the tokio marine and fire insurance company, limited · tokio marine recently agreed with asahi...

THETOKIO

MARINE

ANDFIRE

INSURANCECOM

PANYLIM

ITEDANNUAL

REPORT2001

THE TOKIO MARINE AND FIRE INSURANCE COMPANY, LIMITEDAnnual Report to Holders of American Depositary SharesFor the Year Ended March 31, 2001

Profile

The Tokio Marine and Fire Insurance Company, Limited (“Tokio

Marine”), established in 1879, is Japan’s oldest and largest non-life

insurance company. The company has been a leader in both commercial

and personal underwriting, with a reputation for earning customer

confidence that extends around the world. With a basic philosophy of

establishing customer confidence and satisfaction in all aspects of its

business, the company continues to develop new products and services

as it strives to contribute to the affluence, comfort and economic

development of society by providing safety and protection.

Tokio Marine recently agreed with Asahi Mutual Life Insurance Co.,

The Nichido Fire and Marine Insurance Co., Ltd., and The Kyoei Mutual

Fire & Marine Insurance Co. to form Millea Insurance Group. The

Group aims to build a new business model for a full-scale integration of

life insurance and property and casualty insurance businesses, and to

maximize the distinctive qualities and strengths of each company.

The Tokio Marine and Fire Insurance Company, Limited and subsidiaries 1

Yen in millions Dollars in thousands(except for per ADS data) (except for per ADS data)

Years ended March 31 2001 2000 2001

Property and Casualty:Net Premiums Written ............................................................................. ¥1,323,907 ¥1,297,984 $10,676,669Premiums Earned..................................................................................... 1,310,739 1,281,548 10,570,476

Life Premiums ............................................................................................. 150,543 130,128 1,214,057Net Income from Underwriting .................................................................... 7,709 18,118 62,170Net Investment Income ................................................................................ 69,183 78,108 557,927Net Income .................................................................................................. 93,517 84,107 754,170Net Income per American Depositary Share, each representing 5 shares of common stock ........................................................................................ 302 271 2.435Total Assets at year-end ............................................................................... 8,113,881 8,071,465 65,434,524Stockholders’ Equity at year-end ................................................................. 2,586,544 2,661,770 20,859,226U.S. dollar amounts in this Annual Report have been translated from yen, for convenience only, at the rate of ¥124=U.S.$1. Reference is made in note 1 (a) of the notes to consoli-dated financial statements.

’97 ’98 ’99 ’00 ’01 ’97 ’98 ’99 ’00 ’01 ’97 ’98 ’99 ’00 ’01 ’97 ’98 ’99 ’00 ’01

Net Investment Income(Yen in billions)

Net Income(Yen in billions)

Total Assets(Yen in billions)

Net Premiums Written(Yen in billions)

1,343.01,305.11,298.0 1,323.91,329.6

45.0

22.2

78.1

69.2

43.5

151.4145.8

84.193.5

118.1

7,739.17,676.8

8,071.5 8,113.9

7,573.6

Financial Highlights .......................................................................................................................... 1To Our Shareholders .......................................................................................................................... 2Interview: Kunio Ishihara, President .................................................................................................. 4Financial Section ............................................................................................................................... 7Worldwide Network .......................................................................................................................... 35Directors and Corporate Auditors ...................................................................................................... 39Investor Information .......................................................................................................................... 39

Contents

The Tokio Marine and Fire Insurance Company, Limited and subsidiaries

Financial Highlights

2 The Tokio Marine and Fire Insurance Company, Limited and subsidiaries

To Our Shareholders

Operating Environment and ActivitiesIn the fiscal year ended March 31, 2001,

despite a rise in capital investment, such

factors as the lack of a noticeable

improvement in employment conditions

and sluggish consumer spending

negatively impacted the Japanese

economy r e su l t i ng i n min ima l

advancement toward a recovery.

Against the backdrop of a harsh

operating environment marked by

numerous corporate bankruptcies, the

insurance industry has witnessed the

accelerated development over the past

year of mergers among non-life insurance

companies as well as alliances and

consolidations spanning both the non-life

and life insurance sectors.

In response, The Tokio Marine and Fire

Insurance Company, Limited (“Tokio

Marine”) has pursued its three-year plan,

“Big Challenge 2001—Initiatives for the

21st Century” which started in the

previous fiscal year and carried out

aggressive business development.

Measures carried out under the plan in the

fiscal year ended March 31, 2001 are

discussed below.

Formation of Millea Insurance GroupTo create a leading insurance group that

integrates the life insurance business and

the property and casualty insurance

business, and to provide a broader range of

Koukei Higuchi, Chairman (left) andKunio Ishihara, President

Customer ServiceTo improve its customer service, Tokio

Marine pursued a variety of measures

centered on the construction of a new

business process employing data

communications technology. We believe

that the new system will enable Tokio

Marine to respond accurately to more

sophisticated, diverse customer needs

while drastically improving efficiency of

Tokio Marine and its agents.

In measures to improve customer

service, we expanded the lineup of

products marketed on agents’ homepages

to include such products as automobile

insurance. Tokio Marine also developed

the “Pocket Contact System,” which is the

first system in the insurance industry to

support the activities of agents through the

employment of mobile telephones. This

system’s premium calculation and

accident detail notification functions

enable Tokio Marine to provide prompter,

finely tailored services to customers.

To increase business efficiency, Tokio

Marine expanded the “Agent Online”

system, the mainstay for agents in this age

of liberalization. As a result, the number

of Agent Online terminals reached 76,000,

the largest network in the industry. The

number of contracts of which terms were

directly input by agents employing this

system rose from approximately 1.5

million from the previous fiscal year to

over 5 million in the fiscal year ended

March 31, 2001, contributing significantly

to greater efficiency in the contract process

of Tokio Marine and its agents.

New BusinessesIn the overseas insurance business, we

carried out fundamental preparations for

aggressive expansion of business in Asia.

This included entering into a business and

products and services to customers, Tokio

Marine formed Millea Insurance Group

with Asahi Mutual Life Insurance Co.

(“Asahi Life”), The Nichido Fire and

Marine Insurance Co., Ltd. (“Nichido

Fire”), and The Kyoei Mutual Fire &

Marine Insurance Co. (“Kyoei Fire”) with

a view to management consolidation by

establishing a holding company. Tokio

Marine and Nichido Fire will initially

establish the holding company in April

2002, with Asahi Life and Kyoei Fire

aiming to join the holding company by

approximately 2004 or earlier, if possible.

Product Development and MarketingTokio Marine has integrated i ts

automobile insurance into its proprietary

“Tokio Automobile Policy” (TAP), which

has expanded policy protection in

response to customer demands. TAP has

enabled Tokio Marine to provide all of its

automobile insurance policyholders with

protection and services based on the

unique expertise of Tokio Marine.

Furthermore, to respond to new

customer needs stemming from changes in

society, we developed “Tokio Marine

Ladies Guard,” a non-life insurance

product designed exclusively for women

offering a variety of services to counter

stalkers, as well as “Comprehensive

Condominium Insurance,” which is fire

insurance for condominium management

cooperatives.

For corporate customers, we developed

products that target new emerging risks

faced by companies, including “e-Risk

Insurance,” to more broadly cover risks

entailed in IT-related businesses, and

“Weather Derivatives,” to provide for

unforeseen increases in expenses due to

weather conditions.


acquired for the headquarters in the

previous fiscal year, and continued

mangrove reforestation activities in

Southeast Asia.

ResultsAs a result of endeavoring to improve our

business results, as well as carrying out the

foregoing measures, our operating income

increased by ¥77.9 billion from the

previous fiscal year to ¥1,594.2 billion,

primarily including property and casualty

insurance premiums earned of ¥1,310.7

billion, life premiums of ¥150.5 billion,

net investment income of ¥69.2 billion and

realized gains on investments of ¥63.7

billion.

Operating costs and expenses amounted

to ¥1,453.6 billion, primarily including

losses, claims and loss adjustment

expenses of ¥833.1 billion, policy

acquisition costs of ¥422.6 billion, other

operating expenses of ¥72.0 billion and

policy benefits and losses for life of ¥125.9

billion.

As a result, income before income tax

expense amounted to ¥140.6 billion, an

increase of ¥17.9 billion or 14.6% from the

previous fiscal year. The main reason for

this was an increase in realized gains on

investments.

Income tax expense increased by ¥8.5

billion to ¥47.1 billion. Net income for the

year amounted to ¥93.5 billion, an

increase of ¥9.4 billion or 11.2% from the

previous fiscal year.

OutlookWith little prospect of a full-scale

recovery in consumer spending, a decline

in exports and a slowdown in capital

investments, the Japanese economy in the

fiscal year ending March 31, 2002 is

projected to turn increasingly severe.

capital tie-up with the Samsung Fire &

Marine Insurance Co., Ltd. in Korea and

establishing an insurance company in

India with the country’s largest state-

owned fertilizer cooperative.

As a new business investment, Tokio

Marine, SOFTBANK CORP., ORIX

Corporation and others purchased

common shares of The Nippon Credit

Trust Bank, Ltd. (currently Aozora Bank,

Ltd.) in the sale of such bank from Deposit

Insurance Corporation of Japan. Tokio

Marine aims to utilize the strong

relationship between Aozora Bank and

medium- and small-sized companies and

regional financial institutions to reinforce

Tokio Marine’s customer base for

marketing insurance.

Tokio Marine is making steady

progress in preparations to launch a

defined contribution pension business

(Japanese 401k), so that it can be started

soon after the enactment of the Defined

Contribution Pension Law.

Risk Management and EnvironmentalPreservationBased on an awareness o f the

unprecedented sophistication and

complexity of risks surrounding Tokio

Marine as a result of changes in the

business environment, Tokio Marine

further reinforced its company-wide risk

management capabilities through such

measures as the establishment of a Risk

Management Committee. With the

establishment of the Corporate Legal

Department to handle legal and

compliance issues, Tokio Marine pursued

greater soundness and fairness in business

operations.

To preserve the environment, we

implemented a variety of measures to

comply with ISO 14001 certification

Deregulation will further advance in the

insurance industry, including the start of

sales of insurance policies at banks in

April 2001, and the mutual entry into third

sector insurance not only by subsidiaries

but also by parent companies in July 2001.

Tokio Marine aims to expand profits by

taking advantage of such deregulatory

trends through business development that

conforms to its three-year plan, as well as

by making steady progress in preparations

for establishing the holding company with

Nichido Fire in April 2002.

To ensure that Tokio Marine continues

to grow as an innovative and resourceful

company, and to elevate the Millea

Insurance Group to a world-class level,

Tokio Marine aims to rally its employees

around the above measures. We ask for the

continued support of our shareholders.

July 2001

Koukei Higuchi

Chairman

Kunio Ishihara

President



We aim to form a insurance group with advantages in the gl insurance market.

Kunio IshiharaPresident

Q. Can you tell us about the newinsurance group?A. The Tokio Marine and Fire Insurance

Co., Ltd., along with Asahi Mutual Life

Insurance Co., The Nichido Fire and

Marine Insurance Co., Ltd., and The

Kyoei Mutual Fire & Marine Insurance

Co. are forming Millea Insurance Group to

create a leading insurance group by

integrating the life insurance business and

the property and casualty insurance

business. The new insurance group derives

its name from the word “millennium” to

denote its formation in 2000, at the start of

a new millennium. The name represents

our determination to gain the trust of

customers and to grow far into the future.

Each member of Millea Insurance

Group furnishes unique capabilities in

their area of expertise. In the non-life

insurance field, Tokio Marine excels in the

wholesale market, Nichido Fire’s forte is

in the retail market and Kyoei Fire is

particularly strong in sales to cooperative

organizations. In the life insurance field,

Asahi Life boasts many years of

experience and expertise. We expect the

distinctive qualities of these companies to

generate considerable synergies for the

group as a whole.

Management of the companies will be

consolidated by forming a holding



world-classcompetitiveobal

company. This holding company structure

will provide a high degree of flexibility as

an organization, allowing the group to

respond to potential partnerships with

other insurance companies, venture into

new businesses and restructure its

businesses in the future. Tokio Marine and

Nichido Fire will jointly establish the

holding company in April 2002, and Asahi

Life and Kyoei Fire intend to join the

holding company by approximately 2004

or earlier, if possible.

Q. What is the basic strategy of MilleaInsurance Group?A. Millea Insurance Group has formulated

three basic strategies aimed at becoming a

leading global insurance group; namely,

the creation of a new business model

which fully integrates life and non-life

insurance operations, expansion of

business domains and the development of

a highly productive and efficient

management infrastructure.

Our customers are faced with

increasingly diverse, complex and

sophisticated risks and diversification of

customer lifestyles is changing insurance

needs. Millea Insurance Group will seek to

offer customers a broader range of

products and services by merging the life

and non-life insurance businesses.

By effectively utilizing the investment

reserve to be created through formation of

the group, we plan to aggressively enter

into a variety of new and growing business

sectors, including overseas insurance and

asset management businesses as well as

the health care business and a variety of

services for senior citizens.

Furthermore, we aim to boost

productivity and efficiency through

eliminating duplicative infrastructure at all

four companies and pursuing strategic IT

investments.

Q. Please tell us about Tokio Marine’sbusiness strategy.A. Tokio Marine’s business strategy is to

make every effort in securing a solid

market position by gaining the trust and

support of customers while significantly

strengthening the core insurance business.

Tokio Marine has devised a three-year

plan “Big Challenge 2001—Initiatives for

the 21st Century.” In the first two years of

the plan we have worked to provide

products and services that truly benefit our

customers. We believe Tokio Marine

leads the industry in the development of

advanced products and services that

respond to customer needs, and we will

continue to do our utmost to reflect the

opinions of customers in the development

of products and services.

For instance, our “Tokio Automobile

Policy” (TAP) provides “Bodily Injury

Indemnity Insurance” whereby full

settlement is paid directly to our own

policyholders in the event of their injury in

a car accident. By providing coverage that

exceeds the scope of traditional insurance

policies, TAP is setting the standard for

automobile insurance in Japan.

Other leading products include “e-Risk

Insurance,” which covers a wide range of

risks inherent to IT-related businesses and

“Tokio Marine Ladies Guard,” personal

injury insurance designed for women with

such coverage as indemnity for expenses

incurred in obtaining protection from

stalkers.

Tokio Marine also offers its “365-Day

Anshin Service,” which provides claims

services on weekends and holidays in a

similar manner to those provided on

ordinary weekdays.

The current fiscal year coincides with

the f inal year of our three-year

management plan. We believe that

establishing customer confidence and

satisfaction is the starting point of our

business. While fulfilling the objectives of

the plan, we aim to earn the trust and

support of our customers by meeting their


6 The Tokio Marine and Fire Insurance Company, Limited and subsidiaries6 The Tokio Marine and Fire Insurance Company, Limited and subsidiaries

needs, which we hope will extend to the

new Millea Insurance Group.

Q. Barriers preventing non-lifeinsurance companies from entering‘third sector’ insurance will bederegulated. How will this affectTokio Marine?A. We believe a full-fledged entry into the

‘third sector,’ such as cancer and medical

insu rance , p resen t s s ign i f i can t

opportunities for Tokio Marine, as this

matches our corporate philosophy of

contributing to the affluence, comfort and

economic development of society by

providing safety and protection.

In January 2001, when subsidiaries

were permitted to enter ‘third sector’

insurance, The Tokio Marine Life

Insurance Co., Ltd. released cancer

insurance and medical insurance products.

Sales of these insurance products have

grown steadily since their introduction and

have been well received among a broad

range of customers.

From July 2001, Tokio Marine itself

will be able to enter the ‘third sector’ as

well. Backed by expertise accumulated

among members of the Millea Insurance

Group, Tokio Marine will offer new

products beyond the t radi t ional

framework of life and non-life insurance.

For example, through joint development

within the Millea Insurance Group, we

will endeavor to provide high-quality

services for medical and nursing-care

services as well as a variety of services for

senior citizens.

Q. As the new President, what areyour ambitions?A. I was appointed President this year at a

time when Tokio Marine was at a major

turning point and the operat ing

environment surrounding Tokio Marine

continues to change rapidly with mergers

among non-life insurance companies and

new partnerships between life and non-life

insurance companies. Along with new

participants in the industry, insurance

companies continue to aggressively

compete in terms of products, premiums

and services. I believe, however, that our

current operating environment presents us

with exciting new opportunities for

growth and I expect Tokio Marine will

continue to be an innovative company as it

meets challenges in this time of upheaval.

In particular, as we look forward, I

would like to emphasize the importance to

us of continuing our customer-oriented

policy by providing products and services

which respond directly to customers’

opinions and trends.

