Tokio Marine Hldgs Ord

Good evening and good afternoon to everyone. My name is Endo. Thank you very much for taking the time to join us today despite your busy schedule. As of this April, I took over the CFO role from my predecessor, Mr. Okada. As the new CFO, I intend to continue contributing to the enhancement of corporate value while placing great importance on dialogue with capital market participants, so I look forward to our continued relationship. I would like to get right into the details, but before that, I will briefly explain how we are disclosing the financial results for this period. As explained at the IFRS briefing held last September, Total Marine Holdings have transitioned its accounting standards to IFRS at the end of fiscal year 25, and we have revised the definitions of KPIs, such as adjusted net income, accordingly. Since this financial reporting timing is a transitional period, we will explain results for fiscal 25 using JGAP-based accounting and figures according to old definitions to announce the fiscal 26 forecast. We will be using IFRS-based accounting and newly defined figures. Additionally, we have revised our presentation material format. We have referenced materials from European peers who have already adopted IFRS. Materials which I believe you're familiar with, with the aim of presenting our performance in a more simple and easy to understand manner. Detailed data is available in the group supplemental data in Excel format available on our website, and we hope that you will find it useful. Apologies for the lengthy introduction. Please turn to page one of the material. Here we are presenting our core KPIs. EPS, and ROE. To allow you to assess our progress against the current and interim plan, we have included figures based on both IFRS and JGAP. Regardless of the accounting standards used, steady profit growth combined with the denominator effect from share buyback has led to a robust increase in EPS. On the other hand, ROE currently stands at 13%, making it appear flattish. This is due to our definition of ROE. In reality, it is trending towards improvement. Specifically, we are in the process of selling business-related equities which have a lower ROR compared to our core insurance business and reinvesting the proceeds into businesses with higher RORs. In this process, since our definition of ROE excludes unrealized gains on equities from the denominator, so selling business-related equities, realizing their gains, and converting them to cash increases capital or the denominator, which in turn puts downward pressure on ROE. As mentioned earlier, profit, or the numerator of ROE calculation, are growing steadily. but our current ROE appears to be flattish, though this is strictly a matter of definition as explained. What makes ROE in content are improving. Furthermore, while this mechanism will continue until fiscal 29, until we achieve zero business-related equities, we hope you will understand that we are in the process of utilizing the risk released through these sales of equities to achieve further profit growth and enhanced ROE. Next, I will explain our performance for fiscal year 25. Please turn to page two. Regarding top line as shown in the graph on the left, the group as a whole recorded plus 1% year-on-year growth. This is because life insurance premiums declined due to the impact of Anshin Life's additional block session transaction executed in March of 2026. On the other hand, regarding the top line of the PNC insurance business, international saw plus 6% year-on-year growth, while Japan PNC saw plus 3% year-on-year growth, with both segments showing steady growth. Next, regarding adjusted net profit. Our management places great emphasis on adjusted net income, excluding gains on the sales of business-related equities, which we regard as our core business profit. However, adjusted net profit, shown in the middle graph, amounted to 711.6 billion yen, representing a 17% increase year-on-year, due to factors such as benign natural catastrophes and decreasing capital losses in North American credit investments. The normalized figure, which excludes one-time impact, is shown on the graph on the right. The normalized figure excluding one-time effect is shown in the graph, as it stood at 635.6 billion yen, a 6% decrease year-on-year, and below the full-year forecast announced this February. This is because there has been some progress in the lawsuit filed by our Australian branch regarding a claim for credit insurance related to Greensill bonds, and we have factored a loss into our fiscal 25 financial results. To explain the background, Greensill went bankrupt in March of 2021. Subsequently, from October 21 through June 23, 10 insurance claims losses were filed in Australian courts. In response, In April 2022, we notified the parties involved that the insurance contracts are invalid due to fraudulent misrepresentation and fraudulent breaches of disclosure, and stated that we would appropriately assert our position through litigation. In fact, we have successfully carried out various initiatives, such as gathering evidence to substantiate our position.

