Benchmark of Success

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Benchmark of Success
Tomijiro MORITA Chairman of the Board The
Dai-ichi Mutual Life Insurance Company
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Global Life Insurance Market
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3
Global Life Insurance Market
?The scale of three markets, North America,
Europe and Asia, are similar.
Premium Income Share by region (FY 2001)
North America
Asia
32.27
31.78
Europe
32.27
Source Japan Institution of Life Insurance
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4
Life Insurance Market in Each Economy
?Japan has highest penetration rates of life
insurance. ?Chinas market is growing prominently
in Asia.
(billion dollars)
()
Market Comparison (Life Insurance Premium Income,
FY 2001)
Japan
Korea
China
Taiwan
United States
United Kingdom
France
Germany
Italy
Source Japan Institution of Life Insurance
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5
Changing Operating Environment in Japan
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6
Declining Birthrate and Aging Population
? Twin Peaks of Demography.
?Key is approach to the middle-aged and elder
customers.
Demographic Change
Demography in 2020
Demography In the 70s
Current Demography
Age Group
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Reform of Social Security System
?As social security shrinks, private security
expands.
Declining Birthrate Aging Population
Private Security
Private Security
Personal Financial Security
Social Security
Social Security
Financial Squeeze in Public Pensions, Health
Insurance and Other Social Security Systems
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8
Changing Market
?Sale of medical insurance supports the growth of
new businesses of individual insurance.
Number of Policies of New Business
(thousand)
18,000
Annuity 750 thousand
Annuity 511 thousand
Annuity 1,113 thousand
16,000
Annuity 886 thousand
14,000
12,000
10,000
Insurance 13,830 thousand
Insurance 12,431 thousand
Insurance 14,109 thousand
Insurance 13,166 thousand
8,000
6,000
4,000
Medical/Cancer
Medical/Cancer
Medical/Cancer
2,000
3913 thousand
Medical/Cancer
3,197 thousand
3,491 thousand
2,343 thousand
0
FY2000
FY2001
FY2002
FY2003
? Individual Insurance and Annuity
Source Japan Institution of Life Insurance
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Financial Market Conditions
?Prolonged decline of interest rates and stock
prices, which has damaged the investment
performance of life insurers, is beginning to
show signs of reversal.
Nikkei 225
10 Year JGB Interest Rate
()
(Yen)
8
10
Negative Spread of 9 Domestic Life Insurers
(hundred million yen)
FY 1998
FY 1999
FY 2000
FY 2001
FY 2002
FY 2003
Investment rate of return and Average Assumed
Interest Rate of Dai-ichi Life
Source FY 1998 to 2002 Toyo-Keizai Special
Edition of Life Insurance magazine
FY 2003 Press release FY1998 to
2002 sum of 10 major companies before merger
of Meiji Life and
Yasuda Life
()
Source Disclosure of Dai-ichi
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11
Amount and Number of Policies in Force
(trillion yen)
( ten thousand)
1,583
1,268
1,222
Amount insured as of March 2004 have declined by
361 trillion yen (?22.8 ) in comparison to that
in FY 1996
? Individual Insurance and Annuity
Source Japan Institution of Life Insurance
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Regrouping and Alliance between Insurers
1999
2000
2001
2002
2003
2004
Nipponkoa Insurance
Koa Fire
Nippon Fire
Koa Fire
Nippon Fire
Mitsui Marine
Sumitomo Marine
Mitsui Marine
Mitsui Sumitomo Insurance
Non-Life Insurers
Dai-Tokyo Fire
Chiyoda Fire
Aioi Insurance
Yasuda Fire
Nissan Fire
Yasuda Fire
Nissan Fire
Sompo Japan
Taisei Fire
Tokyo Marine
Nichido Fire
Millea Holdings
Millea Holdings
Tokyo Marine
Nichido Fire
Asahi Life
Tokyo Marine
Nichido Fire
Kyoei Fire
(To be Merged in 10/04)
Sumitomo Life
Mitsui Marine
Tokyo Marine Nichido Financial Life
Mitsui Life
Mitsui Life
Life and Non-LifeInsurers
Sakura Bank
Sumitomo Mitsui Bank
Mitsui Sumitomo Marine
Sony Financial Holdings
Nissay Dowa General
Nippon Life
Dowa Fire
Nippon Life
Sony Bank
Sony Assurance
Sony Life
Dai-ichi Life
Dai-ichi Life
Yasuda Fire
Sompo Japan
Dai-ichi Life
AFLAC
Meiji Life
Yasuda Life
Meiji Yasuda Life
TD Holdings
Life Insurers
Taiyo Life
Daido Life
Taiyo Life
Daido Life
Taiyo Life
TD Life
Daido Life
TD Life
ALICO
AIG Star Life
ALICO
AIG Star Life
ALICO
AIG Star Life
AIG Edison Life
GE Edison Life
Trend of Demutualization April, 2002Daido Life
April,2003Taiyo Life April,2004Mitsui Life
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Strategy of Dai-ichi Life
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Overview of Dai-ichi Life
Key Factors
Total Assets
29.7 trillion yen (USD 285.3 bn)
Premium Income
3.4 trillion yen (USD 32.9 bn)
Number of Individual Customers
8,852 thousand
Number of Corporate Customers
26 thousand
As of March, 2004 1US 103.95yen
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Management Concept and Basic Strategy
Management Concept of Dai-ichi LifePolicyholder
Comes First
Change of Social Structure
Change of Market Condition
Change of Needs of Customers
Improvement of Management Quality as Backbone
of Management and Action
Total Life Planning as Concrete Action
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Total Life Planning Strategy
Current Demography
Coverage for Death, Longevity, Medical care
Death Coverage
Traditional Business
Evolution of Business Model to Total Life
Planning

?Market good at death coverage
weak in living benefit

• Focus on providing diverse products, such as
  annuity, medical and long-term care insurance in
  addition to death coverage

?Insufficient after-sales services unsatisfactory
to customers

• Flexible design adaptable to customers unique
  demands at different stages of life
• High value product to mitigate price competition
  - focus on profitability

?Sale of only one product for a customer

• Multiple support / access to customers

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Strategic Business Alliance
?Enhanced product line-ups and access to broader
customer base by leveraging business alliances
Customers
Enhanced Products and Service Line-ups through
Strategic Alliances
Dai-ichi
Non-life Insurance
Life Insurance Annuity Medical Insurance Mutual
Fund
Cancer Insurance
Sompo Japan Sales Agents
AFLAC Sales Agents
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Japan Quality Award

• Award for corporations with remarkable
  management system
• Modeled on Malcom Baldrige National Quality
  Award in the U.S.

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Improvement of Management Quality
Improvement of Customer Satisfaction (Customer-Ori
ented)
Improvement of Management Scheme (Self -
Assessment)
Improvement of Employee Satisfaction
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Japan Quality Award

• First winner in the financial and insurance
  sector
• Self-innovation program for realization of Total
  Life Planning and its complete implementation
  were appraised.

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Achievement of Total Life Planning Strategy
Trend of Shares among 6 Major Life Insurers
Shares policies in force of individual
insurance and annuity of each company divided by
those of sum of 6 major companies Shares of
Meiji Yasuda Life till March 2003 is calculated
based on the sum of the policies in force of
both Meiji Life and Yasuda Life
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Achievement of Total Life Planning Strategy
Dai-ichi Life
Relative Share among 6 Major Life Insurers
(Amount of policies in force in individual
insurance and annuity, 90/3100)
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