We will also seek to increase our

earnings power through efficiency

enhancements and implementing timely

changes to our business strategies. Aiming

for sustainable growth, we will make

every effort to meet the expectations of our

shareholders.

The fiscal year ending March 31, 2002

is the final year of our three-year

management plan, and is also the initial

year of the newly formed Millea Insurance

Group. We look forward to the future with

confidence and it is our sincere hope that

we will receive the continued support of

our shareholders.


Net premiums written of property and casualty insurance amounted to ¥1,324 billion, an increase of 2.0% from the previous fiscal year,

mainly due to the increase in premiums of automobile insurance which is the largest line of business. Net premiums earned amounted to

¥1,311 billion, an increase of 2.3% from the previous fiscal year. Life premiums amounted to ¥151 billion, of which ¥149 billion was from

Tokio Marine Life, an increase of 15.7% from the previous fiscal year.

The ratio of losses and claims incurred and related adjustment expenses to premiums earned increased by 1.5 percentage points to 63.6%

mainly due to an increase in liability for unpaid losses and claims as a result of the depreciation of the yen.

Due to the Company’s effort to reduce expenses, the ratio of underwriting and administrative expenses incurred to premiums written

decreased by 0.5 percentage point to 36.2%.

As a result, net income from underwriting, including life insurance operations, decreased by 57.5% to ¥8 billion.

Net investment income decreased by 11.4% to ¥69 billion. Net income amounted to ¥94 billion, an increase of 11.2% from the previous

fiscal year. Per American Depositary Share, net income was ¥302, compared with ¥271 the fiscal year before.

Investment assets increased by 0.6% to ¥6,818 billion and total assets increased by 0.5% to ¥8,114 billion. Stockholders’ equity

decreased by 2.8% to ¥2,587 billion. Stockholders’ equity as a percentage of total assets decreased from 33.0% of the previous fiscal year

to 31.9%.

Financial Section

Analysis of Insurance Premiums Written ........................................................................................... 9Loss and Expense Ratios ................................................................................................................... 10Investments ....................................................................................................................................... 12Consolidated Statements of Income ................................................................................................... 13Consolidated Balance Sheets ............................................................................................................. 14Consolidated Statements of Stockholders’ Equity .............................................................................. 15Consolidated Statements of Cash Flows ............................................................................................ 16Consolidated Statements of Comprehensive Income .......................................................................... 17Notes to Consolidated Financial Statements ....................................................................................... 18Independent Auditors’ Report ............................................................................................................ 34

Contents



’01’97 ’98 ’99 ’00 ’01’97 ’98 ’99 ’00

’01’97 ’98 ’99 ’00 ’01’97 ’98 ’99 ’00 ’01’97 ’98 ’99 ’00 ’01’97 ’98 ’99 ’00

Fixed Maturities31.6

Equity Securities43.0

Mortgage Loans on Real Estate2.4

Real Estate1.5

Policy Loans0.3

Other Long-TermInvestments9.4

Short-Term Investments11.8

1,323.91,298.01,305.11,329.6

14.6

17.4

20.8

14.0

Cargo & Transit

52.9

61.063.6

53.0

Fire and Allied Lines

157.6159.2165.8

159.5

Automobile

664.6655.8663.5686.7

Personal Accident

132.8

145.9149.2

129.1

Other

171.8174.7177.5 174.3

Compulsory Automobile Liability

107.5104.1105.8

110.4

98.895.0

91.9

99.8471

489

381

271

Loss Ratio (%) Loss Ratio (%) Loss Ratio (%)

Loss Ratio (%)Loss Ratio (%) Loss Ratio (%) Loss Ratio (%)

Ratio of Loss and Loss Adjustment Expenses to Premiums Earned

Ratio of Expenses to Premiums Written

36.737.235.8

63.657.8

36.2

56.3

58.6 60.965.7

50.7 50.2 52.950.3

49.6

64.060.3

41.2

50.0

37.937.3

43.2 43.341.639.738.3

65.059.0

62.959.659.459.2

74.0

51.562.0

65.5

1,343.022.0

65.6

59.9164.2

652.2

60.0 62.857.254.152.8

126.1

174.6 107.6

90.9

34.6

56.1

302

Automobile

HullCargo & Transit

Personal Accident

Other

Compulsory Automobile Liability

Fire and Allied Lines

62.1

Breakdown of Investment Assets(%)

Net Premiums Writtenby Class of Insurance(Yen in billions)

Net Premiums Written and Loss Ratios(Yen in billions)

Hull

Combined Loss and Expense Ratios(%)

Net Income per ADS(Yen)

’01’97 ’98 ’99 ’00’01’97 ’98 ’99 ’00 ’01’97 ’98 ’99 ’00 ’01’97 ’98 ’99 ’00


Analysis of Insurance Premiums Written—Property and Casualty

Yen in millions

Years ended March 31 2001 2000 1999 1998 1997

Hull:Direct premiums written ............................................... ¥ 16,554 ¥ 17,342 ¥ 20,042 ¥ 23,259 ¥ 27,726Reinsurance premiums assumed ................................... 6,927 7,673 9,656 15,261 16,329Reinsurance premiums ceded ........................................ 9,520 10,461 12,317 17,726 22,077Net premiums written ................................................... 13,961 14,554 17,381 20,794 21,978Ratio to total all lines .................................................... 1.05% 1.12% 1.33% 1.55% 1.66%

Cargo & Transit:Direct premiums written ............................................... ¥ 59,317 ¥ 57,734 ¥ 65,575 ¥ 68,514 ¥ 63,414Reinsurance premiums assumed ................................... 2,751 3,041 5,256 6,748 9,639Reinsurance premiums ceded ........................................ 9,029 7,885 9,795 11,656 13,182Net premiums written ................................................... 53,039 52,890 61,036 63,606 59,871Ratio to total all lines .................................................... 4.01% 4.07% 4.68% 4.73% 4.50%

Fire and Allied Lines:Direct premiums written ............................................... ¥ 189,755 ¥ 184,282 ¥ 185,763 ¥ 197,758 ¥ 181,586Reinsurance premiums assumed ................................... 10,881 11,389 12,846 19,209 20,728Reinsurance premiums ceded ........................................ 41,171 38,077 39,403 51,133 38,106Net premiums written ................................................... 159,465 157,594 159,206 165,834 164,208Ratio to total all lines .................................................... 12.05% 12.14% 12.20% 12.35% 12.35%

Automobile:Direct premiums written ............................................... ¥ 695,711 ¥ 672,154 ¥ 662,867 ¥ 669,917 ¥ 658,469Reinsurance premiums assumed ................................... 1,509 2,889 3,380 4,472 5,039Reinsurance premiums ceded ........................................ 10,554 10,451 10,402 10,920 11,352Net premiums written ................................................... 686,666 664,592 655,845 663,469 652,156Ratio to total all lines .................................................... 51.86% 51.20% 50.25% 49.40% 49.05%

Personal Accident:Direct premiums written ............................................... ¥ 130,608 ¥ 131,526 ¥ 135,555 ¥ 148,281 ¥ 151,429Reinsurance premiums assumed ................................... 216 308 316 605 839Reinsurance premiums ceded ........................................ 4,756 2,760 3,028 2,954 3,059Net premiums written ................................................... 126,068 129,074 132,843 145,932 149,209Ratio to total all lines .................................................... 9.52% 9.94% 10.18% 10.87% 11.22%

Other:Direct premiums written ............................................... ¥ 184,605 ¥ 181,243 ¥ 180,789 ¥ 184,722 ¥ 181,135Reinsurance premiums assumed ................................... 15,611 17,525 19,205 24,973 28,169Reinsurance premiums ceded ........................................ 25,881 26,963 25,275 32,201 34,739Net premiums written ................................................... 174,335 171,805 174,719 177,494 174,565Ratio to total all lines .................................................... 13.17% 13.25% 13.38% 13.22% 13.13%

Total (excluding compulsory automobile liability):Direct premiums written ............................................... ¥1,276,550 ¥1,244,281 ¥1,250,591 ¥1,292,451 ¥1,263,759Reinsurance premiums assumed ................................... 37,895 42,825 50,659 71,268 80,743Reinsurance premiums ceded ........................................ 100,911 96,597 100,220 126,590 122,515Net premiums written ................................................... 1,213,534 1,190,509 1,201,030 1,237,129 1,221,987Ratio to total all lines .................................................... 91.66% 91.72% 92.02% 92.12% 91.91%

Compulsory Automobile Liability:Direct premiums written ............................................... ¥ 191,811 ¥ 186,911 ¥ 179,179 ¥ 178,338 ¥ 193,776Reinsurance premiums assumed ................................... 56,222 54,361 53,035 55,088 55,639Reinsurance premiums ceded ........................................ 137,660 133,797 128,106 127,595 141,822Net premiums written ................................................... 110,373 107,475 104,108 105,831 107,593Ratio to total all lines .................................................... 8.34% 8.28% 7.98% 7.88% 8.09%

Total All Lines:Direct premiums written ............................................... ¥1,468,361 ¥1,431,192 ¥1,429,770 ¥1,470,789 ¥1,457,535Reinsurance premiums assumed ................................... 94,117 97,186 103,694 126,356 136,382Reinsurance premiums ceded ........................................ 238,571 230,394 228,326 254,185 264,337Net premiums written ................................................... 1,323,907 1,297,984 1,305,138 1,342,960 1,329,580Ratio to total all lines .................................................... 100.0% 100.0% 100.0% 100.0% 100.0%


Loss and Expense Ratios—Property and Casualty

(1) All Classes Other than Compulsory Automobile Liability:Yen in millions


Hull:Net premiums written ................................................... ¥ 13,961 ¥ 14,554 ¥ 17,381 ¥ 20,794 ¥ 21,978Premiums earned .......................................................... 14,102 15,260 19,351 20,414 22,474Losses incurred ............................................................. 8,584 8,942 9,809 13,406 14,753

Loss ratio .................................................................. 60.9% 58.6% 50.7% 65.7% 65.6%

Cargo & Transit:Net premiums written ................................................... ¥ 53,039 ¥ 52,890 ¥ 61,036 ¥ 63,606 ¥ 59,871Premiums earned .......................................................... 52,990 53,455 62,644 64,730 58,689Losses incurred ............................................................. 28,009 26,817 31,527 32,136 37,587

Loss ratio .................................................................. 52.9% 50.2% 50.3% 49.6% 64.0%

Fire and Allied Lines:Net premiums written ................................................... ¥ 159,465 ¥ 157,594 ¥ 159,206 ¥ 165,834 ¥ 164,208Premiums earned .......................................................... 153,695 143,900 148,441 147,359 145,498Losses incurred ............................................................. 63,267 86,836 74,253 55,818 54,313

Loss ratio .................................................................. 41.2% 60.3% 50.0% 37.9% 37.3%

Automobile:Net premiums written ................................................... ¥ 686,666 ¥ 664,592 ¥ 655,845 ¥ 663,469 ¥ 652,156Premiums earned .......................................................... 682,396 663,696 661,334 662,669 645,367Losses incurred ............................................................. 428,273 397,901 377,982 358,826 340,661

Loss ratio .................................................................. 62.8% 60.0% 57.2% 54.1% 52.8%

Personal Accident:Net premiums written ................................................... ¥ 126,068 ¥ 129,074 ¥ 132,843 ¥ 145,932 ¥ 149,209Premiums earned .......................................................... 131,602 133,232 137,883 146,885 151,623Losses incurred ............................................................. 56,993 57,558 57,395 58,338 58,111

Loss ratio .................................................................. 43.3% 43.2% 41.6% 39.7% 38.3%

Other:Net premiums written ................................................... ¥ 174,335 ¥ 171,805 ¥ 174,719 ¥ 177,494 ¥ 174,565Premiums earned .......................................................... 167,981 165,033 175,699 165,809 158,699Losses incurred ............................................................. 124,344 97,693 90,453 102,861 103,966

Loss ratio .................................................................. 74.0% 59.2% 51.5% 62.0% 65.5%

Total:Net premiums written ................................................... ¥1,213,534 ¥1,190,509 ¥1,201,030 ¥1,237,129 ¥1,221,987Premiums earned .......................................................... 1,202,766 1,174,576 1,205,352 1,207,866 1,182,350Losses incurred ............................................................. 709,470 675,747 641,419 621,385 609,391

Loss ratio .................................................................. 59.0% 57.5% 53.2% 51.4% 51.5%

Loss adjustment expenses incurred—unallocated ............. ¥ 40,575 ¥ 41,695 ¥ 42,107 ¥ 43,060 ¥ 43,245Ratio of losses and loss adjustment expenses incurred to premiums earned ............................................ 62.4% 61.1% 56.7% 55.0% 55.2%Underwriting and administrative expenses incurred ........................................................................... ¥ 438,886 ¥ 432,616 ¥ 442,149 ¥ 439,863 ¥ 421,185Ratio of underwriting and administrative expenses incurred to premiums written ........................................... 36.2% 36.3% 36.8% 35.6% 34.5%Combined loss and expense ratio ...................................... 98.6% 97.4% 93.5% 90.6% 89.7%


(2) Compulsory Automobile Liability:Yen in millions


Net premiums written ....................................................... ¥ 110,373 ¥ 107,475 ¥ 104,108 ¥ 105,831 ¥ 107,593Premiums earned .............................................................. 107,973 106,972 106,787 104,557 104,367Losses incurred ................................................................. 70,218 67,257 63,652 62,093 61,532

Loss ratio ...................................................................... 65.0% 62.9% 59.6% 59.4% 59.0%Loss adjustment expenses incurred—unallocated ............. ¥ 12,795 ¥ 11,067 ¥ 10,741 ¥ 10,353 ¥ 10,549Ratio of losses and loss adjustment expenses incurred to premiums earned ............................................ 76.9% 73.2% 69.7% 69.3% 69.1%Underwriting and administrative expenses incurred ........................................................................... ¥ 41,019 ¥ 43,705 ¥ 43,988 ¥ 40,562 ¥ 39,227Ratio of underwriting and administrative expenses incurred to premiums written ........................................... 37.2% 40.7% 42.3% 38.3% 36.4%Combined loss and expense ratio ...................................... 114.1% 113.9% 112.0% 107.6% 105.5%

(3) All Classes:Yen in millions


Net premiums written ....................................................... ¥1,323,907 ¥1,297,984 ¥1,305,138 ¥1,342,960 ¥1,329,580Premiums earned .............................................................. 1,310,739 1,281,548 1,312,139 1,312,423 1,286,717Losses incurred ................................................................. 779,688 743,004 705,071 683,478 670,923

Loss ratio ...................................................................... 59.5% 58.0% 53.7% 52.1% 52.1%Loss adjustment expenses incurred—unallocated ............. ¥ 53,370 ¥ 52,762 ¥ 52,848 ¥ 53,413 ¥ 53,794Ratio of losses and loss adjustment expenses incurred to premiums earned ............................................ 63.6% 62.1% 57.8% 56.1% 56.3%Underwriting and administrative expenses incurred ........................................................................... ¥ 479,905 ¥ 476,321 ¥ 486,137 ¥ 480,425 ¥ 460,412Ratio of underwriting and administrative expenses incurred to premiums written ........................................... 36.2% 36.7% 37.2% 35.8% 34.6%Combined loss and expense ratio ...................................... 99.8% 98.8% 95.0% 91.9% 90.9%

These tabulations set forth information with respect to the property and casualty loss and expense ratios of the Company for the last five fiscal years. Loss ratios represent the ratio oflosses incurred to premiums earned.


