Mitsui Sumitomo Insurance Co., Ltd. (“MSI”) (President & CEO Toshiaki Egashira) hereby announces that it has formulated a medium-term group management plan, “New Challenge 10” whose target year is set in fiscal 2010, and implements it in the current fiscal year.
The medium-term management plan envisages a goal of the MSI Group and is composed of the strategy to achieve the goal and values for all group members to share and respect. We all at the group will achieve our respective assignments under the plan.

1. Outline of New Challenge 10 Future vision: to become a world’s top-level insurance and financial group seeking sustainable development with corporate quality as the main source of competitiveness < Basic group strategy > Bearing “putting the first priority on the customers’ view” in mind in every aspect of products and services, MSI keeps a virtuous cycle of quality, trust and growth going round, and thus explores the way to CSR-oriented management In quality improvement, MSI not only maintains desirable quality, quality on a level that customers find satisfactory, but furthermore seeks for outstanding quality, quality on a level far beyond customers’ expectation. <Group business strategy> In each of the five major business domains*, we will make efforts mainly for quality improvement and business expansion, intending to raise core profit to a 100-billion-yen level as of fiscal 2010 and make business portfolio in better-balanced diversification. This is how we at MSI are going to pave the way towards a business of world’s top-class in terms of profit size and business diversification. (* businesses of domestic non-life insurance, life insurance, overseas, financial services and risk-related) <Quality improvement strategy> While we listen to suggestions from every stakeholder category** to reflect them broadly in the operations, we also develop employees and foster agents as well as improve operational process and infrastructure. Thereby, we take every chance of improving business quality in every workplace. (** customers, shareholders, agents, business partners, employees, local communities and the international community and environment) 2. Background for formulating New Challenge 10 and plan features (1) Background of the formulation [1] In response to the administrative disposition issued June 2006 due to inappropriate non-payments of third-sector claims, etc., MSI formulated and announced a business improvement plan July 2006. On this occasion, we all got determined to change ourselves dramatically to be a “company that puts the first priority on the customers’ view” and participate in formulating a new management plan.   [2] In developing the plan, the “New Vision Promotion Division” was established, and the “Meet-the-Management campaign” was launched, where senior managers had 120 meetings at branch offices all over Japan and heard directly from employees. Also a meeting was held at each workplace, and consequently, more than 1,500 suggestions were raised from employees in those meetings and on other occasions. After these preparatory works involving the entire organization and taking eight months, the plan was finalized. (2) Features of the plan [1] The plan identifies corporate quality as the main source of competitiveness. We will seek for our cutting edge in increasing capability of offering products satisfying potential customer needs on a service level of impressive quality to an extent that customers would appreciate such disciplined competitiveness as our hallmark.   [2] Product designs will be reviewed dramatically. To make sure that customers understand correctly the substance of the product, we will monitor comments from outside and use them for any improvement. Items on product lineup will be reduced and simplified in designing. Explanation materials will be prepared in a clearer expression, as well as difficult insurance terms will be reviewed as to whether or not they may be replaced by any other preferable wordings.   [3] In sales activity, we will maintain and organize the sales channels, particularly the network of agents that are trustworthy for customers, besides properly proposing and quoting a policy, and completely performing the procedures of concluding a contract.   [4] In claims handling, we will build up a consistent business process and computer system that encompasses from receiving an accident report to paying the claim in addition to fair and proper claims handling and prevention of payment mistakes.   [5] A new corporate message, “For all the things you care about,” was adopted. It symbolizes our determination to care for each every person concerned in carrying out our business.   [6] New programs will be launched for improving operational quality. As a personnel management focusing on the front fields, new employees are to be transferred around to experience jobs in the sales and the claims handling sections within the first seven years in his or her career. For better education, the Global Training Center will be established as well as other encouraging measures will be taken for better environment in terms of framework and contents.   [7] As part of strengthening the management framework, supervisory function of the Board of Directors and transparency in decision making by the top management will be increased. A group-wide management system is also on agenda in order to draw total potentiality for higher out put.   [8] In addition to the participation of employees in the process of formulation, the base line is set on a level of viewpoints from outside, and discussions made at meetings of the Board of Directors, including the outside directors, are incorporated. 3. New Challenge 10 : Key target figures as of end of fiscal 2010   Fiscal 2006 forecast Target for fiscal 2010 Group core profit Group ROE 61.7 billion yen 3.0% Over 100 billion yen 5.0% or more *1 *2 [MSI stand-alone] Net premiums written Combined ratio 1,310.0 billion yen 96.1% Over 1,370 billion yen 95.0% or less *3 *4 [Consolidated non-life] Consolidated. net premiums written 1,518.0 billion yen Over 1,650 billion yen   [Overseas] Core profit 10.2 billion yen 20% of group core profit *5 [Life insurance] Core profit 9.0 billion yen 20% of group core profit *6 [Financial services and Risk related] Core profit 1.6 billion yen 5% of group core profit *7-8 Distribution to shareholders - 40% of group core profit   < Notes > *1) Group core profit = consolidated net income - capital gains and losses on stocks (buying and selling gains and losses, etc.) - evaluation gains and losses on credit derivatives - other special gains and losses - consolidated net income of life insurance subsidiaries + profit before the provision of additional policy reserve for standard underwriting reserve at Mitsui Sumitomo Kirameki Life + equity in earnings under U.S. GAAP of Mitsui Sumitomo MetLife and certain other items (all on an after-tax basis)   *2) Group ROE = group core profit ÷ consolidated shareholders’ equity (defined as the average of shareholders’ equity at the beginning and at the end of the fiscal year)   *3) Excludes refundable premiums under Modo-Rich automobile insurance policies that provide for return of premium on maturity (and takes account of the impact of abolition of the government reinsurance program of compulsory automobile liability insurance).   *4) Combined ratio = net loss ratio + net expense ratio   *5) Core profit of the overseas business = profit from overseas departments on a non-consolidated basis + equity in earnings of overseas insurance companies of the Group   *6) Core profit of the life insurance business = profit before the provision of additional policy reserve for standard underwriting reserve at Mitsui Sumitomo Kirameki Life + equity in earnings under U.S. GAAP of Mitsui Sumitomo MetLife   *7) Core profit of the financial services business = profit of financial service businesses on a non-consolidated basis + equity in earnings of financial service companies of the Group   *8) Core profit of the risk-related business = equity in earnings of risk-related business companies of the Group Appendix: Summary sheet of New Challenge 10, medium-term management plan (PDF 277KB)