Tokio Marine Hldgs Ord

Thank you very much for joining us today. I am Ishiguro from Global Communications Department. We will now begin the conference call on the overview of financial results for the first quarter of FY 2023 of Tokyo Marine Holdings. First, our group CFO, Mr. Okada, will give a 10-minute presentation of our financial results using the presentation material posted on our website today. After that, We will take questions from all of you. Thank you very much. In addition to Mr. Okada, Managing Director of Tokyo Marina Nichido TMNF, Mr. Sakiyama is also attending the call today and will respond to your questions as appropriate, including a series of news releases. Before we begin the call, let me remind you of the following. In this presentation, we may make forward-looking statements based on our current expectations all of which are subject to risks and uncertainties. Please be aware that actual results may differ materially from those discussed in the forecast. A recording of this meeting is also available. We will now begin. Mr. Okada, please. Thank you very much for taking time out of your busy schedule to join us today. I am Okada, Group CFO. Today, we announced our first quarter financial results So let me explain the contents and other related matters. Please turn to page three. There are three points I want to communicate today. First is steady performance towards FY2023 projections of 670 billion yen. In the first quarter, there were some negative impacts from NatCats in Japan and overseas and North American capital losses but all of them are within the scope of our initial projections. In addition, yen depreciation led to an increase in the reserve for outstanding claims in foreign currency and a loss on validation of foreign exchange derivatives in Japan, but those will be offset by the increase in full-year profits for international insurance. In addition, taking into account the domestic buyer insurance profitability improvement, expansion of specialty insurance, stronger than expected international insurance underwriting, and increase in investment income, I believe it is fair to say that performance is steady towards FY2023 projections of 670 billion yen. Second point is concerning Japanese media coverage of TMNF, Tokyo Marine, and Michido, which have caused great inconvenience and concern to our customers in the capital market. First, regarding the price fixing of premium rates, as announced on June 20th, we take this matter very seriously and have established a special committee headed by several external lawyers to investigate potential additional infringements. As released on Friday last week, we received An FSA directive requiring a report which is exactly on our ongoing investigation on similar incidents. We will sincerely deal with this order as well. We are analyzing the root cause, formulating and implementing necessary measures both from governance and basic employee behavioral perspective to prevent further recurrence. Next, regarding fraudulent insurance claims concerning Big Motor, as announced on August 1st, we prioritize the recovery of customers' damages and have begun contacting customers who were or may have been affected. We will not wait for the conclusion of Big Motor's total investigation and work to proceed with various measures such as supporting safe driving initiatives sincerely and proactively. Thirdly, despite such incidents, it is our duty to provide insurance coverage at an appropriate rate and conditions based on customer needs. Therefore, I would like to add that the initiatives to further improve domestic fire insurance profitability shall continue without compromise. In this context, the domestic NatCat since July is slightly exceeding our original plan for the year. But apart from that, the performance is strong domestically and internationally. On this basis, and taking into consideration the fact that this is before the full-scale season of NatCats and other factors, we are not revising our full-year adjusted net income forecast. of 670 billion yen at this time. We do not intend to revise the dividend share buybacks and other shareholder return policy that we announced at the beginning of the year at this time. Let me now explain particularly the first point in more detail. Please turn to page four. First is top line. In the first quarter, net premiums written increased by 9.9% and life insurance premiums increased by 0.2%. Excluding FX, net premiums written was up 6.7% thanks to strong domestic and international sales. On the other hand, life insurance premiums declined by 4.1%, which was due to the expected increase in the cancellation of domestic corporate insurance. So the performance is strong overall. Next, please turn to page five for the first quarter assessment of the main components of adjusted net income. The group's adjusted net profit was 164.5 billion yen, and the progress rate compared to our four-year projection was 25%. That 25% progress rate is lower than our five-year average, 36%. We have explained the factors behind this gap at the beginning, and we think we are enjoying steadying performance. Let's take a look at each business. Starting with our domestic operations at Tokyo Marine and Ichiro Fire, profit drivers are yen depreciation and natural catastrophes that we have explained. About yen depreciation, it sure pushes down the profits of the company, but on a group basis, it is offset with a factor on page 27, an increase in overseas subsidiaries' profits in yen terms. Rather, one yen depreciation against the dollar will benefit the group's profit by 400 million yen. When we look at our underlying performance, excluding these factors, the progress rate is 40%, on pace with our five-year average. We think that the performance of our profit drivers, domestic fire insurance profitability improvement, and expansion of specialty business is steady. About foreign insurance business, our first