Background and Purpose of Merger. As announced in a press release issued on January 27, 2012 titled “Measures to Accelerate Group Strategy and to Improve Business Performance,” NKSJ Holdings, Sompo Japan, and Nipponkoa have conducted extensive review and discussions concerning efforts to “establish a new company which can compete effectively on the global stage,” with the aim of improving the efficiency of the domestic P&C insurance business. As a result, in light of changes in the challenging operating environment surrounding the P&C insurance industry, the three companies have decided to establish Sompo Japan Nipponkoa Insurance Inc. (hereinafter, “Sompo Japan Nipponkoa”) through the merging of Sompo Japan and Nipponkoa, with Sompo Japan as the surviving company. The goal is to maximize earnings power based on a strong business foundation where Sompo Japan and Nipponkoa can demonstrate, as a single company, the strengths they have developed over the years. As set forth in the attached "Sompo Japan Nipponkoa's Company Goals and Corporate Vision: Five Challenges for Competing Effectively on the Global Stage," the most important objective of Sompo Japan Nipponkoa’s management strategy will be to become a P&C insurance company that earns the highest evaluation from customers, with the aim of achieving sustained growth. Given the social mission of the P&C insurance business, Sompo Japan Nipponkoa will also continue to contribute to the creation of a sustainable society.
