Dai-ichi Life Insurance Aktie

So thank you very much for your time to join us for today's Dai-ichi Life Group Financial Analyst Conference Call for the fiscal year ended March 2026. So please turn to Page 2. I'd like to review the fiscal '25 summary. Group adjusted profit was driven by factors such as for domestic businesses and expansion of positive spread and higher-than-expected gain on sales of securities at Dai-ichi Life and also we had a strong progress at PLC. Group-wise, group adjusted profit totaled JPY 551.5 billion, exceeding the full year forecast of JPY 500 billion. So group PMD was driven by TAL's performance exceeding the previous year, partly due to the effect of repricing and reached JPY 173.8 billion. Revenues from subsidiaries with the increase in group adjusted profit is projected at JPY 580 billion for the current fiscal year.

Additionally, for shareholder returns by raising the dividend payout ratio of 50%, starting with interim dividend for fiscal 2026, we expect the figure to be at JPY 260.6 billion. The final figure for ESR as of end of March rose by 10 points from the end of the previous fiscal year to 220% despite increased mass risk due to the rising interest rates, thanks to rising stock prices and increase in eligible capital driven by VNB and expected returns. The relative TSR, which indicates market valuation ranked fourth among 14 peers as of May 15, maintaining the target of being in the middle of or higher. Please turn to the next page. So I'll also explain the changes in group ESR during the period. As of the end of March 2026, the group ESR stood at 220%, an improvement of approximately 10 percentage points.

So there were increased mass lapse risks, but to reduce equity risk, our ongoing efforts on the reducing of equity risk have partially offset this impact. And for increase of eligible capital had a contribution to improved ESR and with the external environment such as rising domestic stock prices and rising interest rates. So we had the increase in ESR with the contribution on to the eligible capital. And we see the overall improvement with these factors. Please turn to the next slide. [Indiscernible] Group, we define group ESR as an indicator of financial soundness. Previously, we had a target range of group ESR of 170% to 200%. Moving forward, we'll maintain the lower limit of current definition while no longer setting the upper limit for the target level. And instead, we will aim for 170% or higher. Our current ESR stands at approximately 220%, which is well above the target.

This level indicates sufficient financial flexibility from the perspective of financial soundness, while at the same time, we recognize that there's a room for further capital utilization from the perspective of improving capital efficiency. Based on this understanding, our basic approach to capital policy remains unchanged. So to maintain the ESR above a certain level based on that premise, we prioritize the allocation of capital to areas that lead to profit growth and improved ROE. In practice, when the ESR exceeds a target level, we'll first continue to pay stable dividends along with our profit as a basic principle while combining this with growth investments and flexible additional shareholder returns as appropriately. So if the ESR is below 170%, we'll look at the accelerated ESR or other measures to have the increased capital strength.

So going forward, by balancing disciplined capital allocation with flexible management, we will ensure financial soundness while achieving improved capital efficiency and sustainable growth. Please turn to the next page. Next, I'll explain about the group risk profile. So this fiscal year, including the sale of approximately JPY 800 billion in domestic equities, we've continued our efforts to reduce market risks. However, this was offset by increase in market cap due to the rising stock prices. And the proportion of equity risk relative to total required capital remains largely unchanged. On the other hand, due to impact of rising interest rates, mass lapse risk continue to increase. In order to keep the market cap of domestic equities below JPY 2.8 trillion by the end of this fiscal year, we expect to sell approximately JPY 800 billion worth of domestic equities this fiscal year.

So we'll continue to closely monitor market conditions while working to improve capital efficiency through risk reduction. Now please turn to Page 7. This concerns new business results and its forecast. The fiscal '25 results presented here are the same as they are disclosed during the conference call on May 15. So this section outlines this fiscal year's forecast for value of new businesses. We anticipate that fiscal '26 forecast for VNB will be approximately JPY 188 billion with the factors, including TA's contribution as well. And this fiscal year, the overseas business was a driver to maintain this level. Regarding Dai-ichi Life, acquisition of new business remains on a recovery trend. And we had seen a slight increase from the previous fiscal year.

For Dai-ichi Frontier Life, we have the yen-denominated products that is selling and there are some value that is not reflected to VNB, but with the increase in the excess profit, this could be a negative factor for VNB numbers, but it doesn't mean that the profitability of this business has been decreased rather that is not true. So please turn to Page 9. This illustrates the holding company's cash position. Due to increase in group adjusted profit, remittance for the fiscal '25 is expected to exceed initial projections at around JPY 600 billion. In light of transition to economic value regulation, Dai-ichi Frontier Life or DFL for short, which has reduced its capital and TAL, which adjusted its capital levels in accordance with local regulations. paid dividends exceeding adjusted profit, respectively.

And we've conducted disciplined capital circulation management. As a result, group-wide dividend payout ratio for fiscal '25 exceeded 100% to reach 109%. Furthermore, our group aims to revise group adjusted profit to JPY 700 billion by fiscal '30. Free cash through fiscal '30 is expected to exceed JPY 2 trillion. So taking into account outflows associated with dividend payouts, the strategic investment for available for allocation to M&A and share buybacks is currently projected to exceed around JPY 1 trillion.

Furthermore, in executing our future growth strategy, particularly strategic investments, including M&A, in addition to internal funding, we're considering the use of external funding, specifically, as illustrated in this material, including debt finance such as corporate bonds and loans, hybrid instruments such as preferred stock and other needs, our policy is to flexibly utilize a diverse range of funding methods.

In doing so, we'll proceed on the premise of maintaining financial soundness and will primarily consider measures that do not result in share dilution. Through this balanced balance sheet management, including our funding capabilities, we intend to ensure flexibility in growth investment while achieving the maximized shareholder value. The holding company's cash position has been expanding and the cash position has been improving as well. So will have a solid foundation to support both future shareholder returns and growth investments. We'll continue to enhance corporate value through disciplined capital allocation and flexible funding.

Please turn to the next page. On relative TSR, starting from fiscal '23 as the base year, we ranked fourth among 14 peer companies, including global top 2 firms. So with the increased share prices, we had achieved return exceeding TOPIX. So we would like to strengthen the expected returns in VNB and would like to contribute to the group's performance. Please turn to the next page. So finally, under EV, in addition to the realization of VNB and expected returns due to rising in interest rates and changes in yield curve pricing that's steepening our group EV rose significantly.

For EV disclosures in light of fiscal year's introduction of economic value regulation, we're currently considering disclosure aligned with ESR and for useful information disclosure, we would like to ensure that investors does not fall short of current standards. Thank you very much. Now we'll ask Kikuta-san to give his presentation.

This is Group CEO, Kikuta. Thank you very much for your time despite your busy schedule today. So I will now explain our vision for fiscal 2030, centering on our growth story. So first, I would like to report on the progress of the midterm management plan. Please turn to Page 16. As our Group CFO, Nishimura, explained earlier, we assess that group adjusted profit and adjusted ROE for fiscal '25 are progressing smoothly supported by a favorable economic environment and are expected to significantly exceed targets set in the midterm management plan and to be achieved ahead of schedule. Taking this steady progress on the midterm management plan into account and in preparing for fiscal '26, the final year of the midterm plan, we have raised the dividend payout ratio to 50%. So first, regarding domestic business, against the backdrop of rising domestic interest rate, Dai-ichi Life's positive spreads expanded significantly.

By using proceeds from the sale of domestic equities for funding and accelerating bond rebalancing during the rising interest rate environment, we're able to achieve a higher-than-expected yield improvement. The rising yen interest rate is also having a positive impact in Dai-ichi Frontier Life's distribution. Thanks to a strong accumulation of new contracts, Dai-ichi Frontier Life's AUM is steadily increasing while its profitability is also improving. So in our domestic business, initiatives to improve profitability are making steady progress. Furthermore, Dai-ichi Life's new business is continuously on a steady recovery trend. Going forward, by leveraging AI, digital technologies and other tools to further improve productivity, we aim to enhance Dai-ichi Life's profit-generating capability.

I will provide a more detailed explanation for this later. In overseas business, Protective is driving profit growth and is making progress in capital-light acquisitions, reinsuring unprofitable blocks and business operations focused on capital efficiency, resulting in an improving trend in Protective's capital efficiency. In the APAC region, due to increased payment of insurance claims, TAL experienced temporary decline in performance last fiscal year.

But with its revision in insurance assumptions and repricing last year, TAL for this fiscal year now sees a significant recovery in profit forecast. In noninsurance business, Capula in which we invested during the current midterm plan period and Dai-ichi Life Marubeni Real Estate, where the joint venture has been launched, have begun contributing to profits and leading to a significant expansion in the profit scale of like quadrupled asset management profit in this segment.

At Benefit One, the distribution share of Dai-ichi Life's channel and employee benefits business is growing steadily and through both on M&A and business alliance, its customer base is expanding. While we anticipate launching new midterm plan starting next fiscal year, as explained, our group's profit base is being steadily bolstered. We are confident in achieving profit growth exceeding our plans and improved cash generation capabilities. Now please turn to the next page.

As you heard from Nishimura, in fiscal year 2025, we achieved a record high group adjusted profit of JPY 551.5 billion as we did in fiscal year 2023 and fiscal year 2024. The adjusted ROE reached 12.7%, and we consider it quite an achievement to attain the target set in the MTP ahead of schedule for both profit levels and capital efficiency. This is due to stable profit generation in domestic business, growth in overseas and asset management businesses and steady progress in capital recycling management focused on capital efficiency.