InvestmentsYen in millions

% of Total Value Shown % of TotalCost Investments on Balance Sheet Investments

March 31, 2001 and 2000 2001 2000 2001 2000 2001 2000 2001 2000

Securities held to maturity:Fixed maturities:

Bonds and notes:Government and government agencies and authorities:

Other than United States ............. ¥ 317,237 — 6.17% — ¥ 325,933 — 4.78% —All other corporate bonds ................ 16,971 — 0.33 — 16,906 — 0.25 —Total fixed maturities held to maturity ......................................... 334,208 — 6.50 — 342,839 — 5.03 —

Securities available for sale:Fixed maturities:

Bonds and notes:Government and government agencies and authorities:

United States ............................... ¥ 30,885 ¥ 34,243 0.60% 0.71%¥ 36,973 ¥ 37,075 0.54% 0.55%Other .......................................... 514,179 605,060 10.00 12.52 555,422 623,289 8.15 9.19

............................................................... 545,064 639,303 10.60 13.23 592,395 660,364 8.69 9.74

States, municipalities and political subdivisions:

United States ............................... 265 938 0.00 0.02 340 938 0.00 0.01Other .......................................... 317,470 334,746 6.18 6.93 347,370 335,145 5.10 4.95

............................................................... 317,735 335,684 6.18 6.95 347,710 336,083 5.10 4.96

Public utilities ................................. 47,945 70,326 0.93 1.46 50,395 71,145 0.74 1.05Convertibles and bonds with warrants attached ........................... 136,574 134,691 2.66 2.79 151,304 147,559 2.22 2.18All other corporate bonds ................ 598,137 708,746 11.64 14.67 617,093 711,407 9.05 10.49Total bonds and notes ..................... 1,645,455 1,888,750 32.01 39.10 1,758,897 1,926,558 25.80 28.42

Redeemable preferred stock ................ 53,100 50,100 1.03 1.04 53,100 50,100 0.78 0.74Total fixed maturities ...................... 1,698,555 1,938,850 33.04 40.14 1,811,997 1,976,658 26.58 29.16

Equity securities:Common stocks:

Public utilities ................................. 26,846 26,797 0.52 0.55 61,252 68,019 0.90 1.00Banks, trust and insurance companies ...................................... 228,316 235,477 4.44 4.87 356,698 451,251 5.23 6.66Industrial, miscellaneous and all other .............................................. 1,068,355 1,005,166 20.79 20.81 2,456,392 2,658,332 36.03 39.21Total common stocks ...................... 1,323,517 1,267,440 25.75 26.23 2,874,342 3,177,602 42.16 46.87

Nonredeemable preferred stocks ......... 57,856 3,863 1.12 0.08 57,809 3,701 0.85 0.06Total equity securities ..................... 1,381,373 1,271,303 26.87 26.31 2,932,151 3,181,303 43.01 46.93Total securities available for sale .... 3,079,928 3,210,153 59.91 66.45 4,744,148 5,157,961 69.59 76.09

Mortgage loans on real estate .................. 164,542 173,118 3.20 3.58 164,542 173,118 2.41 2.55Real estate—investment properties ......... 104,786 104,895 2.04 2.17 104,786 104,895 1.54 1.55Policy loans ............................................ 19,112 17,454 0.37 0.36 19,112 17,454 0.28 0.26Other long-term investments ................... 634,647 840,740 12.35 17.40 639,086 840,740 9.37 12.40Short-term investments ........................... 803,431 484,827 15.63 10.04 803,431 484,827 11.78 7.15

Total investments ............................ ¥5,140,654 ¥4,831,187 100.00%100.00%¥6,817,944 ¥6,778,995 100.00%100.00%



Consolidated Statements of IncomeYears ended March 31, 2001, 2000 and 1999

Yen in millions, Dollars in thousands,except per share amounts except per share amounts

2001 2000 1999 2001

Operating income:Property and casualty:

Net premiums written (note 8) ............................................ ¥1,323,907 ¥1,297,984 ¥1,305,138 $10,676,669Less increase (decrease) in unearned premiums .................. 13,168 16,436 (7,001) 106,193

Premiums earned (note 8) ............................................... 1,310,739 1,281,548 1,312,139 10,570,476Life premiums (note 8) ........................................................... 150,543 130,128 98,817 1,214,057Net investment income (note 2) .............................................. 69,183 78,108 22,215 557,927Realized gains (losses) on investments (note 2) ....................... 63,708 26,444 (17,415) 513,774

Total operating income ........................................... 1,594,173 1,516,228 1,415,756 12,856,234

Operating costs and expenses:Losses, claims and loss adjustment expenses (notes 8 and 9):

Losses and claims incurred and provided for ....................... 779,688 743,004 705,071 6,287,806Related adjustment expenses ............................................... 53,370 52,762 52,848 430,404

Total losses, claims and loss adjustment expenses ................................................................. 833,058 795,766 757,919 6,718,210

Policy benefits and losses for life ............................................ 125,947 108,706 84,046 1,015,702Policy acquisition costs ........................................................... 422,551 413,112 426,814 3,407,669Other operating expenses ........................................................ 72,017 75,974 69,503 580,782

Total operating costs and expenses .......................... 1,453,573 1,393,558 1,338,282 11,722,363

Income before income tax expense .......................... 140,600 122,670 77,474 1,133,871

Income tax expense (note 4):Current ................................................................................... 12,886 2,444 63,762 103,919Deferred ................................................................................. 34,197 36,119 (132,136) 275,782

................................................................................................... 47,083 38,563 (68,374) 379,701Net income ............................................................. ¥ 93,517 ¥ 84,107 ¥ 145,848 $ 754,170

Amounts per American Depositary Share, each representing 5 shares of common stock (note 12):

Basic and diluted net income ................................... ¥ 302 ¥ 271 ¥ 471 $ 2.435Cash dividends declared .......................................... ¥ 42.50 ¥ 42.50 ¥ 42.50 $ 0.343

Weighted average and diluted common shares in thousands ........ 1,549,692 1,549,692 1,549,692

See accompanying notes to consolidated financial statements.



Consolidated Balance SheetsMarch 31, 2001 and 2000

Yen in millions Dollars in thousands

2001 2000 2001

AssetsInvestments—other than investments in related parties (note 2):

Securities held to maturity: [market value 2001 ¥363,988 million ($2,935,393 thousand)] ....................... ¥ 342,839 ¥ — $ 2,764,831Securities available for sale:

Fixed maturities, at market value [amortized cost 2001 ¥1,698,555 million ($13,698,024 thousand); 2000 ¥1,938,850 million] ....................... 1,811,997 1,976,658 14,612,879Equity securities, at market value [cost 2001 ¥1,381,373 million ($11,140,105 thousand); 2000 ¥1,271,303 million] ................................... 2,932,151 3,181,303 23,646,379

Mortgage loans on real estate ......................................................................... 164,542 173,118 1,326,952Investment real estate ..................................................................................... 104,786 104,895 845,048Policy loans ................................................................................................... 19,112 17,454 154,129Other long-term investments .......................................................................... 639,086 840,740 5,153,919Short-term investments.................................................................................. 803,431 484,827 6,479,282

Total investments........................................................................... 6,817,944 6,778,995 54,983,419

Cash and cash equivalents .................................................................................. 112,431 107,901 906,702Premiums receivable and agents’ balances ......................................................... 159,708 156,459 1,287,968Reinsurance recoverable on losses (note 8) ........................................................ 180,361 182,353 1,454,524Prepaid reinsurance premiums (note 8) .............................................................. 179,234 171,726 1,445,435Deferred policy acquisition costs ....................................................................... 305,743 283,255 2,465,669Property and equipment, net of depreciation (note 3) ......................................... 212,084 225,117 1,710,355Other assets ....................................................................................................... 146,376 165,659 1,180,452

Total assets .................................................................................... ¥8,113,881 ¥8,071,465 $65,434,524

Liabilities and Stockholders’ EquityPolicy liabilities and accruals:

Losses, claims and adjustment expenses (note 9) ........................................... ¥ 655,253 ¥ 621,389 $ 5,284,298Unearned premiums (note 8) .......................................................................... 1,192,904 1,163,842 9,620,194Future policy benefits and losses .................................................................... 348,106 241,575 2,807,306

Total policy liabilities and accruals ................................................. 2,196,263 2,026,806 17,711,798

Investment deposits by policyholders (note 7) .................................................... 2,170,444 2,248,045 17,503,581Income tax liability (note 4) ............................................................................... 645,478 699,019 5,205,468Retirement and severance benefits (note 6) ........................................................ 146,846 145,381 1,184,242Ceded reinsurance balances payable .................................................................. 78,445 79,237 632,621Long-term debt (note 5) ..................................................................................... 110,000 50,000 887,096Other liabilities .................................................................................................. 179,861 161,207 1,450,492

Total liabilities ............................................................................... 5,527,337 5,409,695 44,575,298

Stockholders’ equity:Common stock, ¥50 par value.

Authorized 2,500,000,000 shares; issued and outstanding, 1,549,692,481 shares in 2001 and 2000 ..................................................... 101,995 101,995 822,540

Other stockholders’ equity:Additional paid-in capital ........................................................................... 52,917 52,917 426,750Retained earnings (notes 11 and 12) ........................................................... 1,748,272 1,667,928 14,098,969Accumulated other comprehensive income:

Unrealized appreciation of securities ...................................................... 722,674 888,526 5,828,016Foreign currency translation adjustments ............................................... (21,666) (28,311) (174,726)Minimum pension liability adjustments (note 6) ..................................... (17,648) (21,285) (142,323)

Total stockholders’ equity .............................................................. 2,586,544 2,661,770 20,859,226

Commitments and contingent liabilities (notes 8 and 10)Total liabilities and stockholders’ equity ........................................ ¥8,113,881 ¥8,071,465 $65,434,524




2001 2000 1999 2001

Common stock:Balance at beginning and end of year ...................................... ¥ 101,995 ¥ 101,995 ¥ 101,995 $ 822,540

Additional paid-in capital:Balance at beginning and end of year ...................................... 52,917 52,917 52,917 426,750

Retained earnings:Legal reserve (note 11):

Balance at beginning of year ............................................... 33,493 30,828 28,163 270,105Transfer from unappropriated retained earnings.................. 2,657 2,665 2,665 21,427Balance at end of year ......................................................... 36,150 33,493 30,828 291,532

Price fluctuation reserve (note 11):Balance at beginning of year ............................................... 19,392 7,206 12,619 156,388Transfer from (to) unappropriated retained earnings ............ 12,252 12,186 (5,413) 98,806Balance at end of year ......................................................... 31,644 19,392 7,206 255,194

Unappropriated retained earnings:Balance at beginning of year ............................................... 1,615,043 1,558,959 1,423,535 13,024,540Net income for year ............................................................ 93,517 84,107 145,848 754,170Dividends paid (note 12) ..................................................... (13,173) (13,172) (13,172) (106,234)Transfer from (to) legal reserve (note 11) ............................ (2,657) (2,665) (2,665) (21,427)Transfer from (to) price fluctuation reserve (note 11) .......... (12,252) (12,186) 5,413 (98,806)Balance at end of year ......................................................... 1,680,478 1,615,043 1,558,959 13,552,243

Retained earnings at end of year ...................................... 1,748,272 1,667,928 1,596,993 14,098,969

Accumulated other comprehensive income:Unrealized appreciation of securities:

Balance at beginning of year ............................................... 888,526 733,685 764,128 7,165,532Change during year ............................................................. (165,852) 154,841 (30,443) (1,337,516)Balance at end of year ......................................................... 722,674 888,526 733,685 5,828,016

Foreign currency translation adjustments:Balance at beginning of year ............................................... (28,311) (12,189) (5,179) (228,315)Change during year ............................................................. 6,645 (16,122) (7,010) 53,589Balance at end of year ......................................................... (21,666) (28,311) (12,189) (174,726)

Minimum pension liability adjustments:Balance at beginning of year ............................................... (21,285) (25,688) (16,133) (171,654)Change during year ............................................................. 3,637 4,403 (9,555) 29,331Balance at end of year ......................................................... (17,648) (21,285) (25,688) (142,323)

Total stockholders’ equity ........................................... ¥2,586,544 ¥2,661,770 ¥2,447,713 $20,859,226



Consolidated Statements of Stockholders’ EquityYears ended March 31, 2001, 2000 and 1999



2001 2000 1999 2001

Cash flows from operating activities:Net income ....................................................................................... ¥ 93,517 ¥ 84,107 ¥ 145,848 $ 754,170Adjustments to reconcile net income to cash provided by operating activities:

Increase (decrease) in losses, claims and loss adjustment expense reserve, net of ceded reinsurance .................................................. 35,389 (14,632) (12,387) 285,395Increase in unearned premiums, net of ceded reinsurance ............. 21,554 21,284 5,228 173,823Increase in future policy benefits for life ....................................... 106,531 95,083 76,492 859,121Increase (decrease) in liability for income taxes ............................ 2,532 (29,975) 18,440 20,419Deferred income taxes .................................................................. 34,197 36,119 (132,136) 275,782Provision for retirement and severance benefits ............................ 23,624 23,636 21,661 190,516Payments of retirement and severance benefits ............................. (16,474) (19,222) (12,068) (132,855)Decrease (increase) in premiums receivable and agents’ balances, net of ceded reinsurance ................................... (4,041) 8,538 (3,866) (32,589)Increase in deferred policy acquisition costs ................................. (22,488) (23,845) (16,809) (181,355)Depreciation ................................................................................. 17,159 18,259 19,918 138,379Increase (decrease) in other liabilities ........................................... 18,654 5,126 (54,261) 150,435Deferred (gains) losses on hedging activities ................................ — (92,556) 92,083 —Other—net.................................................................................... 4,031 (125,592) (8,486) 32,509

Net cash provided by (used in ) operating activities .................. 314,185 (13,670) 139,657 2,533,750Cash flows from investing activities:

Proceeds from investments sold or matured:Fixed maturities sold ..................................................................... 296,843 352,667 888,110 2,393,895Fixed maturities redeemed ............................................................ 261,102 226,634 331,781 2,105,661Equity securities ........................................................................... 125,080 241,637 68,502 1,008,710Mortgage loans on real estate ........................................................ 20,093 29,389 32,000 162,040Investment real estate ................................................................... 8,095 11,374 2,017 65,282Policy loans .................................................................................. 21,991 20,732 18,766 177,347Other long-term investments ......................................................... 307,232 333,102 283,506 2,477,677

Cost of investments purchased:Fixed maturities ............................................................................ (650,427) (811,863) (1,333,726) (5,245,379)Equity securities ........................................................................... (188,261) (302,385) (73,831) (1,518,234)Mortgage loans on real estate ........................................................ (16,706) (17,872) (19,513) (134,726)Investment real estate ................................................................... (6,633) (2,719) (974) (53,492)Policy loans .................................................................................. (23,649) (22,360) (19,974) (190,718)Other long-term investments ......................................................... (107,957) (135,077) (143,596) (870,621)

Short-term investments—net ............................................................ (318,604) 117,183 (177,433) (2,569,387)Securities and indebtedness of related parties .................................... 175 (662) 54,338 1,411Additions to property and equipment ................................................ (7,503) (11,007) (25,502) (60,506)

Net cash provided by (used in) investing activities .................... (279,129) 28,773 (115,529) (2,251,040)Cash flows from financing activities:

Investment deposits funded by policyholders and yields therefrom ......................................................................................... 338,637 376,450 432,503 2,730,944Withdrawals of investment deposits by policyholders ....................... (416,238) (450,574) (448,104) (3,356,758)Proceeds from issuance of long-term debt ......................................... 60,000 50,000 — 483,871Dividends to stockholders ................................................................. (13,173) (13,172) (13,172) (106,234)

Net cash provided by (used in) financing activities ................... (30,774) (37,296) (28,773) (248,177)Effect of exchange rate changes on cash and cash equivalents .............. 248 51 101 2,000Net change in cash and cash equivalents ............................................... 4,530 (22,142) (4,544) 36,533Cash and cash equivalents at beginning of year .................................... 107,901 130,043 134,587 870,169Cash and cash equivalents at end of year .............................................. ¥ 112,431 ¥ 107,901 ¥ 130,043 $ 906,702

Supplemental information of cash flows:Cash paid during the year for:

Interest.......................................................................................... ¥ 1,142 ¥ 709 ¥ 489 $ 9,210Income taxes ................................................................................. ¥ 10,354 ¥ 32,419 ¥ 45,322 $ 83,500



Consolidated Statements of Cash FlowsYears ended March 31, 2001, 2000 and 1999



2001 2000 1999 2001

Net income ................................................................................. ¥ 93,517 ¥ 84,107 ¥145,848 $ 754,170Other comprehensive income (loss), net of tax:

Unrealized appreciation of securities:Unrealized holding gains (losses) ........................................ (124,191) 212,678 (18,329) (1,001,537)Less: reclassification adjustments ........................................ (41,661) (57,837) (12,114) (335,979)

(165,852) 154,841 (30,443) (1,337,516)

Foreign currency translation adjustments:Foreign currency translation ................................................ 4,736 (16,122) (6,071) 38,194Less: reclassification adjustments ........................................ 1,909 — (939) 15,395

6,645 (16,122) (7,010) 53,589Minimum pension liability adjustments .................................. 3,637 4,403 (9,555) 29,331

Other comprehensive income (loss) ............................................ (155,570) 143,122 (47,008) (1,254,596)

Comprehensive income (loss) ..................................................... ¥ (62,053) ¥227,229 ¥ 98,840 $ (500,426)



Consolidated Statements of Comprehensive IncomeYears ended March 31, 2001, 2000 and 1999


Notes to Consolidated Financial StatementsMarch 31, 2001, 2000 and 1999

1. BASIS OF PRESENTATION AND SIGNIFICANTACCOUNTING POLICIES

(a) Basis of PresentationThe Tokio Marine and Fire Insurance Company, Limited (“Tokio

Marine”), incorporated in Japan, is a property and casualty insurer

which writes marine, fire and casualty, automobile and allied lines

of insurance principally covering risks located in Japan and hull and

cargo risks for Japanese business. The financial statements pre-

sented herein are accordingly expressed in yen and, solely for the

convenience of readers, have been translated into United States dol-

lars at the rate of ¥124=U.S.$1, the approximate exchange rate pre-

vailing on the Tokyo foreign exchange market as of March 31,

2001. This translation should not be construed as a representation

that all the amounts shown could be converted into U.S. dollars at

the rate shown.

