The following is a supplement to the MS & AD Insurance Group's sustainability approach.

Subject period:

FY2023 (April 1, 2023 - March 31, 2024)

Corporate Governance

Supplement to the performance-based remuneration for directors

See "Corporate Governance" for an overview of the system.

1.Share of the CEO's short-term incentive

  • Performance-linked remuneration shall be linked with the business performance of the company and determined based on financial(*1) and non-financial(*2) indicators.The standard ratio between financial and non-financial indicators used in the calculation of performance-linked remuneration shall be50:50.
  • The stock-based remuneration components of performance-linked remuneration shall be calculated as follows, based on standard amounts for each position

     Standard amount per position × business performance coefficient

     (financial indicators × 20% + non-financial indicators × 80%)

  • The standard ratios of the components of compensation for the President and Director are as follows:

    <Breakdown of 25% of Stock-based remuneration>

    The ratio of financial indicators (indicators reflecting single fiscal year performance) is

    25% × 20% = 5%.

    The ratio of non-financial indicators (indicators to reflect medium- to long-term performance

    contributions) is 25% × 80% = 20%.

(*1)Financial indicators are indicators that are used to reflect business performance in a single fiscal year in officer remuneration.

(*2)Non-financial indicators are indicators that are used to reflect initiatives contributing to medium- to long-term business performance in officer remuneration.

2.Performance Period for Variable CEO Compensation

  • Performance-linked remuneration shall be linked with the business performance of the company and determined based on financial and non-financial indicators.
  • Financial and non-financial indicators have been selected after taking into consideration the Group’s Medium-Term Management Plan(FY2022-2025), which began in fiscal 2022 and will end in fiscal 2025 for a period of 4 years.


3.Claw back Clause

  • We have a claw back clause in place. (click here)

Management Ownership

Ratio of the amount converted into the fair value of shares to the amount of consolidated fixed remuneration of a person whose total amount of consolidated remuneration in fiscal 2023 is 100 million yen or more.

Name(s) Position Fixed remuneration
(million yen)
Shares of the Company owned(*) Value equivalent to Market Value of the shares held / fixed compensation
Number of shares of
the Company owned
Fair value(*)
(million yen)
Yasuyoshi Karasawa Director 55 177,414 481 9.15
Yasuzo Kanasugi Director 56 197,145 534
Noriyuki Hara Director,
65 184,890 501 7.71

*: March 31, 2024 end-of-day basis

Risk Management

Impact of Material Risks and Mitigation Measures

■Changes in the environment surrounding human resources

Our Group recognizes changes in the environment surrounding human resources as one of the important risks in light of the following:

・A gap between management strategies and the human resources portfolio, as well as a shortage in securing or developing human resources to eliminate the gap due to external changes in the human resources market, labor supply-demand, and changes in the skills and expertise necessary for implementing strategies such as DX promotion.

・A decline in employee engagement and an outflow of human resources due to insufficient organizational response to harassment and a lack of employee support program that accurately captures changes in employees' attitudes toward autonomous career opportunities, flexible / diverse work styles, and respect for diversity.


・Our Group's medium-term management plan calls for the value creation through the global expansion of CSV×DX and the transformation of the business by reforming the structure of the business and adapting to changes in the business environment, including the creation of new businesses.
・The greatest asset of the Group pursuing this strategy is human resources, and each employee is responsible for the concrete implementation of the strategy. In particular, "digital human resources" and "overseas human resources" are the cornerstones of the strategy, as they are responsible for the global expansion of CSV×DX and the transformation of business and risk portfolios. In order to realize changing structure of the business and creation of new businesses in adapting to business environment, it is important to elicit and utilize the opinions and ideas of various employees.
If there is a shortage of such human resources or if employees are unable to demonstrate their abilities, skills, and motivation, it will be impossible  to execute the strategy and the achievement of the goals set forth in the medium-term management plan.



Promote digital human resources development programs which all employees acquire basic digital skills with the aim of fostering human resources leading the CSV×DX strategy. Based on our in-house certification system and education programs, we are systematically improving our skills in both business and digital fields. We are implementing our Group's unique Digital Human Resources Development Program in cooperation with universities and other institutions.
・We are implementing the initiatives for management personnel and "Professional human resources (Accounting, Finance, IT, Risk Management, etc.)" necessary for overseas businesses, including nomination-based training, overseas dispatch training, and the global trainee system, to develop in a multifaceted and planned manner.
・For digital and overseas personnel, we set KPIs and focus on the development of human resources while confirming the progress of their development.
・In order to improve employee engagement, it is important to develop a work environment that includes opportunities for autonomous career development, flexible, efficient, and effective working styles, and a corporate culture that supports individual’s endeavours. We are promoting the provision of opportunities for autonomous career development and diverse and flexible working styles. At the same time, we are working to pursue diversity, equity, and inclusion (DE&I) by promoting women and young personnel to decision-making positions, and by developing management know-how that actively draws on opinions and ideas.


Please refer to ERM and Risk Management for other important risks.