Regarding the forecast for this fiscal year, which is the final year of the MTP, we aim for adjusted profit of JPY 560 billion, marking the highest profit for the fourth consecutive term. Since the initial profit target at the start of the MTP was JPY 400 billion, this means about 40% upside in profits. Of course, there are tailwinds of the financial market. But in addition to Dai-ichi Life Insurance's ability to steadily generate profit generation, our organic and inorganic initiatives in recent years have surely expanded our profit generation capacity. Against the backdrop of profit growth, our cash generation capacity has expanded significantly and reliably compared to the start of the MTP.

In light of these circumstances, we have raised the adjusted ROE target in FY 2030 to 15% or more to further improve capital efficiency. While this target is even higher than the previous level, we believe it is achievable. And by ensuring a state where we consistently exceed the cost of capital, we will continue to achieve sustainable enhancement of corporate value. To achieve a group adjusted profit of JPY 700 billion or more in FY 2030, we will transition into a growth acceleration phase. Now that we have laid the foundation, our profit and cash generation capabilities have increased. So going forward, we plan to actively execute strategic investments while maintaining financial discipline. Specifically, we are planning strategic investments of about JPY 1.5 trillion from FY 2026 to FY 2030.

Among these, for the insurance and asset management business in the developed markets, we will focus on investments expected to contribute early to profits and strengthen our revenue base. On the other hand, for developing the markets and new businesses, mainly in Asia, we will expand future revenue sources with the aim of capturing medium- to long-term growth. To give you an idea, about 70% of the strategic investment will be allocated to developed markets overseas. remaining 30% will be allocated to growth markets and domestic noninsurance areas. Furthermore, considering these investment opportunities and market conditions, we will respond nimbly and flexibly to shareholder returns.

We plan to optimize capital allocation while balancing growth investments by comprehensively taking into account stock price levels and the status of investment projects. As described earlier, based on the results of profit growth and capital efficiency improvements to date, our group will accelerate profit growth through strategic investments in the next growth stage and aim to achieve ambitious targets for FY 2030. Please turn to the next page. Next, I will go over our approach towards enhancing sustainable profit-generating capacities. To date, our group has used group adjusted profit as a key indicator. Going forward, we plan to introduce group core profit as well and position it as a primary management metric from the next MTP onwards.

Group core profit is an indicator that expresses more aptly our group's sustainable profit generating capacity by excluding one-off factors such as capital gains and losses from group adjusted profit. The traditional group adjusted profit was subject to market conditions such as gains from sales of equities. By disclosing group core profit as well, we will clearly show trends in more fundamental earnings power. As shown in the chart on the right, there will be a certain short-term difference between group adjusted profit and core profit. Towards the end of FY 2030, where a large-scale sell-down of equities will end, we believe it is important to steadily narrow this gap and raise the level of core profit.

As a growth driver for this, the deepening of organic growth in existing business is our first key measure. In the domestic business, we aim to enhance revenue generation capacity through expansion of positive spread and improvement in business efficiency. In overseas business, we will drive group-wide profit growth by expanding the insurance business and enhancing profitability. We intend to enhance capital recycling management going forward. By utilizing proceeds from planned sales of equities, we aim to accelerate the growth of the core profit through further expansion of the positive spread in the domestic business and investment in highly profitable space.

We will also enhance the capital-light business so that we can switch to more optimal business portfolio. To reiterate, as a result of these initiatives, we aim to grow our group core profit approaching and eventually almost matching group adjusted profit toward FY 2030. Through these measures, our group aims to achieve sustainable profit growth without relying on temporary factors, aiming to enhance corporate value with higher quality.

Please turn to the next page. Next, as a topic of interest, I will talk about our initiatives to improve business efficiency at Dai-ichi Life. First, what we recognize as the current challenges is that in addition to ongoing inflationary pressures, increased costs are expected due to expanded investment in human capital and IT DX areas.

In particular, we recognize that it is highly likely that AI and cybersecurity-related investments to be expanded going forward. On the other hand, on the income side, we are facing structural challenges such as the shrinking domestic life insurance market and the trend of declining in-force policies, especially in the protection segment, making it difficult to maintain and improve profitability by simply continuing with traditional approaches. In this environment, the company aims not only to reduce costs but to transform our revenue structure itself through fundamental productivity improvements.

Specifically, by maximizing the use of AI and digital technologies to advance and streamline business processes, we aim to realize operational excellence that simultaneously enhances customer convenience and internal efficiency. Through this, we will drive the transformation of administrative and operational processes around underwriting a new business and claims and benefits payments and promote automation and labor saving in areas that previously relied on manual processes. In terms of organizational structures and operational model, we are promoting simplification. Through a highly selective and focused approach to businesses and initiatives, we will turn limited management resources into greater value-added creation.

Through these initiatives, we aim to maximize productivity while expanding recurring revenue and reducing fixed costs. To realize these transformations, we plan to make about JPY 100 billion of additional investments in AI and IT-related investments over the next 5 years. These mainly involve system renewal, data infrastructure development and advanced AI utilization, which in the short term will lead to higher business expenses, that is temporary cost increases. And that will have a negative impact on the value of new business.

However, these are upfront investments aimed at establishing future competitive advantages and are expected to lead to significant cost reductions and improved profitability in the mid- to long term. In fact, by FY 2030, we expect a cost reduction effect of about JPY 50 billion per year, which is equivalent to about 20% of the existing cost base. Furthermore, we plan to continuously monitor the progress of productivity improvement metrics in each business process rather than the amount of cost reduction. For example, we will make it visible as a unit cost, the efficiency at each process level, such as per transaction cost of new business, premium collection and policy maintenance and claims payments to drive continuous improvement.

What is meant by unit cost is a concept of managing the entire operation of the company with per transaction cost. Thus, through this approach, we intend to improve productivity by raising per transaction efficiency rather than focusing on the total cost. By setting a unit cost target for FY 2030 and transitioning to management based on that, we will establish a cost structure that can flexibly respond to changes in the external environment. The company aims to achieve sustainable profitability improvement and to establish competitive advantages in the mid- to long term accompanied by short-term cost increases through business transformation leveraged by AI and digital initiatives, investments as well as the sophistication of organizational management.

Please turn to the next page. Finally, I will touch upon our group's current position in our journey to enhance corporate value and our aspirations for the future. Thanks to everyone's support, the company's market capitalization has exceeded JPY 6 trillion. It was about JPY 2.4 trillion as of April 2023. So in just over 2 years, it has grown by more than 2.5x, allowing us to achieve our initial target about 1 year ahead of schedule. By appropriately reflecting the external environment of rising domestic interest rates, we have delivered steady profit growth, improved capital efficiency and enhanced shareholder returns. As a result, we outperformed the TOPIX.

However, we are not satisfied with our current position. Rather, -- we see ourselves as finally getting to the starting line. Our goal is not to gain relative recognition domestically, but to realize corporate value that rivals the global top tier. A milestone for this is to attain a market capitalization of JPY 10 trillion in FY 2030. To achieve this ambitious goal, we will be more growth-oriented than ever and will accelerate transformation. First, we will achieve sustainable and high-quality profit growth by strengthening growth drivers anchored on overseas and asset management businesses while relying on stable cash flows generated by domestic business.

Regarding shareholder returns, while maintaining stable dividends, we will further strengthen total returns and further enhance market valuation by more flexibly utilizing share buybacks. Through these initiatives, we aim to simultaneously enhance profit growth and capital efficiency, and we will incessantly accelerate the enhancement of corporate value, and we will work closely together as one company to achieve a market capitalization of JPY 10 trillion in FY 2030. That concludes my presentation. Thank you for your attention.

[Statements in English on this transcript were spoken by an interpreter present on the live call.]

I'm Kohei Kai, and thank you for joining us today. Here is my background. I have always worked in the financial industry, including insurance, banking and securities. I have long experience in business strategy, organizational reform and M&A. I joined Dai-ichi Life Holdings in October 2024. At present, I am the Head of Protection Business in Japan.

Together with the President and the management of the group companies and the CxOs of the holding company, I am responsible for developing and implementing business strategies and realizing synergies across the group. My main role is to objectively view the business and steadily implement strategies. Also, as we often say at our company, I try to create a healthy conflict.

Now let me begin the presentation. First, let us look at the domestic insurance market and how we position ourselves in the market. In the past few years, the domestic life insurance market has remained flat. However, with the size of almost JPY 30 trillion, it remains one of the most important markets for us. In terms of new business, savings type products have nearly doubled, compared to fiscal 2019, while the protection-type products dropped to 90%.

While savings-type products have surpassed protection-type products, the ANP from protection-type products continues to exceed JPY 1 trillion annually, even though we see little room for significant growth in the future. At Dai-ichi Life Group, the contribution from overseas and noninsurance business is increasing, but we continue to position domestic protection business as our core business, which contribute to stable cash generation.

We believe the integrated value proposition of protection and asset formation succession is becoming increasingly important for the domestic insurance business. We are experiencing a transition to a world with interest rates, a decline in birth rate and aging society, longer healthy life expectancy and the increase in dual income households, structural changes are progressing, affecting lifestyle and asset formation. Against this backdrop, sales of savings type products have increased significantly, and the demand for asset formation and succession is expected to grow further.