quarter results as our key entities were better than local plans by 2 billion yen. To give you some color, our underwriting profit was favorable, mainly as Delphi Group and the Brazilian entity TMSR, and also formed local plan by 7 billion yen. About investment business, We stated back in May that we anticipated more than 20 billion yen of full-year capital loss. To this capital loss of the first quarter was 12.4 billion yen and was somewhat larger. Thanks to the higher than planned investment income, our total investment profit is aligned with our plan at the beginning of the year. This leaves us with negative 5 billion yen gap. This is 5 billion yen. This 5 billion yen is the loss in Europe from fluctuations of currency rates between dollar and pound. About the first half slash report numbers of our major entities, they outperformed local plans by approximately 13 billion yen, further accelerating the solid trend that they're enjoying from their first quarter. The basic trend remains the same as Q1, but we plan to book additional loss reserves in overseas runoff reinsurance posted by TMNS of 11 billion yen. This is the reserve provision for ADC, or Adverse Development Cover, that we signed with Bayer at the time of divesting our formal reinsurance subsidiary, TMR, in March 2019. Social inflation is a factor behind this. We believe that our current reserve level is appropriate But even in the case that we need to add further reserve in the future, our ADC has an upper limit. So the maximum loss amount to be added in the future is kept at 100 million yen or so. The loss is a one-time factor, and our entire overseas business did more than just offset this negative factor. As you see on page one, half-year flash report at the end of June indicates that our overall overseas business was on pace, even after reflecting this particular loss. To summarize, we need to continue to monitor the progress of the coming natural catastrophe and investment, but our overall understanding of our performance is that it is steady. We would like to satisfy capital market participants by realizing a top-level EPS growth and ROE improvement to one of the world's best. To do this, we will capitalize on our strength of global risk diversification and global and aligned group management and implement corporate strategies steadily. It goes without saying that our customers' trust is the source of whole insurance business. We take a series of cases very seriously. and our holding company will provide thorough supervision and guidance to ensure the implementation of various measures at Tokyo Marine and Nichiro Fire. We will appreciate your continued support. Thank you for listening. Thank you, Mr. Okada. We would now like to take questions. If you have a question, Please press number one after a star. When your turn comes, I will call your name. Please state your name and affiliation before starting your question. Please press number two after a star when you wish to take back your question. For questions, due to time constraints, we will take maximum two questions at a time per person today. We will now start taking your questions. Thank you. Today's first question will be from Mr. Muraki of SMBC Nuclear Security. Hello, I am Muraki of SMBC Nuclear Security. I have two points. The first point is on page three. It's regarding price fixing and big motor issues. There is a directive requiring you to submit an official report, so I believe it's difficult to give us details. I would like to ask a question in terms of group governance for big motors. in around March last year, and for Tokyo Group, around December last year, TMNF, your subsidiary, learned of the fact or the possibility. And after that, at the board of directors meeting, executive meetings, audit meetings, at a holding company, how has the holding company dealt with these matters? And what kind of guidance, supervision has been given? We know that your company has some external board of directors members, but the long years of the sales operation practices at TMNF, I am also interested in the current state of such sales and marketing practices. And my second question is regarding investment business. On page 20, Delphi's capital loss 11 billion yen is recorded. And I would like to understand the breakdown of this 11 billion yen, if you can give us the breakdown. And also, compared to the initial plan in the U.S., short-term interest rates seem to stay at a very high level. And also, there is the reserve of a particular loan that groups income gain and capital loss as well as hedge costs. There should be some changes of the market impact on these points, and I would like to understand what kind of impacts are given from the recent market changes. Thank you very much for your question. For your first question, our CFO, Okada-san, is going to provide an answer. Hello, I am Okada. Thank you for your question. As I said before, about the series of cases at Tocho Marine and Nichiro Fire, We have caused great inconveniences and concerns to our customers and capital market participants, and we take these whole matters very seriously. And about our understanding and action as a holding company, I would like to explain, starting with price fixing. We received a report about this matter in January this year to Tokyo Marine Initiative of Fire, or from Tokyo Marine Initiative of Fire, and as of In January, we gave an instruction to do early investigation of the facts of taking sincere actions to customers and formulation of recurrence prevention measures. And after that, timely information sharing has been done and we have been providing supervision and we did investigation using external lawyers. And based on this result, of the investigation, there was a reporting made at the board of directors meeting of the holding company in April. And even after that, on a monthly basis, we have been conducting discussions, including information sharing and actions. And