Mitsui Sumitomo Insurance

October 7, 2004

MS Quarterly News (2nd Quarter, 2004)

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 30^th, 2004, as set below.

Performance

on a preliminary basis for the second quarter of fiscal 2004, from July to September 2004

	Q2, fiscal 2004(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	135,824	-1.8	286,186	-1.2
Compulsory Automobile Liability	39,415	3.1	76,022	2.5
Fire	46,987	2.7	92,386	3.7
Personal Accident	32,213	8.3	59,228	9.2
Miscellaneous	39,100	7.1	86,678	7.3
Cargo and Transit	14,689	11.7	30,049	9.7
Hull	5,520	-4.3	12,594	1.1
Total	313,748	2.1	643,137	2.4

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

< Comments >
In this September precedent to the third anniversary of MSI's establishment on October 1, 2004, a company-wide promotion campaign was conducted as hard as three MSI's Oympic delegates had fought up to the hilt.
As a result, the lines of fire, personal accident, miscellaneous and cargo and transit insurances fared so well that they made up for a decrease in the automobile line, and total premiums marked for only the second quarter and those for the first half increased at annual rates of 2.1% and 2.4%, respectively. In terms of product items, earthquake, a mainstay of the fire line, took a lead-off while miscellaneous and hull met steady demands from corporate clientele. "ViV shushin"whole life insurance and overseas travel insurance underscored the personal accident line in its increase of premium revenues.

Selected News Releases (July - September 2004)

note: released on the date in parenthesis

(1)

New Products and Services

Application / policy input navigation system developed (July 9)

MSI developed "making of contract application with navigate function・Econtract input system," which is considerably improved in maneuverability for preparing an application form and filling data in it. This industry-first system has remarkably shortened a period of issuing a policy from 14 to 4 days, for example, in case of product liability indemnity and others in the liability insurance category, and will bring policyholders improved convenience.
While currently applicable to liability insurance category including product liability, contractors' all risks, facilities damage insurances, it has miscellaneous and personal accident categories in its sight to next application.

Online driving check-up launched (July 12)

MSI has modified its "Diagnosis tools on attitude for Safe-Driving," which is now very popular among its corporate clients, and made it available free of charge 24 hours a day on the Internet to start it in July. This service benefits fleet clients in the ways (1) cost can be saved for driving check-up and (2) check-up ratio can be expected higher than before, and helps them prevent car accidents. This is the industry-first net service that ranges from returning "Advice to Driver" to each driver checked up to preparing "Summary and Data List to Manager" of these drivers.

Japan's first "theft loss prevention consulting service" started for distributors and retailers (August 2)

"theft loss prevention consulting service" has been offered to distributors and retailers since August by TAKACHIHO KOHEKI CO.,LTD.and Inter-Risk Research Institute & Consulting Inc. (IRR), MSI's risk management arm. They had entered into an alliance in which they would develop a service menu by combining Takachiho's know-how in watching out goods stored in and on shop shelves to prevent shopliftings and IRR's that of business risk management. The service menu, forged as a fruit of synergy brought in this collaboration, provides global consultation on security of goods which contains cost-saving analysis on not only existing preventive measures but return on investment in hardware as well as software.

Personal accident insurance designed for the elderly only launched (August 9)

"Hareyaka Sedai," meaning "glorious generation" in Japanese, was put on the market on September 1^st. This newly developed personal accident insurance is the first one in the industry that targets only the elderly people at the age of 70 or higher, as population of the elderly is progressively increasing in the midst of the aging society and they have more opportunities where they play an active role in society. Under the newly provided clauses, this insurance makes to an insured a quick payment of "Injury Benefit(By Body Part and Medical Condition)" in case of injury that requires the injured person to go to or stay in hospital. It pays "Injury Benefit(By fracture and dislocation of legs)" in case of bone fracture or dislocation, which tends to take longer for an elderly person to get cured. In addition, "Information service regarding how to take care of grandchildren for grandparents" and "hobby and travel guide" are available free of charge.

