Sompo Holdings, Inc. (8630) Earnings Call Transcript & Summary

I'm Sakurada of Sompo Holdings. Thank you for taking time out of your busy schedule to attend our IR meeting today. Today, I will explain the overall strategy of the Sompo Group and then COO Okumura, will present our business strategy. We would like to take your questions after the presentations. Although the time is limited, I look forward to having a constructive discussion with you all. Now please turn Page 3. Here are today's main points. First of all, on May 19, we announced the results of FY 2022 and the forecast for FY 2023. In FY 2023, the final year of our medium-term management plan, we expect actual profits to fall short of our target of JPY 300 billion as a result of the deteriorating business environment. On the other hand, we expect to achieve our capital efficiency ROE target of 10% or more. Regarding capital policy, we have established a medium term policy for the reduction of strategic shareholdings. As to shareholder returns, we will adhere to our existing highly transparent shareholder return policy. As a result of steadily increasing dividends in line with profit growth. We expect to increase dividends for the tenth consecutive fiscal year. Finally, with respect to medium-term measures to increase profits. In the domestic P&C insurance business, we will begin to take new actions to restore earnings each of these points is explained in details from Page 5. Please turn to Page 5. Regarding actual profits and ROE, excluding onetime factors such as the impact of COVID and natural disasters, we have achieved steady growth compared to FY 2020. When the midterm plan started mainly in the overseas insurance business. On the other hand, from FY 2022, due to intensifying and very frequent natural disasters and the inflation, we have experienced negative impact, mainly in the domestic P&C business, which we had not factored in when the medium-term plan was first formulated. Those factors cannot be considered as transitory. Therefore, we have carefully examined these effects and incorporated them into our earnings forecast for FY 2023. As a result, the actual amount of profit will not reach the JPY 300 billion target of midterm management plan. We believe that we have increased the probability of achieving the forecast. We expect to achieve our ROE target of 10% or more, partly due to ongoing efforts to improve productivity and share buybacks. Please refer to Page 6 for a more detailed explanation of the probability of achieving the forecast. The main factors behind the change in performance from the FY 2022 as shown on this slide. The biggest driver of the increase is still [ overseas ] insurance and reinsurance business, with improving underwriting profit due to rate hikes and increasing investment income owing to higher interest rates. The profit of the overseas insurance and reinsurance business is expected to increase by JPY 50 billion from FY 2022. Sompo Japan has factored in a negative impact of JPY 12 billion year-on-year from the worsening business environment, but this will be offset by positive effects of the earnings structure recall. The increase in profit will be the fruit of the progress of the midterm planned initiatives. We believe that the achievement of the forecast will be more certain with the steady implementation of the initiatives of the midterm plan. Over the past 2 years, we have steadily implemented initiatives set force in the medium-term management plan and the effect of these initiatives are being felt. In terms of scale and diversification. The overseas insurance business has significantly exceeded the plan in both top line and bottom line growth, resulting in an annualized topline growth of more than 10% for the group as a whole. The growth of the overseas insurance business also led to significant progress in bottom line diversification. In FY 2022, the ratio of overseas business increased by about 20% compared to the level before the start of the medium-term plan, resulting in increased profit stability the group. With respect to RDP, real data platform, in addition to the launch of Egaku, the acquisition of ND software has enabled us to efficiently expand the sales. In addition, the group expects to realize a positive effect of about JPY 15 billion in FY 2023. As a result of among others, conglomerate premium initiatives to pursue the best for the group and the capital transfer to SI. Please return to Page 8. Meanwhile, the business environment surrounding us has deterred related significantly due to such factors as global price hikes changes coming from the end of COVID and the frequent occurrence of severe natural disasters. In light of these circumstances, in addition to simply implementing the various initiatives in the midterm plan, we will strengthen our efforts to improve profitability and aim for further growth in adjusted consolidated profit over the midterm. Okamura COO, will explain the specifics of each these initiatives later. I will touch up on the main points of each business segment from the next page, Page 9, please. The domestic P&C insurance business has achieved a top line growth over the past 2 years, exceeding the plan. In addition, we have been steadily working to improve profitability, the so good earnings structure reform and its effects have exceeded the plan. On the other hand, the business environment has deteriorated significantly due to the absence of the impact of COVID inflation and natural disasters. Therefore, as a medium-term measure to improve profitability, we have started to implement measures to improve profitability and productivity more aggressively. Although the effects of these measures will be limited in FY 2023, we will continue to work to restore profitability by improving the loss ratio and expense ratio over the next midterm plan period as well. Please refer to Page 10. The overseas insurance business has achieved a high top line growth of 27% per annum over the past 2 years through rate increases, bolt-on M&As and an increase in the retention ratio. We have also made progress in diversifying our lines of business and improve the stability of our profits. On the other hand, the impact of natural disasters has recently been at a historically high level overseas. Rate up cycle has run its course. In light of these circumstances, we will expand underwriting in regions outside the U.S. to achieve top line growth and increase profits and stability. At the same we will optimize underwriting risk while increasing rates to exceed loss costs. We will maintain and improve the level of our combined ratio, which is superior to that of our peers. Please turn to Page 11. In the domestic life insurance we continue to grow with Insurhealth products that combine insurance and health promotion functions. As we continue to work for Insurhealth sales expansion toward post midterm plan period, we will also utilize Insurhealth related data in the group to create new services, aiming at high growth and high profitability. The Nursing Care and Seniors business is above all Egaku, which has been just launched, by aiming to become the de facto standard in the nursing care industry with Egaku, we will create not only financial values, but also social value by solving supply demand gaps in the nursing care and the staffing, this is a social problem. Please look at Page 12. While the growth strategy is steadily progressing. We are also making very good progress in improving capital efficiency. Overseas FY 2022, so the fifth highest number of natural disasters, over the past 20 years. However, as a result of our diversification efforts, the share of overseas natural disaster risk has decreased and the impact on the group's results is smaller than in FY 2017, immediately after the acquisition of Endurance, as for interest rate risk, the group accelerated the pace of purchases a very longer term bonds in response to rising interest rates, and as a result, achieved the midterm plan target to reduce interest rate risks ahead of schedule. Please turn to Page 13. In terms of strategic shareholdings, we accelerated the pace of its reduction in FY 2022. We plan to reduce the strategic shareholdings by JPY 70 billion in FY 2023, as we did in FY 2022. In addition, we have formulated a medium-term reduction policy. We will continue to reduce our strategic shareholdings aiming to reduce the balance to about 20% of adjusted consolidated net assets by FY 2030. This is an interim target, and we tend to reduce it further beyond FY 2030. We will also strengthen engagement with portfolio companies to improve capital efficiency and profitability. Please turn to Page 14. Capital generated through improved capital efficiency is allocated to growth investments at appropriate valuations in a midterm management plan we earmarked JPY 600 billion for growth investment. And we have used around JPY 400 billion, including capital transfer to SI, the acquisition of Energy software and for digital-related companies, among others. Our latest appetite for growth investment is greater than the remainder of the earmarked budget, and we will continue to invest aggressively in growth while keeping an eye on variations. Please turn to Page 15. The effects of digital transformation are also producing good results. The group as a whole achieved the benefits of JPY 12.3 billion in FY 22. In particular, underwriting profit has improved. By collaborating with Palantir, underwriting in the domestic P&C insurance business has improved significantly. Sompo Japan had been implementing initiatives to improve the loss ratio, focusing on large fire and other insurance policies. The collaboration with Palantir has made it possible to analyze the vast amount of data that had not been sufficiently aggregated. As a result, it has become possible to improve the loss ratio, not only for fire and allied insurance but also for other lines of business and not only for large policies, but also for small and medium-sized policies. In the overseas insurance business, the domestic life insurance business and nursing care and seniors business, the effects of digital formation are gradually emerging, improving operational efficiency and developing new business opportunities. We will continue to promote transformation through digitalization in the medium term by utilizing new technologies. Please turn to Page 16. The benefit of growth will be returned to our shareholders. In FY 2022, we determined the amount of total return based on adjusted consolidated profit on a normal year basis. And we will maintain our current highly transparent shareholder return policy in FY 2023 as well. We expect to increase dividends for the tenth consecutive fiscal year in line with profit growth. we will continue to implement a well-balanced capital policy with an eye to improving capital efficiency, high-growth investment appetite and attractive shareholder returns. Please turn to Page 17. Our efforts to improve so-called unrealized values are producing good results as well. I have taken the lead in communicating with a total of 20,000 group employees in Japan and abroad through Town hall meetings and other means. And I feel that the simple purpose is steadily spreading through initiatives, for example, to pursue my purpose at each work site. The process is improving employee engagement, the employees are more motivated to take initiatives to build their own career. We believe that the high motivation leads to high productivity and the sense of fulfillment and also to creativity. Maximizing human capital is an indispensable part of realizing the Sompo's purpose. I feel that way day in, day out. We will continue to devote all our energies to advancement of purpose management. Please look at Page 18. Including my presentation, I'd like to talk about Arbitron for a slightly longer time horizon. In order for us to achieve sustainable growth over the longer term, we must further strengthen our resilience and promote capital efficiency and profit stabilization. And we also must create new services that contribute to solving social issues by collecting with multi stakeholders based on the data obtained from each of the group businesses. We believe it is important to create a situation in society where people cannot do without Sompo. Egaku is the very first step in this direction, and we are now looking at the possibility of making it financially valuable as well as creating its value to society. We plan to present the direction over the next midterm plan, which starts in FY 2024 at the IR meeting in November. We are going to show you specifics of the plan. And we will pursue the realization of theme park for security health and well-being, which is Sompo's purpose and increased corporate value by improving both financial and social value. With that, I conclude my explanation. Thank you.

