(As of June 24, 2024)

The Company has implemented all principles (including those for Prime Markets) of the Corporate Governance Code.

The response situations and disclosure scope regarding the following 14 principles of the Corporate Governance Code are as follows:

‹ Basic Policy for Strategic Equity Holdings, Verification of the rationale for the holdings by board of directors meetings We have adopted a policy to significantly reduce the amount of strategic equity holdings, aiming to build a solid financial base less affected by fluctuations in stock prices ›

In addition, we have been verifying each individual stock to see if the benefits and risks associated with holding them are commensurate with the capital cost. The results of these verifications have been confirmed at our board of directors meetings.  If the results of the verification are not favorable and significant improvement is necessary for certain stocks, we conduct constructive dialogues and if there is no prospect for improvement, we proceed with sales negotiations.
However, in December 2023, we received an administrative actions (business improvement order) related to price-fixing in insurance premiums.
As a result of this, we came to recognize that our strategic equity holdings was one of the factors that led to the price fixing issue. Therefore, in order to ensure an environment for fair competition in the non-life insurance industry, we have established a policy of not holding strategic equities, and have decided to reduce our current holdings of listed strategic equities to zero by the end of March 2030.
 

‹ Criteria for Ensuring Appropriate Handling of the Exercise of Voting Rights Pertaining to Strategic Equity Holdings ›

The basic policy on the exercise of voting rights for strategic equity holdings is as follows.
(a) Basic approach to the exercise of voting rights
The exercise of voting rights is seen to be an important means of influencing the management and improving the enterprise value of investee companies. Therefore, decisions are not made uniformly based on formulaic short-term criteria, but rather in terms of enhancement of enterprise value in the medium-to-long term and improvement in shareholder returns, among others, based on dialogue with investee companies.
(b) The process for exercising voting rights
When exercising voting rights, items such as those listed below are verified for each proposal, with a focus on such aspects as whether the company in question is managed with an emphasis on growth of the company and the interests of shareholders, and whether the company is engaged in any antisocial behavior. Proposals are also judged based on the results of dialogue with the company concerned following a detailed examination of individual issues as required.

<Main evaluation criteria for each type of proposal>

 (c) Criteria for judging proposals relating to the exercise of voting rights
Mitsui Sumitomo Insurance and Aioi Nissay Dowa Insurance have established specific evaluation criteria and guidelines for the exercise of voting rights of shares held. In the event that the criteria and guidelines are met, dialogue will take place as necessary with the investee companies, and proposals shall be judged based on the dialogue.

a. With respect to transactions between the Company and a related party, to ensure that they do not harm the common interests of the Company and the Company’s shareholders, such transactions as competition transaction by a director, transactions between a corporate officer and the Company, and other  transactions with conflict-of-interest characteristics, such transactions will require prior deliberation and approval of a Board of Directors’meeting with the attendance of multiple outside directors, and in the case of similar transactions by executive officers will require a report to the Board of Directors.
b. Transactions falling under Related Party Transactions as set forth in the Companies Act and the Ordinance on Financial Statements, etc. are noted in the Securities Report. Note that preparation of the Securities Report is a matter to be reported to the Board of Directors.

Please see to III 3. “Measures to Ensure Due Respect for Stakeholders” in the “Corporate Governance Report”.

• The Mitsui Sumitomo Insurance Corporate Pension Fund and the Aioi Nissay Dowa Insurance Corporate Pension Fund have been established in order for Mitsui Sumitomo Insurance and Aioi Nissay Dowa Insurance, which are the main operating companies of the Group, to implement defined-benefit corporate pension plans and manage the pension assets separately from the companies.
• Decisions regarding asset management of each Corporate Pension Fund are made by the Board of Representatives based on deliberations by the Asset Management Committee. Personnel in the asset management, accounting, and human resources departments in each company who possess appropriate qualities shall be appointed to the Asset Management Committee and the Board of Representatives, and labor union executives are appointed as representatives of the beneficiaries.
• Personnel who have extensive experience in asset management shall undertake asset management operations of each corporate pension fund. In addition, both funds accepted the Stewardship Code.
• For each corporate pension fund, the incorporation of shares and the exercise of voting rights by investees are in accordance with the evaluation criteria of the party to whom asset management has been delegated, and there are no matters that constitute a conflict of interest.

‹Business Objectives , etc.›

Please see “Aspiration of the MS&AD Insurance Group” on our company web site.

‹Business strategies and business plans›

Please see our group's Medium-Term Management Plan, “FY2022-2025” on our company web site. 

