HCC Insurance — Merger or Acquisition (June 2015)
22 slides from HCC Insurance's merger presentation, Jun 23, 2015
Slide 1: 2015 Financial Management Meeting Tokio Marine Group Overview
2015 Financial Management Meeting Tokio Marine Group Overview June 23, 2015
Slide 2: Disclaimer
Disclaimer 2 Additional Important Information About the Proposed Merger and Where to Find It This communication relates to a proposed merger between HCC and a subsidiary of Tokio Marine Holdings, Inc. that will be the subject of a proxy statement that HCC intends to file with the U.S. Securities and
Slide 3: Contents
Contents Overview of Tokio Marine Group Overview of Tokio Marine - International Insurance Business 3
Slide 4: Overview of Tokio Marine Group
Overview of Tokio Marine Group 4 Founded: In 1879 Net Premium Written*1: ¥ 3,348bn (US$27.9bn) Adjusted Earnings*1: ¥ 41bn (US$ 3.4bn) Shareholders' Equity*1: ¥ 3,610bn (US$30.0bn) Market Capitalization: ¥ 3,712bn (US$30.2bn) (Market Cap as of June 19, 2015) Figures as of FY 2014 (March end 2015) Ra
Slide 5: Overview of Tokio Marine Group – Major Lines
Overview of Tokio Marine Group – Major Lines 5 Japanese P&C Insurance: Auto, Fire, PA, Marine, etc. Japanese Life Insurance: Life, Annuity International – Diversified Business Lines: P&C (U.S., U.K. & Europe, Emerging), Reinsurance, Life (Emerging) Others: Asset Management, Risk Consulting, Elderly
Slide 6: Tokio Marine Group – NPW
Tokio Marine Group – NPW 6 (Yen in millions, except for %) Year ended March 31, 2015 Amount Composition Ratio (%) Rate of Change (%) Fire and allied lines 532,482 16.0 7.4 Hull and cargo 111,094 3.0 3.2 Personal accident 203,758 6.0 4.4 Voluntary automobile 1,327,436 40.0 9.8 Compulsory automobile l
Slide 7: Global Comparison of Nonlife Insurers
Global Comparison of Nonlife Insurers 7 Net profits Market cap Total assets P/B Previous FY Latest Latest quarter Latest Company (USDmn) (USDmn) (USDmn) (x) Allianz 8,265 72,317 942,254 0.9 AIG 7,529 79,990 520,701 0.7 Munich Re 4,189 30,590 310,783 0.8 Zurich 3,895 46,737 406,529 1.3 Travelers Comp
Slide 8: TM Global Footprint
TM Global Footprint (as of March 2014) 8 Ho Chi Minh City Guam Sydney Hong Kong Beijing Sao Paulo Chicago New York Bala Cynwyd Toronto Barcelona Dubai Seoul Paris London Brussels Taipei Dusseldorf Mexico City Jeddah Shanghai Bangkok Kuala Lumpur Singapore Jakarta New Delhi Manila Honolulu Tokyo Mosc
Slide 9: Executive Summary of the Strategic Initiatives
Executive Summary of the Strategic Initiatives 9 Growth Strategy 1: Organic Growth Development of global leadership talent Deployment of local talent for global operations Good Company Initiatives Global HR Strategy Enhance business platform to support future growth Governance/Internal Controls ERM
Slide 10: Further Expansion of International Business
Further Expansion of International Business 10 International share of Tokio Marine – Premiums: 32% to 38% Profits: 38% to 46% Pre-Acquisition Post Acquisition (Pro forma Basis) Business Unit Profits Insurance Premiums Domestic Business International Business ¥1,145B 38% 46% ¥127B ¥175B ¥1,500B ¥3,54
Slide 11: Overview of International Insurance Business
Overview of International Insurance Business 11 Snapshot: Providing services in 37 countries and regions. (Figures all as of March end, 2014) History: In 1879, Tokio Marine founded as Japan's first insurance company and established agents in Shanghai, Hong Kong and Busan. In 1880, launched business
Slide 12: Expansion of TM International Businesses
Expansion of TM International Businesses 12 2000 2007 2011 2015 Developed Footholds in Non-Japanese Business Established Presence in Lloyd's (UK) and the US (~2000) focused on Japanese clients Re- insurance P&C emerging markets Life emerging markets Kiln Philadelphia Step-by-step expansion since the
Slide 13: Management Philosophy of International Insurance Business
Management Philosophy of International Insurance Business 14 Long term view on business Bottom line oriented Focus on underwriting discipline and risk selection capability Respect a diverse range of international views, cultures, experiences and management styles Integrity
Slide 14: Organization Chart of Tokio Marine Holdings
Organization Chart of Tokio Marine Holdings 15 Board of Directors Chaired by Shuzo Sumi (Chairman) Executive Committee Chaired by Nick Nagano (President and CEO) Kuni Fujii (Member of the Board, Senior Managing Director) Makoto Okada (Managing Executive Officer) Rick Ishii (Senior Managing Executive
Slide 15: Structure of the U.S. Operation
Structure of the U.S. Operation 16 TMNA Services (TMNAS) Tokio Marine North America (TMNA) Delphi Financial Group (DFG) Safety National (SNCC) Matrix Reliance Standard Life (RSL) Philadelphia Insurance Companies (PHLY) Tokio Marine Holdings, Inc. (TMHD) (Japan) Tokio Marine America Insurance Company
Slide 16: Major International Companies
Major International Companies Entity Staff Major LoBs Philadelphia Insurance Companies 1,600 Commercial Lines Package Products, Management & Professional Liability (D&O, E&O), Environmental Liability Coverage, Surety Bonds Tokio Marine Kiln 700 Casualty, Property, Energy & Marine, A&H, Aviation, Pro
Slide 17: TM Proven Track Record in M&A
TM Proven Track Record in M&A 18 Significant Contribution to the Group’s Profit Growth through M&A Strategy and Smooth PMI Acquisition Principles Management strength and compatibility (high quality management sharing our values) Robust business model High growth potential Smooth PMI (Post Merger Int
Slide 18: Establishment of a More Solid Group Business Foundation
Establishment of a More Solid Group Business Foundation 19 Capital Efficiencies and Sustainable Profit Growth + (Post Acquisition) Tokio Marine Group ’ s Portfolio will be More Diversified Established a More Solid Group Business Foundation HCC ’ s Diversified Portfolio Tokio Marine Group ’ s Portfol
Slide 19: Establishment of a More Solid Group Business Foundation
Establishment of a More Solid Group Business Foundation 20 Post transaction, the proforma adjusted ROE will increase by 1.5% and EPS will improve by 12% Impact on Adjusted EPS Impact on Adjusted ROE 8.2% 8.9% 7.8% (Pre-acquisition) 2013 2014 2015 Forecast 7.6% 6.7% 9.3% (Post acquisition illustrativ
Slide 20: A Truly Global Insurer with Premier Specialty Franchises
A Truly Global Insurer with Premier Specialty Franchises 21 Adjusted Earnings Growth of our Past Acquisitions (2014 vs. First Year after Acquisition) All three acquired specialty companies grew significantly post acquisition as part of Tokio Marine Group TM June 10, 2015 presentation Delphi Philadel
Slide 21: Combining HCC with Tokio Marine Kiln, Philadelphia and Delphi
22 Combining HCC with Tokio Marine Kiln, Philadelphia and Delphi, the transaction solidifies Tokio Marine’s standing as a truly global insurer with premier specialty insurance franchises.
Slide 22: See Notice About This Presentation
See Notice About This Presentation 23
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