MS&AD_en

10/22 　Domestic Non-Life Insurance Business: Efforts to Improve Auto Insurance Loss Ratio and Future Outlook

Please turn to page 9, where I will review our efforts to improve our loss ratio of auto insurance - which accounts for the largest percentage of our domestic non-life insurance business and has a significant impact on the combined ratio described on the preceding page - and our outlook for auto insurance. The graph on the upper left shows the changes in the premium unit price and the number of vehicles insured. Figures at the end of FY2009 are set at 100. The number of vehicles insured stayed roughly the same, while the premium unit price increased steadily. The graph shows that increases in the unit price, which is directly linked to improvements in the loss ratio, have mainly contributed to increasing revenue in auto insurance. The bottom graph shows the change in the number of accidents. This number rose in FY2010 and stayed roughly flat from FY2011 onward. We expect this number to be stable. However, we can't say that the average payout per claim is stable. We will pay attention to future trends and flexibly take action as needed. The average payout per claim by company is shown in the appendix data on page 27. Please refer to this afterward. As a result, our earned-incurred loss ratio improved steadily, to 64.1% by the end of the first half of FY2012. We will continue to implement these initiatives to improve our loss ratio. Also, next fiscal year will show the full effects of our premium rate hike in October of this year. As a result, we expect an improvement in underwriting profit of ￥27.0 billion. Effects will also emerge from a revision to the "non-fleet discount / loading rate system". Our goal of an EI Loss Ratio of just above 60% by the end of FY2013, the final year of our medium-term management plan, is now in sight.