Fiscal Current state of Housing Indemnity, Ltd.July 10, 2008 Registered as small-claims and...
Transcript of Fiscal Current state of Housing Indemnity, Ltd.July 10, 2008 Registered as small-claims and...
Fiscal 2013
Current state of Housing
Indemnity, Ltd. (Financial results for Fiscal Year 2012)
Housing Indemnity, Ltd.
Introduction
Thanks to all of you for your continued patronage of Housing Indemnity, Ltd.
At the end of March 2013 we concluded our fifth fiscal year (FY 2012) as a
small-claims and short-term insurance provider and we have created this Annual
Report, "2013: Current state of Housing Indemnity, Ltd.," in order to give an
overview of our business and to explain the financial conditions of our company.
We hope this report will help you get a better understanding of our company.
In July 2008 our company began operating as provider of small-amount,
small-scale insurance and started selling "Comprehensive Rental Housing
Insurance" offering compensation for the various risks inherent in the daily lives
of tenants of rental housing. We then began selling "Comprehensive Tenant
Insurance" offering compensation for the divers risks incurred in by business
operators established in rental housing in June 2009, and in December 2011 we
introduced the “Peace of Mind Compensation Special Contract” which expanded
compensation contents of the "Comprehensive Rental Housing Insurance,” and
we have been committed ever since to providing insurance products that meet
consumers’ needs.
Even in the future we will continue to carry on that same mutual aid association
spirit of the Housing Guarantee Mutual Aid Association with which our many
customers had been familiar and we shall spare no effort in order to raise the
profile of our company by providing high-quality services and products tailored to
the needs of our customers in the spirit of “customer first.”
We look forward to your continued support and patronage in the future.
Housing Indemnity, Ltd
President and Representative Director: Masahiko Sugiura
*The present report is a "document describing the state of business and
property” as prescribed by the provisions of Article 111 of the Insurance
Business Act as applied mutatis mutandis pursuant to Section 17 of Article
272 of the Insurance Business Act," and has been drafted in accordance with
Section 37 of Article 211 of the Insurance Business Act Implementation
Decree.
Table of Contents
I. Overview of the company and matters relating to its organization
1. Management principles ...........................................................................1
2. Distinctive features of the company..........................................................1
3. Company’s history……………………………………………………………..2
4. Company’s structure…………………………………………………………..3
5. Situation of shares and shareholders……………………………………..5
6. Profile of Directors…………………………………………………………….. 5
7. Information on employees…………………………………………………….5
8. Information on subsidiaries…………………………………………………5
II. Main business activities
1. Products handled .......................................................................................6
2. Situation of shares and shareholders………………………………………6
3. Claim payment stance…………………………………………………………. 6
4. Reinsurance ............................................................................................... 9
5. Residential Security QQ [Emergency] Service ............................................ 9
III. Matters relating to main business activities
1. Overview of business in Fiscal 2012 ........................................................10
2. Indicators showing the state of main business activities in the last three
fiscal years……………………………………………………………………………11
3. State of business in the last two fiscal years ............................................ 12
4. Balance of liability reserves…………………………………………………..17
IV. Matters relating to the conduction of business
1. Risk management stance…………………………………………………….. 18
2. Compliance stance…………………………………………………………….18
3. Handling of Personal (customer) information ........................................... 19
4. Designated bodies for the settlement of disputes………………………….. 21
V. Matters relating to the state of assets in the last two years
1. Financial statements ................................................................................. 22
2. Situation of solvency with regard to benefit payout.................................... 30
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I. Overview of the company and matters relating to its organization
1. Management principles
The following are the management principles followed by our company in
order to heed to the various daily needs of tenants and to contribute to the
healthy development of the small-claims and short-term insurance industry
while strengthening our management structure.
・ We will strive to develop insurance policies and to offer satisfying
indemnification services
・ We will strive to conduct business in an appropriate way making
compliance our top priority.
・ We will strive to create an environment where employees can
continuously improve their capabilities and develop their business skills
to the full.
・ We will pursue solid business development focusing on profitability in
order to fulfill our commitment to shareholders.
・ We will strive to take active part in volunteer activities that can contribute
to the creation of a better global environment.
2. Distinctive features of the company
Our company registered as a small-claims and short-term insurer on July
10, 2008 [Kanto Finance Bureau (small-claims and short-term insurance)
No. 34], and we offer "Comprehensive Rental Housing Insurance" for rent
tenants and “Comprehensive Tenant Insurance “ for business operators
established in rental housing.
In order to be close to our customers and to provide friendly and polite
consultations as well as rapid response, our company is working to open
branches in major cities nationwide and strengthen the network of
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distributors.
In April 2012 we opened a new branch in Kyushu branch and we have been
actively supporting all distributing agencies in the Kyushu region.
We shall continue to take advantage of the characteristics of small-claims
and short-term insurances in order to develop insurance products
appropriately tailored to the diverse needs of consumers and to continue
offering peace of mind to consumers.
3. History of the company
July 2, 1997 ACS Ltd. is established
November 14, 2007 The name of the company is changed to Housing
Indemnity, Ltd.
July 10, 2008 Registered as small-claims and short-term insurer.
