Topics & Basics

July 2013

1. Current Topics

2. About NKSJ Group

3. Appendix

1

Turnaround in Automobile Insurance

Combined ratio of automobile insurance has turned into improvement trend as a result of our several pricing measures.

Combined Ratio of Automobile Insurance (Sum of SJ and NK)

Population of elderly drivers who tend to have frequent accidents is growing.

Increase in number of adjusters and system cost to solve “non-payment problem”

Rising repair cost as car parts are getting more sophisticated The previous Driver Rating System was not rational

Rate revision for elderly drivers (Started in April 2011)

Series of base rate revision (See Page 15)

Revision of Driver Rating System (See Page 15&16)

2

Adverse issues; Our measures;

61% 64% 64% 66% 69% 69% 71% 72% 72% 71% 68% 68%

32%31% 31%

31%33% 33%

33% 33% 33%33%

32% 30%

93.1% 94.4% 95.2%97.5%

101.5% 101.9%104.0% 104.9% 104.7%

103.1%100.6% 98.3%

50%

60%

70%

80%

90%

100%

110%

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013(e)

2015(plan)

Expense Ratio Loss Ratio Combined Ratio

Struggle to cope with adverse issues Enjoy the benefits of measures

2,038

1,869

1,327 1,314

1,103

638

30.6%

31.0%

32.8%

32.4%

34.1%

34.8%

27%

29%

31%

33%

35%

0

500

1,000

1,500

2,000

2,500

Sompo JapanNipponkoa

Company A Sompo Japan

Company B Company C Nipponkoa

Net Premiums Written (Left axis) Net Expense Ratio (Right axis)

Expense Reductions through Merger

Sompo Japan and Niponkoa intend to realize merger synergies such as expense reductions through operational

standardization and streamlining of operations.

Comparison of Premiums and Expense Ratio1

Source: Company disclosures

(¥ bn)

3

2015 Plan 2012 Actual

■,■

Merger synergies

20

30

40

Beginning of FY2010

Beginning of FY2012

Beginning of FY2015

80

100

120

FY2011 FY2015

20

40

60

FY2011 FY2015

vs. beginning of FY2010-7,500 employees

vs. beginning of FY2012-4,800 employees

Personnel expensessynergies

¥28.0 billions(before tax)

(Thousand employees) (Billions of yen) (Billions of yen)

Reduction Reduction

Number of employees Non-personnel expenses (excl. system costs)

Non-personnel expenses (system costs)

Reduce the number of employees through voluntary retirement in addition to natural attrition

Target the industry’s highest level of personnel efficiency by fiscal 2015.

Reduce property rent and other related expenses by co-locating sales offices nationwide.

Reduce administration and printing costs through standardization.

Reduce employee dormitory rent, travel costs and other related expenses by reducing the number of personnel.

Reduce running costs by integrating systems.

Transfer data of long-term policies after the merger, and integrate systems completely.

Non-personnel expensessynergies

¥28.0 billions(before tax)

¥56 billion of expense reduction in FY 2015 compared to FY 2011 are projected.

- Personnel expenses: ¥28 billion

- Non-personnel expenses: ¥28 billion

4

Improving Combined Ratio through the merger etc.

Among three major P&C insurance groups in Japan, NKSJ is the only group that can enjoy the merger synergy.

Aiming to achieve under 95% of combined ratio in FY 2015.

Trends of Combined Ratio (Domestic P&C)

±0pt

Down 5pt

Down 2pt

101.4%

FY 2011 FY 2015

94.7%

- Aiming to improve

6.7 pt by FY 2015

- 2.3 pt out of 6.7 pt

has been already

achieved in FY 2012

5

(Note) Calculation standard of combined ratio shown here are as follows:• One-time merger costs are excluded.• Assumed Impact of natural disasters is ¥38.0 billion in every year.• Impact of the increase in Japan’s consumption tax rate is not reflected• CALI is excluded.

- ¥ 48 bn increase in auto premiums (Down 3pt)

- ¥ 39 bn increase in assumed reinsurance premiums etc. (Down 2pt)

- ¥ 56 bn of merger synergies (Down 3pt)

- Commissions(Up 1pt)

Claim Payments

Increase in Premiums

Expenses

- Decrease of the number of petty claims by the revision of driver rating system

Offset

- Increase in repair cost for automobiles

(Actual) (Plan)

9.4%

0%

2%

4%

6%

8%

10%

12%

319.1333.9

349.2364.8

280

300

320

340

360

380

FY2009 FY2010 FY2011 FY2012

(¥ bn)

62%

Growth with High Margin in Domestic Life Insurance Business

NKSJ Himawari Life aims to enhance sales by utilizing P&C agency network and focus on highly profitable

protection-type products. Both bring us growth coupled with high margin.

