MS& Insurance : SUMMARY OF FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2021

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This document has been translated from the Japanese original solely for reference purposes, and the Japanese original shall prevail if any discrepancy is identified.

SUMMARY OF FINANCIAL STATEMENTS

FOR THE YEAR ENDED MARCH 31, 2021

May 20, 2021

MS&AD Insurance Group Holdings, Inc. Tokyo Stock Exchange and Nagoya Stock Exchange 8725

https://www.ms-ad-hd.comNoriyuki Hara, President & CEO

Masaru Kenma, Manager, Consolidated Accounting Section, Accounting Department

Telephone: [phone]
Scheduled date to hold the ordinary general meeting of shareholders:	June 28, 2021
Scheduled date to file the Securities Report:	June 28, 2021
Scheduled date to commence dividend payments:	June 29, 2021
Explanatory material for business results:	Available
IR Conference (for institutional investors and analysts):	To be held
	(Note) Amounts of less than one million yen are truncated.

1. Consolidated Financial Highlights for the Year Ended March 31, 2021 (April 1, 2020 to March 31, 2021)

(1) Consolidated business performance						(Yen in millions)
	Ordinary income		Ordinary profit	Net income attributable to owners of the
		parent
Year ended March 31, 2021	4,892,244	(5.3)	%	306,524	94.4 %	144,398	1.0 %
Year ended March 31, 2020	5,168,361	(6.0)	%	157,701	(45.8) %	143,030	(25.8) %

Percent figures represent changes from the corresponding period of the preceding year.

(Note) Comprehensive income	For the year ended March 31, 2021:	¥	753,938	million	-	%
	For the year ended March 31, 2020:	¥	(157,288)	million	-	%
							(Yen)
Net income attributable to	Net income attributable
owners of the parent per	to owners of the parent	Return on	Ordinary profit	Ordinary profit
	share	per share	equity	to total assets	to ordinary income
	- Basic	- Diluted
Year ended March 31, 2021	255.79	255.65	5.2 %		1.3 %		6.3 %
Year ended March 31, 2020	248.36	248.22	5.5 %		0.7 %		3.1 %

(Reference) Gains/(losses) on equity method investments	For the year ended March 31, 2021:	¥	(6,601)	million
	For the year ended March 31, 2020:	¥	(30,878)	million

(2) Consolidated financial conditions																(Yen in millions)
														Ratio of net assets less	Net assets less non-controlling
			Total assets				Net assets		non-controlling interests to
														total assets		interests per share (Yen)
March 31, 2021			24,142,562				3,126,657				12.8	%				5,525.42
March 31, 2020			23,196,455				2,494,038				10.6	%				4,308.37
(Reference) Net assets less non-controlling interests		As of March 31, 2021:	¥	3,084,349	million
								As of March 31, 2020:	¥	2,451,670	million
(3) Consolidated cash flows																					(Yen in millions)
		Cash flows from			Cash flows from		Cash flows from		Ending balance of cash and
		operating activities			investing activities		financing activities			cash equivalents
Year ended March 31, 2021			(323,912)				43,925					79,278						1,994,434
Year ended March 31, 2020				667,896				(330,363)				65,321						2,198,680
2. Dividends
					Dividends per share (Yen)			Total annual			Dividend			Dividends on
		1st			2nd		3rd		4th		Annual		dividends			pay-out ratio		net assets
		quarter		quarter		quarter		quarter		total		(Yen in millions)		(Consolidated)		(Consolidated)
Year ended March 31, 2020		-			75.00		-		75.00		150.00		85,770				60.4	%		3.3	%
Year ended March 31, 2021		-			75.00		-		80.00		155.00		86,995				60.6	%		3.2	%
Year ending March 31, 2022		-			80.00		-		80.00		160.00							38.8	%
(Forecast)

3. Consolidated Earnings Forecasts for the Year Ending March 31, 2022 (April 1, 2021 to March 31, 2022)

					(Yen in millions)
	Ordinary profit		Net income attributable to owners	Net income attributable to owners of the
		of the parent		parent per share (Yen)
Year ending March 31, 2022	330,000	7.7 %	230,000	59.3 %	412.03

Percent figures represent changes from the preceding year.