[Kanto Finance Bureau (small-claims and short-term
insurance) No. 34]
July 10, 2008 Started selling home contents insurance (Comprehensive
Rental Housing Insurance)
September 30, 2008 Allocation of new shares to third parties
(Capital stock: 383,750,000 yen)
June 1, 2009 Started selling “Comprehensive Tenant Insurance”
September 1, 2009 “Special clauses for holders of corporate contracts” first
introduced in “Comprehensive Rental Housing Insurance”
September 10, 2009 Started offering Residential Security QQ [Emergency]
Service for policyholders of “Comprehensive Rental
Housing Insurance”
December 1, 2011 Started selling the “Peace of Mind Compensation Special
Contract” which expands compensation contents of the
"Comprehensive rental housing insurance"
December 1, 2011 Introduced the new "Updated Premium by Account
Transfer Special Contract"
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3. Company’s structure (as of July 1, 2013)
1. Management structure
Housing Indemnity, Ltd. Organization Chart
Board of Auditors
Insurance Actuary
Board of Directors
President and
Managing Director
Compliance Committee
Personal/Customer Information Protection
Committee
Risk Management Committee
Standing Auditor
Human Resources Committee
Internal Audit Office Compliance Office
General Manager for Customer Services
Sales Headquarters
East Japan Sales
Promotion Department
West Japan Sales
Promotion Department
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(2) Business Offices
Head Office
1-14-10 Shibadaimon, Minato-ku, Tokyo 105-0012
Tel: (03)5405-1151 Fax: (03)5405-1152
Tokyo Sales Department
1-14-10 3F Shibadaimon, Minato-ku, Tokyo 105-0012
Tel: (03)5405-1155 Fax: (03)5405-1154
Kansai Branch
2-12-4-703 Sonezaki, Kita-ku, Osaka 530-0057
Tel: (06)6809-3555 Fax: (06)6809-3556
Tohoku Branch
3-3-21-4C Uesugi, Aoba-ku, Sendai, Miyagi 980-0011
Tel: (022)726-2777 Fax: (022)726-2666
Tokai Branch
2-19-19-8F Nishiki, Naka-ku, Nagoya, Aichi 460-0003
Tel: (052)220-2401 Fax: (052)220-2402
Tohoku Branch
4-3-3-3A Hakata-ku, Fukuoka 812-0011
Tel: (092)292-3100 Fax: (092)292-3101
5. Situation of shares and shareholders (as of March 31, 2013)
(1) Number of shares
Issuable shares: 8,000 shares
Issued shares: 3,450 shares
(2) Number of shareholders at the end of the fiscal year: 7
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(3) Information on shareholders
Shareholder's name
(person or organization)
Stake in our company
Number of
shares (stock)
Stockholding
ratio (%)
Masahiko Sugiura 1,703 49.36
Koichi Yamanaka 1,185 34.35
Toa Reinsurance Co., Ltd. 300 8.70
Housing Indemnity Employee
Stock Ownership Association
200 5.80
Satoshi Kudo 40 1.16
Shigeshi Suzuki 15 0,43
Sakura Real Estate Co., Ltd. 7 0.20
6. Profile of Directors (as of July 1, 2013)
Job title Name Responsibilities Main concurrent positions
President and
Representative
Director
Masahiko
Sugiura
Director Chiaki Ochiai
Head of East Japan
Sales Promotion
Division
Director Tadafumi
Sakai
Head of West Japan
Sales Promotion
Division
Director Kawauchino
Shigetoshi
General manager for
customer services
Corporate
Auditor Akira Sakurai
Corporate
Auditor Satoshi Kudo Outside Auditor
Director of Kudo Certified
Public Accountant and Tax
Accountant Office
Corporate
Auditor
Tomohisa
Tabata Outside Auditor
Director of Tomohisa
Tabata Law Firm
Auditor at Hamamatsu
Yanase Co.
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7. Information on employees (as of March 31, 2013)
Number of
employees
Average age Average years of
employment
Average salary
per month
46 35.38 years old 3.44 years 323,000 yen
Notes: 1. Average monthly salaries include non-standard wages and have been rounded
down to the nearest thousand yens.
2. Average age and average years of service have been calculated to two decimal
places and rounded down to one decimal place.
8. Information on subsidiaries
N/A
II. Main business activities
1. Products handled
(1) “Comprehensive Rental Housing Insurances” for rent tenants; by
providing "household goods and repair costs" and "indemnity
liability" as a set, we offer compensation for a wide array of damages
to household goods of tenants living in rental housing, ranging from
damages caused by natural disasters to damages caused by fire,
theft, water leakage and breakage, and to the various damages
related to everyday living.
On December 1, 2011, in addition to the traditional “Basic plan,”
we started sales of "Peace of Mind Plan" which is based on the latter
but offers wider compensation coverage for repair costs and
household goods damages.
(2) "Tenant comprehensive insurances," are aimed at corporations running
businesses from “stores" or "offices" established in rented facilities
and offer indemnification for a wide array of damages to owned
assets or equipment, ranging from damages caused by natural
disasters to damages caused by fire, theft, water leakage and
breakage and to the various damages inherent in the conduction of a
business.
2. Insurance sales stance
Our products are intended for tenants living in rental housing and rented
facilities. Sales of our insurance policies are outsourced to real estate
agencies offering rental properties and to distributors offering insurance
policies to real estate managing agencies.
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We believe that, when selling insurance policies, it is extremely important
to accurately assess the insurance needs of customers and to sell suitable
policies in compliance with laws and regulations.
With regard to outsourcing sales to distributors, our company carefully
investigates the suitability of distributors in terms of their compliance with
the law and, even after the outsourcing of sales, we strive to follow up by
offering training and guidance on how to best carry out sales.
3. Claim payment stance
In addition to maintaining a system for reporting the occurrence of
accidents, our company has also adopted a stance for ensuring rapid
damage services and appropriate claim payments with a considerate
approach that takes into account the customer’s position.
(1) Accident reporting
In the event of fires or accidents for which compensation is offered,
we provide a system for reporting accidents to our "Damage Service
Department" 24 hours a day, 365 days a year.
Furthermore, at the time of reporting accidents, we provide
solicitous support for submitting billing documents for those
customers with no previous experience of insurance claims.
"Special phone number for reporting accidents” (accessible also
from mobile phones)
0120-608-879 (toll free)
(2) Customer Support Center
All general inquiries, questions and complaints regarding
insurance underwriting and claim payments are handled with
politeness and professionalism by our full-time staff at our Customer
Support Center.
“Phone number of Customer Support Center”
0120-987-313 (toll free)
(Service available on weekdays from 9:00 to 17.00)
(3) Claims processing system
Our company, besides adequately managing the progress of all
claims, from accident reporting all the way to claim payment, by
means of a web-based reporting and management system, also
provides assistance toward accurate and reliable claims processing.
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(4) Checking stance for claims processing.