Sales Channel Strategy

Product Portfolio Strategy

Utilizing P&C agency

network, i.e. no need to

develop new infrastructure

for sales from scratch.

There is room to broaden

cross-selling to the P&C

customer base of 20 million

customers through P&C

agency network.

Focusing on highly

profitable protection-type

products.

6

P&C

Insurance

Channel

48%52%

Medical29%

Cancer5%

8%Term

6%

Channel Weight1

Product Weight2

Growth with High Margin

Trends of annualized premium in force

New business Margin Comparison (EEV, MCEV)

Steady Growth

(Note) Company A, B, C, D and G adopt EEV.

NKSJ Himawari, Company E and F adopt MCEV.

Other

Channels

Protection

Type

Saving

Type

1. Annualized new premium as of March 31, 20132. Annualized premium in force as of March 31, 2013

IncomeCompensation

(FY2012)

Source:Company disclosures

P&C 1.1P&C 1.5

Life 0.1

Life 0.6

Net Assets (J-GAAP) Adjusted Net Assets

0.0

0.5

1.0

1.5

2.0

2.5(¥ tn)

Share Price Valuation

We believe our share price is undervalued.

Net Assets and Adjusted Net Assets1

Trends of Adjusted PBR3

7

Per Share 3,077Yen 5,415Yen

PBR2 0.7x 0.4x

Background on low PBR Fact & Prospect

Long term deficit in

automobile insurance

Tangible cycle of profit

improvement has appeared

Higher certainty to achieve

our management plan

Frequent occurrence of

natural disasters

Improved accumulation risk

management

Low recognition of Life EV as

profit

Trend of growing MCEV

ensures our future profit

Anxiety about dividend cut

Commitment for 60 yen

dividend per share at the

minimum level.

Upside potential for

shareholder return via an

improvement in business

performance0.0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

Total ¥1.2 tn

Total ¥2.2 tn

1. As of March 31, 2013. Adjusted Net Assets: Consolidated Net assets (excluding life insurance subsidiaries’ net assets) + Catastrophic loss reserve (after tax) + Reserve for price fluctuation(after tax) + Life insurance subsidiaries’ EV

2. As of June 28, 2013.3. Adjusted PBR: Share Price / Adjusted Net Assets Per Share

2. About NKSJ Group

1. Current Topics

3. Appendix

8

Selected Financial Data of NKSJ HD (Consolidated)NKSJ Group Structure

9

To be merged on September 1, 2014

1.As of March 31, 2013

100% 100%

P&C

Insurance

P&C

Insurance

Life Insurance

Asset Management

(¥ bn)FY2011 FY2012

Ordinary Income 2,790.5 2,843.2

OrdinaryProfit (Loss)

(51.8) 104.7

Net Income (Loss) (92.2) 43.6

Total Assets 8,893.3 9,178.1

Total Net Assets 1,000.5 1,283.4

Market Capitalization1 814.4

Total Assets (Non-consolidated)1

¥4,745.0 bn

Total Assets (Non-consolidated)1

¥1,972.6 bn

Total Assets (Consolidated)1

¥9,178.1 bn

Assistance

Healthcare

Overview of NKSJ Group

NKSJ Group is an insurance group that consists mainly of P&C insurance companies and has life insurance and asset

management business as well. Sompo Japan and Nipponkoa are its core P&C insurance companies and aim to further

realize group synergies through a merger scheduled on September 1, 2014.

Other Businesses

Total Assets (Non-consolidated)1

¥2,293.1 bn

100%

Fire12.8%

Marine2.0%

Personal accident

9.3%Automobile49.9%

CALI114.0%

Others12.0%

(¥ bn) FY2010 FY2011 FY2012

Net Premiums Written (“NPW”)

1,877.2 1,911.7 1,966.2

Ordinary Profit (Loss) 20.2 (3.7) 129.6

Net Income (Loss) 5.6 (60.1) 62.4

Total Assets 7,245.5 6,938.2 7,038.2

Total Net Assets 1,061.5 908.1 1,144.9

Combined Ratio 105.9% 115.6% 105.4%

Ratings

Moody’s / S&P / R&I / JCRA1 / A+ / AA- / AA

(As of April 2013)

A.M. Best A+ (As of April 2013)

Sompo Japan and Nipponkoa are centered around domestic P&C insurance business and have solid ratings. With over

120 years of history, we have strengthened our domestic business base through consolidations with major domestic

P&C insurance companies and other steps.

