ltd.

(Private equity investment services)

Tokio Marine Capital Co., Ltd.

(Derivatives and securities services)

Tokio Marine Financial Solutions Ltd.

(Real estate investment advisory services)

Tokio Marine Property Investment Management, Inc.

and others





E. design Insurance Co., Ltd.

Millea Nihon Kosei SS Insurance Co., Ltd.

Philadelphia Consolidated Holding Corp.

Tokio Marine Management, Inc.

Tokio Marine Seguradora S.A.

Tokio Marine Europe Insurance Limited

Tokio Marine Asia Pte. Ltd.

The Tokio Marine &

Nichido Fire Insurance Company (China) Limited

Tokio Millennium Re Ltd.

Tokio Marine Global Ltd.

Kiln Group Limited

Tokio Marine Bluebell Re limited

and others

[Risk consulting business]

Tokio Marine & Nichido Risk Consulting Co., Ltd.

[Comprehensive personnel services business]

Tokio Marine & Nichido Career Service Co., Ltd.

[Facility management business]

Tokio Marine & Nichido Facilities, Inc.

[Total healthcare consulting business]

Tokio Marine & Nichido Medical Service Co., Ltd.

[Senior citizen-related business]

Tokio Marine Nichido Samuel Co., Ltd.Tokio Marine Nichido Better Life Service Co., Ltd.

[Assistance business]

Millea Mondial Co., Ltd.

[Insurance agent business]

Tokio Marine & Nichido Anshin Consulting Co., Ltd.,

and others

Customers

Business Domains of the Tokio Marine Group and Main Group Companies


Overseas Network

(As of March 31, 2009)

Overseas offi ces:

Located in 399 cities in 36 countries and regions

� Expatriate staff: 173

� Local staff: Approximately 14,600

Claims agents:

Located in 250 countries and regions




With an emphasis on the domestic retail market, Nisshin Fire, a non-life insurer, carries

out its marketing activities fi rmly rooted in the communities. Aiming to be a leading

player as the “Customer-oriented company” in the non-life insurance industry, the

Company endeavors to enhance its business quality by reviewing every business activi-

ty from customers’ perspective and making improvements such as development of

tools to help customers easily understand its products and introduction of its unique

agency commission system. With July 2008 marking the 100th anniversary of the

Company, Nisshin Fire will continue to deliver customer-oriented security and compen-

sation with the goal of becoming the most trusted retail non-life insurance company.

Company Profi le (As of March 31, 2009)

Established: June 10, 1908

Capital: ¥20.3 billion

Net premiums written: ¥135.9 billion

Total assets: ¥443.0 billion

Number of employees: 2,746

Headquarters: 2-3 Kanda Surugadai, Chiyoda-ku, Tokyo, Japan

Telephone: 81-3-3292-8000

Website: http://www.nisshinfi re.co.jp/

Main Insurance Business Companies


In October 2004, Tokio Marine & Nichido Fire Insurance Co., Ltd. was founded as a

leading company in the domestic non-life insurance industry, formed through the

merger of Tokio Marine and Nichido Fire, with their histories of 125 and 90 years

respectively. Tokio Marine & Nichido has unrivaled strengths in the area of product

and service development and risk consulting backed by sound fi nancial strength and a

high level of specialized expertise, and in its superior network of agents, its claims set-

tlement service network and its worldwide network. We properly manage our busi-

ness from the customer’s point of view, aiming to be chosen for our quality and

aspiring for steady growth.


Established: August 1, 1879


Net premiums written: ¥1,813.4 billion

Total assets: ¥8,413.4 billion


Headquarters: 1-2-1, Marunouchi, Chiyoda-ku, Tokyo, Japan

Telephone: 81-3-3212-6211

Website: http://www.tokiomarine-nichido.co.jp/

03

31


As a life insurance company specializing in variable annuities insurance and variable insurance,

Tokio Marine & Nichido Financial Life plays a vital role in the Tokio Marine Group, seeking to

achieve the vision described by the Group’s corporate philosophy of “Providing the safety and

security necessary in order to contribute to the continuing economic aspirations of an affl uent and

comfortable society.” With customer trust at the base of all its activities, the Company endeavors

to provide products that satisfy its customers and services from the customer’s point of view.


Date of foundation: August 13, 1996


Total policy amount in force (individual insurance + individual annuities): ¥2,642.2 billion


Number of employees: 363

Headquarters: ThinkPark Tower, 2-1-1, Osaki, Shinagawa-ku, Tokyo, Japan

Telephone: 81-3-6420-4000

Website: http://www.tmn-fi nancial.co.jp/


Tokio Marine & Nichido Life plays a key role in the domestic life insurance business, one of the

core businesses of the Tokio Marine Group. Since opening in 1996 with “Customer-oriented life

insurance business” as its basic philosophy, the Company has provided innovative life insurance

products that suit customers’ needs through its strong sales channels of agents and Life Partners,

resulting in its considerably remarkable growth that had hardly been seen among competitors.

Tokio Marine & Nichido Life seeks to become the “Insurer most trusted by customers and agents

in Japan” by appropriately responding to diversifying customers’ needs and working to implement

further innovations in its business model.


Date of foundation: August 6, 1996


Total policy amount in force (individual insurance + individual annuities): ¥15,914.4 billion



Headquarters: 5-3-16 Ginza, Chuo-ku, Tokyo, Japan

Telephone: 81-3-5537-6555

Website: http://www.tmn-anshin.co.jp/

04

04MANAGEMENT SYSTEM

Basic Policies for International Controls 33

Corporate Governance 35

Compliance 36

Information Management 38

Risk Management 39

Corporate Social Responsibility 41

Internal Audit 44

Disclosure and Investor Relations 45


04

33

04

33

M A N A G E M E N T S Y S T E M

Tokio Marine Holdings, based on the Corporation Law and its

enforcement regulations, operates internal control systems in

accordance with the following Basic Policies for Internal

Controls that were approved by its Board of Directors.

In accordance with the Companies Act of Japan and the

Enforcement Regulations of the Companies Act of Japan, the

Company has adopted basic policies for internal controls as

described below.

1. System for Ensuring That Business Operations within the Tokio

Marine Group Are Appropriate

As a holding company presiding over the businesses of the

Group, Tokio Marine Holdings shall, as appropriate, exercise its

rights as a shareholder of its subsidiaries in a manner consistent

with the goal of maximizing the Group’s corporate value. In

accordance with the “Tokio Marine Holdings, Inc. Group

Company Management Policies,” the Company shall prescribe

the Group’s business strategies and various basic policies that

form the foundation of the Group’s business management.

Furthermore, the Company shall enter into management agree-

ments with each subsidiary that include the identifi cation of

important matters requiring the Company’s prior approval, such

as the subsidiaries’ business strategies and plans, thereby

enabling the Company to manage the businesses of its subsid-

iaries. The management of indirectly-owned subsidiaries shall

generally be conducted through their direct parent companies.

2. System for Ensuring That Professional Duties Are Performed in

Accordance with the Laws and the Articles of Incorporation

(1) The Company shall establish the Group’s basic policy relating

to the promotion of compliance and implement a system for

ensuring compliance of the Group.

(a) The Company shall formulate a Code of Conduct and

ensure that the offi cers and the employees of the Group

understand that top priority should be given to compliance

in all phases of business activity with the Code of Conduct.

(b) The Company shall establish a division that oversees

compliance issues, as well as a Compliance Committee, to

discuss important issues regarding the promotion of compli-

ance within the Group. The Company shall also monitor

progress toward compliance by the Group and report the

results thereof to the Board of Directors.

(c) The Company shall require each of its subsidiaries to pre-

pare a compliance manual and provide training on laws and

internal rules that must be observed by the offi cers and

employees of such subsidiary with a view toward enhancing

compliance.

(d) The Company shall establish reporting rules to be used

in the event of violations of laws or internal rules by a

subsidiary and, a part from the usual reporting route, set

up hotlines (an internal whistle-blower system) within the

Group while keeping the offi cers and employees of the

Group companies informed as to the use of the system.

(2) The Company shall establish the Group’s basic policy for

responding to antisocial factions and groups, and respond,

in an organized and uncompromising manner and in associa-

tion with such professionals as lawyers and the police, to

antisocial factions and groups which threaten the order and

safety of civil society.

(3) The Company shall perform an effective internal audit using

an internal audit division that is independent from other

divisions. In addition, the Company shall establish the basic

internal audit policies of the Group, require its subsidiaries to

perform an effective internal audit, monitor the implementa-

tion of the internal audit, the status of the internal controls

system and so forth and report the results thereof to the

Board of Directors.

3. System Regarding Risk Management

(1) The Company shall formulate basic policies for risk manage-

ment of the Group and require each subsidiary to carry out

its own risk management with respect to the operations of

its business.

(2) The Company shall perform risk management of the entire

Group by establishing a Risk Management Committee that

deliberates on important matters concerning the risk man-

agement of the Group, as well as by establishing a unit that

controls risk management, thereby capturing a sense of risk

levels across the entire Group. The fundamental processes

for carrying out risk management are risk identifi cation, risk

evaluation, risk control, creation of a contingency plan and

monitoring and reporting on risk management performance.

The Company shall implement appropriate processes

depending on the type of business operations and the risk

characteristics of a subsidiary and shall report on the status

of implementation of risk management to the Board of

Directors.

(3) The Company shall formulate the policies regarding the

integrated risk management and perform quantitative risk

management of the entire Group to maintain the Group’s

credit rating and to prevent bankruptcy.

Basic Policies for Internal Controls


04

4. System for Ensuring That Professional Duties Are Performed

Effi ciently

(1) The Company shall formulate a medium-term management

plan and an annual plan for the Group (including numerical

targets, etc.), monitor the status of plan implementation at

subsidiary levels and report the results thereof to the Board

of Directors.

(2) The Company shall establish rules regarding the exercise of

authority in order to realize effi cient business performance

by means of division of responsibilities and a chain of com-

mand. At the same time, the Company shall construct an

appropriate organizational structure to achieve its business

purpose.

5. System for Protecting the Customers’ Interest

The Company shall establish the Group’s basic policies for pro-

tection of customers’ interest and implement a system for pro-

tecting customers’ interest, thereby ensuring customer-oriented

operation and the protection of customers’ interest.

6. System for Keeping and Managing Information with Respect

to Directors’ Performance of Duties

The Company shall establish rules on keeping and managing

documents and so forth. The minutes of important meetings,

other important documents and so forth, including information

on the performance of directors’ duties, shall be properly kept

and managed in accordance with such rules.

7. System for Ensuring the Appropriateness and Reliability of

Financial Reporting

The Company shall establish the necessary system to ensure the

appropriateness and reliability of fi nancial reporting of the

Group, monitor the effectiveness of the system on a periodic

basis and report the results thereof to the Board of Directors.

8. System Regarding Audits by Corporate Auditors

(1) System of reporting to corporate auditors

(a) Directors shall regularly report the status of management,

fi nancial condition, compliance, risk management, internal

audit and so forth to corporate auditors, and when, in con-

nection with execution of their functions, they fi nd any

material violation of laws or internal rules or any other

condition or fact that may cause considerable damage to the

Company, they shall immediately make a report thereof to

corporate auditors.

(b) Corporate auditors shall attend meetings of the Board of

Directors and other important meetings or committees such

as the management meetings and express their

opinion. Furthermore, minutes of important meetings and

other important documents relating to decisions approved by

directors shall be shown to corporate auditors at any time

upon request from corporate auditors.

(c) Status of the hotline operation and important reporting

and consultation matters shall be reported regularly to cor-

porate auditors.

(d) Directors and employees shall explain matters concerning

the operation of their businesses at any time upon request

from corporate auditors.

(2) Matters concerning employees assisting with the auditing

duties of corporate auditors, including matters concerning

such employees’ independence from directors

(a) In order to assist corporate auditors in carrying out their

duties, the Company shall establish a secretariat under the

direct control of corporate auditors. Upon request from

corporate auditors, the Company shall assign full-time staffs

who have the knowledge and ability to assist the audit.

(b) The staffs assigned to the secretariat of corporate audi-

tors shall perform their assigned tasks ordered by corporate

auditors and other work that is required to assist the audit,

and such staffs shall have the right to collect the necessary

information.

(c) The performance evaluation and transfer of, and disciplin-

ary action against, such staffs shall be carried out with the

approval of the standing corporate auditors.

(3) Coordination with corporate auditors of subsidiaries

Corporate auditors shall, based on audit standards and so

forth, request corporate auditors of subsidiaries to report

regularly on important matters regarding the respective

subsidiaries, such as the audit policy, audit status, audit

results and so forth and shall endeavor to closely work

with corporate auditors of subsidiaries in order to perform

effective auditing. Additionally, corporate auditors shall

receive updates from directors or employees of subsidiaries

on the status of their duties at the respective subsidiaries

as necessary.

Adopted on May 2, 2006

Revised on December 17, 2007

Revised on July 1, 2008


04

3535

Corporate Governance

Corporate Governance Policies

Tokio Marine Holdings, Inc. (the “Company”), in line with the

Tokio Marine Group Corporate Philosophy, is committed to the

continuous enhancement of corporate value by fulfi lling its

responsibilities to shareholders, customers, society, employees

and other stakeholders. For this purpose, the Company hereby

establishes a sound and transparent corporate governance

system and, as a holding company, aims to exercise appropriate

control over the Tokio Marine Group companies.

Tokio Marine Holdings corporate governance policies shall

be reviewed and amended as necessary to adapt to changes in

the business environment.

I.

Management Organization

1. The Board of Directors

(1) Responsibilities of the Board of Directors and its Members

The Board of Directors is responsible for decisions on important

matters relating to the execution of the Company’s business, for

supervising the performance of individual directors, and estab-

lishing an effective internal control system. In addition, as the

Board of Directors of a holding company, it is responsible for

determining medium- to long-term business strategies and vari-

ous basic business policies for the Tokio Marine Group.

Each director shall endeavor to enable the Board of Directors

to fulfi ll these responsibilities and functions.

(2) Composition of the Board of Directors

The number of directors shall generally be approximately ten

members, of whom, as a general rule, at least three shall be

outside directors.

(3) Directors’ Term of Offi ce

Directors shall be appointed for a term of offi ce of one year.

Directors may be re-appointed.

2. Corporate Auditors and the Board of Corporate Auditors

(1) Responsibilities of Corporate Auditors and the Board of

Corporate Auditors

Corporate auditors, as an independent body entrusted by share-

holders, shall audit the performance of directors, with the aim

to ensure sound and fair management and accountability.

Corporate auditors shall endeavor to conduct a high quality

audit in accordance with the regulations of the Board of

Corporate Auditors, auditing standards, auditing policies and

auditing plans determined by the Board of Corporate Auditors.

(2) Composition of the Board of Corporate Auditors

The number of corporate auditors shall generally be around

fi ve. As a general rule, a majority of the corporate auditors shall

be outside corporate auditors.

3. Nomination Committee and Compensation Committee

(1) Responsibilities of the Nomination and Compensation

Committees

The Company shall have a Nomination Committee and a

Compensation Committee to serve as advisory bodies to its

Board of Directors.

The Nomination Committee shall deliberate on the following

matters and report to the Board of Directors:

• The appointment and dismissal of directors (including non-

members of the board) and corporate auditors of the Company

and its principal business subsidiaries (*); and

• The criteria for the appointment of directors (including non-

members of the board) and corporate auditors of the Company

and its principal business subsidiaries.

The Compensation Committee shall deliberate on the following

matters and report to the Board of Directors:

• Evaluation of the performance of directors (including non-

members of the board) of the Company and its principal busi-

ness subsidiaries; and

• The compensation system for directors (including non-mem-

bers of the board) and corporate auditors of the Company and

its principal business subsidiaries(*) The term “business subsidiary” refers to companies in which the Company directly

holds a majority of the voting rights.

(2) Composition of Nomination and Compensation Committees

The Nomination Committee and the Compensation Committee

shall generally each consist of approximately fi ve members. As a

general rule, a majority of the members of each committee shall

be selected from outside of the Company, and the chairman of

each committee shall be one of the outside members.

II. Compensation System for Directors and Corporate Auditors of the Tokio Marine Group

(1) Compensation of Directors and Corporate Auditors of the

Company

Compensation for full-time directors (including non-members of

the board) consists of three elements: fi xed compensation;

bonuses related to the business performance of the Company

and the performance of the individual; and stock options.

Compensation for corporate auditors and part-time direc-

tors consists of two elements: fi xed compensation and stock

options.

04

(2) Compensation of Directors and Corporate Auditors of

Principal Business Subsidiaries

The compensation system for directors (including non-members

of the board) and corporate auditors of the Company’s principal

business subsidiaries shall generally be identical to that applied

to directors (including non-members of the board) and corpo-

rate auditors of the Company.

III. Corporate Governance of Subsidiaries

(1) Governance System

In the “Basic Policies for Internal Controls,” the Company shall

prescribe basic terms for the management of the business sub-

sidiaries, systems relating to the promotion of compliance, risk

management and internal auditing of the Tokio Marine group,

and the Company shall manage its subsidiaries through the

establishment and operation of a governance system based on

these basis terms.

(2) Evaluation of Business Results of the Business Subsidiaries

The Company shall evaluate the business results of each busi-

ness subsidiary of the Tokio Marine Group on an annual basis,

comparing actual results with previously determined business

results indices. The results of such evaluations shall be consid-

ered in the determination of the compensation for the directors

(including non-members of the board) and corporate auditors

of each business subsidiary.Adopted on May 27, 2005

Revised on July 5, 2007Revised on December 17, 2007

Revised on July 1, 2008Revised on June 29, 2009

The Board of Directors of Tokio Marine Holdings, Inc.



Declaration of Commitment to Compliance

The Tokio Marine Group is committed to the continuous

enhancement of its corporate value, with customer trust at the

base of all its activities. Strict compliance is at the heart of our

corporate philosophy. The Tokio Marine Group Code of

Conduct is a compilation of important matters that must be

strictly observed. We, the directors, offi cers and employees of

the Tokio Marine Group companies, promise to prioritize com-

pliance in the conduct of business activities in accordance with

the Code of Conduct.

Shuzo Sumi

President

Tokio Marine Group Code of Conduct

The Tokio Marine Group Code of Conduct sets forth ethical

standards that are essential for translating its corporate philoso-

phy into action, and shall be prioritized in all aspects of our

business operations and activities.

We, the directors, offi cers and employees (including tempo-

rary staff members) of the Tokio Marine Group companies, shall

obey applicable laws, rules and regulations and internal rules

and conduct fair and equitable business activities within social

norms. In order to conduct our business in a fair manner, we

shall strive to understand the applicable rules and fully comply

with them.

Non-compliance with this Code of Conduct, applicable laws,

rules and regulations and internal rules are subject to appropri-

ate action, including investigation, corrective action, reporting

to the supervising authorities, disciplinary action against parties

concerned and measures against recurrence, in accordance with

the internal rules of each Tokio Marine Group company.

Basic Principles

1. Compliance

We shall comply with applicable laws, rules and regulations and

internal rules, engage in free and fair competition and conduct

fair and equitable business activities in conformity with social

norms.

1-1 Compliance

We shall strictly comply with applicable laws, rules and regula-

tions and internal rules.

1-2 International Rules and Local Laws

The rules which we must obey are not restricted to those appli-

cable in Japan. We shall obey international rules and local laws,

rules and regulations in the countries where Tokio Marine

Group companies operate. We shall also respect the traditions

and cultures in such countries.

1-3 Free and Fair Competition

We shall conduct our business in compliance with antitrust,

Compliance

04

37

competition and free trade laws. We shall not undertake any

action that hampers free and fair competition, including collusion

and cartel formation. We shall abstain from any act falling under

“unfair trade practices” such as overreaching. We shall be mind-

ful of regulations applicable to the activities of trade associations.

1-4 Confl icts of Interest

We shall not tolerate any action pursuing our personal or a third

party’s interests against our respective company’s legitimate

interests.

1-5 Insider Trading

We shall not buy or sell securities of any company while in pos-

session of material, nonpublic information (known as “inside

information”) regarding the subject company in violation of

securities related laws, rules or regulations. This rule applies not

only to the securities of Tokio Marine Holdings, Inc. but also to

those of other companies. Without authorization, we shall not

pass inside information to any other person.

1-6 Intellectual Properties

We shall respect and not infringe upon intellectual property rights

of third parties, including copyrights, trademarks and patents.

1-7 Working Environment

We shall comply with labor-related laws, rules and regulations

and maintain a safe and proper working environment.

2. Social and Political Issues

We shall maintain proper conduct in social and political activities.

2-1 Anti-social Forces

If we succumb to anti-social forces, including, but not limited to,

criminal organizations, sokaiya (professional extortionists at

shareholders’ meeting) or terrorist groups, it would result in

encouraging anti-social activities. In full recognition of our social

responsibility, we, together with all Tokio Marine Group compa-

nies, shall maintain a fi rm stand against all anti-social forces, and

we shall strive to prevent money laundering by endeavoring to

thoroughly identify transaction parties and by responding appro-

priately to transactions in which we suspect criminal involvement.

2-2 Political Activities, Political Funding

We shall comply with applicable laws, rules and regulations

regarding public elections, political activities as well as political

funds and donations, and we shall always maintain our posture

toward fairness.

2-3 Gifts and Entertainment

We shall not accept money, goods and other inappropriate or

unlawful profi ts by taking advantage of our position. Also, we

shall not accept or give any gifts or entertainment which are

illegal or not considered reasonable by social standards.

3. Appropriate Actions of and High Transparency in Management

We shall take appropriate management actions and strive to

realize a high standard of transparency in our management.

3-1 Appropriate Transaction

We shall maintain sound relationships with clients and engage

in appropriate and fair transactions.

3-2 Public Disclosure

An appropriate disclosure of management information is very

important from the view point of enhancing customer trust. We

intend to enhance our shareholders’, investors’ and customers’

understanding of our management. We shall make full, fair,

accurate, timely and understandable disclosure of information,

including, but not limited to, information included in reports

and documents that Tokio Marine Holdings, Inc. fi les with or

submits to any regulatory bodies and in other public communi-

cations made by Tokio Marine Holdings, Inc.

3-3 Accurate Information

For the purpose of a full, fair, accurate, timely and understand-

able disclosure of information, all records, data and information

owned, used and managed by us should be accurate and com-

plete. We shall cooperate fully with any appropriately autho-

rized internal and external auditing and inspection.

3-4 Confi dential Information

In accordance with applicable internal rules, we shall protect the

confi dentiality of nonpublic information and not disclose such

information to anyone who is not authorized to receive it. In

addition, we shall not use any such information for the benefi t

of anyone other than Tokio Marine Group companies.

4. Respect for Human Rights and the Environment

We shall respect the human rights of our customers, directors,

offi cers, employees and all other people, and respect the global

environment in all of our activities.

4-1 Anti-discrimination

Human rights are values widely recognized around the world,

and any discrimination on grounds of sex, age, profession,

nationality, race, thought, creed, religion, social status or birth

as well as any act constituting an infringement of human rights

should never be tolerated.

4-2 Anti-harassment

Sexual or any other kind of harassment or intimidation should

never be tolerated.

4-3 Private Information

In compliance with applicable laws, rules and regulations as well

as the Tokio Marine Group Privacy Policy, we shall safeguard pri-

vate information, including customers’ information, and we shall

not use such information except on a need basis to carry out our

business operations, in order to avoid any breach of privacy.

04M A N A G E M E N T S Y S T E M


Tokio Marine Group’s Information Security Management

In accordance with the internal rules at each company based on

the Personal Information Protection Law and related guidelines,

the Tokio Marine Group has been making every effort to ensure

the thorough management of information by training its employ-

ees and monitoring the situation of its information security.

Tokio Marine Group’s Privacy Policy

The Tokio Marine Group is committed to the continuous

enhancement of corporate value, with customer trust at the base

of all its activities. Guided by this corporate philosophy, we, the

Tokio Marine Group, shall comply with laws, rules, regulations

and guidelines related to the protection of personal information,

appropriately manage personal information as described below

and implement other appropriate security measures for the

protection of personal information of our customers.

1. We shall acquire the personal information of our customers

in a manner that is both legal and fair. Unless prescribed by

law, rule or regulation, we shall notify or publicize the purposes

for using personal information of our customers and shall use

such information within these limits.

2. Unless prescribed by law, rule or regulation, we shall not

provide personal information of our customers to third parties

without prior consent of each such customer.

3. We will strive to prevent the divulgence, destruction,

impairment and unauthorized access of personal information

of our customers. When we contract out the management of

personal information of our customers to an outside service

provider, we shall supervise the service provider appropriately,

as needed.

4. Whenever we receive requests from our customers to view or

update their personal information we hold, we shall respond

promptly in accordance with laws, rules and regulations.

We also welcome comments and questions regarding the

management of personal information of our customers.

5. We shall provide comprehensive supervision, instructions

and education to our employees who handle personal infor-

mation of our customers to ensure that such information is

managed appropriately.

6. We will continue to revise and aim to improve our internal

systems and procedures to protect personal information of

our customers.

Information Management

4-4 Protection of the Global Environment

Acknowledging that the protection of the global environment is

an important responsibility, we shall comply with applicable laws,

rules and regulations, and respect the harmonization with and

the improvement of the global environment in all of our activities.

The Applicable Laws, Rules, Regulations and Internal Rules

This Code of Conduct is not intended to cover every issue or sit-

uation we may face in our business activities. Please refer to the

respective compliance manual of each Tokio Marine Group

company in order to understand the applicable laws, rules and

regulations as well as the standing internal rules.

Reporting

In the case of non-compliance (including doubtful cases) with

this Code of Conduct, applicable laws, rules and regulations or

internal rules, we, the directors, offi cers and employees (includ-

ing temporary staff members) of the Tokio Marine Group com-

panies, shall make a prompt report or consultation in

accordance with the applicable internal rules. If, for any reason,

it is not appropriate to make use of the regular reporting sys-

tem, please contact one of the hotlines, including the external

hotline (assigned law fi rm).

The reporter will not be treated disadvantageously because

of his or her report. Furthermore, private information of the

reporter shall be handled responsibly. The details of this mecha-

nism are described in the respective compliance manual of each

Tokio Marine Group company.

Compliance Department of Tokio Marine Holdings, Inc. is

responsible for administration of the Tokio Marine Group Code

of Conduct. Please contact this department with any inquiries

related to the Code of Conduct.

Changes to this Code of Conduct must be approved by the

Board of Directors of Tokio Marine Holdings, Inc. Any waiver or

amendment of the Code of Conduct for directors or offi cers of

Tokio Marine Holdings, Inc. must be also approved by the Board

of Directors of Tokio Marine Holdings, Inc. Any such change or

waiver will be promptly disclosed.

Adopted on September 8, 2003

Revised on July , 2008

04

39

Risk Management System of the Tokio Marine Group

In the Tokio Marine Group, subsidiaries themselves take proac-

tive approaches to control risks related to their business activi-

ties while Tokio Marine Holdings ascertains the risk situation

facing the Group as a whole and assumes the task of conduct-

ing risk management for the entire Group. Tokio Marine

Holdings considers insurance underwriting risks and investment

risks (market risks, credit risks and real estate investment risks)

as core risks that must be controlled as sources of earnings and

manages those risks actively.

In addition, with respect to offi ce work risks, system risks

and other risks pertaining to the Group’s business activities,

Tokio Marine Holdings conducts appropriate risk management

by identifying where those risks lie and taking measures to

prevent or mitigate them in order to ensure stable

business management.

Role of Tokio Marine Holdings

Tokio Marine Holdings promotes the establishment and

enhancement of the risk management system for the entire

Group in accordance with the Tokio Marine Group’s basic poli-

cies for risk management. The Company also manages quanti-

tative risks for the Group in order to retain credit ratings and

prevent bankruptcy.

Role of Subsidiaries

Operating subsidiaries actively conduct their own risk manage-

ment as well as that of their subsidiaries by developing their

own risk management policies in line with the Group’s policies.

Risk Management


Subsidiaries

Insurance underwriting risks

Market risks

Credit risks

Real estate investment risks

Liquidity risks

Office work risks

System risks

Information leakage risks

Legal risks

Reputational risks

Other risks

Reporting

Indication of policies, guidance/supervision/administration/monitoring

Core risks

Board of Directors

RiskManagementCommittee

Board of CorporateAuditors

CorporateAuditors

ManagementMeeting

Risk Management Department

Associatedrisks

04



Basic Policies for Risk Management

The Tokio Marine Group has developed the basic policies for risk

management described below. Tokio Marine Holdings and its

subsidiaries manage risks in line with these policies.

(1) Basic policy for risk management

The Basic Policy for Risk Management for the Tokio Marine

Group sets forth the organizations responsible for risk man-

agement, defi nition of risks, organizations and guidelines for

risk management that subsidiaries shall establish, and the

issues that must be reported. Subsidiaries conduct risk man-

agement based on this policy.

(2) Basic policy for integrated risk management

The Tokio Marine Group has developed the “Basic Policy for

Integrated Risk Management,” which establishes the funda-

mental matters concerning the quantitative risk management

of the entire Group, defi nition of risk amount and returns,

and the process for scrutinizing risk planning and monitoring.

(3) Basic policy for crisis management

The Tokio Marine Group has developed the “Basic Policy for

Crisis Management” for the entire Group; this policy clarifi es

the chain of command in the event of an emergency as well

as policies related to the measures to minimize losses and

recover ordinary business operations. Subsidiaries also main-

tain their own systems for crisis management established in

accordance with these basic policies.

Integrated Risk Management

The main purpose of integrated risk management is to quantita-

tively recognize all risks and properly control them so that the

Group can limit to no more than its capital those risks that have

emerged.

(1) Risk quantifi cation

The Tokio Marine Group quantifi es potential losses on all risks

that could arise within the given time horizons and that could

exceed the given probability levels. The risk quantifi cation

method used is a risk indicator called “value at risk” (VaR).

(2) Determination of allowable risk parameters

Integrated risk management aims to maintain credit ratings

and prevent bankruptcy by keeping risks within allowable

parameters. The allowable risk parameter for the Tokio

Marine Group as a whole has been defi ned in terms of

an upper limit on the quantity of risk. We determine this

allowable risk quantity semiannually, and manage operations

so that risk quantity does not exceed this limit.

(3) Evaluation and monitoring of capital allocation plans

Tokio Marine Holdings ensures that the expected risk volume

is within the allowable risk parameters set out in the Group

capital allocation plan. In other words, the Risk Management

Department, which has an internal control function, checks

and examines the capital allocation plans to make sure that

they are appropriate in terms of shareholders’ equity.

Moreover, the status of risk volume is periodically reviewed.

Capital Allocation System

The capital allocation system has been designed to assess the

profi tability against the capital allocated to each business unit of

the Tokio Marine Group and to maximize the corporate value of

the Tokio Marine Group through capital reallocation.

Under this system, capital is identifi ed as pseudo-capital based

on a risk volume calculated as a uniform gauge of all types of

risk. The capital allocation system and integrated risk manage-

ment are intricately related and based on the same risk evalua-

tion methods.

(1) Formulation of capital allocation plan

The Tokio Marine Group allocates capital to each business

unit in accordance with the plans created each fi scal year.

In doing business, each business unit takes risks appropriate

to the amount of the capital that has been allocated.

(2) Evaluation of risk/return and improvement of business portfolio

The level of risk/return is evaluated for operations in each

business unit using certain management indicators. Based on

this, capital is reallocated to business units with higher prof-

itability and growth potential and/or new business. The

introduction of a decision-making process based on the

quantitative analysis method enables us to select business

units that should be focused on at more detailed level.

Through this approach, we seek to increase the return on

equity (ROE) of the entire Group and maximize corporate

value while continuing to increase earnings.

04

41

The Tokio Marine Group’s Approach to CSR

The Tokio Marine Group considers that the execution of its

Corporate Philosophy itself is equal to the fulfi llment of CSR.

The Group’s goal is to increase the value it provides every stake-

holder and, as a result, to increase its corporate value which is

the sum total of the value it provides all stakeholders, through

the implementation of CSR practices. It has established the

“Tokio Marine Group CSR Charter” as a set of behavioral guide-

lines for such implementation of CSR practices.