On occasion of the audits carried out by the Internal Audit
Department we conduct a thorough checking of the claim payment
management system as well as detailed monitoring for preventing
claim payment leaks and ensuring accurate claim processing.
"Description of claim processing from accident occurrence to claim
settlement"
A description of the stages of claim processing, from the occurrence of
accidents to claim settlement, is given below.
Policyholder Housing Indemnity, Ltd.
Accident occurs
Accident reporting Incident Report Line 0120-608-879
With securities number on hand, report details of accident
Confirmation of policy contents and details of
accident
Completion of insurance claim documents, gathering and preparation of attachments Send
documents
Explanation of insurance payment and claim forms, shipment of claim
documents
Document submission Return
documents
Document receipt
Investigation, confirmation of accident or damage
situation, and calculation of insurance amount
Relaying of insurance amount
Payment of insurance amount
Confirmation of insurance amount
Out-of-court settlement with victim (if compensated)
Victim
Finalizing of insurance amount
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4. Reinsurance
Our company, in order to distribute the risks of underwriting insurance
where damages occur simultaneously in a large number of wide-coverage
insurance contracts in case of natural calamities such as large-scale
typhoons, etc., and to maintain an adequate level of control, guarantees the
soundness of claim payment by concluding an insurance contract with a
reinsurance company for part of the insurance.
It should be noted that, as a general rule, when selecting a re-insurance
company, we only consider insurance companies in solid financial health
which have earned an A- (A minus) rating from Standard & Poor's.
In addition, from the perspective of distributing reinsurance risks, we
divide and cede risks to several reliable companies satisfying the
above-stated requirement.
5. Residential Security QQ [Emergency] Service
For policyholders of Comprehensive Rental Housing Insurances, we are
offering the Residential Security QQ [Emergency] Service which provides
24-hours a day, 365 days a year, plumbing assistance, locksmith services
in case of lock-out or loss of keys and glass repair services. (Partially free of
charge)
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III. Matters relating to main business activities
1. Overview of business in Fiscal 2012
(1) Overview of our main activities
As for the world economy in the year under review, while the US enjoyed a gradual
recovery underpinned by that government’s monetary easing policies, the economy
continued to be in a state of general recession in Europe, in spite of a series of
measures aimed at resolving national debt issues. In addition, in many emerging
countries the growth rate has slowed down as a consequence of the global economy’s
downturn.
As for Japan, the economy has been picking up slowly amid the corrective measures
targeting the over-appreciation of the yen and the rise of stock prices in the second half
of the fiscal year. In the small-claims and short-term insurance (SSI) industry to which
our company belongs, 71 SSI providers were registered nationwide with the Financial
Bureau (as of the end of March 2013); among these, the number of SSI providers
handling the same household goods and compensation insurance as our company and
of casualty insurer companies is considered slightly excessive for the size of the market
and mutual competition is expected to intensify in the future.
Under such severe circumstances, we managed to ensure a 110% year-on-year
increase in written insurance premiums by strengthening cooperation with existing
distributing agencies, opening new distributing agencies, pursuing sales of our rental
housing insurance "Relief Plan" introduced last December which expands
compensation coverage, as well as by expanding our sales network with the
establishment of a new Kyushu branch in April. However, regional differences in the
rate of growth have emerged as a consequence of the intensifying of the competition.
With regard to the payment of insurance claims, the effects of expanding
compensation coverage (to include compensation for damages caused by freezing of
water pipes, etc.) were limited and payments remained within the limits specified in the
budget.
With respect to operating costs too, there were expenses related to branch openings,
branch relocations and the rethinking of the damage service department but, as
investments towards growth, they should be seen as contributions to future revenues.
On an unrelated note, distributing agency fees were also slightly increased fee as a
consequence of increased competition among industry operators. On the other hand,
we made efforts to contain operating costs by optimizing the cost of outsourcing
operations to external contractors.
As a result, ordinary revenue for the fiscal year under review amounted to
3,897,000,000 yen (2,142,000,000 of which in insurance premiums), ordinary profit
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amounted to 123,000,000 yen and net income for the fiscal year was 118,000,000 yen.
(2) Issues that must be addressed by our company
In the fiscal year under review, just as in the previous year, we managed to
successfully achieve our planned goals and in the future we would like to devote our
energies to the prompt reduction of cumulative losses. To this end, from the next fiscal
year, we shall enhance our market competitiveness and work to improve profitability
even more by expanding on previous measures such as increasing the efficacy of our
Kyushu Branch opening, diversifying payment methods of insurance premiums,
adjusting agency commissions, digitalizing securities, etc. We will continue to
emphasize compliance throughout the whole company, including on the part of
distributing agencies, insurance salespersons and consignees.
"Changes in assets and profit/loss situation"
Category FY2011 FY2012
Total amount of contracts by the
end of the fiscal year
3,280,986,000 yen 3,661,183,000 yen
Insurance premiums 1,931,181,000 yen 2,142 580,000 yen
Interest and dividend income
Ordinary income (loss)
Net income (loss)
110,000 yen
83,717,000 yen
82,073,000 yen
124,000 yen
123,131,000 yen
118,621,000 yen
Total assets 865,713,000 yen 1,041,099,000 yen
Net income (loss) per share 23,789.19 yen 34,382.95 yen
Note: The amount of contracts at the end of the fiscal year is based on "premium + returned
reinsurance fees + reinsurance commission."
2. Indicators showing the state of main business activities in the last
three fiscal years
(In thousand yen)
Category FY2010 FY2011 FY2012
Recurring revenue 3,165,421 3,481,612 3,897,230
Ordinary income (loss) 13,066 83,717 123,131
Net income (loss) 10,216 82,073 118,621
Capital
(Issued shares)
383,750
(3,450 shares)
383,750
(3,450 shares)
383,750
(3,450 shares)
Net assets as per the
Insurance Business Act
177,226 263,921 387,684
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Amount of net assets 708,849 865,713 1,041,099
Liability reserve balance 173,600 211,131 251,662
Balance of marketable
securities
― ― ―
Solvency margin ratio 605.1 % 787.5% 1,496.8%
Dividend payout ratio ― ― ―
Number of employees 45 45 46
Net premiums income 168,003 186,282 206,356
Notes: 1. Figures have been rounded down to the nearest unit used.