Ready-made "Basic Commercial Credit Insurance" for SMEs launched (September 21)

This new insurance, which is a modified type of the conventional commercial credit insurance and available to corporate client however small its revenues may be, is now on sale. Reasonably priced premiums have been made available by standardizing terms and conditions, such as preset payout ceiling, based on underwriting know-how accumulated and corporate credit information collected by MSI, and therefore, much time has also been saved to get terms and conditions fixed. While commercial credit insurance has been growing progressively in the premiums earned since it was put on the market in 1997, this is the first and only one for small- and medium-sized enterprises in the industry.

"Latest Information on Distribution" of the new EU entrants in the central Europe delivered (September 22)

MSI prepared CD-ROMs covering information on the latest situations of distribution infrastructures and services in central Europe, and delivered them free of charge to the corporate clients. In the expanded EU, with the aggregate population of 450 million and holding a 20%-share in the world trade volume, the distribution industry is growing as the market is expanding and elimination of the trade barriers is advancing. This CD-ROM introduces present situations of distribution in Czech, Hungary and Poland selected among central European countries, which deem to have economic impacts.

(2)

Life Insurance, New Businesses, Alliances and Overseas Operations

Kirameki Life starts quick "Partial Immediate Payment Service" (August 16)

Mitsui Sumitomo Kirameki Life Insurance Company, Limited started "Partial Immediate Payment Service," which is available without delay up to three million yen out of payout to be paid, in case that an insured has died and the funeral expense is urgently in need.

MSI acquiring Aviva's Asian operations (September 7)

MSI agreed with Aviva of the U.K. that MSI acquires Aviva's entire non-life insurance operation in Asia. This deal costs $450 million, roughly equivalent to 50 billion yen. By this acquisition, MSI secures solider base for business growth in this region, expecting net premiums written to jump from 42 billion yen for fiscal 2003 to around 72 billion yen. MSI will stand among world top class insurers; in the ASEAN market, MSI will capture the top position in size, outpacing AIG, and almost catch up with AIG in terms of entire Asian region.

Tsingtao Representative Office opened as Another Milestone in China (September, 14)

On September 9^th, China Insurance Regulatory Commission (CIRC), China's authorities of insurance, issued a permission to MSI to open a representative office in Tsingtao, Shandon Province. Since obtaining license for underwriting and opening its Shanghai Branch in May 2003, MSI has been expanding in the country by coping with various needs of the clientele. As another step going ahead, this quick move targets Japanese corporations, which are increasing in Shandon Province.

MSI entering into risk management operation in India (September 27)

MSI and its Indian partner the Murugappa Group agreed that MSI would acquire certain stake in a risk management firm of the Murugappa Group and then transform it to a newly re-established joint venture, Cholamandalam MS Risk Services Limited. This consultation firm is preparing for its opening on 31^st October, 2004 as the first risk management unit of an insurer group operating in India.

(3)

Corporate Social Responsibility Activities

Kobe MSA opening "Earthquake Insurance Charity Campaign 2004" (July 7)

Looking ahead to the tenth memorial day of the Great Hanshin-Awaji Earthquake, an organization of MSI's agents, MSA, in Kobe district will start "Earthquake Insurance Charity Campaign 2004." While this campaign aims at promotion of earthquake insurance, the body will donate portion of the commissions earned during the period for social benefit purpose to the Foundation for Reconstruction from the Earth Quake in Hanshin-Awaji. Besides the earthquake insurance promotion, the campaign intends to contribute to supporting the bereaved families and the local communities that suffered seriously from the earthquake happened there in 1995.

MSI signed UN Global Compact (August 10)

As prat of ensuring promotion of CSR activities, MSI joined in on the lineup with the UN Global Compact singners. MSI is the sixteenth among only seventeen corporate signers from Japan but the first from Japan's financial community. The UN Global Compact consists of ten principles covering four fields of human rights, labor standards, environment and anti-corruption, and addresses private enterprises to be a good global citizen. This program expects participants to not only conduct business in accordance with the principles but positively announce their commitment to the UN Global Compact as well as their actual activities based on the principles.