after the big motor scandal, after we learned the fact in March, 2022, um, based on the voluntary investigation at Tokyo, Mariana to the fire and investigation result of big motors, a timely information sharing has been done to the management team of the holdings company and to the board of directors meeting. We have shared the stance of taking strict actions to big motors, and also information was shared regarding the action taken. That is it from my side. Thank you very much. And about the second question, Nambu-san is going to take on this question. Hello, I am Nambu, and I am from financial planning department. About Delphi, 11 billion yen breakdown on a dollar basis. Basically, impairment loss was $50 million. And divestment loss was $20 million. And CECL provision is $10 million. This is the breakdown. And about income capital hedge cost fluctuations or changes, there is the increase of the interest rates in the US. For this, we had a loss this time we have the divestment loss from bonds following the bankruptcies in Silicon Valley. And this is to avoid risk. And also, we recorded impairment loss. As we stated before, compared to the capital loss plan of 20 billion yen, we are so far behind the plan. And so far, as to the actual results from January to June, There are positive and negative factors. And overall, we are behind our plan. And to give you more details for the actual results up until June as to the divestment loss or loss on sales, the size of the loss has become smaller than before. And also, increment loss did not increase significantly. However, given the current market environment, CECL, we have to add reserves. And also, in line with increasing interest rates, The interest rate swap has led to a decrease in the valuation amount. So overall, we are behind our plan. However, for the income side, from the increase in interest rate, income side has been going up and there is some contribution on the income side. So we are behind in the valuation. the other, but that we are positive in the income side. So overall, we are on plan when the two factors are combined of income side and capital side. And going forward, we will need to monitor the impairment loss level that we may need to book. And after hedging costs or hedged costs, overall, we have reflected some of the hedged costs already on an annual basis. the three players 22 billion yen and minus 60 billion compared to the year before and also for the first quarter or sorry let me start again at TMNF 14 billion yen or so or 22 billion yen or so for the three major players combined and minus 60 billion or at the TMNF and 90 billion yen for the three players combined And as we have been explaining from before, there's the increase in the income side from the fluctuations in the interest rate. There is a support from that. So overall, when all those factors are combined, we are so far basically on plan. Thank you very much. And thank you very much for giving us the details. Let me go back to the first question. I would like to confirm. This time, you said that you did not you wrote that you do not plan to devise your shareholder returns policy, but about the 100 billion yen of share buyback budget, does this impact your budget for this share buyback? Hello, I am Okada. About this case, so far, we do not believe that this case impacts our performance significantly. Therefore, we are going to take a look at the ESR at the end of September to decide on the size of the buyback, et cetera, the shareholders' return. But so far, we believe that there is not going to be an impact from this. Thank you very much for your answers. Thank you. Next question, Mitsubishi SBA, Morgan Stanley, Mr. Fujino, please. First of all, 11 billion reserve when you sold the reinsurance company. Was this originally incorporated in the company forecast? And the other is auto, domestic, TMNS. There was no major loss, right? major claims and loss ratio deteriorated. Is this sign of this deterioration stopping at the current pace? The auto loss ratio will exceed your projection or is there anything you could share with us in terms of the projection? Thank you very much. Question number one, let me answer the first question, this ADR reserve loss development. Oh, sorry, ADC, adverse development cover, this reserve development. This was not included in the initial protection because in June, this reserve agent notified us of this reserve increase. And so it is not included in the May protection. So that's my first question answer. Second question, Yahata from the personal will explain. So personal lines underwriting development, Yahata is my name. I'm sorry your voice broke up, but combined ratio, the projection of the FY23, is your question, is there a change in your projection? Yes, it's up by 3.5 percentage points. So in the first quarter, is the unit price coming up? In the first quarter you talked about, is it in line with your plan or is it settling? Okay, so let me split into frequency and unit price. In the first quarter, the revenge drive impact, the frequency, exceeded, slightly exceeded our forecast. On a full year basis, can we have a similar projection? In the same term last year, revenge drive impact started. Compared to that time, this impact is still remaining. But towards the end of the year, this will settle gradually. And like we said in the last financial results briefing, the frequency will go down by two to three percent. The unit price is in line with our projection. Originally, of course we forecasted the inflation impact and last briefing we expected three percentage point increase, which is in line in DOJ forecast. Fiscal 23, against fiscal 22, inflation will weaken in their FY23 forecast. So, no big change from our initial forecast. Thank you. I hope this answers your question. Thank you very much. Thank you. Now, I would like to take questions from Watanabe-san and Daiwa Securities. Hello, I have two questions. My