2. Breakdown of net premiums written
・ Insurance premiums: 2,142,580,000 yen
・ Reinsurance premiums ceded (-): 1,927,878,000 yen
・ Returned reinsurance fees (+): 74,281,000 yen
・ Canceled and returned premiums (-): 82,626,000 yen
Deducted net premiums: 206,356,000 yen
3. Our company started operating as a small-claims and short-term insurance
provider on July 10, 2008.
3. State of business in the last two fiscal years
(1) Indicators showing the state of main business activities
① Net original premiums
(In thousand yen)
Items FY2011 FY2012
Amount Component
ratio
Amount Component
ratio
Fire insurance 1,864,362 100.0% 2,059,954 100.0%
Other insurance ― ― ― ―
Total 1,864,362 100.0% 2,059,954 100.0%
Note: Net original premiums are calculated deducting original canceled and returned
premiums and other returns from original premiums.
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② Reinsurance premiums ceded
(In thousand yen)
Items FY2011 FY2012
Amount Component
ratio
Amount Component
ratio
Fire insurance 1,678,080 100.0% 1,853,598 100.0%
Other insurance ― ― ― ―
Total 1,678,080 100.0% 1,853,598 100.0%
Note: Reinsurance premiums ceded are calculated deducting returned reinsurance fees
from reinsurance premiums.
③ Net premiums written
(In thousand yen)
Items FY2011 FY2012
Amount Component
ratio
Amount Component
ratio
Fire insurance 186,282 100.0% 206,357 100.0%
Other insurance ― ― ― ―
Total 186,282 100.0% 206,357 100.0%
Note: Net premiums written are calculated by deducting the paid net reinsurance premiums
of reinsurance contracts from the original net premiums written.
④ Original net claims paid
(In thousand yen)
Items FY2011 FY2012
Amount Component
ratio
Amount Component
ratio
Fire insurance 219,776 100.0% 257,848 100.0%
Other insurance ― ― ― ―
Total 219,776 100.0% 257,848 100.0%
Note: Original net claims paid are calculated deducting from contractual payments of the
original contracts the amount of money recovered through claims for compensation
pertaining to the original contracts.
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⑤ Recovered reinsurance claims
(In thousand yen)
Items FY2011 FY2012
Amount Component
ratio
Amount Component
ratio
Fire insurance 197,798 100.0% 232,315 100.0%
Other insurance ― ― ― ―
Total 197,798 100.0% 232,315 100.0%
⑥ Net claims paid
(In thousand yen)
Items FY2011 FY2012
Amount Component
ratio
Amount Component
ratio
Fire insurance 21,978 100.0% 25,533 100.0%
Other insurance ― ― ― ―
Total 21,978 100.0% 25,533 100.0%
Note: Net claims paid are calculated deducting from contractual payments of the original
contracts the reinsurance premiums recovered on the basis of reinsurance contracts.
⑦ Insurance underwriting profit
(In thousand yen)
Items FY2011 FY2012
Amount Component
ratio
Amount Component
ratio
Fire insurance 83,717 100.0% 123,131 100.0%
Other insurance ― ― ― ―
Total 83,717 100.0% 123,131 100.0%
Note: Insurance underwriting profits are calculated by deducting insurance underwriting costs,
business expenses and general administrative costs from insurance underwriting income and by
taking into account other income and expenditures (other ordinary income and other ordinary
costs).
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(2) Indicators related to insurance contracts
① Policyholder dividend
N/A
② Original loss ratio and original operating cost ratio before recovery of
reinsurance and original combined ratio
Items
FY2011 FY2012
Direct
Loss
ratio
Original
operating
ratio
Combined
ratio
Direct
Loss
ratio
Direct
operating
ratio
Combined
ratio
Fire insurance 11.8% 71.4% 83.2% 12.5% 71.1% 83.6%
Other insurance ― ― ― ― ― ―
Total 11.8% 71.4% 83.2% 12.5% 71.1% 83.6%
Notes: 1. Original loss ratio = Original net claims paid ÷ net original premiums×100
2. Original operating costs ratio = operating cost ÷ net original premiums×100
3. Combined ratio:original loss ratio+original operating costs ratio
③ Net loss ratio, net expense ratio and combined ratio
Items
FY2011 FY2012
Net
Loss
ratio
Net
Operating
cost ratio
Combined
ratio
Net
Loss
ratio
Net
Operating
cost ratio
Combined
ratio
Fire insurance 11.8% 22.0% 33.8% 12.4% 9.7% 22.0%
Other insurance ― ― ― ― ― ―
Total 11.8% 22.0% 33.8% 12.4% 9.7% 22.0%
Notes: 1. Net loss ratio = net claims paid ÷ net premiums written × 100
2. Net expense ratio = net expenses÷ net premiums written × 100
3. Combined ratio (combined ratio) = net loss ratio + net expense ratio
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④ The number of ceding reinsurance companies and the percentage of the
reinsurance premiums paid by the top two companies
Number of ceding
reinsurance companies
Percentage of reinsurance
premiums paid
FY2011 Two companies 100%
FY2012 Two companies 100%
Note: Type of re-insurance: proportional reinsurance (90% of the insurance amount)
⑤ Percentage of reinsurance premiums paid by ceding reinsurance
companies in each rating category
Rating category FY2011 FY2012
A- or higher 100% 100%
BBB or above ― ―
Other ― ―
Total 100% 100%
Note: Rating categories are those used by Standard & Poor's
⑥ Reinsurance claims recoverable
N/A
(3) Indicators related to accounting
① Claims reserves
(In thousand yen)
Items
FY2011 FY2012
Amount Component
ratio Amount
Component
ratio
Fire insurance 9,731 100.0% 7,897 100.0%
Other insurance ― ― ― ―
Total 9,731 100.0% 7,897 100.0%
Note: Claims reserves are calculated by deducting from ordinary claims reserves and losses
incurred but not reported concerning the original contracts the reinsurance portion
based on the related reinsurance contracts.
