Asset Management Strategy

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1 Strategy November 27, 2003 Yoichiro Iwama Managg Director THE TOKIO MARINE AND FIRE INSURANCE CO., LTD.

2 I. Strategy

3 Portfolio Strategy Improve ROE through implementg followg strategies accordance with characteristics respective asset classes Composition Composition assets assets under under management management ( + Nichido Fire) Busess-related Busess-related vestment vestment Manage overall pritability surance busess fancial vestments To improve capital efficiency, sell busess-related equity holdgs by approx. 10% by end FY05 ALM ALM Control terest rate risk embedded assets liabilities, for savg-type non-life surance products Steadily crease surplus value (assets mus liabilities) on a marked-to-market value basis Pure Pure vestment Improve ROE by makg diversified vestments, rangg from conventional fancial markets to alternative vestments Introduced sophisticated risk allocation (Unit: bn) ( + Nichido Fire)

10% by end FY05 ALM ALM Control terest rate risk embedded assets liabilities, for savg-type non-life surance products Steadily crease surplus value (assets mus liabilities) on a marked-to-market

4 Portfolio Strategy Busess-related Investment Millea Group has contuously decreased busess-related equity holdgs. In FY02, implemented a considerable amount liquidation by utilizg ETF (Exchange Traded Funds) Sell approximately anor 10% busess-related equity holdgs by end FY05 <Actual results plan busess-related equity holdgs liquidation> (Unit: bn) End FY 02 1st half FY03 By end FY05 actual actual plan Nichido Fire approx. 260 approx. 60 Liquidate approx.10% outstg

anor 10% busess-related equity holdgs by end FY05 <Actual results plan busess-related equity holdgs liquidation>

5 Portfolio Strategy ALM (1) Stabilizg Surplus Value (= vestment assets - surance liabilities) is essential for managg savg-type non-life surance products The major risk that fluctuates value our surance liabilities is yen-denomated terest rate risk. Therefore, controllg terest rate risk with balancg assets liabilities is vital for ensurg stability Surplus Value --- This is our ALM (s Liabilities ) Surplus Without ALM The case which holds long-term liabilities Surplus With ALM If terest rate is more volatile, stability Surplus Value becomes more vulnerable The surplus level is stable, spite fluctuation terest rate Interest rate lowers The present level terest rate Interest rate rises Interest rate lowers The present level terest rate Interest rate rises The objective ALM is stabilizg Surplus Value by hedgg terest rate risk as much as possible, regardless fluctuations terest rate.

Therefore, controllg terest rate risk with balancg assets liabilities is vital for ensurg stability Surplus Value --- This is our ALM (s Liabilities ) Surplus Without ALM The case which holds

6 Portfolio Strategy ALM (2) The objective ALM is to keep a risk-neutral position agast yendenomated terest rate risk, by hedgg terest rate risk to balance assets liabilities In addition, we target steadily creasg Surplus Value maly through vestg Japanese Government Bonds (JGBs) higher-rated corporate bonds The risk embedded savgs-type surance liabilities Interest rate risk Take a risk-neutral position agast yen-denomated terest rate risk The risk accompanied with vestments Credit risk, etc. Steadily crease Surplus Value maly through vestg JGBs higher-rated corporate bonds

higher-rated corporate bonds The risk embedded savgs-type surance liabilities Interest rate risk Take a risk-neutral position agast

7 Portfolio Strategy Influence Risg Interest Rate ALM ALM assets assets The overall fluence risg terest rate is not significant. --- Much bonds are held for ALM purposes. Although fair market value bonds decles with risg terest rate, fair value surance liabilities decles at same time s s for for or or than than ALM ALM purposes In short-term, a limited contribution, but long run, a certa degree positive effect --- sce higher yields can be expected newly vested bonds money market products Unrealized gas on bonds equities Yen 100 millions End March End September Difference Bonds 25,646 23,718 1,928 (Unrealized gas ( 1,658 ) ( 296 ) ( 1,362 ) Equities 22,631 26,912 4,280 (Unrealized gas ( 9,838 ) ( 14,687 ) ( 4,849 )

limited contribution, but long run, a certa degree positive effect --- sce higher yields can be expected newly vested bonds money market products Unrealized gas on bonds equities

8 Portfolio Strategy Pure Investment Our objective is to improve ROE through vestg broad diversified assets/products We focus on -- (I) sophistication risk allocation, (II) expansion scope vestments contuous vestments new assets/products (III) diversification fund managers Risk Risk allocation allocation Allocation risk-based capital, considerg diversification risks embedded vested assets/products Achieve a higher ROE by by establishg a more pritable portfolio agast embedded risks Scope Scope vestments vestments Global vestments a wide range assets/products, cludg alternative vestments Contuous vestments new new assets/products to to exp scope vestment Fund Fund managers managers Diversifyg style vestments through balancg -house fund managers, who who have proprietary asset management skill, utilizg external fund managers, leveragg our our expertise third-party manager selection

assets/products Achieve a higher ROE by by establishg a more pritable portfolio agast embedded risks Scope Scope vestments vestments Global vestments a wide range assets/products, cludg alternative