first question is regarding auto insurance pricing strategies. In January 2024, you said that you were going to increase price on the third stage for fire lines. There was a statement about an appropriate condition, et cetera, but what is the policy of your auto line pricing? And my second question is regarding big motors. When investigation is done about the unnecessary grade down for customers, it's going to come with some additional cost. But how big is this cost going to be? Is it going to be meaningless? And also, is this something of a nature that you can claim for damage? Thank you very much. I believe I have the right person to answer this question. Hello. Once again, I am from personal line underwriting department. For price division, we already stated that we plan to devise price and including what I mentioned earlier, increased accident frequency and the increase in the claims price due to inflation. In this way, regardless of whether or not there was any big motor incident, we are in an environment where we need to raise our price. But for the big motor issue, we only about announcements to individual customers about the necessity to revise the grade. And there are also announcements we need to make. But when we think of the insurance provided through the big motor, it's 30,000 vehicles are the target for the three years and one year. 10,000 vehicles in the fleet are the targets. that are covered by Big Motor, which is not big, but it is necessary that we understand the fact of what happened. And based on the estimates of the size of this impact, we are going to set our policy for the price provision to come. And after the second point of the impact from the grade down of customers, for the past three years, the target fleet policies were $30,000. for the past three years. But if all of these 30,000 policies were fraudulent, even if those were fraudulent, there are cases where we need to return some claims and also there are some cases where we do not need to do that. And so we need to judge for each policy. And we believe that not all of these 30,000 requires some returns and a division of the customer's grade and therefore we believe that the additional cost comes from this incident is not meaningful related to the revision of the grade. And after the possibility of whether or not we can build a big motor for the cost that is going to be incurred, we are not sure and we would like to refrain from giving you the answer. I would like to ask one more question. In the worst case scenario, If the bankruptcy of Big Motors becomes larger, do you think that the impact on your company is going to be meaningless? Based on the signed information I have just given, I would like to talk based on the if premise that the 40,000 to 50,000 yen is the building amount to Big Motors. So 10,000 policies per year or 30,000 for three years. And even if all of these policies were fraudulent, it's limited. And even if there is a default, even in the case of defaults, the impact is going to be not meaningful. Thank you very much for the answer. Thank you. Thank you. Jackie Morgan, Securities Supplement, please. JP Morgan, Security, Sato speaking. Thank you. I have two questions. First, the question is not just focused on Big Motor, but listening to various mass media coverage, depending on the number referred to Big Motor, there may have been some maneuvering on the Kali So the underwriting volume of Kelly could have been an incentive. Is there such a structure? If so, no loss, no profit is the basis of the system. But why does such incentive exist? Various media say what they want. So if you could share with us your formal view as a company. Second question is international, especially North America, top line, page 15. You explain the status. Excluding ethics, CILI, Delphi, CCHPC, minus 2.5 and 0.2%. 0.6, 9.2, 6.5 in the first quarter against the initial forecast. In Chile, it's on track and the others are exceeding. So can we just see that it's exceeding? And if so, which line is stronger than your initial forecast? Could you elaborate? Thank you. Thank you. First question will be answered by Yahata-san. Second is from international side. Yes, from the automotive group. So Kelly, as you said, no loss, no profit is the baseline. So by promoting that, it does not cause any impact or profit. So you are right. But why is Kelly promoted? Kelly and the automotive insurance is a two-tiered structure. So it's the additional automotive insurance is on top of Kelly. So when there's Kelly policy, we can get the touchpoint with customers on automotive insurance. And so this leads to the top line increase in automotive insurance and automotive insurance in Kelly. is considered as one in our company. So of course, so we have the insurance top line target on the sales side. So in that sense, this automotive insurance sales volume is a barometer of our sales activity. So we are focusing on promoting the sales. Thank you, I hope this answers your question. And second question will be answered by Honjo-san. So I am Honjo from International Business Development Department. Top line, especially in North America. I think that was your question. The short answer is yes, it is exceeding our plan. We're enjoying an upside, as you rightly said. Now the background to that is Roughly speaking, property business line is hardening. And this hardening is continuing. In the initial plan, we said it was slowing down with a peak in 2020, but NatCat is increasing and the economy, social inflation, lost cost increasing. So depending on some business lines, there's a resurge in the first quarter again this year. So centering on property lines, the rate up is strong. And if I could elaborate, for Philadelphia, minus 0.2 to plus 0.6. So it is a slight increase. rate up is going well. But the reinsurance repricing in January was a historically high level. So that is the negative. From second quarter, we think this will again