Ladies and gentlemen. Thank you very much for taking time out of your busy schedules to join today's earnings conference call for NSNAD Insurance Group Holdings, Inc.

My name is Hayashi from the Investor Relations Department, and I will be serving as the moderator for this session. Appreciate your kind attention and look forward to your participation.

Today, in addition to myself, Hayashi, we are joined by Mr. Nakayama, General Manager of Accounting, as well as members from the Investor Relations and Accounting Department.

The presentation materials are available on our company's website under the Investors section, specifically in the IR Events area, listed alongside the earnings release and the other related disclosures for the fiscal 2025 full year results. Please have these materials at hand as we proceed.

Please note that the results for fiscal year 2025 are presented in accordance with Japanese accounting standards, while the forecast for the fiscal year 2026 are based on IFRS. As with our previous conference call, we have included a summary of today's presentation in the materials.

Therefore, at the outset, I will focus only on the key points, and we will dedicate most of the session to the Q&A. We aim to conclude the entire meeting in approximately 45 minutes, and we appreciate your understanding.

Furthermore, please be aware that today's presentation may include forward-looking statements based on our current forecasts. Such statements are subject to risks and uncertainties, and actual results may differ materially from these projections.

We kindly ask for your understanding in this regard. Now let me briefly outline the key points of our financial results.

The key highlights for today are shown on page 4 of the presentation materials. For the full fiscal year 2025, consolidated net income reached a record high of 787.3 billion yen, an increase of 95.6 billion yen from the previous year.

Group adjusted profit, which serves as the basis for shareholder returns, also marked a record at 1,000.9 billion yen, up 269.1 billion yen year on year. Let me begin with an overview of our full-year results for fiscal 2025, starting with the top-line figures.

Please turn to page 11 of the presentation materials. Net premiums written at our domestic non-life insurance businesses increased by 122.6 billion yen year on year, reaching 3,269.6 billion yen.

This growth was mainly driven by higher revenues in automobile and fire insurance, reflecting the impacts of rate revisions. Premium income from our domestic life insurance business increased by 100.6 billion yen, reaching 1,741 billion yen.

This growth was primarily driven by higher sales at Mitsui Sumitomo Primary Life Insurance, following product revisions. Net premiums written by our overseas subsidiaries rose by 207.8 billion yen year on year to 1,735.1 billion yen.

This increase was driven by revenue growth across all regions, with particularly strong performance in the Americas and Europe. Next, I will discuss our profit on a financial accounting basis.

Please refer to page 12 of the presentation materials. Consolidated net income for our two domestic non-life insurance companies increased by 49.3 billion yen despite the burden of merger-related expenses.

This growth was mainly driven by higher premium income, a decrease in natural catastrophe losses, and increased dividend and interest income. In the domestic life insurance business, net income decreased by 74.9 billion yen year on year.

This was mainly due to Mitsui Sumitomo Aioi Life Insurance reporting a loss of 51.9 billion yen, as the company proceeded with the sale of yen-denominated bonds in its available-for-sale securities portfolio to eliminate unrealized losses. Our overseas insurance subsidiaries recorded an increase in profit of 77.4 billion yen, mainly attributable to higher revenues in Europe and the Americas, as well as a decrease in natural catastrophe losses.

Please turn to page 13 for details on the group adjusted profit. Driven by significant profit growth in both our domestic non-life insurance and international businesses, group adjusted profit increased by 269.1 billion yen year on year, reaching a record 1,000.9 billion yen.

Next, please refer to page 17 for an update on our ESR. As of the end of March 2026, ESR declined by 12 points from the previous fiscal year, standing at 214%.

Now let me move on to our earnings forecast for fiscal year 2026. As announced in our news release dated March 30th, the company will voluntarily adopt IFRS for its consolidated financial statements starting with the Securities Report for the fiscal year ended March 2026.

Accordingly, please note that our earnings forecast for fiscal year 2026 are based on IFRS. Before presenting our earnings forecast for fiscal year 2026, let me first explain our fiscal 2025 results on an IFRS basis, which will serve as the basis for comparison.

