Fundamental perspectives
Our Group holds equity investments as part of asset management related to the life insurance business. In other words, the duration of protection offered by our group through life insurance products often spans over long term. For example, it is not uncommon for traditional whole life insurance and annuities to have terms that cover several decades. Under the Insurance Business Act, insurance companies are required to set aside insurance premiums and investment income as financial reserves, to ensure that liabilities on long-term insurance policies are fulfilled. This reserves are called policy reserves and correspond to liabilities in the balance sheet.
The Insurance Business Act stipulates that in addition to underwriting insurance, investment management is a business that is also specific to insurance companies. We believe that life insurance companies, that are even among insurance companies have longer-term stable insurance liabilities, should conduct investment management from a long-term perspective with regard to the amount of policy reserves that are substantially attributable to policyholders.
Each life insurance company in the Group invests assets based on ALM (integrated assets and liabilities management), focusing on fixed income assets. However, there was not sufficiently developed market for super-long-term bonds that correspond to super-long-term liabilities. Therefore, Dai-ichi Life Insurance Company, Limited, which has long-term stable and large-scale insurance liabilities, is focusing on the diversification effect among asset classes in the portfolio, and conduct balanced investment in which risky assets such as equities are included in the investment portfolio considering corporate analysis, diversification of industries and brands, and risk management.
In this way, holding equities in investment portfolio at each Group company engaged in the life insurance business is, in principle, conducted for the pure investment purpose as part of investment management corresponding to policy reserves. Within equities held for the purpose of investment, Company has some strategic-holding shares that carry other important purposes in terms of the Group's business strategies, such as strengthening business relationship with the issuer through a business alliance, and gaining the business strategy effects through collaboration to accurately meet the needs of our customers. After confirming the rationality of holding for each shareholding, it is decided whether to reduce or not, and the content of verification by the Board of Directors is disclosed annually.
Exercising of voting rights
Voting rights of strategic-holding shares shall be exercised in the same manner as shares other than strategic-holding shares, and appropriate actions shall be taken in accordance with the voting rights exercise standards that are separately established.
Confirmation of the share-holding situation
■ Basic Approach
The Company and other companies in the Dai-ichi Life Group holding strategic-holding shares shall examine the appropriateness of the purpose for holding and the profitability relative to cost of capital for listed strategic-holding shares on an individual basis at their meetings of the Board of Directors every fiscal year. Strategic-holding shares shall be sold in case the rationale of holding such shares, neither in terms of strategic-holding nor investment purpose, is confirmed.
■ Result of Confirmation (As of March 31, 2021)
The Board of Directors of the Company and The Dai-ichi Life Insurance Company, Limited confirmed the appropriateness of the purpose for holding and the profitability relative to cost of capital for listed strategic-holding shares on an individual basis.
Possession of The Dai-ichi Life Insurance Company, Limited (As of March 31, 2022)
Equity holding excluding those held solely for the purpose of investment
(Dai-ichi Life Holdings, Inc.)
| Number of companies | 1 |
|---|---|
| Sum of carrying amount | 2.2 billion yen |
Equity holding excluding those held solely for the purpose of investment
(Possession of The Dai-ichi Life Insurance Company, Limited)
| Number of companies | 6 |
|---|---|
| Sum of carrying amount | 64.3 billion yen |
Equity holding for specified purpose
| Company Name | Number of share holding (thousands of shares) |
Carrying Amount (billions of yen) |
|---|---|---|
| Resona Holdings, Inc. | 75,145 | 39.3 |
| Mizuho Financial Group, Inc. | 15,469 | 24.2 |
Equity holding contributed to the retirement benefit trust
| Company Name | Number of share holding (thousands of shares) |
Carrying Amount (billions of yen) |
|---|---|---|
| Sompo Holdings, Inc. | 4,492 | 24.1 |
| Mizuho Financial Group, Inc. | 6,920 | 10.8 |
- (Note)
The information is an extract from the Company's securities report (unofficial translation). For detail, please refer to the Company's securities report (Japanese only).