become strong. And by line, Delphi, HCC, As you can see on page 16, Delphi is life insurance, the group, and the short-term disability. And HCC specialty lines, cyber and medical spot loss, are exceeding our plan. Thank you. I hope this answers your question. So my clarification. So if that's the case, like some say, the additional premium portion, the rider portion. You are not recognizing that benefit portion? You're right. Thank you very much. Thank you. Now the next question is for Ms. Nagasaka-san from Morgan Stanley NUSGA Securities. Hello, I am Nagasaka from Morgan Stanley NUSGA Securities. I have two questions. First question is regarding domestic specialty insurance data. There's a steady expansion of this. And toward the plus 100 billion yen expansion, I understand that this business is expanding But the focal areas are cyber, et cetera. And if you could give us the color for each major specialty line, that would be appreciated. And the second question is regarding the pace of your divestment of first year holdings. There's information on page 13. And it seems that you are so far on plan. But in the first quarter last fiscal year, your pace was very fast, I believe. I know that the current marketing environment is very different, but if you could explain to us how you think of the current progress and also if you could explain the potential of how far of the divestment you will continue in the future, that would be appreciated. Thank you for the questions. For your first question about specialty insurance business, I would like to answer this question. About specialty insurance, We have the full focus areas of social issues and we plan to increase by $100 billion. And in the first quarter, we did steady business in the first quarter. And to give you more colors in terms of mine, SME insurance is more than half of the increase in top line this time. Just with the four areas of the social issues, about 60 billion yen or more than 60 billion contribution is to come from these four, and these four areas are so far outperforming the plan. And about your second question on the pace of sales of our policy holding, thank you for your question. I am Okada, and about the divestment this year. Compared to last year, the size is smaller, but compared to our annual fourth year, our plan is 150 billion in divestment, and we are so far on pace with this plan. For the last fiscal year, it was right after the start of the Boston-Ukraine war, and uncertainty became much higher last year. time this year, so that has led to the fast pace of divestment, but the current market environment is different. So we are, so far, making decisions on when is the right time to divest our social hoarding. And so far, I understand that our current progress is on plan. Thank you very much for your answers. Thank you very much. Next, Nomura Securities. Nomura Security, Sasaki is my name. Can you hear me? Yes? I have two questions. I'm not so well-versed with non-life insurance business, so this is a basic question. The agency and the repair factory, do you constantly monitor? And based on that, you rank them? and decide on the agency commission? So in this management, an incident like Big Motor, why did you not notice this situation? It's not evident from numbers or it was something that you could not notice? So if you could elaborate, I'd appreciate it. That's my first question. The second question is also a simple question. You said earlier that if there is a cost incurred, you may not be able to charge that to Big Motor. Why not the damage compensation? I think this is something that you need to file a lawsuit against them, but why can't you do that? Thank you. Two questions will be answered from Yahata-san from the personal lines department and also additionally from Sakiyama-san. Thank you. This is Yahata from personal. So the agency commission loss ratio track record is watched to decide on the agency commission rate, but why we did not ascertain this situation. in this agency point, this loss ratio track record is included. In addition, from the result countermeasure point of view, the profit and loss of each agency is watched, and if the profitability is bad, we take individual countermeasures. For Big Motor, of course we looked into it. In the overall profitability, Big Motor was not particularly bad, poor in profitability. And the profitability by agency has some variability depending on size. And the types and the method of repair is also a variable factor. So it's difficult to identify from macroeconomic factors. And your second question, can we charge them in any way? What I said earlier was we have not fully studied yet. So it's not that we concluded we cannot charge them. The actual cost incurred, when they become clear, we will think as a company whether to charge them or not. So we will flesh out the details going forward. Thank you. Asakiyama from TMNF. So as Yahada just said, let me add some more. First question. The point of the agency commission rate, so there are virus items, but this is the solicitation. So there is no item that says repair quality. On the other hand, there are various accidents. Why couldn't we identify this? Yes, we are responsible for not being able to identify this. But on the other hand, as publicized, according to the external committee report, they were shrewd and cunning and ill-willed. and sophisticated and so in our normal process we do not anticipate damaging the car intentionally and therefore there were things that we could not identify from our normal process. And second question, of course the customer protection and the elucidation of the overall Root cause is the priority and the cause that will be incurred out of that, whether it's criminal or civil proceedings, we have not ruled out any possibility. Thank you very much. Thank you. So, in case of criminal proceedings, you have to have the burden of proof. So you may well come up with the evidence