Part 1 The Story of Our Purpose Strength 3
Integrated Group Management
Tokio Marine deploys its diverse workforce, including talent acquired through M&A, optimally on a global basis to utilize their expertise and wisdom to resolve issues and to generate synergies.
Utilizing strong local expertise and capabilities across the entire Group
Marine Tokio
Establishment of strong localities
The insurance business is a collection of local businesses because | establish a dominant competitive position. In actuality, each Group |
no matter how global a business becomes, regulations, culture and | company has established the strongest localities in each region |
social issues vary depending on country and region. As a result, for | where it operates by steadily enhancing its capabilities (please see |
the entire Group to continue growing, Group companies must build | pages 120 and 121). We are a global company precisely because of |
a unique business model rooted in their regions and markets to | this strong local presence. |
Generating Group synergies with the Group's capabilities
Main areas for synergy generation
Revenue | Investment | |
(Expanding topline) | (Expanding investment income) | |
Leverage our global network | Leverage DFG's asset | |
Group | synergies | management capabilities |
Annual | results: | |
USD | 295mn |
01
Our of Story The
2021 Report Annual Integrated | .Inc Holdings,
Our strong localities are further refining their strengths and accelerating growth by fully harnessing the Group's capabilities of product lineup, underwriting capacity, and sales network. As a result, in the four areas of revenue (expanding topline), investment (expanding investment income), capital (optimizing retention/reinsurance*) and cost (reducing costs), Group synergies have materialized, resulting in profit contribution of around ¥30 billion this year and over ¥130 billion since fiscal 2016.
Companies that can generate quantitative effects from such synergies are rare. This is why we give such importance to this within our strength of integrated group management. More concretely, most companies attempt to generate cost synergies by rightsizing their workforce, but in our case, our workforce has increased over the years because the companies we acquire
generate even more growth after joining the Group. In addition to growing cross-selling (revenue) using our diverse and broad product lineup along with our global sales network, we are expanding investment income (investment) through DFG with its sophisticated know-how in asset management, optimizing retention/reinsurance (capital) including underwriting capacity, and steady progress with the necessary cost synergies such as joint purchasing of systems. Today, discussions about achieving these synergies are being held actively among each Group company rather than led by the holding company. For example, proactive discussions on generating synergies with PURE Group are taking place during the CEO conference in North America. In this manner, the Group's sense of solidarity is growing.
Capital | (Dec. 31, 2020) | Cost |
(Optimizing retention/reinsurance) | (Reducing costs) | |
Optimize retention / reinsurance | Leverage group resources and | |
on a group basis | economies of scale |
Impact on profits from Group synergies (cumulative)
(USD mn) | |
1,500 | 1,303 |
Purpose
* Transferring some underwritten risk to other insurance companies through reinsurance for risk diversification and other purposes
1,000
500
170
0 | 2016 | 2017 | 2018 | 2019 | 2020 |
22 | 23 |
Strength 3 | ||
Part 1 | The Story of Our Purpose | |
Integrated Group Management | ||
Personnel with advanced expertise are appointed to core positions for the Group's strategy
Assigning our talented workforce optimally to enhance the Group's strategy execution and capabilities
Internal Audit
DesmondYeo
Reserving*3
DanielThomas
Synergies go beyond quantitative figures. We have diversified risk and grown our business through M&A. However, the greatest outcome from these transactions has been the acquisition of talented people, expertise and wisdom. We assign our talented workforce to the positions best suited to them globally. Best practices combining the expertise and wisdom of Group companies is deeply incorporated and utilized in the Group's strategies to enhance the execution of measures Groupwide.
For example, top management of acquired companies are appointed to the position of Group Co-Head of the entire Group's asset management and international insurance operations. Personnel with particularly advanced expertise also play an active role as a focal point of strategy being implementing cross-functionally across the Group. In this manner, our chief officer system*1 and functional global committees, which include top management from outside, Japan have
the Group works collectively on global issues as if by second nature. The Post COVID-19 Task Force, in which top management from
overseas also participates, was launched in the summer of 2020 and since then it has utilized the wisdom of our workforce outside of Japan to upgrade the Group's strategy aimed at the post-COVID-19 world (please see page 69).
