Tokio Marine Holdings, Inc.

The risk that the value of assets held by the Tokio Marine Group could decline significantly due to turmoil in financial and capital markets caused by a global financial crisis on the scale of the Lehman Brothers collapse, geopolitical risk, or large-scale disasters, or due to a crash in Japanese government bonds or hyperinflation. In response, the Group conducts exposure control through aggregated credit risk management, confirms capital adequacy and funding liquidity through stress testing, and has established a financial crisis action plan. As of the end of March 2026, the ESR stood at 268% (255% after considering share buybacks), maintaining a level substantially above the target of 190% or higher.

The risk that a major earthquake directly beneath the Tokyo metropolitan area, a Nankai Trough megaquake, or a large-scale earthquake in the United States could cause massive human and physical damage, leading to a stagnation of social and economic activity and substantial insurance claim payments. The Group aims to stabilize profits through underwriting and reinsurance arrangements commensurate with the risk, while confirming capital adequacy and funding liquidity through stress testing, and ensuring effectiveness through crisis management systems, business continuity planning, and emergency drills.

The risk that the occurrence of massive typhoons or concentrated heavy rainfall, or the frequent occurrence of secondary perils such as hail damage, wildfires, and floods, could result in massive physical damage and substantial insurance claim payments. This includes climate-related physical risks, and there is concern that insurance claim payments could increase over the long term as global warming progresses. The Group addresses this through underwriting and reinsurance arrangements commensurate with the risk, in addition to conducting stress tests related to funding liquidity.

The risk that soaring raw material costs and a rapid global rise in prices could increase the unit cost of insurance claim payments, making it difficult to revise products and procure reinsurance commensurate with the risk, thereby reducing underwriting profit. The Group addresses this by analyzing the impact of inflation on insurance products, revising products and underwriting commensurate with the risk, and procuring reinsurance on reasonable terms.

The risk of substantial insurance claim payments resulting from cyber attacks on customers or their supply chains, or business disruption, information leakage, or reputational damage resulting from cyber attacks on the Group's or outsourced vendors' systems. In addition to stabilizing underwriting risk through aggregated risk management and reinsurance arrangements, the Group addresses this through the rollout of outsourcing management measures, the development of cybersecurity systems, and emergency drills.

The risk of being subject to administrative sanctions or fines due to violations of regulations such as the Insurance Business Act, competition law, personal information protection, anti-money laundering, and strengthened economic sanctions, as well as the risk of reputational damage arising from a divergence between industry practices and social norms or from disadvantages incurred by customers. The Group addresses this through monitoring the compliance status of group companies, providing support for system development, keeping abreast of domestic and international regulatory trends, and improving employee awareness surveys.

The risk that improper acquisition of other companies' material information or unauthorized removal of personal information by employees, or inappropriate use of AI, could result in a serious information leak, leading to a loss of customer trust and reputational damage. The Group addresses this through monitoring information security operations and supporting the group, security training for employees, and the development of an AI governance framework.

The risk that a delayed response to digital transformation and advances in AI could result in a loss of competitive advantage and a significant decline in premium income and profit, and the risk that inadequate responses to structural changes in the insurance industry could fail to gain the understanding and support of customers and agencies, giving rise to reputational risk. The Group addresses this by securing competitive advantage through concentrated investment in priority digital and AI areas, and by carefully explaining new business models to promote understanding.

The risk that disruption in the Company's business domain caused by innovative new entrants or structural transformation in the mobility industry could result in a loss of competitive advantage for the business model and a significant decline in premium income and profit. The Group addresses this by building a medium- to long-term business strategy that anticipates structural transformation in the mobility industry, accumulating digital insurance sales know-how, and promoting the growth of solutions businesses that extend beyond insurance.

An emerging risk in which optimal management control suited to the business type, scale, and regional characteristics of group companies cannot be achieved, resulting in large-scale improper conduct that deteriorates business performance and holds the Company accountable for management responsibility. The Group addresses this by forming management support teams and developing internal controls for new initiatives in the solutions business, and by organizing PMI teams for acquisitions to grasp the actual situation and build management control systems.