that they were at fault. Is that also a possibility? Yes, we will do a thorough investigation. But just one more point, if I may. So when we pay out, we receive all the information and We cannot understand whether there was a faulty repair from the information. And that's why the third party investigation committee, they only did the sampling. So we, since last year, said that they need to have a thorough investigation committee. In the recent dialogue, they said that they will have something like the All Case Investigation Committee. They are moving in that direction. Thank you. Thank you very much. Thank you. The next question is from Niwa San of Citi Group Securities. Hello, I am Niwa from Citi. Can you hear my voice okay? Yes, we hear you okay. Thank you. My question is regarding price fixing of corporate insurance. I just have one question. On page three, you mentioned that as prevention recurrence measures, you have crafted them and have been implementing them. And I would like to understand more about this. How is the current business, first of all, underwriting insurance as co-insurance is Is it still persisting in the area of corporate insurance? And for the current fiscal year, do you have a back number which you can say that you can optimize during this current year? And there are many media coverage that say that the premium level is high, too high. But how is the optimal level of premium decided generally? And also, additionally, I would like to understand the following point. I would like to understand the maximum amount and the basis for the estimate if this number, the maximum loss needs to change in the future. Thank you for your question. Hoshino-san is going to take this question, and if any, Sakiyama-san is going to add information. Thank you. I am Hoshino from Tokyo Marine and Nichiro Fire. And about your first question on corporate insurance, Just one company to undertake the entire risk is very difficult in many cases. Therefore, for the purpose of risk diversification, co-insurance is often used. And for the demand of deposit holders, their demand is to diversify the underwriters to have a more stable capacity sourcing. So the co-insurance is based on the demand of the both sides. And as to the system or the scheme of co-insurance, each insurance company to independently decide on conditions. And based on the results of the proposed amount, the share of the underwriting is decided and proposed to each insurance company. And the insurance becomes valid when those insurance companies respond to this. And this is the system or the scheme of coinsurance. And to your second question on the optimal level of premium, the risks around corporate is different from the risks for individuals. There is a major gap to the reality of risks depending on companies and also depending on the content of the business and the changes in marketing environment, the risk size and content changes. Different from individual retail insurance based on the customer's accident frequency and safety measures and based on other factors. So we look at individual risk factors and we decide on the actual premium based on these various factors. Meaning that we decide on the optimum premium based on each case, based on various factors and this policy will not change in the future. And the business impact wise, we do not believe that this is going to be a meaningful business impact. I am Sakiyama from TMNF. I would like to add information about the first and the third point. About the first point, we are implementing recurrence prevention measure as stated on this page. But as Hoshino-san said earlier, our industry, has a system of coinsurance, and that's a very common system. And we also have the independent agency system. And in this way, we have some interface or the touch points with our competitors. And based on this, of course, we need to understand the rules of anti-monopoly law, but we also need to understand in what cases there are higher risks than others. And for each case, And we think it is necessary that we educate our employees so our employees are more aware of such risks. And as to whether we have been thorough to such risk attitude, we believe that we were not sufficient and we regret for this. And as our company, we need to think about our purpose, why our company is doing business. So we would like to start from reviewing our mindset and also we would like to once again understand our rules, and also we need to understand our risks for each case and each scenario. And also about our touch points with our competitors, basically we would like to prevent and ban touch points to eliminate any potential realization of risks. And that's what we are doing now. And to the third question, I would like to add some info. As said before, we are using external lawyers with independency and objectivity. And those external lawyers are doing thorough investigation at the committee. And after whether the case infringes on anti-monopoly law and after whether there is going to be a penalty, Decisions will be made from the Fair Trade Commission. So our company is not in a position to make a comment about this. But as we have been saying, we believe that we do not need immediately to revise our estimate, corporate estimate. Thank you very much for giving me a very great detail. Thank you. Next, Mizuho Securities, Sakamaki-san, please. Sakamaki speaking from Mizuho Securities. I have two questions. First, a big motor incident, and you're thinking around that. So in your domestic business, you're trying to improve the efficiency of domestic business, I think. So this kind of claim could not be identified. It's difficult to identify, then, your digitalization. This may drag or impact your digitalization efforts negatively or not. Second question is the pricing of the fire insurance. In Japan, there are four large players. And the risk preference and appetite is not that different. And so I