1. In line with its Corporate Philosophy (Mission), MS&AD, as a holding company overseeing all group businesses, has established a management framework that ensures transparent, fair, swift and decisive decision-making that takes into account the standpoint of all stakeholders. The Company’s objectives are to sustain stability and consistent growth over the long term by using corporate resources efficiently and managing risks properly and ultimately, to further increase corporate value.
2. The “MS&AD Insurance Group Corporate Philosophy (Mission), Corporate Vision and Code of Conduct (Values)” were formulated as something all officers and employees of the Group should adhere to in all situations. In addition to working to disseminate these principles among all officers and employees of the Company and its Group companies, the Company positions corporate governance, compliance and risk management as important management issues in the Medium-term Management Plan and actively promotes that Plan.

Please see to II.1 “Disclosure of Policy on Determining Remuneration Amounts and Calculation Methods <Remuneration Determination Processes>” in the “Corporate Governance Report”.

Please see Chapter 3. 10 “Nomination Process” in the “Basic Policies on Corporate Governance” and “Criteria for the Selection and Independence of Outside Directors and Outside Audit & Supervisory Board Members.”

Please see [Reasons for selection as a candidate] in the “Notice of Convocation of Annual Shareholders Meeting” (page 10-21)

a. Initiatives for sustainability
Please see our “Sustainability Report”.
b. For information on the impact of climate change risks and opportunities on our business activities and earnings,
please see our “TCFD Report”.
c. Impact of natural capital risks and opportunities on business activities, earnings, etc.
By providing solutions and products that help improve the sustainability of natural capital, our group will build a sustainable relationship between natural capital and business activities and contribute to coexistence with the global environment.
For more information, please visit our company website here.
d. Investment in human capital and intellectual property
(a) Human capital
Please see page 79-84 in  “Integrated Report 2023”.
(b) Intellectual property
Regarding investment in intellectual property in our group, base on CSV × DX, we are developing new services that come before and after coverage and protection using digital data. In addition, Digitalization Committee has been set up as a task group to regularly discuss the promotion of digitalization.
In addition, through investment in startup companies, we are collaborating with these companies to make use of cutting-edge  technology  to provide  new  services  and  enhance business  operations.  The  main  activities  are  as follows.
・Providing new services for individuals and companies that contribute to risk measurement (quantification) and security and safety measures for customers
*Joint development of solutions and provision of services for enterprises in collaboration with  Coalition, which has cyber risk diagnosis technology
・Enhancing  and  streamlining  operations  such  as  product  development,  insurance  underwriting,  and  claims services.

Please see Chapter 3. 2 “Role of the Board of Directors” in the “Basic Policies on Corporate Governance.”

Please see 1. (1) “Eligibility” and 1. (3) “Independence” of “Criteria for the Selection of Director Candidates and Audit & Supervisory Board Member Candidates.”

Please see the following;
･II1.  [Directors] ”Committee’s Name, Composition and Attributes of Chairperson”  and its Supplementary Explanation
･Chapter 3. 10. Nomination Process and 11. Process of Determining Remuneration in the attached “Basic Policies on Corporate Governance”

• 5 of the 11 Directors (8 men and 3 women) and 2 of the 4 Audit & Supervisory Board Members (2 men and 2 women) have been appointed from outside the Company to incorporate perspectives independent from business execution, strengthen monitoring and oversight functions, and conduct highly transparent management. Our company selects the skills necessary to ensure the effectiveness of the Board of Directors, creates a skills matrix, and confirms that the Board as a whole has the necessary skills. The Board of Directors as a whole strives to ensure diversity, including gender, race and nationality, while considering the balance of knowledge, experience and abilities of the Board of Directors as a whole.
• In addition to meeting the eligibility requirements under the Companies Act and the Insurance Business Act, outside directors are selected based on their skills in areas such as corporate management, human resources, human resource development and legal affairs, which are generally required. In addition, outside directors are selected based on their skills based on the characteristics of our group's business, such as insurance business and internationality, as well as their knowledge and experience in areas such as IT and digital sustainability.
• Director candidates other than Outside Director candidates must meet legal eligibility requirements. In addition, with the goal of selecting candidates able to accurately and fairly supervise the overall management of insurance companies, candidates are selected based on consideration of specialized expertise, such as that stemming from extensive experience working as a manager in an insurance company as well as on consideration of varied experience, highly specialized experience, and the ability to exercise leadership in accordance with the Company's corporate philosophy.
• At least one candidate for Audit & Supervisory Board Member must have sufficient knowledge of accounting or finance.
• Please note that there are no concerns that the interests of these Outside Directors and Outside Audit & Supervisory Board Members of the various companies will be in conflict, in terms of human, capital, transactions, or other relationships, with the interests of shareholders in general. These Directors and Audit & Supervisory Board Members are independent, and their names as independent outside officers have been filed with the Tokyo Stock Exchange Co., Ltd., and Nagoya Stock Exchange Co., Ltd.
• Skills Matrix of the Board
  ･The Company deliberated regarding skills necessary to assure the effectiveness of the Board of Directors (knowledge, experience, and capability), and from the standpoint of supervising the decisions made and execution of duties on matters required for management strategy, we set forth the following.
  1. Base skills that are generally required
    “Corporate management”,  “human resources and human asset development”, “legal affairs and compliance”, “risk management” and “finance and accounting”
  2. Skills complementing the fact that the core business of the MS&AD Group is insurance, and that we engage in business globally
  “Insurance business” and “internationality”
  3. Skills that take into account our current business environment and that are necessary to address business reform and issues considered important by the market  “IT and digital” and “sustainability”
  ･Furthermore, regarding Audit & Supervisory Board Members, we also consider “finance and accounting” to be important skills.
  ･As demonstrated in the “Skills Matrix of Director, Audit & Supervisory Board Member and Executive Officer” we believe that the Board of Directors as a whole has the necessary skills.
  *Please see to “Skills Matrix of Director, Audit & Supervisory Board Member and Executive Officer”in the “Corporate Governance Report”  
   