Please turn to page 14. While group adjusted profit under Japanese accounting standards was 1,000.9 billion yen, adjusted profit on an IFRS basis was 918.9 billion yen.

This difference was mainly due to the recognition of losses on honors contracts in the domestic non-life insurance business and the impacts of eliminating timing differences resulting from the alignment of fiscal year ends in overseas operations. Now let me explain our earnings forecast for fiscal year 2026.

Please refer to page 30 of the presentation materials. As illustrated in this waterfall chart, we are forecasting adjusted profit of 800 billion yen for the fiscal year ending March 2027.

Excluding gains and losses from the sale of strategic equity holdings, we predict adjusted profit from domestic non-life insurance businesses to be 170 billion yen, roughly in line with the previous year. This reflects our expectation of increased revenue offset by a projected rise in natural catastrophe losses.

For the domestic life insurance business, we expect adjusted profit to be 52 billion yen, also roughly unchanged from the previous year. The positive impact from the absence of Mitsui Sumitomo Aioi Life Insurance's bond sales losses is expected to be mostly offset by a decline in investment margins at Mitsui Sumitomo Primary Life Insurance.

For our international businesses, we are projecting adjusted profit of 300 billion yen, an increase of approximately 4 billion yen year on year. While we anticipate natural catastrophe losses in Europe to be in line with the historical average and have factored in the absence of gains from the sale of shares in Challenger Limited in our overseas life insurance operations, we expect profit growth in the Americas primarily driven by equity in earnings from W.

R. Berkley Corporation.

On balance, these factors result in a modest increase for the segment as a whole. On a consolidated group basis, excluding gains from the sale of strategic equity holdings, we expect adjusted profit to be 532 billion yen, remaining at the same level as the previous year.

This forecast reflects the positive effects on ongoing initiatives such as rate revisions, while assuming natural catastrophe losses, both in Japan and overseas, will be in line with historical averages. Finally, let me address our policy on shareholder returns, page 8, please.

For fiscal year 2025, in addition to the interim dividend of 77.5 yen per share already paid, we will pay a year-end dividend of 82.5 yen per share. This brings the total dividend to 160 yen per share, representing an increase of 15 yen compared to the previous fiscal year and 5 yen compared to our initial forecast.

In addition, we have decided to repurchase shares up to a maximum 265 billion yen as part of our basic shareholder return policy, of which 75 billion has already been executed. Furthermore, for fiscal year 2026, we project an annual dividend of 117 yen per share, which represents an increase of 10 yen from the previous year.

In addition to this, we plan to repurchase 80 billion yen of our own shares during the first half as part of our basic shareholder return, and combined with 190 billion yen linked to the previous year's results, we intend to repurchase a total of 270 billion yen worth of shares in fiscal year 2026. I would also like to note that our growth strategy, as well as topics such as the reduction of strategic equity holdings, will be addressed in greater detail by management at the information meeting scheduled for next week on May 26th.

That concludes my remarks. We will now begin the Q&A session.

Sato-san, JPMorgan Securities, please.

This is Sato from JPMorgan. I have two questions.

My first question is about international specialty MS Amlin and MS Re. The impact is, I'd like to learn about the attritional loss project excluding natural catastrophe, and I would also like to learn about the impact of the market softening.

My second question, you have updated your mid-term management plan, and I think basically it is in line with what you have disclosed at the information meeting. However, I'd like to learn about the points you have revised.

Thank you. Mr.

Sato, thank you very much for your question. I'd like to double-check your questions.

Your first question was about Europe, especially MS Amlin and MS Re, excluding natural catastrophe. What's the projection of attritional loss?

Also what's the impact of market softening? Your second question was about whether we have revised our mid-term management plan, and if so, what are the points we have revised?

This is Nakayama from accounting. Thank you very much.