During the three years of the previous Mid-Term Business Plan, besides the novel coronavirus, Tokio Marine faced the challenges of natural disasters and a low interest rate environment. A major accomplishment during this plan was to enhance the capabilities of integrated group management by overcoming these issues using the Group's collective wisdom.
Tokio Marine's integrated group management was included in a case study*2 of the Harvard Business School for its uniqueness as a strategy. We will now take steps to increase the level of integrated
TM Asia Regional Head of Internal Audit (Additional post: HD)
Previously worked as an Internal Audit Director of a Global Insurance company. 23 years of working experience in areas of IA, ERM and IT risk management.
Specialty
Philippe Vezio
TM Asia Deputy CEO & Chief U/W Officer (Transferred from TMHCC Barcelona)
Engaged in various senior positions in a Specialty business unit writing international business.
Chairperson of International P&C Reserving
Actuary Committee
Worked as an adviser on reserving to global insurance companies for over 20 years at a major audit firm.
Legal & HR
Caryn Angelson
TMNAS CHRO & CLO (Concurrent posting at TMHD)
Leveraging her background as a lawyer at a global law firm with a focus on litigation, Caryn provides legal counsel to various global corporate functions across a broad range of issues, including in the field of employment and labor.
been firmly ingrained in the Group over the past six years. In addition,
group management and further enhance our problem solving ability.
Reinsurance
Barry Cook
Cyber Insurance
Daljitt Barn
Globalize and enhance our management structure
Generate Group's collective strength | ||||||||||||
Group CEO / CCO | • Focus on Group management | Domestic | Domestic | International | Financial | |||||||
Non-life | Life | and | ||||||||||
Culture | • Initiatives to spread our Group culture | Insurance | ||||||||||
Insurance | Insurance | Other | ||||||||||
Business | ||||||||||||
Business | Business | Business | ||||||||||
Group Chief Officers | Functional Global Committees, etc. | |||||||||||
CEO of International Group at TMHCC
(TMHD Global Reinsurance Advisor)
Leads TMHCC's International businesses, and has over 30 years service with TMHCC and a reinsurance brokerage company Barry started that was acquired by TMHCC.
Cyber Centre of Excellence
Global Head of Cyber Risk
At his previous position, he formulated and deployed cyber insurance strategy at a global reinsurance company, following more than two decades working as an expert in cyber risk.
CFO Financial | Top management both in Japan and overseas | |||||||
CSSO Strategy and Synergy | ||||||||
discuss various Group management issues | ||||||||
CDO Digital | ||||||||
Tokio | CRSO Retention Strategy | ERM | Enterprise Risk Management Committee | • Create synergies and share | ||||
Co-CRSO Retention Strategy | best practices in a | |||||||
cross-organizational manner | ||||||||
Marine | CIO Investment | International | International Executive Committee | • Brings together the knowledge | ||||
Insurance | ||||||||
Co-CIO Investment | ||||||||
of the Group to solve | ||||||||
Holdings, | CHRO Human Resources | Digital | Digital Round Table | Group-wide problems | ||||
CWO Wellness | • Involve overseas personnel in | |||||||
Group management | ||||||||
.Inc | CRO Risk | Retention | Global Retention Strategy Committee | |||||
Strategy | ||||||||
CLCO Legal and Compliance | ||||||||
| | ||||||||
Integrated | ||||||||
CITO InformationTechnology | Investment | Global Investment Strategy Committee | ||||||
CISO Information Security | ||||||||
Annual | CSUO Sustainability | IT | Global InformationTechnology Committee | |||||
CDIO Diversity & Inclusion | ||||||||
2021 Report | ||||||||
Top management from overseas Group companies are appointed to | ||||||||
Optimal assignment of talented workforce | ||||||||
the position of Group Co-Head and others | ||||||||
Donald Sherman | Christopher Williams | |||||||
Senior Managing Executive Officer | Senior Managing Executive Officer | |||||||
Co-CIO | Co-Head of International Business | |||||||
(Group Co-Chief Investment Officer) | Co-CRSO | |||||||
Delphi Financial Group CEO | (Group Co-Chief Retention Strategy Officer) | |||||||
Former HCC Insurance Holdings CEO | ||||||||
Robert O'Leary | José Adalberto Ferrara | |||||||
Managing Executive Officer | Executive Officer | |||||||
Assistant Officer Responsible for North | Chief Executive Officer of Tokio Marine | |||||||
America (excluding certain subsidiaries) | Seguradora S.A. |
Chairperson of Philadelphia Consolidated
Holding Corp.
