Yomiuri Shimbun Staff Writer

Tokio Marine Holdings Inc., which formed a capital and business alliance with Berkshire Hathaway earlier this year, intends to "jointly pursue large-scale merger and acquisition (M&A) deals" with the U.S. investment firm, said Yoshinari Endo, a managing executive officer and group chief financial officer, during an interview with The Yomiuri Shimbun.

The following is excerpted from the interview.

The Yomiuri Shimbun: In April, Berkshire acquired a stake of 2.5% of Tokio Marine's issued and outstanding shares for about 287.4 billion yen. Could you talk about that?

Yoshinari Endo: This partnership involves three key elements: investment by Berkshire; reinsurance, in which Berkshire assumes a portion of our insurance claim risk; and joint M&A.

Berkshire knows insurance companies all over the world. Until now, we have conducted bolt-on M&A by adding local competitors and related businesses to our base, which includes our existing operational foundation and overseas subsidiaries, among other things. Now, we would like to jointly pursue larger M&A deals, leveraging their financial strength and network.

Another major benefit (of this partnership) is that Berkshire will stably underwrite a portion of our risk in the form of reinsurance for the next 10 years.

Yomiuri: You have adopted the International Financial Reporting Standards (IFRS), and for the fiscal year ending March 2027, you forecast a 56.2% year-on-year increase in net profit to 830 billion yen.

Endo: Our domestic operations are performing steadily, driven in part by premium rate increases for auto insurance, while overseas operations are being boosted not only by the weak yen but also by growing insurance underwriting in North America and Brazil.

We refer to profits excluding one-time factors, such as gains from the sale of cross-held shares and payments related to major disasters, as "adjusted net profit," and we aim to increase this from the current level of about 880 billion yen to over 1.7 trillion yen by (fiscal) 2035.

We want to provide not only traditional insurance services but also services to resolve issues faced by society, such as distributing information to prevent damage from accidents and disasters. This should ultimately lead to a reduction in insurance payouts during disasters and other such events.

Yomiuri: What measures are you planning for your shareholders?

Endo: We intend to provide stable dividend payments, and avoid reducing dividends in principle. In addition to a 1-for-15 stock split effective Oct. 1, we have introduced a shareholder benefits program for long-term shareholders who have held shares for three years or more.

With the stock split, the price per 100 shares is projected to drop from the current level of about 800,000 yen to a little over 50,000 yen. Since this will make it easier to invest at a lower level, we hope a wide range of investors will support our company's endeavors.

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This article is from The Yomiuri Shimbun. Neither Dow Jones Newswires, MarketWatch, Barron's nor The Wall Street Journal were involved in the creation of this content.

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