24 September 2009 SOMPO JAPAN INSURANCE INC. Associate Director Corporate Social Responsibility Office Masao Seki Acting on Climate Change in Asia 2 nd Conference of the OECD International Network on the Financial Management of Large-sale Catastrophes Session Ⅰ Ｓｅｃｏｎｄ ｐａｒｔ

2 In 2004, 10 Typhoons Hit Japan Source: Japan Meteorological Agency

3 Top-10 Claims for Typhoons and Other Weather-related Disasters in Japan Source: The General Insurance Association of Japan (million $) Name of Disaster (year)Claims Paid 1Typhoon No.19 (1991)5,679 2Typhoon No.18 (2004)3,874 3Typhoon No.18 (1999)3,147 4Typhoon No.7 (1998)1,600 5Typhoon No.23 (2004)1,380 6Typhoon No.13 (2006)1,320 7Typhoon No.16 (2004)1,210 8Downpour (2000)1,030 9Typhoon No.13 (1993)977 10Hailstorm (2000)700 Insurance payments for fire and miscellaneous, automobile, marine (Total payments by 20 member companies of General Insurance Association of Japan) $1=\100

4 Integration Our Approaches to Climate Change Mitigation Adaptation Business Government Civil Society Scientists Low Carbon Society Climate-Resilient Society Insurance companies should address climate change with two approaches: mitigation and adaptation.

5 Mitigation Approach Insurance companies should serve as “catalyst” for actions to promote a low carbon society. Insurance Products and Services Insurance Products and Services -Eco-Safe Driving -Automobile Parts Recycling Campaign -Promotion of alternative energy through the provision of weather derivatives Investment -Eco-fund / SRI fund -Loan for green buildings -Principle for Responsible Investment -Carbon Disclosure Project Carbon Footprint Reduction Carbon Footprint Reduction -Installation of energy-efficient equipment -Reducing waste and promoting recycling -Environmental management systems -Green Procurement

6 Mitigation -Insurance Products and Services- Eco-Safe Driving GIAJ (General Insurance Association of Japan) has developed the "Eco-Safe Driving" program, which contributes not only to fuel saving and CO2 reduction but also safer driving. Insurance products and services such as Weather derivatives and Eco-Safe Driving can help corporations and individuals mitigate the discharge of CO2. Weather derivatives Promotion of solar power production through the use of weather derivatives Weather derivative for wind power producers GIAJ (General Insurance Association of Japan) has developed the "Eco-Safe Driving" program, which contributes not only to fuel saving and CO2 reduction but also safer driving.

7 Mitigation -Investment(1/2)- 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8, Market size of SRI in Japan (Million $) Source: SIF - Japan The market size of SRI (Sustainable and Responsible Investment) in Japan has expanded significantly in recent years. $1=\100

8 Mitigation -Investment(2/2)- (Yen) (Million Yen) Eco-fundSRI fund Sompo Japan Green Open: Since September 1999 Balance:11.8 billion yen (as of February 2009) Sompo Japan SRI Open: Since March 2005 Balance:778 million yen (as of February 2009) The constant value, calculated as the value obtained when reinvesting all dividends at the constant value of the settlement date, as compared to TOPIX (Tokyo Stock Price Index). The constant value and the benchmark TOPIX (not including dividends) are indexed as 10,000 on the date of inception. Performance of the Sompo Japan Green Open (as compared toTOPIX) -Total net assets (right axis) -TOPIX (left axis) -Sompo Japan Green Open (left axis)

9 Adaptation Approach Ensuring financial strength -Arrange reinsurance -Increase catastrophe reserve Quick payment to customers Quick payment to customers Preventive measures Risk financing solutions -Develop risk financing solutions for adaptation Insurance companies should give full play to their core competency to help create a climate-resilient society. -Strengthen disaster investigation structure and claims response services -Provide risk management information to society -Set up customer service for loss prevention

10 Importance of Adaptation to Climate Change in Asia Green: Typhoon Heavy rain Hurricane Ocher: Drought Forest fire Red: Heat wave Blue: Cold wave

11 Adaptation -Risk Financing Solutions- MayJuneJulyAugSepOctNovDec Sowing (direct seeding) Sowing (transplanting) Transplanting Flowering Harvesting Drought Tilling Transplanting Flowering Harvesting Sowing Pictures: Embassy of Thailand website, etc. Thailand Weather index insurance Weather Index Insurance Adaptation measures are particularly needed in developing countries, which are vulnerable to the effects of climate change. JBIC and Sompo Japan are developing weather derivatives (weather index insurance) as an adaptation measure and international framework for supporting developing countries.

12 Integration through Education and Learning Decade of Education for Sustainable Development -The United Nations adopted the Decade of Education for Sustainable Development resolution in The overall goal of this resolution is to integrate the principles, values, and practices of sustainable development into all aspects of education and learning. -This educational effort is expected to encourage changes in behavior that will create a sustainable future in terms of environmental integrity, economic viability, and a just society for present and future generations.

13 Capacity Building – Involving Key Stakeholders – CSO Learning Scholarship Program Since students (as of December 2008) Since seminars 14,500 participants (as of December 2008) Public Seminars on the Environment with NGO Employee Environmental Education Program CSO : Civil Society Organizations

14 ● Malaysia, November 2008, UN Asia Ministry Meeting Introduced in UN International Strategy for Disaster Reduction Private Sector Activities in Disaster Risk Reduction Good Practices and Lessons Learned Disaster Prevention Education “The Fire of Inamura”

15 Thank you for your attention