May 30, 2001 Mitsui and Sumitomo Marine Group - Mid-Term Strategic Business Plan The Sumitomo Marine & Fire Insurance Co., Ltd. Mitsui Marine & Fire Insurance Co., Ltd. The Sumitomo Marine & Fire Insurance Co., Ltd. (President: Hiroyuki Uemura) and Mitsui Marine & Fire Insurance Co., Ltd. (Chairman, President & CEO : Takeo Inokuchi) , which are scheduled to merge in October 2001, have together formulated "MS WAVE" a mid-term strategic business plan for fiscal year 2001 and 2002 to obtain early and substantial merger effects. (Note) This plan is refered to as MS WAVE, a name that is symbolic of Mitsui Sumitomo Insurance Company. It is intended to present an image of a new wave breaking over the non-life insurance industry. Aims of the Medium-Term Strategic Business Plan Both companies have set out a mid-term business plan in line with the new company's mission statement, to bring about rapid overall results and achieve goals as outlined in their "Basic Integration plan 2000 - 2004." Prior to the merger, both companies have been operating the businesses under the common policies based on this plan. Specifically, two companies carry out joint activities and progress monitoring by setting forth common measures and "process management indexes" in each target area. Two-Year Goals 1. No.1 in Growth and Profitability of Non-Life and Life Insurance Business First in increase amount and ratio of net premiums of non-life insurance. First in non-life insurance combined ratio: (loss ratio + operating expenses ratio), and first in investment yields. First in increase amount for new life insurance policies (among life insurance subsidiaries of non-life insurance companies). Derive approximately 15% of total income from sectors other than the domestic non-life insurance business for FY2004. 2. Realize Top Quality Be No.1 in customer satisfaction, by offering top quality products and services better suited to customer needs. Advance corporate governance in consideration of shareholders and markets. Reinforce legal compliance. 3. Maximize MS Power - ensure rapid integration, and realize maximized benefits from the merger Ensure all staff can quickly and fully implement benefits from the merger. Create a new corporate culture. Use creative personnel training and improve job satisfaction and work conditions. Strategically implement IT. Three Main Strategies for Achieving Goals - Outline 1. Strategy for Achieving Top Growth and Profitability [Non-Life and Life Insurance businesses] Focus on the retail market (reform agency mechanisms, utilize agency IT systems). Become the top non-life insurer in the wholesale market. Obtain a great share of the dealer market. Invest in new products to adapt to customer needs ("MOST" car insurance, "Home Pikaichi" comprehensive home insurance, etc.). Aggressively pursue new growth markets, such as the "third sector" (nursing-care, pension plan, and health care sectors) and Bancassurance. Impose tighter controls on losses and operating costs (improve loss ratio and operating expenses ratio). Improve investment performance. [Financial Services Business] Offer improved financial guarantees, credit fluidity, ART, derivatives, investment trusts, and asset business planning. Enter into defined contribution pension plans business. [Risk Related Business] Upgrade and expand care business such as health/ medical/ nursing care, risk management business like risk consulting, and emergency assistance business. Enter into the appraisals market. 2. Strategy for Attaining Top Quality (CS, corporate governance, compliance) Become No.1 in customer satisfaction through offering top quality products and services better suited to customer needs. Increase performance and user-friendliness when concluding new policies. Increase user-friendliness by using cashless purchasing and networking agencies. Improve call centers and information services for customers. Expand Internet-based business and agent direct marketing, and study 24-hour service. Improve service on accidents. (providing 24 / 365 service). Improve brand identity. Provide Maximum Value/Quality to Shareholders, the Markets, and the Society Advance corporate governance. Improve risk management systems. Improve capital portfolios with better capital policy and return on equity. Reinforce legal compliance. Contribute to society and to protect the environment. 3. Strategy for Maximizing MS Power Rapid integration, and Maximizing MS Power (The power of Mitsui Sumitomo Insurance's staff and agencies) Implement creative staff training, and a new personnel system based on role and performance. Establish an incentive evaluation system. Integrate all systems, and quickly adopt new clerical methods. Strategically implement IT. Mid-Term Outlooks of Business Performance See sheet 1. Features of Mitsui and Sumitomo Marine Group After a large shake-up, the non-life insurance industry has formed into five main groups, and of these, Mitsui and Sumitomo Marine Group is at the forefront with leading growth rates and profitability. (With reference to its performance among the five groups for FY2000, please refer to Sheet 2) "MS WAVE" will quickly show results from the merger, and further increase growth and profitability rates. (1) Growth Index The group is in the third place when measured by direct premiums and net premiums, among the five major groups, however, only Mitsui and Sumitomo Marine Group has increased direct premiums under the difficult business climate with core and new products selling well . (2) Profitability Index With loss ratio of 58.4%, 0.3% down from last year, the group achieved the best results of the five major groups. Operating expenses ratio is 37.3%, 1.8% improvement from last year. As a result, the group improved combined ratio by 2.1%, and it is the best of the five major groups. [Cautionary Statements with Respect to Forward-Looking Statements] Statements made on this web site with respect to plans, strategies and future performance that are not historical fact are forward-looking statements regarding The Sumitomo Marine and Fire Insurance and Mitsui Marine and Fire Insurance Co., Ltd. These statements are based on assumptions and beliefs in light of the information currently available. Both companies caution that a number of factors could cause actual results to differ materially from those discussed in the forward-looking statements. Such factors include but are not limited to (1) economic conditions affecting the Company's operating environment, (2) intensified competition in the insurance industry, (3) foreign exchange rates of major currencies and (4) regulatory changes, including taxation issues.