Within this context, we believe protection and asset formation succession are closely linked and inseparable. That is to say people need to build assets towards their financial goal while ensuring protection as a safeguard against rainy days. We have the strength to enable both and meeting the diverse needs of customers with our products and services. To ensure cash generation capacity, we will continue to diversify our revenue base by maximizing revenues from both asset management and insurance.

This slide shows the profile of each domestic company and recent highlights. I will also touch upon their performance in the first half of fiscal 2025. Dai-ichi Life is a domestic core company, though its sales reps -- through its sales reps, it provides comprehensive lineup of insurance products to the core generation in need of protection. Adjusted profit is JPY 158.6 billion, increased steadily from the previous year. As we have already disclosed, we plan to revise the full year forecast upward. Value of new business was JPY 53.1 billion. It also increased from the previous year, thanks to growth in contracts with SMEs, even though the effect of new products faded. We would like to push up the value of new business even further.

Dai-ichi Frontier Life offers single premium products to savings and succession-oriented customers, mainly through bancassurance channel. Both asset under management and the number of policies in force were the highest since the company's founding. Mr. Iida will explain the business later, so I will not go into the detail here.

Neo First Life offers medical and health promoting products to comparison-oriented customers through walk-in shops and digital channels. The value of new business was JPY 3.1 billion, and the number of customers was 1.04 million. Both of them increased from the same period the previous year. The number of policies in force exceeded 1 million in the previous fiscal year.

Ipet offers pet insurance through pet shops, website and sales rep channels. The new business ANP was JPY 3.7 billion. The number of customers was 0.73 million. Both of them increased from the same period the previous year. By the end of August, the number of policies in force exceeded 1 million, keeping the second largest share in the industry. We are accelerating the sale through Dai-ichi Life sales reps and the sales more than doubled from the previous year.

And now I will explain the positioning of the Dai-ichi Life sales rep channel in our group. We have a large sales team of approximately 35,000 -- sorry, 35,100 sales reps based in 69 branches and 1,031 sales offices across Japan. They comprise a core channel supporting the group's domestic insurance business, supporting customers by saying, "By your side, for life." The sales rep channel sells Dai-ichi Life products and other group company products as well.

For example, in new premiums for Dai-ichi Frontier Life single premium products, the sales rep channel contributed 20% in FY 2024, playing an important role in supporting Dai-ichi Frontier business. In addition, in selling Benefit Station, which is an employee benefit service, the sales rep channel contributed to getting 40% of approximately 1,000 companies out of 2,400 companies who have joined the membership between May 2025 to December 2025. The sales rep channel has enabled access to small and medium-sized companies that Benefit One had not been able to fully approach in the past. So in this way, the sales reps form a core part of the group's domestic insurance business, staying by the customer, catering to their various needs and providing a wide range of values.

I will now cover EL initiatives for sustainable growth from 4 perspectives: customer, product, channel and sales infrastructure. First of all, from a customer perspective, in addition to the existing individual insurance customer base, we are targeting owners and employees of SMEs and their families. The contribution of executive insurance to total new business was 29% as of the first half of this fiscal year, an increase of 6 points and showing steady growth. We will continue to deliver solutions as a group, including Benefit One in order to cater to corporate customers' needs.

Next, from a product perspective. Last December, we launched wide type and basic type Waiver Premium riders, which was well received by many customers. Going forward, we will continue to deliver new products strategically from both protection and retirement savings and asset management. We will also strengthen product governance and develop products based on deeper insight into customer needs.

Thirdly, from our channel perspective, we are starting to see results from changes made such as new standards and quarterly hiring system and efforts to strengthen development of employees. In terms of hiring, in the most recent results, we have been able to hire 1,200 people in the past 3 quarters, and we believe our pace of hiring has gone up one level. And in terms of enhancing the development and retention of employees, the second year retention rate of new hires is 86% and in the third year, 71%, which is a significant improvement.

In addition, based on the total life design plan, we are continuing to enhance the consulting capabilities and corporate sales skills. And based on these factors, we believe we are starting to see signs of getting out of the turnover issue and moving towards steady regrowth in our organization.

And lastly, on the sales infrastructure. Leveraging digital and AI, we have worked on improving the sales reps productivity and transforming the business process. Specifically, we are using new platforms such as integrated CRM, digital studies and AI customer analysis. We're working on preparations for full operations from FY 2026 onwards. We want the 4 pillars to work together for sustainable growth.

Now I'd like to turn to Dai-ichi Life initiatives to improve operational efficiency and productivity. As people have been saying for some time now, the domestic insurance market overall is a mature industry, which we recognize will shrink in the long term. Also, with recent dramatic advancements in technology, using generative AI has become the norm, and we view this as an opportunity. Based on these environmental changes and potential increase in operating expenses or business costs in the future with inflation, we are working to reduce operating expenses and improve productivity, leveraging AI and digital technology, making our business leaner, a move that we see as a natural course.

The right-hand side of the material shows part of our initiative. First, in reducing business costs, Dai-ichi Life has worked on reorganization of headquarters and branch offices in order to reduce fixed operating expenses in FY 2026 by approximately JPY 35 billion compared to FY 2020, and we expect to generally achieve this plan. In addition, towards FY '30, we will further reduce our operating expenses and improve productivity by revisiting our business processes centering around our back office and administrative functions. This will be made possible through our investment into AI and digital technology. We are assuming a review of existing business processes, referencing global case studies and are working on fundamental transformation of our operations.

Lastly, on the organization. The headquarters organization is becoming more complex, and we're going to make it simple, fast and lean. This will enable speedier decision-making. On the other hand, we will be strengthening our front office sales capabilities that contribute to top line. The expected investment into AI and digital, and our targets for decreasing operating expenses will be disclosed together with the progress of our planning going forward.

Lastly, I'd like to talk about the concept of our business strategy, leveraging the group strength. This is something that we are going to work as a group-wide initiative. First of all, the Dai-ichi Life Group has an abundant management resources available by leveraging them, combining them, we believe we'll be able to evolve our business into a more differentiated one.

In addition to our existing 2C strength, we will be brushing up our value creation capabilities in 2B so that we can create a B2B2C model that is unique to our group. Specifically, we're going to look at developing more corporate customers through Benefit One, provide more value to the employees of members, also provide protection as well as asset formation and business [indiscernible] And work in an integrated manner in the group. And we will be leveraging the strength of the face-to-face interactions that our 35,000 sales reps have so that we will be able to enhance value of our domestic insurance business even in a market that is shrinking. And we will be creating that kind of model.

That concludes my presentation. Thank you.

I'm Takashi Iida. I am the business owner of -- Business Head of Retirement, Savings and Asset Management business. My background is written here. Unlike Kohei Kai, I joined the Dai-ichi from the beginning, and I used to be [indiscernible] and then I started to work on investment and then annuities. And now I am an Executive -- Managing Executive Officer.

First, I would like to give you an overview of retirement savings and asset management business. The desirable state of the business is written on the upper part of the slide. It says that asset management capability is the foundation of the business, and we will develop investment products as well as savings type insurance and annuity products. And the business will be global through overseas group companies. So in the middle, we show the structure of the business by entity. The first domain is the asset formation and succession business, which consists of Dai-ichi Life's Savings Investment Trust and group annuities businesses and Dai-ichi Frontier Life.

And the second one is asset management business in and outside Japan. That's another pillar. That includes Asset Management one, Vertex and overseas companies we have invested in. And the last one is real estate asset management. The largest one is the Dai-ichi Life Marubeni Real Estate, which is a joint venture started operation last year.

Each asset management company has its own profit target. However, at the same time, by providing asset management functions to Dai-ichi Life, Dai-ichi Frontier Life and Dai-ichi Life Reinsurance Bermuda, the group's reinsurance company, they contribute to the development of savings type products by group life insurance companies. That is the characteristic of this business. In the future, they will be able to provide asset management functions to overseas group life insurance companies and help enhance competitiveness, especially in growing retirement markets in advanced economies.

This shows profit target. It shows where we stand in the profit target. And the group's adjusted profit target for 2030 is JPY 700 billion. And you can see in the pie chart on the right, domestic insurance accounts for 40% and overseas insurance 50% and noninsurance business 10%.

Dai-ichi Life Savings Investment Trust and the Dai-ichi Frontier Life businesses are called spread business because the source of profit is the difference between investment yield and cost of debt or assumed interest rates. We believe that spread business will become a major pillar in the domestic business. In the overseas market, because of the aging population and advanced economies, retirement business is expected to grow.

Asset management business, which is included in the noninsurance businesses, will play a central role in noninsurance businesses. The asset management companies aim to increase their profits. They will provide asset management functions to group life insurance companies in creating synergy within the group and contributing to group's profit target.

So before explaining future strategies for each business, I would like to look at the current state of personal assets in the developed countries. From left to right, the United States, Japan, the U.K. and Australia. The vertical scales are roughly aligned, except for the U.S. U.S. is outstandingly large. So this chart shows the growth and the share of each asset over the 5 years period from 2019 to 2024.

One thing in common is that the gray nonfinancial assets are driving the growth in personal assets. So in the U.K., stocks and investment trust declined. But in the other countries, equities, investment trust and other assets are also driving total asset growth. The growth rate is 9.6%, 9.2%, 0.5% and 7.6%, respectively. And with the exception of the U.K., you can also see a solid growth for insurance annuities, the light blue part. The Australian superannuation, in particular, shows a high growth of 5.0%. And the hidden part, it's showing a very high growth.