Selected Financial Data of P&C

(Sum of Sompo Japan and Nipponkoa)

Premiums Written in FY2012 (Sum of SJ and NK)

By Products (Net Premiums) Domestic vs. Overseas2 (Net Premiums) By Distribution Channel3 (GrossPremiums)

10

History of Major Domestic Consolidations

Overview of Sompo Japan and Nipponkoa

1. CALI: Compulsory Automobile Liability Insurance2. Overseas NPW = NPW of overseas subsidiaries + NPW from overseas insurance contracts of SJ and NK3. Gross written premium on a performance evaluation basis, excluding savings-type insurance.

“Professionals”, “Corporate”, “Car dealers” and “Car repair shops and other automobile related” are all agents

Launched fire insurance

first in Japan

Formed as a

joint company

Chugai MarineNippon FireMay, 1892

NipponFire & Marine

KoaFire & Marine

TaiseiFire & Marine

NissanFire & Marine

Nippon Accident

Tokyo FireJuly, 1887

YasudaFire & Marine

NipponkoaSompo Japan

Integration of management in April , 2010

NKSJ Holdings

Sompo Japan NipponkoaScheduled on September 1, 2014

Nipponkoa LifeSompo JapanHimawari Life

October, 2011NKSJ Himawari Life

Launched Personal Accident

insurance first in Japan

Domestic93.8%

Overseas6.2%

Professional28.9%

Corporate21.2%

Car dealers15.7%

Car repair shops, etc.

12.6%

Financial institutions

5.1%

Other agents16.1%

Brokers0.5%

667

131 130

10998

8779

69

55 51

0

50

100

150

(US$ bn)

7,333.3 7,025.6 6,832.5 6,819.3 6,941.9

0.0

2,000.0

4,000.0

6,000.0

8,000.0

FY2007 FY2008 FY2009 FY2010 FY2011

(¥ bn)

Sompo Japan18.5%

Nipponkoa9.1%

Sompo JapanNipponkoa

27.5%

TokioMarine25.7%

MitsuiSumitomo

18.2%

Aioi NissayDowa15.5%

Others13.1%

Japan is the world’s 3rd largest P&C insurance market. Premiums are stable and earned mainly from automobile

insurance. The total market share of the top 5 companies exceeds 80%. The total share of Sompo Japan and

Nipponkoa, which will merge as Sompo Japan Nippokoa, is the largest in the Japanese P&C insurance market.

Size of P&C Insurance Market by Country1 (FY2011)

Historical Premiums in the Japanese P&C Insurance Market2

11

■ Other

■ CALI

■Voluntaryautomobile

■Personalaccident

■ Marine

■Fire &allied lines

Market Share in the Japanese P&C Insurance Market2 (FY2011)

USA Germany Japan UK France ChinaNether-

landsCanada Italy

SouthKorea

Overview of the Japanese P&C Insurance Market and our Market Share

Source: Swiss Re “Sigma Report”, Hoken Kenkyujo “Insurance”, company disclosures1. Gross written premiums, including reinsurance premiums2. Based on net premiums written of P&C insurers in Japan excluding reinsurance companies

Sompo Japan Nipponkoa Company A Company B Company C

646%

534%

665% 649%

581%

0%

100%

200%

300%

400%

500%

600%

700%

Sompo Japan Nipponkoa Company A Company B Company C

65% 69% 72% 72%82%

72%

34% 35% 35% 34% 34% 33%

99%104% 107% 106%

116%105%

0%

20%

40%

60%

80%

100%

120%

140%

FY2007 FY2008 FY2009 FY2010 FY2011 FY2012

Loss Ratio Expense Ratio Combined Ratio

Historical Performance and Financial Strength (SJ and NK)

• Net Premium income of Sompo Japan and Nipponkoa have been stable and started recovering as a result of

premium rate revisions and other efforts. Combined ratio lowered in FY2012 due to various initiatives to improve

loss ratio and expense ratio.

• SJ and NK's financial soundness are high with a strong capital and credit rating.