Tokio Marine Group CSR Charter

The Tokio Marine Group is committed to fulfi lling its corporate

social responsibilities (CSR) by implementing its management

philosophy to achieve sustainable growth together with the

development of society, in accordance with the following

principles:

Products and Services• We aim to provide the society with products and services to meet its needs for safety and security.

Respect for Human Rights and Dignity• We respect and actively promote the recognition of human rights for all people.• We strive to ensure an energetic working environment that is both safe and healthy and to promote training and education of our employees.• We respect the right to privacy and strive to enforce through control of personal information.

Protection of the Global Environment• Acknowledging that the protection of the global environment is an important responsibility for all corporate entities, we respect harmony with and improving the global environment in all of our activities.

Contribution to Communities and Societies• As a member of various communities and societies, we respect the diversity of cultures and customs in different countries and regions and we aim to contribute actively to society in response to the needs of the current era.

Compliance• While striving to maintain high ethical standards at all times, we will pursue strict compliance in all aspects of our business activities.

Communication• We intend to disclose information timely and appropriately and to promote dialogue with all our stakeholders to ensure effective corporate management.

Participation in the United Nations Global Compact

In recognition of the fact that the concepts behind and details of

the 10 principles for behavior in connection with human rights,

labor practices, environment, and anti-corruption advocated in

the United Nations Global Compact coincide with the Tokio

Marine Group’s approach to CSR initiatives and its CSR Charter,

Tokio Marine Holdings and Tokio Marine & Nichido have taken

part since 2005 in the United Nations Global Compact.

CSR Promotion Structure

The Tokio Marine Group has established the CSR Board chaired

by the president of Tokio Marine Holdings with membership

consisting of the presidents of each of the Group’s companies.

The Board formulates fundamental CSR policies and plans for

the entire Group, in addition to monitoring the progress of such

initiatives.

Each Group company promotes its own CSR activities in line

with the policies and plans formulated by the Board.

Additionally, Tokio Marine Holdings has established a CSR

Section to coordinate CSR efforts across the Group and provide

CSR support to each of the Group companies.

Corporate Social Responsibility

The CSR Promotion Structure in the Tokio Marine Group


CSR Board

Corporate Planning Dept

Board of Directors

Workplace

CSR Promotion Officer

CSR Section

Board of Directors (Management Meeting)

Tokio Marine Group Companies


04

� Protection of the Global Environment The business activities of the Tokio Marine Group involve

the consumption of large quantities of paper resources,

electricity, gasoline and other forms of energy. In order to

minimize the environmental burden of such activities, the

Group is committed to promoting recycling, saving energy

and conserving resources by going paperless.

Mangrove Afforestation Project

Tokio Marine & Nichido’s mangrove afforestation project was

initiated in 1999 in six countries across Southeast Asia and the

South Pacifi c’s Fiji Island. As of March 2009, project had planted

5,901 hectares of new forest in these regions. India was added

to the scope of afforestation activities in fi scal 2009, bringing

the total number of target countries to seven.

Mangrove trees in these regions are not only essential in

helping prevent global warming by absorbing large volumes of

CO2, but also serve as bulwarks against tsunamis and other nat-

ural disasters. In addition, by providing fi shery and forestry

resources essential to local livelihoods, mangrove trees contrib-

ute to stabilizing and improving the local living environment,

as well as to achieving environmental sustainability on

a global scale.

“Green Lessons: The Mangrove Story” Staged Nationwide

Through the telling of “The Mangrove Story,” Tokio Marine &

Nichido has developed an educational program to raise aware-

ness of environmental issues among elementary school children

in Japan.

The program is led by Group employees and representatives

who bring lessons to schools throughout Japan. Children learn

about how mangrove trees and other activities, such as uniform

recycling, contribute to ecosystem preservation and the preven-

tion of global warming. Participating schools receive a lasting

memento of the lessons in the form of planters made of

recycled uniforms.

Working to Reduce Environmental Burden Around the World

Around the world, the companies of the Tokio Marine Group

work tirelessly to reduce their environmental impact. A few

examples follow.

Tokio Marine and Fire Insurance Co. (Hong Kong) Ltd. has

taken on efforts to reduce paper and electricity usage at its

offi ces by recycling obsolete offi ce equipment, opting for ener-

gy-saving devices and holding “paperless” business meetings.

At P.T. Asuransi Tokio Marine Indonesia, shredded offi ce paper

and used newspaper are recycled for use as writing paper, enve-

lopes, notebooks and business cards. These activities contribute

to the effective use of paper resources as well as to generating

employment for the local recycling industry.

above: Envelopes, notebooks and business

cards made from recycled paper

left: Recycling

Lesson in progress at Suginami Momoi-Daiichi

Elementary School in Tokyo

Offi ce notice board promotes reducing

the use of paper cups


04

43

� Contribution to Local Communities and Society

The business activities of the Tokio Marine Group are founded on

the support of our customers and representatives in local regions

around the world. In turn, we undertake activities to support

local communities and society with the aim of remaining one

with the planet and its people.

Supporting the Pink-Ribbon Movement

Tokio Marine & Nichido Life Insurance Co., Ltd. actively supports

the efforts of the Pink-Ribbon Movement to educate women

about the importance of early breast cancer detection. These

efforts are coordinated by the nonprofi t organization J. POSH

(Japan Breast Cancer Pink Ribbon Movement).

In fi scal 2008, the Company provided venues to support the

“Kids and Family Program” held in 8 locations throughout

Japan. Moreover, numerous employees volunteered their time

to promote early breast cancer screening. Clad in pink wind-

breakers, employees and other volunteers distributed informa-

tional brochures on the street at 80 locations throughout Japan.

The Scholarship Project for Students in Thailand

Since 2005, The Sri Muang Insurance Co., Ltd. (Thailand); Millea

Life Insurance (Thailand) Public Co., Ltd.; Tokio Marine Asia Pte.

Ltd (Singapore); and Tokio Marine & Nichido Fire Insurance Co.,

Ltd. in cooperation with the National Council on Social Welfare

of Thailand (NCSWT) have supported the educational ambitions

of approximately 330 underprivileged secondary and high

school, technical college and university students by offering

scholarships for tuition, uniforms and school supplies.

The 4th scholarship conferment ceremony held in 2009

The “MOTTAINAI Campaign”

Nisshin Fire & Marine Insurance Co., Ltd. is a staunch supporter

of the “MOTTAINAI Campaign,” an environmental protection

scheme proposed by Nobel Peace Prize laureate Wangari

Maathai of Kenya.

Since fi scal 2006, Group employees have voluntarily partici-

pated in the “MOTTAINAI Mt. Fuji Clean-up Competition”

that was established with the aim of getting people to

value nature.

Volunteer Tree Planting in Mexico

Since fi scal 2006, Tokio Marine Compañía de Seguros, S.A. de

C.V. has worked to implement volunteer afforestation activities

locally. In August 2008, about 30 local volunteers and NGO

members joined 183 employees and their family members to

take part in planting 3,500 trees in the Lagunas de Zempoala

National Park near Mexico City. The Pink-Ribbon

Movement


04M A N A G E M E N T S Y S T E M

Internal Audit Framework of the Tokio Marine Group

Within the Tokio Marine Group, internal audits are executed

based on the aim that “in order to play an effective role in

achieving the Group’s management targets, internal audits

covering the full scope of operations performed in its business

should not simply detect and point out problems in the internal

offi ce processes, but also assess the internal control system and

propose measures for improvements.” Within Tokio Marine

Holdings and its insurance subsidiaries, each company has its

own internal audit department, which performs appropriate

internal audits on key components of the internal control system,

risk management and compliance, in accordance with the type

and level of risks. The internal audit department of Tokio Marine

Holdings directly carries out auditing and monitoring on the

internal control system of those subsidiaries that do not have

their own internal audit division. The results of these audits are

reported to the internal audit department of Tokio Marine

Holdings, and the Board of Directors of each member company

of the Group. If any serious problem is found in the audit

results, it is reported to the Board of Directors of Tokio Marine

Holdings as well.

Unifi ed Framework of Internal Audit within the Tokio Marine Group

A set of unifi ed “Basic Policies for Internal Audit” and “Internal

Audit Rules” are applied to all internal audits that are performed

by internal audit departments of the Group companies, in order

to ensure consistent internal auditing within the Tokio Marine

Group. In addition, priority issues and checking points on internal

audits are defi ned every year and internal audit plans of the Group

companies require a prior approval of Tokio Marine Holdings.

Through these approaches, Tokio Marine Holdings endeavors

to enhance the consistency of internal auditing throughout

the Group.

Joint Audit

In order to raise the effectiveness of internal audits, there are

also cases where the internal audit departments of each subsid-

iary work together.

Internal Audits

04

45

Disclosure Materials

Tokio Marine Holdings and the fi ve group insurance companies

create disclosure documents and materials and strive to improve

information content.

Websites

Please refer to the following websites for disclosure of informa-

tion relating to each Tokio Marine Group company:

Disclosure and Investor Relations

We make every effort to disclose information about the Tokio

Marine Group’s current fi nancial condition and future business

development in a fair and understandable manner that facili-

tates precise understandings for our stakeholders.

Disclosure Policy of the Tokio Marine Group

We aim to disclose meaningful information regarding the

Tokio Marine Group that enhances management transparency

and fairness in connection with our “Corporate Social

Responsibility.”

1. Disclosure Policy

It is our policy to disclose information expeditiously in accor-

dance with the “Rules on the Timely Disclosure of Corporate

Information by Issuers of Listed Securities and the Like” stipulat-

ed by the Tokyo Stock Exchange.

We strive for the timely, accurate and fair disclosure of other

information that is relevant to our customers, shareholders and

investors, representative offi ces and employees as well as the

society at large.

2. Methods of Disclosure

Disclosure pursuant to stock exchange rules, regulations and

other requirements is made through the Timely Disclosure

network, or TDnet, of the Tokyo Stock Exchange as well as the

press and other appropriate means. We subsequently post the

disclosed information on our website. Other disclosure is made

in an appropriate manner based on the content of the relevant

information.

3. Additional Information

Disclosure made based on this Disclosure Policy is intended to

inform the public regarding the Tokio Marine Group’s activities

accurately, expeditiously and fairly and is not intended to consti-

tute an investment solicitation.

Adopted on November 30, 2004



Tokio Marine & Nichido Fire Insurance Co., Ltd.http://www.tokiomarine-nichido.co.jp/

Nisshin Fire & Marine Insurance Co., Ltd.http://www.nisshinfi re.co.jp/

E. design Insurance Preparatory Co., Ltd.http://www.edsp.co.jp/

Millea Nihon Kousei SS Insurance Co., Ltd.http://www.millea-nkssi.co.jp/

Tokio Marine & Nichido Life Insurance Co., Ltd.http://www.tmn-anshin.co.jp/

Tokio Marine & Nichido Financial Life Insurance Co., Ltd.http://www.tmn-fi nancial.co.jp/


04



Investor Relations Activities

Tokio Marine Holdings strives to provide shareholders and inves-

tors with timely, accurate information disclosure to facilitate

their decisions. This is one important aspect of our investor rela-

tions (IR) activities.

Moreover, Tokio Marine Holdings promotes active dialogue

with shareholders and investors. We sincerely welcome the

many opinions and suggestions gained through interaction with

shareholders and investors. Briefi ng sessions, one-on-ones and

other IR activities serve as effective feedback channels, inform-

ing our pursuit of sound and transparent corporate governance.

Fiscal 2008 IR Activities

Many of the Company’s IR activities are specifi cally designed to

encourage constructive dialogue with shareholders and inves-

tors. Tokio Marine Holdings seeks to benefi t from valuable

insight on further improving business operations and manage-

ment. With this goal, Tokio Marine Holdings strives to offer

briefi ngs in a variety of formats to meet diverse interests and

needs.

Activities for Individual Investors

• Information meetings for individual investors:

Twice, approximately 510 participants

• Securities company investment seminars:

10 times, approximately 470 participants

• I R fair for individual investors:

Once, approximately 500 participants

Activities for Institutional Investors

• Large meetings: Four times, approximately 390 participants

• Small meetings: Nine times, approximately 52 companies

• Individual meetings: 224 times, primarily with analysts and

institutional investors

• Quarterly results conference calls for institutional investors:

Four times Japanese and English for each, Total eight times,

approximately 492 participants

• Overseas investor meetings: Six times, 126 participating fi rms

IR Activities via the Internet

Tokio Marine Holdings proactively discloses information on its

website with regard to fi nancial information, Group structure,

management strategies and CSR activities. Through these

efforts, we are striving to offer “visible IR” that makes people

feel close to the Group with a sense of trust.

In addition, Tokio Marine Holdings provides webcasts of

important IR events, such as business results briefi ngs, informa-

tion meetings for investors and business plan presentations.

Decisions of the Board of Directors and the monthly business

results of Tokio Marine Nichido are among the many other

resources provided through the Website.

Tokio Marine Holdings Receives

“IR Prime Business Award Special”

The Japan Investor Relations Association (JIRA) recognized Tokio

Marine Holdings with the “IR Prime Business Award Special” on

November 12, 2008.

JIRA makes this annual award to listed member companies

that display excellent achievement by proactively engaging in IR

activities, demonstrating deep understanding of the central role

IR plays in gaining positive recognition from market players.

Tokio Marine Holdings was the only fi nancial institution in the

banking and insurance sectors to win this coveted award.

At the TSE IR Festa 2008 held by the

Tokyo Stock Exchange in March

2009, Tokio Marine Holdings

explained the business outline of its

Group companies. The Group’s

exhibition booth also offered a

driving simulator, providing partici-

pants with a dynamic demonstration

on safe driving.

http:// www.tokiomarinehd.com/

05

05

47

05PERFORMANCE

Change in Key Business Indicators

(Consolidated Basis) 48

Financial Information 49

Solvency Margin Ratio 103

Interest-rate Sensitivity of ALM Surplus Value 106

Embedded Value 107

Statutory Reserve 112


05P E R F O R M A N C E

(Yen in millions if not indicated specifi cally)

2009(April 1, 2008–

March 31, 2009)

2008(April 1, 2007–

March 31, 2008)

2007(April 1, 2006–

March 31, 2007)

2006(April 1, 2005–

March 31, 2006)

2005(April 1, 2004–March 31,2005)

Ordinary income 3,503,102 3,710,066 4,218,557 3,399,984 2,899,467

Net premiums written 2,134,243 2,245,135 2,148,683 1,978,664 1,925,081

Ordinary profit (15,128) 179,071 168,042 136,563 139,999

Net income 23,141 108,766 93,014 89,960 67,604

Net assets 1,639,514 2,579,339 3,410,707 3,209,849 2,305,243

Total assets 15,247,223 17,283,242 17,226,952 14,260,020 11,624,496

Net assets per share (Yen) 2,066.92 3,195.45 4,127.60 1,910,092.71 1,340,336.54

Net income per share-Basic (Yen) 29.13 133.54 112.10 52,980.59 38,618.19

Net income per share-Diluted (Yen) 29.12 133.50 112.07 52,973.36 —

Capital ratio (%) 10.68 14.83 19.73 22.51 19.83

Return on equity: ROE (%) 1.10 3.65 2.82 3.26 2.93

Price-to-earnings ratio: PER (Ratio) 82.22 27.56 38.89 43.98 40.40

Net cash provided by operating activities 527,964 822,143 1,367,717 899,584 385,740

Net cash used in investing activities (1,693,745) (433,857) (986,389) (1,082,442) (75,449)

Net cash used in/provided by financing activities 104,189 (66,404) (51,018) (45,030) (144,902)

Cash and cash equivalents at end of year 877,551 1,988,696 1,670,006 1,277,127 1,476,879

Number of employees 28,063 24,959 23,280 19,761 18,910

Notes: 1. For calculating net assets, the Company has adopted “Accounting Standard for Presentation of Net Assets in the Balance Sheet” (Accounting Standards Board of Japan, hereinafter “ASBJ”

Guidance No.5, and “Guidance on Accounting Standard for Presentation of Net Assets in the Balance Sheet” (ASBJ Guidance No. 8) for the fiscal year ended March 31, 2007.

2. Effective September 30, 2006, the Company conducted a stock split of its shares of common stock whereby one share was split into 500 shares.

3. Because there were no potential common shares, “Net income per share-Diluted” is not shown for the fiscal year ended March 31, 2005 and prior fiscal years.

4. Number of employees is head-count of staffs currently at work.

5. Number of employees increased by 3,104 from 2008 to 2009, mainly due to the newly consolidated company, Philadelphia Consolidated Holding Corp.

Change in Key Business Indicators (Consolidated Basis)

05

49

1. Preparation of Consolidated Financial Statements

The accompanying consolidated financial statements have been prepared in accordance with the Regulations Concerning Terminology,

Formats and Preparation Methods of Consolidated Financial Statements (Ministry of Finance Ordinance No. 28, 1976, hereinafter the

“Consolidated Statements Regulations”). The consolidated financial statements have been also prepared in conformity with the Enforcement

Regulations for the Insurance Business Law (Ministry of Finance Ordinance No. 5, 1996, hereinafter the “Insurance Law Enforcement

Regulations”), as stipulated under Articles 46 and 68 of the Consolidated Statements Regulations.

The consolidated financial statements for the fiscal year ended March 31, 2008 were prepared in accordance with but prior to the amend-

ment of both the Consolidated Statements Regulations and the Insurance Law Enforcement Regulations. On the other hand, the consoli-

dated financial statements for the fiscal year ended March 31, 2009 have been prepared in accordance with the amended Consolidated

Statements Regulations and the Insurance Law Enforcement Regulations.

The Company and its domestic consolidated subsidiaries maintain their accounts and records in accordance with the provisions set forth in

the Corporate Law of Japan and the Securities and Exchange Law of Japan, and in conformity with accounting principles generally accepted

in Japan, which are different in certain respects as to application and disclosure requirements of International Financial Reporting Standards.

Amounts less than ¥1 million have been omitted in the consolidated financial statements and. As a result, the total thereto do not neces-

sarily agree with the sum of the individual account balances.

2. Auditors’ Certification

Pursuant to Article 193-2, Paragraph 1 of the Financial Instruments and Exchange Law of Japan, Tokio Marine Holdings’ consolidated finan-

cial statements for the fiscal year ended March 31, 2008 and that for the fiscal year ended March 31, 2009 have been audited and certified

by PricewaterhouseCoopers Aarata.

Financial Information



1 Financial Statements of Tokio Marine Holdings and its Consolidated Subsidiaries

(1) Consolidated Financial Statements

q Consolidated Balance Sheets

(Yen in millions except percentages)

As of March 31, 2009 As of March 31, 2008 Increase and Decrease by ComparisonNotes No. Amount

Compositionratio

AmountComposition

ratio

Assets (%) (%)

Cash and bank deposits *4 461,589 3.03 794,528 4.60 (332,939)Call loans 352,576 2.31 199,725 1.16 152,851Receivables under resale agreement 302,893 1.99 42,951 0.25 259,942Receivables under security borrowing transactions 47,224 0.31 95,520 0.55 (48,295)Monetary receivables bought 458,556 3.01 1,712,207 9.91 (1,253,650)Money trusts 8,688 0.06 39,215 0.23 (30,527)Securities *2*4*6 10,695,095 70.14 12,138,621 70.23 (1,443,526)Loans *3*7 611,310 4.01 685,780 3.97 (74,470)Tangible fi xed assets *1 338,414 2.22 338,367 1.96 47

Lands *4 161,238 — 161,238Buildings *4 142,607 — 142,607Construction in progress 10,658 — 10,658Other 23,909 — 23,909

Intangible fi xed assets 427,931 2.81 55,270 0.32 372,660Software 4,341 — 4,341Goodwill 290,577 — 290,577Other 133,012 — 133,012

Other assets 1,241,986 8.15 1,033,007 5.98 208,979Deferred tax assets 219,116 1.44 65,565 0.38 153,551Customers’ liabilities under acceptances and guarantees 102,208 0.67 97,688 0.57 4,520Valuation allowances for bad debts (20,368) (0.13) (15,207) (0.09) (5,160)

Total assets 15,247,223 100.00 17,283,242 100.00 (2,036,018)LiabilitiesInsurance liabilities 11,253,382 73.81 11,173,679 64.65 79,703

Outstanding claims *4 1,192,416 1,098,017 94,398Underwriting reserves *4 10,060,966 10,075,661 (14,695)

Short-term corporate bonds — — 99,965 0.58 (99,965)Corporate bonds 299,922 1.97 333,123 1.93 (33,200)Other liabilities 1,536,993 10.08 2,222,147 12.86 (685,153)

Payables under security lending transactions 600,575 1,448,797 (848,221)Other liabilities *4 936,417 773,349 163,067

Retirement benefi t obligations 148,506 0.97 138,459 0.80 10,047Retirement benefi t obligations for directors and corporate auditors 88 0.00 397 0.00 (309)

Provision for employees’ bonus 20,272 0.13 25,355 0.15 (5,083)Provision for demolition of fi xed assets 3,359 0.02 3,773 0.02 (414)Reserve under the special law 56,449 0.37 121,989 0.71 (65,540)

Price fl uctuation reserve 56,449 121,989 (65,540)Deferred tax liabilities 41,937 0.28 332,322 1.92 (290,384)Negative goodwill 144,587 0.95 155,000 0.90 (10,413)Acceptances and guarantees 102,208 0.67 97,688 0.57 4,520

Total liabilities 13,607,708 89.25 14,703,902 85.08 (1,096,194)

Net assetsShareholders’ equityCommon stock 150,000 0.98 150,000 0.87 —Retained earnings 1,006,891 6.60 1,010,521 5.85 (3,630)Treasury stock (59,663) (0.39) (9,792) (0.06) (49,871)

Total shareholders’ equity 1,097,227 7.20 1,150,728 6.66 (53,501)Valuation and translation adjustments

Unrealized gains on securities, net of taxes 608,106 3.99 1,402,487 8.11 (794,381)Deferred gains/losses on hedge transactions 17,796 0.12 11,952 0.07 5,844Foreign currency translation adjustments (95,297) (0.63) (1,673) (0.01) (93,623)Total valuation and translation adjustments 530,605 3.48 1,412,765 8.17 (882,159)

Stock acquisition rights 849 0.01 619 0.00 229Non-controlling interest 10,832 0.07 15,224 0.09 (4,392)

Total net assets 1,639,514 10.75 2,579,339 14.92 (939,824)Total liabilities and net assets 15,247,223 100.00 17,283,242 100.00 (2,036,018)

The accompanying notes are an integral part of the consolidated financial statements.

05

51

w Consolidated Statements of Income


Year ended March 31, 2009(April 1, 2008–March 31, 2009)

Year ended March 31, 2008(April 1, 2007–March 31, 2008) Increase and

Decrease by ComparisonNotes No. Amount Ratio Amount Ratio

(%) (%)

Ordinary income 3,503,102 100.00 3,710,066 100.00 (206,963)Underwriting income 3,130,076 89.35 3,312,472 89.28 (182,396)

Net premiums written 2,134,243 2,245,135 (110,892)Deposited premiums from policyholders 166,255 200,161 (33,905)Investment income on deposit premiums 71,021 75,050 (4,029)Life insurance premiums 746,083 788,387 (42,304)Reversal of outstanding claims 7,915 — 7,915Other underwriting income 4,557 3,737 820

Investment income 306,664 8.75 342,121 9.22 (35,457)Interest and dividends 237,622 285,424 (47,802)Gains on money trusts 38 517 (479)Gains on trading securities — 7,163 (7,163)Gains on sales of securities 71,693 58,913 12,779Gains on redemption of securities 482 2,994 (2,511)Gains on derivatives 64,639 45,468 19,170Other investment income 3,209 16,690 (13,480)Transfer of investment income on deposited premiums (71,021) (75,050) 4,029

Other ordinary income 66,361 1.89 55,471 1.50 10,890Amortization of negative goodwill 10,604 10,436 167Other ordinary income 55,757 45,034 10,723

Ordinary expenses 3,518,230 100.43 3,530,994 95.17 (12,764)Underwriting expenses 2,232,902 63.74 2,683,605 72.33 (450,702)

Net claims paid 1,306,574 1,270,275 36,299Loss adjustment expenses *1 87,634 86,469 1,165Agency commissions and brokerage *1 442,153 444,572 (2,418)Maturity refunds to policyholders 271,180 288,961 (17,780)Dividends to policyholders 316 31 285Life insurance claims 90,935 88,676 2,258Provision for outstanding claims — 52,442 (52,442)Provision for underwriting reserves 21,443 445,465 (424,022)Other underwriting expenses 12,663 6,711 5,951

(Continued on following page)





Year ended March 31, 2008(April 1, 2007–March 31, 2008) Increase and

Decrease by ComparisonNotes No. Amount Ratio Amount Ratio

Investment expenses 726,659 20.74 326,884 8.81 399,775Losses on money trusts 2,619 4,178 (1,559)Losses on trading securities 1,130 — 1,130Losses on sales of securities 33,365 14,430 18,934Impairment losses on securities 162,205 38,221 123,983Losses on redemption of securities 18,120 1,747 16,372Losses on separate account 440,628 209,781 230,846Other investment expenses 68,591 58,525 10,065

Operating and general administrative expenses *1 519,928 14.84 482,160 13.00 37,767Other ordinary expenses 38,739 1.11 38,344 1.03 395

Interest paid 13,470 20,682 (7,212)Increase in valuation allowances for bad debts 5,693 298 5,394Losses on bad debts 299 126 173Equity in losses of affi liates *2 5,085 3,667 1,418Other ordinary expenses 14,190 13,569 620

Ordinary profi t (15,128) (0.43) 179,071 4.83 (194,199)

Extraordinary gains and lossesExtraordinary gains 83,761 2.39 31,199 0.84 52,562

Gains on sales of fi xed assets 3,146 3,265 (118)Gains on changes in equity of affi liates — 4 (4)Reversal of reserve under the special law 65,540 — 65,540

Reversal of price fl uctuation reserve 65,540 — 65,540Other extraordinary gains *3 15,074 27,929 (12,854)

Extraordinary losses 21,696 0.62 35,683 0.96 (13,987)Losses on sales of fi xed assets 2,430 2,040 390Impairment losses on fi xed assets *4 7,313 8,654 (1,341)Provision under the special law — 8,761 (8,761)

Provision for price fl uctuation reserve — 8,761 (8,761)Losses on reduction of fi xed assets — 9 (9)Other extraordinary losses *5 11,952 16,217 (4,264)

Income or losses before income taxes 46,937 1.34 174,587 4.71 (127,650)Income taxes-current 37,402 1.07 88,031 2.37 (50,628)Income taxes-deferred (12,577) (0.36) (23,763) (0.64) 11,185

Total income taxes 24,824 0.71 64,268 1.73 (39,443)Non-controlling interest (1,028) (0.03) 1,553 0.04 (2,581)

Net income 23,141 0.66 108,766 2.93 (85,624)



05

53

e Consolidated Statements of Changes in Shareholders’ Equity

(Yen in millions)

Year endedMarch 31, 2009(April 1, 2008-

March 31, 2009)

Year endedMarch 31, 2008(April 1, 2007-

March 31, 2008)

Increase andDecrease byComparison

Shareholders’ equityCommon stock

Beginning balance 150,000 150,000 —Changes during the year

Total changes during the year — — —Ending balance 150,000 150,000 —

Retained earningsBeginning balance 1,010,521 1,024,216 (13,694)Changes due to the change of accounting policies applied to foreign subsidiaries 13,306 — 13,306 Changes during the year

Dividends (43,168) (31,964) (11,203)Net income 23,141 108,766 (85,624)Disposition of treasury stock (138) (139) 1 Cancellation of treasury stock — (85,410) 85,410 Changes in the scope of consolidation 1,900 (4,427) 6,327 Changes in the scope of equity method affi liates 1,997 — 1,997 Others (Note) (670) (520) (150)Total changes during the year (16,936) (13,694) (3,241)

Ending balance 1,006,891 1,010,521 (3,630)Treasury stock

Beginning balance (9,792) (5,038) (4,754)Changes during the year

Repurchase of treasury stock (50,302) (90,464) 40,162 Disposition of treasury stock 431 300 130 Cancellation of treasury stock — 85,410 (85,410)Total changes during the year (49,871) (4,754) (45,116)

Ending balance (59,663) (9,792) (49,871)Total shareholders’ equity

Beginning balance 1,150,728 1,169,178 (18,449)Changes due to the change of accounting policies applied to foreign subsidiaries 13,306 — 13,306 Changes during the year

Dividends (43,168) (31,964) (11,203)Net income 23,141 108,766 (85,624)Repurchase of treasury stock (50,302) (90,464) 40,162 Disposition of treasury stock 292 161 131 Changes in the scope of consolidation 1,900 (4,427) 6,327 Changes in the scope of equity method 1,997 — 1,997 Others (Note) (670) (520) (150)Total changes during the year (66,807) (18,449) (48,358)

Ending balance 1,097,227 1,150,728 (53,501)




(Yen in millions)

Years endedMarch 31, 2009(April 1, 2008-

March 31, 2009)

Years endedMarch 31, 2008(April 1, 2007-

March 31, 2008)

Increase andDecrease byComparison

Valuation and translation adjustmentsUnrealized gains on securities, net of tax

Beginning balance 1,402,487 2,217,476 (814,988)Changes during the year

Net changes in items other than shareholders’ equity (794,381) (814,988) 20,607 Total changes during the year (794,381) (814,988) 20,607

Ending balance 608,106 1,402,487 (794,381)Deferred gains and losses on hedge transactions

Beginning balance 11,952 7,728 4,223 Changes during the year

Net changes in items other than shareholders’ equity 5,844 4,223 1,621 Total changes during the year 5,844 4,223 1,621

Ending balance 17,796 11,952 5,844 Foreign currency translation adjustments

Beginning balance (1,673) 4,031 (5,705)Changes during the year

Net changes in items other than shareholders’ equity (93,623) (5,705) (87,918)Total changes during the year (93,623) (5,705) (87,918)

Ending balance (95,297) (1,673) (93,623)Stock acquisition rights

Beginning balance 619 336 283 Changes during the year

Net changes in items other than shareholders’ equity 229 283 (54)Total changes during the year 229 283 (54)

Ending balance 849 619 229 Non-controlling interest

Beginning balance 15,224 11,956 3,268 Changes during the year

Net changes in items other than shareholders’ equity (4,392) 3,268 (7,661)Total changes during the year (4,392) 3,268 (7,661)

Ending balance 10,832 15,224 (4,392)Total net assets

Beginning balance 2,579,339 3,410,707 (831,367)Changes due to the change of accounting policies applied to foreign subsidiaries 13,306 — 13,306 Changes during the year

Dividends (43,168) (31,964) (11,203)Net income 23,141 108,766 (85,624)Repurchase of treasury stock (50,302) (90,464) 40,162 Disposition of treasury stock 292 161 131 Changes in the scope of consolidation 1,900 (4,427) 6,327 Changes in the scope of equity method affi liates 1,997 — 1,997 Others (Note) (670) (520) (150)Net changes in items other than shareholders’ equity (886,323) (812,918) (73,405)Total changes during the year (953,131) (831,367) (121,763)

Ending balance 1,639,514 2,579,339 (939,824)

Note: “Others” for the fiscal year ended March 31, 2008 is the valuation differences of assets in accordance with local accounting standards in foreign countries where consolidated subsidiaries or

equity method affiliates are located.

“Others” for the fiscal year ended March 31, 2009 is the valuation differences of assets in accordance with accounting standards in foreign countries where equity method affiliates are located.