And Japan has an outstanding high level of cash and deposits shown in dark blue. So we assume that the Japan's personal finance assets could reach JPY 4,000 trillion by 2040 as the government's policy to promote Japan as a leading asset management center accelerates the shift from savings to investment, and we are getting ready for that.

This shows the distribution of wealth. The inverted pyramid on the left shows the world's adult population divided into 3 tiers by the amount of assets held. The pyramid in the middle, on the other hand, shows the number of households in Japan divided into 3 tiers by the amount of net financial assets held. The sources are listed below. You can see that the world's wealth concentrates among the so-called the wealthy people. So that's an inverted pyramid.

For example, the adult population holding more than $1 million is limited to 60 million, yet the value of their holdings is $226.5 trillion. And the global mass population with assets less than $100,000 is 3.12 billion. And the value of their holdings is $69.5 trillion. We can see that it's not evenly distributed.

And let's look at Japan. There are 1.65 million wealthy households with a net financial asset of JPY 469 trillion. That's JPY 284 million per household. While there are 44.25 million mass households with a net financial asset of JPY 711 trillion, that's JPY 16 billion per household. So I believe that if the government's policy will succeed, then the pyramid will be like the global one -- close to the global one, but the mass accounts for a large part in Japan.

So particularly in Japan, Dai-ichi Life has provided protection type insurance to the mass segment and DFL has provided savings type insurance in yen and foreign currencies to the senior affluent segment, and will also provide asset management products and services in Japan and abroad using the investment capabilities acquired through its asset management strategy. So that is the integrated value proposition.

So I would like to talk about the synergies between the insurance pension business and the asset management business. On the left-hand side, there's a spread business. The spread business on left-hand side, in particular, requires insurance and pension products backed by strong investment management capabilities. Conversely, if you have an asset management company of choice for insurance company, the group can keep the investment management fees within the group. We have to entrust the fund from our clients to outside company. So we can keep that investment management fees within the group. So combination with the asset management business to help us have the synergy.

Suppose, for example, the group entrusted JPY 10 trillion of investment funds to an external manager. Even if fee is 20 basis points or 0.2%, this would mean that the JPY 20 billion of fees would flow out of the company every year. The target profit for the noninsurance business is 10% of the total, that's JPY 70 billion in 2030. The more you invest, the value of the strong asset management companies will increase. So global insurance groups already have strong asset management companies within their group. We believe that the group needs to build such an asset management platform as soon as possible.

Please go to next page, and this is about DFL. We have two slides for DFL. By enhancing investment capabilities and utilizing reinsurance, DFL has steadily increased asset under management. Our aim is to increase the AUM to JPY 18 trillion by 2030. And in the near future, we expect it will become a major pillar of the domestic business. However, the issue of secondary employees made news and caused significant trouble for the agencies. We need to rebuild the foundation of our business and reform our governance from scratch, starting with corporate culture.

So we have another slide for Frontier Life. And -- so I would like to explain the investment portfolio of DFL, which is the source of its competitiveness. And the slide compares the investment portfolio in 2021 and 2025. By shifting from corporate bonds to so-called alternative credit investments such as CLOs, credit-linked bonds and direct lending, we are strengthening our products, and you can see that in these graphs.

The life insurance industry is set to transition to economic value-based capital regulations from the end of this fiscal year. Toward the end of the fiscal year, we plan to reduce or reverse the accumulated capital and various reserves and distribute them as dividends to the holding company. And that is our plan. Dai-ichi Frontier Life will improve capital efficiency even further by releasing the capital and to contribute to the group's capital circulation management.

Next slide, please. We have not talked much about Dai-ichi Life Group Pension business to the external community in the past. But here, I want to give an introduction of this business. Because it contributes stable and significant profit to the group since general accounts products guaranteed interest rates have been lower, which is a topic that I will touch upon later. The Dai-ichi Life Group Pension business provides services for pension schemes like DBO defined benefits and DC defined contributions that are set up by corporations. And in addition to providing support for setting up and administrating the corporate pension scheme, we are also entrusted with managing assets for corporate pensions.

Now for DB, we offer general accounts or GA products and special accounts or SA products. GA is a spread business. So during the time when interest rates were low, we decided to lower guaranteed rates, which were higher than market interest rates. Since then, interest rates have started rising. But instead of returning to GA with a high capital burden, we have developed and launched a new guaranteed interest rate product called [indiscernible]

Recently, we have been securing good margins so that we're able to provide interest rates that are more attractive compared to other industry peers, asset managers and trust banks. And this has been very well received by our customers. For the SA, we've been leveraging the investment capabilities of asset managers inside and outside the group, and the AUM is #1 in the life insurance industry.

So DC is a fee business. And it's growing significantly in both the corporate and individual lines of business. We're enhancing our corporate DC administration services, of course. And for individual DC [IDCO], we're educating the Dai-ichi Life sales reps so that they can make proposals to individual customers. And through these efforts, we will be promoting integrated proposals combining protection and asset formation, which is also something that is required from a fiduciary duty perspective. And last but not least, in the corporate lump sum retirement payment and corporate surplus asset management, which we believe is one big market. We will maximize the use of our group asset management capabilities in order to monetize market growth.

Next slide, please. So this is about our profit expansion in the asset management business. In our capital-light asset management business, our contribution to group profit at the end of year ending March 2021 was small at JPY 3.5 billion. But after establishing Vertex, we have acquired alternative investment capabilities inside and outside of Japan and through our real estate business joint venture with Marubeni Corporation, profits have grown so that we can expect JPY 18.5 billion and contributing to profit growth.

Going forward, in addition to organic growth from our existing group asset managers, we will execute new M&A deals to build profit to around JPY 70 billion by the end of FY '30, the year ending March 2031.

So now I will introduce two case studies of synergies with group asset managers. The first is our collaboration with Canyon Partners, which is an alternative credit company in the United States. At the moment, the Dai-ichi Life Group holds a 19.9% stake in Canyon, but has the right to acquire a majority interest from FY 2027 onwards.

At the time of the first investment, the group made a USD 1.3 billion investment commitment. And Canyon used that to set up a new fund. And net funds raised outside of assets entrusted by our company also strongly turned positive. And they are also in the alternative credit area, they are significantly increasing hiring of new talent into Canyon. And recently, the AUM has reached a record high even excluding the adjustment that we have been making.

The other case study is Vertex case study, and it's about the development of Dai-ichi Life's savings type of product development with Vertex. So as Kai-san mentioned earlier, there's a Step Jump savings product. And I'd like to talk about how that was developed. The Dai-ichi Life Group has around 60 to 70 financial engineering talent mainly in the investment-related divisions in the group. And when Vertex was established, some of them have been transferred to Vertex so that they can work on product development and investment. So I want to introduce a part of what they do.

So AUM of Vertex, as you can see in the bar chart, is currently JPY 2.7 trillion. Currently, on Dai-ichi Life Investment divisions and QIS service quant-based investment solutions as well as the Dai-ichi Frontier Life and Dai-ichi Life Reinsurance Bermuda asset and entrustments are contributing to the AUM JPY 2.7 trillion, currently. Also, we have the Step Jump indexed annuities product developed mainly in collaboration with Vertex.

Now Step Jump is a product that has taken -- a product that is popular in the U.S. single premium annuity market. We call this an FIA type of product. And you have a right of product where you can be quite flexible. So combining quant with insurance, they are developing a lot of products like that.

Now Vertex has taken reference from those types of products and converting the popular product in the U.S. market into a regular premium product to launch here in Japan. And in that 1 year after launch, we have sold 100,000 policies, and it's quite well received.

Let me also touch upon the investment divisions of group insurance companies. The Dai-ichi Life Group, as of last October, consolidated a portion of the Dai-ichi Life and Dai-ichi Frontier Life investment functions to Dai-ichi Life Holdings, and this is aimed to efficiently leverage group investment functions, reallocating talent and resources to growth areas such as private investment in order to improve investment returns and improve the competitiveness of our products.

And going forward, we will partner and integrate with other life insurance investment divisions and collaborate with asset managers in the group in order to develop this into an asset management platform. That say, on our domestic real estate asset management business. As you can see on the left-hand side of Japan, the market continues to grow, meaning the market for real estate asset management. And when we look at the portfolio and look at the pension fund asset structure in Japan and the United States, we expect real estate allocations as a share of total assets to continue growing in Japan going forward.

And we believe that this is one of the growth areas that help us transform our business portfolio. So this is an asset management business. So it's a capital-light fee business. And in order to expand this, we plan to secure high-quality properties on a continuous and stable basis to meet institutional investor needs and increase our AUM.

So this is the last slide I have to present. In order to expand the domestic real estate business, this fiscal year, we have worked on strategic initiatives such as integrating our real estate business with Marubeni Corporation and making strategic investments into [indiscernible] Holdings Company Limited and also Wealth Management Inc.

By investing into Wealth Management Inc., which has extensive expertise and capabilities in hotel development and operations, including overseas luxury hotels, we hope to be capturing the continued growth opportunities in the hotel market driven by increasing inbound tourist demand, thereby accelerating the growth of the domestic real estate asset management business. And through the business growth of our group companies, we aim to expand real estate AUM to around JPY 3 trillion, reaching a top-tier level in the domestic real estate industry. So that's one reason for investing in the company. And so the last slide is a summary of what I have said so far, and I will be welcoming any comments and questions. Thank you.

