 |
| March 27, 2000 |
|
| Full-scale
Alliance and Scheduled Merger of The Sumitomo M&F and Mitsui M&F |
 Numerical
Business Targets
|
| 1. |
Total income and expenses
|
- For the target for net premium income from the nonlife insurance
business is Yen 1.24 trillion in FY2004, up Yen 100 billion from
FY1998, and a market share of at least 18%.
- For the nonlife insurance business, the goal is to reduce
operating expenses by Yen 55 billion, equivalent to 18% of current
costs, by and including FY2004. Specifically, facility costs
will be reduced by, among other measures,consolidating 360 business
bases in Japan and 30 overseas offices and by integrating systems.
Personnel costs will be reduced by trimming 3,000 employees, to
be accomplished through attrition, hiring freezes, transfer of
personnel into new business areas or into other positions, and
other measures.
The aim is for the combined effect of the increased net premium
income and reduced operating expenses to yield an underwriting
income of Yen 70 billion, net investment income of Yen 80 billion,
and a net income of Yen 84 billion in FY2004.
- For the life insurance business, in order to maintain a sound
financial state, internal reserves will be increased through an
accumulation of premium reserves, in which case, a net income
of about Yen 1 billion is projected in FY2004.
- Added the combined target for all other sectors including foreign
insurance subsidiaries, financial services, and risk-related services;
for the group as a whole therefore, the projection is for a
net income in excess of Yen 90 billion in FY2004.
|
-
For FY2004, the target is for an operating expenses ratio of below
32.5%, and a loss ratio foreseen to increase but to at most 59.5%,
for a combined ratio of below 92%.
-
In FY1998, the two companies had an adequate solvency margin ratio
of 1,540%, and an appropriate level will continue to be maintained.
|
Basic Integrated Plan
(Numerical Business Targets)
(Unit: Yen in millions or %)
* Nonlife insurance business |
|
|
FY1998 |
FY2001
(2-company total before merger)
|
FY2004
(3 fiscal years after merger) |
| Net premium income |
1,154,700 |
[ 1,185,000 ] |
1,240,000 |
| Market share |
17.1% |
[ 17.6% ] |
18.4% |
| Loss ratio |
57.2% |
[ 57.4% ] |
59.5% |
| Operating expenses ratio |
39.1% |
[ 36.8% ] |
32.5% |
| Combined ratio |
96.3% |
[ 94.2% ] |
92.0% |
| Underwriting income |
38,000 |
[ 32,000 ] |
70,000 |
| Net investment income |
68,800 |
[ 70,000 ] |
80,000 |
| Income from financial services business* |
400 |
[ 1,200 ] |
3,500 |
| Net income |
21,100 |
[ 36,000 ] |
84,000 |
| Total assets |
5,731,000 |
[ 5,920,000 ] |
6,500,000 |
| Return On Equity (Book value) |
3.8% |
[ 5.3% ] |
10.1% |
| Life insurance policies in force (sum insured) |
3,184,900 |
[ 5,300,000 ] |
8,700,000 |
| Number of life insurance policies |
310,000 |
[ 620,000 ] |
930,000 |
| Life insurance premiums |
80,200 |
[ 150,000 ] |
220,000 |
| Net life insurance income (loss)* |
(2,000) |
[ 100 ] |
1,000 |
| Net income of overseas subsidiaries* |
2,100 |
[ 4,000 ] |
6,000 |
| Net income from other businesses* |
100 |
[ 800 ] |
3,000 |
| Total net income from businesses other than domestic
nonlife insurance business* |
600 |
[ 6,100 ] |
13,500 |
| Consolidated ROE (Book value) |
3.9% |
[ 6.0% ] |
10.8% |
| Notes: |
1. |
An asterisk indicates net income for businesses other
than the domestic nonlife insurance business. |
| 2. |
For FY2001, the merger will occur at mid-term which
will affect the settlement of accounts. The figures in the table did
not consider this effect and as such are parenthesized. |
| 3. |
Financial services include, among others, financial
guarantee, securitization, investment trusts, ART. |
| 4. |
Other businesses include, among others, asset management
and risk-related businesses. |
|
