October 6, 2003 MS Quarterly News (2nd Quarter, 2003) We, Mitsui Sumitomo Insurance Co., Ltd. ("MSI"), are pleased to issue the quarterly newsletter with a summary of the topics during the second quarter ended September 30th, 2003, as set below. Performance (on a preliminary basis for the second quarter of fiscal 2003(July to September 2003)   Q2 fiscal 2003 (Jul. to Sep.) Fiscal year to date (Apr. to Sep.) Lines of insurance Premiums (sales basis) (in million yen) Growth rate (%)* Premiums (sales basis) (in million yen) Growth rate (%)* Voluntary Automobile 139,248 -1.1 292,737 -0.1 Compulsory Automobile Liability 38,306 0.5 74,266 0.6 Fire 46,535 15.6 90,382 7.7 Personal Accident 29,489 1.4 53,818 2.0 Miscellaneous 37,609 -0.4 82,403 3.4 Cargo and Transit 13,187 7.6 27,492 4.5 Hull 5,767 2.9 12,453 1.2 Total 310,140 2.1 633,551 1.9 *The "growth rate" represents an incremental rate in comparison to the same period in FY 2002. < Comments > Fire,Personal Accident and Marine(Cargo and Hull) increased in premium steadily, and as the result, total premium for second quarter increased by 2.1%. Voluntary Automobile, our main line of insurance, struggled with the tough market condition and recovered from discouraging situation of July and August and ended at a slight decrease of 0.1%. Fire insurance increased by 15.6% as a result of steady increase of "Home Picaichi",bankassurance and large scale commercial contracts. Selected News Releases (July - September 2003) note: released on the date in parenthesis ■  New Products and Services   {  New hedging instrument ,"Forex Swap on Customs Duties"developed (July 1)     MSI developed "Forex Swap on Customs Duties," a financial derivatives application to hedge foreign exchange risk in custom duties on imports, and launched it into market. This hedging instrument was designed in order that an importer could get rid of fluctuation risk of foreign exchange arising from a certain sort of custom duties to be charged on US dollar denominated imported goods. This instrument is the first one of this kind ever designed in Japan. So far, the importers of items charged with high tariff rates and those who pay considerable amounts of custom duties are primarily targeted, and the financial institutions who seek to hedge fluctuation risks on foreign exchange rates of custom duties are also potential targets in our discussion.   {  New medical insurance, "ViV Shushin" to be released (July 14)     Authoritative permission was granted for "ViV Shushin," and it will be released in November 2003. The new medical insurance with coverage of whole life features (1) introduction of mileage service to an insured with no claim, (2) protection spanning whole life, (3) compensation adequately covering medical expenses and (4) reasonably priced premium rate,with "Health V Service" such as "Information Service on Second Opinion for Three Major Fatal Diseases" of heart diseases, diabetes and cancer. With these special services extended only for its policyholders, MSI will provide a great peace of mind to these customers.   {  Event Risk Management Service started (August 13)     InterRisk Research Institute & Consulting, Inc. ("IRR"), one of MSI group companies, commenced to provide the advisory service in August, which not only includes thorough preview of risks hidden in an event such as festival and sports meet, but also covers consultation on preventive measures of an accident and emergency program prepared for an accident if it happens.   {  "ViV Kids," a medical insurance only for children launched (August 18)     Another newly released product was "VIV Kids," a casualty and medical insurance adequately covering damages arising from the risks surrounding insured children. Besides children's hospitalization due to disease or injury as assumed in conventional types, the new insurance has assumed, as background in its product concept, the current social situation where unexpected crimes and accidents involving children happen more sporadically. Specifically speaking, it has introduced the new provisions of "double payout for injury perpetrated by third party" and "double payout for injury in a traffic accident," and also additionally includes coverage for "injury incurred in an earthquake" as part of enhanced protection scheme.   {  "Kantan MOST," a new sales guide of automobile insurance issued     The further product diversification goes, the more complicated the scheme is. In response to the agents' voices saying, "products difficult to explain," "complicated premium calculation," "an application with too many boxes to fill in," and so on, an agency guide "Kantan MOST" was issued in August. The guide contains some practical patterns of explanatory talks as a sales tool for an agent to recommend an automobile insurance to a new customer.   {  "Evacuation inspection service based on fire spread risk analysis" started (September 4)     MSI and IRR began on September 1 to provide "Evacuation inspection service based on Fire spread risk analysis" to such target customers as have large facilities, e.g. commercial buildings, hotels or hospitals, where in case of emergency evacuation, general public and, especially, those who are more vulnerable would be sheltered. This is the first consultation service specialized in "emergency evacuation program" in Japan. ■  New Business and Overseas Operations   {  Risk swap transactions executed with Swiss Re (August 4)     Risk swap transactions were concluded with Swiss Re on the risks of natural disasters inside and outside Japan. These operations were intended to cede some portion of position written by us effectively in exchange, stabilize the overall performance of reinsurances on natural disaster and improve portfolio structure by global diversification of risks, and thus pursue financial soundness further and improve capital efficiency.   {  Corporate restructuring fund established (August 11)     MSI, Sumitomo Mitsui Banking Corporation and Daiwa Securities SMBC Principal Investments, a wholly owned subsidiary of Daiwa Securities SMBC Co. Ltd., jointly established a corporate restructuring fund in September. This was the first step for MSI to enter into the business of restructuring corporations for further commitment.   {  "e-JIBAI" system signed to be developed jointly by MSI and five major non-life insurers (August 20)     MSI, Aioi Insurance Co., Ltd., Sompo Japan Insurance Inc., The Tokio Marine and Fire Insurance Co., Ltd., Nissay Dowa General Insurance Co., Ltd. and NIPPONKOA Insurance Co., Ltd. jointly agreed on development and sharing of "e-JIBAI" system for compulsory automobile insurance transactions. The system will be connected with the agency system of each non-life insurer and increase convenience for the policyholders and the agents, for example, by issuing a certificate to a policyholder or booking an entry directly to the system of the host computer of its insurer at an agent's place. The development will start soon to be set in operation in the second half of fiscal 2004 ending March 2005. ■  Other Business and Corporate Citizenship Topics   {  "Eco 2 Summer" addressed energy saving and Eco 2 summer wear (July 2)     Since its start in April 2003, "Eco 2 (i.e. ecology and economy) Movement" has addressed "saving energy and resources" to the effect of thus curtailing daily expenses such as electricity and printings. In July and August, the movements recommended to review room temperature in the office and to wear Eco 2 summer clothes for further Eco 2 enforcement.   {  Seminar on management given to taxi fleet clients (July 29)     The seminar was held for the executives of taxi companies at MSI's headquarter in Tokyo on July 24. Mr. Yasuhiro Nagatsuka, and Professor Emeritus, Niigata University and Mr. Junji Ojiro, lawyer, were invited as speaker. They lectured on the current issues of "Reduction of car accidents" and "Adminstrative solution in employee management" in the taxi industry, referring to some of actually implemented practices and judicial precedents and finished the lectures with applause from the attendants.   {  "Risk Clinic" system to propose a solution to corporate clients developed (August 1)     To make a better proposal to a medium and small-sized corporate client, a set of proposal tools necessary for a customer is prepared according its industry at one-stop by the developed solution system. The system became available online at about 40,000 agents where the agency network of "MS1" is connected. By recommending these major agents to utilize the system, new customer exploration is expected to be shifting from with MSI's guidance to on each agent's own initiative so that it should help us increase solid clientele base.   {  New TVCM of "MOST" automobile insurance on air (August 6)     The new TVCM of "MOST" automobile insurance has continued to feature Ms. Hitomi Kuroki, actress, and started on air nationwide on August 16. The new CM, taking place in "Mambo Clinic," she appears as a cheerful and unique character and appeals to the audience MOST's assurance with coverage of family's injury not due to a car accident as well as car accident casualty   {  Junior high school students and parents tour visited MSI on bus tour     On August 11, "Bus tour for junior high school students and their parents to go and see finance and economy" visited our headquarters. After visiting around other financial institutions, 13 families of 26 people were welcomed by us. After learning what non-life insurance is and how it works, they all participated in a game-like explanation of weather derivatives, enjoying it very much.   {  Charity season's greeting cards for winter 2003 on sale     Every winter since 1992 we have been cooperated with a nonprofit organization, "Kids Earth Fund," to produce and sell season's greeting cards of pictures drawn by children and donate the profits to support children living in warfare and disasters. For the coming winter holidays, the cards are on sale at our corporate website since September. The art designs were selected by click-voting of visitors to the website during June to July 2003. http://www.ms-ins.com/csr/social/smile.html   {  MSI Kirameki Life developed a new internet based life insurance system(September16)     Mitsui Sumitomo Kirameki Life Insurance Company, Limited replaced one of the backbone systems named "New Contract System" off the host computer, and reconstructed it on the web server as a new web system with a good connectivity and of future potentiality. Certain functions became available online in September, and the rest functions will follow step by step.   {  Risk management seminar held for Japanese corporations in Shanghai (September 22)     MSI and IRR jointly organized a risk management seminar with Shanghai Insurance Association as co-sponsor on September 18. About 150 attendants from Japanese corporations under consideration of entry into China and from China's insurance industry and its relevant bodies participated in the seminar, and the seminar won their good perception.   {  MSI Citi Life keep good pace of variable annuity sales     Mitsui Sumitomo CitiInsurance Life Insurance Co., Ltd. maintains a good pace in the sales promotion of variable annuity insurance. Its monthly sales climbed beyond 36 billion yen consecutively in July and August, and reached to 43.8 billion yen at record high in September, resulting in 151 billion yen for fiscal 2003 to date or 190 billion yen to date since the operation started October 2002. Amateur Sports     {  Women's Marathon and Long Distance     World Track & Field Championships at France Stadium, Paris on August 23: Yoko Shibui participated in the 10,000 meters, and clocked 31:42.01, finishing in the 14th place. Super Track and Field Meet Yokohama 2003 at Yokohama International Athletic Field on September 23: Yoko Shibui and Miki Ohira ran the 5,000 meters. Shibui and Ohira were the eighth and ninth place respectively, after their good running. All Japan Corporate Individual at Momotaro Stadium,Okayama on September27-28. Chiaki Iwamoto won women's junior 3,000 meters. In women's 1,500 meters,Ayumi Hashimoto and Miki Ohira were second and third place.     {  Women's Judo     World Judo Championships 2003 at Osaka Jo Hall on September 11 - 15. Masae Ueno (70 kg class), Noriko Mogi (57 kg class) and Yuki Yokosawa (52 kg class) took part in the world championships. Ueno won the gold medal, defending the title after the previous championships in Munich. She won her second world title admiringly in the championships. Yokosawa also fought remarkably to win the bronze medal. MSI also contributed to winning gold medals in the team competition by sending three representative Judo-women to Japan's national team. All Japan Corporate Individual Judo Championships at Amagasaki Memorial Park Gymnasium on August 30 - 31: Rie Iwafuji (57 kg class) and Yoshie Ueno (63 kg class) won the gold medal for the first time, respectively. Hitomi Kaiyama (70 kg class) and Hitomi Tokuhisa (63 kg class) also won the bronze medal, respectively.