Dai-ichi Life Holdings, Inc.

Geopolitical risks and trends in monetary policy among central banks worldwide could destabilize financial and capital markets, leading to declines in asset prices and deterioration in market performance. This raises concerns over reduced demand for insurance products, higher lapse and surrender rates, and deterioration in investment income. As a countermeasure, the Company conducts regular stress tests, and the internal ESR as of the end of March 2026 stood at a sufficient level of 220%.

If stock prices fall sharply due to volatility in global financial markets, an increase in valuation losses and losses on sales of securities, along with a decrease in unrealized gains and gains on sales, could significantly worsen soundness indicators such as investment income, net assets, and ESR. Dai-ichi Life implements risk control through the sale of equities and the use of derivatives, but a substantial deterioration in the market could result in significant losses.

Sharp fluctuations in interest rates or a prolonged period of low rates could result in negative spreads (where investment yields fall below the assumed interest rate) despite the implementation of ALM, which could have a material adverse effect on profitability and long-term business operations. In a rising interest rate environment, there is also a risk of a negative impact on net assets due to falling bond prices and an increased risk of policy lapses. While efforts are made to mitigate these effects through the use of policy reserve-matching bonds and duration matching via ALM, responding to significant interest rate volatility over a short period may prove difficult.

If actual results deviate from the assumed bases for calculation, such as mortality rates, assumed interest rates, and expense ratios, additional policy reserves may need to be set aside, which could have a material adverse effect on financial condition and business performance. In particular, Third Sector Insurance (Medical, Living Benefits, etc.) products (medical, cancer, nursing care insurance, etc.) have limited experience data and high uncertainty, and there is a risk that claim incidence rates may fluctuate beyond expectations due to advances in medical technology and changes in medical administration. There is also a risk of temporary fluctuations in policy reserves due to changes in market interest rates for fixed products with MVA and variable annuity insurance with minimum benefit guarantees.

If information systems become non-functional due to unauthorized external access, ransomware or other cyberattacks, or hardware/software failures, insurance claim payments and asset management operations could be disrupted, potentially leading to reputational damage and administrative sanctions. The Group's business operations are highly dependent on information systems, including those of outsourced service providers, and while the Group has established a Basic Policy on Group IT Governance and is promoting a COBIT-based control framework, such risks cannot be entirely eliminated.

Between 2020 and 2023, multiple incidents of fraudulent acquisition of money by former Dai-ichi Life employees occurred, and in August 2024 and September 2025, incidents of personal information leakage and unauthorized acquisition of internal information by employees seconded to insurance agencies were discovered. These improprieties could lead to significant reputational damage, serious legal liability, and administrative sanctions, and may necessitate further revisions to sales policies. While the Company is working to strengthen its systems and reform its corporate culture to prevent recurrence, the risk of similar incidents occurring in the future remains.

An increase in claim and benefit payments due to a rise in heatstroke and infectious diseases and the worsening of natural disasters caused by global warming (physical risk), a decline in the asset value of investees due to the introduction of carbon taxes and changes in the market environment (transition risk), and the impact on the overall economy from the loss of nature (systemic risk) could adversely affect business performance. The Group promotes risk assessment and information disclosure through its endorsement of the TCFD recommendations (September 2018), its membership in the Net-Zero Asset Owner Alliance (FY2021, ending March 2021), and its participation in the TNFD Forum (October 2022), among other initiatives.

In overseas markets such as North America, Oceania, and the Asia-Pacific region, the Group is exposed to risks such as political instability, foreign exchange fluctuations, unexpected changes in laws and regulations, and insufficient understanding of local markets, which could make it difficult to carry out business operations as planned. There is also a risk of impairment related to investments in overseas companies and the risk of withdrawal from markets that fail to meet targets, which could adversely affect financial condition and business performance. While the Group has established regional holding companies in North America and the Asia-Pacific region to strengthen its management and support systems, these risks cannot necessarily be completely avoided.

The solvency margin regulation revised in March 2026 is a new economic value-based standard fundamentally based on ICS specifications, and since it differs significantly from previous regulations, it could affect business operations and performance. In addition, international regulatory trends, such as the application of IFRS 17 and the risk of delays in financial transactions due to the FATF's blacklisting of Myanmar, could also affect the Group's business. The Group operates under the comprehensive supervision of the Financial Services Agency, and if administrative sanctions such as license revocation or business suspension are imposed, it could have a material impact on business continuity.

If the Company falls behind other companies in digital transformation (DX) and the utilization of AI, its competitiveness in acquiring new policies and supporting existing policies could decline, adversely affecting business performance over the long term. Furthermore, if AI is used inappropriately by Group companies or departments, this could result in legal violations or ethical issues, creating a risk that reputational damage could lead to a decrease in new policies and the loss of existing policies. The Group has positioned DX as a key strategy and is working to develop products and services and promote digital communication through the utilization of data and AI.