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② Liability reserves (In thousand yen)
Items FY2011 FY2012
Amount Component
ratio
Amount Component
ratio
Fire insurance 211,131 100.0% 251,662 100.0%
Other insurance ― ― ― ―
Total 211,131 100.0% 251,662 100.0%
Note: Liability reserves are calculated by deducting from ordinary liability reserves and
catastrophe reserves concerning the original contracts the reinsurance portion based
on the related reinsurance contracts.
③ Remaining balance for each category of earned reserves and voluntary
retained earnings
N/A
④ Fluctuations of ordinary losses with respect to increases in the loss ratio
Scenario of increasing loss
ratio
Assuming that incurred loss ratio increases by 1%.
Calculation method: Net earned premiums × 1%
Impact on ordinary income FY2011 1,821,000 yen
FY2012 1,245,000 yen
Note: Earned premiums are calculated deducting the reinsurance portion based on the
reinsurance contract.
(4) Indicators related to asset management
① Situation of asset management
(In thousand yen)
Items FY2011 FY2012
Amount Component
ratio
Amount Component
ratio
Savings deposits 513,238 59.3% 674,243 64.8%
Cash in trust ― ― ― ―
Marketable securities ― ― ― ―
Total operating assets 513,238 59.3% 674,243 64.8%
Total assets 865,713 100.0% 1,041,099 100.0%
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② Amount of income from interest on dividend and investment yield
(In thousand yen)
Items FY2011 FY2012
Amount Yield Amount Yield
Savings deposits 110 0.02% 124 0.02%
Cash in trust ― ― ― ―
Marketable securities ― ― ― ―
Subtotal 110 0.02% 124 0.02%
Other ― ― ― ―
Total 110 0.02% 124 0.02%
Note: yield = "amount of revenue" ÷ "average monthly invested amount" × 100
③ Component ratio with respect to balance by type of marketable securities
held and their total
N/A
④ Yield of marketable securities held
N/A
⑤ Balance of marketable securities by type and by remaining maturity
N/A
4. Balance of liability reserves
A breakdown of the balance of liability reserves is shown below.
(In thousand yen)
Items
FY2011 FY2012
Ordinary
liability
Reserve
Catastro
phe
Reserve
Policyhol
ders
Dividend
Reserve
Total
Ordinary
liability
Reserve
Catastro
phe
Reserve
Policyhol
ders
Dividend
Reserve
Total
Fire
insurance
196,438 14,693 ― 211,131 231,827 19,835 ― 251,662
Other
insurance
― ― ― ― ― ― ― ―
Total 196,438 14,693 ― 211,131 231,827 19,835 ― 251,662
20
IV. Matters relating to the conduction of business
1. Risk management stance
We have established a series of "Risk Management Regulations" with the
purpose of laying a sound management foundation by preventing the
occurrence of risks inherent in the small-claims and short-term insurance
business.
The term “risk” refers here to all losses incurred by the company as a
result of unforeseen damages, sharp fluctuations in economic conditions,
mistakes in the handling of accidents, reputational damages and so on.
<Classification of risks>
(1) Insurance underwriting risk
① Insurance underwriting risk
② Insurance payment risk
③ Reinsurance risk
(2) Asset management risks
(3) Operational risk
① Administrative risks
② System risks
③ Liquidity risks
(4) Harmful rumor risk
In addition, a "Risk Management Committee" has been established by
the decision of the Board of Directors as a Standing Committee.
Although each risk management department handles the above-
mentioned risks, by strengthening the cooperation between each risk
management department, the Board of Directors and the Risk Management
Committee, we are striving to give prompt and appropriate responses in the
course of day-to-day operations.
For projects requiring a company-wide response, we are presently
considering cross-departmental risk management as well as a series of
necessary measures which will center around the "Risk Management
Committee."
21
* Our aim is to adopt a risk management stance which will have the
least possible impact on policyholders and agents.
2. Compliance stance
The term “compliance” is used here in the sense of "compliance with laws
and regulations." Complying with all rules, including laws, company’s
regulations, social norms, etc., is the first requirement.
Even the "Guidelines for compliance with regulations," set forth by our
company as a code of conduct, state that "all officers and employees shall
comply with laws and regulations and shall not justify, nor condone, illegal
activities, regardless of any reasons," making compliance the basis of all
business conduction.
<Compliance stance>
In order to ensure thorough compliance, a Compliance Committee
meeting, chaired by the president, is held with all department heads four
times a year.
The Compliance Committee is responsible for the following matters.
(1) Planning and formulating strategies with regard to the general aspects of
compliance promotion.
① Planning and formulation of compliance program
② Appraisal and evaluation of progress and achievement status of
compliance programs and reporting of results to the Board of
Directors
③ Enacting, revising or abolishing compliance policies, code of
conduct, compliance regulations and compliance manual
(2) Matters relating to misconduct
(3) Analysis of complaints regarding compliance issues as well as the
planning and proposing of preventive measures
(4) Verification of investigation results for non-payment of insurance
premiums
In each department, the head of the department, as the person
responsible for compliance, enforces compliance with laws and
regulations and provides training and guidance for all employees.
22
The Sales Control Headquarters and the Compliance Control Office
cooperate in educating and advising distributors with regard to compliance
with rules and regulations.
* We aim to gain the total trust of our customers by ensuring thorough
compliance and an absolute lack of violations.
3. Handling of personal (customer) information
Given the fact that in recent years protecting personal information has
become increasingly important, we have formulated a series of "personal
information and customer information protection rules " and "personal
information and customer information protection guidelines" and we have
been applying them to ensure the appropriate and secure management of
said information.
In addition, we have also summed up how we handle personal
information in the section "Handling of customers' personal information"
which we make known to our customers by inserting it in the "Application
Form" and in the "Pamphlet."
<Handling of customers’ personal information>
1. Housing Indemnity, Ltd. (hereinafter referred to as "our company") will
acquire personal information concerning its customers by lawful and fair
means and only to the extent necessary for business.
