Mitsui Sumitomo Insurance

July 8, 2004

MS Quarterly News (1st Quarter, 2004)

We, Mitsui Sumitomo Insurance Co., Ltd. ("MSI"), are pleased to issue the quarterly newsletter for April-June 2004 with a summary of the topics for this period, as set below.

Performance

Preliminary for the first quarter of fiscal 2004 from April to June 2003:

Lines of insurance	Premiums (sales basis) (in million yen)	Growth rate (%)*
Voluntary Automobile	150,657	-0.5
Compulsory Automobile Liability	36,649	1.9
Fire	45,627	5.2
Personal Accident	27,170	10.9
Miscellaneous	47,751	7.8
Cargo and Transit	15,371	7.8
Hull	7,074	5.8
Total	330,299	3.1

*The "growth rate" represents an incremental rate in comparison to the same period in fiscal 2003.

< Remarks >
A high growth in the lines of fire, personal accident, miscellaneous and marine served to counter a drift-down in voluntary automobile, and total premiums marked a 3.1% increase for the quarter. " Home Pika-ichi", a mainstay item of the fire line, contributed remarkably to the increase as well as certain large size deals in the personal accident, miscellaneous, and marine lines.

Selected News Releases (April - June, 2004)

note: released on the date in parenthesis

(1)

New Products and Services

Inter-Risk started safety assessment of second-tier large outdoor storage tanks (April 21)

Inter-Risk Research Institute & Consulting Inc. ("Inter-Risk"), our risk management consulting subsidiary, launched a consultation service of "Safety Assessment of Outdoor Storage Tanks Recognized Second class structures" in alliance with Kiso-Jiban Consultants Co., Ltd. in May. The Fire Defense Law of Japan defines 500-to-1,000-kiloliter outdoor storage tank as second-tier recognized, and this service targets tanks in this class to assess anti-earthquake protection, thus improving preparedness of preventive measures against possible damage and compliance with applicable laws and regulations. Based on a combination of Kiso-Jiban's expertise in land survey and measurement, which is said top-class in Japan and Inter-Risk's consultation know-how in risk management of various kinds of hazard, proper and adequate service will be delivered.

"MS 105," a new savings-type personal accident insurance launched for sale (April 26)

"MS 105," a savings-type personal accident insurance for cash surrender value purpose, has been launched on the market since this April. This is offered only for individuals who pay a front-end single premium payment, and designed to pay back a higher-than-conventional cash surrender value on expiry by setting lower indemnity during a ten-year period. Amidst the prolonged low interest rates in Japan, its campaign will be proactively implemented to the targets, centered around retirees.

"Burglary Risk Clinic Service" initiated for Japanese corporations in China (April 26)

MSI and Inter-Risk cooperatively developed a system to examine office protection from burglary for Japanese companies operating in China, and began to offer it in this May. The system is modified based on Inter-Risk's burglary risk evaluation used for examination and analysis in Japan, and provided through MSI's channel in China, which is one of the broadest networks there among those of Japanese non-life insurers. A recipient company undergoes a gratis examination from six risk assessment points such as "potential burglary risk" and "organized protection and control system," and can obtain a specific proposal based on the results from us.

"Suitcase Repair-, Collection- and Delivery-Service" added to overseas travel insurance (May 14)

"Suitcase repair-, collection- and delivery-service" was introduced to insured persons of overseas travel insurance on May 12. MSI gave a shape to opinions and wishes heard among overseas traveling policyholders of this insurance, and this industry's first service provides three options; (1) charge-free collection and delivery of suitcase, (2) express repair and charge-free rental substitute and (3) brand new suitcase at a budget price. Thus, we make another step ahead to achieve higher customer satisfaction.

"Personal Data Protector" a liability insurance against leakage, launched (June 2)

"Personal Data Protector" was put on the market on June 4, and this new complex product not only compensates an insured company for indemnity paid for leakage of personal information held by it and the related expenses but provides it with risk consultation, including a brief risk examination. For example, riders are prepared to cover a wide range of incurrence such as payments to aggrieved persons, expense to retain a consultant and indemnity of leakage due to criminal act by an employee of the insured company. This is also the first product to handle leakage of personal information that includes a brief risk examination which supports an insured company by giving a comprehensive advice regarding corporate information control system and preventive action of recurrence.

(2)

Life Insurance, New Businesses,Alliances and Overseas

Operation and capital alliance with Tokai Tokyo Securities (April 30)

Tokai Tokyo Securities Co., Ltd. and MSI entered into a business and capital alliance to share operational know-how of both and allow each other to use the other's know-how to meet customers' needs by offering new attractive products and services. The main focuses include joint promotion of securities brokerage system, incubation of medium- and small-sized companies, distribution of MSI's savings-type items of life and non-life insurance lines through Tokyo Tokai's channel and exchange of personnel. MSI will hold a 10% stake in equity of Tokyo Tokai, too.

