Below is the main area.

The NKSJ Group has adopted “the NKSJ Group Basic Policy on Risk Management” to ensure appropriate risk management by the Group as a whole and by individual Group companies. Rules have been established according to this policy and the following systems have been developed to monitor, assess and control risks and ensure that appropriate actions are executed if risks are realized. Based on this risk management framework, the Group aims to enhance corporate value by balancing financial soundness, capital efficiency and shareholder returns. The Group's asset management is conducted along with this basic policy.

Risk Management Systems in the NKSJ Group

The NKSJ Group has developed the following risk management systems:

1. To accurately ascertain, monitor and control the various risks inherent to individual Group companies, as well as the risks that are intrinsic in a group structure, such as contagion risk, NKSJ Holdings has established a Risk Management Department. NKSJ Holdings has also established the Risk Management Committee to deliberate on related matters, such as the risk management system and methods, and to monitor the risk management situation.
2. To ensure that equity capital is sufficient for the level of risks, risk factors, those that can affect the financial position of the Group, are measured with common metrics. The results are aggregated, so that risks can be controlled based on comparisons with the financial resources.
3. Group companies are required to develop risk management frameworks, including monitoring and assessment systems, according to the nature and scale of their operations. Certain items have been set forth as requiring approval by and reporting to NKSJ Holdings.
4. Systems have been developed to ensure the continuity or early restoration of key Group operations in case of crisis, such as major natural disasters, and steps will be taken to ensure the stability and soundness of the Group's management structure under emergency conditions.

Roles of NKSJ Holdings and Group Companies

In the NKSJ Group, NKSJ Holdings and Group companies are each fulfilling specific roles and developing appropriate risk management systems.

1. The role of NKSJ Holdings

NKSJ Holdings has established systems to accurately ascertain, monitor and control risk factors affecting the entire Group. This includes the various risks that are inherent to individual Group companies as well as the risks that are intrinsic in a group structure, such as contagion risk. Actually, NKSJ Holdings aims to develop and improve risk management systems for the entire Group by adopting and disseminating this policy to executives and employees within the Group. NKSJ Holdings has set forth items for which Group companies are required to seek approval and submit reports. It has also established systems for the prompt reporting of matters that could significantly affect the Group's financial situation.

2. The role of Group companies

Group companies are independent corporations and ensure that their operations are conducted soundly and appropriately through their own risk management systems according to the principle of self-responsibility. Group companies manage their risks independently by adopting their own basic policies on risk management and disseminating them to their executives and employees. Those basic policies conform to the NKSJ Group Basic Policy on Risk Management.

NKSJ Group Basic Policy on Risk Management

To establish controls to ensure the NKSJ Group's financial soundness by accurately assessing its risk exposures, avoiding unforeseen losses, and adequately controlling risks in accord with Group management policies, NKSJ Holdings has adopted the NKSJ Group Basic Policy on Risk Management, whose main points are as follows.

1. Capital management

To ensure the Group's financial soundness, NKSJ Holdings shall measure the Group's various risk exposures with the common metrics, tally them up to calculate the Group's economic risk capital, and manage its capital to keep the economic risk capital from exceeding the Group's risk tolerance (adjusted capital). NKSJ Holdings shall also allocate capital to its insurance subsidiaries and mandate that the subsidiaries manage their risks to likewise ensure that their economic risk capital does not exceed their capital allocation.

2. Enterprise risk management

In addition to accurately assessing the Group's various risk exposures, NKSJ Holdings shall manage risks on an integrated basis by monitoring risks inherent in an organization that is operating under a group structure, such as contagion, uneven distribution and concentration of risk. NKSJ Holdings shall also mandate that Group companies establish controls to ensure that they operate soundly and appropriately in accord with the principle of self responsibility.

Below is the submenu.