2. Our company will use customers’ personal information within the
boundaries of the purposes stated below and as necessary for the
conduction of business.
(1) Underwriting, extending and maintaining of insurance contracts and
payment of insurance claims
(2) Operational management and provision of information regarding our
business as well as improvement of products and services
(3) Other operations related to, or associated with, the insurance
business
3. Our company shall take the appropriate measures in order to ensure the
accuracy of the collected personal information of our customers and to
keep them up-to-date.
23
Moreover, we shall take all safety measures deemed appropriate in
order to prevent unauthorized access to customers’ personal information
as well as the loss, destruction, tampering and leakage of said
information.
4. Our company, with the exception of the cases stated below, shall not
provide the collected personal information of customers to external
parties.
(1) If customers’ consent is given
(2) If required by laws and regulations
(3) In case of provision of personal information to our subcontractors to
the extent necessary for achieving the purpose stated in the
above section 2
(4) In case of provision of personal information to re-insurers to the
extent necessary for claiming reinsurance
(5) In case of provision of personal information to other insurance
companies (mutual aid organizations) to the extent necessary for
the prevention of the conclusion of unauthorized or unreasonable
insurance contracts or claims based on such contracts.
(6) If deemed necessary for the interest of the customer or for public
interest
(7) If there are other legitimate reasons
5. Our company will handle disclosure, revision, addition or deletion of
customers' personal information in the ways described below.
(1) Customers shall have the right to ask our company to disclose to
them any personal information regarding themselves which is in
possession of the company.
(2) In case of errors or mistakes in the personal information divulged as
a result of the disclosure indicated in the preceding section,
customers shall have the right to ask the company to correct,
amend or delete said information.
(3) In case of requests to disclose, correct, amend or delete information
as indicated in the preceding two sections, such requests have to
be made to our company in writing or by telephone.
24
4. Designated bodies for the settlement of disputes
Our company will respond with the maximum seriousness to all
consultations, inquiries or complaints from our customers.
Our company is also a member company of the Incorporated General
Association of Japanese Small Amount and Short Term Insurers which is
specifically authorized as a "Specified Dispute Settlement Body" (specified
ADR institution).
Consequently, our customers, whenever it is deemed necessary, will be
able to resort to the Specified Dispute Settlement Body listed below and
operated by this association.
The same specified Dispute Settlement Body shall attend to all
consultations and inquiries related to small-claims and short-term
insurances from all consumers, starting with policyholders, as well as to
processing complaint and resolving disputes.
Small-claims and short-term insurance consultation office of the
Incorporated General Association of Japanese Small Amount and Short
Term Insurers.
3-12-8 Hatchobori SF Building 2F, Hatchobori, Chuo-ku, Tokyo
104-0032, Japan
Tel: 0120-82-1144 Fax: 03-3297-0755
Hours: 9:00 to 12:00; 13:00 to 17:00
Days: Monday to Friday (except holidays and the New Year holiday
period)
25
V. Matters relating to the state of assets in the last two years
1. Financial statements
(1) Balance Sheet (In thousand)
Items
2012
As of the end
of March
2013
As of the end
of March
Items
2012
As of the end
of March
2013
As of the end
of March
(Assets)
Cash and savings
Cash
Savings deposits
Other current assets
Tangible fixed assets
Tangible fixed
assets
Intangible assets
Software
Other intangible
assets
Distributor accounts
receivable
Other assets
Accounts receivable
Prepaid Expenses
Other assets
Deferred tax assets
Deposits
513,300
62
513,238
―
15,301
15,301
49,691
49,611
80
64,358
205,063
162,204
8,865
33,994
―
18,000
674,267
24
674,243
―
14,863
14,863
31,077
30,997
80
69,423
219,883
176,831
11,975
31,078
12,585
19,000
(liabilities)
Insurance contract
reserve
Claims reserves
Liability reserves
Distributor accounts
payable
Reinsurance payable
Other liabilities
Income taxes
payable
Accounts payable
Accrued expenses
Deposits received
Suspense receipts
Other liabilities
Reserve for bonuses
Reserve for
retirement benefits
Total liabilities
(net assets)
Capital
Capital
Capital surplus
Capital reserve
Earned surplus
Other earned
surplus
Earned surplus
brought forward
Total shareholders'
equity
220,862
9,731
211,131
128,411
84,561
150,689
1,592
4,935
19,177
4,180
113,792
7,013
8,703
23,259
616,485
383,750
383,750
13,750
13,750
△151,947
△151,947
△151,947
245,553
259,559
7,897
251,662
144,189
70,176
170,374
20,272
2,119
21,277
4,680
113,474
8,552
10,270
18,682
673,249
383,750
383,750
13,750
13,750
△33,326
△33,326
△33,326
364,174
26
Stock acquisition
rights
Stock acquisition
rights
Total stock
acquisition rights
Total net assets
3,675
3,675
3,675
249,228
3,675
3,675
3,675
367,849
Total assets 865,713 1,041,099
Liabilities and net
assets
Total
865,713 1,041,099
Notes: 1. Depreciation and amortization methods of fixed assets
(1) Depreciation of tangible fixed assets, is based on the fixed-percentage method
However, small depreciable assets with an acquisition cost between 100,000
and 200,000 yen are amortized evenly over three years by the straight-line
method.
(2) Depreciation and amortization of intangible assets is based on the straight-line
method.
It should be noted that, for software, the straight-line method is adopted based
on the estimated usable period specified by our company (5 years).
2. Accounting for consumption tax
Consumption tax and local consumption taxes are accounted for by using the tax
inclusion method.