[Statements in English on this transcript were spoken by an interpreter present on the live call]

Good morning. I'm Nishimura, and thank you very much for attending our conference call today. So from my side, I'd like to first review the overall results for the first half of fiscal year 2025.

So please turn to Page 2. The group adjusted profit reached JPY 231.1 billion, progressing steady at 56% of initial forecast, driven by higher-than-expected gains from security sales at Dai-ichi Life and reduced operating expense and the impact of agency sales at PLC. We announced on November 14 that we are raising this fiscal year's adjusted profit outlook to JPY 470 billion. Group VNB increased to JPY 106.3 billion, primarily driven by Dai-ichi Life reflecting the impact of rising interest rates.

Remittance from subsidiaries projected to total JPY 830 billion with increase of about JPY 600 billion for the current and next fiscal year. And we have raised JPY 3 for share payout is expected to reach JPY 280 billion. And for the ESR as of end of September plus lapse risk was there but despite that, we had rising interest rates. And with that, we have the 8 percentage point increase from the fiscal -- previous fiscal year.

And relative to ESR, we have been seventh place compared with to 14 peer companies, and we are in our range. And next to this page, this is about ESR. While lapse risk increased due to rising interest rates, eligible capital rose significantly, driven by higher domestic stock prices, higher interest rates and an increase in the value of new business and expected earnings. So this has been an increase since then.

And compared with our initial plan, the environment itself has become more favorable. So we're above the range. But to the year-end, some cash outs for ESR, it could go up -- to go down by 10 percentage points. And with the volatile financial environment, this could be a factor that we have to be careful. And on the right-hand side, regarding sensitivity, the trend remains unchanged from the levels indicated in June 2025. Please refer to the next page.

Next, we'll explain the group risk profile. As part of efforts to reduce market risk, we proceeded with the sales of domestic equities. However, this was offset by rising stock prices and proportion of equity risk within total required capital remained largely unchanged.

On the other hand, due to the impact of rising interest rates, lapse rates have increased. So the target for this fiscal year, we are considering to increase this fiscal year's target amount for stock sales from JPY 380 billion to approximately JPY 700 billion. We'll continue to closely monitor the market conditions and enhance capital efficiency through risk reduction.

Now on to the next page. This is about the supplementary information on Dai-ichi Life's asset liability duration matching ratio. During the November 14 conference call, we disclosed that the matching ratio for the individual insurance block is 104%. Dai-ichi Life holds the majority of its assets as policy reserve matching bonds. These are assets that unlike those held to maturity can be rebalanced as needed. So that's the asset classification.

And in the liability block of Dai-ichi Life, the duration fluctuates due to new insurance contracts, policy cancellation, et cetera. However, since assets are held in policy reserve matching bonds, the asset can be adjusted through rebalancing and we proactively and flexibly rebalance the asset side to avoid overhedging. Furthermore, in the sensitivity perspective, we are calculating using effective duration that reflects the impact of derivative asset interest rates and the matching rate could be approximately 97%. And this page is about holding cash position.

Following the upward revision of group adjusted profit, remittance for fiscal 2026 is expected to increase by approximately JPY 60 billion compared to the initial forecast. And also, in light of the planned changes to capital regulation at the fiscal year-end, certain domestic subsidiaries are considering the release of surplus capital. It is not reflected in this diagram, but we would like to provide further details on this matter as soon as updated information becomes available.

Also, as announced in October, regarding the subordinated loan of Dai-ichi Life Insurance Company that reached its call date, Dai-ichi Life will repay its position. And also the Dai-ichi Holdings raised approximately JPY 210 billion in subordinated loans. Consequently, Dai-ichi Holdings cash position increased to JPY 440 billion. If there are no specific uses for this cash, such as strategic investments, deleveraging is a potential option, and we're also considering allocating this cash towards repaying some borrowings scheduled for the next fiscal year. Combined with the last fiscal year's increased profit, free cash flow is approximately increasing, as you can see in this diagram.

Please turn to the next page. Under our current medium-term plan, we are actively pursuing strategic investments. We are allocating this capital surplus generated by reducing Dai-ichi Life's risks to growth businesses, particularly overseas operations and asset management. And since the launch of the plan, we have executed approximately 10 strategic investments of varying sizes, including bolt-on deals.

Concurrently, we actively manage capital circulation through measures such as existing our Thai operations and selling unprofitable blocks via PLC. When executing investment projects, we set appropriate hurdle rate variables based on risk and make disciplined decisions.

Going forward, we'll enhance capital efficiency through capital-light projects, pursue projects that contribute to asset formation and leverage bolt-on acquisitions overseas to realize synergies thereby driving early corporate value growth.

Please turn to the next page. So this is reviewing profit contribution from overseas businesses. Since entering Vietnam in 2007, our group has expanded into a total of 10 countries. Considering each country's market environment, we have steadily grown the scale and profit of contribution of these companies.

In developing overseas operations, we partner with local management teams who are deeply familiar with each country's regulations for the insurance sector, an area where we possess deep and affluent expertise. And to leverage our extensive experience in insurance, we also actively invest in human capital to achieve midterm value enhancement. While ROI figures are presented, not all projects have achieved such numbers from the outset day 1.

In the regulated insurance sector, heavy day 1 cost during the initial acquisition phase often result in lower initial ROI calculation at the beginning. However, by taking time to refine these operations, we enable them to generate stable and long-term profits. Our overseas operations now generate profits exceeding JPY 100 billion, accounting for approximately 1/4 of the total group profit, we'll continue to thoroughly refine our each country's operations to drive value enhancement.

Now next page. This is about the future outlook for profits at Protective in the U.S., one of the pillars of our overseas operations. Following the acquisition in 2016, PLC expanded its business scale through large-scale block acquisitions in 2018 and 2019, supported by capital assistance from our company. However, due to impacts, including the novel influenza outbreak, COVID-19 and the failure and the default of U.S. regional banks, the PLC experienced several years of persistently low profit levels.

However, these were all temporary negative events. We received tough criticism from market participants regarding PLC. Amidst all this, since 2023, factors such as temporary downward pressure dissipated. And in recent years, we have actively pursued initiatives, including reducing operating expenses to improve business efficiency and driving unprofitable blocks.

We focused on enhancing the profitability of existing businesses and through measures like improving investment yields through portfolio restructuring and expanding the balance of retirement products, we were able to enhance PLC's capital efficiency and also improve the contribution to Grupo RE. And we also recently announced the acquisition of portfolio, portfolio operates warranty business in the U.S. And the company is a capital-light business model, generating the majority of its revenue from fee income, including ShelterPoint acquired last year and our existing APD businesses, we aim to actively expand the capital-light businesses across in areas going forward and we'll target the generation of approximately USD 200 million in profit from these areas by fiscal 2030.

To achieve its [indiscernible] profit target for fiscal 2026 and 2030 and to realize the vision envisioned at the time of PLC's acquisition, PLC will accelerate initiatives to expand earnings and shifting away from the [indiscernible]. So I would like to talk about Group EV.

In addition to realization of value of new business and expected earnings, the rising interest rates and changes in the yield curve that was steepening pushed up group EV significantly. Regarding EV disclosure, we are currently considering disclosing information based on ESR. In light of the introduction of economic value regulation in the end of the fiscal year -- this fiscal year. Please note that we are considering disclosing useful information to investors so that the disclosure level will not drop. That's all from me.

Thank you, Mr. Nishimura. Next, Group CEO, Kikuta, will give a presentation.

I'm Kikuta, and thank you very much for giving us time today and participating in this meeting. So I will explain to you our growth story for 2030. Let me start by talking about the progress of the midterm management plan. As Mr. Nishimura explained, group adjusted profit and adjusted ROE significantly exceeded targets, thanks to the favorable economic environment and revised upwards.

As it has already been announced, we have revised our full year forecast upwards, and we continue our efforts to enhance corporate value. We see steady progress in M&A activities in overseas and noninsurance businesses and we are taking steps to improve capital efficiency and drive growth.

In Domestic businesses, the recovery trend in Dai-ichi Life's sales performance continues. At Dai-ichi Frontier Life, the sales of yen-denominated products expanded, thanks to the higher interest rates. Its AUM is growing steadily, and we can expect stable profit going forward. Dai-ichi Life is working on initiatives to improve operational efficiency.

In the beginning of the next year, we will have business strategy presentation by group heads. Mr. Kai, the Head of Domestic Protection business, I will give you an overview of the initiatives there. As you have just heard, in overseas businesses, PLC Protective is driving profit growth through capital-light M&A and reinsurance of nonprofitable blocks, it is moving toward operations with focus on capital efficiency.

On the other hand, the Asia Pacific region, TAL and Dai-ichi Life Vietnam are struggling. And in case of TAL, there is a bad claim environment. And in Vietnam, there is regulatory changes. And these companies are struggling to perform. TAL is repricing products with high claim payments. So we can expect some improvement with respect to claims.

And in Vietnam, stagnant sales of bancassurance have hit the bottom, and we are now seeing a sign of recovery. In noninsurance business, Kepler, an investment made during the period of this medium-term plan, and DMRE for which the JV started to operate start to contribute to group profit. And the revenue of Asset Management segment is expanding. It's coming closer to JPY 20 billion.

