Ms& Insurance : Investment in ReAssure, a Leading Closed Book Life Consolidator in the UK

October 6, 2017

Investment in ReAssure, a Leading Closed Book Life* Consolidator in the UK

MS&AD Insurance Group Holdings, Inc. (the "Company", President: Yasuyoshi Karasawa) has reached an agreement with Swiss Re to acquire 5.0% (GBP 175 million) of the outstanding shares of ReAssure Jersey One Limited ("ReAssure"), and subscribe new shares of ReAssure up to a total of GBP 800 million over time, increasing the Company's stake up to 15%.

ReAssure is a leading player in the closed book life business in the UK and part of Swiss Re Life Capital, a business unit of Swiss Re, one of the largest reinsurance companies in the world. The UK is the largest and most mature life insurance market in Europe with the closed book life business as a promising area, providing ample growth potential for ReAssure.

* The closed book life business is a life insurance business where new policies are obtained through acquisition of other insurance companies' portfolio instead of direct underwriting. For further information, please refer to the attachment.

1. Outline of the Investment

   Investment method	Acquisition of 5.0% of the outstanding shares of ReAssure
   Investment amount	GBP 175 million (Approximately JPY 26.3 billion, 1GBP=150JPY)
   Source of funds	Cash on hand
   Time of Completion	Subject to the receipt of approvals from the relevant regulators, the transaction is expected to close during the last quarter of MS&AD's financial year (January-March 2018).
   Director	The Company will appoint one director to ReAssure.
   Next steps	The Company has committed to invest GBP 800 million in total, including the initial acquisition of GBP 175 million, for up to three years period from closing into the equity of ReAssure with a maximum shareholding of 15%. Once the 15% shareholding threshold has been reached, both Swiss Re and the Company will subscribe to any further equity injection into ReAssure on a pro rata basis. Upon reaching a 15% stake in ReAssure, the Company will account it as an affiliated company by the equity-method.

2. Strategic Objectives of the Investment

3. Attractive economics in the UK closed book life sector

   The UK is the largest and most mature life insurance market in Europe, with robust profitability under the low interest rate environment. In light of the changes in regulations such as the introduction of Solvency II and changes in the business environment, it has become common for life insurance companies in the UK to sell in-force policies to dedicated run-off specialists. The UK closed book business is thus expected to demonstrate sustainable growth going forward, and attractive return dynamics from the synergy potential of ongoing consolidation.

   We consider it an attractive opportunity to participate in the consolidation dynamics of the UK closed life market by tying up with Swiss Re and its subsidiary ReAssure, a prominent expert in this business.

4. Leverage of know-how in the closed book life business

   As a result of further tightening of regulations and the prolonged low interest rate environment in many countries around the world, reorganization in the life insurance industry is expected to become more active. Therefore, there may be a possibility of expansion into other regions in the future.

5. Portfolio diversification

   While changes in regulations and the market environment are negatively affecting the life insurance industry, negotiated terms of future acquisitions could prove favourable to closed book life consolidator; and we expect that such risk diversification will support our business stability.

6. Overview of ReAssure Jersey One Limited

7. ReAssure is a leading player in the UK closed book life market. With a recognized and trusted customer brand and long-standing relationships of trust with local regulators.

   (1) Company name	ReAssure Jersey One Limited
   (2) Established	2011
   (3) Headquarters	St Helier, Jersey
   (4) Representatives	Matthew Cuhls, Board Member (ReAssure Ltd CEO)
   (5) Main business	Closed book life business
   (6) Listed on	Not listed
   (7) Fiscal year	Ending on December 31 of each year

   Consolidated information of Swiss Re ReAssure Limited.