3. Assets pledged as collateral Time deposits: 122,385,000 yen
4. Accumulated depreciation of tangible fixed assets: 37,985,000 yen
5. Breakdown of claims reserves
Claims reserves (before recovery of outstanding reinsurance claims): 74,212,000
yen
Outstanding reinsurance claims related to the above: 66,791,000 yen
Net (a): 7,421,000 yen
IBNR reserves (b): 475,000 yen
Net: 7,897,000 yen
6. Breakdown of liability reserves
Liability reserves (balance remaining): 231,827,000 yen
Catastrophe reserves: 19,835,000 yen
Total: 251,662,000 yen
■ Reference
Reinsurance premiums ceded: 1,887,474,000 yen
27
7. Loan guarantee for borrowing from financial institutions of director: 110,900.000 yen
8. Net asset value per share: 105,557.74 yen
9. Figures have been rounded down to the nearest unit used and therefore total amounts
do not necessarily match.
(2) Income Statement (In thousand yen)
Items FY2011
(Apr. 1, ‘11 to Mar. 31, ‘12)
FY2012
(Apr. 1, ‘12 to Mar. 31, ‘13)
Recurring revenue
Insurance premium income
Insurance premiums
Reinsurance income
Recovered reinsurance
claims
Reinsurance commission
Returned reinsurance fees
Reversed reserves for
outstanding claims
Investment income
Interest and dividend income
Other recurring revenue
3,481,612
3,478,784
1,931,181
1,547,603
197,798
1,289,822
59,983
―
110
110
2,717
3,897,230
3,893,498
2,142,580
1,750,918
232,315
1,444,323
74,281
1,834
124
124
1,774
Ordinary costs
Insurance claims and other
expenses
Insurance claims, etc.
Surrendered contract payments
Reinsurance premiums
Liability reserve provisions
Claims reserves provisions
Liability reserve provisions
Investment costs
Operating costs
Business expenses and general
administrative costs
Tax
Depreciation costs
3,397,894
2,024,658
219,776
66,819
1,738,063
41,502
3,970
37,532
―
1,330,718
1,263,282
17,968
35,678
3,774,099
2,268,352
257,848
82,626
1,927,878
40,530
―
40,530
―
1,464,255
1,402,879
17,726
33,380
28
Provisions for reserves for
bonuses
Provisions for reserves for
retirement benefits
Other ordinary costs
8,703
5,088
1,016
10,270
―
961
Ordinary income 83,717 123,131
Extraordinary income ― 2,434
Extraordinary losses ― ―
Net income before taxes
Corporate tax and resident tax
Deferred income taxes
Net income (loss)
83,717
1,331
313
82,073
125,565
19,842
△12,899
118,621
Notes: 1. Claims reserves
Claims reserves provisions (before recovery of outstanding reinsurance claims):
19,984,000 yen
Reversals for outstanding reinsurance claims related to the above: 17,986,000 yen
Net (a): 1,998,000 yen
Provisions for IBNR reserves (b): 164,000 yen
Total (a) + (b): 1,834,000 yen
2. Liability reserves
Provisions for ordinary outstanding liability reserve claims: 35,389,000 yen
Provisions for catastrophe reserves: 5,141,000 yen
Provisions for outstanding liability reserve claims: 40,530,000 yen
■ Reference
Reinsurance premiums ceded: 807,767,000 yen
3. Net income per share: 34,382.95 yen
4. Significant transactions with related parties.
As for money (110,900,000 yen date 1 year update) borrowed from the financial
institution of Masahiko Sugiura, our President and Representative Director, we have
given a loan guarantee and we have provided a security (122,385,000 yen) to said
financial institution.
It should be noted no guarantee fee was set.
5. Significant subsequent events
There are no significant subsequent events
6. Figures have been rounded down to the nearest unit used and therefore total amounts
do not necessarily match.
29
(3) Cash Flow Statement (In thousand yen)
FY2011
(April 1, 2011 to March 31, 2012)
FY2012 (April 1, 2012 to March 31, 2013)
Cash flow from operating activities
Current net income before taxes ( = loss) 83,717 125,565
Depreciation costs 35,678 33,380
Insurance Business Law Article 113 deferred assets amortization
Increase in claims reserves ( = decrease) 3,970 1,834
Increase in liability reserves ( = decrease) 37,532 40,530
Policyholder dividend reserves provision
Increase in reserves for retirement benefits ( = decrease) 2,948 4,577
Increase in reserves for directors retirement benefits ( = decrease)
Increase in reserves for price fluctuations ( = decrease)
Interest and dividend income 110 124
Marketable securities losses and gains ( = gain)
Payment interest 357 108
Foreign exchange losses and gains ( = gain)
Tangible fixed assets losses and gains ( = gain)
Increase in agency accounts receivable ( = increase) 9,706 5,065
Reinsurance receivable ( = increase)
Increases and decreases in other assets (except investment and financing activities-related, = increase)
20,156 28,405
Increase in agency accounts payable ( = decrease) 56,593 15,778
Increase in reinsurance borrowings ( = decrease) 12,082 14,384
Increases and decreases in other liabilities (except investment and financing activities-related, = decrease)
23,053 2,571
Other
Subtotal 179,852 163,543
Proceeds from interests and dividends, etc. 110 124
Amount of interest paid 357 108
Policyholder dividends paid
Other
Amount of income tax paid 1,570 11,736
Cash flow from operating activities 178,035 175,296
Cash flow from investment activities
Increase/decrease in savings ( = increase)
Purchases of marketable securities
Proceeds from sale and redemption of marketable securities
Purchases of Insurance Business Law Article 113 deferred assets
Other 22,317 14,329
Cash flow from investment activities 22,317 14,329
Cash flow from financing activities
Proceeds from borrowings
Repayment of borrowings △15,355 0
Proceeds from issuance bonds
Redemption of bonds
Proceeds from issuance of common stock 0 0
Purchases of treasury stock
Dividend payment 0 0
Other
Cash flow from financing activities 15,355 0
Exchange differences related to cash and cash equivalents
Increase/decrease in cash and cash equivalents ( = decrease) 140,363 160,967
Balance at beginning of year of cash and cash equivalents 372,937 513,300
Balance at end of year of cash and cash equivalents 513,300 674,267
Notes: 1. Funds (cash and cash equivalents) in the of cash flow statement derive from cash on
30
hand, demand deposits and time deposits (excluding foreign currency), and the like.