9 II. Fancial Services for Third Party

10 Portfolio Strategy & Fancial Services Busess Capitalizg on knowledge skills that we have earned through managg our own portfolio, we have entered to followg asset management fancial services busesses Providg knowledge human resources Own portfolio management Third party s asset risk management Feedg back skills Group Members Managg third party funds Capital Millea Real Estate Risk Providg customers with risk solutions based on derivative tools. Fancial Solutions Affiliates Japan Real Estate Mitsubishi Bras

portfolio management Third party s asset risk management Feedg back skills Group Members Managg third party funds Capital

11 Portfolio Strategy Group Companies Affiliates Capital Capital < < > > <Private <Private Equity> Equity> Established December, 1985 Established December, 1985 Recognized Recognized as as one one top-tier top-tier active active portfolio portfolio manager manager Established December 1991 Japanese Japanese equity Established December 1991 equity Managg Entered to mutual funds management busess 1998 Managg capital capital buyout buyout funds funds Entered to mutual funds management busess 1998 Fund size: approximately 37.5 billion Fund size: approximately 37.5 billion Formed Formed a a jot jot with with Rogge Rogge Global Global Partners, Partners, a highly-rated global fixed come vestment manager, a highly-rated global fixed come vestment manager, October October under under management: management: trillion trillion Fancial Fancial Solutions Solutions <Derivatives> <Derivatives> Millea Millea Real Real Estate Estate Risk Risk Established Established December December <Real <Real Estate> Estate> Formally Formally known known as as First First Chicago Chicago Fancial Fancial Products Products Established Established February February Purchased Purchased all all shares shares JV JV counterpart, counterpart, Bank Bank One, One, November November A A real real estate estate vestment vestment advisory advisory company company Organizg Organizg managg managg real real estate estate vestment vestment funds funds for for Utilizg Utilizg both both surance surance knowledge knowledge fancial fancial technology, technology, stitutional stitutional vestors vestors real real estate estate companies companies company company provides provides unique unique novative novative derivative derivative products products cludg cludg commodity commodity derivatives derivatives wear wear derivatives derivatives Japan Japan Real Real Estate Estate <Real <Real Estate> Estate> Established Established October October A A jot jot with with Mitsubishi Mitsubishi Real Real Estate, Estate, Dai-ichi Dai-ichi Life, Life, Mitsui Mitsui & & Co. Co. Managg Managg REIT REIT listed listed on on Tokyo Tokyo Stock Stock Exchange Exchange Property under management: billion as end Property under management: billion as end March, 2003 March, 2003 Mitsubishi Mitsubishi Bras Bras <Mutual <Mutual Funds Funds Assessment> Assessment> A A jot jot with with Bank Bank Tokyo-Mitsubishi, Tokyo-Mitsubishi, Mitsubishi Mitsubishi Trust Trust Bankg Bankg Meiji Meiji Life Life Assessed Assessed more more than than Japanese Japanese mutual mutual funds funds

busess 1998 Managg capital capital buyout buyout funds funds Entered to mutual funds management busess 1998 Fund size: approximately 37.5 billion Fund size: approximately 37.

12 Portfolio Strategy Operations Our goal is to crease prit from asset management busess through accumulatg assets under management Wholesale busess is marketg its private equity fund funds to stitutional vestors pensions has established a jot with Rogge Global Partners to provide global fixed come vestment services to Japanese customers Capital is preparg to launch its next private equity fund Millea Real Estate Risk will contuously launch real estate vestment funds Expg scope busess Retail Retail busess Improve product development functions to provide unique customer-oriented mutual funds or fancial products Strengn relationships with regional banks securities companies to exp distribution channels Provide customers with various fancial products through surance agents Doublg size assets under management

fund Millea Real Estate Risk will contuously launch real estate vestment funds Expg scope busess Retail Retail busess Improve product development functions to provide unique customer-oriented mutual

13 Portfolio Strategy Improvg Global Fixed Income Investment Services (TMA) Rogge Global Partners have established a Jot Venture based London, which provides global fixed come services to vestors Japan Purpose JV JV Providg global fixed come vestment services to stitutional vestors meetg diversified needs customers this asset class Rogge Rogge Global Global Partners A global vestment house registered London. Sce its ception 1984 firm has one longest most competitive vestment track records area global fixed come management Established partnership relationships with vestors U.S., Japan, Europe South Africa. Rogge Rogge Utilizg existg leadg skills capabilities Rogge s vestment team combed with an additional portfolio manager from TMA TMA will serve as a custody Japanese vestors for Rogge Investors Global fixed come vestment service management agreement Marketg Providg vestment reports Investment service management agreement 50% ownership Providg human resources Rogge Advice 50% ownership Providg human resources Rogge Global Partners

registered London. Sce its ception 1984 firm has one longest most competitive vestment track records area global fixed come management Established partnership relationships with vestors U.S., Japan, Europe South Africa.

Life Insurance Business Strategy

Life Insurance Business Strategy November 27, 2003 Sukeaki Ohta President Tokio Marine & Nichido Life Insurance Co., Ltd. Position of Life Business October 1, 2003 Tokio Marine &Nichido Life commenced