As part of the court proceedings required under Australian law, a court-sponsored mediation was recently held in which our company participated. During this process, we have been engaged in settlement and negotiations with the insolvency administrator for Greensill Bank, one of the plaintiffs, on terms that are consistent with our position and acceptable to us. Given these current circumstances, we have made an appropriate increase in reserves in our fiscal 2025 financial results. Excluding this factor, the bottom line for each business segment remained solid and results were generally in line with our full year forecast. Next, let us look at the FY2026 forecast. Please turn to page three. On the left, you see a metric labeled the total business volume. This consists of gross premiums written from our insurance, the business revenue from our solutions business, and can be said to represent the total value we provide to our customers. Regarding the figures for FY2026, we plan to expand the volume of value provided across all businesses with an 8% year-on-year increase for the group as a whole. Regarding adjusted net profit, as shown in the graph on the right, using the FI 2025 IFRS-based actual figure of 881.5 billion yen, as the baseline, we are projecting 950 billion yen, representing an 8% increase. Regarding the breakdown by business segment, in the international segment, there are factors that led to a decline in profits, such as the reversal effects from the low incidence of natural disasters in FY 2025, as well as factors that contribute to an increase in profits, such as the absence of the additional reserves set aside in FY 2025 related to green seal litigation, as explained earlier, excluding these one-time factors. In other words, based on our underlying performance, we expect the growth driven by discipline, the underwriting, the consolidation of both on M&A deals executed last year and the positive impact of the VPN. As a result, we are aiming for 10% growth for the international segment as a whole. As for Japan, starting in fiscal 2026, the head of domestic operations will oversee both the non-life and life insurance business, so the segments have been consolidated. As for the figures, similar to the international segment, there are factors behind the decline in profit, such as the rebound effects from the low number of natural disasters in fiscal 2025 and the decrease in dividend income due to the accelerated sale of strategic equity holdings. However, this is expected to be offset by expanded underwriting and the non-life insurance business and auto rate increases leading to a forecast of a flat year-on-year result. Finally, I would like to discuss our capital strategy. Please turn to page four. Our view that the profit growth in business and expanded shareholder returns should be aligned remains unchanged. In that context, I will explain dividends which form the foundation of our shareholder return. First, regarding the TPS for fiscal year 2025 here, we used the five-year average of JGAAP-adjusted net income Ask the dividend resource and apply a 50% payout ratio since the actual results for FY25 exceeded the forecast announced last November. We have adjusted the DPS accordingly, increasing it by 7 yen from the figure announced last November to 218 yen. Next, regarding FY26 DPS, since we have transitioned to IFRS, the dividend results will be the three-year average of IFRS adjusted net income, as explained at the IFRS briefing last September. Furthermore, regarding the dividend payout ratio, while we had stated that we would review it in light of the transition to IFRS, we have concluded that we will maintain the principle of 50%. On the other hand, regarding fiscal year 26. We believe it is a transitional period involving changes to accounting standards and definitions, and we felt it was important to prioritize the continuity with previous practices. As a result, we have set the DPS at 245 yen, representing a 27 yen increase, and the DPS growth rate of 12%. Next, regarding share buybacks, we view this as a flexible means of shareholder returns, and implement them comprehensively, considering our capital-level opportunities for business investment and increase the risk-taking and market conditions. In addition to these factors, we have recently utilized the share buybacks to boost the EPS growth by 2%. Furthermore, In March of this year, we announced a strategic alliance with Berkshire Hathaway and stated that we would reassess our approach to share buybacks to enhance the flexibility of our capital strategy. Against such a backdrop, regarding fiscal year 26, we have concluded that the annual amount will be 400 billion yen. This decision was made after comprehensively considering the fact that our current ESR remains at a robust level, the effect of boosting EPS growth, the current status of our M&A pipeline, and the increased flexibility in capital strategy resulting from the partnership with Berkshire Hathaway. Furthermore, while we have announced a share buyback of 287.4 billion yen, the same amount as the third-party allotment to Berkshire to offset the dilution resulting from that transaction, we anticipate that additional share buybacks will be necessary to achieve our objectives due to the rise in our stock price as this additional buyback is currently underway. We will take it into account in our shareholder returns for the second half of the fiscal year once the number of shares to be repurchased is finalized. In other words, I would like to note that this is not included in the 400 billion yen mentioned earlier. This concludes my presentation. Going forward, we intend to continue making steady efforts to execute our management strategy, improve both our EPS and ROE, and meet the expectations of the capital markets. We would like to ask for your continued support. Thank you for listening.