The following is a supplement to the MS & AD Insurance Group's sustainability approach.
FY2019 (April 1, 2019 - March 31, 2020)
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 be“50:50.”
- 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, “Vision 2021” which began in fiscal 2018 and will end in fiscal 2021 for a period of 4 years.
3.Claw back Clause
- We have a claw back clause in place. (click here)
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 2020 is 100 million yen or more.
(*) March 31,2021 end-of-day basis
Impact of Significant Risks and Mitigation Measures
One of the important risks for the Group is the system risk in which information system shut-downs, malfunctions, unauthorized use, or information leakage occur due to unauthorized access or information system defects caused by cyberattacks. While cyberattacks themselves are risks that can occur at present, we recognize that they are also risks that require more sophisticated responses in the medium to long term due to technological development. The Group routinely strives to develop a control environment for managing information technology risk, but in the event of a cyber attack, there is the possibility of a large-scale information system shutdown, malfunction or unauthorized use, or information leakage. In recent years, there has been an increase in the number of cases in which government involvement is suspected, and we recognize that the risk is increasing rapidly. The Group also underwrites insurance to compensate for cyber risk, and in the event of a cyber- attack, the Group makes claims payments. Therefore, we recognize that this risk is equally important for MS&AD as (1) a listed company and (2) an insurer.
The impact of this risk on our Group can be summarized in accordance with the above two aspects.
（1）As a listed company:
(2) As an insurer:
(*1) Market value net assets minus the integrated risk amount.
(1)As a listed company:
(2)As an insurer:
(*2) Computer Security Incident Response Team: a team specialized in information security in our Group
Contribute to Climate Change Mitigation and Adaptation
TCFD Scenario Analysis
Scenario Analysis will be updated in September 2021 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||
of occurrence -30 to +28%
|Transition Risk||Investment||Impact on investee companies by carbon costs||EBIT at Risk
Low Carbon Price Scenario 4.66%
Medium Carbon Price Scenario: 9.23%
High Carbon Price Scenario 20.29%
|Developed by Trucost referring to Nationally determined contributions (NDCs), OECD and IEA.|