Susan Rivera
Executive Officer
Chief Executive Officer of HCC Insurance
Holdings, Inc.
24
*1: Tokio Marine has adopted a system in which its chief officers manage the strategies and policies of the entire Group for each particular field, thereby leveraging | 01 | |||
functions in a cross-organizational manner. | ||||
*2: DAVID COLLIS, AKIKO KANNO, "Tokio Marine Group (A)", "Tokio Marine Group (B)", HARVARD BUSINESS SCHOOL, SEPTEMBER 15, 2020 | ||||
*3: To estimate future payments on reported and unreported claims, with respect to insured events that have occurred | ||||
Penetration of our purpose as a foundation | of Story The | |||
Our | ||||
workforce of more than 40,000 employees worldwide is united as | and society and how they can contribute to the world as a team. | |||
Purpose | ||||
It is important to foster an integrated culture where our diverse | opportunity to think about how their work is benefiting customers | |||
one team in order to maintain the same passion during both | Through this dialogue, information is shared Groupwide and the | |||
emergencies and normal times as they go about resolving | meaning of work is further instilled in employees. | |||
challenges. Tokio Marine is working to penetrate its purpose by | At Tokio Marine, the CEO who also serves as the Group Chief | |||
hosting "Majikirakai," a group that talks about serious matters very | Culture Officer (CCO) takes the lead in efforts for penetrating our | |||
casually, globally for various levels of employees, including between | purpose. He engages our employees around the world both | |||
officers, officers and employees, and among employees. The | physically and remotely to ask "What is our business for?" to foster | |||
important aspect of these Majikirakai is that employees have the | this mindset in our culture Groupwide. |
Dialogue with employees aimed at penetration of our purpose
Majikirakai led by President Hirose via Zoom (2020)
Majikirakai led by CEO Komiya at PHLY (2019)
25
Part 1 The Story of Our Purpose Our Aspiration
Question
What are we aiming for?
Answer
Become a company that is always there for customers to support them in their times of need
Protecting customers and society in their times of need has been Tokio Marine's purpose since our founding. This has remained the same no matter the time period. We also believe that this purpose alone should never change.
Currently, our business environment is changing profoundly and rapidly during the COVID-19 pandemic, increasing expectations placed on the insurance industry as a form of social infrastructure. During such a difficult time, focusing solely on the conventional insurance business will make it challenging to continue to meet the true, constantly changing expectations of society and customers. For example, in response to the growing severity of natural disasters and rising number of cyber risks, are we able to fulfill our purpose simply by paying out insurance claims during an event? Needless to say, paying out insurance claims is the most important function of an insurance company, so our mission is first and foremost to carry this out without fail. However, preventing accidents, mitigating the burdens from these accidents if they occur, and quickly restoring and preventing recurrence are also important. Such peace of mind before and after an event and providing value beyond just the payment of insurance claims will likely become more
important in the future. Therefore, we are dramatically expanding the domains where we provide value in a wide range of fields including health care, disaster prevention and mitigation, mobility and cyber, while thoroughly utilizing digitalization. In this manner, we are attempting to evolve into a company that is always there to aid our purpose of supporting customers in their times of need.
As the times change so does social issues and the solutions required. This is a given. As we approach a turning point today, we believe it will be important to carefully examine the domains where we should play a role and embark on bold reforms.
Tokio Marine will continue to contribute to a sustainable society and simultaneously increase social value and economic value (profit growth), while creating a cycle of business activities and solutions to social issues as a leader in solutions to social issues.
