Tokio Marine : Special IR Meeting

Tokio Marine Presents

Special IR Meeting in London

July 1, 2024

TMK CEO	TMHCC CEO	Co-Head of Int'l	Co-Head of Int'l	CEO/CCO	CFO	DFG CEO	PHLY CEO
Matthew Shaw	Susan Rivera	Brad Irick	Kit Yamamoto	Satoru Komiya	Kenji Okada	Don Sherman	John Glomb

Table of Contents
I. Strategy of
International	P.	3
M&A	P.	7
PHLY	P. 12
DFG	P. 13
TMHCC	P. 16
TMK	P. 17

II. Reference		P. 18
◆Abbreviations used in this material
TMHD	: Tokio Marine Holdings	PHLY	: Philadelphia
TMNF	: Tokio Marine & Nichido Fire Insurance	DFG	: Delphi
NF	: Nisshin Fire & Marine Insurance	TMHCC	: Tokio Marine HCC
TMNL	: Tokio Marine & Nichido Life Insurance	TMK	: Tokio Marine Kiln

	◆ "Normalized basis" in the material generally refers to the where natural catastrophes are adjusted to average level
	(other adjustments will be stated in the text)	2
Copyright (c) 2024 Tokio Marine Holdings, Inc.

I. Strategy of

International

M&A

PHLY

DFG

TMHCC

TMK

Profit Target for International Business

• International business profit growth target is CAGR of +7% or more (excl. past reserves takedown) under the Mid-Term Plan (MTP)
• Realize growth driven by strong underwriting while factoring in a certain level of softening

International Business Unit Profit*1	(billions of JPY)
CAGR +7% or more		International
(excl. past reserves takedown)*2		+7% or more
	Business Unit Profit
		(excl. past reserves takedown)
448.9*2		Underwriting	Approx. +7%
	*North American underwriting	*Approx. +10%
Includes a rebound in life insurance		Investment	Approx. +8%
which posted a loss in 2023
		*Investment income	*Approx. +8%

Developed	Emerging
market	market

Top-line*1	3,079.5			CAGR approx. +5％
C/R*3	92.3%	91.8%	91.8%	92% range
(2023
→91.5%	→94.1%
→2026）
Underwriting		Approx. +8%	Approx. -1%	Approx. +7%
profit (CAGR)

Profit will shrink compared to 2023 when Brazil performed very strongly. We plan to secure high levels of revenue by maintaining C/R at low to mid-90%

*1: FX as of Mar. 31, 2024. Business Unit Profit for 2023 is on a normalized basis excluding the impact of past reserves takedown
*2: 2023 result is JPY478.2bn (FX as of Mar. 31, 2024) including past reserves takedown. CAGR of the 2026 plan based on this result is +5% or more (2026 plan does not factor in change in past reserves)
*3: Figures include estimates.	3
Copyright (c) 2024 Tokio Marine Holdings, Inc.

I. Strategy of

International

M&A

PHLY

DFG

TMHCC

TMK

Top-class Underwriting Growth (Comparison with North American Peers)

• North American underwriting profit is expected to grow at CAGR +10%, representing top tier growth vs. peers

Underwriting profit

北North⽶PeersAmerican peers当*1 社■ 北TMHD⽶事業North American business*2

CAGR approx. +10%

CAGR approx. +8%

					No
					Peer's data
2023	2024	2025	2026
			*1: Peers: AIG, Chubb, Travelers, W. R. Berkley (Source: D&P) *Estimates by normalizing the impact of past reserves and Nat Cats to an average year level	4
Copyright (c) 2024 Tokio Marine Holdings, Inc.	*2: Normalized basis (excl. the impact of past reserves takedown for 2023)

I. Strategy of

International

M&A

PHLY

DFG

TMHCC

TMK

Rate Increases

• Achieve growth while maintaining C/R at low levels, leveraging the competitive advantage built through strategic focus on niche markets and specialty insurance*1 and carrying out rate increases exceeding forward- looking loss cost projections
• Market hardening is expected to continue throughout 2024, and achieve steady profit growth through risk selection and a strong bottom-line focus to contain the impact of the market cycle

Rate Increase	C/R
(% represent YoY rate increase)