05

55

r Consolidated Statements of Cash Flows

(Yen in millions)

Year ended March 31, 2009(April 1, 2008–

March 31, 2009)


March 31, 2008)

Increase and Decrease by Comparison

Notes No. Amount Amount

I Cash fl ows from operating activitiesIncome before income taxes 46,937 174,587 (127,650)Depreciation 20,833 20,524 308Extraordinary depreciation of fi xed assets — 5,692 (5,692)Impairment losses on fi xed assets 7,313 8,654 (1,341)Amortization of goodwill 8,774 7,311 1,462Amortization of negative goodwill (10,604) (10,436) (167)Increase in outstanding claims 9,600 53,831 (44,231)Increase in underwriting reserves 18,658 445,026 (426,367)Increase (decrease) in valuation allowances for bad debts 4,716 (808) 5,525Increase in retirement benefi t obligations 10,338 7,360 2,977(Decrease) increase in retirement benefi t obligations for directors and corporate auditors (309) 28 (337)Decrease in retirement benefi t obligations due to transfer to defi ned-contribution pension plan

— (26,151) 26,151

(Decrease) increase in provision for employees’ bonus (3,913) 188 (4,101)(Decrease) increase in provision for demolition of fi xed assets (414) 3,773 (4,187)(Decrease) increase in price fl uctuation reserve (65,540) 8,761 (74,302)Interest and dividends (237,622) (285,424) 47,802Net losses/(gains) on securities 147,003 (14,953) 161,956Interest expenses 13,470 20,682 (7,212)Foreign exchange (gains)/losses (7,905) 39,313 (47,218)(Gains) on tangible fi xed assets (356) (1,215) 859Equity in losses on affi liates 5,085 3,667 1,418Investment losses on separate accounts 440,628 209,781 230,846(Increase) in other assets (other than investing and fi nancing activities) (112,584) (119,402) 6,818Decrease in other liabilities (other than investing and fi nancing activities) 56,108 48,052 8,055Others 47,807 2,795 45,012

Subtotal 398,025 601,641 (203,616)Interest and dividends received 248,161 271,206 (23,045)Interest paid (13,407) (20,172) 6,764Income taxes paid (110,907) (45,235) (65,671)Others 6,093 14,703 (8,609)

Net cash provided by operating activities 527,964 822,143 (294,178)

II Cash fl ows from investing activitiesNet (increase) in deposits (213,128) (12,189) (200,938)Purchases of monetary receivables bought (655,583) (1,119,993) 464,410Proceeds from sales and redemption of monetary receivables bought 904,063 951,335 (47,272)Increase in money trusts (2,000) (810) (1,189)Decrease in money trusts 29,896 40,023 (10,127)Purchases of securities (3,868,685) (4,516,456) 647,771Proceeds from sales and redemption of securities 3,440,526 3,626,194 (185,667)Loans made (203,602) (301,682) 98,080Proceeds from collection of loans 270,320 276,776 (6,455)(Increase)/decrease in cash received under security lending transactions (911,077) 670,887 (1,581,964)Others (3,709) (2,210) (1,498)

II (a) Subtotal (1,212,977) (388,124) (824,852)(I+II (a)) (685,012) 434,018 (1,119,030)

Purchases of tangible fi xed assets (22,632) (16,673) (5,959)Proceeds from sales of tangible fi xed assets 10,527 14,795 (4,268)Payments related to acquisition of consolidated subsidiaries *3 (467,160) (43,720) (423,440)Payments to acquire equity of subsidiaries (1,502) (135) (1,367)

Net cash used in investing activities (1,693,745) (433,857) (1,259,887)




(Yen in millions)


March 31, 2009)


March 31, 2008)

Increase and Decrease by Comparison

Notes No. Amount Amount

III Cash fl ows from fi nancing activitiesProceeds from borrowing 261,053 2,153 258,899Repayments of borrowing (19,554) (14) (19,539)Proceeds from issuance of short-term corporate bonds 127,941 451,841 (323,899)Redemption of short-term corporate bonds (228,000) (352,000) 124,000Proceeds from issuance of corporate bonds 22,125 84,380 (62,254)Redemption of corporate bonds (59,113) (41,791) (17,322)Proceeds from issuance of commercial paper — 692,989 (692,989)Redemption of commercial paper (16,654) (780,355) 763,700Net increase in payables under securities lending transactions 111,151 — 111,151Repurchases of treasury stock (50,302) (90,464) 40,162Dividends paid (43,113) (31,906) (11,207)Dividends paid to non-controlling interest (107) (222) 114Proceeds from paid-up share capital from non-controlling interest 1,049 1,386 (336)Others (2,284) (2,399) 115

Net cash provided by (used in) fi nancing activities 104,189 (66,404) 170,594

IV Effect of exchange rate changes on cash and cash equivalents (49,513) (5,887) (43,625)

V Net (decrease) increase in cash and cash equivalents (1,111,103) 315,993 (1,427,097)

VI Cash and cash equivalents at beginning of year 1,988,696 1,670,006 318,689

VII Increase in cash and cash equivalents due to newly consolidated subsidiaries 287 2,696 (2,408)

VIII Decrease in cash and cash equivalents due to exclusion from consolidation (328) — (328)

IX Cash and cash equivalents at end of year *1 877,551 1,988,696 (1,111,144)


05

57

Basis of Presentation and Significant Accounting Policies

Year ended March 31, 2009 (April 1, 2008–March 31, 2009)


1. Scope of consolidation

(1) Number of consolidated companies: 61 companiesFor details of Tokio Marine Holdings’ consolidated subsidiaries, please refer to “Tokio Marine Holdings and its Subsidiaries” in “Corporate Data”.

Philadelphia Consolidated Holding Corp., Philadelphia Indemnity Insurance Company and 12 other companies are included in the consolidation from the fi scal year ended March 31, 2009 as these entities became subsidiaries of the Company through the acquisition of shares, newly founded or for other reasons.

Vetra Finance Corporation and one other company are excluded from the consolidation in the fi scal year ended March 31, 2009 as Vetra ceased to operate its bond investment business and redeemed the unsecured subordinated debts.

Kiln Ltd and Kiln Reinsurance Ltd are excluded from the consolidation in the fi scal year ended March 31, 2009 as these companies have been dissolved. Asia General Asset Bhd. and one other company are excluded from the consolidation in the fi scal year ended March 31, 2009 because procedures to dissolve these two companies have commenced.

In the fi scal year ended March 31, 2009, TM Asia Insurance Singapore Ltd. changed its name to Tokio Marine Insurance Singapore Ltd., effective July 1, 2008; Real Seguros S.A. changed its name to Tokio Marine Seguradora S.A. effective August 20, 2008; and Kiln (UK) Holdings Limited changed its name to Kiln Group Limited effective January 19, 2009.

(1) Number of consolidated subsidiaries: 53 companies For details of Millea Holdings’ consolidated subsidiaries,

please refer to “Tokio Marine Holdings and its Subsidiaries” in “Corporate Data.”

Millea Nihon Kosei, Kiln Ltd, Kiln (UK) Holdings Limited, Kiln Reinsurance Ltd., Kiln Underwriting Limited and 20 other companies are included in the consolidation from the fi scal year ended March 31, 2008 due to these entities having become subsidiaries through an acquisition of shares during the fi scal year ended March 31, 2008.

Tokio Marine Bluebell Re Limited and two other companies are included in the consolidation from the fi scal year ended March 31, 2008 due to an increase in importance.

(2) Names of major non-consolidated subsidiaries (No change)

(2) Names of major non-consolidated subsidiaries Tokio Marine & Nichido Adjusting Service Co., Ltd. and Tokio

Marine Capital Co., Ltd. are non-consolidated subsidiaries of the Company. Each non-consolidated subsidiary is small in scale in terms of total assets, sales, net income or loss for the period and retained earnings. As such non-consolidated subsidiaries are not considered to materially affect any reasonable determination as to the Group’s fi nancial condition and results of operations, these companies are excluded from the consolidation.

2. Application of the equity method

(1) Number of affi liates accounted for by the equity method: 8 companies

(Names of major affi liates accounted for by the equity method) Sino Life Insurance Co., Ltd.

IBEX Insurance Service Limited is accounted for by the equity method from the fi scal year ended March 31, 2009 because it became an affi liate company through an acquisition of ownership interests.

International Marine Insurance Managers SA (Pty) Ltd (“IMIM”) is no longer an affi liate accounted for by the equity method as the Company increased its ownership interests and IMIM became a consolidated company in the fi scal year ended March 31, 2009. Tianan Insurance Company Limited (“Tianan”) is no longer an affi liate accounted for by the equity method as the Company’s equity interest has been diluted as a result of Tianan’s issuance of new shares to third parties during the fi scal year ended March 31, 2009. Real Tokio Marine Vida e Previdência S.A. is no longer an affi liate accounted for by the equity method as all the shares previously held by the Company through a subsidiary were sold during the fi scal year ended March 31, 2009.

(1) Number of affi liates accounted for by the equity method: 10 companies

(Names of major affi liates accounted for by the equity method) Sino Life Insurance Co., Ltd. Tianan Insurance Company Limited Real Tokio Marine Vida e Previdência S.A.

International Marine Insurance Managers SA (Pty) Ltd and 4 other companies are accounted for by the equity method from the fi scal year ended March 31, 2008 due to these entities having become affi liates through an acquisition of shares during the fi scal year ended March 31, 2008. Sino Life Insurance Co., Ltd. is accounted for by the equity method from the fi scal year ended March 31, 2008 due to an increase in importance.





(2) The non-consolidated subsidiaries (Tokio Marine & Nichido Adjusting Service Co., Ltd., Tokio Marine Capital Co., Ltd., etc.) and other affi liates (IFFCO-TOKIO general insurance Co. Ltd., etc.) have not been accounted for by the equity method because these companies have had a minor effect on the Company’s consolidated net income or loss for the current period as well as retained earnings, on a consolidated basis, respectively.

(2) The non-consolidated subsidiaries (Tokio Marine & Nichido Adjusting Service Co., Ltd., Tokio Marine Capital Co., Ltd., etc.) and other affi liates (Tokio Marine Malayan Insurance Co., Inc., etc.), which are not subject to the equity method, have not been accounted for by the equity method because these companies have had a minor effect on the Company’s consolidated net income or loss for the current period as well as retained earnings, respectively.

(3) (No change) (3) The Company owns 30.1% of the total voting rights of Japan Earthquake Reinsurance Co., Ltd. through Tokio Marine & Nichido and Nisshin Fire. However, the Company does not consider Japan Earthquake Reinsurance Co., Ltd. to be its affi liate since it believes that it can not exert a signifi cant infl uence on any policy making decisions of Japan Earthquake Reinsurance’s operations given the highly public nature of the company.

(4) (No change) (4) With regard to any company accounted for by the equity method that has a different closing date from that of the consolidated fi nancial statements, the fi nancial statements of that company for its fi scal year are used for presentation in the consolidated fi nancial results.

3. Balance sheet date of consolidated subsidiaries

There are one domestic subsidiary and 51 overseas subsidiaries whose balance sheet dates are December 31. Their fi nancial statements are used for the preparation of the consolidated fi nancial statements on the basis of their respective balance sheet dates due to the difference between the balance sheet dates of the subsidiaries and that of the consolidated fi nancial statements is no more than three months. Appropriate adjustments for the consolidation are made for material transactions that occur during the periods from their respective balance sheet dates to the consolidated balance sheet date.

The closing date of the fi scal year for one of the domestic consolidated subsidiaries and 43 overseas consolidated subsidiaries is December 31. The closing date of the fi scal year for two of the overseas consolidated subsidiaries is January 31. Since the differences in the closing dates do not exceed three months, the fi nancial statements of the consolidated subsidiaries as of December 31 and January 31, respectively, are used for presentation in the accompanying consolidated fi nancial statements. As for any signifi cant transactions taking place during the period between the subsidiaries’ closing dates and the consolidated closing date, necessary adjustments are made for the purpose of consolidation.

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4. Accounting policies

(1) Valuation of securitiesa. (No change)

b. (No change)

c. (No change)

(1) Valuation of securitiesa. Trading securities are valued by the mark-to-market method,

with the costs of their sales being calculated based on the moving-average method.

b. Held-to-maturity debt securities are recorded by using the amortized cost method based on the moving-average method (straight-line depreciation method).

c. Debt securities earmarked for policy reserves are stated at amortized cost under the straight-line method in accordance with the Industry Audit Committee Report No. 21 “Temporary Treatment of Accounting and Auditing Concerning Securities Earmarked for Policy Reserve in Insurance Industry” issued by the Japanese Institute of Certifi ed Public Accountants (the “JICPA”), November 16, 2000.

The amount of debt securities earmarked for policy reserves recorded on the consolidated balance sheets and their market value are presented under “(Securities), 3. Bonds earmarked for policy reserve with fair value” below.

The following is a summary of the risk management policy concerning debt securities earmarked for policy reserves.

In order to adequately manage interest rate risk related to assets and liabilities, Tokio Marine & Nichido Life has established the following policy reserve subgroups: “the dollar-denominated policy reserve for insurance policies during the period of deferment regarding individual annuity insurance denominated in U.S. dollars with a policy cancellation refund based on market interest rates”, “accumulated fund of policy reserve for insurance policies during the period of deferment regarding individual annuity insurance with fl oating interest rates”, “accumulated fund of policy reserve for insurance policies of single payment whole-life insurance with fl oating interest rates denominated in U.S. dollars” and “accumulated fund of policy reserve for insurance policies of single payment individual annuity insurance”. Tokio Marine & Nichido Life’s policy is to match the duration of the policy reserve in each subgroup with debt securities of the same or similar duration that are earmarked for policy reserves

d. (No change) d. Other securities with fair value are recorded by the mark-to-market method based upon the market price on the closing date.

The total amount of unrealized gains/losses on other securities is included in net assets, net income taxes and costs of sales sold are calculated using the moving-average method

e. (No change) e. Other securities with no fair value are either stated at cost or amortized cost under the straight-line method, cost being determined by the moving average method.

f. (No change) f. Investments in non-consolidated subsidiaries and affi liates that are not subject to the equity method are stated at cost determined by the moving-average method.

g. (No change) g. Securities held in individually managed money trusts that are mainly invested in securities for trading are accounted for under the mark-to-market method.

(2) Valuation of derivative transactions (No change)

(2) Valuation of derivative fi nancial instruments Derivative fi nancial instruments are accounted for by the mark-

to-market method.





(3) Depreciation of signifi cant tangible fi xed assets a. Tangible fi xed assets Tangible fi xed assets owned by the Company and its domestic

consolidated subsidiaries are depreciated using the declining balance method.

Only buildings that were acquired on or after April 1, 1998 excluding fi xtures attached to buildings are depreciated using the straight-line method.

b. Intangible fi xed assets Intangible fi xed assets recognized in an acquisition of overseas

subsidiaries are amortized over the estimated useful life refl ecting the pattern of assets’ future economic benefi ts.

(3) Depreciation of tangible fi xed assets Depreciation of tangible fi xed assets owned by the Company

and its domestic consolidated subsidiaries is computed using the declining balance method.

However, depreciation of buildings (excluding auxiliary facilities attached to such buildings, etc.) that were acquired on or after April 1, 1998 is computed using the straight-line method.

(Change in accounting policies) For the fi scal year ended March 31, 2008, the Company and its

domestic consolidated subsidiaries have adopted a depreciation method for tangible fi xed assets acquired on or after April 1, 2007, in accordance with the amended Corporate Tax Law of Japan.

As a result, in comparison with the previous method, ordinary gains and income before income taxes for the fi scal year ended March 31, 2008, decreased in the amount of 420 million yen.

The fi nancial impact of the above method on segment information is described in “Segment Information.”

(Additional information) For the fi scal year ended March 31, 2008, the Company and its

domestic consolidated subsidiaries amortized the residual value of tangible fi xed assets which were acquired on or before March 31, 2007 and which have met the end of the amortization period. The residual value is amortized over a fi ve-year period by the straight line method. As a result, in comparison with the previous method, ordinary profi t and income before income taxes for the fi scal year ended March 31, 2008 decreased by 649 million yen. The fi nancial impact of the above method on segment information is described in “Segment Information.”

Tokio Marine & Nichido recognized an extraordinary depreciation by changing the useful life and residual value of its buildings, which became inadequate due to a probability of a new rebuilding plan. Increase of accumulated depreciation due to this change, which amounted to 5,692 million yen, is included in “Other ordinary expenses.” As a result, income before income taxes decreased by the same amount compared to the amount before the change.

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(4) Accounting policies for signifi cant reserves and allowances

a. Valuation allowances for bad debt (No change)

(4) Accounting policies for signifi cant reserves and allowances

a. Valuation allowances for bad debt In order to provide reserves for losses from bad debts, a general

allowance is made pursuant to the rules of asset self-assessment and the rules of asset write-off. Allowances are made by domestic consolidated insurance subsidiaries as follows:

For claims to any debtor who has legally, or in practice, become insolvent (due to bankruptcy, special liquidation or suspension of transactions with banks based on the rules governing clearing houses, etc.) and for receivables from any debtor who has substantially become insolvent, reserves are provided based on the amount of any such claim minus the amount expected to be collectible calculated based on the disposal of collateral or execution of guarantees.

For claims to any debtor who is likely to become insolvent in the near future, reserves are provided based on the overall solvency assessment of the relevant debtor, the net amount of such claims considered to be collectible through the disposal of collateral or execution of guarantee is deducted from such claims.

For claims other than those described above, the amount of claims is multiplied by the default rate, which is computed based on historical loan loss experience in certain previous periods, and is included in the accompanying consolidated fi nancial statements.

For specifi ed overseas claims, any estimated losses arising from political or economic situations in the relevant countries are accounted for as reserves for specifi ed overseas claims in the accompanying consolidated fi nancial statements.

In addition, all claims are assessed by the asset accounting department and the asset management department in accordance with the rules for self-assessment of asset quality. Subsequently, the asset auditing departments, which are independent from other asset-related departments, conduct audits of the assessment results of the other asset-related departments. Reserves for bad debts are accounted for based on such assessment results as stated above.

b. Retirement benefi t obligations (No change)

b. Retirement benefi t obligations To provide for employees’ retirement benefi ts, the Company and

its domestic consolidated subsidiaries have recorded the amount deemed to be incurred at the end of the fi scal year ended March 31, 2008 based on the projected retirement benefi t obligations and related pension assets at the end of the fi scal year ended March 31, 2008.

Prior service costs are charged to expenses in each subsequent consolidated fi scal year by using the straight-line method with costs based on a certain term (14 years) that is based on the average remaining service years of the employees when costs were incurred.

Actuarial differences are charged to expenses in the subsequent consolidated fi scal year by using the straight-line method based on a certain term (1-14 years) that is based on the average remaining service years of the employees when amounts were incurred.





(Additional Information) Pursuant to the Defi ned Contribution Pension Law of Japan,

Tokio Marine & Nichido transferred a portion of its corporate pension fund to a defi ned-contribution pension plan as of July 2, 2007 in accordance with “Accounting Standard for Transfers between Retirement Benefi t Plans” (Accounting Standards Board of Japan , hereinafter “ASBJ”, Guidance No.1. January 31, 2002). This resulted in an extraordinary gain amounting to 26,151 million yen for the fi scal year ended March 31, 2008.

c. Retirement benefi t obligations for directors and corporate auditors

(No change)

c. Retirement benefi t obligations for directors and corporate auditors

Some domestic consolidated subsidiaries set aside a reserve for retirement benefi ts for their directors and corporate auditors as of the end of the fi scal year ended March 31, 2008, in accordance with their internal remuneration regulations.

d. Provision for employees’ bonus (No change)

d. Provision for employees’ bonus To provide for payment of bonuses to employees, the Company

and its consolidated domestic subsidiaries maintain reserves for employees’ bonuses based on the expected amount to be paid.

e. Provision for demolition of fi xed assets (No change)

e. Provision for demolition of fi xed assets To provide for payment of expenses related to dismantling

a building, Tokio Marine & Nichido provided a reserve for demolition of fi xed assets based on the projected amount to be paid for dismantling the building.

f. Price fl uctuation reserve (No change)

f. Price fl uctuation reserve Domestic consolidated insurance subsidiaries maintain reserves

under Article 115 of the Insurance Business Law in order to provide for possible losses or damages arising from price fl uctuation of stock, etc.

(5) Consumption tax (No change)

(5) Consumption tax For the Company and its domestic consolidated subsidiaries,

consumption tax is accounted for by the tax-excluded method. However, underwriting and general administrative costs incurred by domestic consolidated insurance subsidiaries are accounted for by the tax-included method.

In addition, any nondeductible consumption taxes, in respect of assets is included in other assets (as suspense payments) and is amortized over fi ve years using the straight-line method.

(6) Lease transactions Among the transactions of ownership non-transferable fi nance

lease, the transactions with lease periods commencing prior to April 1, 2008 are accounted under the accounting policy applied to normal lease transactions.

(6) Lease transactions The Company and its domestic consolidated subsidiaries

account for fi nance lease transactions, other than those that are deemed to transfer the ownership of the leased properties to lessees under a method similar to that applicable to ordinary operating leases.

05

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(7) Hedge accountingsa. Interest rate

To mitigate interest rate fl uctuation risks associated with long-term insurance policies, Tokio Marine & Nichido and Tokio Marine & Nichido Life implemented an Asset Liability Management framework designed to manage such risks by evaluating and analyzing fi nancial assets and insurance liabilities simultaneously.

As for some of interest rate swap transactions that are utilized to manage such risks, Tokio Marine & Nichido and Tokio Marine & Nichido Life have applied deferral hedge treatment and evaluated hedge effectiveness based upon the Industry Audit Committee Report No. 26, “Accounting and Auditing Treatments related to Adoption of Accounting for Financial Instruments in the Insurance Industry” (issued by the Japanese Institute of Certifi ed Public Accountant (“JICPA”) on September 3, 2002—hereinafter called “Report No. 26”).

Hedge effectiveness is evaluated by examining the interest rate conditions which affect calculation of theoretical value of both the hedged items and the hedging instruments. As for any deferred hedge gains based on the Industry Audit Committee’s Report No.16, “Accounting and Auditing Treatments related to Adoption of Accounting for Financial Instruments in the Insurance Industry” (issued by the JICPA, on March 31, 2000) prior to application of the Report No. 26, Tokio Marine & Nichido has amortized such deferred hedge gains as of the end of March 2003 over the remaining period of hedging instruments (1–17 years) by using the straight-line method, and Tokio Marine & Nichido Life has amortized deferred hedge gains as of the end of March 2002 over the remaining period of hedging instruments (6–10 years) by using the straight-line method, respectively, in accordance with the transitional measures in the Report No. 26. The amount of deferred hedge gains under this transitional treatment as of March 31, 2009 is 35,922 million yen and the amount allocated to gains or losses for the fi scal year ended March 31, 2009 is 11,654 million yen.

In addition, Tokio Marine & Nichido applies the deferred hedge accounting for interest rate swap transactions which are used to hedge the interest rate risk related to bonds issued by Tokio Marine & Nichido. Hedge effectiveness is not evaluated since the critical terms of hedged items and hedging instruments are same and thus believed to be highly hedge effective.

(7) Hedge accountingsa. Interest rate

To mitigate interest rate fl uctuation risks associated with long-term insurance policies, Tokio Marine & Nichido and Tokio Marine & Nichido Life implemented an Asset Liability Management framework designed to manage such risks by evaluating and analyzing fi nancial assets and insurance liabilities simultaneously.




b. Foreign exchange With regard to some currency swap and forward contract

transactions, which are utilized to reduce the future foreign exchange risk associated with assets denominated in foreign currencies, Tokio Marine & Nichido applies deferred hedge accounting and/or fair value hedge accounting. Nisshin Fire applies matching treatment. The effectiveness of these hedging treatments is evaluated by assessing the price fl uctuation of both hedging instruments and hedged items. However, hedge effectiveness is not evaluated, since critical terms of hedged items and hedging instruments are the same and thus believed to be highly hedge-effective.

b. Foreign exchange With regard to some currency swap and forward contract

transactions, which are utilized to reduce the future foreign exchange risk associated with assets denominated in foreign currencies, Tokio Marine & Nichido applies deferred hedge accounting and/or fair value hedge accounting and/or matching treatment. Nisshin Fire also applies deferred hedge accounting and matching treatment. As for deferred hedge accounting and fair value hedge accounting, hedge effectiveness is not evaluated, since critical terms of hedged items and hedging instruments are the same and thus believed to be highly hedge-effective.

_____ (8) Accounting standards of overseas subsidiaries The Company complies with accounting standards of the region

or country in which the relevant consolidated subsidiaries are located.





5. Valuation of assets and liabilities of consolidated subsidiaries

(No change) The Company has adopted the mark-to-market method. The full valuation method is adopted in valuing assets and

liabilities of consolidated subsidiaries at the initial consolidation date.

6. Amortization of goodwill and negative goodwill

Negative goodwill recognized as a liability on the consolidated balance sheets is amortized over 20 years using the straight-line method.

Goodwill recognized as an asset on the consolidated balance sheets is amortized in the following manner. As for the goodwill in connection with Philadelphia Consolidated Holdings Corp., the goodwill is amortized over 20 years using the straight-line method. As for the goodwill in connection with Kiln Group Limited, the goodwill is amortized over 10 years using the straight-line method. Other goodwill is amortized over 5 to 15 years using the straight-line method. Other goodwill and negative goodwill in small amounts are amortized at one time.

Negative goodwill recognized as a liability on the consolidated balance sheets is amortized over 20 years using the straight-line method.

Goodwill recognized as an asset on the consolidated balance sheets is amortized in the following manner. As for the goodwill in connection with Tokio Marine & Nichido Financial Life, the goodwill is amortized over 5 years using the straight-line method. As for the goodwill in connection with Kiln Ltd, the goodwill is amortized over 10 years using the straight-line method. Other goodwill is amortized over 5 to 15 years using the straight-line method. Other goodwill and negative goodwill in small amounts are amortized at one time.

7. Scope of cash and cash equivalents included in the consolidated statements of cash fl ows

(No change) Cash and cash equivalents for the consolidated statements of cash fl ows consist of cash on-hand, demand deposits and short-term investments with original maturities or redemption of 3 months or less at the date of acquisition.

Changes in Significant Matters Related to Financial Statements



Application of “Practical Solution on Unifi cation of Accounting Policies Applied to Foreign Subsidiaries for Consolidated Financial Statements”

The Company has adopted “Practical Solution on Unifi cation of Accounting Policies Applied to Foreign Subsidiaries for Consolidated Financial Statements” (ASBJ Practical Issues Task Force No. 18, May 17, 2006) for the fi scal year ended March 31, 2009 and has implemented adjustments required for consolidated fi nancial reporting.

As a result, for the fi scal year ended March 31, 2009, ordinary loss decreased, and net income before income taxes increased by 4,351 million yen, respectively.

The impact of the above change on the Company’s segment information is detailed in “Segment information” section.

_____

Accounting policies applied to lease transactions The transactions of ownership non-transferable fi nance lease were accounted

under the accounting policy similar to that applicable to lease transaction. However, from the fi scal year ended March 31, 2009, the Company has

adopted “Accounting Standard for Lease Transactions” (ASBJ Statement No. 13, ASBJ 1st Division, June 17, 1993, revised as of March 30, 2007) and “Guidance on Accounting Standard for Lease Transactions” (ASBJ, Guidance No. 16, The Japanese Institute of Certifi ed Public Accountants, Accounting Practice Committee, January 18, 1994, revised as of March 30, 2007). Accordingly, the transactions of ownership non-transferable lease with lease periods commencing prior to April 1, 2008 are accounted under the accounting policy applied to normal sales transactions.

The impact of the changes described above on ordinary loss and net income before income taxes for the fi scal year ended March 31, 2009 is considered immaterial.

_____

05

65

Changes in Presentation



Consolidated balance sheets From the fi scal year ended March 31, 2009, in accordance with the

amendments to the Enforcement Regulations of Insurance Business Law of Japan, it is required to present “Land,” “Buildings,” “Construction in progress” and “Other” in the breakdown of “Tangible fi xed assets,” and “Software,” “Goodwill” and “Other” in the breakdown of “Intangible fi xed assets.”

The breakdown of tangible fi xed assets and intangible fi xed assets for the fi scal year ended March 31, 2008 was as follows: Land: 165,480 million yen, Buildings: 145,497 million yen, Construction in progress: 2,629 million yen, Other tangible fi xed assets: 24,760 million yen, Software: 3,614 million yen, Goodwill: 45,224 million yen and Other intangible fi xed assets: 6,431 million yen.

Consolidated balance sheets 1 In accordance with the amendment of the Enforcement Regulations of

the Insurance Business Law of Japan, the reserve for retirement benefi ts for directors and corporate auditors that was included in “reserve for retirement benefi ts” as of the end of the year ended March 31, 2007 is presented as “reserve for retirement benefi ts for directors and corporate auditors” as of the end of the year ended March 31, 2008.

The amount of the reserve for retirement benefi ts for directors and corporate auditors included in “reserve for retirement benefi ts” as of the end of the year ended March 31, 2007 was 369 million yen.

2 “Payables under securities lending transactions”, which was included in “Other liabilities” as of the end of the fi scal year ended March 31, 2007, is specifi cally presented as a comprising item of “Other liabilities” as of the end of the year ended March 31, 2008, since the amount of the item exceeded 5% of the sum of liabilities and net assets. The amount of “Payables under securities lending transactions” as of the end of the year ended March 31, 2007 was 840,706 million yen.

Consolidated statements of changes in shareholders’ equity From the fi scal year ended March 31, 2009, the item previously presented as

“Decrease in connection with newly consolidated subsidiaries” is presented as two separate items: “Changes in the scope of consolidation” and “Changes in the scope of equity method.” The purpose of this change is to improve the comparability of the Company’s consolidated fi nancial statements in accordance with the introduction of XBRL to the EDINET disclosure platform. The amounts for “Changes in the scope of consolidation” and “Changes in the scope of equity method” for the fi scal year ended March 31, 2008 were 1,056 million yen and negative 5,483 million yen, respectively.

_____

_____ Consolidated statements of cash fl ows In accordance with the amendment of the Enforcement Regulations of the

Insurance Business Law of Japan, the increase in reserve for retirement benefi ts for directors and corporate auditors that was included in “Increase in reserve for retirement benefi ts” for the year ended March 31, 2007 is presented as “Increase in reserve for retirement benefi ts for directors and corporate auditors” for the year ended March 31, 2008.



Notes to Consolidated Balance Sheets



*1 Accumulated depreciation of tangible fi xed assets is 362,697 million yen and advanced depreciation of such assets is 23,969 million yen.

*1 Accumulated depreciation of tangible fi xed assets is 354,952 million yen and advanced depreciation of such assets is 24,613 million yen. The advanced depreciation of 9 million yen was deducted from the acquisition costs for the tangible fi xed assets acquired using government and other subsidies during the year ended March 31, 2008.

*2 Securities of non-consolidated subsidiaries and affi liates, etc. are provided as follows:

*2 Securities of non-consolidated subsidiaries and affi liates, etc. are provided as follows:

(Yen in millions)

Securities (equity) 54,395

Securities (partnership) 29,433

(Yen in millions)

Securities (equity) 92,356

Securities (partnership) 30,824

*3 Of loans, the total amount of loans to borrowers in bankruptcy, past due loans, loans contractually past due for three months or more, and restructured loans is 13,831 million yen. The breakdown is as set forth below.

*3 Of loans, the total amount of loans to borrowers in bankruptcy, past due loans, loans contractually past due for three months or more, and restructured loans is 11,225 million yen. The breakdown is as set forth below.

(1) The amount of loans to borrowers in bankruptcy is 2,853 million yen. Loans that are past due for a certain period, or for other reasons, are generally

placed on non-accrual status when substantial doubt is considered to exist as to the ultimate collectibility either of principal or interest (“Non-accrual status loans”; any part of bad debt written-off is excluded). Loans to borrowers in bankruptcy represent non-accrual loans after a partial charge-off of claims deemed uncollectible, which are defi ned in Article 96, paragraph 1, subparagraph 3 (a) to (e) (maximum amount transferable to reserve for bad debts) and subparagraph 4 of the Enforcement Ordinance of the Corporation Tax Law (Ordinance No. 97, 1965).

(1) The amount of loans to borrowers in bankruptcy is 767 million yen. Loans that are past due for a certain period, or for other reasons, are generally

placed on non-accrual status when substantial doubt is considered to exist as to the ultimate collectibility either of principal or interest (“Non-accrual status loans”; any part of bad debt written-off is excluded.). Loans to borrowers in bankruptcy represent non-accrual loans after a partial charge-off of claims deemed uncollectible, which are defi ned in Article 96, paragraph 1, subparagraph 3 (a) to (e) and subparagraph 4 of the Enforcement Ordinance of the Corporation Tax Law (Ordinance No. 97, 1965).