MSI Culture Foundation inviting to co-sponsoring "Concert for Local Community" for fiscal 2005 (September 16)

Mitsui Sumitomo Insurance Culture Foundation, MSI's socially contributing body, is going to announce that it openly invites municipals, including public halls, to apply for jointly sponsoring "Concerts for Local Community" for fiscal 2005. In this program, the foundation selects joint-sponsors among applicants to send well-known Japanese musicians to a public hall of each joint-sponsor and hold a concert there. Under this joint-sponsorship, the foundation helps prefecture governments and municipals promote cultural activities.

"CSR Report 2004" issued (September 17)

MSI has issued "CSR Report 2004," gathering its CSR activities during the period under review. This report contains our challenges, current issues and future "vision." It reviews our actions taken during the period and current issues for us to challenge in order to fulfill our duties to the stakeholders of customers, shareholders, agents, partners, employees, local communities and global society as well as in preserving environments in accordance with the "Mitsui Sumitomo Insurance Group Charter on Professional Conduct" which prescribes actually applicable principles. And the performance for the period is reported based on the CSR accounting, which is first time applied for this kind of report published within Japan's finance community. Recognizing "CSR activities are strategic investments," we have introduced the CSR accounting to measure costs of and effects from these activities and obtain entire results.

Support in the natural disasters such as floods and typhoons during July to September

< Donations sent from employees >

Recipient of donation	No. of donors	Amount in yen
Tokushima Prefecture for the attack of Typhoon #10	87	170,000
Niigata Prefecture for the flood under the rainy season's front	314	549,000
Fukui Prefecture for the massive cloud burst	182	370,000
Aichi Prefecture for the attacked of Typhoon # 15 and rainfalls under a front stimulated by it	64	73,000
Kagawa Prefecture for the flood tide caused by Typhoon #16	65	72,000
Okayama Prefecture for the flood tide caused by Typhoon #16	151	235,000
Miyazaki Prefecture for the attack of Typhoon #16	59	66,000
Hiroshima Prefecture for the attack of Typhoon #18	in process	in process
Total	922	1,535,000

< 58 volunteers at Okayama Branch and agents in the district joined restoration works >
Among readers within MSI Okayama Branch of a newspaper reporting lacks of volunteers on sites of the flood, arose and spread a call for joining the volunteer activities being organized by the Social Welfare Council. In response to the call, 58 people got gathered to join the works, some at Kojima district in Kurashiki-city and others in Tamano-city on Sunday, September 5^th. They carried away furniture no more useful out of houses once dipped in the water onto trucks, and then cleaned out the houses. Afterwards, various voices were heard; some confessing "Everyone was exhausted due to dust blown up and nasty smell," while others feeling content, "I could be of some help to the community," and "I felt happy to hear thanks from sufferers." Having faced a site of damages, now these insurance men all feel necessity of insurance reconfirmed to cover possible damages by disaster and, therefore, are re-determined to recommend people to insure their properties.

(4)

Others

New TV commercial campaign launched for "MOST" automobile insurance (August 12)

Another commercial film has been produced for MOST automobile insurance. This third story of the series featuring an actress, Ms. Hitomi Kuroki, is "Skelton Car," following "Mamma Visiting Class" and "Mambo Clinic." In the commercial, highlightened is the assurance of the most valuable quality extended to policyholders by MSI as an "invisible partner", exactly as the pet name of the mainstay insurance. The flagship insurance is one of our new products, as young as reborn MSI, which is awaiting the third establishment anniversary on October 1^st.

Amateur Sports

Three Japanese delegates from MSI marked admiring results in Athens Games (August 27)

MSI two women judo athletes and a woman marathon runner to Japan's delegation fought admiringly their games in the the Athens Olympic Games as follows;

(1)	Yuki Yokosawa in 52kg-class, women's judo, advanced as expected to the semi-final match with Amarilys Savon of Cuba, the world champion in this class till then. Savon led the match by one yuko or half game point to the very last second, when Yokosawa made a sharp throw of sode tsuri komi goshi, and finishing the match in an ippon victory, amazingly coming back from behind. And then in the final match, Yokosawa was defeated by China's Xian Dongmei and won the silver medal in this class.