* Notes

1. Changes in significant subsidiaries for the period (changes in specified subsidiaries resulting in changes in scope of consolidation): None
2. Changes in accounting policies and accounting estimates and restatements

1. Changes in accounting policies due to revisions of accounting standards: None
2. Changes in accounting policies other than above: None
3. Changes in accounting estimates: None
4. Restatements: None

1. Number of shares of issued stock (common stock)

1. Number of shares of issued stock (including treasury stock)

	As of March 31, 2021:	593,473,207 shares
	As of March 31, 2020:	593,291,754 shares
2.	Number of shares of treasury stock
	As of March 31, 2021:	35,263,101 shares
	As of March 31, 2020:	24,244,439 shares
3.	Average number of shares of outstanding stock
	For the year ended March 31, 2021:	564,504,353 shares
	For the year ended March 31, 2020:	575,887,317 shares

• This report is unaudited.
• Notes to the earnings forecasts and others

Any earnings forecasts in this report have been made based on the information available to the Company as of the disclosure date of the report and certain assumptions, and therefore do not guarantee future performance. Actual results may differ substantially from these forecasts depending on various factors. For key assumptions of the earnings forecasts and other relevant information, please refer to "Consolidated Earnings Forecasts for the Year Ending March 31, 2022" on page 3 of the Appendix. The forecasts of consolidated ordinary income for the fiscal year and consolidated earnings for the second quarter (cumulative) are not disclosed due to difficulties in calculating reasonable forecast figures stemming from a high susceptibility to natural disasters and market conditions.

[Appendix]

Contents

Page

1. Overview of Business Performance and Forecasts

1. Overview of Business Performance and Financial Conditions in the Fiscal Year

	under Review・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・	2
(2)	Consolidated Earnings Forecasts for the Year Ending March 31, 2022 ・・・・・・・・・・・・・・・・・・	3
2. Basic Stance for Adopting Accounting Standards ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・	4
3. Consolidated Financial Statements and Main Notes
(1)	Consolidated Balance Sheets ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・	5
(2)	Consolidated Statements of Income and Comprehensive Income ・・・・・・・・・・・・・・・・・・・・・・	7
(3)	Consolidated Statements of Changes in Net Assets ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・	10
(4)	Consolidated Statements of Cash Flows ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・	12
(5)	Notes to Consolidated Financial Statements
	(Notes to Going Concern Assumptions) ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・	14
	(Notes to Segment Information) ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・	14
	(Notes to Per Share Information) ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・	20
	(Notes to Significant Subsequent Events) ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・	20

[Attachment]

Explanatory Material for Business Results for the Year Ended March 31, 2021

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1. Overview of Business Performance and Forecasts

1. Overview of Business Performance and Financial Conditions in the Fiscal Year under Review (Overview of business performance in the fiscal year under review)

During the fiscal year under review, the global and Japanese economies continued to be in a difficult situation due to the impact of COVID-19 that has been spreading globally. However, we have seen a trend of recovery since the middle of the year as economic activities have gradually returned.

The MS&AD Insurance Group ("the Group") also faced the impact of the pandemic such as increasing insurance payment in overseas countries and decreasing life insurance premiums in Japan. However, while carrying out initiatives to construct business styles in response to customers' growing preference for contactless services, the Group took measures to increase productivity further by using teleworking, promoting paperless operations and utilizing office space effectively.

In the fiscal year under review, the Group has been making efforts for the three key strategies of "Pursue Group's comprehensive strengths," "Promote digitalization," and "Reform portfolio," in order to achieve sustainable growth and enhance corporate value by maximizing the utilization of the Group's resources, based on the Group's Medium-Term Management Plan "Vision 2021" (from FY2018 to FY2021).

Pursue Group's comprehensive	We strengthened competitiveness by promoting measures to improve quality and
strengths	productivity, including joint initiatives of the marketing & sales divisions such as sales
	promotion of jointly developed products, standardization and sharing of products, services,
	administration, systems, etc. and an increase in efficiency of printing and logistics.
Promote digitalization	We promoted measures to build up the foundation across the entire Group, such as three
	initiatives contributing to enhancing the value of customers' actual experiences (digital
	transformation, digital innovation and digital globalization) and development of human
	resources for digitalization.
Reform portfolio	We promoted reform of our risk portfolio by continuing a reduction in strategic equity
	holdings and natural disaster risk management utilizing reinsurance and made efforts to
	reform our business portfolio by dispersing and diversifying our revenue source including
	new investment in international businesses.