Well, I am Okumura Group COO. On this slide and the fiscal 2023, the fiscal year of the midterm plan last year, I would like to talk about that. And then after that, I would like to go through each business. So for top line, each business has been going quite well with the profit base in your overseas business. We expect to exceed the combined ratio compared to the time that supply was made, but the portfolio was intensively -- was changed, so that the margin and the stability has been much better. As a result, well, the aggregation of the environment has been seen, and the domestic P&C does not reach the midterm target JPY 150 billion due to worsening environment, the overseas insurance business exceed the target by JPY 50 billion, supporting the overall group profit. Although as Sakurada-san mentioned, we have achieved a certain amount of goals as a result of initiatives in the current midterm plan. We recognize there's much more left for the further improvement and growth. So what we need to do should be done and the person in charge of the execution. We are committed to pursuing with a strong result. So let's move on. The first is domestic P&C. For the year 2022, adjusted profit for the domestic P&C was JPY 32 billion and is expected to be only JPY 80 billion in FY 2023. Since the midterm plan has hit the target for adjusted profit at JPY 150 billion for FY 2023, we are JPY 70 billion short. There are various reasons for that because the falling profitability of auto insurance due to inflation, increased losses in fire insurance due to the expansion of ordinary losses from natural disasters, major accident breakers and high expenses. However in light of this situation, we'd like to take up the challenges to work on the profitability or the margin improvement. So on Page 22, we have been working upon the structure reform for the earnings like this, where we projected a JPY 57 billion boost in earnings for FY '23 at the beginning of the midterm plan period but we had expected JPY 76.5 billion boost, approximately JPY 20 billion more than planned. However, we recognize that business environment is worsening on a scale that could offset these effects. So while there were transitory factors in 2022, there were some factors as one-off or transitory factors. However, we recognize that the non-transitory changes in the business and environment also put profits down so that we have to be making effort, especially in auto insurance business, which is the main stone, the unit repair cost rose more than expected due to weaker yen or higher raw material prices and the labor cost hike in addition to the absence of the impact of the accident rate decrease, which we've been seeing during the pandemic. This effect has been seen to push down profits for the time being. We also estimate that fire insurance remain challenging due to the frequency of the severe net count declining insurance capacity and the rising in insurance costs and the impact of inflation. So we have a strong sense of urgency including disposing environment. And we recognize that there remains much room for profit improvement compared to the peers. Next page, please. Therefore, in the -- for the midterm profit recovery in domestic P&C, more in-depth for profit improvement measures and the further productivity improvement measures will be put into action. We aim to return to the profitable level we had in the mid-2020s by further hike in the fire insurance prices because we have tried to do some parts, but we need to do whatever is left for us to do. For example by enhancing the underwriting and also reviewing the coverage -- the policy underwriting with that and also policy coverage and the portfolio. So we will do whatever to get back to the profitability level that once we enjoy it. And in the area of the auto insurance in 2024, we plan to raise the premium rate again. For the better productivity by consolidating and simplifying products, reducing property cost and working on consolidation of administrative functions, standardizing remote work, thoroughly implementing new work styles through the use of digital technology, we will optimize our organizational structure and the personnel through natural attrition. So through this effort, we aim to reduce expense ratio to the level of 31% by FY 2027 at the latest. Page 25, please. Overseas Insurance business is expected to exceed the midterm targets for both top line and adjusted profit. And it will support group profit. The adjusted profit of the overseas insurance is expected to achieve a high annual growth rate of 71% during the midterm plan period. With organic growth driven by rate hikes and both on M&A. SI commercial revenue growth will drive entire profits. SI Commercial's combined ratio has dropped to below 90% range due to appropriate control of natural disaster effects and the lower expense ratio. Well, we have achieved high profitability than peers. On Page 26. We just looking back at the time of the acquisition of Endurance in fiscal 2017. The SI commercial has increased its rate by more than 95% year-to-date. Well, I was just referring to the rate cycle itself has been changing and is slowing down. That is quite obvious. But in the first half, we achieved a 7% rate hike. So through this rate hike and through discipline the risk appetite has been quite appropriate to our level. And like do you think about the capital adequate of deployment, and that effect has been seen on the SI side. All those comprehensive measures that we have been taking has been hiking our total earnings. So I think I have to refer to the governance. The overall business owners and the CEO have been changing in the past, but as a group, the underwriting discipline has been made on a steady basis so that our governance structure and the profitability generation structure is already set in place. So this is a reference page, the Page 27 on pie chart, you see the breakdown back in -- compared to 2017, the Cat rate or the property and the Cat in combination has reduced dramatically. In the meanwhile, the agro and the casualty had increased. Casualty exchange loss ratio is in the current rate, it was higher. However, when it comes to the stability of the profits and earnings, it's much better. So on a steady basis, the portfolio management has been done to stabilize the profitability. That's our focus. So let's move on. As a result, the profitability steadily improving. Inside SI commercial's base loss ratio peaked at 61.3% in FY 2018 and it has been improving to 54% range now. So we will continue to underwrite thoroughly for profitability, including hiking rate to cover the loss cost. On the other hand, the expense ratio also improved in FY 2022 to 22%, which is one of the highest among the peers. For the Fiscal 2023. The expense ratio is expected to go up due to the special factors related to changes in business classification and upfront investment for geographical diversification. So the upfront investment will probably show results in the short-term period, and we would like to see that this is a achieved even more. So on Page 29, please. The other driver is the investment overseas. As you see on this graph. To the net premiums written that's increasing on a steady basis as a result. The AUM has more than double compared to the year 2017. In the meantime, the average duration is just under 4 years and currently, the market yield is about mid 5%. And our book is about 42% -- 4.2%. So that is going to be edging up so that the AUM expansion and the book yield improvement. Those 2 factors are going to push up and address the investment, including credit risk, the risk has been managed quite properly. Average credit rating is AA minus. So it's quite and quality portfolio and the recent financial