(As of June 24, 2019)

1. Principles Items Not to Be Implemented (To Explain) and Reasons for Not Implementing

The Company has implemented all principles of the Corporate Governance Code

2. Principle Items to Be Implemented (To Comply)

The response situations and disclosure scope regarding the following 11 principles of the Corporate Governance Code are as follows:

Principle 1.4 Policy regarding the reduction of holding Strategic Equity Holdings and standards with respect to the voting rights as to their cross-shareholdings

‹ MS&AD Insurance Group Basic Policy for Reduction of Strategic Equity Holdings›

Strategic equity holdings is shares held under the assumption of long-term holding for the purpose of long-term increase of asset value and maintaining and strengthening comprehensive business relationships with issuers, etc.
We have adopted a policy to reduce the aggregate amount of our strategic equity holdings, aiming to build a solid financial base less affected by fluctuations in stock prices and to improve the capital efficiency (Note 1).
The economic rationale for holding strategic equities is assessed from the perspective of the equity issuers’ growth potential and profitability for each equity and the medium- to long-term business relationship.
If the rationale is not confirmed, we shall proceed with sales of those strategic equity holdings after obtaining the equity issuers' understanding. Otherwise, we may sell our holdings, taking into account the market environment and our business and financial strategies.


(Note 1) The Group's strategic equity holdings of ¥500 billion are planned to be sold over the 5 years from FY2017 to FY2021. The Group sold equity holdings of \288.0 billion by the end of fiscal 2018 and is proceeding with the plan after fiscal 2019. The balance of market value of the strategic equity holdings held by the Company as of March 31, 2019 is \2,518.3 billion.


‹ Verification of the economic rationale for strategic equity holdings and reduction efforts›

  • Mitsui Sumitomo Insurance and Aioi Nissay Dowa Insurance shall examine the economic rationale of their strategic equity holdings by each equity as to whether the purpose of the holding is appropriate and whether the benefits and risks associated with the holding are commensurate with the capital cost. The results of these examinations shall be reported to MS&AD’s Board of Directors.
  • Based on the results of the examinations of each equity, constructive dialogue shall take place with regard to equities that do not meet the objective of the rationale and are particularly in need of improvement. The equity will continue to be held in the event that an improvement is anticipated, and sale negotiations will be entered into in the event that an improvement is not anticipated.


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

① 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. Decisions are not made uniformly based solely 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.
② The process for exercising voting rights
When exercising voting rights, items such as those listed below are verified for each potential investment, 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.

  • Profit distribution plan (such as low payout ratios in proposals for appropriation of surplus)
  • Appointment and dismissal of directors (such as poor performance, the occurrence of scandals, etc., or no outside directors being elected)
  • Directors' remuneration, retirement benefits (such as poor performance or the occurrence of scandals, etc.)
  • Issuance of subscription rights to shares (recipients being outside corporate auditors, etc.)
  • Changes to the articles of incorporation (such as changes that may be significantly detrimental to the rights of shareholders)
  • Takeover defense measures (Poison Pills)
  • Business restructuring, etc.

③ 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.

Principle 1.7 Procedures for related Party Transactions

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.

Principle 2.6 Exercise of functions as an asset owner of a corporate pension plan

  • 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 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 the corporate pension fund. In addition, both funds accepted the Stewardship Code in April 2018.
  • 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.

Principle 3.1 Full Disclosure

(ⅰ) Aspiration of the Group (Mission etc.) and business strategies and business plans;

‹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 Medium-Term Management Plan, “Vision 2021” on our company web site. 

(ⅱ) Basic policy and guidelines on corporate governance;

Please see “Basic Policies on Corporate Governance” on our company web site.

(ⅲ) Board policies and procedures in determining the remuneration of the senior management of Directors and Audit & Supervisory Board Members;

Please see “Directors and Audit & Supervisory Board Members Remuneration” on our company web site.

(ⅳ)Board policies and procedures in the appointment and dismissal of the senior management and the nomination of directors and Audit & Supervisory Board Members candidates;

(ⅴ)Explanations with respect to the individual appointments, dismissals and nominations.

Please see [Reasons for selection as a candidate] in the “Notice of Convocation of Annual Shareholders Meeting” (page 6-14)

Supplementary Principle 4.1 ① Scope and content of the matters delegated to the management

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

Supplementary Principle 4.1.③ Succession plan for the Chief Executive Officer (CEO), etc.