Business alliance with Nansha Development Zone (May 13)

On May 11, MSI concluded a cooperation agreement with Nansha Development Zone ("Nansha ETDZ") of China. This is the first agreement of Nansha ETDZ made with a foreign non-life insurer. Under collaboration with Nansha ETDZ, we will provide to-be entrants with specifically planned service from the very beginning. Many foreign carmakers are operating in Guangzhou-city, and Nansha ETDZ, providing an industrial park dedicated for automobile and its related industries, seems one of promising development zones. Our main targets are Japanese corporations, but non-Japanese foreign and Chinese local enterprises are also welcome.

MSI allowed to handle a new personal accident insurance "Protect your employees" in China (May 17)

This new insurance has some Chinese proper features such as "semi-registry" under which it is not registered who are insured but it is fixed how many are insured and "work time only compensation" which limits coverage to damage suffered during work time. The national insurance authority of China Insurance Regulatory Commission granted a permission of this insurance to MSI on May 14, for the first time to a foreign non-life insurer. A law concerning workers' compensation had been enforced in China in January, 2004, and workers' compensation have been drawing attention increasingly year by year in respect of hiring and retaining capable personnel, as well. This new personal accident insurance is a solution in a compact and new contract format to meet employees' needs for compensation of an accident at workplace

"e-JIBAI" system under joint development and new members (May 31)

Last August, Japanese major non-life insurers, including MSI, set about developing a shared computer system for compulsory automobile liability insurance ("CALI") named "e-JIBAI." The Asahi Fire and Marine Insurance Co., Ltd. and four other non-life insurers have decided to join, broadening the project for eleven insurers in total. "e-JIBAI" will process settlements electronically, transferring premiums from agent to insurance company. A discussion is ongoing regarding which electronic settlement service to selected out, and its focus is centering on "Pay-easy," a cash collection and distribution service provided by the Japan Multi-Payment Network Management Organization, and some other candidates.

MSI extending weather derivatives operation across Asian markets (June 18)

With a technical cooperation with MSI, Central Insurance Co., Ltd. of Taiwan obtained a permission to introduce index-linked weather insurance to the local market for the first time. After the first step in Taiwan, MSI will bring weather derivatives and applications such as index-linked weather insurance to Asian markets from its overseas offices and alliance partners, which form a broadest and most energetic operation network, hoping to contribute to development of weather risk management markets in all of these Asian countries.

MSI Kirameki made its embedded value public (June 21)

Mitsui Sumitomo Kirameki Life Insurance Company, Limited ("Kirameki") announced its embedded value ("EV"), known as an indicator of corporate value of a life insurer. According to it, its EV stands at 74.9 billion yen as of March 31, 2004, up 11.7 billion yen from a year ago, and it implies a 13.9% annual growth rate for the period from Kirameki's commencement to the date.

MSIVC established an industrial-academic incubation fund (June 23)

MITSUI SUMITOMO INSURANCE Venture Capital Co., Ltd. ("MSIVC") and Japan Regional Development Corporation ("JRDC") agreed on an collaboration to established an investment limited partnership, a sort of investment fund in order to invest in tenant and to-be-tenant ventures in the Kyodai Katsura Venture Plaza which is a complex facilities associated with Kyoto University and dedicated for startups. On JRDC's side, this is a part of its "industrial-academic incubation business" which takes part in the "1000 Ventures from Universities Project" advocated by the government of Japan and the first fund of this sort set up for specific incubation facilities jointly with a private venture capital partner.

MSI Citi Life continues to fare well

At Mitsui Sumitomo CitiInsurance Life Insurance Co., Ltd. ("MSI Citi Life"), sales of variable annuity insurance surged in the second fiscal year ended March 2004. MSI Citi Life climbed up to the second place in the market with amount in force of 477.4 billion yen from 54,863 policyholders in total as of the year-end.

< net premiums written at MSI Citi Life since its establishment >

Fiscal year	Premiums
FY 2002 from Oct. 02 to Mar. 03	42.1 billion yen
FY 2003 from Apr. 03 to Mar. 04	423.7 billion yen
Q1, FY 2004 from Apr. 04 to Jun. 04	115.0 billion yen (on a preliminary basis)

(3)

Corporate Citizenship

MSA under the Kansai headquarters conducted a CALI charity campaign (April 22)

MSA, an organization of MSI's better-performing agencies, under the Kansai headquarters launched an campaign in February 2004 to collect certain amount of received commissions on compulsory automobile liability insurance ("CALI") for social contribution. The contribution totaled to 623,000 Yen collected from 410 participting agencies, and was donated to the Foundation for Orphans from Automobile Accidents on April 21. Years ago, the charity campaign had originated from an idea of MSA under Chiba-Kita branch, which had advocated a donation to a society of foster mothers of traffic-accident orphans. Gaining a high reputation among customers, it had gradually spread nationwide at MSA since then.