turmoil has not had a significant impact on the portfolio and it's a solid portfolio with high-quality -- liquidity. On Page 30. All this is an overseas insurance business last page. The profit and the growth driver has been this overseas business. But for the external environment, we cannot be overoptimistic. The net CAT is increasing. The inflation is continuing so that the environment is still severe. For the year 2023 and onward, we will continue to diversify our business lines and extend our underwriting regions to Canada, Continental Europe and the Southeast Asia and also in the American continent. The Americas for more states to cover, aiming for the further top line growth and the stabilization of the earnings through geographical diversification. In the SI consumer. The Brazil's consumer business was sold, and the process is complete -- is going to complete in the fiscal 2023 and to Sompo Sigorta in Turkey, which was affected by hyperinflation, also expect to get back to recovery track on the profit. While facing the deterioration of the environment, we will further strengthen our resilience for further growth. On Page 31, please. Domestic life insurance. In FY 2022, in one [ word ] it was hit by the one factor one time factor related to profits. But on the other hand, with regard to insurance products, which we are anchoring, we have extended our product lineup to include income production insurance, medical insurance and cancer insurance, and they are driving ANP. In this month, we launched a new Insurhealth product, a variable life insurance product with reduced market risk. With this as a starting point, we expect to achieve a midterm plan target over JPY 40 billion in adjusted profit for FY 2023 by implementing our product cross-selling and channel strategies. Page 32, please. Well here we wanted to show that, While the peers are experiencing sluggish growth in the volume of policies in force in the highly competitive environment, Himawari Life top line is steadily growing. Growth is coming with the continued launch of Insurhealth products. And in addition to the expansion of the sales of the Insurhealth products, we will analyze the effect of health promotion, aiming for the synergy between insurance sales expansion and the health promotion. There are a lot of data to analyze. And based upon that, we can put the products and making contribution to the health of the customers. So on Page 33, please. Here, we are showing our IRR, as selling the high-margin products and then the paid-up period will be short so that IRR is expected to increase to 18%. And on the right-hand side graph, you see that efforts to improve productivity that we have been working upon since the previous midterm plan. Even under the environment of the COVID, we have enhanced that in the top line and profit level as a percentage of total employee working hours are expected to increase steadily. I myself through the Himawari Life management plan has seen the initiatives that have been taken for the productivity environment. So that we intend to further expand the sales by insurance products or Insurhealth products by making better use of the data and the strengthening corporation with other businesses, we intend to contribute not only to the profitability of the domestic life insurance but also to that of the group as a whole. 34, please. This is nursing care and the senior business. For the year 2022, we had struggled. I think you have felt that in reality, the utility cost and everything was inflated as cost and that hits the operation of the nursing care and the senior business as well. However, the earnings structure has been improved. And as I mentioned earlier, the Egaku or the data usage business model is something that we are taking up as a model. So as a result, the adjusted profit for FY 2023 is expected to increase by JPY 1 billion to hit JPY 7 billion. Page 35, please. In Sompo Care, as a tier operator, we shall improve productivity with quality. In the Nursing Care business -- no -- it's not one over the other. The productivity or quality, but we need to pursue 2 of them. What can be the driver that's digital or data utilization and talent. Well, after the launch of Sompo care, Sompo Care University and the food lab or the better treatment for the caregivers, those talent investment have been done continuously. And Egaku, the data, the digital utilization business is coming in also. So that the [ Mirai no kai go ] or the nursing care of the future is going to be delivered. Well according to the demo or the pilot case done by the Ministry of Health of 1 person taking care of the 3 patients, we need to go through that breakthrough -- we need to provide a breakthrough front to come to the Nursing care of the future to deliver in the future. The key driver is going to be the data digital. The real data platform, the first product, which is Egaku already has been individually customized product that was already released, and we are fine-tuning products with 12 early adopter officers. We aim to complete the release of the major initial products by releasing applications in the second half of FY 2023. Well, in terms of sales, we already expected to sell to 10 offices and in cooperation with ND software and Sompo Japan start approaching 3,000 offices and expect to sell to 100 external care providers' offices. Of course so, we are prioritizing with those potential offices. Well, until the fiscal 2024, the business is positioned as a start-up phase. But we are planning to install one by one. And we are also going to -- from the year 2025, expect to expand this business widely to SMEs also, to significantly increase sales. So for FY 2023, we aim to achieve JPY 30 billion revenue and the JPY 10 billion operating income, including synergies to deliver with ND software. At the same time, we hope that this will become a de facto standard to bring solution to social problems. On page 37, please. Well, the last part for the business, the digital business. Well, it just started shortly. However, finally, we are starting to see the generating of the profit, especially the Palantir Technologies Japan, the joint venture with the Palantir, the number of the customer is increasing greatly. So the following last year for the current year FY 2023, the number of customers is expected to double. In addition to the existing businesses, through collaboration with existing businesses and the development of the solutions business that goes beyond insurance, digital business alone will make a stable contribution to the group's earnings, so that the contribution is going to be quite significant and remarkable. Last page, I will explain the progress of the conglomerate premium initiative. In fiscal 2022, we launched the initiative. It was a small start. In fiscal 2023, we shall work in the 3 areas of retention and reinsurance, investment and the multinational business. Well here, however, this -- we are still in the starting point. And this is just a visual for you to understand. But based upon the worsening environment, those 3 are not going to be enough so that we have to have in-depth group synergy to deliver. Your connection or being connected and to connect that could be the key to deliver the group's synergy going forward and that we want to the results in the IR meeting in November. But for the single year of FY 2023, one simple conglomerate premium initiative, but pursuing of that, we wanted to deliver JPY 15 billion coming from that initiative. The business environment is -- not seen to have several upturn that fast, so that we want to work on the group best to pursue, we will further improve resilience and strengthen cooperation within and outside the group. Thank you very much for your attention.