(2) The amount of past due loans is 5,465 million yen.Past due loans are non-accrual status loans, other than loans to borrowers in legal bankruptcy and loans on which interest payments are deferred in order to assist business restructuring or fi nancial recovery of the borrowers.

(2) The amount of past due loans is 5,940 million yen. Past due loans are non-accrual status loans, other than loans to borrowers in legal bankruptcy and loans on which interest payments are deferred in order to assist business restructuring or fi nancial recovery of the borrowers.

(3) The amount of loans contractually past due for three months or more is 107 million yen.

Loans contractually past due for three months or more are defi ned as loans on which any principal or interests payments are delayed for three months or more from the date following the due date. Loans classifi ed as loans to borrowers in bankruptcy and past due loans are excluded.

(3) There are no loans contractually past due for three months or more. Loans contractually past due for three months or more are defi ned as loans on which any principal or interests payments are delayed for three months or more from the date following the due date. Loans classifi ed as loans to borrowers in bankruptcy and past due loans are excluded.

(4) The amount of restructured loans is 5,405 million yen.Restructured loans are loans on which concessions (e.g. reduction of the stated interest rate, deferral of interest payment, extension of the maturity date, forgiveness of debt) are granted to borrowers in fi nancial diffi culties to assist them in their corporate restructuring or fi nancial recovery by improving their ability to repay creditors. Restructured loans do not include loans classifi ed as loans to borrowers in bankruptcy, past due loans or loans past due for three months or more.

(4) The amount of restructured loans is 4,517 million yen. Restructured loans are loans on which concessions (e.g. reduction of the stated interest rate, deferral of interest payment, extension of the maturity date, forgiveness of debt) are granted to borrowers in fi nancial diffi culties to assist them in their corporate restructuring or fi nancial recovery by improving their ability to repay creditors. Restructured loans do not include loans classifi ed as loans to borrowers in bankruptcy, past due loans or loans past due for three months or more.

*4 The value of assets pledged as collateral totals 330,405 million yen in securities, 9,125 million yen in deposits, 375 million yen in land, 1,327 million yen in buildings. Collateralized debt obligations are held to the value of 65,233 million yen in outstanding claims, 51,724 million yen in underwriting reserve and 59,334 million yen in other debts.

*4 The value of assets pledged as collateral totals 387,607 million yen in securities, 33,081 million yen in deposits and savings and 60 million yen in other assets. Collateralized debt obligations are held to the value of 59,995 million yen in outstanding claims, 61,809 million yen in underwriting reserve, 29,363 million yen in corporate bonds and 66,259 million yen in other debts.

5 Securities received from security borrowing transactions are 75,343 million yen at market value.

5 Securities received from security borrowing transactions are 107,854 million yen at market value.

*6 Securities include securities lent under loan agreements of 595,987 million yen.

*6 Securities include securities lent under loan agreements of 1,540,899 million yen.

05

67



*7 The outstanding balance of undrawn committed loans is as follows: *7 The outstanding balance of undrawn committed loans is as follows:(Yen in millions)

Total loan commitments 101,127

Balance of drawn committed loans 16,019

Undrawn loan commitments 85,108

(Yen in millions)

Total loan commitments 127,420

Balance of drawn committed loans 16,486

Undrawn loan commitments 110,934

8 The amount of both assets and liabilities for separate account as prescribed in Article 118 of the Insurance Business Law totals 1,876,816 million yen.

8 The amount of both assets and liabilities for separate account as prescribed in Article 118 of the Insurance Business Law totals 1,967,195 million yen.

*9 Tokio Marine & Nichido guarantees the liabilities of some of its subsidiaries. The balance of the guarantees to its subsidiaries as of March 31, 2009 is as follows:

*9 Tokio Marine & Nichido guarantees the liabilities of some of its subsidiaries. The balance of the guarantees to its subsidiaries as of March 31, 2008 is as follows:

(Yen in millions)

TNUS Insurance Company 22

Tokio Marine Compania de Seguros, S.A. de C.V. 4,880

Tokio Marine Pacifi c Insurance Limited 1,876

The Tokio Marine & Nichido Fire Insurance Company (China) Limited 6,088

Total 12,868

(Yen in millions)

TNUS Insurance Company 870

Tokio Marine Compania de Seguros, S.A. de C.V. 4,727

Tokio Marine Pacifi c Insurance Limited 1,818

Total 7,416

Notes to Consolidated Statements of Income



*1 Major components of business expenses *1 Major components of business expenses(Yen in millions)

Agency commissions, etc. 397,387

Salaries 207,980

(Yen in millions)

Agency commissions, etc. 397,020

Salaries 202,185

Business expenses consist of “Loss adjustment expenses”, “Operating and general administrative expenses” and “Agency commissions and brokerage” as shown in the accompanying consolidated statements of income.

Business expenses consist of “Loss adjustment expenses”, “Operating and general administrative expenses” and “Agency commissions and brokerage” as shown in the accompanying consolidated statements of income.

*2 In accordance with Paragraph 9 of the “Implementation Guidelines for Equity Method Accounting” (Accounting Practice Committee, Report No.9) and Paragraph 32, Subparagraph 1 of the “Implementation Guidelines for Capital Consolidation in Consolidated Financial Statements” (Accounting Practice Committee, Report No.7), the depreciation amount of 1,892 million yen on goodwill in connection with Sino Life Insurance Co., Ltd. is included in “Equity in losses of affi liates.

_____

*3 The main component of “other extraordinary gains” is gains on sales of shares of affi liates amounting to 14,275 million yen.

*3 The main components of other extraordinary gains are 26,151 million yen resulting from the transfer of a portion of the corporate pension fund to a defi ned-contribution pension plan and 1,777 million yen resulting from correction of income in previous period related to hedge accounting.





*4 The Company recognized impairment losses on the following properties during the year ended March 31, 2009.

*4 The Company recognized impairment losses on the following properties during the year ended March 31, 2008.

Purpose of use Category LocationImpairment loss (Yen in millions)

Land Building Others Total

Properties for business use (deriva-tive business and elderly care busi-ness)

Land and buildings

10 properties including a building in Yokohama City, Kanagawa Pref.

222 1,956 365 2,544

Properties for rent

Land and buildings

A property in Iwaki City, Fukushima Pref.

22 71 — 93

Idle or potential dis-posal proper-ties

Land and buildings

55 properties including a building in Kashiwa City, Chiba Pref.

1,313 419 1,050 2,784

Others Goodwill — — — 1,890 1,890

Total — — 1,558 2,447 3,307 7,313

Purpose of use Category LocationImpairment loss (Yen in millions)

Land Building Others Total

Properties for rent

Land and buildings

2 properties including a building in Imabari City, Ehime Pref.

40 62 — 103

Idle or potential disposal properties

Land and buildings

46 properties including a building in Utsunomiya City, Tochigi Pref.

1,870 924 47 2,842

Others Goodwill — — — 5,707 5,707

Total — — 1,911 987 5,755 8,654

(1) Properties, etc. Properties are classifi ed as follows: (a) properties for business use used for

insurance business and other businesses are grouped by each business unit and (b) other properties including properties for rent, idle or potential disposal properties and properties such as properties business use used for elderly care business are grouped on an individual basis.

The total amount of projected future cash fl ow generated from the derivative business and the elderly care business fell below the book values of the properties used for these businesses. Consequently, the Company wrote off the excess of the book values of such properties over the recoverable values and recognized such write-offs as impairment losses in extraordinary losses.

The Company calculated the recoverable value of the relevant property by discounting projected future cash fl ows at a rate of 1.4% to 6.0%.

Due mainly to decline in the real estate market, book values of some properties for rent and idle or potential disposal properties fell below the recoverable values. Consequently, the Company wrote off the excess of the book values of such properties over the recoverable values and recognized any such write-off as impairment losses in extraordinary losses.

Recoverable values are either the higher of the net sales price or the utility values of each property. Net sales price is the market value assessed by real estate appraisers minus anticipated expenses for disposal of the relevant properties. The utility values were calculated by discounting the future cash fl ows to net present values at a rate of 7.7%.

(2) Goodwill With respect to the goodwill relating to Tokio Marine Seguradora S.A.,

an impairment loss of 1,890 million yen was recognized and recorded as “extraordinary losses” for the year ended March 31, 2009, since the Company concluded that Tokio Marine Seguradora S.A. would not achieve the initially expected levels of profi t.

(1) Properties, etc. Properties are classifi ed as follows: (a) properties used for insurance businesses

are grouped as a whole and (b) other properties including properties for rent and idle or potential disposal properties are classifi ed on an individual basis.

As to properties for rent and idle or potential disposal properties that depreciated in value mainly due to the fall in the real estate market, the Company wrote off the excess of the carrying values of such properties over the recoverable values and recognized any such write off as an impairment loss, in extraordinary item.

The Company determined the recoverable value of a property by selecting the higher of the net sale price or the utility value. The net sale prices were calculated as the assessed values established by a real estate-appraiser, minus the anticipated expenses for disposing of the relevant properties. The utility values were calculated by discounting the future cash fl ows to net present values at a rate of 8.7% to 8.8%.

(2) Goodwill With respect to the goodwill relating to Real Seguros S.A., an impairment loss

of 5,707 million yen was recognized and recorded as ”extraordinary losses” for the year ended March 31, 2008, since the profi t projected in the business plan at the time of the acquisition of shares of Real Seguros S.A. has been deemed to be not achievable.

In addition, with respect to the amount of goodwill that relates to Tianan Insurance Company Limited, an impairment loss of 2,140 million yen was recognized and recorded as “equity in losses of affi liates” in “Other ordinary expenses” for the year ended March 31, 2008.

*5 The main components of other extraordinary losses are 7,668 million yen of “Impairment losses in debt securities issued by subsidiaries” and 3,139 million yen of “Losses on redemption of debt securities issued by subsidiaries.”

05

69

Notes to Consolidated Statements of Changes in Shareholders’ Equity


1. Class and number of issued shares and treasury stock

(Unit: thousand shares)

Number of shares as of March 31, 2008

Increase during the year ended March 31, 2009

Decrease during the year ended March 31, 2009


Issued sharesCommon stock 804,524 — — 804,524

Total 804,524 — — 804,524Treasury stock

Common stock 2,293 14,772 104 16,961Total 2,293 14,772 104 16,961

1. The increase of 14,772 thousand shares of treasury stock is attributable to an acquisition of 14,682 thousand shares to implement financial policies.

2. The decrease of 104 thousand shares of treasury stock is attributable to a decrease of 75 thousands shares due to share distribution in accordance with an exercise of stock acquisition rights.

2. Stock acquisition rights (including those owned by the Company)

Category Nature of stock acquisition rights Amount as of March 31, 2009 (yen in millions)

The Company (parent company) Stock acquisition rights as stock options 849

3.Dividends

(1) Amount of dividends

Resolution Class of stockAmount of dividends

paidDividends per share Record date Effective date

Ordinary general meeting of shareholders held on June 23, 2008

Common stock24,066

million yen30 yen March 31, 2008 June 24, 2008

Meeting of the board of directors held on November 19, 2008

Common stock19,101

million yen24 yen

September 30, 2008

December 10, 2008

(2) Dividends of which the record date falls within the year ended March 31, 2009, and the effective date falls after March 31, 2009.

Resolution Class of stockAmount of

dividends paidSource of dividends

Dividends per share

Record date Effective date


Common stock18,901

million yenRetained earnings

24 yen March 31, 2009 June 30, 2009




1. Class and number of issued shares and treasury stock

(Unit: thousand shares)


Increase during the year ended March 31, 2008

Decrease during the year ended March 31, 2008


Issued sharesCommon stock 824,524 — 20,000 804,524

Total 824,524 — 20,000 804,524Treasury stock

Common stock 1,187 21,175 20,069 2,293Total 1,187 21,175 20,069 2,293

1. The decrease of 20,000 thousand shares is attributable to a cancellation of shares of treasury stock.

2. The increase of 21,175 thousand shares of treasury stock is attributable to an acquisition of 21,074 thousand shares to implement financial policies.

3. The decrease of 20,069 thousand shares of treasury stock is attributable to a cancellation of shares, decreasing treasury stock by 20,000 thousand.

2. Stock acquisition rights (including those owned by the Company)

Category Nature of stock acquisition rights Amount as of March 31, 2008 (yen in millions)

The Company (parent company) Stock acquisition rights as stock options 619

3. Dividends

(1) Amount of dividends

Resolution Class of stockAmount of dividends

paidDividends per share Record date Effective date


Common stock 17,290 million yen 21 yen March 31, 2007 June 26, 2007

Meeting of the board of directors held on November 20, 2007

Common stock 14,674 million yen 18 yenSeptember 30,

2007December 10,

2007

(2) Dividends of which the record date falls within the year ended March 31, 2008, and the effective date falls after March 31, 2008.

Resolution Class of stockAmount of

dividends paidSource of dividends

Dividends per share

Record date Effective date


Common stock24,066

million yenRetained earnings

30 yen March 31, 2008 June 24, 2008

05

71

Notes for Consolidated Statements of Cash Flows



*1 Reconciliation of cash and cash equivalents at the end of the year to the amounts disclosed in the consolidated balance sheets is provided as follows:

*1 Reconciliation of cash and cash equivalents at the end of the year to the amounts disclosed in the consolidated balance sheets is provided as follows:

(As of March 31, 2009) (Yen in millions)

Cash and deposits 461,589

Call loans 352,576

Monetary receivables bought 458,556

Securities 10,695,095

Time deposits with initial term over three months to maturity

(63,560)

Monetary receivables bought not included in cash equivalents

(342,345)

Securities not included in cash equivalents (10,684,358)

Cash and cash equivalents 877,551

(As of March 31, 2008) (Yen in millions)

Cash and deposits 794,528

Call loans 199,725

Monetary receivables bought 1,712,207

Securities 12,138,621

Time deposits with initial term over three months to maturity

(120,718)

Monetary receivables bought not included in cash equivalents

(639,661)

Securities not included in cash equivalents (12,096,006)

Cash and cash equivalents 1,988,696

2 (No change) 2 Cash fl ows from investing activities include cash fl ows arising from asset management relating to the insurance business.

*3 Breakdown of assets and liabilities of newly consolidated subsidiariesThe breakdown of assets and liabilities of newly consolidated subsidiary, Philadelphia Consolidated Holding Corp. at the commencement of the consolidation is as follows. The following also shows the acquisition cost of the shares of Philadelphia Consolidated Holding Corp. and amounts paid (net) for the acquisition of such shares.

(Yen in millions)

Assets 511,852

(Securities) 225,405

Goodwill 253,611

Liabilities (291,926)

(Underwriting funds) (226,859)

Acquisition cost of Philadelphia Consolidated Holding Corp. shares 473,537

Cash and cash equivalents of Philadelphia Consolidated Holding Corp. (6,377)

Net amounts paid for the acquisition of Philadelphia Consolidated Holding Corp. shares 467,160

*3 Breakdown of assets and liabilities of newly consolidated subsidiaries The breakdown of assets and liabilities of newly consolidated subsidiary, Kiln

Ltd at the commencement of the consolidation is as follows. The following also shows the acquisition cost of the shares of Kiln Ltd and amounts paid (net) for the acquisition of such shares.

(Yen in millions)

Assets 207,439

(Securities) 79,167

Goodwill 29,596

Liabilities (142,914)

(Underwriting funds) (82,746)

Acquisition cost of Kiln Ltd shares 94,122

Cash and cash equivalents of Kiln Ltd (52,199)

Net amounts paid for the acquisition of Kiln Ltd shares 41,922



Lease Transactions



1. Finance Lease Transactions The transactions of ownership non-transferable fi nance lease which are

accounted under the accounting policy similar to that applicable to normal lease transaction.

1. Finance lease other than those in which ownership of leased property is deemed to be transferred to the lessees

q Acquisition cost, accumulated depreciation, accumulated impairment losses and net book value of leased assets;

(Yen in millions)

Acquisition costAccumulated depreciation

Accumulated impairment

lossesNet book value

Tangible fi xed assets 5,058 2,888 50 2,120

q Acquisition cost, accumulated depreciation, accumulated impairment losses and net book value of leased assets;

(Yen in millions)

Acquisition costAccumulated depreciation

Net book value

Movables 5,917 3,531 2,386

(No change) Acquisition cost includes interest payable thereon because the balance of future lease payment accounts for a small portion of the balance of tangible fi xed assets.

w Balance of future lease payments; w Balance of future lease payments;

(Yen in millions)

Due within one year 842

Due after one year 1,328

Total 2,170

(Yen in millions)

Due within one year 1,170


Total 2,386

Balance of impairment losses on lease assets: 50 million yen

(No change) Future lease payment includes interest payable thereon because the balance of future lease payment accounts for a small portion of the balance of tangible fi xed assets.

e Lease payment, reversal of impairment loss on leased assets, depreciation equivalent and impairment losses;

(Yen in millions)

Lease payment 1,254

Reversal of impairment losses on lease assets —

Depreciation equivalent 1,254

Impairment losses 50

e Lease payment, reversal of impairment loss on leased assets, depreciation equivalent and impairment losses;

(Yen in millions)

Lease payment 1,473

Depreciation equivalent 1,473

r Computation of depreciation equivalent; (No change)

r Computation of depreciation equivalent; Depreciation equivalent is determined on the straight-line method over the

lease period, with no residual value.

2. Operating lease Future lease payments related to non-cancelable operating leases

(Yen in millions)



Total 7,614

2. Operating lease Future lease payments

(Yen in millions)



Total 5,568

(Impairment losses)There is no impairment loss allocated to the leased assets.

05

73

Securities

1. Trading securities

(Yen in millions)

Type

As of March 31, 2009 As of March 31, 2008

Fair value on balance sheetsValuation gains (losses)

included in earningsFair value on balance sheets

Valuation gains (losses) included in earnings

Trading securities 2,121,901 (490,413) 2,216,467 (70,022)

(Note)


As of March 31, 2009, the above fi gures include amounts related to foreign mortgage securities (carrying amount 1,659 million yen and valuation losses recognized on statements of income negative 90 million yen), which are presented as “Monetary receivables bought” on the consolidated balance sheets.

As of March 31, 2008, the above fi gures include amounts related to commercial papers (carrying amount 172 million yen and valuation losses recognized on statements of income 0 million yen), which are presented as “Monetary receivables bought” on the consolidated balance sheets.

2. Bonds held to maturity with fair value

(Yen in millions)

Type


Cost shown on balance sheets

Fair value DifferenceCost shown on balance sheets

Fair value Difference

Gross unrealized gains

Public and corporate bonds (Domestic)

980,575 1,028,261 47,685 751,953 785,441 33,487

Foreign securities 12,949 13,267 318 12,180 12,287 107

Subtotal 993,524 1,041,528 48,003 764,133 797,728 33,594

Gross unrealized losses


456,180 434,756 (21,423) 492,741 450,451 (42,290)

Foreign securities 12,343 11,917 (426) 19,239 18,819 (419)

Subtotal 468,524 446,674 (21,849) 511,980 469,270 (42,709)

Total 1,462,048 1,488,202 26,153 1,276,114 1,266,998 (9,115)

3. Bonds earmarked for policy reserve with fair value

(Yen in millions)

Type


Cost shown on balance sheets

Fair value DifferenceCost shown on balance sheets

Fair value Difference

Gross unrealized gains


94,707 97,926 3,218 73,001 76,078 3,077

Foreign securities 216,228 232,272 16,044 208,967 222,631 13,664

Subtotal 310,936 330,198 19,262 281,968 298,710 16,741

Gross unrealized losses


8,302 8,231 (70) 3,974 3,953 (21)

Foreign securities 2,956 2,930 (26) 2,984 2,910 (73)

Subtotal 11,258 11,161 (97) 6,958 6,864 (94)

Total 322,195 341,360 19,165 288,927 305,574 16,647



4. Other securities (available for sale) with fair value

(Yen in millions)

Type


CostFair value shown on balance sheets

Difference CostFair vale shown

on balance sheetsDifference

Carrying value which exceeds the original cost


2,447,355 2,528,468 81,113 2,286,053 2,348,538 62,484

Stock (Domestic) 876,891 1,838,527 961,635 1,084,620 3,270,604 2,185,983

Foreign securities 293,294 327,022 33,728 526,403 597,711 71,307

Other (Note 1) 15,334 17,755 2,420 71,904 83,140 11,236

Sub-total 3,632,876 4,711,773 1,078,897 3,968,982 6,299,994 2,331,012

Carrying value which does not exceed the original cost


768,403 749,213 (19,190) 809,829 786,729 (23,100)

Stock (Domestic) 244,750 210,767 (33,983) 157,412 140,724 (16,687)

Foreign securities 730,253 685,547 (44,706) 759,101 706,697 (52,403)

Other (Note 2) 314,638 281,581 (33,056) 287,516 248,019 (39,497)

Sub-total 2,058,046 1,927,109 (130,937) 2,013,860 1,882,171 (131,689)

Total 5,690,922 6,638,883 947,960 5,982,842 8,182,165 2,199,323

(Notes)As of March 31, 2009 As of March 31, 2008

1. “Other” includes foreign mortgage-backed securities (original cost 7,232 million yen, amount shown on the consolidated balance sheets 7,401 million yen, difference 169 million yen) which are presented as monetary receivables bought on the consolidated balance sheets.

1. ”Other” includes foreign mortgage-backed securities (original cost 42,969 million yen, amount shown on the consolidated balance sheets 45,720 million yen, difference 2,750 million yen) which are presented as monetary receivables bought on the consolidated balance sheets.

2. “Other” includes foreign mortgage-backed securities (original cost 277,434 million yen; amount shown on the consolidated balance sheets, 248,216 million yen; difference (-) 29,218 million yen) which are presented as monetary receivables bought on the consolidated balance sheets.

2. ”Other” includes foreign mortgage-backed securities (original cost 214,098 million yen; amount shown on the consolidated balance sheets, 180,930 million yen; difference (-) 33,168 million yen) which are presented as monetary receivables bought on the consolidated balance sheets.

3. Impairment losses amounting to 188,098 million yen were recognized for “Other securities” with fair value. This includes the impairment loss in connection with foreign mortgage securities in the amount of 38,436 million yen, which is included in “Other investment expenses” in the consolidated statements of income. Impairment losses are in principle recognized on securities for which fair values have declined 30% or more versus their book values at the end of the period.

3. Impairment losses amounting to 32,378 million yen were recognized for “Other securities” with fair value. Impairment losses are in principle recognized on securities for which fair values have declined 30% or more versus their book values at the end of the period.

5. Bonds held to maturity with fair value that were sold

None.

6. Bonds earmarked for policy reserve that were sold

(Yen in millions)



Type Sale proceeds Total gains on sale Total of losses on sale Sale proceeds Total gains on sale Total losses on sale

Bonds earmarked for policy reserve 10,349 125 300 13,787 934 16

7. Other securities (available for sale) that were sold

(Yen in millions)



Type Sale proceeds Total gains on sale Total losses on sale Sale proceeds Total gains on sale Total losses on sale

Other securities 1,464,810 71,579 33,437 1,521,938 58,037 15,861

05

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(Notes)



The above fi gures include amounts related to negotiable certifi cates of deposit (sale value: 394 million yen; profi t on sale: 0 million yen; loss on sale: 0 million yen), which are presented as “Cash and bank deposits,” and commercial papers, etc. (sale value: 45,197 million yen; profi t on sale: 11 million yen; loss on sale: 372 million yen), which are presented as “Monetary receivables bought” on the consolidated balance sheets.

The above fi gures include amounts related to foreign mortgage securities, etc. (sale value, 228,141 million yen; profi t on sale, 58 million yen; loss on sale, 1,447 million yen), which are presented as “Monetary receivables bought” on the consolidated balance sheets.

8. Major securities not stated at fair value

(1) Bonds held to maturity

None.

(2) Bonds earmarked for policy reserve

None.

(3) Other securities

(Yen in millions)

Type As of March 31, 2009 As of March 31, 2008

Public and corporate bonds (Domestic) 0 0Stock (Domestic) 209,044 163,749Foreign securities 89,166 89,078Other 252,702 1,558,061

(Notes)


“Other” includes negotiable certifi cates of deposit (52,340 million yen), which are presented as “Cash and bank deposits” and commercial papers, etc. (175,057 million yen), which are presented as “Monetary receivables bought” on the consolidated balance sheets.

“Other” includes negotiable certifi cates of deposit (116,840 million yen), which are presented as “Cash and bank deposits” and commercial papers, etc. (1,415,460 million yen), which are presented as “Monetary receivables bought” on the consolidated balance sheets.

9. Change in the purpose of holding

None.

10. Maturity schedule of other securities with maturity, bonds held to maturity and bonds earmarked for policy reserve

(Yen in millions)


Type Within one year Over 1 to 5 years Over 5 to 10 years Over 10 years Within one year Over 1 to 5 years Over 5 to 10 years Over 10 years

Government bonds (Domestic) 272,093 371,370 851,847 2,363,999 235,308 435,145 748,421 1,950,228Municipal bonds (Domestic) 6,395 55,557 120,711 — 9,222 52,715 133,621 —Corporate bonds (Domestic) 102,946 425,514 181,634 65,376 194,918 428,213 213,030 56,111Stock (Domestic) 100 — — — — 100 — —Foreign securities 177,717 438,152 251,560 140,934 377,375 535,651 243,885 43,247Other 236,261 35,038 46,768 166,599 1,536,712 48,750 41,548 138,073

Total 795,514 1,325,633 1,452,522 2,736,909 2,353,537 1,500,577 1,380,507 2,187,661

(Notes)


“Other” includes negotiable certifi cates of deposit (51,142 million yen for within one year, 1,197 million yen for 1 to 5 years), which are presented as “Cash and bank deposits,” and commercial papers, etc. (184,871 million yen for within one year, 32,743 million yen for 1 to 5 years, 46,461 million yen for 5 to 10 years, 166,599 million yen for over ten years), which are presented as “Monetary receivables bought” respectively on the consolidated balance sheets.

“Other” includes negotiable certifi cates of deposit (114,616 million yen for within one year, 1,534 million yen for 1 to 5 years, 690 million yen for 5 to 10 years), which are presented as “Cash and bank deposits,” and commercial papers, etc. (1,418,789 million yen for within one year, 44,830 million yen for 1 to 5 years, 40,418 million yen for 5 to 10 years, 138,073 million yen for over ten years), which are presented as “Monetary receivables bought” respectively on the consolidated balance sheets.



Money Trusts

1. Money trusts held for trading purposes

(Yen in millions)


Item Carrying amountValuation gains (losses)

included in earningsCarrying amount

Valuation gains (losses) included in earnings

Money trust 7,493 (593) 34,028 (729)

2. Money trusts held to maturity

None.

3. Money trusts other than those held to maturity or those held for trading purposes


1. There are no individually managed money trusts valued at market value. 1. There are no individually managed money trusts valued at market value.

2. Jointly managed money trust is included in the balance sheets at the acquisition cost of 1,195 million yen.

2. Jointly managed money trust is included in the balance sheets at the acquisition cost of 5,186 million yen.

Derivative Transactions

1. Details of transactions



(1) Types of transactions Consolidated subsidiaries are mainly engaged in the following derivative

transactions;

(1) Types of transactions

Consolidated subsidiaries are mainly engaged in the following derivative transactions;

a. Currency-related transactions: Forward contracts, currency swaps, currency options, etc.

a. Currency-related transactions: Forward contracts, currency swaps, currency options, etc.

b. Interest rate-related transactions: Interest rate futures, interest rate options, interest rate swaps, etc.

b. Interest rate-related transactions: Interest rate futures, interest rate options, interest rate swaps, interest rate swaptions, etc.

c. Equity-related transactions: Equity index futures, equity index options, etc. c. Equity-related transactions: Equity index futures, equity index options, etc.

d. Bond-related transactions: Bond futures, etc. d. Bond-related transactions: Bond futures, over-the-counter bond options, etc.

e. Other transactions: Credit derivatives e. Other transactions: Credit derivatives

(2) Objectives and policies of transactions The main purposes of the derivative transactions are as follows.

(2) Objectives and policies of transactions

The main purposes of the derivative transactions are as follows.

a. Risk management related to assets and liabilities: (No change)

a. Risk management related to assets and liabilities held by the Millea Holdings’ consolidated subsidiaries:

In order to adequately manage risks related to assets and liabilities held by the consolidated subsidiaries (ALM: Asset Liability Management) and reduce losses arising from the future fl uctuations in interest rates, exchange rates and stock prices.

b. Investment activities: (No change)

b. Investment activities:

The Company engages in various derivative transactions in order to maximize interest gains within a certain risk limit.

c. Response to customer needs: (No change)

c. Response to customer needs:

The Company carries out derivative transactions in order to provide a wide range of fi nancial instruments that meet customers’ hedging needs as well as their diverse and complex investment/funding style.

05

77



The actual transactions are carried out in accordance with the “Investment Guidelines” under which types of fi nancial instruments, specifi c risk limits, and actions taken against any losses incurred arising from such transactions, etc. are classifi ed and prescribed according to each investment style.

Accounting policies for signifi cant hedging activities are as follows:

The actual transactions are carried out in accordance with the “Investment Guidelines” under which types of fi nancial instruments, specifi c risk limits, and actions taken against any losses arising from such transactions, etc. are classifi ed and prescribed according to each investment style.

Accounting policies for signifi cant hedging activities are as follows:

q Interest rate

To mitigate interest rate fl uctuation risks associated with long-term insurance policies, Tokio Marine & Nichido and Tokio Marine & Nichido Life implement the Asset Liability Management designed to manage such risks by evaluating and analyzing fi nancial assets and insurance liabilities simultaneously.

q Interest rate

To mitigate interest rate fl uctuation risks associated with long-term insurance policies, Tokio Marine & Nichido and Tokio Marine & Nichido Life implement the Asset Liability Management designed to manage such risks by evaluating and analyzing fi nancial assets and insurance liabilities simultaneously.


Hedge effectiveness is evaluated by examining the interest rate conditions which affect calculation of theoretical value of both the hedged items and the hedging instruments. As for any deferred hedge gains based on the Industry Audit Committee’s Report No.16, “Accounting and Auditing Treatments related to Adoption of Accounting for Financial Instruments in the Insurance Industry” (issued by the JICPA, on March 31, 2000) prior to application of the Report No. 26, Tokio Marine & Nichido has amortized such deferred hedge gains as of the end of March 2003 over the remaining period of hedging instruments (1-17 years) by using the straight-line method, and Tokio Marine & Nichido Life has amortized deferred hedge gains as of the end of March 2002 over the remaining period of hedging instruments (6-10 years) by using the straight-line method, respectively, in accordance with the transitional measures in the Report No. 26. The amount of deferred hedge gains under this transitional treatment as of March 31, 2009 is 35,922 million yen and the amount allocated to gains or losses for the fiscal year ended March 31, 2009 is 11,654 million yen.





w Foreign exchange

With regard to some currency swap and forward contract transactions, which are utilized to reduce the future foreign exchange risk associated with assets denominated in foreign currencies, Tokio Marine & Nichido applies deferred hedge accounting and/or fair value hedge accounting. Nisshin Fire also applies matching treatment. The effectiveness of hedging treatments is evaluated by assessing the price fl uctuation of both hedging instruments and hedged items. However, hedge effectiveness is not evaluated, since critical terms of hedged items and hedging instruments are the same and thus believed to be highly effective.

w Foreign exchange

With regard to some currency swap and forward contract transactions, which are utilized to reduce the future foreign exchange risk associated with assets denominated in foreign currencies, Tokio Marine & Nichido applies deferred hedge accounting and/or fair value hedge accounting and/or matching treatment. Nisshin Fire also applies deferred hedge accounting and matching treatment. As for deferred hedge accounting and fair value hedge accounting, hedge effectiveness is not evaluated, since critical terms of hedging instruments and hedged items are the same and thus believed to be highly hedge effective.





(3) Details of risks related derivative transactions (No change)

(3) Details of risks related derivative transactions

Derivative transactions involve market risks and credit risks.

Market risks include risks that the consolidated subsidiaries may incur losses arising from future fl uctuation in prices of the relevant fi nancial instruments (interest rates, exchange rates and stock prices). Major consolidated subsidiaries have established risk management systems, under which such consolidated subsidiaries comprehensively manage risks relating to derivative transactions as well as assets and liabilities, and quantify such market risks by way of VaR method, etc.