As a result of these efforts, earnings for the current consolidated fiscal year to date are as follows.

Ordinary income was ¥4,892.2 billion, due to underwriting income of ¥3,425.3 billion, investment income of ¥1,450.7 billion and other ordinary income of ¥16.0 billion. At the same time, ordinary expenses amounted to ¥4,585.7 billion, including ¥3,800.4 billion in underwriting expenses, ¥69.6 billion in investment expenses, ¥688.5 billion in operating expenses and general and administrative expenses, and other ordinary expenses amounting to ¥27.0 billion.

As a result, ordinary profit for the current fiscal year was ¥306.5 billion, reflecting a year-on-year increase of ¥148.8 billion. After adjustments to ordinary profit mainly for extraordinary income and losses and income taxes, net income attributable to owners of the parent for the current fiscal year was ¥144.3 billion, reflecting a year-on-year increase of ¥1.3 billion.

Summaries of each business segment are given below.

1) Domestic Non-life Insurance Business (Mitsui Sumitomo Insurance Co., Ltd)

Ordinary income for the current fiscal year totaled ¥1,802.1 billion yen, including underwriting income of ¥1,664.6 billion, investment income of ¥132.6 billion, and other ordinary income of ¥4.7 billion. At the same time, ordinary expenses amounted to ¥1,670.5 billion, including ¥1,420.9 billion in underwriting expenses, ¥6.4 billion in investment expenses, ¥232.2 billion in operating expenses and general and administrative expenses, and other ordinary expenses amounting to ¥10.8 billion.

As a result, ordinary profit for the current fiscal year was ¥131.6 billion, reflecting a year-on-year increase of ¥42.4 billion. After adjustments to ordinary profit mainly for extraordinary income and losses and income taxes, net income for the current fiscal year was ¥92.2 billion, reflecting a year-on-year decrease of ¥1.8 billion.

2) Domestic Non-life Insurance Business (Aioi Nissay Dowa Insurance Co., Ltd)

Ordinary income for the current fiscal year totaled ¥1,389.8 billion yen, including underwriting income of ¥1,322.1 billion, investment income of ¥62.1 billion, and other ordinary income of ¥5.6 billion. At the same time, ordinary expenses amounted to ¥1,357.4 billion, including ¥1,149.8 billion in underwriting expenses, ¥7.9 billion in investment expenses, ¥197.0 billion in operating expenses and general and administrative expenses, and other ordinary expenses amounting to ¥2.5 billion.

As a result, ordinary profit for the current fiscal year was ¥32.4 billion, reflecting a year-on-year decrease of ¥26.1 billion. After adjustments to ordinary profit mainly for extraordinary income and losses and income taxes, net income for the current fiscal year was ¥21.6 billion, reflecting a year-on-year decrease of ¥23.1 billion.

3) Domestic Non-life Insurance Business (Mitsui Direct General Insurance Co., Ltd.)

Ordinary income was ¥36.5 billion after recording underwriting income of ¥36.4 billion. Meanwhile, ordinary expenses came to ¥35.1 billion resulting from underwriting expenses of ¥24.0 billion and operating expenses and general and administrative expenses of ¥11.0 billion.

As a result, ordinary profit for the current fiscal year was ¥1.4 billion, reflecting a year-on-year increase of ¥1.2 billion. Net income for the current fiscal year was ¥0.9 billion, reflecting a year-on-year increase of ¥0.8 billion. As a result, net income after taking ownership interests into account (net income by segment) was ¥0.8 billion, reflecting a year-on-year increase of ¥0.7 billion.

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4) Domestic Life Insurance Business (Mitsui Sumitomo Aioi Life Insurance Co., Ltd.)

Ordinary income for the current fiscal year totaled ¥568.4 billion yen, including insurance premiums and others of ¥513.1 billion, investment income of ¥51.0 billion, and other ordinary income of ¥4.2 billion. At the same time, ordinary expenses amounted to ¥542.7 billion, including ¥218.1 billion in insurance claims and others, ¥228.0 billion in provision for underwriting reserves and others, ¥0.7 billion in investment expenses, ¥77.2 billion in operating expenses, and other ordinary expenses amounting to ¥18.6 billion.