Now we will go into a Q&A session. Today, this session is being translated simultaneously. So please speak slowly when you ask questions. [Operator Instructions] So we are in the very tough business environment, and we are in the mode of growth, and we'd appreciate if you ask questions on midterm and long-term perspective. So Muraki-san Please.

SMBC Nikko Securities, Muraki. Thank you for the presentation. So the business environment is very tough for domestic P&C business. And also, I would like to ask a question about investment. On Page 23. On the right-hand side, so from the next year on, what is the image, you take new actions, not so effective next year, some later time, but it will boost up the profit in 2026. So JPY 76 billion impact from the initiative. But in the next midterm plan, new earnings structure reform, what is the breakdown? Pricing, underwriting and the profitability enhancement. What is your image or thought at this moment. Next question, on Page 38. Conglomerate premium, about investment part, so the assumption is for Sompo Group, the domestic peers or the western peers, you are not taking much credit risks. And based on that, I'd like to ask the following question. JPY 200 billion was transferred to SI and the other risk asset purchase at SI and Sompo Japan and Himawari plan to purchase such risk assets. Could you please talk about the plan on midterm plan? How -- to what extent are you going to increase it MS&AD's saying that they are going to buy a JPY 1 trillion worth risk assets. And then who is going to invest where and who is the owner of that investment activities. Toke Marine and Fire, it is still in fine [ will stay enough ] who is responsible and Group CIO, not the U.S. CIO, but the group -- the Chief Investment Officer is responsible MS&AD. MSR company is responsible for that type of investment. I understand. So in your case, one of the pillars investment under conglomerate premium banner, what is your midterm plan?

So the domestic P&C. Shirakawa-san is going to talk about specifics. The specific initiatives that will be shared with you when we announce next midterm plan. At least JPY 150 billion. That is our commitment to start the plan. And now it was reduced to JPY 80 billion. So how are we to fill in the gap. Product and expense ratio or growth strategy. There are various areas. We are not finalizing numbers yet. So what is here the domestic P&C insurance business, how are they looking at the business environment? What will be the initiatives. Shirakawa-san, please?

Shirakawa from Domestic P&C business. Thank you for the question. The image for next year on, the new actions. The initiatives that we already took, we are going to go one step ahead with some trade-off. This is to recover the profitability, and that is going to be across the board company level initiative. The earnings structure reform that we worked on paid off last fiscal year and this fiscal year, business environment is very tough. So if we just work on an extrapolated manner. That will not be enough. We need actions on the different level. That's how we started to take some initiatives from April this year. Most recently, well, in FY 2022, here the profitability went down mainly because of auto insurance and fire and allied, and we are going to work on the level of rates these insurance lines. We did raise rates. But based on the current circumstances, we are going to start from the scratch to determine on to what level we are going to raise our rates. As to fire and allied line, the underwriting standard coverage. Currently, we are doing very detailed analysis. So based on the results of such analysis, we are going to have a much greater granular level for our other rate the coverage so that we can improve our portfolio. Wrapping up, I would say the following: it's fire and allied business which is impacting most our profitability. And we are going to improve profitability, then we have to work on rates and terms and conditions and the portfolio and -- the at risk portion should be decreased as well. And what we have worked so far was rates. But now we need to think about terms and conditions and the portfolio, the content and risk we take. We are going to work on that as well. Also, we would take initiatives to improve the productivity. The cost increase because of the complexity of our products. We have so many the products, and we are going to review the product line, and we might simply or integrate the rules and provisions, and we are going to grow the non-personnel costs, and we have the branch network nationwide, and we will review that as well. We are going look to at the organization and also the some special treatment of the specified products that will be centralized at headquarters. And generative AI will be used, we are going to use more of the data technology. So we are going to optimize the reduction in the unprofitable products by natural attrition. So currently, we are sophisticating our plan. We are still in that process, so we cannot talk about specifics as of today, but we are going to accelerate to execute plans to improve profitability. And as we presented earlier, by latest by FY 2027, we are going to at lowered expense ratio to 31%. And as [indiscernible] knows we are not currently reviewing the other systems, and that included that we will target at that network. Thank you. So as to investment, here is Hamada. Answering your questions.