Credit risks include risks that such consolidated subsidiaries may incur losses when their counter-parties in derivative transactions fail to perform obligations set forth in the initial agreements due to insolvency or otherwise, other than any losses arising from deterioration of the credit standing of trade reference stated in credit derivative agreements, etc. Major consolidated subsidiaries manage such credit risks by periodically computing credit risks based on market values. If such counter-parties are fi nancial institutions, etc., with which transactions have been frequently carried out, such consolidated subsidiaries adopt necessary actions to reduce credit risks (e.g. conclusion of netting agreements).

(4) Risk management system

The Risk Management Department of Tokio Marine, a department in charge of risk management which is independent of transaction-related departments, fi rst reconciles transaction information and requests for managerial decisions to transaction reports provided by fi nancial institutions and brokers, and then approves such transaction data. Any risk position determined based upon such approved data are evaluated at fair value as needed, and the Risk Management Department determines interest income and risk volume related to derivative transactions together with balance-sheet transactions such as securities and loans, and reports them to a director in charge on a monthly basis.

In addition, as for the risk position of derivative transactions, the Risk Management Department thoroughly reviews whether such position is determined in accordance with types of fi nancial instruments, specifi c risk limits and actions taken against any losses arising from such derivative transactions classifi ed and expressly stated by investment style in the “Investment Guidelines” and then reports the results of such review to a director in charge on a monthly basis.

The department also confi rms by each transactions whether details of such risk position falls within the authority of transaction related departments.

Other consolidated subsidiaries have also established similar risk management structures as described above.

(4) Risk management system

The Risk Management Department of Tokio Marine, a department in charge of risk management which is independent of transaction-related departments, fi rst reconciles transaction information and requests for managerial decisions to transaction reports provided by fi nancial institutions and brokers, and then approves such transaction data. Any risk position determined based upon such approved data are evaluated at fair value as needed, and the Risk Management Department determines interest income and risk volume related to derivative transactions together with balance-sheet transactions such as securities and loans, and reports them to a director in charge on a monthly basis.

In addition, as for the risk position of derivative transactions, the Risk Management Department thoroughly reviews whether such position is determined in accordance with types of fi nancial instruments, specifi c risk limits and actions taken against any losses arising from such derivative transactions classifi ed and expressly stated by investment style in the “Investment Guidelines” and then reports the results of such review to a director in charge on a monthly basis.

The department also confi rms by each transactions whether details of such risk position falls within the authority of transaction related departments.

Other consolidated subsidiaries have also established similar risk management structures as described above.

(5) Supplemental explanation on contract amount, fair value and unrealized gains/losses

a. Notional principal (contract amount)(No change)

(5) Supplemental explanation on contract amount, fair value and unrealized gains/losses

a. Notional principal (contract amount)“Contract amount” as shown in the tables set forth in the following section is a nominal contract amount or notional principal of derivative transactions. The amount itself does not represent market risk or credit risk of derivative transactions.

b. Unrealized gains/lossesDerivative transactions utilized for the purpose other than investment gains are used for the purpose of managing the market risk of fi nancial assets from an ALM point of view. It is therefore necessary to evaluate assets and liabilities as a whole, rather than to focus solely on unrealized gains/losses of derivative transactions, to assess the profi tability and fi nancial soundness.

b. Unrealized gains/lossesDerivative transactions utilized for the purpose other than investment gains are used for the purpose of managing the market risk of fi nancial assets from an ALM point of view. It is therefore necessary to evaluate assets and liabilities as a whole, rather than to focus solely on unrealized gains/losses of derivative transactions, to assess the profi tability and fi nancial soundness.

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2. Contract amount, fair value and unrealized gains and losses of derivative financial instruments

(1) Foreign currency-related instruments(Yen in millions)

Type


Contract amount, etc.

Over 1 year Fair valueUnrealized

gains/(losses)Contract

amount, etc.Over 1 year Fair value

Unrealized gains/(losses)

Over-the-countertransactions

Foreign exchange forwards Short USD 413,200 4,272 (8,136) (8,136) 389,598 13,039 1,578 1,578 EUR 68,921 — (3,325) (3,325) 118,631 — (1,107) (1,107) GBP 11,148 — (658) (658) 14,683 — 293 293 AUD 9,746 — (133) (133) 19,793 — 325 325 CAD 5,310 — (302) (302) 7,200 — 880 880 HKD 24 — (0) (0) 899 — (26) (26) JPY 1,144 — (74) (74) 1,255 — (1) (1) Long USD 94,284 — 1,403 1,403 14,248 — 227 227 EUR 19,546 — 41 41 13,582 — 78 78 GBP 284 — (4) (4) 25,065 — (332) (332) AUD 11,985 — (200) (200) 2,084 — (17) (17) CAD 801 — (22) (22) 2,079 — (77) (77) SGD 1,033 — 63 63 — — — — NZD — — — — 809 — (26) (26)Currency swaps Pay Foreign/Rec. Yen USD 803,162 607,213 24,609 24,609 1,006,691 893,520 (2,436) (2,436) EUR 21,315 15,931 1,461 1,461 47,528 47,528 (3,411) (3,411) AUD 25,239 17,609 4,501 4,501 26,243 25,945 (2,607) (2,607) Pay Yen/Rec. Foreign USD 282,144 205,544 (26,915) (26,915) 249,589 188,359 6,416 6,416 EUR 15,728 14,202 (1,847) (1,847) 27,011 27,011 3,574 3,574 AUD 820 820 (226) (226) 1,013 1,013 46 46 Pay Foreign/Rec. Foreign Pay EUR/Rec. USD. 1,525 — (126) (126) 1,990 1,990 23 23 Pay USD/Rec. EUR. 484 — 26 26 647 647 16 16 Pay USD/Rec. AUD. — — — — 1,377 — 48 48 Pay USD/Rec. NZD — — — — 2,105 — (14) (14)Currency options Short Call

USD33,2271,639

22,0181,302

924 71532,258

912 7,700

271 482 429

Put

USD37,1531,929

25,8631,584

5,826 (3,896)41,8661,345

15,380 705

1,499 (153)

Long Call

USD56,0214,158

52,4213,979

4,216 5761,7834,408

57,372 4,272

5,147 739

Put

USD54,1334,173

50,5404,017

7,328 3,06452,3274,009

43,9063,800

2,694 (1,315)

Total 1,968,393 1,016,439 8,336 (9,927) 2,162,367 1,323,414 13,275 3,151

Notes: 1. The fair value of the foreign exchange forwards agreements at end of period is based on the futures’ market price.

2. The fair value of currency swap transactions is calculated by discounting future cash flows to the present value based on the interest rate at year end.

3. The fair value of foreign currency options contracts is based on an option pricing model.

4. For option contracts, option premiums at the inception are shown below the respective contractual amount.

5. Those instruments united with hedged items in a single accounting treatment are not included in the table above.



(2) Interest rate-related instruments

. (Yen in millions)

Type







Market transactions

Interest rate futures Short — — — — 15,000 —. 0 0 Long 87,679 — 129 129 55,892 —. 46 46

Over-the-counter transactions

Interest rate forward Short — — — — 57,125 — 13 13 Long — — — — 15,424 — (2) (2)Interest rate options Short

Cap45,570

81440,612

729173 641

45,387839

39,387770

374 465

Swaption79,148

78669,848

4452,109 (1,323)

87,687786

84,687786

1,356 (570)

Long

Cap24,785

42614,600

13527 (398)

33,596431

28,596402

75 (355)

Swaption37,974

44733,974

357425 (21)

41,974129

39,974129

89 (39)

Interest rate swap Rec. fi x/Pay fl oat 5,579,844 4,267,435 183,089 183,089 7,711,281 5,723,575 130,520 130,520 Rec. fl oat/Pay fi x 5,118,983 3,772,252 (124,231) (124,231) 7,021,398 4,883,349 (88,002) (88,002) Rec. fl oat/Pay fl oat 689,241 451,341 19,514 19,514 767,364 461,064 10,694 10,694 Rec. fi x/Pay fi x 123,864 45,667 (42,670) (42,670) 155,218 138,218 (2,741) (2,741)

Total 11,787,092 8,695,731 38,567 34,727 16,007,352 11,398,854 52,424 50,028

Notes: 1. The fair value of the interest rate future is based on the closing price at major stock exchanges.

2. The fair value of the interest forward and the interest rate swap transactions is calculated by discounting future cash flows to the present value based on the interest rate at year end.

3. The fair value of interest rate options transactions is based on an option pricing model.

4. For option contracts, option premiums at the inception are shown below the respective contractual amount.

5. Interest rate swaps to which hedge accounting is applied are as follows. The amounts of deferred hedge gains and losses are presented before tax basis.

(Yen in millions)

Classifi cation



Over 1 year Fair valueDeferred hedge



Deferred hedge gains/(losses)

Deferred hedge accounting in accordance with Report No.26*

439,400 362,900 19,463 5,095 420,400 420,400 853 2,894

(Unamortized portion of deferred hedge gains and losses in accordance with Report No.16** are shown below “Deferred hedge gains/(losses)”

6,117 1,086

Other deferred hedge accounting 96,748 46,448 894 844 107,287 102,287 693 649

Total 536,148 409,348 20,357 12,058 527,687 522,687 1,547 4,631

6. Deferred hedge gains and losses relating to the interest rate swap transactions to which hedge accounting is not applied are as follows. The amount of deferred gains and losses are present-

ed before tax basis.

(Yen in millions)

Classifi cationAs of March 31, 2009 As of March 31, 2008

Deferred hedge gains (losses) Deferred hedge gains (losses)

Unamortized potion of deferred hedge gains and losses in accordance with Report in No. 16** relating to interest rate swaps which are not covered by Report No. 26*

29,804 46,490

Other deferred hedge accounting (13,955) (32,296)

Total 15,849 14,194

* Report No. 26: Accounting and Auditing Treatments related to Adoption of Accounting for Financial Instruments in the Insurance industry (Japanese institute of Certified Public Accountants,

September 3, 2002)

** Report No. 16: Tentative Accounting and Auditing Treatments related to Adoption of Accounting for Financial Instruments in the Insurance industry (Japanese institute of Certified Public

Accountants, March 31, 2000)

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(3) Equity-related instruments

(Yen in millions)

Type







Market transactions

Equity index futures Short 10,454 — (57) (57) 22,030 — (41) (41) Long 2,269 — 114 114 26,008 — 567 567Equity index options Short

Call——

——

— —5,800

70 ——

0 70

Long

Put——

——

— —11,900

819 ——

175 (644)


Equity index options Long

Put30,5786,452

22,1755,272

13,609 7,15730,8866,961

26,6036,187

9,263 2,302

Equity swap transactions Rec. fl oating rate/Pay. fl oating equity price

199 — 56 56 380 — 4 4

Rec. fl oating equity price/Pay. fl oating rate

199 — (56) (56) 380 — (4) (4)

Total 43,702 22,175 13,666 7,214 97,387 26,603 9,965 2,254

Notes: 1. The fair values of equity index futures and equity index options (market transaction) are based on the quoted closing price of the principal stock exchanges.

2. The fair values of equity index options of over-the-counter transactions and equity swap transactions are based on quotation from futures market, brokers and financial institutions (counter-

parties), or on an option pricing model.

3. For option contracts, the option premiums at the inception are shown below the respective contractual amount.

4. The synthetic options are classified into such as short or long positions by the receiving or paying option premiums at the time transactions started.

(4) Bond-related instruments

(Yen in millions)

Type







Market transactions

Bond futures Short 5,726 — (48) (48) 21,966 — (182) (182) Long 23,547 — 421 421 49,281 — 235 235


Bond future options Short

Call——

——

— —31,253

46 ——

75 (29)

Put——

——

— —10,499

44 ——

34 9

Long

Call——

——

— —10,499

37 ——

20 (16)

Put——

——

— —10,460

39 ——

11 (27)

Total 29,274 — 373 373 133,959 — 194 (11)

Notes: 1. The fair values of bond futures are based on the closing price at the principal stock exchanges.

2. The fair values of bond future options of over-the-counter are based on quotation from financial institutions (counterparties) or prices calculated by the internal valuation model.

3. For option contracts, the option premiums at the inception are shown below the respective contractual amount.



(5) Credit-related instruments

(Yen in millions)

TypeAs of March 31, 2009 As of March 31, 2008



gains/ (losses)Contract


Unrealized gains/ (losses)


Credit derivatives Sell protection 678,171 473,254 (22,703) (22,703) 892,488 892,212 (10,944) (10,944) Buy protection 47,017 45,379 1,588 1,588 46,855 43,579 714 714

Total 725,189 518,633 (21,114) (21,114) 939,343 935,792 (10,229) (10,229)

Note: The fair value of the credit derivatives is calculated using the internal valuation model.

(6) Commodity-related instruments

(Yen in millions)

TypeAs of March 31, 2009 As of March 31, 2008






Over-the-counter transactions

Commodity swaps Rec. fi xed price/Pay Commodity indices

4,307 4,157 (6,139) (6,139) 10,828 10,492 (24,402) (24,402)

Rec. commodity indices/ Pay fi xed price

3,863 3,817 4,369 4,369 9,802 9,555 20,329 20,329

Rec. Commodity indices/ Pay variable indices

5,212 5,212 (221) (221) 19,351 19,351 (437) (437)

Total 13,383 13,187 (1,990) (1,990) 39,983 39,400 (4,510) (4,510)

Note: The fair value of commodity swaps is calculated using the internal valuation model.

(7) Others

(Yen in millions)

Type








Index basket options

Long165,162

4,976165,162

4,97630,897 25,920

167,3552,394

167,3552,394

11,962 9,568

Natural disaster derivatives

Short18,442

396400

17396 —

——

——

— —

Long27,9121,593

——

1,593 ———

——

— —

Others

Short123

9123

99 —

——

——

— —

Total 211,640 165,686 32,895 25,920 167,355 167,355 11,962 9,568

Notes: 1. The fair value of the index basket option is calculated based on the price quoted by financial institutions (counterparties).

2. The option premiums at the inception are shown below the respective contractual amount.

3. The fair value of natural disaster derivatives and others are calculated based on the option premiums.

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Retirement Benefits

1. Outline of the retirement and severance benefit plans

The Company and other seven consolidated subsidiaries have an unfunded lump-sum payment retirement plan covering substantially all

employees.

Tokio Marine & Nichido has a corporate pension fund system and an approved retirement annuity plan. The benefits of the corporate pension

fund system and lump-sum payment retirement plan are based on the points which each employee acquired through service.

Additionally, some domestic consolidated subsidiaries have the employee retirement trust.

In the year ended March 31, 2008, Tokio Marine & Nichido transferred a portion of its corporate pension fund to a defined-contribution pen-

sion plan as of July 2, 2007.

2. Breakdown of retirement benefits liabilities

(Yen in millions)


a. Retirement benefi t liabilities (371,793) (384,401)b. Pension assets 151,611 181,286c. Employee retirement trust 9,687 13,350

d. Unaccrued retirement benefi t liabilities (a+b+c) (210,494) (189,764)e. Unrecognized actuarial difference 90,345 82,842f. Unrecognized prior service costs (21,586) (25,015)

g. Net amount in the consolidated balance sheets (d+e+f) (141,734) (131,937)

h. Prepaid pension expenses 6,772 6,522

i. Reserve for retirement benefi ts (g–h) (148,506) (138,459)


Notes 1. The Company and its subsidiaries excluding Tokio Marine & Nichido, Nisshin

Fire, Tokio Marine & Nichido Life, Tokio Marine & Nichido Facilities and Tokio Marine & Nichido Career Service adopt the simple method in calculation of retirement benefi t liabilities.

Notes1. The Company and its subsidiaries excluding Tokio Marine & Nichido, Nisshin

Fire, Tokio Marine & Nichido Life, Tokio Marine & Nichido Facilities and Tokio Marine & Nichido Career Service adopt the simple method in calculation of retirement benefi t liabilities.

2. The changes that resulted from the transfer of a portion of Tokio Marine & Nichido’s corporate pension fund to its defi ned contribution pension plan are detailed below.

(Yen in millions)

Decrease in retirement benefi t liabilities 60,163

Decrease in pension assets (32,984)

Unrecognized actuarial difference (8,185)

Unrecognized prior service costs 7,157

Decrease in reserve for retirement benefi t 26,151

3. Breakdown of retirement expenses

(Yen in millions)



a. Service cost 16,505 16,102b. Interest cost 7,350 7,701c. Expected investment income (5,016) (5,847)d. Actuarial differences accounted for as expense 8,918 7,909e. Amortization of prior service cost accounted for as

expense(2,681) (2,910)

f. Retirement benefi t expenses (a+b+c+d+e) 25,076 22,955g. Amount transferred to the defi ned contribution

pension plan1,758 1,011

h. Gains and losses resulted from the transfer to the defi ned contribution pension plan

— (26,151)

i. Total (f+g+h) 26,835 (2,184)





Notes1. Employee contributions to the corporate pension fund are deducted from

service cost.2. Retirement expenses for companies using simple method are recorded as ”a.

service cost.“

Notes1. Employee contributions to the corporate pension fund are deducted from

service cost.2. Retirement expenses for companies using simple method are recorded as

“a. service cost.”3. The item “h. Gains and losses resulted from the transfer to the defi ned-

contribution pension plan” is the gain recognized in connection with the transfer some part of corporate pension fund system to the defi ned contribution pension plan, and included in “Other extraordinary gains.”

4. Accounting for retirement benefit liabilities



a. Distribution method for estimated retirement benefi ts

The lump-sum retirement benefi t system and the corporate pension fund system mainly employ the point standard.

The lump-sum retirement benefi t system and the corporate pension fund system mainly employ the point standard.

b. Discount rate 2.0% 1.3%–2.0%

c. Expected rate of return on investments

1.3%–3.0% 1.3%–3.1%

d. Terms to amortize unrecognized prior service costs

(No change) 14 years (Expenses are accounted for using the straight-line method over a certain number of years and within the average remaining work period of employees at the time of occurrence)

e. Terms to amortize actuarial unrecognized differences

(No change) 1 to 14 years (Expenses are accounted for in the following fi scal year using the straight-line method over a certain number of years and within the average remaining work period of employees at the time of occurrence)

Stock Options


1. The account title and the amount related to stock options;

(Yen in millions)

Loss adjustment expenses 73

Operating and general administrative expenses 359

Total 432

05

85

2. Details and figures relating to stock options

(1) Details of stock options

Stock options (July 2008)(Stock option scheme as stock-linked

compensation plan)


compensation plan)


compensation plan)


compensation plan)

Title and number of grantees

Directors of the Company: 13Corporate auditors of the Company: 5Directors of the Company’s consolidated subsidiaries (excluding directors of the Company): 25Corporate auditors of the Company’s consolidated subsidiaries: 12Directors* of the Company’s consolidated subsidiaries: 28(*) Non-members of the board



Directors of the Company: 11Corporate auditors of the Company: 5Directors of the Company’s consolidated subsidiaries (excluding directors of the Company): 15Corporate auditors of the Company’s consolidated subsidiaries: 5Directors* of the Company’s consolidated subsidiaries 27(*) Non-members of the board

Number of stock options (Note 1)

Common stock: 122,100 shares Common stock: 86,700 shares Common stock: 97,000 shares Common stock: 155,000 shares

Grant date August 26, 2008 July 23, 2007 July 18, 2006 July 14, 2005

Vesting conditions

Stock options vest on the date of grant. Additionally, stock options held by any of the directors or corporate auditors that he/she received in his/her capacity as a director (including a non-member of the board) or a corporate auditor of the relevant entity may be exercised after he/she has retired from any position as a director (including a non-member of the board) or corporate auditor of such entity before June 30, 2009. The number of the exercisable stock options is calculated by the following formula.Number of stock options allotted x Number of months served by directors (including non-members of the board) or corporate auditors from July 2008 inclusive of the month of the retirement/12.Remaining stock options become unexercisable after the retirement date and then expire.

Stock options vest on the date of grant. Additionally, stock options held by any of the directors or corporate auditors that he/she received in his/her capacity as a director (including a non-member of the board) or a corporate auditor of the relevant entity may be exercised after he/she has retired from any position as a director (including a non-member of the board) or corporate auditor of such entity before June 30, 2008. The number of the exercisable stock options is calculated by the following formula.Number of stock options allotted × Number of months served by directors (including non-members of the board) or corporate auditors from July 2007 inclusive of the month of the retirement/12.Remaining stock options become unexercisable after the retirement date and then expire.






compensation plan)


compensation plan)


compensation plan)


compensation plan)

Requisite service period

From August 27, 2008 to June 30, 2009

From July 24, 2007 to June 30, 2008



Exercise period

From August 27, 2008 to August 26, 2038. Stock options held by any of the directors, corporate auditors or operating offi cers that he/she received in his/her capacity as a director (including a non-member of the board) or a corporate auditor of the relevant entity may be exercised within ten days after he/she has retired from any position as a director (including a non-member of the board) or corporate auditor of such entity (excluding the date of the retirement).

From July 24, 2007 to July 23, 2037. Stock options held by any of the directors, corporate auditors or operating offi cers that he/she received in his/her capacity as a director (including a non-member of the board) or a corporate auditor of the relevant entity may be exercised within ten days after he/she has retired from any position as a director (including a non-member of the board) or corporate auditor of such entity (excluding the date of the retirement).

From July 19, 2006 to July 18, 2036. Stock options held by any of the directors, corporate auditors or operating offi cers that he/she received in his/her capacity as a director (including a non-member of the board) or a corporate auditor of the relevant entity may be exercised within ten days after he/she has retired from any position as a director (including a non-member of the board) or corporate auditor of such entity (excluding the date of the retirement).

From July 15, 2005 to June 30, 2035. Stock options held by any of the directors, corporate auditors or operating offi cers that he/she received in his/her capacity as a director (including a non-member of the board) or a corporate auditor of the relevant entity may be exercised within ten days after he/she has retired from any position as a director (including a non-member of the board) or corporate auditor of such entity (excluding the date of the retirement).

Note: The number of stock options corresponds to the number of underlying common stock.

(2) Figures relating to the stock options;

(a) Number of the stock options

Stock options (August 2008)(Stock option scheme as stock-linked

compensation plan)


compensation plan)


compensation plan)


compensation plan)

Stock options before vested (converted to shares)

Outstanding at the beginning of the fi scal year

— 19,400 — —

Granted 122,100 — — —

Forfeited — 300 — —

Vested 95,900 19,100 — —

Outstanding at the end of the fi scal year

26,200 — — —

Exercisable stock options (converted to shares)


— 66,300 73,000 91,500

Vested 95,900 19,100 — —

Exercised 200 22,800 22,500 30,000

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87


compensation plan)


compensation plan)


compensation plan)


compensation plan)

Forfeited — — — —


95,700 62,600 50,500 61,500

Note: The Company conducted a stock split of its shares of common stock effective as of September 30, 2006, whereby one share was split into 500 shares. The above numbers are presented on an

after stock split basis.

(b) Price information


compensation plan)


compensation plan)


compensation plan)


compensation plan)

Exercise price ¥000,100 ¥000,100 ¥0,000,500 ¥0,500

Average stock price at exercise

¥002,215 ¥004,294 ¥0,004,307 ¥4,290

Fair value on the grant date

¥353,300 ¥491,700 ¥2,013,506 ¥ —

3. Valuation technique used for the estimated fair value of stock options

Stock options granted in the fiscal year ended March 31, 2009 were valuated using the following valuation technique.

(a) Valuation technique Black-Scholes Model

(b) Assumptions

Stock options (August, 2008)(Stock option scheme as stock-linked

compensation plan)

Expected volatility (Note 1) 34.93%

Expected lives (Note 2) 2 years

Expected dividends (Note 3) ¥32

Risk-free interest rate (Note 4) 0.700%

Notes: 1. Computed based on the stock prices from August 27, 2006 to August 26, 2008.

2. Computed based on the average period of service of directors and corporate auditors.

3. Computed based on the average amount of dividends paid.

4. Based on yields of Japanese government bonds for a term corresponding to the expected lives.

4. Estimate of vested number of stock options

Only the actual number of forfeited stock options is considered because it is difficult to rationally estimate the number of stock options that

will be forfeited in the future.


1. The account title and the amount related to stock options;

(Yen in millions)

Loss adjustment expenses 67

Operating and general administrative expenses 318

Total 385



2. Details and figures relating to stock options

(1) Details of stock options


compensation plan)


compensation plan)


compensation plan)

Title and number of grantees



Directors of the Company: 11Corporate auditors of the Company: 5Directors of the Company’s consolidated subsidiaries (excluding directors of the Company): 15Corporate auditors of the Company’s consolidated subsidiaries: 5Directors* of the Company’s consolidated subsidiaries 27(*) Non-members of the board

Number stock options (Note 1)

Common stock: 86,700 shares Common stock: 97,000 shares Common stock: 155,000 shares

Grant date July 23, 2007 July 18, 2006 July 14, 2005

Vesting conditions Stock options vest on the date of grant. Additionally, stock options held by any of the directors or corporate auditors that he/she received in his/her capacity as a director (including a non-member of the board) or a corporate auditor of the relevant entity may be exercised after he/she has retired from any position as a director (including a non-member of the board) or corporate auditor of such entity before June 30, 2008. The number of the exercisable stock options is calculated by the following formula.Number of stock options allotted × Number of months served by directors (including non-members of the board) or corporate auditors from July 2007 inclusive of the month of the retirement / 12.Remaining stock options become unexercisable after the retirement date and then expire.

Stock options vest on the date of grant. Additionally, stock options held by any of the directors or corporate auditors that he/she received in his/her capacity as a director (including a non-member of the board) or a corporate auditor of the relevant entity may be exercised after he/she has retired from any position as a director (including a non-member of the board) or corporate auditor of such entity before June 30, 2007. The number of the exercisable stock options is calculated by the following formula.Number of stock options allotted × Number of months served by directors (including non-members of the board) or corporate auditors from July 2006 inclusive of the month of the retirement / 12.Remaining stock options become unexercisable after the retirement date and then expire.

Stock options vest on the date of grant. Additionally, stock options held by any of the directors or corporate auditors that he/she received in his/her capacity as a director (including a non-member of the board) or a corporate auditor of the relevant entity may be exercised after he/she has retired from any position as a director (including a non-member of the board) or corporate auditor of such entity before June 30, 2006. The number of the exercisable stock options is calculated by the following formula.Number of stock options allotted × Number of months served by directors (including non-members of the board) or corporate auditors from July 2005 inclusive of the month of the retirement / 12.Remaining stock options become unexercisable after the retirement date and then expire.

Requisite service period

From July 24, 2007 to June 30, 2008 From July 19, 2006 to June 30, 2007 From July 15, 2005 to June 30, 2006

Exercise period From July 24, 2007 to July 23, 2037. Stock options held by any of the directors or corporate auditors that he/she received in his/her capacity as a director (including a non-member of the board) or a corporate auditor of the relevant entity may be exercised within ten days after he/she has retired from any position as a director (including a non-member of the board) or corporate auditor of such entity (excluding the date of the retirement).

From July 19, 2006 to July 18, 2036. Stock options held by any of the directors or corporate auditors that he/she received in his/her capacity as a director (including a non-member of the board) or a corporate auditor of the relevant entity may be exercised within ten days after he/she has retired from any position as a director (including a non-member of the board) or corporate auditor of such entity (excluding the date of the retirement).

From July 15, 2005 to June 30, 2035. Stock options held by any of the directors or corporate auditors that he/she received in his/her capacity as a director (including a non-member of the board) or a corporate auditor of the relevant entity may be exercised within ten days after he/she has retired from any position as a director (including a non-member of the board) or corporate auditor of such entity (excluding the date of the retirement

Note: The number of stock options corresponds to the number of underlying common stock.

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(2) Figures relating to the stock options

(a) Number of the stock options


compensation plan)


compensation plan)


compensation plan)

Stock options before vested (converted to shares)


— 13,500 —

Granted 86,700 — —

Forfeited — — —

The number of stock options whose terms settled

67,300 13,500 —


19,400 — —

Exercisable stock options (converted to shares)


— 83,500 121,500

Vested 67,300 13,500 —

Exercised 1,000 24,000 30,000

Forfeited — — —


66,300 73,000 91,500

Note: The Company conducted a stock split of its shares of common stock effective as of September 30, 2006, whereby one share was split into 500 shares. The above numbers are presented on an

after stock split basis.



(b) Prices information


compensation plan)


compensation plan)


compensation plan)

Exercise price ¥000,100 ¥0,000,500 ¥0,500

Average stock price at exercise

¥003,670 ¥0,004,936 ¥5,022

Fair value on the grant date

¥491,700 ¥2,013,506 ¥ —

3. Valuation technique used for the estimated fair value of stock options

Stock options granted in the fiscal year ended March 31, 2008 were valuated using the following valuation technique.

(a) Valuation technique Black-Scholes Model

(b) Assumptions

Stock options (July, 2007)(Stock option scheme as stock-linked

compensation plan)

Expected volatility (Note 1) 34.00%

Expected lives (Note 2) 3 years

Expected dividends (Note 3) ¥28

Risk-free interest rate (Note 4) 1.164%

Notes: 1. Computed based on the stock prices from April 1, 2002 to July 23, 2007.

2. Computed based on the average period of service of directors and corporate auditors.

3. Computed based on the average amount of dividends paid.

4. Based on yields of Japanese government bonds for a term corresponding to the expected lives.

4. Estimate of vested number of stock options

Only the actual number of forfeited stock options is considered because it is difficult to rationally estimate the number of stock options that

will be forfeited in the future.

Deferred Tax Accounting


1 Signifi cant portions of deferred tax assets and deferred tax liabilities

(Yen in millions)

Deferred tax assets

Underwriting reserves 431,940

Outstanding claims 58,433

Reserve for retirement benefi ts 57,881

Loss on revaluation of securities 55,651

Net operating loss carry forward 25,073

Provision for reserve for price fl uctuation 20,379

Deferred hedge losses 15,028

Others 85,523

Subtotal 749,912

Valuation allowance (60,600)

Total deferred tax assets 689,312

Deferred tax liabilities

Difference from revaluation of other securities (347,099)

Unrealized gains on consolidated subsidiaries (73,673)

Deferred hedge gains (24,959)

Others (66,402)

Total deferred tax liabilities (512,134)

Net deferred tax assets (liabilities) 177,178

1 Signifi cant portions of deferred tax assets and deferred tax liabilities

(Yen in millions)

Deferred tax assets

Underwriting reserves 429,562

Outstanding claims 55,532

Reserve for retirement benefi ts 54,102

Provision for reserve for price fl uctuation 44,042

Loss on revaluation of securities 30,151

Deferred hedge losses 18,787

Net operating loss carry forward 15,485

Others 80,815

Subtotal 728,481

Valuation allowance (27,251)

Total deferred tax assets 701,229

Deferred tax liabilities

Difference from revaluation of other securities (801,347)

Unrealized gains on consolidated subsidiaries (107,253)

Deferred hedge gains (25,587)

Others (33,799)

Total deferred tax liabilities (967,987)

Net deferred tax assets (liabilities) (266,757)

05

91


2 Reconciliation between the effective tax rate of the Company and the Japanese statutory income tax rate

(Percentages)

Japanese statutory tax rate 40.7(Adjustment)

Permanent differences such as dividends received (33.1)Tax rate applied to subsidiaries (17.2)Permanent differences such as entertainment expenses 9.1

Valuation allowance 71.0Investment profi t/loss on equity method affi liates 4.4Reversal of deferred tax liabilities for retained earnings of foreign subsidiaries due to the tax reform (25.9)

Others 3.9Effective tax rate 52.9

2 Reconciliation between the effective tax rate of the Company and the Japanese statutory income tax rate

(Percentages)

Japanese statutory tax rate 40.7

(Adjustment)

Permanent differences such as dividends received (8.8)

Tax rate applied to subsidiaries (3.6)Permanent differences such as entertainment expenses 0.9

Valuation allowance 3.9Income tax equivalents related to the reserve for policyholders dividends incurred by overseas subsidiaries

3.8

Others 0.0

Effective tax rate 36.8

Business Combinations and Other Matters

As of December 1, 2008, the Company acquired Philadelphia Consolidated Holding Corp., a U.S. property & casualty (“P&C”) insurance

group and made it a subsidiary through Tokio Marine & Nichido, a wholly owned subsidiary of the Company. In connection with the account-

ing for the acquisition, the Company has applied the purchase method as described below.