By quickly implementing this cycle of solutions to social issues and business activities along with continual improvement, we will continue to provide value to all stakeholders and become a "Good Company" that is truly needed and trusted by all even a century later.
26 | 27 |
Special Feature 1 | ||
Part 1 | The Story of Our Purpose | |
WhatTokio Marine Aims For in the Future | ||
We will thoroughly utilize digitalization in an effort to expand business domains to evolve into a company that always supports its customers.
Becoming a company that always supports its customers to support them in their times of need means not only paying out
information on their living habits may enable us to provide advice so that they are less prone to sickness or prevent health conditions
Examples of expanding business domains *Please see pages 15 and 52 to 53 for mobility and pages 80 and 81 for cyber
insurance claims, but also detecting possible accidents customers may encounter, helping prevent customers from experiencing these accidents, and offering advice that will help customers regain their health should they become sick. Internally, we refer to this as providing peace of mind before and after events. We believe that we will only be able to fulfill our purpose after achieving such a presence.
Digitalization is one vital aspect that will empower us to expand business domains and evolve into a company that always supports its customers. For example, it may be possible to prevent customers from getting into a traffic accident by analyzing their driving tendencies. Obtaining customers' health data and
from becoming severe if they do. The Tokio Marine Group's aspiration can be found here.
In July 2021, the Tokio Marine Group established Tokio Marine dR Co., Ltd. (TdR) to head up our core data functions in order to evolve into a company that always supports its customers. TdR will become a focal point of the Group's sophisticated digital capabilities and spearhead efforts to strengthen the Group's data analysis and solution development capabilities. Utilizing TdR's digital capability, we will provide powerful peace of mind before and after events in the fields of disaster prevention and mitigation, health care, mobility (please see pages 15 and 52 to 53) and cyber (please see pages 80 and 81).
Disaster prevention and mitigation
In recent years, Japan as a whole has seen an increase in the number of natural disasters causing significant damages. With regard to water damages in particular, the torrential rains that hit Western Japan in 2018, Typhoon No. 19 (Hagibis) in 2019, and the torrential rains in Kyushu in 2020 resulted in large scale flooding and rivers overflowing their levees.
In the case of flooding disasters, local governments must make decisions regarding evacuations in a swift and appropriate manner. For this reason, it is important to gather information immediately after a flood in a timely manner.
Going forward, TMNF and TdR will provide this system to local governments already using an integrated geographic information system (GIS) to contribute to strong local communities that are resilient in the face of natural disasters. As a result, we will earn positive evaluations from customers by preventing accidents before they happen and reduce the loss rate.
Overview of Group-wide initiatives through TdR
Amidst this, in April 2021 TMNF and TdR (Tokio Marine Risk Consulting as of April 2021) newly developed a flood hazard prediction system using AI with the cooperation of the National Research Institute for Earth Science and Disaster Resilience. This system is able to
01
| .Inc Holdings, Marine Tokio
Launch of business aimed at new value creation
Original risk data | Reinforcing the Group's | Expand various Rs | |
while collaborating | |||
platforms | data analysis and solutions | R | across the Group |
development capabilities | Group companies, etc. | ||
d | REVEAL |
New value provided
Be able to underwrite new risk and risks that we did not typically underwrite before (provide coverage)
instantaneously predict areas of flood damage, present threat levels in real time, and visualize the number of households and age-group-specific population in areas with high threat levels.
Management Sustainability
2021 Report Annual Integrated
Detect threats and | 1 | |||
Disaster | data | clarify risks | ||
prevention and | ||||
mitigation | ||||
• Our original risk data | REDUCE | Data-driven | ||
products | ||||
platform | Reduce risk and | |||
• Sophisticated data | eliminate accidents | |||
analysis system | ||||
Health care | REFINE | 2 | ||
digital | ||||
Improve health | ||||
• Research and utilization | ||||
of cutting edge | RETAIN | Risk solutions | ||
beyond | ||||
technology and IoT | ||||
Mobility | devices | Underwrite new risk | insurance | |
and risks that we did | ||||
design | not typically | |||
underwrite before | 3 | |||
• Agile development | ||||
implementation system | RESILIENCE | |||
Cyber | Achieve resilient | Risk algorithm | ||
business | Overseas Group | |||
local communities |
Provide new technologies and solutions in the field of early detection and prevention seamlessly linked with insurance products
Make society a better place (eliminate accidents and improve health) by encouraging behavioral changes among customers and local communities based on risk visualization and future forecasting
Health care
As we enter an era of 100-year lifespans and extension of healthy life expectancy becomes an important social issue, there is growing demand mainly among middle aged and elderly customers for living a long, healthy and independent life.