As you pointed out correctly, conglomerate premium, we transferred JPY 200 billion to the SI as injection. As of the end of last year, about 60%. And right now, about 80% have been used to invest in high-yield bonds, risk assets. So I think that we thought we have completed the investment. You might be worried about it. But in this very tough business environment. The question is where we are going to take risks. We are going to take credit risks on a much -- a bit higher part, higher risk part. As a group, we believe that we can do it. So about 4% to 5%. That is the 1% increase in the ratio of risk credit assets in the overall bond assets. And Himawari Life, for example, they have been investing only in the safe vehicles. But now they are doing some the credit investment, more risk taking, but we do not have a specific level of target how far we are going to go. But at least for this fiscal year, Sompo Japan and Himawari Life in their investment plans include the credit risk taking, more of credit risk taking. That's how we started this fiscal year. So who is going to make that investment and where? Well, originally, Sompo International, a little bit more than 10% of the portfolio was in the risk asset. And so they have a track record of higher bonds and it's outsourced. But when it comes to high-yield bonds, the fundamental analysis is done very firmly. During the other financial crisis, the track record was good. So we are doing -- using very good outsourcing the vehicle. And it is mainly in North America. So Sompo Japan and Himawari Life are working very closely with Sompo International for this type of investment. So far, the investment in our group is based on vehicle. In other words, Sompo Japan, the investment owner is Shirakawa-san. And the same applies to other company -- group company. And in the past, there is some -- the division at the headquarters had a soft supervised -- very position. But now this cross the board, the sharing of the investment has been more rigorous. So we know that where we are taking how much the credit risks and so -- so still, as to risk and return, the responsible responsibility of credit risk, the investment lies with each owner the business or CEO of each business. As Okumura-san said that the conglomerate premium should be improved and what kind of governance that we should have in place. We are discussing that internally right now. So we are going to give the responsibility and authorities with a good track record. So I think it is SI. When it comes the credit investment, how many people do you have to do that investment. Sompo International that has just about 10 or so because it is outsourced. Actual investment is outsourced.

Thank you, Muraki-san. So next is Watanabe-san.

Yes, this is Watanabe of Daiwa Securities. I want to know about the capital policy. One is on Page 16. I'm talking about the dividend increase. You said that that's going to be in line with the profit growth. Well, now when you look at the total payout, then that's 35%, I think. So when you said that you're going to grow the dividend in line with the profit growth, are you going to be looking at the level to revise or need room to improve the payout ratio as a total? And the second one is Page 14, about the amount that you're going to spend for the future growth. Now here, you are talking about the appetite for making an investment for future growth more than the amount that you had set. Now about the breakdown, which area -- what kind of risk -- the risk at rate and also the frequency of the usage of that amount? Well, in the past when you were not using it now for the investment, I thought that your policy was basically to use that for the return to shareholders. But any policy change or any view change?

I think those 2 questions are for me to answer. First of all, for the dividend. Roughly speaking, in the last midterm time period, there were big M&A overseas or the entering into the nursing-based -- the business and so on. We haven't stated to increase the dividend level, but because of the net count and the frequency of that. At the last time -- the last phase of the midterm plan, we have increased the dividend amount by JPY 10 or JPY 20 or so, but for the current midterm plan, as we have described in the return policy, the weighting on the dividend is expected to grow. So that is going to be the area that we're going to be if not. On the average of the last 3 years, the average benchmarking payout ratio was about 40%. So last year, it was JPY 40, this year it's JPY 50. So it's been pacing up. And the single year for next year, we're looking at the payout ratio of 35%. But on a 3-year average, it's going to land at 43%. But for the fiscal 2022, the performance was not good. So there will be some adjustment. But even with the adjustments, that will be very close to the benchmarking. We're going to be around 41%. However, whether hitting the 40% is good enough or not is another discussion, but we think we're going to have the discussion towards wrapping up the next meeting plan. Well, at least the dividend hike is going to be the principle, and we are not going to change the policy, but the pace of that increase -- if we can hit 50% according to the current stock price, we think we have to pay everything back to the shareholders. So keeping that in mind, we'd like to think about what kind of policy we're going to have for the year -- beyond for 2024. Regarding the investments. JPY 400 billion out of JPY 600 billion have been used. [indiscernible] More in details. I think you have an image that the things like M&A have spent 400 -- it's not the JPY 400 billion of all would be a variety of that. In combination, that was JPY 400 billion. Well, M&A was one, digital-related investment was one. That has been spending about JPY 140 billion. And for overseas, the top line had sharply increased so that the risk was taken more. So more than expected, the risk was spent by over JPY 100 billion. So that's also included in this JPY 400 billion, and to give more color on that, well, the financial market has been changing so that the unrealized gain has been reduced. So that according to our simulation, there are some portion that we needed to spend more. So that's the portion that we are describing here is JPY 400 billion in total. So for the current fiscal year, we will be mindful of the remainder, the JPY 200 billion, and then think about the investment of where to spend for the next 12 months. We have the Global Executive Committee. Each business unit has confirmed the appetite at this point of time. But we have had a lot of discussions. In total, that could be beyond the JPY 200 billion, which is a remainder. Of course, I can't give you the details, but that covers basically the insurance and noninsurance business as well. That's all from me. Thank you.

Well, in the past, you were saying that if you do not use up everything, then you're not going to carry over, but you will be giving back to the shareholders. But because your appetite is big, you're not giving back to the shareholders. Is that correct?

Well, we don't know whether we are going to use up everything of what's left, which is JPY 200 billion. So that next to midterm plan period, we will have the new policy for the shareholder return and also the spending. Probably by the time that we come to the end of the year, I think ROE 10% is need to be first of all, double checked. And then we will see how much we -- will have been left to additionally return to shareholders.

Sir Tsujino-san, please unmute yourself.

First question, about investment, investment capacity. So JPY 600 billion during the plan, and you have used up some of them. The risks are increasing. So based on the current ESR, how much -- the investment capacity do you have? I would like to have some dynamic understanding because this year is the last year of the midterm plan. And what will be the investment capacity for the next year and onwards? So setting aside the midterm plan, based on the current ESR, what will be your remaining investment capacity?

So the current -- the ESR is 223%. So 200% to 270% range, a bit lower part of the range. That is what the ESR stands. I think I explained about it before. Internal, the management of the ESR, also rating, we are thinking about these factors to manage investment capacity. As I mentioned earlier, the remainder of JPY 200 billion is still earmarked for investment.

Okay. So on the next one, the next stage, this range of 200% to 270% of ESR, you're going to decide how much you would like to use for investment for the next plan. So you cannot talk about how much you can invest if there is a very good target right now, right?

Well, if there is such a big -- the target, that we might have different thinking. But right now, as a group, we have this JPY 200 billion for the investment.

Now moving on to Page 23, the domestic -- the P&C business as to auto insurance. On Page 23, bottom right. Business environment -- impact of adverse business environment. The gap with the assumptions at the time of the formulation of the plan. So FY '22, minus JPY 20 billion and '23, minus the JPY 50 billion against the assumption. So this is about the gap of the midterm plan formulation timing, I don't understand it very well. So in what way it will be worse compared to previous year? Are there opportunities for improvement on short run? What kind of efforts are you making. More specifically, the repair unit cost goes up, the repair cost goes up. But there are some elements which can be controlled. I think there are many aspects that you can make improvement. And if you make efforts, you might be able to make more improvements, probably. And last year, there were -- the -- in June, for example, because of the hail, the damage, there were lots of claims. So the -- lots of the increase in losses. But there is always an opportunity for improvement. So the gap of JPY 50 billion might be smaller through some efforts. I'm wondering if there are any specific initiatives that you're working on to fill in the gap.