(Indexation based on 2017)					+5％	105%
	TMHCC *2									U.S. P&C market average*5
	PHLY				+6％	+9％
	Market *3					100%
	マーケット			+14％
					+9％
			+16％			+6％	95%						PHLY*4
			+11％
		+9％	+11％	+8％	+6％
				90%
	+5％	+7％		■ [Ref.] North America U/W profit (USD mn)
		+9％			1,500
	+3％
					1,000							TMHCC*4
		+4％				85%
	+2％
					500
2017	2018	2019	2020	2021	2022	0	80%
2023	2017	2018	2019*4	2020	2021	2022	2023

Due to Covid-19

Due to past reserve provision

Copyright (c) 2024 Tokio Marine Holdings, Inc.

*1: See P.12 and 16 for details

*2: Excl. A&H・Surety・Credit *3: (Source)Willis Towers Watson

*4:	Local management accounting basis. Temporary increase in PHLY due to increase in past reserve provision	5
*5:	（Source）S&P Capital IQ

I. Strategy of

International

M&A

PHLY

DFG

TMHCC

TMK

(Ref.) External Evaluation of Our North American GCs

• Scored the highest favorability rating in the Americas*

*: A survey for risk managers in large companies with 250 or more employees by FT Commercial Insurance GIST 2024 Survey (Nov. 2023-Feb. 2024) (Source) P&C Specialist: Big Commercial Insurers with the Highest Favorability Ratings

	https://commercial.pandcspecialist.com/c/4491854/587354	6
Copyright (c) 2024 Tokio Marine Holdings, Inc.

I. Strategy of

International

M&A

PHLY

DFG

TMHCC

TMK

Disciplined In / Out Strategy

• Our large-scale M&A track record (ROI) is +21.5%. Successful track record makes Tokio Marine an attractive acquirer for the next M&A
• Valuations are currently high, and we need to continue being patient with large-scale M&As, but we will seize opportunities for bolt-on M&As and continue to implement the In / Out strategy with discipline

Strict acquisition criteria	"In" strategy (M&A, new establishment)

Cultural fit

Target

(Three High profitability principles

of M&A)

Solid business model

	Cost of capital (7%)
Hurdle	+ Risk premium
rate	+ Country interest rate
	spread

• ROI*1 of our large-scale M&As is 21.5％, significantly exceeding our capital cost (7%)
• We have been steadily implementing bolt-on M&As. Most recently, TMHCC completed acquisition of GGEBS*2

Mar. 2008

Dec. 2008

May 2012

Oct. 2015

Feb. 2020

"Out" strategy (divestment, run-off)

• We are implementing the "Out" strategy also with discipline by determining the future of the business in a forward-looking manner

	Highland*3 Guam TMPI	Saudi Arabia
Mar. 2019	Aug. 2022		Life/Non-life
Dec. 2023	Feb. 2024

	*1: ROI is calculated by using the sum of business unit profits under FY2024 projection as numerator and the sum of
	acquisition amounts as denominator (Different formula from ROE (=RoR / ESR) which reflects risk diversification
	*2: Gulf Guaranty Employee Benefit Services, Inc.
	A managing general underwriter that handles group gap medical insurance for small and mid-sized businesses.
Copyright (c) 2024 Tokio Marine Holdings, Inc.	*3: Agent handling construction insurance in the Tokio Marine Highland (former WNC) group owned by TMK

effect, etc.)

7

I. Strategy of

International

M&A

PHLY

DFG

TMHCC

TMK

Track Record of large-scale M&A

• Five subsidiaries acquired with large-scale M&A have continually outperformed market growth
• ROI is significantly above TMHD capital cost (7%) at 21.5%

Growth after joining the Group*1

ROI of large M&As*2

＜Top-line＞

＜Bottom-line*3＞

＜Top-line＞

＜Bottom-line＞

＜Top-line＞

＜Bottom-line＞

DFG

Market

TMK Market

17.4% Market

TMK

7.0%

PHLY

12.8%

5.9%

6.6%

PHLY

DFG

5.3%

6.4%

Market

Market

7.3%

4.2%

4.1% Market

5.7%

Capital cost

1.9%

21.5%

>

2007-2023 CAGR

2007-2023 CAGR

2011-2023 CAGR

%

7

▲189.8%

＜Top-line＞

＜Bottom-line＞

＜Top-line＞

Pure

TMHCC
9.7% Market	TMHCC
6.1%	5.4% Market
	3.1%

2014-2023 CAGR

Copyright (c) 2024 Tokio Marine Holdings, Inc.