   (1) Number of employees	2,257 (as of December 31, 2016)
   (2) Contributed equity	USD 5,202 million (as of June 2017)
   (3) Rating	A-, stable outlook (S&P)
   (4) Swiss Re ReAssure consolidated results (USD million)
   Fiscal year	FY 2015	FY 2016	H1 2017(Note 1)
   Net assets	4,568	6,470	5,202
   Total assets	44,526	62,681	63,950
   Premiums earned	192	193	75
   Net profit	425	741	145

   Note: Swiss Re ReAssure Limited is the only entity within the transaction perimeter for which consolidated US GAAP accounts are prepared

   (Note 1) Figures as of H1 2017 are unaudited

   -End -
8. Outline of Closed Book Life Business [Appendix]

   ・The closed book life business consists in acquiring and actively managing closed books of in- force life and health insurance business

   ・In-force policies can be added by acquiring entire lines of business or the entire share capital of life insurance companies, or via reinsurance.

   ・Policies are transferred to the acquiring consolidator together with the seller's portfolio (assets and liabilities)

   ・Receipt of approvals from regulators and consent of the majority of policyholders are prerequisites for the transfer

   ・The closed book life consolidator continues to conduct insurance services, including collection of premiums, claims payments, payments of matured endowment, until termination or maturity of contracts.

   ＜Seller＞

   Illustrative Example

   Other life insurance companies

   Policies in force

   Policyholder

   Closed book life consolidator

   Policies in force

   Policyholder

   Portfolio acquisition (Cash)

   Portfolio disposal (Assets & liabilities)

   ＜Buyer＞

   Transfer

9. Overview of Swiss Re Group

(1) Company name	Swiss Re
(2) Established	1863
(3) Headquarters	Zurich, Switzerland
(4) Representatives	Walter B. Kielholz, Chairman of the Board Christian Mumenthaler, Group CEO
(5) Number of employees	14,352 (FTE as of June 30 2017)
(6) Line of business	Insurance, reinsurance
(7) Main business location	Worldwide
(7) Contributed equity	USD 35,475 m
(8) Rating	AA-, stable outlook (S&P)
(9) Listed on	SIX Swiss Exchange in accordance with the International Reporting Standard
(10) Fiscal year	Ending on December 31 of each year
(11) Swiss Re consolidated results (USD million)
Fiscal year	FY 2015	FY 2016	H1 2017(note 1)
Net assets	33,517	35,634	35,475
Total assets	196,135	215,065	223,632
Premiums earned	29,751	32,691	15,950
Net profit	4,597	3,558	1,211

(Note 1) Figures as of H1 2017 are unaudited

Note Regarding Forward-looking Statements

This document includes "forward-looking statements" that reflect the plans and expectations of MS&AD Insurance Group Holdings, Inc. (the "Company") with respect to its business, results of operations and other matters. To the extent that statements in this document do not relate to historical or current facts, they constitute forward-looking statements. These forward-looking statements are based on the current assumptions and beliefs of the Company in light of the information currently available to it, and involve known and unknown risks, uncertainties and other factors. Such risks, uncertainties and other factors may cause the actual results, performance, achievements or financial position of the Company to be materially different from any future results, performance, achievements or financial position expressed or implied by these forward- looking statements. The Company undertakes no obligation to publicly update any forward- looking statements after the date of this document. Investors are advised to consult any further disclosures by the Company in its subsequent domestic filings in Japan.

The risks, uncertainties and other factors referred to above include, but are not limited to: (1) economic conditions in Japan, the United States, Europe and China; (2) the extent of competition faced by the Company from Japan's other major non-life insurance companies and new entrants in the Japanese non-life insurance market; (3) the extent of further deregulation of the Japanese insurance industry; (4) occurrence of natural disasters in Japan and elsewhere; (5) occurrence of losses the type or magnitude of which could not be foreseen at the time of writing the insurance policies covering such losses; (6) the price and availability of reinsurance; and (7) the performance of the Company's investments. Further details of potential risks and uncertainties affecting the Company are described in its domestic filings in Japan including the Company's annual report.

More information about the target company group can be found on its website.