April 14, 2003 Mitsui Sumitomo Insurance Group Medium-Term Strategic Business Plan "MS WAVE II" Mitsui Sumitomo Insurance Co., Ltd. (MSI/President, Hiroyuki Uemura) has formulated a medium-term strategic business plan, MS WAVE II*, for the two-year period from fiscal 2003 to fiscal 2004. The final goals expressed as figures as at the end of fiscal 2004 have yet to be established but will be set after consideration of the results of fiscal 2002, and then we will announce the goals. *MS WAVE The plan's name, MS WAVE, is the same as the trademark, representing MSI's resolution to make big, new waves in the non-life insurance industry in Japan. Summary of MS WAVE II Following the previous plan, MS WAVE, which was completed with the excellent achievement of the merger, the MSI Group intends to become "No. 1 in total corporate group power" by concentrating the expertise of all our staff in implementing the plan. Specifically speaking, we will attempt to reach our goals of becoming No.1 in both growth and profitability and also attaining the No. 1 position in corporate quality to support the achievement of these final goals. Listed below is an explanation of the key words to the framework of the plan: 1.Concentrating the Expertise of All Staff All of our 20,000 Group staff are expected to take part in the implementation. As part of this implementation, the directors, executives, and general managers at headquarters and branches were asked for their opinions on the preliminary framework of the plan during an interim phase of planning. A project team, Mirai Forum 2010, of younger staff submitted a report as well, which reflects support for two of the Group's mainstay goals set in the MS WAVE II plan: "becoming No. 1 in growth and profitability compared with other companies in the same industry" and "attaining the No. 1 position in corporate quality". 2.Becoming No. 1 in total corporate group power In Japan's non-life insurance industry, which depends largely on domestic operations, we have been staying ahead of the competition in dynamically "diversifying revenue sources" into the five business categories of "non-life insurance," "life insurance," "overseas business," "financial services," and "risk related business" to place management on a course toward sustainable growth on a consolidation basis. 3.Becoming No. 1 in growth and profitability In terms of growth, goals have been set to attain to the lofty position we desire. We intend to reach these goals: No. 1 in increasing the ratio of net premiums written from domestic non-life insurance, No. 2 in consolidated net premiums written from non-life insurance, and No. 2 in the amount of life insurance in force among subsidiaries of non-life insurers. As for profitability, similarly; we intend to attain: No. 1 position in the combined ratio (loss ratio plus expense ratio) No. 1 in the rate of investment return 4.Attaining No. 1 in corporate quality We bear in mind that we strive to offer clients the best quality products and services as well as enhance our business foothold and corporate strength to satisfy the expectations of our customers, shareholders, society and employees. Strategic Objectives 1.Becoming No. 1 in Growth and Profitability (1) No. 1 in increasing the ratio of net premiums written from domestic non-life insurance   We will reinforce marketing activities in such market segments as personal, small and medium-sized companies, and corporate groups such that the net premiums written, the market shares we hold, and the number of customers we have will increase in the market. The specific tactics to be adopted are as below: (i) The weighted allocation of management resources on retail operations (ii) Active sales of our flagship "MVP"* products and the development of new third-sector insurance products (iii) Reinforcement of retail channels via the introduction of the"MS1" information network system between our agents and the Group (iv) Establishment of a brand of excellent claims handling services through the further expansionof the service network   *MVP   This is the name of a product lineup made up of our three flagship types of insurance, with M standing for "MOST" automobile insurance, V for "VIV" individual accident and medical insurance, and P for "Home Pikaichi" homeowner fire insurance. (2) No. 2 in consolidated net premiums written from non-life insurance underwritings, including those from overseas   In overseas business, particularly in Asian markets, where we are No. 1 in premiums volume and office network among Japanese peers, we allocate our strategic resources to those areas for those purposes as listed below. Further expansion of our business network in China Intensive operations at newly established sales bases in India and Korea As for reinsurance business, we seek to implement a policy of best-balanced retention and reinsurance Groupwide to increase net premiums written. Simultaneously, we intend to keep reinsurance acceptance running on track for further income growth at overseas reinsurance subsidiaries. (3) No. 2 in the amount of life insurance in-force among subsidiaries of non-life insurers   While incorporating the income protection policies "Shunyu Hosho" and whole life insurance "MS Shushin" as core items in the retail market, our subsidiary, Mitsui Sumitomo Kirameki Life Insurance Co., Ltd. ("MS Kirameki"), will conduct the direct control system* on trial while we will beef up life insurance expertise at MSI. Mitsui Sumitomo CitiInsurance Life Insurance Co., Ltd. ("MSICiti"), which made a good start in its variable annuity business, will continuously promote its sales activities via the commissioned financial institutions using these as market channels.   *Direct control system   In our life insurance business, staff at MSI have instructed and trained our agents until now. Now, however, staff at MS Kirameki will handle the job responsibilities for the agents at each office in this system. (4) No. 1 in combined ratio (loss ratio + expense ratio)   We ensure to seek for higher efficiency, cutting costs and expenses, enhancing productivity, and lowering the loss ratio to attain No. 1 in the combined ratio. Above all, we will revise the process from customers to the Group through an agent from a viewpoint of customer satisfaction (CS), leading to greater CS, prompter reactions to various business circumstances, and further costs and expenses reduction. (5) No. 1 in the rate of investment return   We will extend our record of seven straight years in the top spot in the rate of investment return in the coming years by ceaselessly improving efforts in investment. (6) Further strengthening of group business   Toward the goal of becoming No. 1 in total corporate group power, each Group member strives to expand its business and yield the positive result of synergy effect within the Group. Examples follow: In financial services, develop a business model based on our high credit rating and advanced financial technology applications In risk-related business, expand risk management, long-term and medical care services, emergency assistance and appraisals 2.No. 1 in corporate quality (1) We bear in mind that we strive to offer clients the best quality products and services as well as enhance our business foothold and our corporate strength to satisfy the expectations of our customers, shareholders, society and employees. (2) Focusing on No. 1 in CS, we strive to offer customers the best quality services in a well-prepared manner and, thus, build their trust. For example, we will make the most of our CS efforts to resolve and eliminate any problems customers may have with our services (CS and complaint system) and sharing service improvement tips Companywide to offer customers even better service.     Appendix: chart: "Medium-Term Strategic Business Plan: MS WAVE II for Fiscal 2003 and Fiscal 2004"