(i) The outline of the business combination to which the purchase method was applied

a. Acquired company

Philadelphia Consolidated Holding Corp.,

b. Business

A holding company for subsidiaries operating insurance and insurance-related businesses

c. Reasons for the business combination

The Company intends to strengthen its operational platform for local commercial businesses in the U.S. and expand its overall insurance

business in the U.S. insurance market.

d. Date of the business combination

December 1, 2008

e. Form of the business combination

Reverse triangular merger under business combination laws in the U.S.

f. Ratio of voting rights acquired through the business combination

100%

(ii) Period for which the operating results of the acquired company are included in the consolidated financial statements of the Company

For accounting purposes, the business combination date is deemed to be the balance sheet date of Philadelphia Consolidated Holdings Corp.

Consequently, the results of operation of the acquired company are not included in the consolidated statements of income of the

Company for the fiscal year ended March 31, 2009.

(iii) Acquisition cost

473,537 million yen

(iv) Amount, reason, amortization method and period of goodwill

a. Amount of goodwill

253,611 million yen

b. Reason

The acquisition cost of the acquired company, which was calculated by taking into account the projected future revenues as of the valua-

tion date, exceeded the value of the assets and liabilities of the acquired company as of the date of the business combination. This differ-

ence was recognized as goodwill.



c. Amortization method and period

To be amortized over 20 years using the straight-line method

(v) Assets and liabilities assumed on the date of the business combination and their main components.

ItemAmount

(million yen)Item

Amount(million yen)

Total assets 511,852 Total liabilities 291,926 (Securities) 225,405 (Insurance liabilities) 226,859

(vi) Approximate impact on the consolidated statements of income, assuming that the business combination took place at the beginning of

the fiscal year ended March 31, 2009.

The ordinary income, ordinary profit and net income would have increased by 166,851 million yen, 4,393 million yen and 143 million yen,

respectively.

These amounts represent the difference between the actual figures and the estimates of the figures for ordinary income, ordinary profit

and net income calculated based on the assumption that the business combination was completed at the beginning of the fiscal year ended

March 31, 2009. The amortized amount of goodwill was calculated assuming that the goodwill recognized at the time of the business com-

bination had arisen at the beginning of the fiscal year ended March 31, 2009.

The figures above are un-audited.


As of March 10, 2008, the Company acquired Kiln Ltd, a global insurance player with its primary base in the U.K. insurance market of Lloyd’s,

and made it a subsidiary through Tokio Marine & Nichido, a wholly owned subsidiary of the Company. In connection with the accounting for

the acquisition, the Company has applied the purchase method as described below.

(i) The outline of the business combination to which the purchase method was applied

a. Acquired company

Kiln Ltd

b. Business

A holding company for subsidiaries operating insurance and insurance-related businesses

c. Reasons for the business combination

The Company intends to expand the scale of its operations and earnings of its overseas insurance business and to establish a position as a

major player in Lloyd’s of the U.K., one of the world’s leading insurance markets.

d. Date of the business combination

March 10, 2008

e. Ratio of voting rights acquired through the business combination

100%

(ii) Period for which the operating results of the acquired company are included in the consolidated financial statements of the Company

For accounting purposes, the business combination date is deemed to be the balance sheet date of the acquired company.

Consequently, the results of operation of the acquired company are not included in the consolidated statements of income of the

Company for the fiscal year ended March 31, 2008.

(iii) Acquisition cost

94,122 million yen

(iv) Amount, basis, amortization method and amortization period of goodwill

a. Amount of goodwill

29,596 million yen

05

93

b. Basis

The acquisition cost of the acquired company, which was calculated by taking into account the projected future revenues as of the valua-

tion date, exceeded the market value of the net assets of the acquired company as of the date of the business combination. This difference

was recognized as goodwill.

c. Amortization method and period

To be amortized over 10 years using the straight-line method

(v) Assets and liabilities assumed on the date of the business combination and their main components

ItemAmount

(million yen)Item

Amount(million yen)

Total assets 207,439 Total liabilities 142,914 (Securities) 79,167 (Insurance liabilities) 82,746

(vi) Approximate impact on the consolidated statements of income, assuming that the business combination took place at the beginning of the fi scal

year ended March 31, 2008.

The ordinary income, ordinary profi t and net income would have increased by 81,167 million yen, 9,566 million yen and 5,050 million yen, respectively.

These amounts represent the difference between the actual fi gures and the estimates of the fi gures for ordinary income, ordinary profi t and net

income calculated based on the assumption that the business combination was completed at the beginning of the fi scal year ended March 31, 2008.

The amortized amount of goodwill was calculated assuming that the goodwill recognized at the time of the business combination had arisen at the

beginning of the fi scal year ended March 31, 2008.

The fi gures above are un-audited.

Segment Information

Segment information by business lines


(Yen in millions)

Property and casualty

Life Others Total Elimination Consolidated

I Ordinary income and ordinary profi t / loss

Ordinary income

(1) Ordinary income from transactions with external customers

2,723,100 847,152 68,816 3,639,069 (135,967) 3,503,102

(2) Ordinary income arising from internal segment transactions

6,984 456 27,490 34,931 (34,931) —

Total 2,730,085 847,608 96,306 3,674,001 (170,898) 3,503,102

Ordinary expenses 2,726,550 852,933 109,836 3,689,320 (171,089) 3,518,230

Ordinary profi t / loss 3,534 (5,324) (13,529) (15,319) 191 (15,128)

II Assets / Depreciation / Impairment losses of fi xed assets and capital expenditure

Assets 9,458,878 5,359,894 512,090 15,330,864 (83,640) 15,247,223

Depreciation 19,280 760 791 20,833 — 20,833

Impairment losses of fi xed assets 3,008 243 4,061 7,313 — 7,313

Capital expenditure 25,490 956 1,079 27,526 (35) 27,491

Notes: 1. The segments are classified based on the characteristics of operation of the Company and its subsidiaries.

2. Major operations of each segment are as follows;

Property and casualty: Underwriting property and casualty insurance and related investment activities

Life: Underwriting life insurance and related investment activities

Others: Securities investment advisory, securities investment trusts business, derivatives business, staffing business, real estate management business and elderly care business

3. The amount of the “Elimination” for “Ordinary income from transactions with external customers” is the transferred amount of the reversal of underwriting reserve in the amount of

123,046 million yen, which has been included in “Provision for underwriting reserve “ in “Other ordinary expenses” in the consolidates statements of income.

4. As described in “Changes to Basis of Significant Accounting Policies,” the Company has adopted “Practical Solution on Unification of Accounting Policies Applied to Foreign Subsidiaries for

Consolidated Financial Statements” (ASBJ Practical Issues Task Force No.18, May 17, 2006) for the fiscal year ended March 31, 2009 and made necessary adjustments. As a result, in com-

parison with the previous method, ordinary income of property and casualty insurance business increased by 1,934 million yen and ordinary expense decreased by 2,416 million yen and ordi-

nary profit increased by 4,351 million yen for the fiscal year ended March 31, 2009.




(Yen in millions)

Property and casualty

Life Others Total Elimination Consolidated

I Ordinary income and ordinary profi t / loss

Ordinary income


2,775,255 887,652 47,161 3,710,069 (3) 3,710,066


5,470 271 27,705 33,447 (33,447) —.

Total 2,780,725 887,924 74,866 3,743,517 (33,451) 3,710,066


Ordinary profi t / loss 174,155 4,024 (804) 177,375 1,696 179,071

II Assets / Depreciation / Impairment losses of fi xed assets and capital expenditure

Assets 11,917,672 4,958,610 431,556 17,307,839 (24,597) 17,283,242

Depreciation 25,336 655 225 26,217 —. 26,217

Impairment losses of fi xed assets 7,920 734 —. 8,654 —. 8,654

Capital expenditure 20,595 626 290 21,512 (31) 21,480

Notes: 1. The segments are classified based on the characteristics of operation of the Company and its subsidiaries.

2. Major operations of each segment are as follows;

Property and casualty: Underwriting property and casualty insurance and related investment activities

Life: Underwriting life insurance and related investment activities

Others: Securities investment advisory, securities investment trusts business, derivatives business, staffing business and real estate management business

3. The amount of the “Elimination” for “Ordinary income from transactions with external customers” is the transferred amount of the reversal of reserve for bad debt in the amount of 3 mil-

lion yen, which has been included in “Provision of reserve for bad debts” in “Other ordinary expenses” in the consolidated statements of income.

4. As described in “Basis of presentation and significant accounting policies—(3) Depreciation method of tangible fixed assets—(Change in accounting policies),” the Company and its domes-

tic consolidated subsidiaries have adopted a depreciation method for tangible fixed assets acquired on or after April 1, 2007, in accordance with the amended Corporate Tax Law of Japan.

As a result, in comparison with the previous method, ordinary expenses of property and casualty insurance business, life insurance business and other businesses for the fiscal year ended

March 31, 2008 increased by 398 million yen, 12 million yen and 9 million yen, respectively.

5. As described in “Basis of presentation and significant accounting policies—(3) Depreciation method of tangible fixed assets—(Change in accounting policies),” the Company and its domes-

tic consolidated subsidiaries amortized the residual value of tangible fixed assets which were acquired on or before March 31, 2007 and which has met the end of the amortization period.

The residual value is amortized over a five-year period by the straight-line method.

As a result, in comparison with the previous method, ordinary expenses of property and casualty insurance business, life insurance business and other businesses for the fiscal year ended

March 31, 2008 increased by 646 million yen, 1 million yen and 1 million yen, respectively.

Segment information by location

Year ended March 31, 2009 (April 1, 2008–March 31, 2009)(Yen in millions)

Japan Americas Others Total Elimination Consolidated

I Ordinary income and ordinary profi t/loss

Ordinary income


3,219,462 124,108 202,183 3,545,754 (42,652) 3,503,102


516 38 291 846 (846) —

Total 3,219,979 124,146 202,475 3,546,600 (43,498) 3,503,102


Ordinary profi t/loss (4,012) (6,083) (5,219) (15,316) 188 (15,128)

II Assets 13,145,641 1,458,730 652,226 15,256,599 (9,375) 15,247,223

Notes: 1. Countries and regions are classified into groups based on geographic proximity.

2. Major countries and regions included in each group are as follows:

(1) Americas: Brazil, Bermuda

(2) Others: United Kingdom, Singapore and Malaysia

3. The major components of “Elimination” for “Ordinary income from external customers” are due to transferring amount of (1) 15,971 million yen from “Provision for outstanding claims”,

which is included in ordinary expenses of “Other” segment, to “Reversal of outstanding claims” in “Ordinary income” in the consolidated statements of income and (2) 14,737 million yen

from “Foreign exchange gain”, which is included in ordinary income relating to “Other” segment, to “Other investment expenses” in “Ordinary expenses” in the consolidated statements.

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95

4. As noted in “Changes in significant matters related to financial statements,” the Company has adopted “Practical Solution on Unification of Accounting Policies Applied to Foreign

Subsidiaries for Consolidated Financial Statements” (ASBJ Practical Issues Task Force No. 18, May 17, 2006) for the fiscal year ended March 31, 2009 and implemented adjustments required

for the consolidated financial reporting. As a result, in “Americas” segment, ordinary income and ordinary expenses increased by 115 million yen and 72 million yen, respectively, and ordi-

nary loss decreased by 43 million yen. In addition, in “Others” segment, ordinary income increased by 1,832 million yen, ordinary expenses and ordinary losses decreased by 2,475 million

yen and 4,308 million yen, respectively.


Segment information by location is omitted since the “business in Japan” constitutes more than 90 percent of the aggregated amount of the

ordinary income and the assets of all segments

Segment information by overseas sales

Year ended March 31, 2009 (April 1, 2008-March 31, 2009)

(Yen in millions, except percentages)

Americas Others Total

I Overseas sales 183,188 254,525 437,713

II Consolidated ordinary income 3,503,102

III Ratio of I to II (%) 5.2 7.3 12.5



(1) Americas: North America, Brazil

(2) Others: United Kingdom, Singapore, and Malaysia

3. “Overseas sales” consists of the sum of overseas sales of domestic consolidated subsidiaries and ordinary income of overseas consolidated subsidiaries.


(Yen in millions, except percentages)

Americas Others Total

I Overseas sales 237,677 197,450 435,128

II Consolidated ordinary income 3,710,066

III Ratio of I to II (%) 6.4 5.3 11.7



(1) Americas: North America, Brazil

(2) Others: United Kingdom, Singapore, and Malaysia

3. “Overseas sales” consists of the sum of overseas sales of domestic consolidated subsidiaries and ordinary income of overseas consolidated subsidiaries.

Transactions with Related parties


None of our transactions are specifically described for they are considered immaterial.

(Additional Information)

The Company has applied “Accounting Standard for Related Party Disclosures” (ASBJ Statement No. 11, October 17, 2006) and “Guidance on

Accounting Standard for Related Party Disclosures” (ASBJ Guidance No. 13, October 17, 2006) from the fiscal year ended March 31, 2009.


None of our transactions are specifically described for they are considered immaterial.



Per Share Information


Year ended March 31, 2008(April 1, 2007 –March 31, 2008)

(Yen)

Net assets per share 2,066.92

Net income per share—Basic 29.13

Net income per share—Diluted 29.12

(Yen)

Net assets per share 3,195.45

Net income per share—Basic 133.54

Net income per share—Diluted 133.50

Note: Calculation of “Net income per share-Basic” and “Net income per share-Diluted” is based on the following figures.

Year ended March 31, 2009

(April 1, 2008–March 31, 2009)Year ended March 31, 2008

(April 1, 2007–March 31, 2008)

Net income per share—Basic

Net income (Yen in millions) 23,141 108,766

Net income not attributable to common shareholders (Yen in millions) — —

Net income attributable to common stocks (Yen in millions) 23,141 108,766

Average number of shares outstanding 794,350,872 814,477,047

Net income per share—Diluted

Adjustment of net income (Yen in millions) — —

Increase number of common stocks 268,558 239,566

Stock acquisition rights (268,558) 239,566

Subsequent Events



On June 8, 2009, E. design Insurance Preparatory Co., Ltd. (“E. design”), jointly established by Tokio Marine Holdings, Inc. and NTT FINANCE CORPORATION, received approval to commence business from the Financial Services Agency of Japan. E. design began operations on June 13, 2009.

E. design Profi le (1) Location of headquarters: 13F Tokyo Opera City Tower 3-20-2, Nishi-Shinjuku,

Shinjuku-ku, Tokyo, Japan(2) Principal business: Property and casualty insurance business(3) Capitalization: 6,750 million yen(4) Shareholders and shareholding percentages: (i) Tokio Marine Holdings, Inc.: 85.01% (ii) NTT FINANCE CORPORATION: 14.99%

As of June 8, 2009, the company’s name changed from “E. design Insurance Preparatory Co., Ltd.” to “E. design Insurance Co., Ltd.”

1. The Company agreed to acquire 100% of the outstanding shares of Philadelphia Consolidated Holding Corp. (“Philadelphia Consolidated”), a U.S. property & casualty (“P&C”) insurance group (hereinafter: “the Acquisition”) amounting to US$4,705 million (505.09 billion yen), through the Company’s wholly owned subsidiary, Tokio Marine & Nichido Fire Insurance Co., Ltd. (“TMNF”) on July 23, 2008.

The purpose of the acquisition and overview of Philadelphia Consolidated are as follows.

(1) Purpose of the Acquisition The acquisition of Philadelphia Consolidated enables us to signifi cantly

enhance our U.S. platform for local commercial business and to fully realize this key international market.

(2) Overview of Philadelphia Consolidated(i) Name of the company Philadelphia Consolidated Holdings Corp.(ii) Head offi ce Philadelphia, Pennsylvania, the U.S.(iii) Business A holding company which owns insurance companies and insurance related companies.(iv) Gross premiums written (2007) US$1,692 million (181.66 billion yen)(v) Total assets (as of Dec.31, 2007) US$4,099 million (4,401.28 billion yen)

05

97



(3) Financing The Acquisition will be fi nanced through the utilization of Tokio Marine Group

cash on hand, together with borrowings, including non-convertible bond issuance.

(4) Acquisition process Under and in accordance with applicable laws and regulations in the U.S., the

Acquisition will be implemented by fi rst establishing TMNF’s 100% owned special purpose company in Pennsylvania, and then merging Philadelphia Consolidated and the special purpose company. The merger requires a majority approval of Philadelphia Consolidated’s shareholders present at a special meeting called to vote on the Acquisition, and the approval of the shareholder of the special purpose company. Through this process, TMNF will purchase the entire outstanding shares in return for consideration to Philadelphia Consolidated’s shareholders. The Acquisition is subject to approval of various regulatory authorities of Japan and the U.S.

(5) Closing The Company intends to proceed expeditiously and expects to complete the

process by the fourth quarter of 2008.

(Note) The Japanese yen amounts which described above have been translated at the exchange rate as of July 23, 2008.

2. The Company announced that it intended to sell all of the shares of Real Tokio Marine Vida e Previdência S.A. (“RTMVP”), a life insurance and pension affi liate in Brazil, to ABN AMRO Brasil Dois Participacoes S.A. (“ABN AMRO”)

(1) Cause of sales Under the shareholders’ agreement between the Company and ABN AMRO,

entered into when the Company acquired the shares of RTMVP in July 2005, ABN AMRO reserves the right to purchase all the shares of RTMVP held by the Company if a change of control of either the Company or ABN AMRO occurs.

Following the recent change in the control of ABN AMRO, ABN AMRO notifi ed the Company of its intention to exercise its acquisition right in accordance with the shareholders’ agreement.

(2) Overview of RTMVP(i) Name of the company Real Tokio Marine Vida e Previdência S.A.(ii) Head offi ce São Paulo, Brazil(iii) Business Life insurance and pension(iv) Premiums & Pension income (2007) R$ 1,490 million (102.236 billion yen)(v) Total assets (as of Dec.31, 2007) R$ 5,432 million (372.689 billion yen)

(3) Number of shares to be sold 99,309 thousand shares

(4) Share of equity after sales None

(5) Time of sales, sales price of shares Undecided

(Note) The Japanese yen amounts which described above have been translated at the exchange rate as of July 28, 2008.





3. On August 11, 2008, the board of directors of the Company 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.

(1) Class of shares to be repurchased Common stock of the Company.

(2) Aggregate number of shares to be repurchased Up to 18,000,000 shares.

(3) Aggregate purchase price of shares Up to 50 billion yen.

(4) Period in which repurchases may be made From August 12, 2008 through November 18, 2008 except September 22,

2008 through September 30, 2008.

Related Information to the Consolidated Financial Statements

(Bonds)

Issuer Series Issue Date

AmountOutstanding31 Mar 09

(Yen in millions)


(Yen in millions)

Coupon(%)

Collateral Maturity

Tokio Marine & Nichido

Short-term11 Mar 08

–28 Mar 08

—99,965[99,965]

0.62–

0.71None

11 Apr 08–

25 Apr 08

1 Unsecured 2 Dec 99 [50,000] 50,000 1.96 None 2 Dec 09

1–2 Unsecured 28 Feb 00 [15,000] 15,000 1.95 None 26 Feb 10

3 Unsecured 20 Sep 00 20,000 20,000 2.14 None 20 Sep 10

4 Unsecured 20 Sep 00 10,000 10,000 2.78 None 18 Sep 20

Kiln Group LimitedSubordinated Bond

in USD

11 Oct 06–

20 Nov 06

5,881(US$64,247,000)

7,325(US$63,974,000)

4.53 None11 Oct 36

–20 Nov 36

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Issuer Series Issue Date


(Yen in millions)


(Yen in millions)

Coupon(%)

Collateral Maturity


Straight Bond7 Apr 04

–30 Jul 08

32,424[300]

40,978[5,000]

0.30–

2.17None

13 Jan 09–

19 May 21

Straight Bond in Euro 31 Mar 06127

(EUR1,000,000)165

(EUR1,000,000)2.35 None 31 Mar 11

Power Reverse Dual Currency Note

18 Aug 03–

3 Jul 08

29,850[300]

30,4500.00

–8.00

None20 Jan 09

–5 Jul 38

Nikkei Average Linked Note

6 Feb 06–

2 Dec 086,300 4,500

0.00–

4.30None

13 Sep 27–

3 Dec 38

CMS Floater Note16 Sep 04

–28 Sep 06

19,740 20,2400.09

–3.03

None28 Sep 11

–20 Feb 26

Reverse Floater Note1 Feb 05

–8 Nov 06

26,600 32,5000.00

–2.60

None20 Dec 11

–30 Mar 26

FX Linked Digital Coupon Note

1 Dec 04–

23 Oct 061,250 1,250 0.10 None

2 Dec 24–

24 Oct 36

Snow Ball Note16 Jun 05

–26 Oct 06

15,200[800]

17,2000.00

–4.80

None13 Jan 09

–27 Oct 26

FX Linked Coupon Note

12 Jul 05–

23 Oct 0865,250 53,770

0.00–

12.00None

11 Jan 17–

24 Oct 38

Credit Linked Note14 Jul 08

–30 Jul 08

2,100[1,000]

—1.44

–1.94

None29 Jun 09

–28 Sep 11

China Class-A Equity Linked Note

13 Aug 08–

28 Nov 08

199[199]

380[380]

0.00 None14 Aug 09

–30 Nov 09

VetraFinanceCorporation

Straight Bond in USD29 May 07

–20 Jun 07

—12,284

(USD115,451,000)[12,284]

5.04–

5.43Yes

29 May 08–

20 Jun 08

Straight Bond in GBP20 Mar 07

–12 Jul 07

—13,559

(GBP64,010,000)[13,559]

5.50–

6.12Yes

20 Mar 08–

14 Jul 08

Straight Bond in AUD 17 Jul 07 —1,428

(AUD14,994,000)[1,428]

7.17 Yes 17 Jul 08

Straight Bond in NZD 27 Jul 07 —2,091

(NZD24,988,000)[2,091]

8.74 Yes 28 Jul 08

Total — 299,922 433,088 — — —

Notes: 1. The figures shown in the parentheses ( ) are the principal amount in foreign currencies.

2. The figures shown in the parentheses [ ] are the principal amount to mature within 1 year.



3. Principal amounts to mature within 5 years after March 31, 2009 are as follows:

(Yen in millions)

Within 1 Year Over 1 to 2 Years Over 2 to 3 Years Over 3 to 4 Years Over 4 to 5 Years

67,599 23,373 13,481 3,000 10,675

(Borrowings)


(Yen in Millions)


(Yen in Millions)

AverageInterest

rate(%)

Maturity

Short term borrowings 3,857 153 18.4 —

Long term borrowings to be repaid within 1 year 12,599 2 1.4 —

Obligations under lease transactions to be repaid within 1 year 2,129 — — —

Long term borrowings other than above 282,496 37,544 0.930 Apr 10

–20 Mar 32

Obligations under lease transactions other than above 3,335 — —20 Apr 10

–20 Feb 15

Other interest-bearing liabilitiesCommercial Paper (to be repaid within 1 year)

— 16,009 — —

Total 304,418 53,711 — —

Notes: 1. Average interest rate is calculated based on the interest rate as of the end of the fiscal year and principal amount outstanding.

2. As lease obligations are posted on the consolidated balance sheets in amounts prior to the elimination of an amount equivalent to interest, including interest on the total lease amount, lease

obligations are not stated in the “Average Rate” column.

3. The above amount is included in “Other liabilities” in the consolidated balance sheets.

4. Principal amount of long term borrowings (other than that which is to be repaid within 1 year) to be repaid within 5 years after March 31, 2008, is as follows:

(Yen in millions)

Over 1 to 2 Years Over 2 to 3 Years Over 3 to 4 Years Over 4 to 5 Years

Long-Term borrowings 1,076 250,357 5,022 5,009

Lease Obligations 1,915 958 436 14

(2) Others

Quarterly results for the year ended March 31, 2009First quarter

(April 1, 2008 to June 30, 2008)

Second quarter(July 1, 2008 to

September 30, 2008)

Third quarter (October 1, 2008 to December 31, 2008)

Fourth quarter (January 1, 2009 to

March 31, 2009)

Ordinary income (Yen in Millions) 1,048,740 910,492 827,711 716,157

Quarterly net income or losses before income taxes (Yen in Millions)

33,062 (18,651) (7,007) 39,533

Quarterly net income or losses (Yen in Millions)

28,854 (10,800) (13,417) 18,503

Quarterly net income or losses per share (Yen) 35.96 (13.51) (17.01) 23.49

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Insurance claim and other payment abilities of subsidiary insurance companies and small-amount, short-term insurers

Solvency margin ratio for Tokio Marine & Nichido Fire Insurance

(Unit: Yen in millions % )

Item As of March 31, 2009 As of March 31, 2008

Total amount of solvency margin (A) 3,258,557 4,493,449

Total net assets 703,794 715,211

Price fl uctuation reserve 53,462 115,628

Contingency reserve 62 —

Catastrophe loss reserve including earthquake insurance 1,059,901 1,079,319

General valuation allowances for bad debts 1,039 1,322

Net unrealized gains/losses on securities (Prior to tax effect deductions) 975,195 2,157,040

Net unrealized gains/losses on real estate 244,192 197,955

Excess amount of policyholders’ contract deposits — —

Subordinated debt, etc. — —

Deductions 10,000 10,000

Other 230,909 236,971

Total amount of risks (B) �(R1+R2)2+(R3+R4)2+R5+R6

935,272 938,278

General insurance risk (R1) 107,078 108,178

Third sector insurance risk (R2) 6 —

Assumed interest risk (R3) 8,770 8,964

Asset management risk (R4) 417,692 453,809

Business administration risk (R5) 20,178 20,274

Catastrophe risk (R6) 475,391 442,754

Solvency margin ratio (C) [(A)/{(B)×1/2}]×100

696.8% 957.8%

Note: The above figures were calculated in accordance with Articles 86 and 87 of the Insurance Business Law of Japan enforcement regulations and Ministry of Finance Official Notification No.50 stipu-

lated in 1996.

Solvency Margin Ratio

1. In addition to reserves to cover claims payments and payments for maturity-refunds of saving type insurance policies, etc., it is necessary

for insurance companies to maintain sufficient solvency in order to cover against risks which may exceed their usual estimates, i.e. the

occurrence of major disasters, a significant decline in value of assets held by insurance companies, etc.

2. The solvency margin ratio (C); which is calculated in accordance with the Insurance Business Law, is the ratio of “solvency margin of insur-

ance companies by means of their capital, reserves, etc.” (total amount of solvency margin: (A)) to “risks which will exceed their usual

estimates” (total amount of risks: (B)).

3. “Risks which will exceed their usual estimates” (total amount of risks; (B)) is composed of risks described below.

(1) (General) insurance risk, third sector insurance risk: Risks of occurrence of insurance claims in excess of normal expectations (excluding

risks relating to major disasters).

(2) Assumed interest risk: Risks of invested assets failing to yield assumed interest rates due to the aggravation of investment conditions than

expected.

(3) Asset management risk: Risks of retained securities and other assets fluctuating in prices in excess of expectations.

(4) Business administration risk: Risks beyond normal expectations arising from business management that does not fall under other categories.

(5) Catastrophic risk: Risks of the occurrence of major catastrophic losses in excess of normal expectations. (risks such as the Great Kanto

Earthquake or Isewan typhoon)

4. “Solvency margin of insurance companies by means of their capital, reserves, etc.” (Total amount of solvency margin: (A)) is total amount

of net assets (excluding planned outflows), certain reserves (reserve for price fluctuations, contingency reserves and catastrophe reserves,

etc.) and parts of net unrealized gains on real estate.

5. The solvency margin ratio is one of the indicators for the regulatory authorities to supervise insurance companies. A ratio exceeding 200%

indicates adequate ability to meet payments of insurance claims.

Solvency Margin Ratio



Solvency margin ratio for Nisshin Fire & Marine Insurance

(Unit: Yen in millions %)


Total amount of solvency margin (A) 138,990 178,365


Price fl uctuation reserve 272 4,108

Contingency reserve — —

Catastrophe loss reserve including earthquake insurance 64,354 65,912

General valuation allowance for bad debts 441 256

Net unrealized gains/losses on securities (Prior to tax effect deductions) 6,564 19,499

Net unrealized gains/losses on real estate 1,828 2,200

Excess amount of policyholders’ contract deposits — —


Deductions — —

Other 8,229 16,191

Total amount of risks (B) �(R1+R2)2+(R3+R4)2+R5+R6

37,669 39,663

General insurance risk (R1) 7,831 8,034

Third sector insurance risk (R2) — —

Assumed interest risk (R3) 445 467


Business administration risk (R5) 1,242 895

Catastrophe risk (R6) 24,255 21,992


737.9% 899.3%

Note: The above figures were calculated in accordance with Articles 86 and 87 of the Insurance Business Law of Japan enforcement regulations and Ministry of Finance Official Notification No.50 stipu-

lated in 1996.

Solvency margin ratio for Tokio Marine & Nichido Life Insurance





Price fluctuation reserve 2,688 2,235

Contingency reserve 22,959 21,717

General valuation allowance for bad debts 158 59

Net unrealized gains on securities ×90% (× 100% if losses) 22,639 12,565

Net unrealized gains on real estate×85% (× 100% if losses) — —

Excess of continued Zillmerized reserve 76,733 63,419


Deductions — —

Other 65,319 64,234

Total amount of risks (B) �(R1+R8)2+(R2+R3+R7)2+R4

21,259 18,054

Insurance risk (R1) 11,475 10,808

Assumed interest risk (R2) 2,249 2,221


Business administration risk (R4) 865 729

Minimum guarantee risk (R7) — —

Third sector insurance risk (R8) 3,010 2,904

Solvency margin ratio (C) (A) (1/2)×(B)

×1002,596.7% 2,766.7%

Note: The above figures were calculated in accordance with Articles 86, 87, 161, 162 and 190 of the Insurance Business Law of Japan enforcement regulations and Ministry of Finance Official

Notification No.50 stipulated in 1996.

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105

Solvency margin ratio for Tokio Marine & Nichido Financial Life Insurance





Price fluctuation reserve 26 17


General valuation allowance for bad debts 0 —

Net unrealized gains on securities ×90% (× 100% if losses) 166 -7

Net unrealized gains on real estate×85% (× 100% if losses) — —

Excess of continued Zillmerized reserve 28,978 45,841

Subordinated debt, etc. 10,000 10,000

Deductions — —

Other — —

Total amount of risks (B) �(R1+R8)2+(R2+R3+R7)2+R4

16,123 16,627

Insurance risk (R1) 145 150

Assumed interest risk (R2) 2 2


Business administration risk (R4) 475 489

Minimum guarantee risk (R7) 8,882 14,567

Third sector insurance risk (R8) 47 41

Solvency margin ratio (C) (A) (1/2)×(B)

×1001,057.5% 1,157.5%

Notes: 1. The above figures were calculated in accordance with Articles 86, 87, 161, 162 and 190 of the Insurance Business Law of Japan enforcement regulations and Ministry of Finance Official


2. The minimum guarantee risk was calculated using the standard method.

Solvency margin ratio for Millea Nihon Kosei SS Insurance



Total amount of solvency margin (A) 1,979 755

Total net assets excluding planned outflows 1,938 755

Reserve for price fluctuation — —

Catastrophe loss reserve 41 —

General valuation allowance for bad debts — —

Net unrealized gains on securities (Prior to tax effect deductions) — —

Net unrealized gains/losses on real estate — —

Refund reserve premium — —

Future profit — —

Tax effect equivalent value — —


Deductions — —

Total amount of risks (B) �R12+R22+R3+R4

213 18

Equivalent insurance risk 203 11

General insurance risk equivalent value (R1) 183 1

Catastrophe risk equivalent value (R4) 20 10

Asset management risk equivalent value (R2) 29 7

Business administration risk equivalent value (R3) 6 0


1,858.3% 8,278.3%

Note: The above figures were calculated in accordance with Articles 211-59 and 211-60 of the Insurance Business Law of Japan enforcement regulations and Financial Services Agency’s Official




The following tables show how the hypothetical changes in interest rates affect the present value of the surplus in Tokio Marine & Nichido’s

and in Tokio Marine & Nichido Life’s asset-liability portfolio as of March 31, 2009 and March 31, 2008. The asset-liability portfolio is com-

posed of assets to meet future obligations and reserves for insurance policies including deposit-type insurance and long-term insurance

policies, and the present value of the surplus in the portfolio is measured as the difference between the present value of assets and that of

liabilities (before taxes and future policy dividends).

