Policies Related to Japan’s Stewardship Code
The Principles for Responsible Institutional Investors
(Japan’s Stewardship Code)
Tokio Marine & Nichido Fire Insurance Co., Ltd. (the “Company”) announces that it adheres to the objective of the Principles for Responsible Institutional Investors (Japan’s Stewardship Code) and accepts the Code.
For details of Japan’s Stewardship Code, please refer to the website of the Financial Services Agency.
The Company’s policy and approach are as follows:
Institutional investors should have a clear policy on how they fulfill their stewardship responsibilities, and publicly disclose it.
- The Company believes that making efforts to improve corporate value of investee companies and prevent damage of it as well as promoting sustainable growth of investee companies through constructive “purposeful dialogue” based on in-depth understanding of them and their business environment, etc. will lead to the interests of insurance policyholders and insured persons, etc. in the medium to long term.
- Specifically, the Company, which is engaged in the non-life insurance business, believes that the improvement of corporate value and sustainable growth of investee companies will increase the Company’s asset value and will eventually lead to the enhancement of its capabilities to pay out insurance claims, etc. in the medium to long term.
- The Company holds shares mainly for the purpose of strengthening its business relationships, and in fulfilling its stewardship responsibilities, will pay attention to the management of specific information, including stock transaction information and customer related information.
- Furthermore, the Company will make efforts to reduce the total volume of its shareholding from the standpoint for its equity capital to be less susceptible to stock market fluctuations.
Institutional investors should have a clear policy on how they manage conflicts of interest in fulfilling their stewardship responsibilities and publicly disclose it.
- The Company, in its stewardship activities, will take actions to ensure that the interests of insurance policyholders and insured persons, etc. are not unduly harmed. The Company’s structure and method for the management of conflicts of interest, including the above activities, is as set forth in “The Tokio Marine Group’s Management Policies for Conflict-of-interest Transactions, etc.”
- *Link will open in a new window (website of Tokio Marine Holdings, Inc.)
Institutional investors should monitor investee companies so that they can appropriately fulfill their stewardship responsibilities with an orientation towards the sustainable growth of the companies.
- The Company will strive to understand the investee companies’ situation of governance, corporate strategy, business performances, capital structure, management of risks including environmental and social issues, so that it can appropriately fulfill its stewardship responsibilities with an orientation towards the sustainable growth of the investee companies.
Institutional investors should seek to arrive at an understanding in common with investee companies and work to solve problems through constructive engagement with investee companies.
- The Company will make efforts to arrive at an understanding in common with investee companies and work to solve problems, by engaging in constructive dialogue with the investee companies, based on long-term trusting relationships with them.
Institutional investors should have a clear policy on voting and disclosure of voting activity. The policy on voting should not be comprised only of a mechanical checklist; it should be designed to contribute to the sustainable growth of investee companies.
- The Company believes that promoting the improvement of investee companies’ corporate value and their sustainable growth through constructive “purposeful dialogue” based on in-depth understanding of the investee companies and their business environment, etc. will lead to the interests of insurance policyholders and insured persons, etc. in the medium to long term, and on exercising its voting rights, it makes decisions comprehensively in consideration of the contents of such dialogue. The Company also fully consider initiatives toward environmental problems, social contributions, and corporate governance.
- With regard to the disclosure of the results of voting rights, while the Company refrains from publicly disclosing the names of individual companies from the viewpoint of management of individual transaction information, it discloses examples of dialogues with investee companies, examples of proposals which the Company voted against, and aggregate results of the exercise of voting rights, in order to encourage the understanding of the contents of the Company’s stewardship activities.
- With regard to proposals that may significantly damage the investee companies’ corporate value, the Company makes decisions to vote for or against the proposals following a detailed examination of these proposals. In conducting a detailed examination, the Company focuses on the following items.
- Appointment and dismissal of directors (of companies that have reported net losses for a given consecutive period, companies at which scandals have occurred, etc.)
- Appointment and dismissal of corporate auditors (of companies at which scandals have occurred, etc.)
- Awarding of directors’ retirement benefits (at companies that have reported net losses for a given consecutive period, etc.)
- Increase of directors’ remuneration (at companies that have reported net losses for a given consecutive period, etc.)
- Favorable issuance of new shares and subscription rights to new shares
- Organizational restructuring including mergers, acquisitions, and transfer and acceptance of businesses
- Acquisition of treasury shares from specific shareholders at prices exceeding the fair price
- Induction of takeover defense measures
- Existence of outside directors
- Attendance rate of outside directors at the Board of Directors’ meetings or the Board of Corporate Auditors’ meetings
- Shareholder proposals, etc.
The Company will definitely vote against proposals in violation of laws and regulations or constituting antisocial behavior, regardless of the existence of any circumstances.
Institutional investors in principle should report periodically on how they fulfill their stewardship responsibilities, including their voting responsibilities, to their clients and beneficiaries.
- In order to encourage the understanding of the Company’s stewardship activities, the Company reports examples of dialogues with investee companies, examples of proposals which the Company voted against when exercising its voting rights, and aggregate results of the exercise of voting rights.
- This report will be disclosed periodically on the Company’s website.
To contribute positively to the sustainable growth of investee companies, institutional investors should have in-depth knowledge of the investee companies and their business environment and skills and resources needed to appropriately engage with the companies and make proper judgments in fulfilling their stewardship activities.
- In order to conduct stewardship activities appropriately, the Company will strive to improve its initiatives by deepening its understanding of the investee companies and their business environments, etc. and periodically reviewing such activities at the Board of Directors’ meetings.
ESG investment policy
Tokio Marine & Nichido Fire Insurance Co., Ltd. (hereinafter “TMNF”) aims to be a “Good Company”, which supports customers and society in times of need, for 100 years and beyond. To this end, TMNF incorporates consideration of social and public welfare-related issues into its investment process and contributes to creating a safe, secure and sustainable society, in view of its social responsibility as a property and casualty insurance company.
Specifically, as a signatory of the United Nations-supported Principles for Responsible Investment (PRI), TMNF promotes ESG investment that takes account of not only financial information but also environmental, social, and governance factors, and aims to improve long-term investment performance and counter social issues.
TMNF aims to enhance both corporate value and sustainable growth of its investee companies through;
- Encouraging the improvement of non-financial disclosures, including ESG issues, to facilitate proper performance assessment, and
- Enriching ESG-related themes for the purpose of engagement to enable constructive and purposeful dialogues.
TMNF adopts ESG integration to evaluate financial information and ESG factors comprehensively in its investment decision-making process.
Specifically, TMNF excludes antisocial forces and confirms information on the environmental, social (including human rights), governance and other issues in its investment decision-making process. Through these efforts, TMNF will accumulate knowledge of ESG evaluation and strive to enhance its investment decision-making process.
Financial Planning Department conducts ESG investment planning and promote the implementation of ESG investment initiatives in collaboration with Global Investment Department and Corporate Investment Department, which execute transactions.
In addition, by receiving evaluations from an external organization through the PRI's annual reporting and assessment, TMNF identifies challenges in initiatives and processes related to ESG investment and strives for continuous improvement.