So this is the question for Shirakawa-san? Tsujino-san, thank you. So the midterm plan formulation and the 2023 auto insurance status. What is the difference? For FY 2022 results, based on that, the COVID impact, the decrease in accidents. Recently, we thought it would be minus 3%. Now it is revised up to plus/minus 0. And second element, the safety features with such the decrease in number of accidents. At the time of the midterm formulation, we thought it will be minus 4%, but now it is -- the rate [ to 1%. ] And the vehicle-related factor, plus 3%, was the original assumption. Now it is plus 5%. This 5% includes level rate increase. So JPY 50 billion impact on profit. As to repaying our unit cost, it is linked up with CPI. That is our thinking. Some people think that the CPI rise will slow down. But because what happened last year, we think that we need to be conservative. What we can do right now as to -- maybe you are suggesting to make some more efforts for claims and adjudication. And of course, it is to deal with customers directly. And it's not just about the location, but also the cost reduction using digital, the technology to raise productivity, that's what we would like to continue to do.

So from '22, '23, JPY 29 billion aggravation for auto. Am I right to read that table that way in a simplistic manner? If the assumption is now better because this JPY 50 billion impact, it stands out. So how much worsening you assume that this what...

I don't understand. Tsujino-san, sorry. This is Hamada. It's not easy to understand. I'm sorry. On Page 23, it says JPY 50 billion -- minus JPY 50 billion. The JPY 150 billion, that was the regional assumption of the profit for domestic P&C. So from '22 to '23, the premium will increase by JPY 29 billion. But if you go to the next page -- Page 6 -- sorry, Page 6. If you look at Page 6, for FY '22 -- compared to FY '22, minus JPY 12 billion increase in auto losses. So as simulation, this is more in line with the current -- the situation. Sorry for the complexity.

That's clear. So because of the impact of the adjusted profit. I don't know whether this pretax or post-tax, but okay. That's clear. Thank you.

Tsujino-san, thank you very much. Well on the web, there are 2 people who have been joining. So Majima-san from Tokai Tokyo, please unmute yourself and ask your questions. Majima-san, are you there?

Yes, I can hear you. The first question is about engagement. What kind of features are -- what kind of uniqueness -- are there like genders, age bracket or department -- like sales admin department -- what's the difference of the gap of the engagement. Do you see a wide gap? How are you going to solve it? Any measures to implement? That's my first question. The second question is on the TSE, PBR below 1 was on point. For you, it seems it's over 1. So the Tokyo Stock Exchange has a problem to see the adjusted level of the PBR. So I don't think that's -- they are going to raise the issue for you. Having said that, on the adjusted base, it's below 1 on the PBR. So -- well, as you have said, I think that is basically coming from the growth and also the highly competitive environment in the industry, but this -- how you are going to achieve the onetime of the PBR on an adjusted basis?

Okay. Thank you very much Majima-san. Your first question about the engagement, all the companies, domestic, overseas, insurance and noninsurance, we've been engaged with the -- My Purpose business. And once the engagement goes up, then that will be linked with the performance. We've been making a survey of that. But for the improvement of the engagement, let's start with Shirakawa-san for the SJ initiative.

Okay. This is Shirakawa speaking. First of all, the penetration of this My Purpose has been quite high in SJ. And I do hold town meetings answering questions. And my staff ask questions about My Purpose quite often, the company purpose and their own My Purpose. There's been an increasing number of staff talking about that. Now when we look at Sompo Japan as a total, engagement is surely on the rise. But when we look at division by division, there are some uniqueness. One is that in the claim payment service, there is one uniqueness. What we see in the claim payment service division is -- well, in the face of the natural disasters of last year, there were many of that. And also because of the lifting of the COVID situation, the number of the car accidents is increasing. So the claim -- the number of claims we received has overwhelmingly increasing last year compared to the year before. So when we walk through a lot of purpose, the stuff has to really deal with customers and the number of jobs or the volume of jobs that are in front of them, so that I think something that they have raised as a purpose has not really shown or seen a great result, so that we are going to probably increase the number of staff working on that and also for the higher profitability. The digital development cost is probably going to incur more, so that we are going to be spending more for the digital for efficiency so that while people are in need of working with the heavy workload -- if we, as a company, will be able to enhance the productivity, then the engagement for the company per se may be improving. So that's what we want to end at for FY 2023. So the engagement and My Purpose, maybe Sakurada-san can touch upon that.

Okay. Thank you for that question. About 20,000 people that we have held townhall meeting to cover. And as a matter of fact, that's for the whole group. So for example, the people and Jim's team, all together, we've been holding a townhall meeting for the entire group. I think the uniqueness for our group is it's not only the insurance business, not only the domestic insurance, this purpose townhall meeting is normally inviting a panelist of less than 10%, sometimes on a whim. Am I being the panelist exchanging opinions with the participants on the web? The theme is my purpose and the company purpose, how can we synchronize the two? The starting point is what is my purpose? And what is Sompo's purpose? The Sompo's purpose has been kind of taken on the back burner, so that the My Purpose is the first priority in the discussion. For example, in the commercial line of the SI -- underwriting for the SI. And our Sompo cares, no single care working staff or Shirakawa-san's team, domestic P&C claim payment to people and also the life insurance or the digital part as well. So that goes across the board, the people in totally different business areas getting together, talking about what the Sompo's purpose. Well I am a member of that company, so what's my reason for the existence in this company? We have a thorough discussion for 1.5 hours. The result of those discussions is that, well those people who normally have no opportunities of contacting or talking with the people who are totally -- working in a totally different divisions, will be able to be aware of what kind of people are working with, the purpose of -- and the responsibility at the same company. And they are also able to have the discussion of whether my purpose that's synchronized with the company's purpose. So that needs to be pursued continuously. And we -- as for the questionnaire or the survey, before and after the townhall, after we repeat those townhalls, the engagement increases. The increase of the engagement itself is not the purpose. Well, through diversity, we will be able to get to the new innovation, new idea, and then that will lead to the better performance. That's, of course, what we aim to. High engagement areas does deliver good performance is what we have started to see. So I think it's my mission, and the nomination has also given me that we need to continue pursuing this engagement. Otherwise, the momentum will be lost. So we have to continue this initiative. And also, for the gender, I think the younger age bracket has a higher engagement. Well, if I talk more, I may be misleading so that I have to stop. But those people with the senior managerial level or the higher age bracket, maybe they are not very used to this kind of a concept, like a purpose. When we talk about purpose, it must be the purpose that must be equal to my purpose. That's sometimes what people say in the higher age bracket, or individual purpose is my own issue, it's not something that I have to share with the company. That's the way of the mindset. So the synchronizing -- the significance of the synchronization between the company and the My Purpose probably not being felt among the older generations. But for those people in the younger brackets, just globally, not only in Japan, have been aligned and then actively participating in this initiative. And I do believe that this is going to lead to a certain result. Well, the second question about PBR. This is a real headache. Well, of course, the PBR comes from IUR and PR, so that we have to work upon somewhere to get good results. But as Hamada-san, the CFO, has said, as Sompo, we are not only looking at the mega 3 players. But even looking into the perspective of the global market, the improvement in ROE is going to be quite important, not only for the near future, but in the longer-term shot. What I want to say in a nutshell is, well, this is very capital-intensive business. So if you are constrained with capital, then E of ROE is something that we have to make an effort. Of course, the requirements for E or the necessity for E like a digital or nursing care business, well, that has to be increased and ramped up. So as a result, the ROE for the entire Sompo Group is going to be leading to the expected level of PBR. Thank you so much.