The consolidated financial statements of Tokio Marine and its

subsidiaries (collectively referred to as “the Company”) are pre-

sented herein in accordance with United States generally accepted

accounting principles, which differ in certain respects from Japa-

nese accounting principles. In the financial statements prepared in

conformity with Japanese accounting principles, Tokio Marine re-

ported net income of ¥43,140 million ($347,903 thousand) in 2001,

¥30,614 million in 2000 and ¥31,964 million in 1999, and stock-

holders’ equity of ¥1,997,667 million ($16,110,218 thousand) at

March 31, 2001 and ¥815,482 million at March 31, 2000.

Certain reclassifications have been made to prior years’ amounts

to conform to the 2001 presentation.

(b) Principles of ConsolidationThe accompanying consolidated financial statements include all

significant majority-owned subsidiaries. All significant intercom-

pany accounts and transactions have been eliminated in consolida-

tion. Other subsidiaries and affiliates, which are not significant, are

accounted for primarily by the equity method. At March 31, 2001

and 2000, investments in related parties which were presented as

other assets amounted to ¥20,943 million ($168,895 thousand) and

¥21,118 million, respectively.

The amounts of statutory net income (loss) for the years ended

March 31, 2001, 2000 and 1999 and stockholders’ equity at March

31, 2001 and 2000 of the consolidated insurance subsidiaries were

as follows:


2001 2000 1999 2001

Statutory net income (loss):Property and casualty ....... ¥ 2,443 ¥ 1,970 ¥ 3,240 $ 19,702Life ................................... 1 (324) (2,150) 8

Statutory stockholders’ equity:Property and casualty ....... 36,800 20,128 296,774Life ................................... 28,102 26,490 226,629

(c) Use of EstimatesThe management of the Company has made a number of estimates

and assumptions relating to the reporting of assets and liabilities and

the disclosure of contingent assets and liabilities to prepare these

financial statements in conformity with generally accepted account-

ing principles. Actual results could differ from these estimates.

(d) Investments—Other than Investments in Related PartiesFixed maturities held to maturity, which the Company has the abil-

ity and positive intent to hold to maturity, are stated at amortized

cost. Fixed maturities available for sale, which are not classified as

held to maturity securities, are stated at market value. When quoted

market value is not available, quoted market value for similar secu-

rities is used instead.

Equity securities comprise common and nonredeemable preferred

stocks. Stocks listed on Japanese or foreign stock exchanges, repre-

senting approximately 89% and 94% of the investment in stocks at

March 31, 2001 and 2000, respectively, are stated at quoted market

values. Unlisted stocks are stated at cost except when a company’s

financial condition has deteriorated or there is a decline in value that is

other than temporary. In those cases, the carrying value of stock of

such company is adjusted downward to an estimated fair value on the

basis of the latest financial information available to the Company or

fair value information for similar companies.

The cost of securities sold is determined on the moving-

average basis.

A loan is considered impaired when it is probable that the Com-

pany will be unable to collect all amounts due according to the con-

tractual terms of the loan agreement. Mortgage loans on real estate

and loans which are included in other long-term investments are

principally carried at the unpaid balance of the principal amount.

For impaired loans, a valuation allowance is established for the dif-

ference between the recorded investment in the loan and either the

present value of expected future cash flows discounted at the loan’s

effective interest rate or the fair value of collateral if the loan is


collateral dependent. Interest income on impaired loans is recog-

nized as cash is received.

Policy loans are carried at cost.

Gains and losses on the sale of investments are included in real-

ized gains and losses in the consolidated statements of income. Un-

realized appreciation or depreciation, net of taxes, in the value of

securities available for sale is accounted for as other comprehensive

income.

Derivative financial instruments are used for asset and liability

management. Foreign exchange, interest rate and equity index con-

tracts are accounted for in a manner consistent with the accounting

treatments appropriate for the assets and liabilities hedged by such

contracts.

(e) Investment Real Estate, Property and EquipmentInvestment real estate, property and equipment are stated at cost less

accumulated depreciation on buildings and furniture and fixtures.

Depreciation is computed principally by the declining-balance

method based on estimated useful lives. The estimated useful lives

of buildings and equipment range as follows:

Reinforced concrete ............................................................. 38 to 50 yearsBrick and block .................................................................... 41 yearsWood ................................................................................... 24 yearsWood and mortar ................................................................. 22 yearsBuilding equipment .............................................................. 3 to 18 yearsFurniture and fixtures ........................................................... 2 to 15 years

Maintenance and repairs are charged against income as incurred.

Betterments are capitalized to property and equipment.

The cost and accumulated depreciation with respect to assets re-

tired or otherwise disposed of are eliminated from the asset and re-

lated accumulated depreciation accounts. Any resulting profit or

loss is credited or charged to income.

(f) Cash EquivalentsCash equivalents include cash deposited in demand deposits at

banks.

(g) Accounts with Foreign AgentsThe amounts included in the consolidated balance sheets at March

31, 2001 and 2000 with respect to foreign agents of the Company

represent data as of December 31, 2000 and 1999, respectively. The

consolidated statements of income likewise include amounts for the

corresponding periods ended on those dates.

(h) Premium RevenuesProperty and casualty insurance premiums are recognized as earned

on a pro rata basis over the terms of the policies. Unearned premi-

ums represent the portion of premiums written relating to the unex-

pired terms of coverage.

Life premiums are generally recorded as premium revenues over

the premium paying periods of the related policies. For short dura-

tion contracts, premiums are recognized over the period to which

the premiums relate on a pro rata basis.

(i) Policy Acquisition CostsCosts that vary with and are primarily related to the acquisition of

insurance policies are capitalized and charged to expense in propor-

tion to premium revenue recognized. Other costs incurred during

the period, such as those relating to policy maintenance, are charged

to expense as incurred. Details of policy acquisition costs are as fol-

lows:


2001 2000 1999 2001

Property and casualty:Deferred at beginning of year ..................................... ¥229,725 ¥226,239 ¥224,310 $1,852,621Incurred during year:

Commissions and brokerage ........................ 215,447 215,024 220,593 1,737,476Salaries and other compensation .................. 116,310 116,040 116,523 937,984Other underwriting costs ................................ 84,589 78,993 85,858 682,169

............................................. 416,346 410,057 422,974 3,357,629

............................................. 646,071 636,296 647,284 5,210,250Deferred at end of year ......... 232,477 229,725 226,239 1,874,815Policy acquisition costs ........ ¥413,594 ¥406,571 ¥421,045 $3,335,435

Life:Deferred at beginning of year ..................................... ¥ 53,530 ¥ 33,171 ¥ 18,291 $ 431,694Incurred during year ............. 28,693 26,900 20,649 231,394Deferred at end of year ......... 73,266 53,530 33,171 590,854Policy acquisition costs ........ ¥ 8,957 ¥ 6,541 ¥ 5,769 $ 72,234Total policy acquisition costs .................................... ¥422,551 ¥413,112 ¥426,814 $3,407,669


(j) Losses, Claims and Loss Adjustment ExpensesThe net liabilities stated for reported and estimated property and

casualty losses and claims and for related adjustment expenses are

based upon the accumulation of (1) case estimates for losses and

related adjustment expenses reported prior to the close of the ac-

counting period on the direct business written by the Company and

(2) estimates received from ceding reinsurers. The loss adjustment

expenses represent administrative expenses in connection with set-

tling or disposing of claims, which include out-of-pocket expenses

as well as allocated personnel cost. Provision has been made for

unreported losses and for adjustment expenses not identified with

specific claims based upon past experience. The Company believes

that the provisions for unpaid losses and adjustment expenses at

March 31, 2001 and 2000 are adequate to cover the ultimate net cost

of losses and claims incurred to those dates. However, the provi-

sions are necessarily based on estimates and the management makes

no representation that the ultimate liability may not exceed or fall

short of such estimates.

(k) Future Policy Benefits and LossesFuture policy benefits and losses include provisions for future

policy benefits for life contracts and for unpaid life policy claims.

The liabilities for future policy benefits are computed by a net level

premium method using estimated future investment yields, with-

drawals and recognized morbidity and mortality tables. Unpaid

policy claims are the estimated liability for reported and unreported

losses on life policies on an undiscounted basis.

The Company believes that the estimated provisions for future

policy benefits and for losses at March 31, 2001 and 2000 are ad-

equate to cover the life insurance liability. However, the ultimate

liability may vary from such estimates.

(l) Compulsory Automobile Liability InsuranceJapanese law provides that all automobiles are to be covered by

specified amounts of liability insurance for personal injury and that

insurance companies are to accept such coverage on a non-profit

basis. In compliance with this law, which came into effect on April

1, 1966, the Company has not reflected any profit or loss from un-

derwriting such compulsory automobile liability insurance in finan-

cial statements prepared for distribution to stockholders under the

Japanese Commercial Code. In these consolidated financial state-

ments, which are presented in accordance with United States gener-

ally accepted accounting principles, losses, net of income taxes,

from underwriting compulsory automobile liability insurance

amounting to ¥10,278 million ($82,887 thousand) in 2001, ¥9,636

million in 2000 and ¥7,420 million in 1999 have been charged to

income. Accumulated losses since April 1, 1966 amount to approxi-

mately ¥59,405 million ($479,073 thousand).

(m) Foreign Currency TranslationAssets and liabilities of the subsidiaries located outside Japan are

translated into Japanese yen at the rates of exchange in effect at the

balance sheet date. Income and expense items of the subsidiaries are

translated at average exchange rates prevailing during the year.

Gains and losses resulting from translation of financial statements

are excluded from the consolidated statements of income and are

accumulated as foreign currency translation adjustments in stock-

holders’ equity.

Gains (losses) resulting from foreign currency transactions in the

amount of ¥7,022 million ($56,629 thousand) in 2001, ¥(10,549)

million in 2000 and ¥(6,412) million in 1999 are included in operat-

ing income, costs and expenses.

(n) Foreign Exchange ContractsThe Company enters into foreign exchange agreements for hedging

currency exposures resulting mainly from fixed maturity invest-

ments denominated in foreign currencies. These agreements in-

clude foreign currency forward contracts, currency swap

agreements and currency option agreements. Gains or losses on

these agreements are recognized in the same period in which gains

or losses from the transaction being hedged are recognized.

(o) Impairment of Long-Lived Assets and Long-Lived Assetsto Be Disposed OfLong-lived assets and certain identifiable intangibles are reviewed

for impairment whenever events or changes in circumstances indi-

cate that the carrying amount of an asset may not be recoverable.

Recoverability of assets to be held and used is measured by a com-

parison of the carrying amount of an asset to future net cash flows

expected to be generated by the asset. If such assets are considered

to be impaired, the amount of impairment to be recognized is the

amount by which the carrying amount of the assets exceeds the fair

value of the assets. Assets to be disposed of are reported at the lower

of the carrying amount or fair value less costs to sell.


(p) New Accounting StandardsIn June 1998, the Financial Accounting Standards Board (FASB)

issued Statement of Financial Accounting Standards (SFAS)

No.133, “Accounting for Derivative Instruments and Hedging Ac-

tivities.” SFAS No.133 establishes accounting and reporting stan-

dards for derivative instruments embedded in other contracts, and

for hedging activities. SFAS No.133 requires that an entity recog-

nize all derivatives as either assets or liabilities in the statement of

financial position and measure those instruments at fair value. Addi-

tionally, the fair value adjustments will impact either net income or

stockholders’ equity depending on whether the derivative instru-

ment qualifies as a hedge and the nature of the hedging activity. In

June 2000, FASB issued SFAS No.138, “Accounting for Certain

Derivative Instruments and Certain Hedging Activities, an amend-

ment of SFAS No.133.” SFAS No.138 addresses a limited number

of issues causing implementation difficulties for numerous entities

that apply SFAS No.133 and amends the accounting and reporting

standards of SFAS No.133 for certain derivative instruments and

certain hedging activities. As permitted by SFAS No.137, “Deferral

of the Effective Date of FASB Statement No.133,” issued in June

1999, to defer its effective date to all fiscal years beginning after

June 15, 2000, the Company will adopt SFAS No.133 and No.138

for the year ending March 31, 2002. Due to some technical issues

unsolved, the Company has not yet determined the impact that

SFAS No.133 and No.138 will have on the Company’s results of

operations and financial position.

2. INVESTMENTS

The following summarizes the Company’s investments in fixed

maturities at March 31, 2001 and 2000:

Yen in millions

Gross GrossAmortized unrealized unrealized Estimated

cost gains losses market value

2001:Bonds and notes:

Other government and government agencies and authorities .......................... ¥325,933 ¥20,563 ¥(73) ¥346,423Other corporate bonds ........ 16,906 659 — 17,565

Total fixed maturities held to maturity ............. ¥342,839 ¥21,222 ¥(73) ¥363,988

Yen in millions




U.S. government and government agencies and authorities .......................... ¥ 30,885 ¥ 6,088 ¥ — ¥ 36,973U.S. states, municipalities and political subdivisions .. 265 75 — 340Other government and government agencies and authorities .......................... 514,179 41,244 (1) 555,422Other municipalities and political subdivisions ......... 317,470 29,921 (21) 347,370Public utilities ..................... 47,945 2,450 — 50,395Convertibles and bonds with warrants attached ....... 136,574 14,730 — 151,304Other corporate bonds ........ 651,237 18,958 (2) 670,193

Total fixed maturities available for sale ............ ¥1,698,555 ¥113,466 ¥(24) ¥1,811,997

Yen in millions




U.S. government and government agencies and authorities .......................... ¥ 34,243 ¥ 2,938 ¥ (106) ¥ 37,075U.S. states, municipalities and political subdivisions .. 938 — — 938Other government and government agencies and authorities .......................... 605,060 19,555 (1,326) 623,289Other municipalities and political subdivisions ......... 334,746 413 (14) 335,145Public utilities ..................... 70,326 819 — 71,145Convertibles and bonds with warrants attached ....... 134,691 12,868 — 147,559Other corporate bonds ........ 758,846 2,853 (192) 761,507

Total fixed maturities available for sale ............ ¥1,938,850 ¥39,446 ¥(1,638) ¥1,976,658

Dollars in thousands




Other government and government agencies and authorities .......................... $2,628,492 $165,831 $(581) $2,793,742Other corporate bonds ........ 136,339 5,315 (3) 141,651

Total fixed maturities held to maturity ............. $2,764,831 $171,146 $(584) $2,935,393


their scheduled maturity dates were ¥296,843 million ($2,393,895

thousand), ¥352,667 million and ¥888,110 million for the years

ended March 31, 2001, 2000 and 1999, respectively. Gross gains of

¥20,656 million ($166,580 thousand) and gross losses of ¥11,076

million ($89,320 thousand) in 2001, gross gains of ¥11,560 million

and gross losses of ¥9,086 million in 2000, and gross gains of

¥32,025 million and gross losses of ¥21,565 million in 1999 were

realized on those sales.

Bonds carried at ¥19,174 million ($154,629 thousand) at March

31, 2001 were pledged as collateral primarily to reinsurance compa-

nies and bonds carried at ¥139,003 million ($1,120,995 thousand)

were used as collateral for the Bank of Japan’s instant gross settle-

ment system for transactions of checking accounts and Japanese

government bonds.

Bonds carried at ¥104,279 million ($840,960 thousand) at March

31, 2001 and ¥79,399 million at March 31, 2000, and stocks carried

at ¥5,824 million ($46,978 thousand) both at March 31, 2001 and

March 31, 2000 were deposited primarily with the United States

and other foreign government authorities as required by law.

Stocks carried at ¥49,258 million ($397,242 thousand) at March

31, 2001 and ¥115,694 million at March 31, 2000 were deposited

with securities brokers primarily as a collateral for futures transac-

tions entered into by the Company.