From myself, I'd like to address your first question. Regarding MS Amlin, FY26 earnings forecast, which is on page 50 and 51, we have the earnings forecast of MS Amlin and MS Re.

Starting from this time, as we have moved to IFRS for overseas subsidiaries, we are based on April to March. Regarding the previous year's number, the number of FY25, it is also translated into April to March numbers.

That is why we have some discrepancy with JGAAP-based numbers, which we have the later version of the presentation. Again, this is April to March basis, and when you look at loss ratio on page 50 for MS Amlin, it's changed from 53.7% to 59.1%, and excluding natural catastrophe for MS Amlin, it was one point improvement.

On the other hand, regarding MS Re, if you refer to page 51, loss ratio has increased from 71% to 77.5%, and excluding natural catastrophe, it was 3.7-point increase, it was increased. There is the impact of market softening as well, we have already incorporated the impact into these numbers, and excluding natural catastrophe for MS Re, it was 3.7%, which looks actually bigger.

However, there is the discount impact for IFRS, and for FY25 discount, impact was bigger, and also for FY26, it is smaller. That is why it looks like it has increased.

That's all for myself. For your second question, this is Hayashi.

I'm going to address your question. Today, at the timing of financial result announcement, we have presented our management plan.

Last November, we have presented the 2030 operating profit target based on IFRS. We have presented 764 billion, and now we do have the higher possibility to achieve this target for 2030 target, even though we have presented it as 700 billion.

Now that we have increased the number to 800 billion, and for other, including initiatives, we really haven't made major revisions.

Understood. Regarding my first question, the impact of market softening, according to what you have said, regarding MS Amlin, it's improving, and also for MS Re, there is the bigger impact of the fluctuation.

Even though there is the impact of market softening, however, you have been successfully managing that, is that okay to understand that way?

Yes. Thank you.

Mr. Sato, thank you very much.

Mr. Muraki from SMBC Nikko Securities, please.

This is Muraki from SMBC Nikko Securities. I have two questions.

My first question is regarding the projection of auto on the insurance. How do you see the necessity to increase the premium?

On page 21, there's numbers based on Japanese standard. However, with IFRS, there is a projection of a 2-point improvement for automobiles, and I would like to learn more about the projection.

That is my first question. My second question: how should we see top-line growth of MS Re and also the American companies?

I think MS Re had a 15% growth of top line last year, and also based on IFRS for the coming fiscal, the 15% growth is projected. However, there are companies such as Munich Re, which get higher impact of market softening, and also they are experiencing reduction of revenues as well.

My understanding is that you are strengthening your American base. However, as there is less the growth of top line in some companies.

Are there some companies which are not really growing? However, I was wondering how I should interpret the two-digit top line growth.

Let me confirm your question. Your first question was about FY26 and the auto insurance projection, and your second question was about MSV and also the Americas top line growth.

Regarding your first question, this is Nakayama speaking. Regarding FY26 auto mobile projection, I would like you to refer to page 38.

As Mr. Muraki mentioned, we are projecting 2% improvement, excluding natural catastrophe, there is the 4-point improvement, and as you may understand from the P&L, there is the impact from onerous contracts.

That is why we are projecting slight improvement, and we have been working on rate revisions. When we have apple-to-apple comparison, still we are projecting improvement, and regarding rate revisions, I would like to ask Mr.

Hayashi to answer that point. Regarding rate revisions, at this point in time, we have nothing finalized.

However, as we have been explaining to you, the ratio we would like to achieve is the ratio, we would like to achieve, we still have several things to consider.

May I move on to the next point? Regarding page 38, loss ratio based on IFRS, there is the loss from the onerous contract of FY2025.

Are you saying that is going to decrease in the coming fiscal?

Regarding onerous contract, there is the change of the estimate. However, for this time, already in my answer, I included natural catastrophe and also the onerous contract.

However, still we are projecting the improvement of the auto. You can understand that it is improving even based on our traditional Japanese basis standard.