Tokio Marine & Nichido

(Yen in billions)

Yield curve shift

As of March 31, 2009

-1% 0% 1% 2%

General Policy Account (1.9) 0.0 (1.9) (5.5)

Deposit-Type Insurance Accounts (3.3) 0.0 (1.0) (7.9)

Asset-Liability Portfolio (5.2) 0.0 (2.9) (13.5)

(Yen in billions)

Yield curve shift


-1% 0% 1% 2%

General Policy Account (5.6) 0.0 0.6 (1.2)

Deposit-Type Insurance Accounts (4.5) 0.0 0.6 (5.0)

Asset-Liability Portfolio (10.1) 0.0 1.2 (6.2)

Tokio Marine & Nichido Life(Yen in billions)

Yield curve shift


-1% 0% 1%

Asset-Liability Portfolio (93.2) 0.0 (16.4)

(Yen in billions)

Yield curve shift


-1% 0% 1%

Asset-Liability Portfolio (45.7) 0.0 (27.2)

(1) Based on the prevailing yield curve for Japanese government bonds on the indicated dates.

(2) The information presented above has been prepared solely for risk management purposes and is not indicative of the actual effect on

the financial condition, results of operations or corporate value of Tokio Marine & Nichido and Tokio Marine & Nichido Life caused by the

changes in past or future interest rates.

(3) The information indicates the hypothetical changes of the present value of ALM surplus value and accordingly the numbers of Tokio

Marine & Nichido Life presented above may be different from those which are described in table “4. Effects of Changes in Assumptions”

of “Embedded Value for Tokio Marine & Nichido Life as of March 31, 2009.”

(4) Tokio Marine & Nichido Life: On the basis taking dynamic lapse into consideration

Interest-rate Sensitivity of ALM Surplus Value

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About Embedded Value

Embedded Value (“EV”) is regarded as one of the measures used to assess the economic value of a life insurance business and its perfor-

mance. In Japan, over ten insurers have disclosed their EV as of March 31, 2008. It is calculated as the sum of the “net asset value” and

“value of in-force business.”

“Net asset value” is calculated by adding “Contingency reserve (after tax)” and “Reserve for price fluctuations (after tax)” which are

regarded as appropriate to be included in “net assets,” to “net assets” in the balance sheets.

“Value of in-force business” represents the present value as at the valuation date of future “net incomes (after tax)” distributable to

shareholders from the in-force business. The present value is calculated by discounting future distributable shareholders’ profits, fewer sur-

pluses required to be retained in order to maintain a certain level of solvency margin, using a risk discount rate that takes a risk premium into

consideration.

The financial accounting practices of Japanese life insurance companies emphasize a conservative approach for the purpose of best pro-

tecting their policyholders. As such, policies are initially valued as a minimal contribution to profits, limiting the usefulness of their value and

impact on earnings evaluations in the life insurance business. EV adjusts for this conservatism in financial accounting practices, enabling a

proper evaluation based on value and earnings that reflect actual business conditions.

The Tokio Marine Group adopts “change in EV” and “ROE”, as measures used for assessing its performance in the life insurance business.

Embedded Value for Tokio Marine & Nichido Life

1. EV as of March 31, 2009

The EV as of March 31, 2009 was 358.3 billion yen in total: net asset value of 118.4 billion yen and value of in-force business of 239.9 billion yen.

(Yen in billions)

FY2008 FY2007 FY2006

Net asset value 118.4 108.6 97.6

Value of in-force business 239.9 255.7 237.5

EV as at the end of the fiscal year 358.3 364.3 335.2

Value of new business 0.2 3.7 8.7

2. Change in EV and ROE

EV as of the end of FY2008 decreased by 6.0 billion yen from that as of the end of FY2007 (the change in EV: -6.0 billion yen), while ROE for

FY2008 was -1.7%.

The change in EV from March 31, 2008 to March 31, 2009 (excluding the capital increase during the term) decreased by 35.1 billion yen,

compared to that from March 31, 2007 to March 31, 2008. This is mainly because the effect of changes in assumptions such as mortality

& morbidity rates and surrender & lapse rates was negative 17.8 billion yen, a deterioration of 19.8 billion yen from the previous fiscal year,

and also because the effect of changes in investment yields in the wake of decreased ultra long-term JGB yield was negative 8.7 billion yen, a

deterioration of 10.6 billion yen from the previous fiscal year.

(Yen in billions)

FY2008 FY2007 FY2006

Change in EV (excluding the capital increase during the term) (6.0) 29.1 30.4

Average balance of EV 361.3 349.7 295.0

ROE Note (1.7)% 8.3% 10.3%

(Reference)Change in EV (excluding the capital increase and the effects of changes in assumptions and investment yields during the term)

20.6 25.3 29.8

Note: ROE = Change in EV (excluding the capital increase during the term)/Average EV

Embedded Value



3. Major Assumptions

The major assumptions used in calculating the value of in-force business at March 31, 2009 were as follows:

Assumption Basis of assumption

Mortality and morbidity ratesBased on past experience by benefit type, and policy year and attained age, etc. For policy years where no experience data was available, assumptions have been based on industry statistics.

Surrender and lapse rates Based on past experience by line of business, premium mode and policy year

Expenses Based on past actual expenses, expressed as unit costs per in-force policy and percentage of premiums.

Investment yield on new money

Assumed to be invested in Japanese Government bonds (JGB) matched to the duration of liabilities (*). The JGB yield used is the yield as of the valuation date of the EV (at the end of fiscal year) as follows: FY2007: 10yrs 1.25%; 20yrs 2.10%; 30yrs 2.40%; 40yrs 2.53%FY2008: 10yrs 1.37%; 20yrs 1.96%; 30yrs 2.11%; 40yrs 2.13%

Effective tax rate Based on actual experience (36.14%)

Solvency Margin Ratio Assumed to maintain a solvency margin ratio of 600%.

Risk discount rateSet by adding a risk premium of 6% to the risk free interest rate (the 20-year JGB Yield). FY2007: Risk-free interest rate (2.10%)+6%�8%FY2008: Risk-free interest rate (1.96%)+6%�8%

*Note: Average investment yield is approximately 2.1%.

<Investment yield on new money>

New money is assumed to be invested in JGBs matched to the duration of liabilities.

<Risk discount rate>

The risk discount rate has been set by adding a risk premium of 6% to the risk free rate (the 20-year JGB yield). The risk premium has not

been changed between FY2007 and FY2008. The Tokio Marine Group set a risk premium of 6.0% as the required level for its domestic life

insurance business.

4. Effects of Changes in Assumptions

The table below shows the change in EV at March 31, 2009 arising from changes to assumptions:

(Yen in billions)

Change in Assumptions Effect on EV EV Amount

Set 1.1 times the insurable mortality and morbidity rate (19.3) 338.9

Set 1.1 times the surrender rate (0.6) 357.7

Set 1.1 times the expense (5.9) 352.4

Investment yield (yield of JGB) up 0.25%* 5.5 363.9

Investment yield (yield of JGB) down 0.25%* (5.4) 352.9

Set solvency margin ratio at 500% 1.5 359.9

Set solvency margin ratio at 700% (2.0) 356.3

Reduce risk premium by 2.0% (with 6% discount rate) 47.6 406.0


Raise risk premium by 1.0% (with 9% discount rate) (18.7) 339.5

Raise risk premium by 2.0% (with 10% discount rate) (35.0) 323.3*Note: Based on the assumption that only investment yield is changed without changes in the risk discount rate.

<Increase or reduction in investment yield>

The change in assumed investment yield is set based on the assumption that it is affected by increase/decrease in JGB yield (risk free market

interest rate). Also, the increase/decrease in unrealized gains/losses arising from the change in interest rate is taken into consideration. For the

purpose of the above increase/decrease, the EV has been re-calculated on the basis that risk discount rate is unchanged.

<Increase or reduction in the risk premium>

The risk discount rate is dependent on market interest rates and on the risk premium. For the purpose of the above sensitivities, the EV has

been re-calculated on the basis that the risk premium changes without any change in market interest rates (investment yield).

05

109

5. Analysis of Movement of EV

(Yen in billions)

FY2008 FY2007 Year-on-year change

Value of new business 0.2 3.7 (3.4)

Release of the discounted value of in-force business 21.6 19.3 2.3

Variances between experience and assumptions (1.9) 0.8 (2.8)

Effect of changes in investment yields (8.7) 1.8 (10.6)

Effect of changes in assumptions (17.8) 1.9 (19.8)

Others 0.6 1.3 (0.7)

Total (6.0) 29.1 (35.1)

The change in EV consists of two major components, the value of new business (new businesses issued in FY2008) and others.

(1) Value of new business

The value of new business written for FY2008 was 0.2 billion yen, a decrease of 3.4 billion yen from the previous fiscal year.

For FY2008, the profitability decreased due to revised assumptions such as new business written-related mortality & morbidity rates and

surrender & lapse rates, and the gains from investments also dropped due to declined ultra long-term JGB yield. The amount of losses related

to those negative factors exceeded that of profits in the sales increase of new policies, and accordingly the value of new business declined.

(2) Changes other than value of new business

In FY2008, the effect of changes in assumptions such as mortality & morbidity rates and surrender & lapse rates was negative 17.8 billion

yen, a deterioration of 19.8 billion yen from the previous fiscal year. The effect of changes in investment yields was also negative 8.7 billion

yen, a deterioration of 10.6 billion yen from the previous fiscal year.

6. Review by Independent Actuarial Firm

To ensure the validity and appropriateness of the EV evaluation, Tokio Marine & Nichido Life engaged an external actuarial consulting firm

with expertise and knowledge in the area of EV valuations.

7. Instruction

As the EV is calculated based on the assumptions including future prospects with risk and uncertainty, actual future results can differ largely

from the assumptions used in EV calculation.

Also, since the actual market capital is determined by investors’ judgment based on a number of information, EV can significantly differ

from it. Therefore, sufficient consideration needs to be made in using EV.



Embedded Value for Tokio Marine & Nichido Financial Life

1. EV as of March 31, 2009

EV as of March 31, 2009 was 44.0 billion yen in total: net asset value of 46.2 billion yen and value of in-force business of negative 2.2 billion yen.

(Yen in billions)

FY2008 FY2007 FY2006

Net asset value 46.2 40.3 31.6

Value of in-force business (2.2) 53.9 67.1

EV as at the end of the fiscal year 44.0 94.3 98.7

Value of new business (2.7) 2.6 14.1

2. Change in EV and ROE

EV as of March 31, 2009 (excluding the capital increase during the term) decreased by 50.2 billion yen from that as of March 31, 2008

(the change in EV: negative 50.2 billion yen), while ROE was negative 72.7%.

(Yen in billions)

FY2008 FY2007 FY2006

Change in EV (excluding the capital increase during the term) (50.2) (14.4) 17.8

Average EV 69.1 96.5 79.8

ROE Note (72.7)% (14.9)% 22.3%

Note: ROE=Change in EV (excluding the capital increase during the term)/Average EV

The change in EV from March 31, 2008 to March 31, 2009 (excluding the capital increase during the term) decreased by 35.8 billion yen,

compared with that from March 31, 2007 to March 31, 2008. However, when “Variances between actual performance and assumptions on

investment” and “Effect of changes in assumptions” were excluded, the change in EV from March 31, 2008 to March 31, 2009 was negative

6.2 billion yen, a decrease of 13.2 billion yen compared with that from March 31, 2007 to March 31, 2008.

Reference

(Yen in billions)

FY2008 FY2007 FY2006

Change in EV Note (6.2) 6.9 12.2

Note: Excluding the capital increase during the term, variances between actual performance and assumptions on investment and effect of changes in assumptions.

3. Major Assumptions

The major assumptions used in calculating the value of in-force business at March 31, 2009 were as follows:

Assumptions Basis of assumptions

Mortality rate Based on past claim payment performance by insurance type, policy year, etc.

Surrender rate Based on past surrender performance by insurance type, payment method and policy year

Expense Based on past actual expenses, expressed as unit costs per in-force policy

Investment earnings ratio for separate accounts

Based on earnings ratio of portfolio (stock fund, bond fund and money fund) by insurance policy type

Effective tax rate Based on actual experience (36.2%)

Solvency margin ratio Assumed to maintain a solvency margin ratio of 600%

Risk discount rate Set by adding a risk premium of 6% to the risk free interest rate (the 20-year JGB Yield)FY2007:Risk-free interest rate (2.10%)+6%�8%FY2008: Risk-free interest rate (1.96%)+6%�8%

<Investment earnings ratio for separate accounts>

Investment earnings ratio for separate accounts is set by insurance policy type, 4% of stock fund, 1.444% of bond fund and 0.1% of money fund.

<Risk discount rate>

The risk discount rate has been set by adding a risk premium of 6% to the risk free interest rate (the 20-year JGB yield). The risk premium has

not been changed between FY2007 and FY2008.

The Tokio Marine Group set a risk premium of 6.0% as the required level for its domestic life insurance business.

05

111

4. Effects of Changes in Assumptions

The table below shows the change in EV at March 31, 2009 arising from changes to assumptions:

(Yen in billions)

Change in Assumptions Effect on EV EV Amount

Set 1.1 times the insurable mortality rate (0.9) 43.0

Set 1.1 times the surrender rate 0.3 44.3

Set 1.1 times the expense (1.1) 42.8

If the balance of actual cash value of separate accounts is instantly increased by 10% 17.3 61.4

If the balance of actual cash value of separate accounts is instantly reduced by 10% (19.1) 24.9

Set solvency margin ratio at 500% 2.0 46.1

Set solvency margin ratio at 700% (2.2) 41.7





<Increase or reduction in the risk premium>

Any increase or reduction in discount rate is in tandem with the fluctuations in market interest rates and increases or reductions in the risk

premium rate. However, in this case, the market interest rate is fixed and the effect is calculated based on the fluctuation of the risk premium.

5. Factors for the Change in EV

(Yen in billions)

FY2008 FY2007 Year-on-year change

Capital increase during the term — 10.0 (10.0)

Value of new business (2.7) 2.6 (5.3)

Release of the discounted value of in-force business 4.4 6.6 (2.2)

Variances between actual performance and assumptions on investment (42.4) (21.5) (20.8)

Variances between actual performance and assumptions on others (0.0) (1.4) 1.3

Effect of reinsurance (7.9) (0.8) (7.0)

Effect of changes in assumptions (1.5) 0.1 (1.7)

Total (50.2) (4.4) (45.8)

(Excluding capital increase during the term) (50.2) (14.4) (35.8)

The change in EV, excluding capital increase during the term, consists of two major components, the value of new business and others.

(1) Value of new business

The value of new business written for FY2008 was negative 2.7 billion yen, down by 5.3 billion yen from the previous fiscal year. This was

mainly because the hedge costs for minimum guarantee risks related to new business written for FY2008 increased in the latter half of

FY2008 when the investment environment rapidly worsened due to financial turmoil.

(2) Changes other than Value of new business

Actual performance on investment was 42.4 billion yen lower than the assumptions, which was due to the projected decrease in M&E to

be earned in the future in proportion to the total amount of net assets of the separate accounts, resulting from the fact that the actual per-

formance of the separate accounts fell short of the assumptions due to rapid worsening of the investment environment caused by financial

turmoil.

Effect of reinsurance for FY2008 was negative 7.9 billion yen, which was because reinsurance premium rate for the policies ceded in this

fiscal year was higher than expected at the beginning in total.

Release of the discounted value of in-force business for FY2008 was 4.4 billion yen, a decrease of 2.2 billion yen from the previous fiscal

year, along with the decreased value of in-force business as of the beginning of FY2008.



6. Instruction

As EV is calculated based on the assumptions including future prospects with risk and uncertainty, actual future results can differ largely from

the assumptions used in EV calculation.

Also, since the actual market capital is determined by investors’ judgment based on a number of information, EV can significantly differ

from it. Therefore, sufficient consideration needs to be made in using EV.

Property and casualty insurance

� Tokio Marine & Nichido Fire Insurance Co., Ltd.

(Yen in millions)

Year ended March 31, 2009 Year ended March 31, 2008

Catastrophe loss reserve 911,148 937,307


� Nisshin Fire & Marine Insurance Co., Ltd.

(Yen in millions)


Catastrophe loss reserve 52,511 54,602

Price fluctuation reserve 272 4,108

Life insurance

� Tokio Marine & Nichido Life Insurance Co., Ltd.

(Yen in millions)




� Tokio Marine & Nichido Financial Life Insurance Co., Ltd.

(Yen in millions)



Price fluctuation reserve 26 17

Statutory Reserve

0606

113

06CORPORATE DATA

Stock Information 114

List of Directors and Corporate Auditors 117

Organizational Chart 122

Tokio Marine Holdings and Its Subsidiaries 123

Major Subsidiaries 124

History of the Tokio Marine Group 125

Worldwide Network of the Tokio Marine Group 126


06CORPORATE DATA

Stock Information (As of March 31, 2009)

Stock issued by Tokio Marine Holdings is common stock and the total number of authorized shares is 3.3 billion shares with the total number

of shares outstanding at 804,524,375 shares (including treasury shares) as of March 31, 2009.

a. The Ordinary General Meeting of Shareholders is held within three months of the end of each fi scal year.

b. Accounting period: Ends March 31

c. Share registrar: The Mitsubishi UFJ Trust and Banking Corporation

d. Record date: Ordinary General Meeting of Shareholders: March 31

Year-end dividend: March 31

Interim dividend: September 30

e. Public notice will be electronically published.

However, in the event that public notice cannot be electronically published due to an accident or other compelling reason, a notifi cation

shall be published in the Tokyo issue of the Nihon Keizai Shimbun.

f. Number of shares constituting one unit: 100

g. Stock/security exchange listings: Tokyo Stock Exchange (First Section), Osaka Securities Exchange (First Section)

Matters for the General Meeting of Shareholders

The 7th Ordinary General Meeting of Shareholders was held on June 29, 2009. The items reported and the proposals acted upon were as follows:

(Items reported)

1. Business report, consolidated fi nancial statements and the audit reports on consolidated fi nancial statements prepared by the independent

auditor and the Board of Corporate Auditors, respectively, for the fi scal year ended March 31, 2009 (April 1, 2008 to March 31, 2009)

2. Non-consolidated fi nancial statements for the fi scal year ended March 31, 2009 (April1, 2008 to March 31, 2009)

(Proposals acted upon)

1. Appropriation of Surplus

2. Amendment to the Articles of Incorporation

3. Election of Eleven (11) Directors

4. Election of One (1) Corporate Auditor

The proposals have been approved as proposed.

Stock Ownership Distribution

As of March 31, 2009, the number of shareholders was 105,143. The percentage of major stock ownership was: fi nancial institutions:

41.00%, foreign shareholders: 33.59%.

a. Types of shareholder(As of March 31, 2009)

Number of shareholder(s) Number of shares held Shareholding ratio (%)

Government/Local government 2 1,000 0.00

Financial institutions 271 329,827,473 41.00

Financial instruments fi rms 58 4,308,010 0.54

Other domestic companies 2,168 70,704,333 8.79

Foreign shareholders 760 270,211,817 33.59

Individuals and others 101,883 112,510,303 13.98

Treasury stocks 1 16,961,439 2.11

Total 105,143 804,524,375 100.00

Stock Information

115

06

b. Breakdown by region(As of March 31, 2009)

Region Number of shareholder(s) Shareholders’ ratio (%) Number of shares held Shareholding ratio (%)

Hokkaido 1,465 1.39 5,193,413 0.65

Tohoku 2,407 2.29 4,029,677 0.50

Kanto 47,826 45.49 460,315,272 57.22

Chubu 16,596 15.78 22,324,396 2.77

Kinki 24,600 23.40 30,884,662 3.84

Chugoku 4,342 4.13 4,121,032 0.51

Shikoku 2,870 2.73 4,643,125 0.58

Kyushu 4,262 4.05 7,825,181 0.97

Overseas and others 775 0.74 265,187,617 32.96

Total 105,143 100.00 804,524,375 100.00

c. Breakdown by number of shares held(As of March 31, 2009)

Category5,000 units

or more1,000 units

or more500 units or

more100 units or

more50 units or

more10 units or

more5 units or

more1 unit or

moreLess than 1 unit Total

Number of shareholder(s) 193 284 166 1,446 3,141 26,196 23,480 30,893 19,344 105,143Composition ratios to total number of share-holders (%) 0.18 0.27 0.16 1.38 2.99 24.91 22.33 29.38 18.40 100.00Number of shares 615,011,828 63,335,426 11,467,422 25,821,580 20,268,435 49,182,194 13,044,711 5,650,948 741,831 804,524,375

Composition ratios to total number of shares (%) 76.44 7.87 1.43 3.21 2.52 6.11 1.62 0.70 0.09 100.00

Major shareholders


Shareholders AddressNumber ofshares held

(thousand shares)

Compositionratios to

total numberof shares

(%)

Japan Trustee Services Bank, Ltd. (Trust Account) 8-11, Harumi 1-chome, Chuo-ku, Tokyo 46,973 5.8

Japan Trustee Services Bank, Ltd. (Trust Account 4G) 8-11, Harumi 1-chome, Chuo-ku, Tokyo 44,765 5.6

The Master Trust Bank of Japan, Ltd. (Trust Account) 11-3, Hamamatsucho 2-chome, Minato-ku, Tokyo 44,275 5.5

Moxley & Co.(Custodian: The Bank of Tokyo-Mitsubishi UFJ, Ltd.)

4 New York Plaza, 13th Floor, New York, N.Y. U.S.A.(7-1, Marunouchi 2-chome, Chiyoda-ku, Tokyo) 23,691 2.9

Meiji Yasuda Life Insurance Company (Custodian: Trust & Custody Services Bank, Ltd.)

1-1, Marunouchi 2-chome, Chiyoda-ku, Tokyo( Harumi Island Triton Square offi ce tower Z, 8-12, Harumi 1-chome, Chuo-ku, Tokyo) 20,498 2.5

The Bank of Tokyo-Mitsubishi UFJ, Ltd. 7-1, Marunouchi 2-chome, Chiyoda-ku, Tokyo 15,695 2.0

Trust & Custody Services Bank, Ltd. as a trustee for Mizuho Trust Retirement Benefi ts Trust Account for Mitsubishi Heavy Industries, Ltd

Harumi Island Triton Square offi ce tower Z, 8-12, Harumi 1-chome, Chuo-ku, Tokyo

14,074 1.7

State Street Bank and Trust Company 505225 (Custodian: Mizuho Corporate Bank, Ltd.)

P. O. Box 351 Boston, Massachusetts, U.S.A.(6-7, Nihombashi Kabutocho, Chuo-ku, Tokyo) 12,307 1.5

The Master Trust Bank of Japan, Ltd. Retirement Benefi tsTrust Account for Asahi Glass Co., Ltd.

11-3, Hamamatsucho 2-chome, Minato-ku, Tokyo11,630 1.4

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

11-3, Hamamatsucho 2-chome, Minato-ku, Tokyo10,832 1.3

Total — 244,743 30.4

Notes: 1. Moxley & Co. is the corporate nominee holder of common stock deposited for the issuance of ADRs.2. Tokio Marine Holdings holds 16,961 thousand shares of treasury stock but is not included in “Shareholders” column in the table.


06CORPORATE DATA

Resolution Regarding Share Repurchases

In order to implement fl exible fi nancial policies, our Articles of Incorporation provides that “The Company may, by resolution of the Board of

Directors, acquire its own shares pursuant to Article 165, paragraph 2 of the Companies Act.”

Share repurchases made after the 6th Ordinary General Meeting of Shareholders and up to the 7th Ordinary General Meeting of

Shareholders pursuant to resolutions of the Board of Directors in accordance with our Articles of Incorporation were as follows:

Number of common stock repurchased: 14,682,100 shares

Aggregate purchase prices of shares: ¥49,999,835 thousand

Reason for the repurchases: To implement fl exible fi nancial policies

Dividend Policy

With respect to the appropriation of surplus, the Company seeks to improve shareholder returns by distributing stable dividends on its

common stock and by repurchasing its own shares after taking into consideration the business results and expected future environment of

the Company, subject to the Company having provided suffi cient capital to meet the business needs of the Tokio Marine Group.

In accordance with the above policy, and in consideration of various factors, the Company proposed and was approved to pay 24 yen per

share of common stock of the Company as year-end cash dividends. As 24 yen per share was paid as an interim cash dividend, the amount of

total annual cash dividends was 48 yen per share for the fi scal year ended March 31, 2009, the same amount paid for the previous fi scal year.

Additionally, the Company proposed and was approved to set aside 80.0 billion yen as general reserve.

Capital

Date Equity capital

April 2, 2002 ¥150 billion

March 31, 2009 ¥150 billion

External/Internal Audit

Tokyo Marine Holdings is subject to inspections conducted by the Financial Services Agency of Japan pursuant to Article 271-28 of the

Insurance Business Law.

The Company is also subject to an external audit conducted by PricewaterhouseCoopers Aarata, the Company’s independent auditor,

pursuant to the Companies Act and the Financial Instruments and Exchange Law.

Additionally, the Company is subject to a statutory audit conducted by Corporate Auditors in accordance with the Companies Act and an

internal audit performed by the Internal Audit Department. The internal audit is performed based on the “Internal Auditing Rules” that have

been approved by the Board of Directors.

117

06

Directors


TitleName

(Date of birth) Biography Responsibilities

Chairman of the Board

Kunio Ishihara(October 17, 1943)

April 1966 Joined Tokio MarineJune 1995 Director and General Manager of Hokkaido Regional Headquarters of Tokio MarineJune 1998 Managing Director and General Manager of Hokkaido Regional Headquarters of

Tokio MarineJuly 1998 Managing Director and General Manager of Hokkaido Division of Tokio MarineJune 1999 Managing Director of Tokio MarineJune 2000 Senior Managing Director of Tokio MarineJune 2001 President of Tokio MarineApril 2002 President of Millea HoldingsOct. 2004 President of Tokio Marine & NichidoJune 2007 Chairman of the Board of Tokio Marine & Nichido (to present)June 2007 Chairman of the Board of Millea HoldingsJuly 2008 Chairman of the Board of Tokio Marine Holdings (to present)

President & Representative Director

Shuzo Sumi(July 11, 1947)

April 1970 Joined Tokio MarineJune 2000 Director and Chief Representative in London, Overseas Division of Tokio MarineJuly 2001 Director, General Manager and Chief Representative in London,

Overseas Division of Tokio MarineJune 2002 Managing Director of Tokio MarineOct. 2004 Managing Director of Tokio Marine & NichidoJune 2005 Senior Managing Director of Tokio Marine & NichidoDec. 2005 Senior Managing Director and General Manager of

Drastic Reform Promotion Dept. of Tokio Marine & NichidoJune 2006 Senior Managing Director of Tokio Marine & NichidoJune 2007 President of Tokio Marine & Nichido (to present)June 2007 President of Millea HoldingsJuly 2008 President of Tokio Marine Holdings (to present)(Representation of other companies: President of Tokio Marine & Nichido)

Executive Vice President & Representative Director

Toshiro Yagi(November 1, 1947)

April 1971 Joined Tokio MarineJune 2001 Director and General Manager of Chemical Industry Promotion Dept.,

Tokyo Corporate Business Division I of Tokio MarineOct. 2001 Director and General Manager of Corporate Planning Dept. of Tokio MarineJune 2002 Director and General Manager of Corporate Planning Dept. of Tokio MarineJune 2003 Managing Director of Tokio MarineJune 2003 Director of Millea HoldingsOct. 2004 Managing Director of Tokio Marine & NichidoJune 2005 Managing Director and General Manager of Corporate Planning Dept. of

Tokio Marine & NichidoJune 2006 Retired from his position as Managing Director of Tokio Marine & NichidoJune 2006 Senior Managing Director of Millea HoldingsJune 2007 Executive Vice President of Millea HoldingsJuly 2008 Executive Vice President of Tokio Marine Holdings (to present)

Assistant to the President;In charge of Corporate Planning Dept. (excluding Internal Control Group), Personnel Planning Dept. and Legal Dept.; Assistant to the Directors in charge of Compliance Dept., Risk Management Dept. and Internal Audit Dept.

Executive Vice President & Representative Director

Daisaku Honda(September 28, 1949)

May 1972 Joined Tokio MarineJune 2002 Director and General Manager of New Financial Markets Dept., Investment and

Financial Services Division of Tokio MarineOct. 2004 Director and General Manager of New Financial Markets Dept. of

Tokio Marine & NichidoJune 2005 Managing Director of Tokio Marine & NichidoJune 2007 Senior Managing Director of Tokio Marine & NichidoJune 2008 Retired from his position as Senior Managing Director of

Tokio Marine & NichidoJune 2008 Senior Managing Director of Millea HoldingsJuly 2008 Senior Managing Director of Tokio Marine HoldingsJune 2009 Executive Vice President of Tokio Marine Holdings (to present)

Assistant to the President;In charge of Corporate Planning Dept. (Internal Control Group), Corporate Accounting Dept., Business Development and Support Dept., Compliance Dept., Risk Management Dept. and Internal Audit Dept.

List of Directors and Corporate Auditors


06CORPORATE DATA

Directors


TitleName



Hiroshi Amemiya(October 2, 1950)

April 1973 Joined Tokio MarineJune 2002 Director and General Manager of Nagoya Production Dept. III,

Tokai Division of Tokio MarineJune 2003 Director and General Manager of Corporate Planning Dept. of Tokio MarineOct. 2004 Director and General Manager of Corporate Planning Dept. of

Tokio Marine & NichidoJune 2005 Managing Director of Tokio Marine & NichidoJune 2005 Director of Millea HoldingsJune 2007 Managing Director and General Manager of Financial Planning Dept. of

Tokio Marine & NichidoAug. 2007 Managing Director of Tokio Marine & NichidoJune 2008 Senior Managing Director of Tokio Marine & Nichido (to present)June 2008 Senior Managing Director of Millea HoldingsJuly 2008 Senior Managing Director of Tokio Marine Holdings (to present)(Representation of other companies: Senior Managing Director of Tokio Marine & Nichido)

In charge of Financial Planning Dept.


Shin-Ichiro Okada(July 7, 1950)

April 1973 Joined Tokio MarineJune 2005 Director and General Manager of Commercial Lines Underwriting Dept. of

Tokio Marine & NichidoJune 2007 Director of Tokio Marine & NichidoJune 2007 Managing Director of Millea HoldingsJune 2008 Managing Director and General Manager of International Business Development

Dept. of Millea HoldingsJune 2008 Managing Director of Tokio Marine & NichidoJune 2009 Senior Managing Director of Tokio Marine & Nichido (to present)June 2009 Senior Managing Director and General Manager of International Business

Development Dept. of Tokio Marine Holdings (to present)

Overall supervision of international insurance business; General Manager of International Business Development Dept. (Management of the North American, European and Middle Eastern regions and reinsurance operations)

Director Minoru Makihara(January 12, 1930)

March 1956 Joined Mitsubishi CorporationJune 1986 Director of Mitsubishi CorporationJune 1988 Managing Director of Mitsubishi CorporationJune 1990 Senior Managing Director of Mitsubishi CorporationJune 1992 President of Mitsubishi CorporationJune 1993 Director of Tokio Marine (outside director)April 1998 Chairman of the Board of Directors of Mitsubishi CorporationApril 2002 Retired from position as Director of Tokio Marine (outside director)April 2002 Director of Millea Holdings (outside director)April 2004 Director and Senior Corporate Advisor of Mitsubishi CorporationJune 2004 Senior Corporate Advisor of Mitsubishi Corporation (to present)July 2008 Director of Tokio Marine Holdings (to present)

—

Director Masamitsu Sakurai(January 8, 1942)

April 1966 Joined Ricoh Company, Ltd.June 1992 Director of Ricoh Company, Ltd.June 1994 Managing Director of Ricoh Company, Ltd.March 1995 Managing Director and General Manager, Research & Development Group of

Ricoh Company, Ltd.Jan. 1996 Managing Director and General Manager, Business Development Center of

Ricoh Company, Ltd.April 1996 President of Ricoh Company, Ltd.April 2002 Director of Millea Holdings (outside director)June 2005 Representative Director and President of Ricoh Company, Ltd.April 2007 Representative Director and Chairman of the Board of Ricoh Company, Ltd.