Proceeds from sales of investments in equity securities were

¥125,080 million ($1,008,710 thousand), ¥241,637 million and

¥68,502 million for the years ended March 31, 2001, 2000 and

1999, respectively. Gross gains of ¥61,630 million ($497,019 thou-

sand) and gross losses of ¥13,566 million ($109,401 thousand) in

2001, gross gains of ¥80,489 million and gross losses of ¥20,658

million in 2000, and gross gains of ¥22,818 million and gross losses

of ¥15,914 million in 1999 were realized on those sales.

With respect to marketable equity securities, gross unrealized gains

were ¥1,695,874 million ($13,676,400 thousand) and gross unreal-

ized losses were ¥145,096 million ($1,170,126 thousand) at March

31, 2001, and gross unrealized gains were ¥2,015,431 million and

gross unrealized losses were ¥105,431 million at March 31, 2000.

Mortgage loans on real estate are primarily mortgage loans on

commercial buildings.

Accumulated depreciation of investment real estate amounted to

¥83,249 million ($671,363 thousand) and ¥76,102 million at March

31, 2001 and 2000, respectively.

Policy loans are made to policyholders of long-term insurance

with refund at maturity, such as long-term comprehensive insurance

and long-term family personal traffic accident insurance, etc. The

maximum amount of loans is limited to 90% of return premiums on





U.S. government and government agencies and authorities .......................... $ 249,073 $ 49,096 $ (1) $ 298,168U.S. states, municipalities and political subdivisions .. 2,140 604 — 2,744Other government and government agencies and authorities .......................... 4,146,604 332,610 (6) 4,479,208Other municipalities and political subdivisions ......... 2,560,240 241,303 (170) 2,801,373Public utilities ..................... 386,650 19,750 — 406,400Convertibles and bonds with warrants attached ....... 1,101,401 118,794 — 1,220,195Other corporate bonds ........ 5,251,916 152,888 (13) 5,404,791

Total fixed maturities available for sale ............ $13,698,024 $915,045 $(190) $14,612,879

The following table summarizes investments in fixed maturities

held to maturity at March 31, 2001, by contractual maturity:


Amortized Estimated Amortized Estimatedcost market value cost market value

Due in one year or less ..... ¥ — ¥ — $ — $ —Due after one year through five years ............ 8,121 8,318 65,492 67,081Due after five years through 10 years .............. 15,569 16,496 125,556 133,032Due after 10 years ............ 319,149 339,174 2,573,783 2,735,280......................................... ¥342,839 ¥363,988 $2,764,831 $2,935,393

The following table summarizes investments in fixed maturities

available for sale at March 31, 2001, by contractual maturity:


Amortized Estimated Amortized Estimatedcost market value cost market value

Due in one year or less ..... ¥ 214,285 ¥222,429 $ 1,728,107 $ 1,793,781Due after one year through five years ............ 830,294 879,179 6,695,919 7,090,152Due after five years through 10 years .............. 259,967 278,093 2,096,508 2,242,683Due after 10 years ............ 391,009 429,355 3,153,298 3,462,541......................................... ¥1,695,555 ¥1,809,056 $13,673,832 $14,589,157

The Company has bonds available for sale with no contractual

maturity carried at ¥2,941 million ($23,722 thousand).

Actual maturities may differ from contractual maturities because

certain issuers may have the right to call or prepay obligations with

or without call or prepayment penalties.

Proceeds from sales of investments in fixed maturities prior to


the policies.

Other long-term investments include:


2001 2000 2001

Mortgage loans on vessels and facilities ....................................... ¥ 29,203 ¥ 35,041 $ 235,508Collateral and bank-guaranteed loans ............................................ 36,650 41,622 295,565Unsecured loans ........................... 485,655 579,970 3,916,572Money trust .................................. 87,578 184,107 706,274..................................................... ¥639,086 ¥840,740 $5,153,919

Mortgage loans on vessels and facilities are generally joint loans

in which other financial institutions participate. The Company par-

ticipates in the hull insurance on these vessels.

Collateral loans are made to commercial enterprises and are se-

cured principally by listed stocks and/or bonds of Japanese corpora-

tions. Certain of these loans are made jointly with other insurance

companies.

Bank-guaranteed loans are made to commercial enterprises.

Unsecured loans within authorized limits are made on a selective

basis to corporate borrowers. The loans mature through 2045 and

have interest rates varying from 0.3% to 11.7% in 2001 and 0.1% to

9.0% in 2000.

Money trust is a type of portfolio investment in which trust banks are

entrusted with investments in securities or other financial instruments.

Short-term investments consist primarily of call loans and other

investments maturing within one year.

Short-term investments amounting to ¥207 million ($1,667 thou-

sand) were deposited with the United States authorities.

Details of net investment income were as follows:


2001 2000 1999 2001

Fixed maturities .................... ¥31,912 ¥34,762 ¥37,780 $257,354Equity securities ................... 16,159 14,157 13,224 130,316Mortgage loans on real estate ................................... 2,563 2,699 2,963 20,668Investment real estate ........... 7,567 7,803 7,852 61,025Policy loans .......................... 473 413 380 3,814Other long-term investments ......................... 8,698 13,356 16,043 70,147Short-term investments ......... 3,231 3,010 5,370 26,058Call loans ............................. 393 1 764 3,172Other loans and investments ......................... 18,058 18,756 9,725 145,625

Total investment income .. 89,054 94,957 94,101 718,179

Less investment expenses ..... 19,871 16,849 71,886 160,252

Net investment income ..... ¥69,183 ¥78,108 ¥22,215 $557,927

At March 31, 2001 and 2000, accrued investment income, in-

cluded in other assets, amounted to ¥20,381 million ($164,363

thousand) and ¥14,366 million, respectively.

Net realized and change in unrealized gains or losses on fixed

maturities available for sale, equity securities and other investments

for the years ended March 31, 2001, 2000 and 1999 were as follows:

Yen in millions

Fixed Equity Other Net gainsmaturities securities investments (losses)

2001:Realized ............................... ¥ 9,400 ¥ 61,144 ¥ (6,836) ¥ 63,708Change in unrealized ............ 75,634 (359,222) 4,438 (279,150)

Total ................................. ¥ 85,034 ¥(298,078) ¥ (2,398) ¥(215,442)

2000:Realized ............................... ¥ 1,028 ¥ 14,998 ¥10,418 ¥ 26,444Change in unrealized ............ 18,081 305,251 — 323,332

Total ................................. ¥ 19,109 ¥ 320,249 ¥10,418 ¥ 349,776

1999:Realized ............................... ¥(12,425) ¥ 631 ¥(5,621) ¥ (17,415)Change in unrealized ............ (63,944) (56,528) — (120,472)

Total ................................. ¥(76,369) ¥ (55,897) ¥(5,621) ¥(137,887)


Fixed Equity Other Net gainsmaturities securities investments (losses)

2001:Realized ............................... $ 75,809 $ 493,099 $(55,134)$ 513,774Change in unrealized ............ 609,953 (2,896,954) 35,792 (2,251,209)

Total ................................. $685,762 $(2,403,855) $(19,342)$(1,737,435)

On April 1, 2000, the Company transferred certain of its fixed

maturities available for sale to held to maturity category. This trans-

fer was based on the Company’s review of investment policies to

match the duration of securities portfolio with certain life insurance

liabilities with relatively long duration. After this transfer, the re-

lated unrealized gains on these securities are being amortized from

other comprehensive income into investment income over the re-

maining terms of the securities. Net change in unrealized gains on

fixed maturities held to maturity mentioned above was ¥8,631 mil-

lion in the year ended March 31, 2001.

Securities available for sale are carried in the financial statements

at market value. Changes in unrealized gains and losses, net of

taxes, on securities available for sale shown above are included as

other comprehensive income.

The Company’s investments in Toyota Motor Corporation and

its affiliates amounting to ¥337,917 million ($2,725,137 thousand)

and ¥411,937 million at March 31, 2001 and 2000, respectively,

exceeded 10% of stockholders’ equity.


The following summarizes the Company’s recorded investments

in impaired loans, all of which had valuation allowances, and the

valuation allowances at March 31, 2001 and 2000:


Total Totalrecorded Valuation recorded Valuation

investment allowances investment allowances

2001:Mortgage loans on real estate ................................... ¥20,051 ¥ 9,017 $161,701 $ 72,719Unsecured loans ................... 43,682 16,509 352,274 133,141............................................. ¥63,733 ¥25,526 $513,975 $205,860

2000:Mortgage loans on real estate ................................... ¥21,571 ¥ 3,829Unsecured loans ................... 50,455 14,130

............................................. ¥72,026 ¥17,959

The activity in the valuation allowances for the years ended

March 31, 2001, 2000 and 1999 is presented as follows:


2001 2000 1999 2001

Balance at beginning of year ..................................... ¥17,959 ¥ 47,682 ¥53,748 $144,836Charges to income ................ 8,598 5,433 (5,187) 69,339Principal charge-offs ............ (1,031) (35,156) (879) (8,315)Balance at end of year .......... ¥25,526 ¥ 17,959 ¥47,682 $205,860

During the years ended March 31, 2001, 2000 and 1999, the aver-

age recorded investment in impaired loans amounted to ¥67,880

million ($547,419 thousand), ¥77,667 million and ¥85,152 million,

respectively, and interest income recognized and received in cash

on those loans amounted to ¥744 million ($6,001 thousand), ¥1,147

million and ¥963 million, respectively. At March 31, 2001 and

2000, the carrying value of loans that were non-income producing

during the preceding twelve months amounted to ¥26,845 million

($216,491 thousand) and ¥13,529 million, respectively.

In addition to the allowances described above, reflecting the slug-

gish Japanese economy, the Company made allowances for loans

amounting to ¥13,393 million ($108,008 thousand) and ¥20,260

million at March 31, 2001 and 2000, respectively, because there

were certain rates of latent impairment among those loans with no

specific loss information based on our experience during the past

few years. The costs for these allowances were charged to income

as investment expenses for the respective years.

3. PROPERTY AND EQUIPMENT

A summary of property and equipment is as follows:


2001 2000 2001

Land ..................................................... ¥ 96,989 ¥ 99,251 $ 782,164Buildings .............................................. 231,311 236,878 1,865,408Furniture and equipment ...................... 40,589 43,454 327,331Construction in progress ....................... 664 1,304 5,357

Total at cost ...................................... 369,553 380,887 2,980,260Less accumulated depreciation ............. 157,469 155,770 1,269,905

Net property and equipment ............. ¥212,084 ¥225,117 $1,710,355

4. INCOME TAXES

Income taxes are accounted for under the asset and liability method.

Deferred tax assets and liabilities are recognized for the future tax

consequences attributable to differences between the financial state-

ment carrying amounts of existing assets and liabilities and their

respective tax bases and operating loss and tax credit carryforwards.

Deferred tax assets and liabilities are measured using enacted tax

rates expected to apply to taxable income in the years in which those

temporary differences are expected to be recovered or settled. The

effect on deferred tax assets and liabilities of a change in tax rates is

recognized in income in the period that includes the enactment date.

Total income taxes for the years ended March 31, 2001, 2000 and

1999 were allocated as follows:


2001 2000 1999 2001

Income before taxes ......... ¥ 47,083 ¥ 38,563 ¥(68,374) $ 379,701Other comprehensive income:

Stockholders’ equity, for unrealized appreciation (depreciation) of securities during the year ............................. (92,329) 87,489 (24,195) (744,589)Minimum pension liability adjustments .... 2,046 2,477 (6,195) 16,500

......................................... ¥(43,200) ¥128,529 ¥(98,764) $(348,388)


The Company is subject to a number of taxes based on income,

which in the aggregate resulted in a normal tax rate of approxi-

mately 36% in 2001 and 2000, and 42% in 1999, respectively.

Due to the changes in Japanese income tax regulations, the nor-

mal income tax rate was reduced in fiscal 1999 from approximately

42% to approximately 36% effective on April 1, 1999.

The effective tax rates of the Company for the years ended March

31, 2001, 2000 and 1999 differ from the Japanese normal income

tax rates for the following reasons:

2001 2000 1999

Japanese normal income tax rate ...... 36.0% 36.0% 42.0%Tax credit for dividends received ..... (4.4) (4.6) (8.7)Expenses not deductible for tax purposes .......................................... 1.1 1.4 2.5Adjustments to deferred tax assets and liabilities for enacted changes in laws and rates .......................................... — — (132.1)Change in normal income tax rate attributable to deferred gains on hedging ........................................... — — 6.6Other ................................................ 0.8 (1.4) 1.4

Effective tax rate .......................... 33.5% 31.4% (88.3)%

The effect of adjustments of deferred tax assets and liabilities in

response to the above-mentioned change in enacted income tax

rates in 1999 amounted to ¥102,258 million. Most of this resulted

from remeasurement of deferred income taxes applicable to unreal-

ized appreciation of securities at the beginning of the year which

amounted to ¥101,365 million.

The significant components of deferred income tax expense

(benefit) for the years ended March 31, 2001, 2000 and 1999 are as

follows:


2001 2000 1999 2001

Deferred tax expense (benefit) (exclusive of the effects of other components below) ............. ¥34,197 ¥36,119 ¥ (29,878) $275,782Adjustments to deferred tax assets and liabilities for enacted changes in laws and rates .............................. — — (102,258) —............................................. ¥34,197 ¥36,119 ¥(132,136) $275,782

The tax effects of temporary differences that give rise to signifi-

cant portions of the deferred tax assets and deferred tax liabilities at

March 31, 2001 and 2000 are presented below:


2001 2000 2001

Deferred tax assets:Unpaid and unreported losses ..................................... ¥ 46,211 ¥ 62,282 $ 372,669Retirement and severance benefit ................................... 29,010 25,870 233,952Reserve for compulsory automobile liability insurance ............................... 16,734 17,457 134,952Minimum pension liability adjustments ........................... 11,234 13,280 90,597Other ...................................... 51,064 45,704 411,805

Total deferred tax assets ..... 154,253 164,593 1,243,975Deferred tax liabilities:

Tax deductible reserves .......... (8,959) (7,296) (72,250)Deferred policy acquisition costs ...................................... (110,158) (101,980) (888,371)Other ...................................... (70,653) (54,578) (569,782)

Total deferred tax liabilities ............................ (189,770) (163,854) (1,530,403)Net deferred tax assets (liabilities) before deferred taxes on unrealized appreciation of securities ... (35,517) 739 (286,428)

Deferred taxes on unrealized appreciation of securities ....... (604,697) (697,026) (4,876,588)

Net deferred tax liabilities ............................ (640,214) (696,287) (5,163,016)

Income taxes currently payable ...................................... (5,264) (2,732) (42,452)

Income tax liability ............. ¥(645,478) ¥(699,019) $(5,205,468)

At March 31, 2000, the Company had income taxes refundable in

the amount of ¥33,694 million, which were included in other assets.

The Company has not provided a valuation allowance for the de-

ferred tax assets at March 31, 2001 and 2000. The management be-

lieves that it is more likely than not that the Company will realize

the benefit of the deferred tax assets. While there are no assurances

that this benefit will be realized, the Company expects sufficient

taxable income in the future based on its historical record and ex-

pected annual taxable savings related to expense reductions.


5. LONG-TERM DEBT

Long-term debt at March 31, 2001 and 2000 comprises the following:


2001 2000 2001

1.47% Japanese yen unsecured bonds, due Sept. 2005 ..................................... ¥ 30,000 ¥ — $241,9351.96% Japanese yen unsecured bonds, due Dec. 2009 ..................................... 50,000 50,000 403,2262.14% Japanese yen unsecured bonds, due Sept. 2010 ..................................... 20,000 — 161,2902.78% Japanese yen unsecured bonds, due Sept. 2020 ..................................... 10,000 — 80,645

¥110,000 ¥50,000 $887,096

The proceeds of the bonds were used for general corporate purposes.

6. RETIREMENT AND SEVERANCE BENEFITS

Employees of the Company are covered by the defined retirement

and severance benefit plans described below.

Tokio Marine has an unfunded lump-sum payment retirement

plan covering substantially all employees. Under the plan, employ-

ees are entitled to lump-sum payments based on points, which are

accumulated each year by employees’ rank, length of service and

certain other factors, upon retirement or termination of employment

for reasons other than dismissal. Directors and statutory auditors are

covered by a separate plan. It is not the policy of the management to

fund the retirement and severance benefits described above.

Tokio Marine also has a funded pension plan covering substan-

tially all employees who meet age and service requirements. The

plan covers a portion of the welfare pension plan administered by

the Japanese government. In accordance with SFAS No. 87, “Em-

ployers’ Accounting for Pensions,” the net periodic benefit costs of

the funded pension plan in 2001, 2000 and 1999 were calculated

using the unit credit actuarial cost method.