Let me move on to the second question, which is related to the top line. In 2026, the guidance is available on page 49 for our international business, and as you are aware of Europe, we're expecting 169.9 billion yen revenue increase, which does include MS&AD, and Americas 155.5 billion yen revenue increase, which includes the United States.

MS Re, as Mr. Muraki-san is aware of, over the past several years, we've been able to keep growing the business also while the market has been softening.

Increased these reinsurance companies, they are directly affected by the softening situation. Their top line has been affected, but at least these reinsurance company, these reinsurance company, their portfolios are being matured, I will say.

Our business, MS Re, they are still under development. The phases are different.

Under such a circumstance, we can refer to the rate, and we can choose the classes or lines which are not facing softening situation. With that, we are aiming to further grow our business.

We've been growing till now, and even as of today, we are expecting to further grow our business. Reinsurance customers, we are being able to maintain good relationships.

That should be also enabling us to reach out to attractive contracts. That's another reason why we're being able to grow.

We are not competing based on pricing. That's not the case.

The Americas. The Americas, yes, top line is growing.

This 155.5 number is there, and 2026 top line growth is affected a lot by the foreign currency exchange situation. If you look at page 49, close to 400 billion yen top line is growing, out of which foreign currency impact is according to 160 billion yen, which is included in this 400 billion yen number.

If you do the math, maybe the actual growth is 240 billion yen, and as if we switch over to FYS, the ordinary profit is going to be gross profit based, and we have a friendly retail business in the US, and they are going to enhance the new program. On a gross basis, it may seem we are expanding a lot, but in terms of actual underwriting, the premiums written, not necessarily.

Top line growth you see on page 49, again, that is incorporating foreign currency positive impact. That's it.

Fully understood, thank you. Thank you very much, Mr.

Muraki. Next, Mizuho Securities, Sakamaki-san, please.

I am Sakamaki from Mizuho. My question is about your guidance.

I have two questions. First, page 30, waterfall chart, international business, Europe, Americas, loss insurance.

If you do the math, I don't think the number makes 3-9. What are the other factors you take into consideration?

The Americas, WRB, what kind of contribution you're expecting, and what is the organic growth you're expecting? My second question is about natural catastrophe impact.

Now the accounting is going to be different, it may be difficult to compare, but you are increasing your budget in Japan, and maybe you are downsizing your budget in overseas. Am I correct?

Let's double check your questions. First is about page 30 waterfall chart, the difference in the numbers for our overseas international business and WS Sparky contribution.

That was your first part of a question, and the second part is the impact coming from natural catastrophe, especially in the overseas markets. Mr.

Nakayama will answer to the question. If you compare 25 and 26 on page 30, the difference is 3-9, and if you also look at page 48, you will see numbers by region.

Americas 6.5, International Life Insurance 2.75. We also have Asia minus 3.2 and other adjustments, which is minus 1.73.

That should be the breakdown of the numbers.

I hope I could answer to your question. Right, right.

I was missing this page 48. Thank you.

Next let us know about the WR Berkeley situation.

WRB, if you look at page 48, Americas plus 6.55 is including the equity method profit coming from WR Berkley as well. This is a listed company, SEC, we cannot mention the specific numbers.

Again, such a number out of this 65.5 is coming from WR Berkley. Again, they are listed in SEC, there is market consensus number available.

We do not have any internal number, we are based on the market consensus. I think we are incorporating like 15% of the market consensus.

I think. I hope I could answer your question.

Yes, thank you. Natural catastrophe, the per-risk coefficient.

If you look at slide number 28, you will find, left hand below, domestic 150 billion, and last year 124.7, we are expecting kind of a negative rebound following the previous fiscal year. Overseas, we are expecting 64 billion for natural catastrophe, last year 54.2.

We are not kind of being optimistic or undervaluating the situation. We are just incorporating the expected average situation.

When you switch over to IFRS basis, what is going to be the average year basis compared to J-GAAP average year for domestic business? Can we expect the average base to be the same?

Thank you.

Shifting to IFRS, natural catastrophe assumption we are not revisiting. Basically the definition remains the same.