Given such environmental changes, in August 2020, TMNL released Medical Kit Yell, a medical insurance with relaxed underwriting criteria expanding coverage to people with chronic disease or people with health concerns, in order to deliver peace of mind to as many customers as possible.
Medical Kit Yell analyzes big data to fundamentally change insurance underwriting criteria to expand the number of people eligible for insurance and to keep premiums low. In addition, people with chronic
disease or people with health concerns are highly interested in receiving support from a medical professional or finding ways to prevent serious complications associated with an illness. There is also growing interest in easing health concerns online owing to the COVID-19 pandemic. Medical Kit Yell offers two new online services that deliver even greater peace of mind and health to customers as they go about their daily lives.
Medical Kit Yell, which was developed extensively with digitalization, has recorded strong sales second only to Medical Kit R, our best-selling product ever*1. TMNL will continue to deliver greater peace of mind to customers while utilizing the digital capability of TdR.
companies | ||||||||
Etc. | ||||||||
Etc. | Consolidate the | Strategic JVs | ||||||
Group's sophisticated | with AlgoNaut | |||||||
digital capability | and PKSHA | |||||||
Become a company that always supports its customers to support them in their times of need
Examples of new online services
We offer online health consultations*2, second opinion appointments, a first-of-its-kind in the life insurance industry where customers can designate a hospital, and exam booking services where customers can designate a physician or hospital.
To support customers' health management and efforts to prevent serious complications, we will offer a health advice app that supports people's everyday life, including eating, exercise and sleeping habits, using an AI-powered virtual dietitian.
*1: Limited to protection-type products
*2: Implemented within the scope of remote health consultations permitted under the "Guidelines on Appropriate Implementation of Online Physician Visits."
28 | 29 |
Part 1 The Story of Our Purpose Our Approach to Value Creation
The Group we aim to be
A global insurance group that delivers sustainable growth by providing safety and
security to customers worldwide
-Our timeless endeavor to be a Good Company-
For Customers | For Society | For Future | For Employees | For Shareholders / | ||||||||||||||
Generations | Investors | |||||||||||||||||
Contributing to the | Contributing to creating | Passing on a | Contributing to | Sustainable growth of | ||||||||||||||
realization of healthy | a sustainable society | sustainable | employees' high | shareholder returns. | ||||||||||||||
and enriched lives of | where can live in safety | environment to the | performance by | Working to gain the | ||||||||||||||
our customers by | and security, and take | future generations | providing opportunities | trust of shareholders / | ||||||||||||||
delivering safety and | on any challenges | to work brightly and | investors and improve | |||||||||||||||
security and by | vibrantly and through | corporate value | ||||||||||||||||
supporting them in | engagement | through appropriate | ||||||||||||||||
challenges that lead to | disclosure and | |||||||||||||||||
the future | constructive dialogue | |||||||||||||||||
Medium- to long-term targets | Adjusted Net Income | Adjusted ROE | Payout ratio | |||
(milestones) to achieve during the | Over ¥ 500 bn | About 12 % | Increase to levels on par with global peers | |||
new Mid-Term Business Plan | (approx. 50%) | |||||
100 years from now
Upward value creation spiral
Simultaneously increase social value and economic value
Create a cycle of business
activities and solutions to social issues to further enhance problem solving capabilities and refine strengths and strategies
The society we aim to create
A sustainable society in which everyone can live in safety and security,
and take on any challenge
01 | 02 | 03 | 04 | 05 | 06 | 07 | ||||||||||||
Resilient world | World with | World offering | World of | A safe, secure | World that | World with a | ||||||||||||
at peace with | extended healthy | a sense of | increased | and comfortable | fosters children | sustainable | ||||||||||||