In Benefits One's, employee benefit business, the share of Dai-ichi Life channel is growing, especially the sale to the large corporations. The major sales will come next year, but we are making steady progress. As you may know, we have revised upward the fiscal '25 full year forecast of adjusted profit from JPY 410 billion to JPY 470 billion. Favorable economic environment is indeed a tailwind, but Dai-ichi Life has been generating profit steadily and both organic and inorganic initiatives have heightened our profit generation capacities, capabilities.

As for group adjusted ROE, assuming the achievement of this fiscal year's full year forecast, it will be 11.8%, bringing us closer to the midterm plan target of 12% Dai-ichi Life's plan to sell domestic listed stocks is progressing according to the plan. Its ROE forecast for the next fiscal year is around 13%. So there is a high probability of achieving group adjusted ROE of 12%, and we will move forward with greater speed and steady progress toward our target of 14% or more by fiscal 2030.

Considering current performance and future forecast, we have revised our fiscal 2030 profit target to JPY 700 billion from JPY 600 billion. Domestic businesses are expected to generate scalable profit. And we also take into account profit growth of overseas businesses driven by Protective profit expansion and increase of profit contribution from noninsurance businesses as the profit of Asset Management segment grows in the mid-to-long term.

So in profit levels have risen under the current medium-term plan, enabling us to generate more cash than when plan first began. We will think about inorganic investment using this capital. We cannot aim to achieve JPY 700 billion only by organic growth. So we would like to allocate more capital to inorganic growth in order to achieve this target. So we will put more focus on cash flow and cash remittance. And at the same time, we'll be reviewing our KPIs. This shows the outlook for 2030.

In our current medium-term management plan, we have made improvement of capital efficiency a top priority and have steadily strengthened our founding of growth by expanding profit, reducing risks and accelerating growth in our overseas business and entering adjacent noninsurance market. So the target of ROE larger than 10% and adjusted profit of JPY 400 billion have been adjusted upward to JPY 450 billion and ROE of 12%.

In light of these circumstances, the most important goal of the medium-term plan, achieving capital efficiency that consistently exceeds capital cost as we approach the third year of the plan. So we have previously stated that when that is achieved that we would raise our dividend payout ratio to 50% and allocate more capital to growth investments to accelerate growth towards 2030.

We believe that the time has come for that. First, we will focus on achieving our full year forecast for this fiscal year and hope to raise our dividend payout ratio to 50% as early as possible. Furthermore, we will increase capital allocation to growth investment and accelerate profit growth. However, these changes do not mean a weakening of our shareholder return policy. We expect shareholder returns to expand in line with profit growth, especially the dividends.

Our basic we intend to manage share buybacks flexibly. Before that the plan has been disclosed shortly before the General Meeting of Shareholders. So as a means to improve our capital efficiency, share buyback is one of the measures -- possible measures. However, we would like to decide the timing very flexibly, taking into consideration such factors as capital and cash positions, a pipeline of strategic investments and the share price.

So that is how we would like to change the announcement of share buyback. We backed by stable profit and cash generation, we have been able to steadily increase dividends for over the past 10 years. We are proud of our dividend per share growth rate of 18%. It is a very good number. And as for EPS, the growth rate is 11%, and it demonstrates a stable profit growth. So by steadily implementing our growth strategy, focusing on profit growth and accelerating our growth, we aim to further expand shareholder returns.

Now I would like to conclude my explanation here. Thank you very much for listening.

[Statements in English on this transcript were spoken by an interpreter present on the live call]

Thank you very much. I'm Kai Executive Officer. Prior to the panel discussion, I'm going to give you update on the mid-to-long-term strategy to realize our group goals.

Next page. As you know, our goal is -- actually, our goal for fiscal year 2030 is to become global top-tier insurance company and leader shaping the future of Japanese insurance industry. To achieve these goals, we set the goals for fiscal year 2026 as follows: Capital efficiency steadily above cost of capital, building of the base for transforming ourselves into insurance service provider, achieving upward revised group adjusted profit of JPY 450 billion and doubling of our market capitalization from fiscal year 2023 level of JPY 3 trillion.

For financial year 2024, on the back of the favorable economic environment, we could make more than expected progress with capital efficiency exceeding cost of capital for the first time. In addition, we actually had achieved the goals in group adjusted profit and adjusted ROE for the end of management plan period on the first year of the period. So in June, in our earnings call, we actually explained that we are going to raise the target for adjusted ROE and group adjusted profit.

For further profit and capital efficiency, we would like to be more aggressive on strategic investments. For this fiscal year, for example, our Australian subsidiary, TAL, made investment in Challenger, and we increased our stake in Capula in U.K. And also, we announced our investment in M&G in the U.K.

We continue to diversify in geography and risk types. And through the investment in the asset management companies with high cash generation, we would like to make at a highly capital-efficient portfolio. So that was the overview of our group mid- to long-term strategy.

So I'd like to move to the panel discussion. And I'll be the moderator for this panel discussion. For this panel, we are going to focus on mid- to long-term strategy of our group and initiatives to improve capital efficiency. First, I'd like to ask the outside directors to introduce themselves. First, Ishii-san, please go ahead.

Thank you very much. I'm Ishii, I'm Outside Director. Well, this is my resume, as you can see on the screen. I joined the company as an Outside Director in June last year. So it's been 1 year since I joined as Outside Director. And prior to that, I've been actually focusing on the work of Tokio Marine Group. Most of my time and career were actually spent for International business. And we -- actually, I was head for the responsible person for International Business at the end and actually covered the acquisition and PMI of North American companies.

So I think that my experience and the background, I hope will contribute to the improvement of enterprise value of Dai-ichi Group. Thank you very much.

Now Nagase-san, please. Together with Ishii san, I became a Outside Director last year. My background is shown on the screen. I actually was in many different segments. I was in financial department in Suntory and I was a CFO for Dexerials. So my career is basically focusing on the treasury department and market and financials.

When I was at the Dexerials, there are many investment ideas. And as a CFO, when I consider those opportunities, I had a lot of thoughts process. And I was actually told by other people that the new CEO, which is me, doesn't like M&A. But actually, I -- it's not the case that I don't like investment. But I don't like the situation that we could actually get return on investment. That's what I don't like. So that the thought is still staying with me. Thank you very much.

So please go to next page. For Ishii san, he has rich experiences and insights as a manager in the global companies plus he was International Insurance Business head. So he has expertise for M&A, International M&A, particularly. Nagase san, he has a rich experience as a manager in financial institutions, and he served as a CFO. So he has expertise for capital strategy and financing.

Here, I'd like to touch upon our company's -- our group's corporate governance structure. In our company, we have Audit and the Supervisory Committee. And in order to heighten the management transparency, we actually set up discretionary committees such as Nominations and Advisory Committee and Remuneration Advisory Committee. In order to build a high-level corporate governance structure, in addition to the Chair of Audit and Supervisory Committee, the Chair of the Remuneration and Nomination Committees were actually served by outside directors.

And in audit and other committees, a majority of the members are outside directors in our Board of Directors as well, more than 1/3 of members are outside people. So we are actually working on the governance issue on a consistent basis.

So I'd like to move to the panel discussion now. So we have some questions, and I'd like to ask both of you to answer those questions.

This is the first question. It's about mid- to long-term strategy of the group. Currently, we are at the midpoint of our Mid-Term Management Plan period. So what is your impression or vision on the progress of the strategy so far?

First, Nagase-san, please. Thank you very much. Regarding the progress of the strategy, what is my view? Basically, as Kai-san said, in the initial year, you had a very good performance and the profit in the initial year actually exceeded the target for the final year of the period and ROE actually exceeded the cost of capital.

So in terms of numbers, I think that because of the efforts of the current management and employees, good performance has been achieved. And for fiscal year 2030, the group has been working on many initiatives. For example, Benefit One PMI is underway and made investments in many companies. Those initiatives are actually going very well.

On the other hand, with huge profit increase, even they have a good profit and initiatives that the share price is still left unappreciated in the market, and that could be a kind of criticism from the market. Even though the company is striving for progress, but from the investors' point of view, the potential or the growth potential of the profit is not really convincing. That's all I have now.

Now Ishii-san, please.

Thank you very much. On this theme, Nagase-san actually covered the most important points. From '24 to '26 at the timing of the building or the creation of this midterm plan, I was not -- I'm not the outside director at that point. However, since I joined in 2024, the performance was very good. And for the first time, the capital efficiency exceeded cost of capital. And based on that, as Kai-san said, the goal for fiscal year 2026, the adjusted profit and adjusted ROE has been actually upward revised.

Beyond that, towards 2030, I think they actually set a very challenging goals. So as early as possible towards 2030, they like to actually make a steady progress. So for 2024, it was very good. And for this fiscal year, I think they are on track. Towards 2030, what kind of steps they are going to make as early as possible because it takes some time for the result come up. So I think that the early action will be very important. So from that perspective, the BOD has been actually be watchful and make advice. Thank you.