Specifically speaking, IFRS, are we going to do some discount, or is it going to be gross basis? What kind of risk factors?

Theoretically speaking, these details may need to be considered, but we are talking about natural catastrophe. It's not something we can kind of adjust.

The definition is going to be the same. It's going to be net basis, Japan-based, and we are just handling or treating the same as before.

Of course the bigger the company be, the natural catastrophe loss is going to be expanding. Depending on the scale, the size can be different or become bigger.

Understood. Thank you.

Thank you, Mr. Sakamaki.

Next, Daiwa Securities, Watanabe, please.

This question is related to the Middle East situation. The marine insurance with your domestic business, what kind of assumptions you have?

If you have already, for the current fiscal year, are you expecting any negative impact? The second question is shareholder return.

You have a policy-wise DPS expectation, and should we expect that the dividend increase speed is going to be faster in the future accordingly? Thank you.

Let me confirm your questions. First is about the Middle East.

What kind of impact are we expecting? Second question is related to the shareholder returns.

Thank you. Regarding your first question, Nakayama is going to answer.

Regarding domestic insurance, we do see the limited impact. Regarding overseas, especially in Europe, MS Amlin or MS Re, for these companies, they do cover the Middle East.

However, as you understand, or as you have pointed out, the accounting calendar results in March and April, and regarding Iran situation happened in February, for certain exposures, we have already included loss. We have already included the loss for FY25, and talking about Middle East situation, which is quite unstable, we would like to be prepared to take a look at the short-term impact.

For CPI or for other economic index, it is now in the inflation trend, and we have already incorporated that impact into our numbers. When there is, we have not incorporated the impact of economic decline, however, in the beginning of April, when Japan Bank has published a report, we have already included that impact.

In total, it's around 30 billion yen provision, which we have already incorporated.

When you say 30 billion, are you talking about FY26 or FY25?

Partially, the number is included for FY26, however for overseas business, which results in March or April, we have numbers included for FY25, and for domestic numbers, we have included these numbers for FY26 according to our current plan. Regarding your second question regarding shareholders return, I would like to address your question.

The shareholder return, we have already presented the improvement or the increase of the dividend. This is basically in line with our traditional shareholder return policy, and we have communicated that we are presenting the progressive dividend, and this is what we are considering for this fiscal and also for the next fiscal.

We really do not have fixed numbers, however we would like to present the progressive dividend, and also we keep our basic shareholders return policy, which is 50%, and I would like your understanding on this. Thank you very much.

Thank you very much. Mr.

Mashima from Tokai Tokyo Intelligence Laboratory, please.

My first question: on page 32, for two non-life insurance companies, there is 79 billion for merger expenses, and I would like to know the breakdown, and I was wondering until when you are going to have merger expenses. That is my first question.

Second question: when TaxiGo announced its listing, and I understand that the Aioi Nissay, they has the shares, and I was wondering if the sales of your share of TaxiGo is already included into the numbers, and is it included into your performance of this fiscal regarding the variance?

For your question regarding merger expense and also your second question about Taxi Go, the listing, and also our gain from the sales of the shares, and also you asked about Verix Company as well. This is Nakayama speaking.

I would like to answer your question regarding merger expenses. Mr.

Majima, you mentioned page 32, which is 79 billion as the merger expenses. This is based on the IFRS 2026, before adjustment and also after adjustment.

However, I would like you to understand that this is the after-tax numbers. When you go back to page 28, as you can see major assumptions for earning forecast, 111 billion, this is the number that we have for FY26, and there is the increase of 68.5 billion, meaning that before FY25 it was 42.5 billion, and for FY26 it's 111 billion.

For merger expenses, the merger is scheduled at April 1st, 2027, and we are projecting that there will be some numbers for FY27 as well. We are projecting that we have numbers from FY25, 26, and 27 for the three years.

However, the merger numbers are coming from this fiscal year, it's about the merger expenses. Did you also ask about breakdown?