Net Premiums Written (Sum of SJ and NK)

Solvency Margine Ratio (FY 2012, Regulatory Base)

12

(¥ bn)

688 653 633 620 630 638

1,345 1,290 1,258 1,256 1,281 1,327

2,0331,943 1,892 1,877 1,911 1,966

0

500

1,000

1,500

2,000

2,500

FY2007 FY2008 FY2009 FY2010 FY2011 FY2012

SJ NK Total

Combined Ratio (Sum of SJ and NK)

Regulatory Minimum

Capital Requirement

Credit Ratings of Major P&C Insurance Companies

Aa3 / AA-

A1 / A+

A2 / A

A3 / A-

(As of April 2013)Moody’s / S&P

n/a

3. Appendix

1. Current Topics

2. About NKSJ Group

13

Loading Premium Rates

for expenses

Pure Premium Rates(Advisory Pure Premium Rates)

for claims

Advisory Pure Premium Rates

Calculated for: fire insurance, personal accident

insurance, automobile insurance, etc.

Calculated by the NLIRO1

The NLIRO collects large quantities of data from member

insurance companies2

The NLIRO uses statistical approach to calculate the advisory

pure premium rates and present it to member insurance

companies1

Member insurance companies1 can use the advisory pure

premium rates with respect to the pure premium rates as a

basis of calculating their own premium rates

The NLIRO annually reviews whether the current advisory

pure premium rates are at an appropriate level and reports the

result to FSA. If they are judged to be inappropriate, the

advisory rates are promptly recalculated

The advisory rating system functions as a profit stabilizer.

14

Premium

Rates

Advisory Rating System in Japan

1. Non-Life Insurance Rating Organization of Japan2. Member companies of the General Insurance Association of Japan

SJ and NK have raised premiums for automobile

insurance 3 times since FY 2010.

The effects will continue to materialize gradually.

The Driver Rating System was revised in April 2012 and

the revision has been reflected in our automobile

insurance policies written after October 2012

Expected to improve profitability in the mid-and-long

term

Automobile Insurance: Measures to Improve Profitability

Profitability of our automobile insurance business is expected to improve as a result of revisions of premium rates and

the Driver Rating System.

Historical Premium Rates Revisions & Driver Rating System Revision Measures to Improve Profitability

15

Sompo Japan

Nipponkoa

NLIRO1

Apr.

+0.8%

Apr.

+1.7%

Dec.

+1.4%

Jan.

+1.8%

Apr.

<Revision of Driver Rating System>

Oct.

1. Non-Life Insurance Rating Organization of Japan

FY2011 FY2012 FY2013FY2010

<Reflect>

Apr.

+2.1%

Oct.

Apr.

+2.0%

Risk is classified into rating levels from 1 to 20 to ensure that premiums reflect the degree of risk according to a policyholders’ prior accident record

A rating coefficient (discount rate) is established for each rating level

A driver with no accidents during a given year will be promoted to the next higher rating level in the following year. A driver involved in an accident will be demoted by three rating levels

Ratings shall be maintained at the same level if a driver suffers certain types of incidents such as vehicle theft, as well as damage due to flying debris or vandalism such as graffiti (hereinafter, “waived incident”)

For policies in force, rating levels 7 to 20 were subdivided into an “accident-free coefficient” and an “accident coefficient”

Ratings coefficients for all rating levels shall be revised to reflect the most recent actual risk

The practice of recognizing waived incidents was abolished and replaced with demotion by one rating level

The period1 for applying the “accident coefficient” shall be three years for every accident resulting in a demotion by three rating levels (one year for anaccident resulting in a demotion of one rating level)

Policyholders involved in accidents have a higher actual risk than justified by the premiums they pay

Accident-free policyholders have a lower actual risk than justified by the premiums they pay

Under the old Driver Rating Sytem, accident-free policyholders had to pay a part of the premiums that primarily

policyholders involved in accidents would have had to pay. After the revision, rating levels are determined reflecting

risks of each policyholder more accurately.

Old Driver Rating System

Overview Problems Overview

<Example> When customers with rating level 18 received an insurance payment after being involved in an accident

16

Revised Driver Rating System

Old

Oldcoefficient

Old coefficientOld

coefficient

Level 18-59%

Level 15-52%

Level 16-55%

Level 17-57%

Level 18-59%

<One year later> <Two years later> <Three years later> <Four years later>

Revised

Accident-free

Accident coefficientAccident-

free

Level 18-54%

Level 15-33%

Level 16-36%

Level 17-38%

Level 18-54%

<One year later> <Two years later> <Three years later> <Four years later>

Rate of premium increase from the old system2 => 39.6% 42.2% 44.2%

Automobile Insurance: Revision of Driver Rating System

(Applicable from October 2012)

1. Up to six years2. Rate of premium increase = Accident coefficient (after application of discount rate) / Old coefficient (after application of discount rate)

Note Regarding Forward-looking Statements

The forecasts included in this document are based on the currently available information and certain assumptions that we believe reasonable. Accordingly, the actual results may differ materially from those projected herein depending on various factors.

17