Thank you very much. Now let's go to the next theme. So as we mentioned earlier by fiscal 2030, we would like to ask for the long-term vision for 2030. So for achieving the vision for 2030 set by Group CEO, Kikuta, some in the market suggests that based on the current progress, market capitalization of JPY 10 trillion may not be achievable. So could you please share with us what discussions have taken place in the Board of Directors and other relevant forms? And as an Outside Director, what is your assessment of the current situation and challenges? So Nagase-san, please go ahead.

Now on this theme, I think this is very significant in the Board of Directors as well, we have been studying this, spending a long time to take various discussions. So on the executive side, we have been very much deep diving into this important theme with materials that are covering all the details. And based on those things, we have set a broad direction, and we have reached a broad agreement on this theme.

And more specifically, so International Insurance Business have to be expanded. And so we're not going to use that much capital, meaning that we're going to further go into and expand into capital-light business format. And similarly, asset management business have to be expanded. So those kind of broad directions we have been reaching consensus already inside the Board of Directors. But with those broad directions, what are the proportions of all these points and in each domain and area, what kind of investments have to be made into which exact and specific deals we need further discussion on those details as well.

So the direction is already set and there. So the point is which mountain we're going to climb up and what would be the detail for reaching all the peaks that are the things we're going to further explore. And by fiscal 2030, we have set the vision. And looking at the Japanese insurance industry, we would like to become the leadership in the future of Japanese insurance company and industry. So we have to be broad, including new business domains and international businesses compared with those discussions. Inside Japanese insurance company and market industries, I think there needs more detailed discussion.

So we are a share holding company, meaning that we may have to have a different style in competing in this kind of insurance company. So with equity at stake, we would like to identify what would be most appropriate for us to compete to become the ideal company in the industry. Thank you very much.

Now Ishii-san, please go ahead.

So for fiscal 2030, we have the challenging target of market capitalization of JPY 10 trillion. We are well aware of the market and how are we going to fill the gap to achieve this target is what we are now being asked for under scrutiny. So I'm from Tokio Marine, as I said. So what I have been doing, including M&A and other deals, it has actually impacted the business results, and we had increased market capitalization. Well, I already left Tokio Marine, but I have those experiences in my career path, meaning that what you have done and as a result, you get returns and that would ultimately be reflected to share prices, and there could be some time lag. I'm well aware of that.

So I may be repeating myself, but we should be as fast and quick as possible to show that we can do what we had promised to market participants and shareholders. So Dai-ichi Life portfolio, if you look at it closely, by fiscal 2030 in order to achieve the target set, what kind of business portfolio is required. And with that, ultimately, how can we reflect that to our share prices. So we need to have the future ideal of our business portfolio. So that design could be crucial for what we are doing as a business. So looking at domestic as well as international and protection, savings and investment and asset management, insurance.

So how are we going to align all this together and also annuity as well as noninsurance, new businesses. So these are all important pillars, all the domains we are covering. We are looking at the broad horizon. So in each domain, what would be the ideal business that we can construct. And then as a total, like we can maximize our return, looking at the risk allocation as well. So those are the perspective we are applying. But inside the Board and the company, whether our discussion is full-fledged, well, maybe we can do more. That's my opinion.

So in each deal, of course, we are discussing it in the Board of Directors. But on these each points, looking at the entire business portfolio, what is the ultimate goal, what we have to focus right now. And then we are always emphasizing on those points. And looking at the mid- to long-term plan, we are looking at each list items and having detailed discussions and going to have a good result looking at the overall portfolio.

Thank you very much. Okay. So let's go into the second theme. So here, in fiscal 2024, as we may be repeating, but capital efficiency exceeded the cost of capital for the first time. To further enhance capital efficiency in 2025, we have implemented and announced multiple M&A deals. Regarding these initiatives, please share with us what discussions have taken place at the Board of Directors' meetings and what governance aspects are prioritized in decision-making processes for M&A transaction, along with areas requiring improvement perhaps.

Additionally, so currently, we have Challenger, Capula, M&G in 2025, we have been investing. But how do you perceive the recent series of minority investment deals with regards to each deals? So first, Ishii-san, please go ahead.

Yes. Thank you very much. So as I mentioned earlier in this session, so the total business portfolio by fiscal 2030, how are going to compile that? And in each items, how should we have it aligned? So Challenger, Capula, and M&G, all these deals are under discussion.

Challenger, as you may know, in Australia, we have TAL, the top player, our subsidiary. And so the Australian market and we have the presence as a top player. We're going to expand that to have more synergy, and we want to expand our business more and more. So as a piece of our small steps with Challenger, we have been holding strategic discussions already. And at Capula as well, how are we going to expand globally for asset management businesses? What are promising, for example? And what could contribute to our group revenue as a total portfolio? And how can we maximize our skills and capabilities? And what are the lacking points we have to fill the gap, for example, we're also discussing on that.

And for M&G, U.K. and Europe, where we haven't had that much presence back then, we're going to focus on insurance products and also M&G itself is a very impactful asset management company in that market. So we can combine both the insurance and asset and what are the potentials that we can expand and further go into this important market. So inside Japan, we have synergy yet to come from fledged bases. But the U.K. market compared with Japanese market, maybe they are more advanced, so to speak. So what's happening in the U.K. market can also be taken for Japanese market as a good example. So those are the perspectives we are looking at.

Regarding the minority investments, Well, it's not actually the decision from the beginning. But in principle, whatever the suitable transaction for us, we'd like to take majority. But it's not necessarily the case that we are going to take a majority from the beginning because it could be risky. So we can start with minority and build a relationship and to confirm the chemistry of -- with the company and at the appropriate timing, we can actually take a minority. That's the process. So from that perspective, we do the minority investment.

Regarding M&A deals, well, in Board of Directors' meeting, we had a lot of discussions. Last year and this year, if you read the minutes, I think there are many discussions about M&As. So for each deal, we have a good discussion with this deal, what's the impact on ESR and what will be the relationship with the company and also what kind of risks relating to the deal. And of course, legal investigation has been done as well. So very high caliber CXOs actually monitoring all the information relating to deals and everything is actually checked and investigated before we make final decisions on M&A. Sorry for long answer.

Thank you very much. So, Nagase san.

Thank you. Well M&A deals, you read on the screen, of course, we can actually improve the capital efficiency. But in addition to that, for example, we can use reinsurance arrangement to improve the capital situation. So we are working on many initiatives, and this should continue.

For Insurance business, for example, we still have room for growth. For example, we can expand our asset management capability like our alternative asset capabilities such as private debt, then we can improve the spread, then the capital efficiency will be raised.

And for Dai-ichi Life, which are working on the domestic business might be able to see productivity increase through those deals. And for Noninsurance business, for example, Capula is an asset management company. So we can increase investment in asset management business and also Benefit One that we are already working on the PMI, we can actually improve the profitability of the kind of business, and that's quite useful to improve capital efficiency.

Regarding the minority investments, in principle, well, it depends on the sector that we invest. When something happens in that company that we invest in, well, that company has to have -- I mean, we have to have knowledge to save the company in that segment. If that's the case, we can actually take a majority. However, in other segments that we don't have enough experience and expertise, probably through minority investments, we can actually learn the business model and deepen our understanding about the segment and confirm the chemistry with the management of the investee. And in that way, it's sometimes useful to start with minority investment. Thank you.

Thank you very much. So this will be the last question for the panel. This is about the monitoring of our existing business. In Board of Directors meeting, how do you actually understand and supervise the status of the existing business? And in the current business environment, do you see any particular risks that we should pay attention to? Ishii san.

Thank you. Regarding the monitoring of our existing businesses, every quarter in Board of Directors meeting, Nishimura san, CFO, report us the performance and also the status of the ESR and other financial ratio. And Ohashi san, CRO explains about the risk management from various perspectives. So we have a full report.

For a group as a whole, we can actually monitor the situation. And the major group entities status can be confirmed every quarter through those reports. So we have a clear view about the status. CXO function has been strengthened those CXOs come from the Dai-ichi Life, but the other CXO actually came from outside. So we have a horizontal access.

The CXO system is functioning very well. And for individual entity under the group, with the other companies with the status of the monitoring needed, we actually check whether the action plans are being progressed for those entities that is being confirmed and followed up by Board of Directors. There are several risks to be monitored. But as a framework, risk reporting system is there by CRO, ERM, integrated risks, various risks are explained. And what kind of risks they are actually prioritizing every year, including emerging risks that is actually explained to us.

So by this system, we can actually have a good view of the total status. And interest risk or interest rate-related indices might actually change depending on the environment and sensitivity analysis is actually being shared with us with what kind of interest rate change, what kind of impact on the ESR well, by forecasting the change in the future, they make analysis and that is reported to us at BOD so that we can actually confirm the current status.

Regarding the most recent risks that we should pay attention to is the information security and compliance-related risks and also IT, DX and AI responses, if there are some delays in those responses, that would be quite risky. So DX and IT risks for those areas, the high expertise CXO and some of them are not Japanese, but by having those high-caliber CXOs, I guess that we can actually cover important areas in timely manner.

But of course, this is quite complicated and difficult challenging themes. So I cannot safely say that perfect system is established, but actually, they are making good progress as a work in progress. Thank you very much.

So Nagase san, what's your view on this?

As I said in the beginning, monitoring of the existing businesses is important to recover investment. As Ishii-san said, in BOD and mid- to long-term strategic sessions, we actually check the capital adequacy and the capital efficiencies for each business. We actually set the KPI. And on those numbers, we reported on a regular basis.

