Reorganization by Function

An unprecedented business model made possible by the 2013 revision of Japan’s Insurance Business Act, “Reorganization by Function”calls for making the most of the strengths of each group insurance company while undertaking business reorganization. While enabling the bypassing of the negative aspects of simple corporate mergers – including temporary costs and the business impediments, time losses, and various other problematic factors that often arise at the time of mergers – “Reorganization by Function” is designed to realize smooth business integration without slowing the speed of business “growth,” and it concurrently enables the leveraging of individual companies’strengths and the realization of “efficiency” in the pursuit of business scale and profitability.
Aiming to promote sustained growth and an increase in enterprise value for the Group as a whole, the MS&AD Group is moving ahead with the implementation “Reorganization by Function” initiatives as the central pillar of its Next Challenge 2017 plan with the following three key objectives.

①Realization of ‘growth’ and ‘efficiency’ across the entire Group
②Maximum demonstration of the features of the two core non-life insurance companies (MSI and ADI) to respond to customers’ diverse needs
③Strengthening of Group governance stance centered on the holding company


Achieving the industry’s leading quality, expertise and productivity by continuing to work on integrating claims service systems and standardizing claims services in Stage 2, with the goal of further evolutions in reorganization by function.

We believe that our reorganization by function will enable us to simultaneously achieve growth and efficiency without sacrificing speed or being weighted down by the temporary costs and various time-consuming procedures required for a merger.
Having two non-life insurance companies with their own unique strengths in the group will also enable us as a whole group to provide multiple options for meeting the diverse needs of our customers.

Plan for Reorganization by Function (Details, Schedule)


Claims service

■Enhance customer satisfaction, claims adjustment capability, and productivity; realize No. 1 claims service in industry

  • Share claims service functions by sharing systems and standardizing operation, and thereby aim to reinforce and enhance efficiency of functions
  • Promote operational consolidation in “claims adjustment operations” and “back-office administration” and establish joint system
  • Consolidate and integrate insurance-class-specialized bases of both companies (e.g. CALI and credit management) and jointly use claims service infrastructure
  • Through consolidation and integration of bases, establish optimal and efficient claims service system

・Promote consolidation of claims and consolidation and integration of bases (increase in scale), and reduce bases

・Make investigation bases that co-exist with consolidated and integrated insurance-class-specialized service centers joint bases of both companies



【Sharing system】

Apr. 2019~

Apr. 2020~ To be launched in 2 stages

【Operational concentration and function sharing】

FY2016~ To be implemented in stages

【Consolidation and integration of bases】

FY2016~ To be implemented in stages New



Aim to expand reorganization effects by further promoting expansion of synergies, product standardization and mutual use of measures in existing implementation areas below.

Third sector insurance

■Transfer products development function of long-term policies in the third sector to MS Aioi life

  • In addition to promoting product development capitalizing on the high compatibility with life insurance products, we will enhance product branding and market recognition through the sale of the same products through MSI, ADI and MSA life.

Local sales networks

■Consolidation of sales networks and bases

  • By eliminating remote responses and consolidating small bases, we will optimize operation of the Group’s bases and strengthen our sales force and ability to provide service while also enhancing marketing efficiency.

International business

■MSI will take care of operations for Japanese corporate clients, and ADI will focus on international business primarily for Toyota retail business.

  • MSI will comprehensively expand its business including investment in new businesses and M&A. ADI will continue to focus on strengthening its Toyota retail business.
  • We will improve profitability and efficiency through mutual use of the two companies’ facilities and the unification of operation management.

Motor channels

■The insurance contracts handled by MSI motor channel agencies which have ADI as the main business partner will be migrated to ADI.

  • Through centralization of business in ADI, which has strength in the motor channel, and mutual utilization of the two companies’ know-how, we will establish the Group’s leading position in the motor channel.

Head office functions

■The holding company will reorganize and consolidate the head office functions of the two core non-life insurance companies and will enhance the group governance stance

  • By centralizing duplicated functions, unifying management schemes, and standardizing and simplifying operations, we will simultaneously improve business management, streamline the headquarters organization and speed up decision making.
  • By strengthening the holding company structure, we will demonstrate instruction and coordination functions as well as check functions in internal control preparedness to achieve the Group strategy and pursue synergies.

Sharing bases

■If both companies’ bases are close to each other, the bases will move to a joint facility.

  • In addition to reducing real estate costs and logistics costs and improving efficiency in joint operations of the two companies, we will strengthen cooperation and communication to cultivate a greater sense of unity.

Marine and aviation insurance

■Transfer of hull, aviation, aerospace, cargo and transportation insurance to MSI

  • We have completed policy transfers in each area of hull, aviation, aerospace, cargo and transportation, and achieved revenue growth after their transfer.

Compared with the target of implementing ¥50.0 billion in cost reductions compared to fiscal 2011, ¥31.0 billion in cost reductions had been implemented as of the end of fiscal 2014. (The cost reduction figure is calculated based on consideration of special factors – such as the impact of the consumption tax rate hike, depreciation expense for new integrated IT systems, the internalization of affiliated companies accompanied by the offsetting of claims paid – as well as of such factors as nonpersonnel expense growth associated with a rise in premiums written.)
MSI’s net expense ratio is expected to fall to the 30’s% range in fiscal 2015, and the sharing of operational efficiency know-how is expected to lower the combined net expense ratio of the two core insurance companies to around 31.5% in fiscal 2017.