Well the overseas initiatives -- well, Sakurada-san is providing townhall, of course. But Jim and other members, the townhall has been hosted. Well, see you all letter is also issued, so that we probably want to listen from Jim about the initiatives overseas as well.

Thank you, Okumura-san. Similar too, as described by Sakurada-san and Okumura-san, we've been engaged very much with our employees. And I believe since COVID, it's required not only Sompo, but all organizations to adapt and reach out to employees. And you see the increase as COVID restrictions relaxed and travel has increased, it's even more important for us to continue that communication. And so engaging in townhalls, small, what we call coffee chats, we've implemented a communication base across the organization to bring the better stories and businesses together so that people are proud, not just within Sompo International, of the relationship we have between a Brazil marine underwriter and a London marine underwriter, but also working more closely between Shirakawa-san and myself to make sure that we're building global communities. And I believe that over the past 3 years, people have become much more aware of the organization that they are part of and much -- and very proud of the things that we're doing, not only in their own business or their own country, but around the world.

Majima-san, did that answer your question?

Yes. Thank you so much.

Thank you for waiting. Sato-san from JPMorgan, please unmute yourself and ask your question.

I have 2 questions. First, how are you preparing for future risks? And the second question is about long-term perspective. The chances that you are seeing on the long term. So the first question, already have you talked about it when you talked about results, where the inflation is giving impact and the large losses are happening? The other companies, for example, IBNR, the provision that was increased in the case of other companies. At this moment, as inflation is expected to go up, how are you preparing in terms of reserves provisioning, including overseas business? Well the short answer is that we have sufficient reserve, but could you please give some color to it. So against the best estimate, this is the buffer that we have. For example, the accumulated IBNR this March, such specifics will be appreciated. My second question, this year, generative AI, or more recently, NVIDIA, the results announcement was like a feast. I mean, talking about accelerated computing and the technology. So for your RDP real data platform strategy and also the business with Palantir Technologies Japan, what kind of benefits do you expect from this new trend in the technology sector?

Sato-san, thank you for the questions. About provisioning. So continuously, on a conservative basis, our basic policy is to continue to build up our reserves. Social inflation and economic inflation is happening, in particular, overseas. So mainly IBNR, how much rougher we have, how much we have built. So for overseas business, Jim, could you please talk about reserving policy? And then as to your second question, how to utilize generative AI, this is a group-wide issue. So for that, Narasaki is going to talk about the current status and the future plans. Jim, please.

Thank you, Okumura-san. I think it's an excellent question and very topical and something that as an organization and as an industry, we've been dealing with inflation for many years. It's always factored into our reserving philosophy, and we apply it very conservatively. I think that we've seen it increase over the past number of years to call it social inflation and overall inflation. But we feel that we have a very conservative approach and are adequately reserved, and we watch it very closely. As you can see, the increase in premium -- rate increase that we've seen over the past 5 years is averaging 12% to 13% each year. And we are confident that has outpaced the cost of inflation. And so we're comfortable with the business, but we monitor it on a quarterly basis, and we'll continue to do so.

I have been working with them overseas. So I know that they are checking regular reserving. And for the casualty, for example, limits were lowered to hedge against future inflation risks, and that is part of the activities on the underwriting side. So [indiscernible] about the generative AI, here is Narasaki, the CEO of the digital business.

Could you please look at Page 15 or on the screen, bottom right, LLM, large language model. So in short, we are feeling a strong tailwind for RDP and for Palantir and Japan as well. And also for the ex -- or digital transformation, digitalization, the process -- generative AI, or LLM, are accelerating the process. More specifically, as you know, large language model, LLM. So if you are familiar with ChatGPT, you would know that they can think and answer in a very easy-to-understand way. So user experience is good, and that is the benefit of generative AI, but it comes with risks. So the GPT, to use as it is, is that right choice or not? Well, internally, I can talk about details today, but the LLM patterns have been discussed internally, have been checked for best combination and so on. And that is linked directly with digital transformation, or the productivity improvement and efficiency improvement, whether it is insurance business or nursing care business, we will see immediately the effects from this process. And as to RDP, as you mentioned, Real Data Platform or platform, that's what we would like to be, to create new values not only for insurance, but beyond insurance as well. RDP, real data. So it's about data, and we analyze data using the Palantir's Foundry and to get some insights. And that is the model, and that is applied to Egaku as well. Let me repeat, the process is scaled up or accelerated by large language model, LLM. So with this RDP as a product, it's -- it will be much easier for our customers to use, and that will be good contribution, both for bottom line and top line. So what about Palantir Technologies Japan? Well, on June 1, it is going to be official GA. I mean Palantir's LLM, AIP -- this is the product, AIP -- will be released. And with that, with AIP, the Palantir's -- the strengths that will be more competitive by multiple notches. So the same as RDP. Here again, it will be the better user experience. It will be easier for customers to use, and that is a very strong tailwind. So LLM unique to Sompo will be implemented. And in various ways, it will be scaled up, and we are accelerating our efforts to make that happen.

Thank you. On the first question, what about inflation in Japan? Are you building more reserves?

Are you talking about domestic P&C business?

Yes.

The other -- the casualty business, I think that they are more -- the large contract policies. So more results, maybe. Here is Shirakawa, answering your question.

As to auto insurance for FY '22 IBNR, about JPY 3 billion plus JPY 3 billion. I'm sorry, auto and liability, about JPY 3 billion addition to IBNR. And for FY 2023, fire and allied business, JPY 20 billion, that's the actual amount.