Impact of Emerging Risks and Mitigation Measures

Utilization of AI
The technology of AI (Artificial Intelligence) that operates and learns autonomously is advancing daily and is being utilized to drive innovation in many industries. Among these, generative AI, which can generate text, images, programs, and more, has been gaining attention in recent years, making it easier for many people to use AI. Our company group is also advancing the use of generative AI.


Generative AI facilitates tasks such as document summarization and translation, transcription of speech, and image creation. Therefore, our company group is leveraging generative AI with the aim of improving operational efficiency and productivity. Specifically, we are using it for tasks such as compiling meeting minutes and creating illustrations for presentation materials, and we are working to further expand its use. On the other hand, as the use of generative AI in business and the advancement of technology progress, there are medium-term risks associated with the potential for human rights and intellectual property violations, information leaks, and the dissemination of false or misleading information. Should such issues arise, there is a risk that our company group's corporate value could be significantly damaged, leading to a loss of social trust.



In utilizing generative AI, our company group is taking the following measures to mitigate these risks:

Developing guidelines for risk management in the use of AI within our Group, including those specific to generative AI.

Mandating that employees receive training on the risks associated with generative AI before they utilize it.

Having the headquarters' management department obtain logs of employees' use of generative AI and conduct regular risk monitoring.

To strengthen AI governance, establishing meetings comprising relevant departments from the Holdings and domestic insurance subsidiaries to regularly share the actual use of generative AI and discuss the direction of governance.

In addition to monitoring our Group’s situation, we are also keeping an eye on external environmental changes such as trends in domestic and international regulations and technological advancements. We are advancing our efforts with agile governance in mind to continually improve AI governance.

Please refer to ERM and Risk Management for other emerging risks.

Risk Culture

We are implementing the following initiatives to cultivate a risk culture.
・Dissemination and explanation from the top management on business plans and promotion of ERM.
・Implementation of training and learning programs for employees on ERM and risks related to our business
[Providing mandatory online training programs for all employees and face-to-face hierarchical training program on topics such as ; Information management and cybersecurity, human rights, crisis management, compliance, quality improvement, sustainability, etc.]
・Posting explanations, policies, and commentary about ERM on the intranet
・To further promote employees' understanding, the ORSA report (Own Risk and Solvency Assessment) is posted on the intranet (internal homepage). An English version and a summary version are also posted for employees.
・Incorporating a risk management perspective into the rules and standards in the process of developing products and services
[Risks related to customer protection, underwriting risks, market risks, risks related to damage support operations, administrative and system risks, risks related to information management, etc.]
・Introduction of financial incentives incorporating risk management  and compliance indicators [Evaluating the performance of branches in terms of enhancing underwriting, implementing risk solutions and complying with regulations for the sustainable provision of insurance]

Contribute to Climate Change Mitigation and Adaptation

Governance change from previous year

We maintain a climate-related governance structure composed of the Board of Directors, the Group Management Committee, and Task-Specific Committees such as Sustainability Committee. 
CSuO(Group Chief Sustainability Officer)has been newly assigned this fiscal year and administrates Sustainability.

Remuneration in Relation to Climate Issues –Incentives

As part of the initiatives contributing to medium- to long-term performance, we have non-financial indicators reflected in the performance-linked remuneration for directors and officers excluding external directors. Initiatives toward climate change mitigation are included in the evaluation of these indicators. The standard ratio of performance-linked remuneration to total remuneration is 50% for President & CEO and 30 -40% for other directors and officers.
Other employees are also incentivized through annual appraisal where achievement of climate-related KPI in his charge is considered.

Portfolio scope of Business Activities with Consideration for Sustainability

Business Coverage for our fossil fuel-related policies in “Business Activities with Consideration for Sustainability” is all of active, passive and third-party managed investment and all direct and re-insurance excluding treaty-re-insurance.

Climate Activities through initiatives and Trade Associations

Our memberships of industry associations and outside initiatives will promote "Initiatives to Achieve Net Zero By 2050".
While ascertaining the decarbonization pathways that these organizations are pursuing, the status of their membership and activities are managed by the line of control, and important information is reported to the director in charge. After management of the status of membership and activities by the line of control, material matters are reported to the officer in charge. We will respond through discussions with the organizations when found necessary to confirm consistency with our policy.

TCFD Scenario Analysis

Scenario Analysis has been updated in August 2022 in our TCFD disclosure (link below).

■Scenario Analysis excerpt

  Business area Contents Result Examples Scenario used
Physical Risk Insurance Underwriting Fluctuation in  loss paid by typhoon and storm surge in Japan

Typhoon  2050
Effects of change                            +5 to +50%
Effects of changing frequency

of occurrence                               -30 to +28%

Transition Risk Investment Impact on investee companies by carbon costs EBIT at Risk   
Equity    2030
Low Carbon Price Scenario
:             4.2%
Medium Carbon Price Scenario:
High Carbon Price Scenario:
Developed by Trucost referring to Nationally determined contributions (NDCs), OECD and IEA.