The biggest portion is coming from system integration. Major part of the expenses is actually coming from the system integration, and also there is the integration of the locations, which we have mainly in FY26.

These are merger expenses. Thank you.

Your second question, which was about TaxiGo IPO-related gain, is it included in these numbers? For the AD and also the MS, we would like to refrain from answering which shares we have sold.

How about Verix? Regarding the Verix company, this is financial and related services, meaning for FY26, I'd like you to refer to the numbers by categories, and there is 10 billion, which is for the financial services, and also there is the social challenges-related businesses as well, the numbers are included here.

However, for specific numbers, as Verix is not a listed company, I'd like to refrain from answering specific numbers related to this. Thank you very much.

Thank you. Next, Tsujino-san from BofA Securities.

I have two questions. You have made the announcement of the share buyback, which is around 190 billion.

Is it for the second half of the FY26, and also for this year's number? That is 190 billion, and also there is another announcement possibly you are going to make in November.

That is why you are saying that it will be 270 billion in total for 2026. As for the fiscal number, the number from the second half will be incorporated for your financial results announcement, which you are going to have probably around the same time next year.

That is my first question.

I think your question was about share buyback. Let me answer.

Yes, what you explained right now sounds correct. First of all, 190 billion yen, this was for second half 2025, and 80 billion yen is for 2026 first half, or in the middle.

In total, 2026, we are expecting 270 billion yen. Sometimes this time next year, separately, depending on the adjusted profit expected, we may announce additional share buyback.

That's it. Thank you.

So 80 billion yen we are expecting now is kind of additional share buyback, maybe 50% of the profit excluding the capital reserve adjustment we are talking about.

Now this 80 billion yen is reflecting the basic shareholder return

for the full year?

Half of the full year. Understood.

Second question is the midterm, you are also announcing, and in 2030, your adjusted profit target is 800 billion yen. Last year in November, at the exploratory session, the adjusted profit based on IFRS and J-GAAP, there were two different numbers.

One of them was around 750 billion yen, another one was around 760 billion yen or so. Now the number is becoming bigger.

Is that because just you're rounding up the number, or is there any specific reasons why now the profit you're expecting, adjusted profit you're expecting, is not 750 or 760, but 800? Is it for currency exchange?

Thank you. The business management plan we are announcing, the number is what you're asking for.

As we explained at the beginning, the numbers we were announcing in November, we've been revisiting or scrutinizing. Now the probability of achieving numbers are becoming higher.

Now we are adding up more probable numbers, and we are saying 800 billion yen. It's not like rounding up 750 or 760.

We just scrutinize all of the business expected adjusted profit and accumulate

it. There's no specific business which is likely to perform much stronger than what we were expecting in November.

International business, yes, is contributing a lot for the difference between now and November, understood? Thank you.

Thank you. Next, Sasaki from Nomura Securities, please.

I am Sasaki from Nomura Securities. I have one question.

Strategic equity holding. I think this year the outstanding balance is going to be much lower than last year.

Is this number expected number going to be, can this number become different at the end of the day? Because the trend can become even stronger to unwind the cross-shareholding or strategic equity holding.

If that's the case, can this number actually become larger than what you're expecting for at this moment? Thank you.

It's about how much we are planning to downsize our strategic equity holding. I am Nakayama.

I will answer to your question. The thinking we have, as we've been explaining, as you see on page 28, this year we're expecting 476.3 billion yen.

Last year was 701. We are expecting more than 200 billion yen decrease.

We've been decreasing already a lot, and the yen has been weakening, based on these assumptions, we have this plan. We believe this 476.3 is a highly probable number, but of course during the fiscal year anything can happen, the actual number can become higher or lower compared to these numbers.

Thank you. Any other questions?

If not, we'd like to close the session. If there are any questions we could not take during the Q&A, please feel free to access to our IR department.

We will individually respond to your questions. This concludes today's conference call.

We appreciate your continuous support and understanding. Thank you very much for joining our earnings conference call today.

Thank you.