Click-voting web-page opened for charity winter holidays' greeting cards (June 25)

The "Smile Heart Club," a social contribution body of volunteer employees in the MSI group, re-opened a web-page for click-voting for electing a greeting card for 2004 winter season within MSI's corporate website (http://www.ms-ins.com), and started the election open to viewers accessing there. This year, five pictures will be adopted for greeting cards out of twelve candidates drawn by children in Croatia. Based on a concept of "Kids Helping Kids," elected pictures will be laid out on a greeting card to produce for sale to the public, and revenues from them will be used to support children of the world living in predicament of warfare and disasters. This activity is a collaboration with the Kids Earth Fund and the Smile Hear Club, and has supported children of the world suffering warfare and disasters. Revenues has totaled to 28.6 million yen since 1992 by this fund-raising method of kids-helping-kids cards.

MSI set up the Community Relations Section

MSI opened the Community Relations Section in the Public Relations Department in April, which gives support to volunteer social activity of employees, and plays role of partner in a cooperation with an outside non-profit organization. Five staff assigned to the office are all women except the head. They are eager to work with their womanly sensitivity in social service activities. Besides, from this year, MSI will issue a corporate social responsibility (CSR) report.

(4)

Others

External disclosure policy formulated (April 12)

MSI adopted the "Disclosure Policy" for information to be disclosed externally as the first policy of this sort in the industry, and made the policy public on its corporate website. From a viewpoint of retaining and improving transparent and fair information governance, the policy makes it a principle to positively make useful information open to stakeholders to an extent that surpasses requirements of the General Insurance Association of Japan, as far as we conclude it will have effect in making ourselves understood to the public regarding our corporate attitude.

Subsequent progress of MS Wave II plan (June 1)

Out of five major numeric goals set in the medium-term management plan of MS Wave II for fiscal 2003-2004, three goals were achieved as of fiscal 2003 year-end, March 31, 2004; "No. 1 in growth rate of net premiums written from domestic non-life insurance," "No. 2 in consolidated net premiums written from non-life insurance underwriting, including those from overseas" and "No. 1 in the rate of investment return."

Chairman and CEO Takeo Inokuchi to be honored into the "Insurance Hall of Fame" (June 10)

The International Insurance Society, Inc. ("IIS") resolved that Mr. Takeo Inokuchi, Chairman and CEO, MSI, would be honored into the "Insurance Hall of Fame, "appreciating mainly his contribution to liberalization of Japan's non-life insurance market. He will be the third winner, after 22 years interval, in the Japanese non-life insurance industry. He will be celebrated at the ceremony to be held on July 12, London time.

"MitSuKo 2004," an advertorial magazine for women, issued (June 22)

MSI released "MitSuKo 2004," an annual investment booklet targeting women, under the title of "Woman's power - how top-running women are making their ways. " It introduces women actively working at the front line of their industries such as a camerawoman and a sommelie`re and what they think of investment to protect their lives and prepare for their future ones.

Amateur Sports

MSI's athletes elected to Japan's delegation to Athens

Three athletes sent from MSI to Athens Olympics are;

Ms. Yuki Yokosawa of women's judo, 52 kg class for the first game at 16:30 on Sunday, August 15

Ms. Masae Ueno of women's judo, 70 kg class for the first game at 16:30 on Wednesday, August 18, and

Ms. Reiko Tosa of Women's marathon for the race at 24:00, Sunday, on August 22

(all starting times at Tokyo time)

	*	Special page opened for these three on the corporate website
		The page covers profiles of these three athletes, messages from their chief coaches and how they are currently preparing for Athens Olympics. URL: http://www.ms-ins.com/olympic/index.html
	*	MSI formed "Team Athens " to support these three delegates to the Olympics
		The "Athens Olympics Delegation Office," which is called by its nickname of "Theme Athens ," was set up within MSI. This seven-member task force is "helping these three in preparation and management, organizing fans' support, responding to mass media and promoting commemorative sales campaign."
	*	Women's judo
		Woman Selection Weight Judo Championships held at Yokohama Bunka Gymnasium on April 12^th Ms. Yuki Yokosawa and Ms. Rie Iwafuji won the gold medal in 52kg class and 57kg class, respectively. Ms. Noriko Mogi and Ms. Hitomi Kaiyama also earned the silver in 57kg class and 70kg class, respectively. The achievements Ms. Yokosawa and Ms Ueno performed in this championship decisively secured their positions in Japan's delegation.