Sato-san, thank you very much. So the last question from the web. Tsujino-san, you have follow-up questions, so do you want to ask again?

Yes. Well, regarding risks. When you have the conference call, you said that the breakdown of the risks in percentage. So what we can do is to calculate based upon that percentage. Now this time, the interest risk is down. Congratulations. The other investment risk is increasing. The equity risk is also increasing. In addition, the SJ risk is also big. So I just wanted to touch upon the direction of each of them. What I want to know first is the domestic P&C risk has increased, is that because of the modeling of the natural disaster has changed? And also the method of the seeding also changed, so the risk is going to increase? You're talking about 99.5%. We will -- it's not changing that largely even when you change the modeling or the method. So I want to know about that. And the second part is the investment. Probably the equity is increasing because of the Palantir-related, or anything outside the yen interest rate. Well, you were talking about JPY 200 billion capital and then construct the portfolio, so that maybe that is coming from that. So in the process of constructing the portfolio, the process may not be over 100%. So that when you look at the JPY 200 billion capital, I just wanted to know what's the progress of the utilization of the JPY 200 billion. So the risk, how do you think that is going to come up in the FY 2023, in reality?

This is Hamada to answer your questions. Thank you for your question. As for the risks themselves for the domestic P&C, that's natural disasters mainly. And maybe the reinsurance is going to increase the risk taking, and that's the impact. And for the equity, we've been working on the disposition of the strategic shareholding. As you have imagined, basically, the mark-to-market value is increasing more than the disposition gain. So on the book value base, it's been declining. On nonequity investment, that large portion is the currency risk. The hedge cost is on the right and the foreign bond has become unhedged more. So the credit risk itself is not going up that much. As I mentioned earlier, about 60% of the JPY 200 billion is going to be for the current -- within the year. And about -- we're going to be ending at the rate of about 80%. So for the credit risk, it's not likely to go up that much. It's basically the currency risks.

Okay. Understood. So the credit risk, about 60% has already been factored in for the March end, so that the remainder might be some changes or fine-tuning, but it's not going to change, right?

Yes, we have hit 60% already at the end of December. So -- but March-end, I think we've already been there.

Tsujino-san, thank you very much. So it's about time. I would like to go back to the hall Niwa-san.

My name is Niwa from Citi. I have questions on mid- to long-term perspective. The first, you're aiming at becoming the global top-level of the insurance entity. You're saying that the other -- it is likely that you can achieve JPY 300 billion or 10% or more ROE. But it seems that you are not really among the top 10. So what is the gap? What do you need to do to be the top 10? And the second question is about how Sakurada-san is going to allocate his resources and time this year and beyond this year, how are you going to allocate your time and effort for your own company or for Japan and in your company, what will be the focus? The digital business and nursing care business are very promising. But in order to expand the business itself, you need to speed up. And in this very difficult business environment, the leadership by top management is very important.

Thank you very for the very important question. I think -- I thought I was sitting at the Nomination Committee. So whether top 10 or not. Well, the FX issues and market issues -- You're right. We are not really one of the top 10. Sometimes, yes, but that is not the issue. So it's about the size. And still, we are very unique presence as P&C company. We have a very strong feeling about it. Rather than talking about the qualitative aspect, we need to focus on top line and bottom line if we are talking about top 10 and profitability. The biggest challenge is as -- it's profitability. Not just us, the overall financial industry. To -- it is a good thing to have one responsible person to make decisions. But we need to think about cultural difference. And the cultural differences can be translated into difference in speed. For example, Jim and overseas CEOs of our group, when I talk with them, I realize that there are too many layers of decision-making and it is taking too much time. And they say that the -- when they need approval, they need an approval from the Sakurada. Too many Layers of decision-making, it's so bureaucratic. I think that is a cultural difference. And Sompo Japan, Himawari and Holdings, it's like we take bottom-up approach and we have the accumulation of layers. And then ultimately, top management makes a decision. And we are still in that mechanism or scheme. But we are speeding up. So the speed difference, cultural difference and how to execute the decisions and the delegation of decision-making in this area, I think we are speeding up. Compared to who, I cannot talk about that, but we are speeding up. And eventually, we are talking about today or tomorrow, but the P&C business in Japan is different from that overseas or vice-versa. I think essentially, they are the same, especially when it comes to commercial business, almost not different at all. So what is different? It's retail, consumer business in the P&C business, they are very different. The retail in Brazil, retail in Turkey, or Germany, or India, all different. And we don't need to be the same. But P&C business as a whole, we need to delegate the responsibility to the CEO in the region for capital allocation, risk allocation, the staff allocation. I think it is right to have one single person responsible in the region to take care of all that. He or she doesn't need to be a Japanese. And I think it's a big theme for the next midterm plan. So top 10, when we talk about top 10, it includes all that, the culture, governance that we need to respect. And also for business and size, we must be in top 5. What -- it can be top 5. Why are we talking about top 10 on the mid- to long term? The question is whether we would like to stay the P&C business company. The answer is no. We already declared that. Of course, our base business is P&C. But how we are perceived by external audience, including shareholders and customers? We would like to be the presence, which is difficult to define. Maybe it's not a good example, but companies like Uber or Tesla. Rather than horizontal perspective utilized in insurance business, IT or digital business, but we need horizontal connection to provide better benefits for customers and to shareholders. So our base is P&C, and we create cash, and we have talent on that base and know-how as well. And data is also very important, real data. And by utilizing real data on the platform, we provide security, health and well-being to our customers. In short we provide solutions to our customers. As a platform, we would like to the only platform in Japan, and we would like to be the platform on a global stage as well. That is what I've been discussing internally. So for IR activities. Of course, we would like to listen to analysts specialized in the insurance and also to other types of analysts as well, it will be nice those other types of analysts to be interested in us asking questions to understand the direction where we are going and when the expectation goes up, then the other future ROE will go up. That's what we expect. And this Egaku is the first step that we launched and the platform is already there. And we put Egaku on that platform. And we explained about Egaku to the government as well. So as to the resource allocation on the April 27, I completed my job as the Keizai Doyukai So now I can concentrate on our real business. The CEOs and the colleagues here present today, I would like to delegate as much as possible to them. And I would like to use my time for something which is not visible yet. Or I would like to do whatever I can to raise the recognition of Sompo through the communications or contact with the press or with experts like yourselves. Not about the specific themes, probably not in a more general sense, and I would like to talk in front of different audiences. So this is going to be the final round or the coming around the fourth corner of the track.

So we've answered all the questions, I think. So let us wrap up. If you have any follow-up questions, please contact our IR office. So again, all thank you very much for joining today.