The Company has formulated the succession plan that stipulates the selection of the Group CEO (hereinafter referred to as “CEO”) and the fostering of successors, and published it on May 20, 2019. The outline of the plan is as follows.
a. Criteria for CEO selection

  • Ability to embody the Group’s Mission, Vision and Values, and having the concept of CSV (Creating Shared Value with society) in his/her own system of values
  • Ability to plan and build future visions
  • Fairness and impartiality
  • Ability to develop human assets
  • Ability to demonstrate leadership
  • Global response capability
  • Acting in the Group’s best interest

b. CEO Selection Process
(a) Recommendation by Current CEO

  • The current CEO prioritizes the candidates and recommends them to the Nomination Committee (the majority of whose members and the chairperson are appointed from among Outside Directors).
  • Candidates may be from within the Group as well as outside the Group.

(b) Deliberation by the Nomination Committee

  • The Nomination Committee deliberates on candidates recommended by the CEO.
  • Outside Directors can recommend other candidates.

(c) Resolution by the Board of Directors
     After (a) and (b) above, the Nomination Committee advises the Board of Directors which makes the final decision.

c. Development Plan for CEO Candidates
   The CEO must position the development of a large number of candidates as an important role for him/her and provide the candidates from inside the Group with the following experience as needed.

  • Multiple departments (Management, operations, international, sales, claims services, systems, etc.)
  • Management of domestic operating companies and overseas subsidiaries

Supplementary Principle 4.2.① Management remuneration

In order to realize a Director remuneration system functioning as an appropriate incentive for improving linkage between Director remuneration and business performance and achieving sustainable growth for the purpose of strengthening governance and increasing medium term corporate value, the Company is introducing a restricted stock remuneration plan to be allotted to the Directors excluding Outside Directors, in place of the existing stock-based compensation stock options, from fiscal 2019.

For details, please see “Remuneration Determination Processes”of “Corporate Gavernance”

Supplementary Principle 4.3.③ Objective, timely and transparent procedures for the dismissal of a CEO

The objective, timely and transparent procedures for the dismissal of a CEO were published on May 20, 2019.
a. When an Outside Director deems it necessary to discuss dismissal, such as when the CEO is subject to the prohibitions stipulated in the Executive Officers Rules (violating obligations set forth in the Companies Act and other laws and regulations or company regulations, etc.) or when it is determined that it is difficult for the CEO to properly continue his/her duties due to health reasons or other reasons, the Outside Director shall deliberate on his/her own initiative with members of the Nomination Committee excluding the CEO.
Based on the results of the deliberation, necessary procedures are carried out in accordance with the Companies Act and internal regulations.
b. Directors who are not Outside Directors may request a meeting of the Board of Directors to be convened in accordance with the Rules of the Board of Directors and submit proposals for dismissal of Directors at the Shareholders Meeting.

Principle 4.9 Criteria of determining the independence of outside directors

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

Supplementary Principle 4.11 ① Policies on the Board of Directors' Overall Balance of Expertise, Experience, Capabilities, Diversity, and Scale

  • Five of the twelve Directors (ten men and two women) and two of the four Audit & Supervisory Board Members (2 men and 2 women) have been appointed from outside the Company to incorporate perspectives independent from management, strengthen monitoring and oversight functions, and conduct highly transparent management. We take into consideration overall balance of the Board of Directors in terms of expertise, experience, and capabilities of Directors and strive to ensure diversity, including that of gender.
  • Outside Director candidates must satisfy the eligibility requirements as defined in the Companies Act and the Insurance Business Act. 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 experience working as a general business company corporate officer, government administration officer, lawyer, and academic as well as specialized expertise regarding social, cultural, and consumer issues.
  • 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.

Supplementary Principle 4.11 ② A status for concurrent positions of Outside Directors and Outside Audit & Supervisory Board Members

Please see [Important Concurrent Positions] in the “Notice of Convocation of Annual Shareholders Meeting” (page 10-14, page 34-35, page 38-39)

Supplementary Principle 4.11 ③ A summary of the results from analysis and evaluation of overall effectiveness of the Board of Directors.

1. Analysis and Evaluation Process

As noted in Chapter 3.5 of “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 for fiscal 2018 is as follows.