15.9%

Market

7.6%

2019-2023 CAGR

*1: TMHD top-line /bottom-lines are local financial accounting basis, Pure's top-line is the premiums under management company

Market for TMK: all Lloyd's companies, Other: North American non-life insurance (Source) Lloyd's Annual Report, S&P Capital IQ

*2: ROI is calculated by using the sum of business unit profits under FY2024 initial projection as numerator and the sum of acquisition amounts as denominator

(Different formula from ROE (=RoR / ESR) which reflects risk diversification effect, etc.)

*3: TMK proactively increased past reserve provision for some business lines （However, Syndicate 510 C/R was good level at 86%）

8

I. Strategy of

International

M&A

PHLY

DFG

TMHCC

TMK

Track Record of Bolt-on M&A

• Room for bolt-on M&A based on in-depth understanding of mutual business
• Leverage the experience and expertise of TMHCC as our strength and steadily execute transactions

Advantages

of bolt-on

M&A

High success rate	: In-depth understanding based on a long-term business relationship
Accumulated know-how : Experience of executing over 60 bolt-on M&As
Disciplined M&A	: Strategic portfolio adjustment taking the future business environment into consideration

2015-2017

2018-2020

2021-

In

Pro Ag

(Crop

Insurance)

January 2015

AJF

(P.A.)

June 2015

AIG business

acquisition

(Medical stop-loss)

October 2017

International Ag

(Crop Insurance)

April 2017

WNC

(Property /

flood)

January 2018

Qdos

(Liability)

October 2018

NAS

(Cyber / liability)

April 2019

BCC

(Surety /

credit)

April 2019

A&H	SSL
International
(Paid family leave)
(P.A.)
April 2021
June 2019

GCube	GGEBS
(Gap medical
(Renewable energy)
insurance)
May 2020
July 2023

Out

On Call	Bail USA	Midlands	AｍTrust Ag
(Crop
International	(Surety)	(Excess W/C)
(Assistance service)	Insurance)
January 2016	February 2016	December 2018
May 2019

Bail USA		Life Trac
	(Medical Service)
(Surety)
Divested in January
Divested in April 2019
2020

Colors represent the acquiring companies TMHCC TMK

WWS business	Will find high
acquisition

(Insurance for temporary	quality
staffing industry)	transactions
December 2020

Highland*

(Construction insurance)

Divested in August

2022

PHLY DFG TMMA (Australia)

	*: Construction insurance agency, part of Tokio Marine Highland (former WNC) Group owned by TMK	9
Copyright (c) 2024 Tokio Marine Holdings, Inc.

I. Strategy of

International

M&A

PHLY

DFG

TMHCC

TMK

(Ref.) Rate Cycle and M&A Opportunities

• Valuations remain high for high-quality M&A transactions, requiring patience
• The market is cyclical and attractive M&A opportunities increase when the market softens; we will remain diligent

Rate Cycle*1(left axis)	Total transaction amount*2 (right axis)											（M$）
15%																				60,000
10%																				50,000
																				40,000
5%																				30,000
0%																				20,000
-5%																				10,000
-10%																				0
2003	2004	2005	2006	2007	2008	2009	2010	2011	2012	2013	2014	2015	2016	2017	2018	2019	2020	2021	2022	2023

(Ref.) Overseas business
expansion track record*3	Dec. 2007	July 2008	Dec. 2011	June 2015	Oct. 2019

	*1: U.S. Commercial market (Source) WTW, "Commercial Lines Insurance Pricing Survey"
	*2: Global deals announced between 2003 and 2023 in P&C sector with transaction amount of $100MM or more (Source) Dealogic
Copyright (c) 2024 Tokio Marine Holdings, Inc.	*3: Dates listed are the announcement dates of the acquisition	10