Reconciliations of beginning and ending balances of the benefit

obligations and the fair value of the plan assets are as follows:


2001 2000 2001

Change in benefit obligation:Benefit obligation at beginning of year ............................................. ¥ 310,374 ¥ 292,718 $ 2,503,016Service cost ...................................... 15,301 14,380 123,395Interest cost ...................................... 9,060 8,635 73,065Plan participants’ contributions ........ 2,097 2,060 16,911Amendments .................................... (2,319) — (18,702)Actuarial loss .................................... 15,599 1,815 125,798Benefits paid .................................... (11,254) (9,234) (90,758)Benefit obligation at end of year ....... ¥ 338,858 ¥ 310,374 $ 2,732,725

Change in plan assets:Fair value of plan assets at beginning of year ............................................. ¥ 130,092 ¥ 111,044 $ 1,049,129Actual return on plan assets .............. 257 7,000 2,073Employer contributions .................... 8,893 13,293 71,718Plan participants’ contributions ........ 2,097 2,060 16,911Benefits paid .................................... (3,672) (3,305) (29,613)Fair value of plan assets at end of year ............................................. ¥ 137,667 ¥ 130,092 $ 1,110,218

Funded status ................................... ¥(201,191) ¥(180,282) $(1,622,507)Unrecognized actuarial loss .............. 91,388 75,525 737,000Unrecognized prior service cost ....... (5,839) (3,736) (47,089)Net amount recognized ..................... ¥(115,642) ¥(108,493) $ (932,596)

Amounts recognized in the statement of financial position consist of:

Accrued benefit liability ............... ¥(146,846) ¥(145,381) $(1,184,242)Accumulated other comprehensive income ......................................... 31,204 36,888 251,646

Net amount recognized ..................... ¥(115,642) ¥(108,493) $ (932,596)

Significant actuarial assumptions:Discount rate .................................... 3.0% 3.0%Rate of salary increase ...................... 2.8% 1.2%Expected long-term return on plan assets .................................. 2.9% 2.7%


Tokio Marine reflected future promotion of employees on rate of

salary increase to calculate benefit obligation at March 31, 2001.

The effect on the consolidated statement of comprehensive income

is not material.

The components of net periodic benefit cost for the years ended

March 31, 2001, 2000 and 1999 are as follows:


2001 2000 1999 2001

Components of net periodic benefit cost:

Service cost ...................... ¥15,301 ¥14,380 ¥13,576 $123,395Interest cost ...................... 9,060 8,635 8,999 73,065Expected return on plan assets ............................... (3,831) (3,091) (3,814) (30,895)Amortization of prior service cost ...................... (217) (62) (62) (1,750)Recognized actuarial loss . 3,310 3,774 2,962 26,694Net periodic benefit cost ... ¥23,623 ¥23,636 ¥21,661 $190,509

7. INVESTMENT DEPOSITS BY POLICYHOLDERS

Under the long-term insurance coverage offered by the Company,

such as long-term comprehensive insurance and long-term family

personal traffic accident insurance, etc., specified amounts must be

returned to the policyholders upon expiration of the policy period

unless there has been a substantial settlement under the policy. Poli-

cies are issued for periods of two to sixty-four years. The Company

has provided for such refundable amounts by classifying a portion

of the net premiums written on these policies, together with invest-

ment income therefrom, as investment deposits by policyholders.

8. REINSURANCE

In the ordinary course of business, the Company cedes risks to other

insurers and reinsurers. Reinsurance enables the Company to re-

duce its exposure to large losses in all aspects of its insurance busi-

ness, although it does not relieve the Company of its obligations as

direct insurer of the risks reinsured.

Prepaid reinsurance premiums represent the portion of premiums

ceded to reinsurers applicable to the unexpired terms of the reinsur-

ance contracts in force. Reinsurance recoverable on losses repre-

sents estimates of amount that will be recovered from reinsurers on

reported and unreported losses and claims and loss adjustment ex-

penses.

The Company is exposed to contingent liability with respect to

reinsurance which would become an actual liability to the extent

that any reinsurer failed to meet its obligations to the Company.

Because of the large amount of funds held by the Company under

reinsurance treaties and the Company’s favorable historical results

with the reinsurers involved, no material amounts were considered

uncollectible and no material provision was made for this contin-

gency.

The effect of ceded reinsurance on the consolidated statements of

income for the years ended March 31, 2001, 2000 and 1999 is as

follows:


2001 2000 1999 2001

Property and casualty:Premiums written:

Direct .................. ¥1,468,361 ¥1,431,192 ¥1,429,770 $11,841,621Assumed ............. 94,117 97,186 103,694 759,008Ceded .................. (238,571) (230,394) (228,326) (1,923,960)

Net premiums written ............ ¥1,323,907 ¥1,297,984 ¥1,305,138 $10,676,669

Premiums earned:Direct .................. ¥1,449,523 ¥1,413,126 ¥1,462,145 $11,689,702Assumed ............. 92,236 95,778 106,111 743,839Ceded .................. (231,020) (227,356) (256,117) (1,863,065)

Premiums earned ............. ¥1,310,739 ¥1,281,548 ¥1,312,139 $10,570,476

Losses, claims incurred:

Direct .................. ¥ 889,295 ¥ 848,664 ¥ 808,061 $7,171,732Assumed ............. 92,823 97,195 105,070 748,574Ceded .................. (202,430) (202,855) (208,060) (1,632,500)

Losses, claims incurred .......... ¥ 779,688 ¥ 743,004 ¥ 705,071 $6,287,806

Life:Premiums earned:

Direct .................. ¥ 150,654 ¥ 130,182 ¥ 98,870 $1,214,952Assumed ............. 1 — 2 8Ceded .................. (112) (54) (55) (903)

Premiums earned ............. ¥ 150,543 ¥ 130,128 ¥ 98,817 $1,214,057


9. LIABILITY FOR UNPAID LOSSES AND CLAIMS ANDLOSS ADJUSTMENT EXPENSES

Activity in the liability for unpaid losses and claims and loss adjust-

ment expenses for the years ended March 31, 2001, 2000 and 1999

is summarized as follows:


2001 2000 1999 2001

Balance at beginning of year ..................................... ¥621,389 ¥634,866 ¥647,518 $5,011,201

Less reinsurance recoverables .................... 98,727 97,572 97,837 796,185

Net balance at beginning of year ................................. 522,662 537,294 549,681 4,215,016Incurred related to:

Current year ..................... 771,526 748,087 711,778 6,221,984Prior years ........................ 61,532 47,679 46,141 496,226

Total incurred ............... 833,058 795,766 757,919 6,718,210Paid related to:

Current year ..................... 519,627 507,091 471,793 4,190,541Prior years ........................ 278,042 303,307 298,513 2,242,274

Total paid ..................... 797,669 810,398 770,306 6,432,815Net balance at end of year ..................................... 558,051 522,662 537,294 4,500,411

Plus reinsurance recoverables .................... 97,202 98,727 97,572 783,887

Balance at end of year .......... ¥655,253 ¥621,389 ¥634,866 $5,284,298

Besides the amounts referred to above, reinsurance recoverables

included invoiced recoveries from reinsurers in the amount of

¥83,159 million ($670,637 thousand) and ¥83,626 million at March

31, 2001 and 2000, respectively.

10. COMMITMENTS AND CONTINGENT LIABILITIES

At March 31, 2001, commitments outstanding for the purchase of

property and equipment approximated ¥13,740 million ($110,806

thousand).

The Company occupies certain offices and other facilities and

uses certain equipment under cancelable lease arrangements. Rental

expenses for the years ended March 31, 2001, 2000 and 1999, ag-

gregated ¥18,515 million ($149,315 thousand), ¥18,682 million and

¥18,905 million, respectively.

The Company had guarantees outstanding relating to the finan-

cial transactions including asset backed securities amounted to

¥379,612 million ($3,061,387 thousand) and ¥126,568 million at

March 31, 2001 and 2000, respectively.

11. APPROPRIATED RETAINED EARNINGS

(a) Legal ReserveThe Insurance Business Law stipulates that an amount equal to at

least 20% of appropriations of retained earnings paid in cash be ap-

propriated as a legal reserve until such reserve equals stated capital.

This reserve is not available for dividends but may be used to reduce

a deficit or may be transferred to stated capital.

(b) Price Fluctuation ReserveIn accordance with the provisions of the Insurance Business Law, the

Company shall provide price fluctuation reserve, which is deter-

mined based on the balances of certain categories of assets, primarily

fixed maturities and equity securities, at each year end and the re-

serve rates according to asset category. This reserve is not available

for dividends but may be used to offset the realized and unrealized

losses arising from the assets subject to this reserve in excess of the

realized gains arising from such assets or may be reversed subject to

the approval of the Commissioner of the Financial Services Agency.

12. UNAPPROPRIATED RETAINED EARNINGS,DIVIDENDS AND EARNINGS PER SHARE

Pursuant to the provisions of the Japanese Commercial Code, unap-

propriated retained earnings at March 31, 2001, which were unre-

stricted as to payment of dividends, amounted to ¥668,402 million

($5,390,342 thousand). Of this amount, ¥272,770 million

($2,199,758 thousand) has been restricted by action of the stock-

holders to provide principally for extraordinary losses.

Cash dividends charged to unappropriated retained earnings rep-

resent dividends paid. Provision has not been made in the accompa-

nying balance sheet as of March 31, 2001 for dividends

subsequently proposed to stockholders by the Board of Directors in

the aggregate amount of ¥13,173 million ($106,234 thousand).

13. RISK MANAGEMENT ACTIVITIES ANDDERIVATIVE FINANCIAL INSTRUMENTS

The Company utilizes derivative financial instruments with off-

balance-sheet risk in the normal course of business to reduce its ex-

posure to fluctuations in foreign exchange rates, interest rates and

market values in its equity portfolio. Those instruments involve, in

varying degrees, elements of credit, exchange rate, interest rate and

equity fluctuation risk. The Company has limited involvement with

derivative financial instruments and does not engage in material

trading activities.


Amounts to be received or paid attributable to foreign exchange,

interest rate and equity index contracts are included in the measure-

ment of the carrying amount of underlying assets and are credited or

charged to operations as the related gains and losses on underlying

assets realize.

Foreign exchange contracts are agreements to exchange different

currencies at a specific future date. The total amount of the foreign

exchange contracts outstanding at March 31, 2001 were ¥5,026 mil-

lion ($40,532 thousand) to purchase and ¥224,265 million

($1,808,589 thousand) to sell foreign currencies, and at March 31,

2000 were ¥16,771 million to purchase and ¥240,854 million to sell

foreign currencies.

For foreign exchange forwards and futures, currency swaps and

currency option contracts, the gross aggregate unrealized gains

based on current market values were ¥1,710 million ($13,790 thou-

sand) million at March 31, 2001 and ¥9,456 million at March 31,

2000, and the gross aggregate unrealized losses were ¥18,483 mil-

lion ($149,056 thousand) at March 31 2001, and ¥325 million at

March 31, 2000.

The Company has entered into interest rate swap agreements to

manage interest rate exposure. Interest rate swap agreements gener-

ally involve the exchange of fixed and floating rate interest expo-

sures without the exchange of the underlying principal.

At March 31, 2001 and 2000, the Company had outstanding in-

terest rate swap agreements having an aggregate notional amount of

¥3,680,600 million ($29,682,258 thousand) and ¥3,523,100 mil-

lion, respectively. Under those interest rate swap agreements, float-

ing rate exposure was converted into fixed rate exposure in

weighted average fixed rates of approximately 0.8% and 0.6% at

March 31, 2001 and 2000, respectively, and floating rate exposure

in various interest rates and fixed rate exposure, with weighted aver-

age fixed rates of approximately 1.5% and 1.2% at March 31, 2001

and 2000, respectively, were converted into floating rate exposure

that was generally based on the three-month or six-month LIBOR

(London Interbank Offered Rate), or the long-term prime rate.

In addition to interest rate swap agreements, the Company en-

tered into interest rate swaption agreements to further strengthen the

asset and liability management. The Company had outstanding in-

terest rate swaption agreements having an aggregate notional

amount of ¥26,000 million at March 31, 2000.

The Company has terminated interest rate swap agreements only

in situations when it has disposed of the financial instruments to

which the swaps were matched. In these instances, the Company

has recognized gains or losses on the termination of the swap agree-

ments concurrently with the recognition of losses or gains on the

disposition of the financial instruments to which they were

matched.

The Company has entered into equity index futures contracts to

manage market risk of its equity portfolio, principally comprising

domestic listed stocks. The total amount of the equity index futures

contracts outstanding at March 31, 2001 were ¥44,786 million

($361,177 thousand) to purchase and ¥23,082 million ($186,145

thousand) to sell equity index futures, and at March 31, 2000 were

¥10,391 million to purchase, and ¥530,997 million to sell equity

index futures.

The Company has entered into equity index option contracts to

earn midterm investment gains. At March 31, 2001, the Company

had outstanding option contracts amounting to ¥83 million ($669

thousand) to sell call equity indexes and ¥70 million ($565 thou-

sand) to buy call equity indexes.

The Company has entered into bond futures contracts to manage

market risk of its bond portfolio. At March 31, 2001 and 2000, the

Company had outstanding notional amounts of ¥6,953 million

($56,073 thousand) bond futures to purchase and ¥34,781 million to

sell, respectively.

The Company manages its investments to limit credit risks by

diversifying its portfolio among various investment types and in-

dustry sectors. The credit risk of financial instruments is controlled

through credit approvals, limits and monitoring procedures. The

management believes that significant concentrations of credit risk

do not exist.

14. FAIR VALUES OF FINANCIAL INSTRUMENTS

SFAS No.107, “Disclosures about Fair Value of Financial Instru-

ments,” requires disclosure of estimated fair value for all financial

instruments. The following methods and assumptions were used by

the Company in estimating the fair values of its financial instru-

ments:

Cash and cash equivalents, accrued investment income (included in

other assets), premiums receivable and agents’ balances, reinsur-

ance recoverable on losses and ceded reinsurance balances pay-

able

The carrying amounts approximate fair values due to the short ma-

turity of these instruments.

Fixed maturities and equity securities

The carrying amounts and fair values (market values) of fixed matu-

rities and equity securities are disclosed in note 2.


Policy loans

The carrying amounts of floating-rate policy loans approximate

their fair values as the interest rates charged on those instruments

are designed so that they would be adjusted periodically to reflect

changes in overall market interest rates.

Mortgage loans on real estate, other long-term investments and

short-term investments

The fair values for these financial instruments are estimated based

on the quoted market prices for these or similar instruments. For

financial instruments for which quoted market prices are not avail-

able, fair values are estimated using discounted cash flow analysis

and interest rates currently being offered for similar loans to bor-

rowers with similar credit ratings or for similar deposits.

Long- term debt

The fair values for long-term debt are estimated using their market

prices. For long-term debt on which quoted market prices are not

available, the fair values are estimated using discounted cash flow

analysis, based on the Company’s current borrowing rates for simi-

lar types of borrowings.

Foreign exchange contracts

The fair values of foreign exchange contracts including forwards

and futures, swaps and options are estimated by obtaining current

market quotes from banks.

Interest rate contracts

The fair values of interest rate swap agreements are based on the

estimated present value amounts the Company would receive or pay

to terminate agreements, taking into consideration current interest

rates and the current creditworthiness of the counterparties. The fair

values of interest rate swaption agreements are estimated by obtain-

ing current market quotes from banks.

Equity index contracts and bond futures contracts

The fair values of futures contracts are based on the official market

quotes.