natural disaster | life expectancy | purpose and | national strength | world based on | with the | environment | ||||||||||||
risks | and where | motivation to all | supported by | urban strategies | strength to live | that is passed | ||||||||||||
everyone can live | industrial and | led by Tokio | down to future | |||||||||||||||
independently | regional | Marine Group | generations | |||||||||||||||
and affluently with | innovation | |||||||||||||||||
peace of mind | ||||||||||||||||||
Targets for Fiscal 2030 | • Reduce our own greenhouse gas emissions by 60% (compared to fiscal 2015) | |||||||||||||||||
• Increase the ratio of renewable energy in electricity consumption at main | ||||||||||||||||||
business locations to 100%, etc. | ||||||||||||||||||
01 | 07 | Social issues forming the basis | * Based on emissions from our business activities | |||||||||||||||
for identification of materiality | (Scopes 1+2+3 (Categories 1, 3, 5 & 6)) |
Pages 72-73
01
2021 Report Annual Integrated | .Inc Holdings, Marine Tokio
Eliminate | Quickly restore |
uncertainty by | and prevent |
underwriting risk | recurrence |
Provide value through resolution of social issues
-Realize our purpose unchanged
from time of founding-
We will achieve our purpose by not only supporting customers and local communities in their times of need through the payment of insurance claims, but also expanding domains where we provide value before and after events (always there for customers).
Identify all risks | Provide safety and | ||
facing customers and | security, including | Cover damages | |
Detect risk and | propose the right | before and after | |
products and | events, using | and encourage | |
avoid/control | |||
damages | services | digitalization | efforts to tackle |
challenges |
Foundations Underpinning Value Creation
Strengths Cultivated byTokio Marine Group
The Ability to Deliver Security and | Portfolio Management Ability | Integrated Group Management |
Expand Safety | ||
Pages 14-17 | Pages 18-21 | Pages 22-25 |
Present | Pages 48-51 |
Unlocking growth through resolutions to
social issues 2+1 growth strategy in the new Mid-Term Business Plan
New Markets | Enhance | |
profitability of | ||
New Approach | insurance business | |
Business investment
for the next growth stage
Pages 16-17 | Past |
History of resolving social issues constantly
changing with the times
2002 Release of Super Insurance, Japan's first integrated life and non-life insurance product
2001 Launch of microinsurance for farmers in India
1999 Start of provision of cyber-related coverage from early on at U.K.-basedTMK
1959 Release of Japan's first liability insurance
1914 Launch of Japan's first auto insurance
1879 Founded as a marine insurance company for supporting trade
02 | 07 | |||||||||||||||||||||||||||||||
Global climate change and | ||||||||||||||||||||||||||||||||
increase in natural | ||||||||||||||||||||||||||||||||
disasters | ||||||||||||||||||||||||||||||||
Rising burden of nursing | ||||||||||||||||||||||||||||||||
and medical care due to | Protection of natural | |||||||||||||||||||||||||||||||
aging population and | resources and | |||||||||||||||||||||||||||||||
progress in medical | biodiversity | |||||||||||||||||||||||||||||||
technology | ||||||||||||||||||||||||||||||||
Persistent core | ||||||||||||||||||||||||||||||||
social issues | ||||||||||||||||||||||||||||||||
03 | Equal | |||||||||||||||||||||||||||||||
opportunities 06 | ||||||||||||||||||||||||||||||||
Social disparity | through education | |||||||||||||||||||||||||||||||
and inclusion | ||||||||||||||||||||||||||||||||
Industrial foundations for | Operating environment |
supporting economic | changes stemming |
growth and | from technological |
innovation | innovation |
04 | 05 |
Changing customers and social needs and increasing diversity and complexity of social issues
01
Purpose Our of Story The
Robust and transparent corporate governance measures Pages 92-113
Global warming | Demographic changes | COVID-19 pandemic | Rapid progress of |
DX, etc. | |||
30 | 31 |
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Tokio Marine Holdings Inc. published this content on 16 December 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 15 December 2021 15:48:09 UTC.