think this will converge You talked about the price setting, the rate setting. So I think it will naturally converge to a similar level among the four large players. So what do you think? That's my second question. Thank you. Thank you. So first question, Yahata-san, and Hoshino-san, second question. So I'm Yahata from personal lines department. this big motor incident, will it negatively impact our digitalization efforts? No. My answer is no. The assessment will be done and we also need to improve the efficiency in the assessment. Yes, we are researching the digitalization. the image diagnosis and analyzing the past estimate and see what the repair level is. This research is ongoing, so not using this incident as a trigger, but we will continue our research going forward. Thank you. Thank you. Next is about fire insurance. As you rightly said, it's basically the price of the four companies may become similar. I think that is a large trend, but there will be differences in the end to price. We not only need the past incident data, but also the future forecast. So it will not just come to one. same level, the company's strategy will also come into play. And so there will be differences. In addition, company's portfolio, how the underwriting will be pursued, how the result countermeasures will be taken. Depending on that, the company portfolio will not be homogeneous. There will be differences. By taking these countermeasures, we are trying to improve the quality of portfolio. So we think this will result in differences among the large players. Thank you. I hope this answered your question. Thank you. Thank you. We only have five more minutes until the planned end time for today, but we have questions from Okada-san, Sujino-san, and one more. And we might overrun the... plans and time. We apologize for that. The next question is from Okada-san from UBS. I am Okada from UBS Security. About overseas business, I have two questions. The first question is on page 17. For the overperformance of your foreign major entities from the first to second quarter, from 7 to 20 billion yen, there is the underwriting increase. And I would like to understand the reason for this. Earlier, they all mentioned that there's a contribution of North American rate up. So is it right that this one-time impact is basically the contribution? And also, is it right to understand that we can expect a similar performance in the future? And second question, on page 21, TMHPC Q1 results, Excluding currency factors, negative 6.6% in business unit profit, but 4% increase in four-year plans. So I believe that they are behind plans. And also, about HTC, I would like to understand how you see the current market for PMHTC, especially compared to other businesses. Thank you very much for these questions. Honjo San will answer these questions. Hello, I am Honjo from International Business Development Department. To your first question, in the first quarter, 7 billion yen, and the flash report's 20 billion yen. Your question is regarding what pushed up this number to this 20 billion yen. And basically, in the first quarter, Delphi and Brazilian business operations have been favorable as we stated for the first quarter, and they are expected to contribute to us further in the future. For the first quarter, in the underwriting from Killen, the European business, we can expect further contribution, the bigger-than-larger contribution. This is to your first question. And to your second question about how we see TMACC's performance, your understanding on TMHCC's performance is correct, that on the local currency basis, our conclusion is that they are somewhat lower than planned. And as to investment income, it was on plan, but for the underwriting business, they were slightly behind. In addition, there was the impact from the a currency fluctuation between some currencies and this gave a negative impact. For the European business, dollar was depreciated and pound was higher and this impacted the loss in Europe from some fluctuation of currency rates. And how this is going to turn out in the future can change based on the market environment. That's how we see it. And one more point about my second point about the, if you could give us a reason why their underwriting business is behind, that would be appreciated. You said that the top line is higher than a plan, but why is it that the underwriting lines are behind? I believe you're talking about TMHCC. About TMHCC insurance underwriting, that I said that they were behind in underwriting, and this is because of the relatively large impact from the fluctuations of currency rates and also larger claims. These resulted in a slightly behind progress. Thank you for the additional answer. I am Ishiguro, and I would like to add some information. In the first half, TMATC is catching up which is different from the first quarter actual performance. Next, SBI Securities Otsuka-san, please. SBI Securities Otsuka speaking. Can you hear me? Yes. I have two questions. Let me go one by one. First question, on August 4, TMNF issued a release. So I have a clarification on the content. from FSA, there was an order to submit a report. The content in all branches, this is the order for a report of the undercover investigation. So does this mean all case investigation is required and you are doing that? So that's my first question. Thank you. Sakiyama will explain. Sakiyama speaking. Thank you for the question. So literally, in all branches, it has to investigate all branches to see if there are any similar incidents. That is the order given. So in other words, so looking into all sales departments, It's not that we will look into each and every policy. We're asked to look into all branches to see if there are any similar incidents and report back. So on June 20th, PM&F had a release. On March 24th, you reported to FSA in June 20th. This was Tokyo, just one company. So you just made a report on that. And