As a result, ordinary profit for the current fiscal year was ¥25.6 billion, reflecting a year-on-year increase of ¥6.9 billion. After adjustments to ordinary profit mainly for extraordinary income and losses and income taxes, net income for the current fiscal year was ¥11.9 billion, reflecting a year-on-year increase of ¥4.4 billion.

5) Domestic Life Insurance Business (Mitsui Sumitomo Primary Life Insurance Co., Ltd.)

Ordinary income for the current fiscal year totaled ¥2,039.1 billion yen, including insurance premiums and others of ¥892.1 billion, investment income of ¥1,142.8 billion, and other ordinary income of ¥4.0 billion. At the same time, ordinary expenses amounted to ¥1,879.0 billion, including ¥1,805.6 billion in insurance claims and others, ¥18.6 billion in provision for underwriting reserves and others, ¥0.7 billion in investment expenses, ¥44.2 billion in operating expenses, and other ordinary expenses amounting to ¥9.7 billion.

As a result, ordinary profit for the current fiscal year was ¥160.0 billion, reflecting a year-on-year increase of ¥128.6 billion. After adjustments to ordinary profit mainly for extraordinary income and losses and income taxes, net income for the current fiscal year was ¥43.1 billion, reflecting a year-on-year increase of ¥22.8 billion.

6) International Business (Overseas Insurance Subsidiaries)

In the overseas insurance subsidiaries segment, net premiums written was ¥623.5 billion, reflecting a year-on-year decrease of ¥88.3 billion

Ordinary profit was ¥12.8 billion, reflecting a year-on-year decrease of ¥37.9 billion. Net loss after taking ownership interests into account (net loss by segment) was ¥3.1 billion, a decrease of ¥39.3 billion from the previous fiscal year.

(Overview of Financial Conditions in the Fiscal Year under Review)

Total assets as of the end of the current fiscal year totaled ¥24,142.5 billion, reflecting a year-on-year increase of ¥946.1 billion. Net assets, on the other hand, increased ¥632.6 billion year-on-year to ¥3,126.6 billion, due primarily to an increase in net unrealized gains/(losses) on investments in securities

(Overview of Cash Flows in the Fiscal Year under Review)

With regard to cash flows in the fiscal year under review, net cash flows provided by operating activities decreased by ¥991.8 billion over the previous fiscal year to ¥(323.9) billion, due in part to an increase in foreign currency insurance contracts returns of Mitsui Sumitomo Primary Life Insurance Co. Net cash flows from investing activities increased by ¥374.2 billion over the previous fiscal year to ¥43.9 billion, due in part to an increase in income due to a decrease in money trusts and proceeds from sales and redemption of securities. In addition, cash flows provided by financial activities increased by ¥13.9 billion over the previous fiscal year to ¥79.2 billion, due in part to an increase in income from sales under repurchase agreements, despite an increase in expenditure from redemption of corporate bonds. As a result, cash and cash equivalents at the end of the fiscal year under review have decreased by ¥204.2 billion from the end of the previous fiscal year to ¥1,994.4 billion.

With regard to the liquidity of funds, in preparation for the possibility that cash flow may worsen due to cash outflows used for the payment of claims, etc. or due to unstable market conditions, etc., the Group will ensure appropriate cash flow by maintaining sufficient liquidity and evaluating liquidity with consideration of cash-flow trends, taking into account both assets and liabilities.

(2) Consolidated Earnings Forecasts for the Year Ending March 31, 2022

For consolidated earnings for the next fiscal year, the Company forecasts ordinary profit of ¥330.0 billion and net income attributable to owners of the parent of ¥230.0 billion on the basis of the assumptions set forth below.

• Net premiums written are based on the Company's own forecasts in view of past trends in results.
• Incurred losses due to new natural disasters (domestic) are expected to be ¥40.0 billion for Mitsui Sumitomo Insurance Co. and ¥30.0 billion for Aioi Nissay Dowa Insurance Co. (total of net claims paid and provision of outstanding claims).
• We estimate that no significant fluctuations in market interest rates, exchange rates, or stock market prices will take place from the end of March 2021.

The Company's consolidated earnings forecasts have been made based on certain assumptions including those above mentioned but actual results may differ substantially from these forecasts depending on various factors

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