2. Figures have been rounded down to the nearest unit used and therefore subtotals do
not necessarily match.
(4) Statement of changes in shareholders' equity (in thousands of yen)
FY2011
(Apr. 1, ‘11 to Mar. 31,
‘12)
FY2012
(Apr. 1, ‘12 to Mar. 31,
‘13)
Subject Amount Amount
Shareholders' equity
Capital
Balance at the end of the previous
fiscal year
383,750 383,750
Changes during the fiscal year under
review
Total changes during the fiscal year
under review
― ―
Balance at the end of the fiscal year
under review
383,750 383,750
Capital surplus
Capital reserve
Balance at the end of the previous
fiscal year
13,750 13,750
Changes during the fiscal year under
review
Total changes during the fiscal
year under review
― ―
Balance at the end of the fiscal year
under review
13,750 13,750
Other capital surplus
Balance at the end of the previous
fiscal year
― ―
Changes during the fiscal year under
review
Total changes during the fiscal
year under review
― ―
Balance at the end of the fiscal year ― ―
31
under review
Total capital surplus
Balance at the end of the previous
fiscal year
13,750 13,750
Changes during the fiscal year under
review
Total changes during the fiscal
year under review
― ―
Balance at the end of the fiscal year
under review
13,750 13,750
Earned surplus
Earned Reserve
Balance at the end of the previous
fiscal year
― ―
Changes during the fiscal year under
review
Total changes during the fiscal
year under review
― ―
Balance at the end of the fiscal year
under review
― ―
Other earned surplus
Balance at the end of the previous
fiscal year
― ―
Changes during the fiscal year
under review
Total changes during the fiscal
year under review
― ―
Balance at the end of the fiscal
year under review
― ―
Earned surplus brought forward
Balance at the end of the previous
fiscal year
△234,019 △151,946
Changes during the fiscal year
under review
Net income for the fiscal year
under review
82,072 118,621
Total changes during the fiscal
year under review
82,072 118,621
32
Balance at the end of the fiscal
year under review
△151,946 △ 33,326
Total Earned surplus
Balance at the end of the previous
fiscal year
△234,019 △151,946
Changes during the fiscal year under
review
Net income for the fiscal year
under review
82,072 118,621
Total changes during the fiscal
year under review
82,072 118,621
Balance at the end of the fiscal year
under review
△151,946 △33,326
Total shareholders' equity
Balance at the end of the previous
fiscal year
163,480 245,553
Changes during the fiscal year under
review
Net income for the fiscal year under
review
82,072 118,621
Total changes during the fiscal year
under review
82,072 118,621
Balance at the end of the fiscal year
under review
245,553 364,174
Stock acquisition rights
Balance at the end of the previous fiscal
year
3,675 3,675
Changes during the fiscal year under
review
― ―
Balance at the end of the fiscal year
under review
3,675 3,675
Total net assets
Balance at the end of the previous fiscal
year
167,155 249,228
Changes during the fiscal year under
review
Net income for the fiscal year under
review
82,072 118,621
33
Total changes during the fiscal year
under review
82,072 118,621
Balance at the end of the fiscal year
under review
249,228 367,849
Notes: 1. Items related to the type and total number of shares issued
Class of shares Number of
shares at the
end of the
previous fiscal
year
Current-year
increase in
number of
shares
Current-year
decrease in
number of
shares
Number of
shares at the
end of the fiscal
year under
review
Common stock 3,450 shares ― ― 3,450 shares
2. Items related to acquisition rights of new stocks
Category
Breakdown of
stock acquisition
rights
Class of
shares to be
issued upon
exercise of
stock
acquisition
rights
Number of shares to be issued upon
exercise of stock acquisition rights Current
year-end
Balance
(thousand
yen)
Current
year
end
Current
year
increase
Current
year
decrease
Current
year-end
Submitting
companies
First-time stock
acquisition rights
Common
stock
1,500 ― ―
1,500 3,675
Submitting
companies
Second-time
stock acquisition
rights
Common
stock
60
― ―
60 ―
3. Figures have been rounded down to the nearest unit used and therefore total amounts
do not necessarily match.
(5) Audit by independent auditor
In accordance with the provisions of Article 436, Paragraph 2,
Section 1 of the Companies Act , we have retained the services of
independent auditor "Deloitte Touche Tohmatsu LLC” for the auditing
of our company’s financial statements for FY 2012, such as the
"Balance Sheet," the "Income Statement," the "Statement of
changes in equity," etc.
34
2. Situation of enhancement of capacity to pay insurance claims, etc.
(solvency margin ratio)
(In thousands of yen and %)
Items End of FY2011 FY2012
(1) Solvency margin ratio 263,921 387,683
① Partial total of net assets (except estimated
outflow to the outside, differences arising from
valuation and translation and deferred assets)
249,228 367,850
② Reserves for price fluctuation ― ―
③ Catastrophe reserves 14,693 19,834
④ General allowance for bad loans ― ―
⑤ Evaluation differences of other
marketable securities (before effects of
taxation) (99% or 100%)
― ―
⑥ Profits and losses including land (85% or
100%) ― ―
⑦ Policyholder dividend reserves ― ―
⑧ Future profits ― ―
⑨ Taxation effect equivalent ― ―
⑩ Debt capital instruments, etc. ― ―
Items (⑩ (a)) listed in Section 5 of
Paragraph 3 of Article 2
of Notification (No. 14)
― ―
Items (⑩ (b)) listed in Section 5 of
paragraph 3 of Article 2
of Notification (No. 14)
― ―
⑪ Items to deduct (-) ― ―
(2) Total amount of risks √[R12 + R2
2] + R3 + R4 67,025 51,801
R1: General risks equivalent 18,677 11,999
R2: Asset management risks equivalent 23,898 35,032
R3: Operating management risks equivalent 2,309 1,800
R4: Catastrophe risks equivalent 34,386 12,970
Solvency margin ratio (1) and {(1/2) × (2)} 787.5% 1496.8%
Note: Figures have been rounded down to the nearest unit used.
The solvency margin ratio has been rounded down to the first decimal place.
End of document