(1) Questionnaires conducted for Directors’ self-evaluation and its summary

  • A questionnaire consisting of nine questions (concerning the roles and responsibilities of the Board of Directors, its operation, etc.) was distributed to each Director in advance and the secretariat conducted an interview with each Director based on the questionnaire.
  • Evaluation mainly focused on whether initiatives to enhance effectiveness of the Board of Directors were implemented or not in accordance with the improvement measures (measures for improving capabilities to be implemented in fiscal 2018) which had been formulated based on the evaluation of the Board of Directors in fiscal 2017.

(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) Analysis and evaluation by the Governance Committee and formulation of measures for improving capabilities

  • Following the exchange of opinions in (2) above, the Governance Committee (consisting of all the Outside Directors, the Chairman of the Board of Directors, and the President) conducted analysis and evaluation and formulated measures for improving capabilities by identifying issues to be addressed in fiscal 2019.

(4) We will promptly commence and strengthen measures for improving capabilities in fiscal 2019, and link them to a PDCA cycle aimed at enhancing effectiveness.

2. Summary of the Results of Analysis and Evaluation

(1) Content of deliberations at the Board of Directors and fulfilling function


  • New projects involving significant risks, including overseas projects, are subject to active discussion with an in-depth examination of each individual project.
  • A group-wide “Sustainability Contest” was held in order for employees to deepen their understanding of “MS&AD’s Story of Value Creation”, which is the Group’s business model, CSV (Creating Shared Value with society), and SDGs and implement them in their daily work. The contest attracted over 500 applications from within Japan and overseas, and further increased understanding.
  • The MS&AD Integrated Report 2018 disseminated “MS&AD’s Story of Value Creation”, which further embodies our Corporate Philosophy (Mission), within and outside of the Group, and this led to a deeper understanding within the Group and improved evaluation from outside the Group.
  • The name of our whistleblowing system was changed to the “Speak Up System”, while the acts subject to reporting were expanded and the acceptance of anonymous reports was enhanced. As a result, the number of reports increased, and efficiency has improved.

<To be improved from now on>

  • Each individual project is discussed in depth, but it is important to position each project from the perspective of overall strategy. The understanding of the important themes of “Vision 2021” (sustainability, digitalization, and promotion of diversity & inclusion), the domestic non-life insurance business strategy, and the overseas business strategy by outside officers will be deepened and discussions will be accelerated.
  • It is important to ensure that all Group employees understand that their own initiatives to implement “MS&AD’s Story of Value Creation” are linked to CSV and SDGs. In fiscal 2019, besides holding a “Sustainability Contest” among the Group as a whole, efforts will be made to further raise awareness through various methods such as examining employee awareness surveys conducted at overseas bases.
  • It is important to understand the actual conditions at each worksite, and information dissemination will be strengthened in order to further increase awareness and enhance the efficiency of the Speak Up System, mainly through the newly established “Speakup Section”.

(2) Operation of the Board of Directors


  • As a result of measures such as greater application of package deliberation, in which explanation of agenda items during the meetings is simplified, number of agenda items has been decreasing year on year and it is becoming customary practice to take time to deliberate on important agenda items regarding strategic decisions.
  •  As a result of our efforts from fiscal 2015, the operation of the Board of Directors has been improved, with average time spent for deliberation per agenda item at regular meetings of the Board of Directors increasing every year. Operations are appropriate also from the perspective of materials being distributed prior to meetings and sufficient time allowed for deliberations.
  • In view of the fact that there are many statutory matters for resolution, it can be regarded that operations of the meetings are being conducted efficiently.

<To be improved from now on>

  • Considering time constraints and the establishment of even greater strategic themes, it is desirable to expand opportunities for deliberation and the exchange of opinions at every meeting of the Board of Directors, etc. Therefore, the length of meetings will be extended beyond that held in fiscal 2018.

(3) Other


  • Operating company study tours were continued from fiscal 2017, including an inspection of the Disaster Countermeasures Headquarters, which focuses on payments of insurance claims for natural disasters.

Supplementary Principle 4.14 ② Criteria for Directors and Audit & Supervisory Board Members Training

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

Principle 5.1 Policies concerning the measures and organizational structures aimed at promoting constructive dialogue with shareholders.