(to present)July 2008 Director of Tokio Marine Holdings (to present)(Representation of other companies: Representative Director and Chairman of the Board of Ricoh Company, Ltd.)

—

119

06

Directors


TitleName


Director Tomochika Iwashita(November 14, 1946)

July 1969 Joined Tokio MarineJune 1998 Director and General Manager of Automobile Industry Production Dept. II of

Tokio MarineJuly 1998 Director and General Manager of Automobile Industry Production Dept. II,

Tokyo Automobile Division of Tokio MarineJune 1999 Director and General Manager of Corporate Planning Dept. of Tokio MarineApril 2000 Managing Director and General Manager of Corporate Planning Dept. of

Tokio MarineJune 2000 Managing Director of Tokio MarineSept. 2000 Director of Tokio MarineDec. 2000 Retired from his position as Director of Tokio MarineJune 2002 Managing Director of Tokio MarineJuly 2002 Managing Director and General Manager of Public & Institutional Business Division

of Tokio MarineJune 2003 Senior Managing Director and General Manager of Public & Institutional Business

Division of Tokio MarineOct. 2004 Senior Managing Director of Tokio Marine & NichidoJune 2005 Executive Vice President of Tokio Marine & NichidoJune 2005 Director of Millea HoldingsJune 2006 Retired from his position as Executive Vice President of

Tokio Marine & NichidoJune 2006 President of Tokio Marine & Nichido Life (to present)July 2008 Director of Tokio Marine Holdings (to present)(Representation of other companies: President of Tokio Marine & Nichido Life)

—

Director Hiroshi Miyajima(May 4, 1950)

April 1974 Joined Nisshin FireJune 2000 Director and General Manager, General Planning Dept. of Nisshin FireApril 2001 Director and General Manager, Personnel & General Affairs Dept. of Nisshin FireApril 2002 Director and General Manager, Personnel Dept. of Nisshin FireApril 2003 Managing Director and Deputy General Manager, Production Promotion

Headquarters of Nisshin FireJune 2003 Senior Managing Director and Deputy General Manager, Production Promotion

Headquarters of Nisshin FireApril 2004 Senior Managing Director and General Manager, Production Promotion Headquarters

of Nisshin FireApril 2005 President and General Manager, Marketing Promotion Headquarters of Nisshin FireJune 2006 Director of Millea HoldingsApril 2007 President of Nisshin Fire (to present)July 2008 Director of Tokio Marine Holdings (to present)(Representation of other companies: President of Nisshin Fire)

—

Director Kunio Ito(December 13, 1951)

April 1980 Assistant Professor, Faculty of Commerce and Management, Hitotsubashi UniversityApril 1984 Associate Professor, Faculty of Commerce and Management, Hitotsubashi UniversityApril 1992 Professor, Faculty of Commerce and Management, Hitotsubashi UniversityAug. 2002 Dean, Graduate School of Commerce and Management/Faculty of Commerce

and Management, Hitotsubashi UniversityJune 2004 Corporate Auditor of Tokio Marine (Outside Corporate Auditor)Oct. 2004 Corporate Auditor of Tokio Marine & Nichido (Outside Corporate Auditor)Dec. 2004 Board Member/Executive Vice President of Hitotsubashi UniversityDec. 2006 Professor, Graduate School of Commerce and Management, Hitotsubashi University

(to present)June 2009 Retired from his position as Corporate Auditor of Tokio Marine & Nichido

(Outside Corporate Auditor)June 2009 Director of Tokio Marine Holdings (to present)

—

Note: Messrs. Minoru Makihara and Masamitsu Sakurai and Dr. Kunio Ito qualify as outside directors as prescribed by Article 2, Item 15 of the Companies Act.


06CORPORATE DATA

Executive Offi cers


TitleName


President Shuzo Sumi Please refer to “Directors” column

Executive Vice President

Toshiro Yagi Please refer to “Directors” column

Executive Vice President

Daisaku Honda Please refer to “Directors” column

Senior Managing Executive Offi cer

Hiroshi Amemiya Please refer to “Directors” column

Senior Managing Executive Offi cer

Shin-Ichiro Okada Please refer to “Directors” column

Managing Executive Offi cer

Hiroshi Endo(May 31, 1952)

April 1975 Joined Tokio MarineJune 2005 Director and General Manager of Corporate Accounting Dept. of

Tokio Marine & NichidoJune 2006 Director and General Manager in charge of Asia region of Tokio Marine & NichidoJune 2008 Retired from his position as Director of Tokio Marine & NichidoJune 2008 Managing Director of Millea HoldingsJuly 2008 Managing Director of Tokio Marine HoldingsJune 2009 Managing Executive Offi cer of Tokio Marine Holdings (to present)

In charge of International Business Development Dept. (management of Asian, Oceanian and South and Central American regions)

Executive Offi cer

Masashi Oba(February 13, 1955)

April 1978 Joined Tokio MarineJune 2007 Director and General Manager of Corporate Accounting Dept. of

Tokio Marine & Nichido (to present)June 2009 Executive Offi cer and General Manager of Corporate Accounting Dept. of

Tokio Marine Holdings (to present)

General Manager of Corporate Accounting Dept.

Executive Offi cer

Hirotsugu Umeki(January 9, 1953)

April 1975 Joined Tokio MarineJune 2009 Executive Offi cer and General Manager of International Business Development Dept.

of Tokio Marine Holdings (to present)

General Manager of International Business Development Dept.

Executive Offi cer

Kunihiko Fujii(June 18, 1955)

April 1978 Joined Tokio MarineJune 2009 Executive Offi cer and General Manager of International Business Dept. of

Tokio Marine Holdings (to present)

General Manager of International Business Development Dept.

Executive Offi cer

Jinpei Yamaguchi(January 9, 1957)

April 1979 Joined Tokio MarineJune 2009 Executive Offi cer and General Manager of Financial Planning Dept. of

Tokio Marine & NichidoJune 2009 Executive Offi cer and General Manager of Financial Planning Dept. of

Tokio Marine Holdings (to present)July 2009 Executive Offi cer and General Manager of Investment Dept.1 of

Tokio Marine & Nichido (to present)

General Manager of Financial Planning Dept.

121

06

Corporate Auditors


TitleName


Standing Corporate Auditor

Yasuo Yaoita(November 13, 1947)

May 1970 Joined Tokio MarineJune 2000 Director and General Manager of Corporate Planning Dept. of Tokio MarineOct. 2001 Director and General Manager, Corporate Planning Dept. of Tokio MarineApril 2002 Retired from his position as Director of Tokio MarineApril 2002 Managing Director and General Manager of Corporate Planning Dept.

of Millea HoldingsApril 2003 Managing Director and General Manager of Merger Promotion Dept.

of Millea HoldingsOct. 2004 Managing Director of Millea HoldingsJune 2005 Senior Managing Director of Millea HoldingsJune 2006 Standing Corporate Auditor of Tokio Marine & NichidoJune 2006 Retired from his position as Senior Managing Director of Millea HoldingsJune 2007 Retired from his position as Standing Corporate Auditor of Tokio Marine & NichidoJune 2007 Standing Corporate Auditor of Millea HoldingsJuly 2008 Standing Corporate Auditor of Tokio Marine Holdings (to present)

—

Standing Corporate Auditor

Tetsuo Kamioka(September 3, 1948)

April 1967 Joined Nichido FireJune 2000 Director and General Manager of Marketing & Sales Promotion Dept. of Nichido FireApril 2001 Director and General Manager of Agency Dept. of Nichido FireApril 2002 Director and General Manager of Tokyo Production Dept. and General Manager of

Tokyo Production Dept. (Tokyo Chuo Branch) of Nichido FireJune 2002 Managing Director and General Manager of Tokyo Production Dept. and

General Manager of Tokyo Production Dept. (Tokyo Chuo Branch) of Nichido FireMarch 2003 Retired from his position as Managing Director of Nichido FireApril 2003 President of Nichido LifeOct. 2003 Senior Managing Director of Tokio Marine & Nichido LifeJune 2005 Retired from his position as Senior Managing Director of Tokio Marine & Nichido LifeJune 2005 Standing Corporate Auditor of Millea HoldingsJuly 2008 Standing Corporate Auditor of Tokio Marine Holdings (to present)

—

Corporate Auditor

Shigemitsu Miki(April 4, 1935)

April 1958 Joined The Mitsubishi Bank, Ltd.June 1986 Director of The Mitsubishi Bank, Ltd.June 1989 Managing Director of The Mitsubishi Bank, Ltd.June 1994 Senior Managing Director of The Mitsubishi Bank, Ltd.April 1996 Senior Managing Director of The Bank of Tokyo-Mitsubishi, Ltd.May 1997 Deputy President of The Bank of Tokyo-Mitsubishi, Ltd.June 2000 President of The Bank of Tokyo-Mitsubishi, Ltd.June 2000 Corporate Auditor of Tokio MarineApril 2001 President of Mitsubishi-Tokyo Financial Group, Inc.April 2002 Retired from his position as Corporate Auditor of Tokio MarineApril 2002 Corporate Auditor of Millea HoldingsJune 2004 Chairman of The Bank of Tokyo-Mitsubishi, Ltd.June 2004 Director of Mitsubishi-Tokyo Financial Group, Inc.Oct. 2005 Director of Mitsubishi UFJ Financial Group, Inc.Jan. 2006 Chairman of The Bank of Tokyo-Mitsubishi UFJ, Ltd.June 2006 Retired from his position as Director of Mitsubishi UFJ Financial Group, Inc.April 2008 Senior Advisor of The Bank of Tokyo-Mitsubishi UFJ, Ltd. (to present)July 2008 Corporate Auditor of Tokio Marine Holdings (outside corporate auditor) (to present)

—

Corporate Auditor

Hiroshi Fukuda(August 2, 1935)

April 1960 Joined Ministry of Foreign Affairs of JapanJan. 1989 Director-General of Treaties Bureau and Director-General of Offi ce for

the Law of the Sea, Ministry of Foreign AffairsSept. 1990 Ambassador to MalaysiaAug. 1993 Deputy Minister of Foreign Affairs, Ministry of Foreign AffairsAug. 1995 Retired from Ministry of Foreign AffairsSept. 1995 Justice of the Supreme Court of JapanAug. 2005 Retired Justice of the Supreme Court of JapanAug. 2005 Attorney-at-law (to present)June 2006 Corporate Auditor of Millea Holdings (outside corporate auditor)July 2008 Corporate Auditor of Tokio Marine Holdings (outside corporate auditor) (to present)

—

Corporate Auditor

Yuko Kawamoto(May 31,1958)

April 1982 Joined The Bank of Tokyo, Ltd.Sept. 1988 Joined McKinsey & Company, Tokyo Offi ceApr. 2004 Professor, Waseda Graduate School of Finance, Accounting and Law (to present)June 2006 Corporate Auditor of Millea HoldingsJuly 2008 Corporate Auditor of Tokio Marine Holdings (outside corporate auditor) (to present)

—

Note: Messrs. Shigemitsu Miki and Hiroshi Fukuda and Ms. Yuko Kawamoto qualify as outside corporate auditors as prescribed by Article 2, Item 16 of the Companies Act.


06CORPORATE DATA

Corporate Planning DepartmentMatters relating to business strategies and planning, CSR, corporate communications, IR, M&A, internal control and providing business administration and management assistance of domestic insurance subsidiaries of the Tokio Marine Group

International Business Development DepartmentMatters relating to planning strategies for international business and providing business administration and management assistance of overseas subsidiaries of the Tokio Marine Group

Financial Planning DepartmentMatters relating to asset management, planning and implementing strategies for financial services business and providing business administration and management assistance of subsidiaries operating financial services business of the Tokio Marine Group

Corporate Accounting DepartmentMatters relating to financial reporting and taxes of the Tokio Marine Group

Business Development and Support DepartmentMatters relating to new business lines and providing business administration and management assistance of general business subsidiaries of the Tokio Marine Group

Personnel Planning DepartmentMatters relating to personnel strategies of the Tokio Marine Group

Legal DepartmentMatters relating to general meeting of shareholders and board of directors

Compliance DepartmentMatters relating to promoting compliance and information security management of the Tokio Marine Group

Risk Management DepartmentMatters relating to integrated risk management of the Tokio Marine Group

Internal Audit DepartmentMatters relating to internal audit of the Tokio Marine Group

General Meeting of Shareholders

Board of Directors

NominationCommittee

CompensationCommittee

ComplianceCommittee

Risk ManagementCommittee

Management Meeting

Directors

Corporate Auditors

Board of Auditors


Employees(As of March 31, 2009)

Number of employees: 370

Average age of employees: 41.3 years old

Average length of service of employees: 18.1 years

Note: Most employees of Tokio Marine Holdings are seconded from its subsidiaries. Average length of service includes the years of service at these subsidiaries.

Organizational Chart

123

06


Description of Business

Tokio Marine Holdings, Inc. is an insurance holding company established in April 2002.

The Tokio Marine Group is engaged in the non-life insurance and life insurance businesses and the following are the primary Group companies.

Business Diagram*

Non-life Insurance Business

Property and casualty insurance business

Other Business

Derivatives business

Consolidated subsidiaries Equity-method affiliates�

* Tokio Marine Insurance Singapore Ltd. is the new corporate name of TM Asia Insurance Singapore Ltd. as of July 1, 2008.** Tokio Marine Seguradora S.A. is the new corporate name of Real Seguros S.A. as of August 20, 2008.

*** Kiln Group Limited is the new corporate name of Kiln (UK) Holdings Limited as of January 19, 2009.

Small-amount short-term insurance business

Other business

Life Insurance Business

�

Tokio Marine & Nichido Fire Insurance Co., Ltd.Nisshin Fire & Marine Insurance Co., Ltd.Philadelphia Indemnity Insurance CompanyTokio Marine Global Ltd.Kiln Underwriting LimitedTokio Marine Insurance Singapore Ltd.*Tokio Marine Seguradora S.A.**Tokio Millennium Re Ltd.


Millea Nihon Kousei SS Insurance Co., Ltd.

Philadelphia Consolidated Holding Corp.Kiln Group Limited***Tokio Marine Asia Pte. Ltd.Asia General Holdings Limited

Tokio Marine & Nichido Life Insurance Co., Ltd.Tokio Marine & Nichido Financial Life Insurance Co., Ltd.Tokio Marine Bluebell Re LimitedTM Asia Life Singapore Ltd.TM Asia Life Malaysia Bhd.Sino Life Insurance Co., Ltd.


Tokio Marine Holdings and Its Subsidiaries


06CORPORATE DATA


Company nameDate of

incorporationPaid-in capital

Ratio of Tokio Marine Holdings’ voting rights (*1)

Ratio of Tokio Marine Holdings’

subsidiaries’voting rights (*2)

Location Major business

Consolidated subsidiariesTokio Marine & Nichido Fire Insurance Co., Ltd.

Mar. 20, 1944 (*3)

(Yen in millions)101,994

%100

%0

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



June 10, 1908 20,389 100 0 3, Kanda-Surugadai 2-chome, Chiyoda-ku, Tokyo



Aug. 6, 1996 55,000 100 0 3-16, Ginza 5-chome, Chuo-ku, Tokyo

Life insurance


Aug. 13, 1996 48,000 100 0 ThinkPark Tower1-1, Osaki 2-chome,Shinagawa-ku, Tokyo

Life insurance

Millea Nihon Kousei SS Insurance Co., Ltd.

Sept. 1, 2003 1,595 89.5 0 2-1-1, Minatomirai 2-chome, Nishi-ku, Yokohama, Kanagawa Pref.


Philadelphia Consolidated Holding Corp.

July 6, 1981 US$1,000

0 100 One Bala Plaza, Suite 100 Bala Cynwyd, PA 19004 USA


Philadelphia Indemnity Insurance Company

Feb. 4, 1927 US$3,599,000

0 100 One Bala Plaza, Suite 100 Bala Cynwyd, PA 19004 USA


Tokio Marine Global Ltd. Oct. 30, 1990 £125,000,000

0 100 2 Minister Court, London EC3R 7BB, UK


Kiln Group Limited July 11, 1994 £1,000,000

0 100 106 Fenchurch Street, London, EC3M 5NR, UK


Kiln Underwriting Limited June 13, 1994 £0

0 100 106 Fenchurch Street, London, EC3M 5NR, UK


Tokio Marine Bluebell Re Limited Mar. 8, 2007 (Yen in millions)14,000

100 0 15-19 Athol Street, Douglas, Isle of Man, IM1 1LB

Life insurance

Tokio Marine Asia Pte. Ltd. Mar. 12, 1992 S$561,714,000

THB542,000,000

100 0 6 Shenton Way, #23-08 DBS BuildingTower Two, Singapore 068809


Asia General Holdings Limited Feb. 24, 1971 S$75,000,000

0 92.4 80 Anson Road, Fuji Xerox Towers, Singapore 079907


Tokio Marine Insurance Singapore Ltd.

July 11, 1923 S$100,000,000

0 100 80 Anson Road, Fuji Xerox Towers, Singapore 079907


TM Asia Life Singapore Ltd. May 21, 1948 S$36,000,000

0 85.2 80 Anson Road, Fuji Xerox Towers, Singapore 079907

Life insurance

TM Asia Life Malaysia Bhd. Feb. 11, 1998 RM100,000,000

0 100 Level 7, Menara TM Asia Life 189, Jalan Tun Razak, 50400 Kuala Lumpur, Malaysia

Life insurance

Tokio Marine Seguradora S.A. June 23, 1937 R.248,669,000

100 0 R. Sampaio Viana, 44 CEP:04004-000 São Paulo, SP, Brazil


Tokio Millennium Re Ltd. Mar. 15, 2000 US$250,000,000

0 100 Tokio Millennium House, 3 Waterloo Lane Pembroke HM 08


Tokio Marine Financial Solutions Ltd. Dec. 4, 1997 (Yen in millions)1,178

0 100 The Offi ces of Maples and Calder Ugland House P.O. Box 309 South Church St. George Town Grand Cayman, Cayman Islands, British West Indies

Other business(Derivatives business)

(and 42 other companies)

Affi liates accounted for by the equity methodSino Life Insurance Co., Ltd. Mar. 4, 2002 Yuan

1,358,189,0000 24.9 17th Floor,

Xinhua Insurance Mansion No.171 Mintian Road, Futian CBD, Shenzhen, P. R. China

Life insurance

(and 7 other companies)

(*1) The ratio of voting rights of said subsidiaries held by Tokio Marine Holdings to total voting rights(*2) The ratio of voting rights of said subsidiaries held by Tokio Marine Holdings’ subsidiaries to total voting rights(*3) Founded on August 1, 1879

Major Subsidiaries

125

06

2001 January Tokio Marine and Nichido Fire agree to establish a joint holding company

September Announces holding company name, business purpose, representative, location of head offi ce, stock transfer ratio, etc.

2002 April Lists shares of Millea Holdings, Inc. on the Tokyo Stock Exchange and the Osaka Securities Exchange (opening price: ¥970,000), and lists American Depositary Receipt (ADR) on NASDAQ.Establishes Millea Holdings, Inc.Holds its opening ceremony.

November Announces medium- to long-term Group strategy

December Establishes Millea Asia Pte. Ltd.Tokio Marine Group takes 30% stake in Taiwanese nonlife insurance company Newa Insurance Co., Ltd. via Millea Asia Pte. Ltd.

2003 February Establishes Millea Real-Estate-Risk Management, Inc.

July Launches Tokio Marine & Nichido Career Service Co., Ltd.

October Launches Tokio Marine & Nichido Life Insurance Co., Ltd.

November Revises Millea Group’s medium- to long-term strategySino Life Insurance Co., Ltd., (owned 24.9% by the Millea Group) commences operation in Shanghai

2004 February Acquires all outstanding shares of Scandia Life Insurance Co., Ltd. via Tokio Marine & Fire Insurance Co., Ltd. (becomes a direct subsidiary of Millea Holdings in April 2004, changing its name to Tokio Marine & Nichido Financial Life Insurance Co., Ltd.)

September Purchases 99.81% of the stock of Taiwanese non-life insurance company Allianz President General Insurance Co., Ltd. via Millea Asia

October Launches Tokio Marine & Nichido Fire Insurance Co., Ltd.

2005 April The two general insurance companies in Taiwan under the umbrella of Millea Asia merge into a single entity, Tokio Marine Newa Insurance Co., Ltd.

May Establishes Corporate governance policy

July Tokio Marine takes a 100% and 50% stake in Brazilian nonlife insurance company Real Seguros S.A. and life insurance and annuity company Real Vida e Previdência S.A., respectively.

October Makes Tokio Marine & Nichido Facilities, Inc. its subsidiary

November Formulates Group’s long-term strategy and mid-term corporate strategy for FY06 to FY08 “Stage Expansion 2008”

2006 January Establishes Millea Mondial Co., Ltd. and enters the assistance and Business Process Outsourcing (BPO) businesses

February Establishes Tokio Marine Nichido Samuel Co., Ltd. and enters the retirement home and nursing care business.

September Nisshin Fire & Marine Insurance Co., Ltd. becomes a wholly owned subsidiary

October Tokio Marine & Nichido Career Service Co., Ltd. invests in Classy Co., Ltd. and enters the homemaker service industry

2007 February Makes Tokio Marine & Nichido Medical Service Co., Ltd. its subsidiary

April Makes Tokio Marine & Nichido Insurance Service Co., Ltd. its subsidiary and changes the name to Tokio Marine & Nichido Anshin Consulting Co., Ltd.Establishes Tokio Marine Blubell Re Limited on U.K.-governed Isle of Man

October Makes Tokio Marine & Nichido Risk Consulting Co., Ltd. its subsidiary

2008 January Makes Nihon Kousei Kyousaikai its subsidiary and changes the name to Millea Nihon Kosei SS Insurance Co., Ltd.

March Acquired Kiln Ltd., a leading U.K.-listed Lloyd’s insurance group member, through Tokio Marine & Nichido Fire Insurance Co., Ltd.

July Changes the trade name to Tokio Marine Holdings, Inc.

November The Tokio Marine & Nichido Fire Insurance Company (China) Limited becomes a wholly owned China-based subsidiary of Tokio Marine & Nichido Fire Insurance Co., Ltd.

December Acquired of Philadelphia Consolidated Holding Corp., a U.S.-based property and casualty insurance group, and formulation of the Group’s mid-term corporate strategy for FY09 to FY11 “Innovation and Execution 2011”

2009 March Sold Real Tokio Marine Vida e Previdência S.A., a life insurance and pension affi liate

June Established E. design Insurance Co., Ltd.

History of the Tokio Marine Group


06CORPORATE DATA

Worldwide Network of the Tokio Marine Group

Tokio Marine has in place a system that is capable of meeting the diverse needs of global customers.


North America United States � U.S. Branch (New York)� New York, Los Angeles, San Francisco, Chicago, Atlanta, Nashville and Honolulu� Tokio Marine Management, Inc.

(New York, Los Angeles, San Francisco, Chicago, Atlanta, Houston, Nashville and Cincinnati)� Trans Pacifi c Insurance Company (New York)� TM Specialty Insurance Company (New York)� TM Casualty Insurance Company (New York)� TNUS Insurance Company (New York)� TM Claims Service, Inc. (New York, Los Angeles and Honolulu)� First Insurance Company of Hawaii, Ltd. (Honolulu)� Philadelphia Consolidated Holding Corp. (Bala Cynwyd and 47 other cities)

Canada � Toronto and Vancouver� Lombard Canada Ltd. (Toronto and Vancouver)

Bermuda � Tokio Millennium Re Ltd. (Hamilton)

Central & South America Mexico � Tokio Marine Compañía de Seguros, S.A. de C.V. (Mexico City, Tijuana, Monterrey and Guadalajara)� Tokio Marine Global Re Limited (Mexico City)

Brazil � Tokio Marine Brasil Seguradora S.A. / Tokio Marine Seguradora S.A. (São Paulo and 50 other cities)Paraguay � La Rural S.A. de Seguros (Asunción and 5 other cities)

Europe United Kingdom � London� Tokio Marine Europe Insurance Limited (London, Manchester and Birmingham)� Tokio Marine Europe Limited (London)� TM Management Services Limited (London)� Tokio Marine Global Ltd. (London)� Kiln Group Limited (London)

France � Paris� Tokio Marine Europe Insurance Limited (Paris, Lyon, Bordeaux and Strasbourg)� TM Management Services Limited (Paris)

Germany � Düsseldorf� Tokio Marine Europe Insurance Limited (Düsseldorf)� Tokio Marine Europe Insurance Limited c/o Burmester, Duncker & Joly (Düsseldorf and Hamburg)

Netherlands � Amsterdam� Tokio Marine Europe Insurance Limited

c/o Delta Lloyd Schadeverzekering Volmachtbedrijf B.V. (Amsterdam)� TM Management Services Limited (Amsterdam)

Belgium � Bruxelles� Tokio Marine Europe Insurance Limited

c/o Fortis Corporate Insurance N.V. (Bruxelles and Antwerpen)Italy � Milano

� Tokio Marine Europe Insurance Limited c/o Allianz S.p.A. (Milano)Spain � Barcelona

� Tokio Marine Europe Insurance Limited (Barcelona and Madrid)Ireland � Tokio Marine Global Re Limited (Dublin)Norway � Tokio Marine Europe Insurance Limited c/o Citius Insurance AS (Oslo)Denmark � Tokio Marine Europe Insurance Limited c/o RiskPoint A/S (Copenhagen)Greece � Tokio Marine Europe Insurance Limited c/o Willis KENDRIKI S.A. (Athens)

Eurasia Russia � Moscow and St. Petersburg

On the Cover: Mangrove Afforestation ProjectTokio Marine is committed to reducing environmental impact as one of its major corporate social responsibility activities. In 1999 we started our mangrove afforestation

project in South East Asia and over the last ten years have planted 5,901 hectares (14,582 acres) of forests in six countries. An additional 2,300 hectares (5,683 acres) will

be added over the next fi ve years under the project, which is being undertaken in partnership with the following nongovernmental organizations: Action for Mangrove

Reforestation (ACTMANG), the Organization for Industrial, Spiritual and Cultural Advancement-International (OISCA) and the International Society for Mangrove

Ecosystems (ISME).

Mangrove trees help prevent global warming by absorbing large volumes of carbon dioxide and can serve as bulwarks to protect people from tsunamis and other

hazards. In the tsunami that occurred in the Indian Ocean as a result of the earthquake off the coast of Sumatra in December 2004, villages situated behind mangrove

plantations were protected from the tsunami. In addition, by providing fi shery, forestry and other resources essential to local residents’ lifestyles, mangrove trees contribute

to sustainable development in the areas in which they are planted. This, in turn, stabilizes and improves the lives of these residents.

Note: The forecasts appearing on this Annual Report are based on information available as of the publication date of the Report. Actual results may differ materially due to

various factors.

Tokio Marine Group Corporate PhilosophyWith customer trust as the foundation for all its activities, Tokio Marine Group continually strives

to raise corporate value.

• Through the provision of the highest quality products and services, Tokio Marine Group aims to

deliver safety and security to all our customers.

• By developing sound, profi table and growing businesses throughout the world, Tokio Marine

Group will fulfi ll its mandate to shareholders.

• Tokio Marine Group will continue to build an open and dynamic corporate culture that enables

each and every employee to demonstrate his or her creative potential.

• Acting as a good corporate citizen through fair and responsible management, Tokio Marine

Group will broadly contribute to the development of society.

Overseas offi ces: Located in 399 cities in 36 countries and regions• Expatriate staff: 173 • Local staff: Approx. 14,600 • Claims agents: Located in 250 countries and regions

Middle & Near East U.A.E. � Dubai� Tokio Marine Middle East Limited (Dubai)� Al-Futtaim Development Services Co. (Dubai)

Saudi Arabia � Jeddah, Riyadh and Al Khobar� Hussein Aoueini & Co., Ltd. (Jeddah, Riyadh and Al Khobar)� Tokio Marine Saudi Arabia Limited (to be established)

Bahrain � The Arab-Eastern Insurance Co. Ltd E.C. (Manama)Turkey � Allianz Sigorta A.S. (Istanbul)

� Allianz Hayat ve Emeklilik A.S. (Istanbul)

Oceania & Micronesia Australia � Sydney and Melbourne� Tokio Marine Management (Australasia) Pty. Ltd. (Sydney, Melbourne and Adelaide)

New Zealand � IAG New Zealand Insurance Limited (Auckland)Guam � Guam

� Tokio Marine Pacifi c Insurance Limited (Guam)� Tokio Marine Pacifi c Insurance Limited c/o Nanbo Guam, Ltd. (Guam)� Tokio Marine Pacifi c Insurance Limited c/o Calvo’s Insurance Underwriters, Inc. (Guam)

Commonwealth of the Northern Mariana Islands

� Pacifi ca Insurance Underwriters, Inc. (Saipan)� Calvo’s Insurance Underwriters (CNMI), Inc. (Saipan)

Asia Korea � Seoul Sub-branchPeople’s Republic of China

� Beijing, Tianjin, Dalian, Chengdu, Nanjing, Suzhou, Hangzhou, Guangzhou and Shenzhen� The Tokio Marine & Nichido Fire Insurance Company (China) Limited (Shanghai)� Zhongsheng International Insurance Brokers Co., Ltd. (Beijing)� Sino Life Insurance Co., Ltd. (Shenzhen, Shanghai and 20 other cities)

Hong Kong � Hong Kong� The Tokio Marine and Fire Insurance Company (Hong Kong) Limited (Hong Kong)

Taiwan � Taipei� Tokio Marine Newa Insurance Co., Ltd. (Taipei and 25 other cities)

Philippines � Malayan Insurance Co., Inc. (Manila and 27 other cities)Vietnam � Vietnam International Assurance Company (Hanoi and Ho Chi Minh City)Thailand � The Sri Muang Insurance Co., Ltd. (Bangkok and 16 other cities)

� Millea Life Insurance (Thailand) Public Co., Ltd. (Bangkok)Malaysia � Tokio Marine Insuranse (Malaysia) Berhad (Kuala Lumpur and 19 other cities)

� TM Asia Life Malaysia Bhd. (Kuala Lumpur and 15 other cities)� Tokio Marine Global Re Limited (Labuan)

Singapore � Tokio Marine Asia Pte. Ltd. (Singapore)� Tokio Marine Insurance Singapore Ltd. (Singapore)� TM Asia Life Singapore Ltd. (Singapore)� Tokio Marine Retakaful Pte. Ltd. (Singapore)� TM Claims Service Asia Pte. Ltd. (Singapore)

Brunei � Tokio Marine Insurance Singapore Ltd. (Bandar Seri Begawan)� TM Asia Life Singapore Ltd. (Bandar Seri Begawan)

Indonesia � P.T. Asuransi Tokio Marine Indonesia (Jakarta and 7 other cities)India � New Delhi

� IFFCO-TOKIO General Insurance Co. Ltd. (New Delhi and 110 other cities)Myanmar � Yangon

� Branches of Tokio Marine & Nichido� Representative and Liaison Offi ces of Tokio Marine & Nichido� Underwriting Agents of Tokio Marine & Nichido� Subsidiaries and Affi liates

127

Tokio Marine HoldingsTokio Marine Holdings2009 Annual Report

http://www.tokiomarinehd.com/

Pr inted in Japan

An

nu

al Rep

ort 2009

Tokio

Marin

e Ho

ldin

gs, In

c.

Member of Financial Accounting Standards Foundation

Tokio Marine Nichido Building Shinkan,

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

Tokyo 100-0005, Japan

phone: +81-3-6212-3333

Documents

Tokio Marine Holdings, Inc. Tokio Marine Holdings