The carrying amounts and fair values of the Company’s financial

instruments at March 31, 2001 and 2000 are as follows:


Carrying Fair Carrying Fairvalue value value value

2001:Policy loans ........................... ¥ 19,112 ¥ 19,112 $ 154,129 $ 154,129Mortgage loans on real estate .................................... 164,542 166,772 1,326,952 1,344,935Mortgage loans on vessels and facilities ......................... 29,203 29,338 235,508 236,597Collateral and bank- guaranteed loans ................... 36,650 36,710 295,565 296,048Unsecured loans .................... 485,655 489,532 3,916,573 3,947,839Money trust ........................... 87,578 87,578 706,274 706,274Short-term investments .......... 803,431 803,431 6,479,282 6,479,282Long-term debt ...................... 110,000 116,801 887,097 941,942Foreign exchange contracts:

Swaps—in a net payable

position ......................... — (8,170) — (65,887)Futures agreements—in a net payable

position ......................... — (8,603) — (69,379)Interest rate contracts:

Swaps—in a net receivable

position ......................... — 150,752 — 1,215,742Futures agreements:

Bond futures—in a net payable

position ......................... — (3) — (24)Equity index futures—in a net receivable

position ......................... — 1,533 — 12,363Options:

Equity index options—in a net receivable

position ......................... 30 13 242 105

Yen in millions

Carrying Fairvalue value

2000:Policy loans ............................................................. ¥ 17,454 ¥ 17,454Mortgage loans on real estate .................................. 173,118 176,025Mortgage loans on vessels and facilities .................. 35,041 35,180Collateral and bank-guaranteed loans ...................... 41,622 41,862Unsecured loans ...................................................... 579,970 584,692Money trust ............................................................. 184,107 192,083Short-term investments ............................................ 484,827 484,827Long-term debt ........................................................ 50,000 50,114Foreign exchange contracts:

Swaps—in a net receivable position .................... — 6,617Interest rate contracts:

Swaps—in a net receivable position .................... — 75,016Swaption—in a net receivable position ............... 139 16

Futures agreements:Bond futures—in a net payable position — (66)


Limitations

Fair value estimates are made at a specific point in time, based on

relevant market information and information about the financial in-

struments. These estimates are subjective in nature and involve un-

certainties and matters of significant judgment and therefore cannot

be determined with precision. Changes in assumptions could sig-

nificantly affect the estimates.

15. BUSINESS SEGMENTS

The Company is organized around differences in products and ser-

vices. This structure is considered in the identification of its two

reportable segments. These segments and their respective opera-

tions are as follows:

Property and Casualty

Property and Casualty segment writes marine, fire and casualty, au-

tomobile and allied lines of insurance principally covering risks lo-

cated in Japan and hull and cargo risks for Japanese businesses. The

Company evaluates the results of this segment based upon premium

income and underwriting results.

Life

Life insurance products primarily include innovative whole-life in-

surance. The Company evaluates the results of this segment based

upon amounts of policies and net income.

The accounting policies of the business segments are the same as

those described in the notes to consolidated financial statements.

The effects of certain intersegment transactions are included in the

Property and Casualty segment results. Income and asset data for

the Company’s business segments for the years ended March 31 are

as follows:

Yen in millions

Propertyand Casualty Life Consolidated

2001:Operating income:

Property and casualty:Net premiums written ............ ¥1,323,907 ¥ — ¥1,323,907Less increase in unearned premiums ............................. 13,168 — 13,168Premiums earned ................... 1,310,739 — 1,310,739

Life premiums ........................... — 150,543 150,543Net investment income .............. 56,925 12,258 69,183Rerealized gains (losses) on investments .............................. 63,425 283 63,708

Total operating income .......... 1,431,089 163,084 1,594,173Operating costs and expenses:

Losses, claims and loss adjustment expenses ................. 833,058 — 833,058

Policy benefits and losses for life — 125,947 125,947Policy acquisition costs ............. 413,594 8,957 422,551Other operating expenses .......... 66,048 5,969 72,017

Total operating costs and expenses ............................... 1,312,700 140,873 1,453,573

Income before income tax expenses ............................... 118,389 22,211 140,600

Income tax expenses:Current ...................................... 9,952 2,934 12,886Deferred .................................... 29,025 5,172 34,197

38,977 8,106 47,083

Net income ............................ ¥ 79,412 ¥ 14,105 ¥ 93,517

Total investments ........................ ¥6,417,143 ¥400,801 ¥6,817,944

Total assets .................................. ¥7,623,180 ¥490,701 ¥8,113,881


Yen in millions



Property and casualty:Net premiums written ............ ¥1,297,984 ¥ — ¥1,297,984Less increase in unearned premiums ............................. 16,436 — 16,436

Premiums earned ................... 1,281,548 — 1,281,548Life premiums ........................... — 130,128 130,128Net investment income .............. 70,816 7,292 78,108Realized gains (losses) .............. 27,022 (578) 26,444


Losses, claims and loss adjustment expenses ................. 795,766 — 795,766

Policy benefits and losses for life ...................................... — 108,706 108,706Policy acquisition costs ............. 406,571 6,541 413,112Other operating expenses .......... 69,452 6,522 75,974



Income tax expenses:Current ...................................... 1,808 636 2,444Deferred .................................... 31,175 4,944 36,119

32,983 5,580 38,563

Net income ............................ ¥ 74,614 ¥ 9,493 ¥ 84,107


Total assets .................................. ¥7,725,888 ¥345,577 ¥8,071,465

Yen in millions



Property and casualty:Net premiums written ............ ¥1,305,138 ¥ — ¥1,305,138Less increase in unearned premiums ............................. (7,001) — (7,001)

Premiums earned ................... 1,312,139 — 1,312,139Life premiums ........................... — 98,817 98,817Net investment income .............. 18,476 3,739 22,215Realized gains (losses) .............. (27,073) 9,658 (17,415)


Losses, claims and loss adjustment expenses .................. 757,919 — 757,919

Policy benefits and losses for life ...................................... — 84,046 84,046Policy acquisition costs ............. 421,045 5,769 426,814Other operating expenses .......... 65,377 4,126 69,503



Income tax expenses:Current ...................................... 63,685 77 63,762Deferred .................................... (36,678) 6,800 (29,878)

27,007 6,877 33,884

Cumulative effect of change in tax rate ...................................... 101,441 817 102,258

Net income ............................ ¥ 133,635 ¥ 12,213 ¥ 145,848


Total assets .................................. ¥7,457,325 ¥219,457 ¥7,676,782



Property and Casualty Life Consolidated


Property and casualty:Net premiums written ............ $10,676,669 $ — $10,676,669Less increase in unearned premiums ............................. 106,193 — 106,193Premiums earned ................... 10,570,476 — 10,570,476

Life premiums ........................... — 1,214,057 1,214,057Net investment income .............. 459,072 98,855 557,927Rerealized gains (losses) ........... 511,492 2,282 513,774

Total operating income .......... 11,541,040 1,315,194 12,856,234Operating costs and expenses:

Losses, claims and loss adjustment expenses ................. 6,718,210 — 6,718,210

Policy benefits and losses for life ...................................... — 1,015,702 1,015,702Policy acquisition costs ............. 3,335,435 72,234 3,407,669Other operating expenses .......... 532,645 48,137 580,782

Total operating costs and expenses ............................... 10,586,290 1,136,073 11,722,363

Income before income tax expenses ............................... 954,751 179,120 1,133,871

Income tax expenses:Current ...................................... 80,258 23,661 103,919Deferred .................................... 234,072 41,710 275,782

314,330 65,371 379,701

Net income ............................ $ 640,422 $ 113,748 $ 754,170

Total investments ........................ $51,751,153 $3,232,266 $54,983,419

Total assets .................................. $61,477,258 $3,957,266 $65,434,524

16. SUBSEQUENT EVENTS

On April 2, 2001, The Bank of Tokyo-Mitsubishi, Ltd., The

Mitsubishi Trust & Banking Corporation and Nippon Trust Bank

Limited established through an exchange of stock of their parent

company, Mitsubishi Tokyo Financial Group, Inc. As a result, each

of the three banks has become a wholly owned subsidiary of

Mitsubishi Tokyo Financial Group.

On April 2, 2001, The Sanwa Bank, Limited, The Tokai Bank,

Limited and The Toyo Trust and Banking Company, Limited

jointly established the holding company, UFJ Holdings Inc.,

through a stock transfer. As a result, the three banks have become

wholly owned subsidiaries of UFJ Holdings.

On April 25, 2001, The Taisei Fire and Marine Insurance Com-

pany Limited, The Nissan Fire and Marine Insurance Company

Limited and The Yasuda Fire and Marine Insurance Company Lim-

ited agreed to merge on April 1, 2002.

The Company has shares of The Mitsubishi Trust & Banking

Corporation, The Tokai Bank, Limited and The Taisei Fire and Ma-

rine Insurance Company Limited carried at fair value with unreal-

ized gains, net of deferred taxes, recognized as a separate

component of stockholders’ equity.

For all three transactions stated above, the Company is required

to value the shares at market at the date of the combination and

recognize the resulting gain to income in accordance with Emerging

Issues Task Force (EITF) Issue 91-5, “Non-monetary Exchange of

Cost-Method Investments.”

Accordingly, for the year ending March 31, 2002, the Company

will recognize gains of ¥720 million ($5,811 thousand), net of in-

come taxes, on the shares of The Mitsubishi Trust & Banking Cor-

poration and gains of ¥518 million ($4,175 thousand), net of income

taxes, on the shares of The Tokai Bank, Limited. For the year end-

ing March 31, 2003, the Company will recognize gains on shares of

The Taisei Fire and Marine Insurance Company Limited, which are

currently not determinable.


Independent Auditors’ Report

To the Board of Directors

The Tokio Marine and Fire Insurance Company, Limited:

We have audited the accompanying consolidated balance sheets of

The Tokio Marine and Fire Insurance Company, Limited and sub-

sidiaries as of March 31, 2001 and 2000, and the related consoli-

dated statements of income, stockholders’ equity, cash flows and

comprehensive income for each of the years in the three-year period

ended March 31, 2001, all expressed in yen. These consolidated

financial statements are the responsibility of the Company’s man-

agement. Our responsibility is to express an opinion on these con-

solidated financial statements based on our audits.

We conducted our audits in accordance with auditing standards

generally accepted in the United States of America. Those standards

require that we plan and perform the audit to obtain reasonable as-

surance about whether the financial statements are free of material

misstatement. An audit includes examining, on a test basis, evi-

dence supporting the amounts and disclosures in the financial state-

ments. An audit also includes assessing the accounting principles

used and significant estimates made by management, as well as

evaluating the overall financial statement presentation. We believe

that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to

above present fairly, in all material respects, the financial position of

The Tokio Marine and Fire Insurance Company, Limited and sub-

sidiaries at March 31, 2001 and 2000, and the results of their opera-

tions and their cash flows for each of the years in the three-year

period ended March 31, 2001 in conformity with accounting prin-

ciples generally accepted in the United States of America.

The accompanying consolidated financial statements have been

translated into United States dollars solely for the convenience of

the reader. We have recomputed the translation and, in our opinion,

the consolidated financial statements expressed in yen have been

translated into United States dollars on the basis set forth in note

1(a) of the notes to the consolidated financial statements.

Tokyo, Japan

June 25, 2001


■ BRANCHES■ REPRESENTATIVE AND LIAISON OFFICES■ UNDERWRITING AGENTS■ SUBSIDIARIES AND AFFILIATES

Worldwide Network

NORTH AMERICAUNITED STATES

■ ■ NEW YORK101 Park Avenue, New York, NY 10178-0095

■ ■ NEW YORKTokio Marine Management, Inc.101 Park Avenue, New York, NY 10178-0095

■ ■ NEW YORKTokio Re Corporation101 Park Avenue, New York, NY 10178-0095

■ NEW YORKTrans Pacific Insurance Company101 Park Avenue, New York, NY 10178-0095

■ NEW YORKTokio Marine Realty Co., Ltd.101 Park Avenue, New York, NY 10178-0095

■ NEW YORKTM Claims Service, Inc.101 Park Avenue, New York, NY 10178-0095

■ NEW YORKAXIA Services, Inc.101 Park Avenue, New York, NY 10178-0095

■ NEW YORKTokio Marine Asset Management (USA), Ltd.203 Park Avenue, Suite 910, New York, NY 10169

■ NEW YORKMorita & Co., Inc.600 Third Avenue, 18th Fl., New York, NY 10016

■ NEW YORKTM Specialty Insurance Company101 Park Avenue, New York, NY 10178-0095

■ NEW YORKTM Casualty Insurance Company101 Park Avenue, New York, NY 10178-0095

■ NEW YORKErgonomics Technologies Corporation6851 Jericho Turnpike, Suite 200 Syosset, NY 11791

■ ■ LOS ANGELESTokio Marine Management, Inc., Western Regional Office800 East Colorado Blvd., Pasadena, CA 91101-2132

■ LOS ANGELESTM Claims Service, Inc., L.A. Office800 East Colorado Blvd., Pasadena, CA 91109-7316

■ ■ SAN FRANCISCOTokio Marine Management, Inc., San Francisco Office100 Pine Street, Suite 2225, San Francisco, CA 94111

■ ■ CHICAGOTokio Marine Management, Inc., Chicago OfficeSuite 2980, 444 North Michigan Avenue, Chicago, IL 60611

■ ■ ATLANTATokio Marine Management, Inc., Atlanta OfficeOne Ravinia Drive, Suite 1130, Atlanta, GA 30346

■ DELAWARETokio Marine Delaware Corporation32 Loockerman Square, Suite L-100, Dover, DE 19901

■ ■ HONOLULUFirst Insurance Company of Hawaii, Ltd., Tokio Marine Unit1100 Ward Avenue, Honolulu, HI 96814

■ HONOLULUTM Claims Service, Inc., Honolulu Branch1100 Ward Avenue, Suite 710, Honolulu, HI 96814

■ ■ ■ GUAMNanbo Guam, Ltd.P.O. Box 2980, Agana, Guam 96910

CANADA

■ ■ TORONTOc/o Lombard Canada Ltd.105 Adelaide Street West 3rd Floor, Toronto, Ontario M5H 1P9

■ VANCOUVERc/o Lombard Canada Ltd.Suite 602, Two Bentall Centre, 555 Burrard Street, Box 261,Vancouver, British Columbia V7X 1M8

CENTRAL & SOUTH AMERICABERMUDA

■ HAMILTONTokio Millennium Re Ltd.The Waterfront, 96 Pitts Bay Road, P.O. Box HM1296, HamiltonHMFX, Bermuda

CAYMAN ISLANDS

■ GRAND CAYMANFirst Chicago Tokio Marine Financial Products Ltd.P.O. Box 309, South Church Street, George Town, GrandCayman, Cayman Islands, British West Indies

■ GRAND CAYMANTokio Marine Asset Management (Cayman) Ltd.W.S. Walker & Company, P.O. Box 265, G.T., Mary Street,Caledonian House, George Town, Grand Cayman, CaymanIslands, British West Indies

MEXICO

■ ■ MEXICO CITYTokio Marine Compañia de Seguros, S.A. de C.V.Félix Parra 39, Col. San José, Insurgentes, C.P. 03900México, D.F.


■ MEXICO CITYTokio Marine Global Re Ltd. Oficina de Representación enMéxicoFélix Parra No.39, 1er Piso, Col. San José Insurgentes, Deleg.Benito Juarez, 03900 México, D.F.

■ TIJUANATokio Marine Compañia de Seguros, S.A. de C.V.Blvd. Agua Caliente 4558, Desp. 204Colonia Aviacion 22420 Tijuana, B.C.

■ AGUASCALIENTESTokio Marine Compañia de Seguros, S.A. de C.V.Sierra Morena 512, Desp. 103Fraccionamiento Bosques del Prado,la Secc. 20127, Aguascalientes, AGS.