Please see [Important Concurrent Positions] in the “Notice of Convocation of Annual Shareholders Meeting” (page 15-21, page 49,50)

・As noted in Chapter 3.5 of the attached “Basic Policies on Corporate Governance,” an analysis and evaluation of the overall effectiveness of the Board of Directors is conducted annually.

An outline of the analysis and evaluation of the effectiveness of the Board of Directors for FY 2023 is as follows.
(1) Questionnaires conducted for all Directors’ self-evaluation and board evaluation

• 12-item questionnaire (Questions were formulated based on the roles, responsibilities and operations of the Board of Directors.) and a gap analysis on the importance and completeness of the draft Board of Directors meeting were distributed in advance, and a questionnaire was conducted in the form of an interview by the secretariat. In addition, the status of responses related to inappropriate actions that occurred at insurance operating companies was also checked.

(2) Exchange of opinions at the Outside Director Council

• At a meeting of the Outside Director Council (consisting of all the Outside Directors), Outside Directors exchanged opinions about analysis and evaluation based on the results of the questionnaire.

(3) Summary of analysis and evaluation by the Governance Committee

• The Governance Committee (consisting of all the Outside Directors, Chairman & Director, Vice Chairman & Director and President) conducted analysis and evaluation based on the results of the exchange of views at the meetings of the Outside Directors. In addition, based on the opinions of the external agency, the committee compiled measures to improve the functions of the board in fiscal 2023.

(4) Initiatives in Fiscal 2024

• We will promptly commence and strengthen measures for improving capabilities in fiscal 2024, and link them to a PDCA cycle aimed at enhancing effectiveness.

Based on the content of discussions at the Board of Directors meeting in fiscal 2023, the performance of functions, management, and the status of training and information provision to outside officers, the results are as follows.

(1)Fiscal 2023 Initiatives and Board of Directors Evaluation Results

• Sufficient information sharing and discussion have been conducted on the progress management of the medium-term management plan and countermeasures.
• Executive study sessions on today‘s and highly specialized areas were held, and the knowledge of individual directors was deepened. This contributed to improving the quality of discussions at the Board of Directors as a whole. It is necessary to continue study sessions on areas closely related to the insurance business.
• Business investment is fully discussed at an early stage. However, it is desirable to enhance the explanation of the direction of new business investment and the review of past business investment.
• It is considered that the penetration of the Management Principles, etc. into the frontline was insufficient, and it is necessary to consider a method to periodically review the penetration of the Management Principles, etc.

(2)Measures to improve functions in fiscal 2024

• Opportunities will be provided to deepen discussions on the positioning of business investment projects within the overall strategy of overseas business and the explanation of past events at the time of capital increase.
• We will expand opportunities to explain the long-term direction and outlook of our growth strategy and capital policy (including shareholder returns) at meetings of the Board of Directors and executive study meetings.
• In addition to improving the analysis method of employee awareness surveys, we will continue to conduct field trips to the front lines of insurance companies and exchange opinions with overseas management in order to confirm the penetration and implementation of the management philosophy among employees.

Please see Chapter 3. 8 “Support Systems for Directors and Audit & Supervisory Board Members” in the “Basic Policies on Corporate Governance.”