Tokio Marine : Announcement Regarding Acquirement of Additional Shares of Tokio Marine Newa Insurance by Our Consolidated Subsidiary (Change in Second-tier Subsidiary) (39KB)PDF

August 5, 2022

Tokio Marine Holdings, Inc.

President: Satoru Komiya

TSE Code: 8766

Announcement Regarding Acquirement of Additional Shares of Tokio Marine Newa Insurance by

Our Consolidated Subsidiary (Change in Second-tier Subsidiary)

Tokio Marine Holdings, Inc. (President and Group CEO: Satoru Komiya, hereinafter "The Company") and Tokio Marine & Nichido Fire Insurance Co., Ltd. (hereinafter "TMNF"), the Company's consolidated subsidiary, announce that TMNF has decided and reached a definitive agreement today with Tokio Marine Newa Insurance Co., Ltd. (hereinafter "TMNewa") and its major shareholder, Yulon Group, a major automobile related conglomerate in Taiwan, that TMNF will acquire majority share of TMNewa and incorporate TMNewa as its subsidiary.

While the acquirement of shares is subject to approval and authorization by the relevant authorities, we plan to complete the acquirement by September 30, 2022.

１．Purpose of acquirement of shares

Taiwanese non-life insurance market is one of the largest markets in Asia, following Thailand and Indonesia, and is an attractive and profitable market that is expected to grow.

Originally established in 1999 as an insurance company of Yulon Group, TMNewa was formed in 2005 in Taiwan as the Company's equity-method affiliate, with Yulon Group and TMNF as its current major shareholders (TMNF's shareholding ratio is 48.94%). Since its establishment, TMNewa has achieved steady growth through its focus on automobile insurance and strength in online marketing, and has become the fourth largest non-life insurance company in Taiwan.

The number of Covid-19 cases in Taiwan had been kept at a very low level until 2021 but following the change from "zero Covid policy" to "with Covid policy" in April 2022, the number of cases soared rapidly, resulting in Taiwanese non-life insurance market suffering major losses due to Covid insurance which pays out a fixed amount in the event of infection or isolation. Along with the market, Covid insurance related claims had surged at TMNewa, requiring capital injection.

Yulon Group, TMNewa, and the Company have agreed that TMNF shall acquire major stake of TMNewa and take initiatives to improve management, including product development and risk management, to capture future stable profit growth in Taiwan.

Under the Company's leadership, TMNewa will continue to provide industry-leading insurance and loss prevention services to its customers, leveraging its strengths in digital and e-commerce, and the sales network of Yulon Group in Taiwan.

２．Overview of TMNF
（１）	Company Name	Tokio Marine & Nichido Fire Insurance Co., Ltd.
（２）	Location of Registered	2-6-4 Otemachi, Chiyoda-ku, Tokyo
Office
（３）	Name of	Shinichi Hirose, President
Representative

（４）	Nature of Business	Non-life insurance
（５）	Capital	101.9 billion yen

３．Overview of the subsidiary (TMNewa)

（１）	Company Name	Tokio Marine Newa Insurance Co., Ltd.
（２）	Location of Registered	8F-13F, No.130, Section 3, Nanjing E. Rd., Zhongshan District, Taipei City,
Office	Taiwan
（３）	Name of	Chung-Keng Chen, Chairman
Representative
（４）	Nature of Business	Non-life insurance
（５）	Capital	TWD 14,700,000,750(approx. 67.5 billion yen)*
（６）	Date of Establishment	January 20, 1999
		Yulon Group					49.33%
		(China Motor Co., Ltd		20.57%)
		(Yulon Motor Co., Ltd.		17.39%)
	Major Shareholders	(Fu Lun Motors Co., Ltd.		3.57%)
	(Shung Ye Motor Co., Ltd.	3.34%)
（７）	and Ownership
(Yulon Finance Co., Ltd.		1.94%)
	Percentages
	(Fortune Motors Co., Ltd.		1.34%)
		(Yuea Ching Business Co., Ltd.	1.17%)
		Tokio Marine & Nichido Fire Insurance Co., Ltd.	48.94%
		Other shareholders		1.73%
		Capital		TMNF, a wholly owned subsidiary of the Company, plans
			to own 50.18% of TMNewa's common stock.
	The Company's
			The Company and TMNF will nominate and deploy
（８）	Relationship with
Management		personnel for the majority of directors and key executive
	TMNewa
			positions.
		Business		No relationship to be noted.
（９） TMNewa's Consolidated	Financial Results	in the past three years
	Fiscal Year	December 2019		December 2020	December 2021
Net Assets	TWD 9,492M		TWD 9,665M	TWD 11,082M
(JPY 43,623M)		(JPY 44,421M)	(JPY 50,930M)
Total Assets	TWD 24,656M		TWD 25,646M	TWD 28,206M
(JPY 113,313M)		(JPY117,861M)	(JPY 129,630M)
Net Assets per share	TWD 31.7		TWD 32.3	TWD 37.0
	(JPY 145)		(JPY 148)	(JPY 170)
Net Premiums Written	TWD 10,360M		TWD 11,172M	TWD 12,152M
(JPY 47,612M)		(JPY 51,347M)	(JPY 55,846M)
Profit Before Tax	TWD 1,150M		TWD 1,024M	TWD 1,475M
(JPY 5,289M)		(JPY 4,708M)	(JPY 6,780M)
Net Profit	TWD 960M		TWD 856M	TWD 1,235M
(JPY 4,412M)		(JPY 3,937M)	(JPY 5,679M)

Net Profit Attributable to	TWD 967M	TWD 860M	TWD 1,237M
Owners of the Company	(JPY 4,446M)	(JPY 3,955M)	(JPY5,688M)
Net Profit per share	TWD 3.2	TWD 2.8	TWD 4.1
(JPY 14)	(JPY 13)	(JPY 18)
		(TWD1＝JPY4.595676	(as of June 30, 2022))

(*) Capital expected to be after the transaction planned on September 30, 2022.

４．Overview of the number of acquiring shares, share purchase price, and position of shareholdings before and after transaction

	Number of Shares	146,326,732 Shares (*)
（１）	Held Before	（Number of Voting Rights: 146,326,732）
	Transaction	（Voting Rights Ownership Ratio: 48.94%）
	Expected Number of	737,595,285 Shares
（２）	Shares to be
（Number of Voting Rights：737,595,285）
	Transferred (Planned)
	Expected Share
（３）	Purchase Price	Common Stock of TMNewa TWD7,375M (JPY 33,897M)
	(Planned)
	Expected Number of	737,595,322 Shares
	Shares Held After
（４）	（Number of Voting Rights: 737,595,322）
Transaction
	（Voting Rights Ownership Ratio: 50.18％）
	(Planned)
		(TWD1＝JPY4.595676 (as of June 30, 2022))

1. The 146,326,732 Shares held before the transaction will be reduced to 37 Shares through capital reduction procedure before the capital increase, and then 737,595,285 Shares are planned to be acquired. A total of 737,595,322 Shares will be held after the transaction.

５．Timeline
（１）	Date of Agreement	August 5, 2022
（２）	Date of Signing	August 5, 2022
	Agreement
（３）	Expected Acquirement	September 30, 2022 (Planned)
	of Shares

６．Outlook

The impact of this transaction to the Company's consolidated financial results is minor.