VENEZUELA

■ ■ CARACASTokio Marine de Venezuela, C.A.Edificio Centro Seguros Sud America Piso 2, Ofc. 2-B,Av. Francisco de Miranda, El Rosal, Caracas

COLOMBIA

■ BOGOTACalle 100, No. 19-61 Oficina 603 Edificio Centro Empresarial100, Bogota

BRAZIL

■ ■ SÃO PAULOTokio Marine Brasil Seguradora S.A.Rua 13 de Maio, 1529, CEP: 01327-001, São Paulo, SP

■ ■ RIO DE JANEIROTokio Marine Brasil Seguradora S.A.Av. Rio Branco, 115-14° Andar-cj. 1403Rio de Janeiro, RJ, CEP: 20040-004

■ MANAUSTokio Marine Brasil Seguradora S.A.Rua 24 de Maio, 200-9° Andar-cj. 902 Manaus, AM,CEP: 69010-080

■ BELO HORIZONTETokio Marine Brasil Seguradora S.A.Av. Cristovao Colombo, 400-2º Andar, Belo Horizonte, MG,CEP: 30140-150

■ CURITIBATokio Marine Brasil Seguradora S.A.Rua Marechal Deodoro, 950-5° Andar-cj. 501 Curitiba, PR,CEP: 80060-010

■ BLUMENAUTokio Marine Brasil Seguradora S.A.Rua Ingo Hering, 20-Sala 6, Blumenau, SC, CEP: 89010-205

■ PÔRTO ALEGRETokio Marine Brasil Seguradora S.A.Rua dos Andradas, 955-4º Andar-cj. 401, Pôrto Alegre, RS,CEP: 90020-005

■ RIBEIRÃO PRÊTOTokio Marine Brasil Seguradora S.A.Rua Cerqueira Cesar, 481-5º Andar-cj. 500 Ribeirão Prêto, SP,CEP: 14100-130

ARGENTINA

■ BUENOS AIRESc/o HSBC La Buenos Aires Compañia Argentina de Seguros S.A.Avenida de Mayo 701, 1084 - Buenos Aires

PARAGUAY

■ ASUNCIÓNLa Rural S.A. de SegurosAvenida Mcal López 1082 N° esq Mayor Bullo, Asunción

■ ENCARNACIÓNLa Rural S.A. de SegurosMonseñor Wiesen 389, 1 Piso, o/m cal Estigarribia, Encarnación

EUROPEUNITED KINGDOM

■ ■ LONDONThe Tokio Marine & Fire Insurance Company (UK) Limited150 Leadenhall Street, London EC3V 4TE

■ LONDONThe Tokio Marine Capital Research Limited150 Leadenhall Street, London EC3V 4TE

■ LONDONTokio Marine Property Limited150 Leadenhall Street, London EC3V 4TE

■ LONDONTM Management Services Limited150 Leadenhall Street, London EC3V 4TE

■ LONDONTokio Marine Asset Management (London) Limited150 Leadenhall Street, London EC3V 4TE

FRANCE

■ ■ PARISThe Tokio Marine & Fire Insurance Company (UK) Limited,France Branch21, boulevard de la Madeleine 75038 Paris, Cedex 01

■ PARISTM Management Services Limited, Paris Branch21, boulevard de la Madeleine 75038 Paris, Cedex 01

BELGIUM

■ ■ BRUXELLESThe Tokio Marine & Fire Insurance Company (UK) Limited,Belgium Branchc/o Fortis Corporate Insurance N.V.Avenue du Boulevard 21, B-1210 Bruxelles

■ ANTWERPENThe Tokio Marine & Fire Insurance Company (UK) Limitedc/o Fortis Corporate Insurance MarineAntwerp Tower, De Keyserlei 5 box 6, B-2018 Antwerpen

GERMANY

■ HAMBURGThe Tokio Marine & Fire Insurance Company (UK) Limitedc/o Burmester, Duncker & Joly,Trostbrücke 1, D-20457 Hamburg

■ ■ DÜSSELDORFThe Tokio Marine & Fire Insurance Company (UK) Limited,German BranchImmermannstrasse 45, D-40210 Düsseldorf

NETHERLANDS

■ ■ AMSTERDAMThe Tokio Marine & Fire Insurance Company (UK) Limited,Netherlands BranchProf. J.H. Bavincklaan 5, 1183 AT Amstelveen

■ AMSTERDAMTM Management Services Limited, Netherlands BranchProf. J.H. Bavincklaan 5, 1183 AT Amstelveen

IRELAND

■ DUBLINTokio Marine Global Re LimitedIFSC House, International Financial Services Centre, Dublin 1


DENMARK

■ COPENHAGENThe Tokio Marine & Fire Insurance Company (UK) Limitedc/o Hansen & Klein Insurance Management Limited A/S.9 Dronningens Tvaergade, DK-1302, Copenhagen K

NORWAY

■ OSLOThe Tokio Marine & Fire Insurance Company (UK) Limitedc/o Citius Insurance ASDrammensveien 145b, P.O. Box 170, Skøyen N-0212 Oslo

GREECE

■ ATHENSThe Tokio Marine & Fire Insurance Company (UK) Limitedc/o Willis Kendriki S.A.44 Ermou Street, 105 63, Athens

ITALY

■ ■ MILANOThe Tokio Marine & Fire Insurance Company (UK) Limited,Italy Branchc/o Allianz Subalpina S.p.A.Via Turati 4, 20121 Milano

SPAIN

■ ■ BARCELONAThe Tokio Marine & Fire Insurance Company (UK) Limited,Spain Branchc/o Plus Ultra, S.A.Via Augusta, 281-285, 08017, Barcelona

MIDDLE AND NEAR EASTUNITED ARAB EMIRATES

■ ■ DUBAIc/o Al-Futtaim (Private) Limited, Agents, The Tokio Marine andFire Insurance Co., Ltd.3rd Floor, Deira City Center Office Building,P.O. Box 152, Deira, Dubai

IRAN

■ TEHRANc/o Rahavard Insurance Consultants CompanyTavanir Ave., Nezami Ghanjavi Ave., No. 20, Pannah St.,Post Code 14348, Tehran

SAUDI ARABIA

■ ■ JEDDAHc/o Hussein Aoueini & Co., Ltd.Apartment 202-204 Shaker Building, South of Caravan ShoppingCenter, Ibrahim, Shaker Street, (P.O. Box 25), Jeddah 21411

■ RIYADHc/o Hussein Aoueini & Co., Ltd.No. 356 5th Floor, Al-Mousa Residential & Commercial Center,Olayia Road, (P.O. Box 643), Riyadh 11421

■ AL KHOBARc/o Hussein Aoueini & Co., Ltd.Room No. 203, Fluor Arabia Building, King Abdul AzizBoulevard Road, 1 KM North of Al Khobar, (P.O. Box 290),Al Khobar 31952

BAHRAIN

■ ■ MANAMAThe Arab-Eastern Insurance Company Limited E.C.2nd Floor, AFS Tower Building 155, Road 2004,(P.O. Box 10264), Manama 320

KUWAIT

■ KUWAITc/o Kuwait Insurance Company S.A.K.P.O. Box 769 Safat, 13008, Kuwait

TURKEY

■ ■ ISTANBULKoc Allianz Sigorta A.S.Baglarbasi, Kisikli Caddesi No. 11, 81180 Altunizade-Istanbul

■ ISTANBULKoc Allianz Hayat Sigorta A.S.Baglarbasi, Kisikli Caddesi No. 11, 81180 Altunizade-Istanbul

OCEANIAAUSTRALIA

■ ■ ■ SYDNEYTokio Marine Management (Australasia) Pty. Ltd.Level 33, The Chifley Tower, 2 Chifley Square, Sydney, N.S.W.2001 (G.P.O. Box 4616, Sydney N.S.W. 1044)

■ ■ MELBOURNETokio Marine Management (Australasia) Pty. Ltd.Victoria Branch,Level 17, 90 Collins Street, Melbourne, Victoria 3000

■ ADELAIDETokio Marine Management (Australasia) Pty. Ltd.South Australia Branch,7th Floor, 45 King William Street, Adelaide,South Australia 5000

NEW ZEALAND

■ AUCKLANDc/o New Zealand Insurance LimitedLevel 10, NZI House, 151 Queen Street, Auckland 1(P.O. Box 1609)

COMMONWEALTH OF THE NORTHERN MARIANA ISLANDS

■ SAIPANc/o Pacifica Insurance Underwriters, Inc.P.O. Box 168, Saipan, C.N.M.I. 96950

REPUBLIC OF PALAU

■ PALAUc/o Neco Insurance Underwriters, Ltd.P.O. Box 129, Koror, Palau, W.C.I. 96940

ASIAPEOPLE’S REPUBLIC OF CHINA

■ SHANGHAI38F Shanghai Senmao International Building, 101 Yin ChengDong Lu, Pudong New Area, Shanghai 200120

■ BEIJING7th Floor, Changfugong Office Building, No. JIA26,Jianguomenwai Dajie, Chaoyang-Qu, Beijing

■ TIANJINRoom No. 2309, Tianjin International Bldg., 75 Nanjing Road,Tianjin

■ DALIAN5F Sen Mao Building, No. 147 Zhong Shan Road,Xi Gang Qu, Dalian

■ NANJINGRoom 16C1, Nanjing World Trade Center, 2 Hanzhong Road,Nanjing

■ CHENGDURoom No. 361, Jin Jiang Hotel, No. 80 Section 2 Ren Min Ave.,Chengdu

■ GUANGZHOURoom 1231-1233, Garden Office Tower, 368 Huanshi Dong Lu,Guangzhou

■ SHENZHENRoom 713, 7F, Office Tower Shun Hing Square, Di WangCommercial Centre, 5002 Shen Nan Dong Road, Shenzhen


■ MELAKATokio Marine Insurans (Malaysia) Bhd.No. 5A, Jalan Melaka Raya 13,Taman Melaka Raya 75200 Melaka

■ LABUANTokio Marine Global Re Limited, Labuan Branchc/o MNI Offshore Insurance (L) Ltd., Level 11 (E), Main OfficeTower, Financial Park Labuan, Jalan Merdeka, 87000 WP Labuan(Kuala Lumpur Marketing OfficeMenara Dion, #34-01, 27 Jalan Sultan Ismail,50250 Kuala Lumpur)

SINGAPORE

■ ■ SINGAPOREThe Tokio Marine and Fire Insurance Company (Singapore)Pte. Limited6 Shenton Way #23-08, DBS Building, Tower Two,Singapore 068809

■ SINGAPORETokio Management Services (Asia) Pte. Ltd.6 Shenton Way #23-08, DBS Building, Tower Two,Singapore 068809

■ SINGAPORETokio Marine Asset Management International Pte. Ltd.6 Shenton Way #23-08, DBS Building Tower Two,Singapore 068809

BRUNEI

■ BANDER SERI BEGAWANThe Tokio Marine and Fire Insurance Company (Singapore)Pte. Limited6 Shenton Way #23-08, DBS Building Tower Two,Singapore 068809

INDONESIA

■ ■ JAKARTAP.T. Asuransi Tokio Marine IndonesiaWisma Kyoei Prince, 9th & 10th Floors, Jl. Jend Sudirman Kav.3-4, Jakarta 10220

■ SURABAYAP.T. Asuransi Tokio Marine Indonesia, Surabaya Branch OfficeMedan Pemuda Building 8th Floor, 27-31 Jalan Pemuda,Surabaya-60271

■ BATAMP.T. Asuransi Tokio Marine Indonesia, Batam RepresentativeOfficeWisma Batamindo, 3rd Floor, unit no. 16

VIETNAM

■ ■ HANOIVietnam International Assurance Company, Hanoi Branch6th Floor, Sun Red River, 23 Phan Chu Trinh Street, Hoan KiemDistrict, Hanoi

■ HO CHI MINH CITYVietnam International Assurance Company8th Floor, The Landmark, 5B Ton Duc Thang Street, District 1,Ho Chi Minh City

MYANMAR

■ YANGONFMI Centre, Room No. 908, 9th Floor, No. 380,Bogyoke Aung San Street, Pabedan Township, Yangon

INDIA

■ NEW DELHILower Ground Floor, A-11/1,Vasant Vihar, New Delhi 110057

■ NEW DELHIIFFCO-TOKIO General Insurance Co., Ltd.3rd Floor, Farm Bhavan, 14/15, Nehru Place, New Delhi 110019

(As of July 1, 2001)

■ ■ ■ HONG KONGThe Tokio Marine and Fire Insurance Company (Hong Kong)Limited27th Floor, United Centre, 95 Queensway, Hong Kong

■ HONG KONGTokio Marine Investment Services, Limited27th Floor, United Centre, 95 Queensway, Hong Kong

TAIWAN

■ TAIPEI14th Floor, No. 111, Sungchiang Road, Taipei

KOREA

■ SEOUL3rd Floor, Samsung Insurance Bldg. 87, Euljiro, 1-Ga, Joong-Gu,Seoul 100-843

PHILIPPINES

■ ■ MANILATokio Marine Malayan Insurance Co., Inc.6th and 7th Floors, Y Tower II, Alfaro Cor. Gallardo Streets,Salcedo Village, Makati, Metro Manila

THAILAND

■ ■ BANGKOKThe Sri Muang Insurance Co., Ltd.9th–11th Floors, Kamol Sukosol Building, 317 Silom Road,Bangkok 10500

■ BANGKOKTokio Marine South-East Servicing Company Limited10th Floor, Kamol Sukosol Building, 317 Silom Road, Bangkok10500

■ BANGKOKTokio Management Services (Thailand) Co., Ltd.9th Floor, Kamol Sukosol Building, 317 Silom Road, Bangkok10500

■ BANGKOKTMF Holding (Thailand) Limited10th Floor, Kamol Sukosol Building, 317 Silom Road, Bangkok10500

■ BANGKOKThai Charoen Assurance Public Company Limited288/6-9 Surawongse Road, Siphaya Subdistrict, Bangrak District,Bangkok 10500

■ BANGKOKTokio Marine Holding (Thailand) Limited10th Floor, Kamol Sukosol Building, 317 Silom Road, Bangkok10500

■ CHONBURIThe Sri Muang Insurance Co., Ltd., Chonburi Branch880, 882 Sukumvit Road, Tumbol Bangplasroi, Ampher Muang,Chonburi 20000

■ CHIANG MAIThe Sri Muang Insurance Co., Ltd., Chiang Mai BranchAirport Business Park Bldg. Suite 208, 90 Mahidol Rd.,Chiang Mai 50100

MALAYSIA

■ ■ KUALA LUMPURTokio Marine Insurans (Malaysia) Bhd.29th & 30th Floor, Menara Dion 27 Jalan Sultan Ismail, 50250Kuala Lumpur

■ IPOHTokio Marine Insurans (Malaysia) Bhd.No. 17, 1st Floor, Medan Istana 7, Bandar Ipoh Raya30000 Ipoh, Perak Darul Ridzuan

Investor Information(As of July 1, 2001)

Directors and Corporate Auditors


Chairman of the Board ofDirectorsKoukei Higuchi

President, DirectorKunio Ishihara

Executive Vice Presidents,DirectorsHirotada SeyamaShoji UenoAkihiko Mori

Senior Managing DirectorsToshikazu KakudaiKatsuo Handa

Managing DirectorsShinsaku NomuraJosuke ShindoYoichiro IwamaHaruo MarumoMasaharu NakamuraHiroshi KanasugiTomohisa YamadaTsutomu OkuboSachio SakiyaHiroyoshi WadaKazuya HamaguchiHiroyuki KatoMinoru SuzukiMorio IshiiKenji Omori

Head Office:2-1, Marunouchi 1-chome, Chiyoda-ku, Tokyo 100-8050,JapanPhone: (03) 3212-6211Facsimile: (03) 5223-3100

Independent Auditors:KPMG

Stock Exchange Listings and Quotations:The Common Stock is listed on all Japanese stock exchangesincluding the Tokyo Stock Exchange. American DepositaryReceipts for common stock are quoted on NASDAQ/NMS inthe United States.

Depositary for American Depositary Receipts:Citibank, N.A.Shareholder enquiries should be directed to:Citicorp Shareholder ServicesP.O. Box 2502, Jersey City, New Jersey 07303-2502, U.S.A.Phone: 877-CITI-ADR (248-4237)Facsimile: 201-324-3284E-mail: [email protected]

Transfer Agent for Common Stock:The Mitsubishi Trust and Banking Corporation11-1, Nagatacho 2-chome, Chiyoda-ku, Tokyo 100-0014,Japan

Annual Meeting of Stockholders:The annual meeting of stockholders of the Company isnormally held in June in Tokyo, Japan.

Number of Shares of Common Stock Issued:1,549,692,481 shares

Investor Relations:Corporate Legal DepartmentThe Tokio Marine and Fire Insurance Co., Ltd.2-1, Marunouchi 1-chome, Chiyoda-ku, Tokyo 100-8050,JapanPhone: (03) 3285-1608Facsimile: (03) 3285-0088

Tokio Marine on the Internet:Financial results, news and information about Tokio Marinecan be found on Tokio Marine’s Home Page on the Internet athttp://www.tokiomarine.co.jp/

DirectorsMinoru MakiharaHidetsugu NakayamaTeruyuki ShirakawaShuzo SumiToru KomiyaYasuo YaoitaMasayuki HashimotoMasayuki IwataKatsumi KandaHaruhiko GyodaShozo SawamuraToshiro YagiFudeji HamaHideo Nagatomo

Standing Corporate AuditorsHiroshi OshioKuniyuki SudaToshio Hashimoto

Corporate AuditorsYusuke YoshinagaShigemitsu Miki

This report was printed on recycled paper.

THE TOKIO MARINE AND FIRE INSURANCE COM

PANY, LIMITED

ANNUALREPORT

2001

THE TOKIO MARINE AND FIRE INSURANCE COMPANY, LIMITED2-1, Marunouchi 1-chome, Chiyoda-ku, Tokyo 100-8050, Japan Phone: Tokyo (03) 3212-6211

PRINTED IN JAPAN

E03-11030 (9) ’01.7 改廃（部）

the tokio marine and fire insurance company, limited · tokio marine recently agreed with asahi...

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