(2)	Masae Ueno in 70 kg-class, women's judo, met her long-time rival, Edith Bosch of the Netherlands in the final match, up to which Ueno had fought through steadily. In spite of being 20cm smaller, Ueno fought on aggressively against Bosch from the start, and at last 3:10, Ueno gave Bosch a decisive throw of sode tsuri komi goshi down onto the mat. This prompt move made a championship ippon which brought her the gold medal.

(3)	Reiko Tosa ran the women's marathon race, which started at a slow pace in the intensely hot weather. Ten runners formed a leading group for the first several miles, including the world record holder, Paula Radcliffe of the U.K., Tosa and two other Japanese. Past the 27km point, Mizuki Noguchi (Globaly Corporation), one of these three Japanese, made a spurt and led the race alone to the goal. Noguchi brought Japan the second consecutive Olympic gold medal in women's marathon. Also, Tosa won the fifth prize, finishing only 2:24 behind Noguchi.

Women's Judo

< The 34^th All Japan Corporate Team Judo Championships held at Amagasaki Memorial Park Gymnasium on Ausgust 28^th and 29^th >
Both Rie Iwafuji in 57kg class and Yoshie Ueno in 63kg achieved their second consecutive championships, and Hitomi Kaiyama in 70kg class also came back to the champion's seat after two years' interval
< The 41^st Eastern Japan Corporate Team Judo Championship held at Kodokan, Tokyo on September 19^th and 20^th >
MSI team, made of Iwafuji in 57kg class as a lead-off, Y. Ueno in 70kg class as a middle attacker, and Tokuhisa / Kaiyama in open-weight class as captain, participated, and finished in the third prize with the results of 1-1-1.
< The US International Judo Cup held in Las Vegas on September 25^th and 26^th >
Iwafuji in 57kg class, Y. Ueno in 63kg and Kaiyama in 70kg class joined Japan's squad, and Ueno and Kaiyama won the gold medals, Iwafuji the bronze.

Women's Marathon and Track

< The 47^th Sapporo International Half Marathon held in Sapporo on July 4 >
Ohyama and Ishiyama participated in the race. Ohyama won the third prize with a record of 1:9:54 and Ishiyama finished 20^th.
< The 17^th Nambu Memorial Track Games held in Sapporo on July 11 >
Hashimoto took part in 5,000m race. She first led the group, gradually slowing down, and crossed the goal line 15^th.
< Japan's National Junior Track Games held in Italy during July 13^th to 18^th >
Iwamoto ran the women's 5,000m race and won the third prize.
< Berlin Marathon in Berlin on September 26^th >
Yoko Shibui won the race, setting a Japanese record of 2:19:41.
She set every split time beforehand, and ran the first half as she had planned. But, around the 25km point she gradually slowed down, compared to the plan, to 4 minutes behind at the 30km point. Chief Coach Suzuki shouted a timely instruction at her from the roadside. Then she speeded up back onto the plan and kept the pace till the goal, overcoming her problem of pacing down for the last several miles. As a result, she marked 2:19:41, a new Japanese record, by five seconds, and this is also her personal record by a minute and 41 seconds. Moreover, this is the forth best all-time record.
As a result, she now holds two Japanese records, together with the other one in 1,000m marked at the Cardinal Invitation in 2002.
< All Japan Corporate Team Track and Field Championships held at Niigata Big Swan on September 25^th and 26^th >
O-hira, Ohyama, Hashimoto, Iwamoto, Ishiyama, Yamashita and Takayama participated. Takayama finished sixth with his/her personal best record and Yamashita seventh in J3000. In the 5,000km race, Hashimoto won the third prize, Ishiyama finished eighth with his/her personal best record, Iwamoto 14^th. In the 10,000m race, Hashimoto finished fourth, O-hira 21^st and Ohyama 24^th.

Kendo, Japanese fencing

< All Japan Corporate Team Kendo Championships held at Budokan, Tokyo on September 20^th>
MSI won the championship in the five-to-win tournament games competed by 293 corporate teams gathering there across the nation. MSI celebrated its sixth championship after two years' interval.