the survey, the investigation on all branch will be from this August 4th. So the, I cannot go into all the details of the order for the report, but as of June, it was not for all branch, all branches. Thank you very much. Understand. Thank you. Second question is a simple question. Page five says, so Anxin Life. First quarter was off to a slow start, and I understand that. My question is, if the week end continues, then there will be a bigger burden on the derivatives, and this will lead to the Are you falling short of the full year forecast? What is your visibility right now? Yes, this is Accounting Department from Onsheen Life. If the weekend continues? Yes, this will be a factor that will lead to an underperformance against the plan. Thank you very much. Accounting cannot be applied in some parts. And so if we look at the P&L, if the weekend continues, then yes, the hedge increase portion will emerge. But underlying asset, if we look at the economic value base, then yes. The next question is from . Hello. This time, the price 16. is an issue for some cases and you gave additional relief that you are doing investigation for some industries and I heard that some additional cases were uncovered. And about these cases, are these cases in the areas that have been profitable in the first place and for fire, Even excluding natural catastrophe, I know that the fire is a very difficult line to be profitable with that three major players included. But excluding natural catastrophe, fire line is generally improving at your company. And for corporate insurance, is corporate insurance in the state where you can basically be profitable Thank you for your question. Your question is whether we have been profitable for a corporate fire insurance. Hello, I am Hoshino. I would like to take this question about profitability of the fire insurance. We have been saying that we need to continue to improve profitability. And we would like to take additional measure on the mid-term business plan. But at this point in time, we do not see any difference depending on the size of the company. And we believe that the trend is same across different sizes of the company. And this incident will not trigger a change to the policy or the direction we generally would like to improve the profitability of the corporate fire line. Triggered by this media coverage, They were the first media coverage in the middle of June, and after that, corporate insurance-related price fixing was covered. Has it impacted your company's business, for example? Has it made it difficult for you to propose price increase? Or, given your tough circumstances, are you taking tough actions on Because you need to increase price. For the intensifying natural catastrophe levels and increasing frequency of accidents and also negotiation, the need to negotiate the rate. We are in the same environment in the sense that we need to increase our price for fire line. And the action that we need to take is that we need to provide detailed explanation. And we have been doing this. At this point in time, especially from the customer side, based on the series of media coverage, we have not received a special request from customers. And also, the series of media coverage has not prevented us from taking action that we need to take. Thank you for the answer. And thank you for your question. And at the end, we would like to take questions from Majima-san from Tokai Tokyo. Can you hear me? Yes. So coinsurance, training, we're in the world of free competition. There are only around three PNC companies, and so there was this tacit market share, I think, among companies in this industry. But once this free competition progresses, there will not be this. There's no fixed share right now. So what is the current status of the share in this co-insurance scheme? This NatCat in July. There was hail in North Kanto and typhoon in Okinawa. If you could share with us the size, the scale of this hail and typhoon. Yes, Hoshino will answer the first question. First, coinsurance. As mentioned earlier, this is done because of a few reasons. First is for high risk, company risk. One company cannot bear the risk in many cases. And so as an insurance company, we need to diversify and manage the risks. Another is the business customer for the policyholder. They want to diversify the capacity source, capacity procurement. And therefore, this is a win-win for both sides. Now, if this coinsurance is terminated, what can we do? The policyholders will need to have multiple policies with multiple insurance companies so the partial policy insurance will have to be assigned with multiple insurers. By taking this format, the policyholder will have to bear the more burden signing the policy contract. If one insurance company will take and try to diversify the risk through reinsurance, The reinsurance market fluctuation will become bigger and so this will destabilize the procurement situation and it's been a while since 1997 the market has been deregulated. So we think the significance of coinsurance will remain unchanged. Coinsurance scheme or the business scheme, business structure will not change. I don't think it will change. Thank you. Second question, Ishikuro will answer. In this paper on page eight, first quarter of 13.1 billion pre-tax is shown on page eight. And since then, second quarter, there has been some net caps. In July, there were torrential rain, and at the end of July, There was hail in North Kanto. All inclusive. Most likely scenario is 55 billion pre-tax. The typhoon in Kyushu is not included. Thank you. I hope that answered your question. Thank you very much. Thank you. So I'm sorry we exceeded the time. With that, we will close the conference call on Tokyo Marine Holdings' overview of financial results for first quarter of FY 2023. Please do not hesitate to contact us if you have any questions or points to clarify. Thank you very much again for joining us today.