In principle, equity holdings by group companies engaged in the life insurance business are intended as pure investments, as part of long-term asset management aligned with policy reserves.
In managing domestic equities, we operate under a fiduciary duty to policyholders, conducting ALM (Asset-Liability Management) operations for the general account. With a long-term perspective and a focus on stable performance, we hold and trade equities for pure investment purposes. This is done by referencing major indices such as TOPIX, which represent the domestic equity market, and aiming to generate excess returns over these benchmarks.
As part of our ALM policy and efforts to reduce capital costs, our group has announced a plan under the Medium-Term Management Plan for FY2024-2026 to sell domestic equities equivalent to 1.2 trillion yen-representing 30% of the 10% domestic equity allocation in the general account portfolio. Furthermore, we plan to continue sales through FY2027-2030, targeting a maximum domestic equity balance of 1.5 trillion yen by the end of FY2030.
The Financial Services Agency (FSA), in its revised "Guidelines for Corporate Disclosure" dated January 31, 2025, has clarified the following regarding equities held for pure investment purposes:
"Pure investment purpose" refers to the intent to earn profits solely from changes in the value of the stock or dividends associated with the stock. For example, if the issuer of the stock also holds shares in the reporting company, or if the issuer's consent is required for the sale of the stock, such circumstances may hinder the reporting company's ability to sell the stock, and therefore, the stock cannot be considered as held for pure investment purposes.
In our group, when trading domestic equities, we comply with the above guidelines and make independent decisions based on economic rationality under the responsibility of the investment execution department. By striving to enhance corporate value, we aim to fulfill the trust placed in us by our stakeholders.