The MS&AD Group endeavors to increase its earnings power and capital efficiency while maintaining financial soundness. Toward this end, it practices Group management based on an enterprise risk management (ERM) cycle. It allocates capital to its businesses in accord with its Group Risk Appetite Statement. Its businesses take risks with the allocated capital. The Group exercises appropriate risk control, through the monitoring of return on risk (ROR) and other metrics. Under the Medium-Term Management Plan (2022–25), the ERM Committee will work to enhance the evaluation and management of each business in the Group, considering capital, risk, and return, and to improve the Group’s capital efficiency by flexibly allocating capital to more capital-efficient business opportunities, such as investments in growth businesses.

To realize its management vision, the Group formulates medium-term management plans in accord with its Group Risk Appetite Statement and holistically manages risk (integrated risk amount), returns (Group Adjusted Profit), and capital (NAV) with the aim of maintaining financial soundness and boosting capital efficiency and risk/return.

To achieve its management vision, the Company sets out the direction and basic concepts of initiatives related to matters such as capital policy and risk appetite, in the Group Risk Appetite Statement which is resolved by the Board of Directors and manages risk, return and capital in a unified manner.
The Company formulates the Group Medium-Term Management Plan consistent with the Group Risk Appetite Statement, and aims to ensure soundness, improve capital efficiency and increase return on risk through an ERM cycle.
When allocating capital for each business and making the Group income and expenditure plan, the Company confirms these are consistent with the Group Risk Appetite Statement.
The Company periodically reviews the necessity of a revision of the Group Risk Appetite Statement in light of the results of stress tests, environmental changes and other factors.

To boost capital efficiency while maintaining financial soundness, the MS&AD Insurance Group seeks to earn adequate risk/return through the following initiatives in each of its business domains.

ROR trends

Our Group has established the MS&AD Insurance Group Risk Management Basic Policy and is implementing risk management based on the basic philosophy shared within the Group. Specifically, our Group promotes risk management by identifying major risk events affecting our business portfolio and evaluating their risk factors both quantitatively and qualitatively.

・Risk Management Basic Policy

・Risk Management Structure

・Three Lines of Defense Structure for Risk Management

・Insurance Business Risks

・Risk Management in International Business

・Crisis Management System (Including Business Continuity Management System) 

Our Group designates important risk events that should be addressed by management as “Group Material Risks,” formulates a management action plan, and periodically monitors the status of each risk. In addition to considering the correspondent relationship of each risk event, we are working to control risks based on the scenario of the occurrence of the risk event to be addressed.

Listed below are events with the potential for medium- to long-term impacts on Group management and events for which the impact and timing are difficult to grasp at present but about which we need to maintain awareness. As Group Emerging Risks, our Group periodically monitors these events.