Before I came here, I was the outside Director of Frontier Life. And at that time, sometimes I felt that too much intervention from the parent company. However, now I'm serving as an outside director of the parent company. And now I understand that as a group, it's important to improve the enterprise value and the capital efficiency of each company and the governance is very important. And for that purpose, monitoring function has to be at a high level very well.

And there are some good areas. So as you may know, in Thailand, there was this Life Insurance business that we have withdrawn already. We have exited there. And Protective in the U.S. we had a thorough dialogue with them. And through reinsurance, we have been adding more capital. So these are backed by a good monitoring system already within our company and group. So the risks in the current environment. Well, within our group, it's not an immediate risk, but those are the risks that I have personally focused and is aware. But as Ishii-san mentioned, cybersecurity, so Asahi Group is now closed.

Looking at those situations, I think these kind of risks cannot be underestimated. And also geopolitical thinking, the uncertainty from the Trump administration, we have to also look carefully about what kind of impact that could give to our business and I have been also looking at market. So the yen interest rate is also point of my concern.

Thank you very much. So Ishii san,Nagase san, thank you very much for sharing your insights today. So we hope that this session provided everyone with an opportunity to directly confirm how highly effective our group's directors are functioning. So I hope this could be a good experience for investors and analysts as well.

We will now begin the CFO update by the group CFO, Nishimura san. Nishimura san, please proceed.

Okay. So maybe only 10 minutes left. So I have one slide. So we have been discussing about domestic interest rates that's rising, and it may continue to rise. So given those situations, it could be a positive factor for insurance providers, but there could be a surrender risk potentially damaging our profit. So with those one on one and also the frequently asked question from investors, I have summarized this point.

So starting from today with breakdown, especially for in-force policies, what are we going to control the recovery risk? I would like to give some additions. So looking at the left-hand side, there is the line graph. And you can see I have been repeating that the surrender risk is limited. And focusing on fiscal 2019 and afterwards, we have been looking at more detail, and we have been showing the transition. You can see the spike here.

And looking at the entire in-force policies in the past, there is this -- we didn't see that much significant jump. But if you look closely, so latter half of fiscal 2023, we have seen the U.S. interest rate roads. And with that, there was people that switched to foreign currency-denominated products, and it went up less than 1%. So that was about JPY 70 billion impact.

On the other hand, we have the other line that for single premium single type insurance surrender rate, and it's fairly stable. So the reason behind this, we believe that the background factors preventing a significant increase in surrender rates are for products purchased through Dai-ichi Life sales rep channel, customers choose us after receiving consulting tailored to their family structure and lifestyle and the products incorporate insurance protection functions.

So based on these actual performance and also the characteristics, we recognize that even if domestic interest rates rise further and likelihood of a significant increase in the surrender rate for our in-force policies, it could be low. Furthermore, as shown on the right, we have portion of saving type products, which are relatively more susceptible to increased cancellations and surrenders during rising interest rate environment.

Within Dai-ichi Life in-force policies is limited. So volume-wise, it's about JPY 7 trillion. And looking at those entire volumes, you can see that the saving type products account for only about 20% to 30% of the total volume of individual insurance and individual annuity policies as well. Particularly for single premium saving type products, which are prone to increased surrenders and cancellations, the duration of bonds held is shorter compared to other segments. And this keeps the product at a relatively mild level against unrealized loss ratio on JGBs, et cetera, which has expanded due to rising domestic interest rates.

And furthermore, we have established measures such as constructing hedging positions using interest rate swaps for a portion of these holdings. So we have those initiatives in place. So based on these factors, we believe the surrender risk for saving products is being managed at a controllable level, and we'll continue to closely monitor market development and take timely and appropriate actions as necessary. So that's briefly from my side. Thank you very much.

[Statements in English on this transcript were spoken by an interpreter present on the live call.]

Thank you, and good afternoon. Thank you very much for giving us your time today. I am Yamaguchi, Business Head of International Life Insurance. And this is my profile. I joined Dai-ichi Mutual Life Insurance Company in 1989. And from 3 years ago, I've become responsible for the overseas business, and this is my third year. I have become a Senior Manager, Executive Officer, Business Head of International Life Insurance in April 2024. I have experience working in New York and also in India.

Next slide, please. And today, myself and Brett will be providing a briefing on what we are doing in our International Life Insurance business. So to provide an overview of the International Life Insurance business, I would first like to give a brief history of our group's market expansion and the adjusted profit target of the International Life Insurance business.

So starting with our market expansion to Vietnam in 2007, our group has entered an expanded business in Australia, Thailand, India, Indonesia, United States, Cambodia, Myanmar, New Zealand. And as announced, we are also planning to enter into the U.K. market as well.

Last fiscal year, the International Life Insurance businesses adjusted profit exceeded JPY 100 billion for the first time, expanding our share of the group-wide adjusted profit to 1/4 approximately 25%. Dividends received from overseas subsidiaries have also continued to grow steadily, exceeding JPY 280 billion in the amount of accumulated dividends. In this way, through steady growth in profit and dividend payments, we are contributing to the group's capital circulation management.

Going forward, we aim to expand our share of the group's adjusted profit to approximately 40%, or JPY 160 billion, by FY 2026 and approximately 50%, or JPY 300 billion, by FY 2030. In order to achieve these adjusted profit targets, we have the recent initiatives and future vision by region, which I will cover in the next slide.

The International Life Insurance business mainly operates business in 4 regions, namely North America, Oceania, Asia and Europe. Going forward, for each market, we have strategies in place according to the market's level of maturity in our 3-level maturity scale comprised of advanced market, growth market and early market. North America, Oceania and Europe are positioned at vast markets. And through capital efficiency improvement and business scale expansion, we aim to pursue an immediate contribution to the group's adjusted profit.

Recent initiatives here include those in North America with Protective's acquisition of ShelterPoint, as well as seeding of in-force box to reinsurance, and initiatives in Oceania was TAL's investment in Challenger. Going forward, we aim to pursue scale in mature extremely large markets, explore new areas such as capital-light businesses and further drive expansion into adjacent businesses and pursue synergies.

In Asia, we position markets such as Vietnam and India as growth markets, and markets such as Cambodia and Myanmar as early markets. By capturing the high growth potential and leveraging our early market entry advantage, we aim to contribute to the group's profit in the mid- to long term. Recent initiatives in this region include enhancement of distribution channels, expansion into neighboring regions where synergies can be expected, as well as expanding market share.

On the other hand, as can be seen from the dissolution of our capital relationship with Ocean Life in Thailand, we will be reviewing our business portfolio in an appropriate manner at the appropriate timing. In order to achieve our adjusted profit goals for FY 2026, we will be entering into new markets and/or work on M&A activities to further our contribution to additional profit.

As mentioned earlier, our recent initiatives for investment in M&G in the U.K. provide a launch pad for us to enter and expand into the European life insurance and asset management business in the future. We will continue to work on further globalization of our business portfolio going forward.

And last but not least, in this slide, I've mapped the Dai-ichi Life Group's coverage of major markets and regions across the world. As you can see, we have a well-balanced coverage of major markets across the world, such as North America, Japan and Europe. We are benefiting from the high growth potential in the Asia Pacific region and have established a competitive position in each market. And from this point onwards, we'd like to continue focusing on these endeavors. And from here, we'd like to focus our presentation on our strategies for a region which plays an important role for sustainable growth in the International Life Insurance business.

And so I'd like to turn it over to Mr. Brett Clark, who oversees the Asia Pacific region to talk about recent initiatives and strategy going forward.

Well, good afternoon, everyone. Please allow me to speak in English today. It's my pleasure to be here today with you and talk to you about the Asia Pacific strategy.

My name is Brett Clark. I'm Senior Managing Executive Officer of Dai-ichi Life Holdings, and CEO and Managing Director of Dai-ichi Life Asia Pacific. In my current role as an executive of Dai-ichi Life Holdings, I have the responsibility to lead Dai-ichi Life's strategy and business operations in the Asia Pacific region, including the Oceania region.

I've been very fortunate to have a long career in life insurance for over 30 years. I'm a qualified actuary and commenced my career in various actuarial and management roles with a particular focus on product management, marketing and business growth. Prior to my current role, I was the CEO of TAL, Dai-ichi Life's business in Australia for almost 10 years, and I've had 16 years in total working for TAL. In fact, in my first week working with TAL in August 2008, Dai-ichi Life made its first investment in TAL. And so I consider that I've been a Dai-ichi Life executive now for 17 years. And then prior to TAL and Dai-ichi Life, I spent almost 10 years with AIA.

Next slide, please. And so today, I would like to provide you a brief overview of the strategy for Asia Pacific, and then I look forward to your questions. Before I go through this, I would like to share some context for the Asia Pacific business environment and our strategy.

This slide covers the key trends and implications for our business strategy in Asia Pacific. I don't intend to go through this line by line, but I would highlight some key points. Asia Pacific, including Oceania, presents a diverse portfolio of market opportunities. From early-stage, high-growth markets, to more developed markets, to more mature markets like Australia.

Demographically in Southeast Asia and India, in particular, the growing middle class continues to present growing demand for the products and services that we provide, and opportunities for sustainable long-term growth for our business. But of course, we're not the only company that sees this opportunity, and we respect our competition, and know that we will need to be agile, move with speed and be consistently at our best to win and compete and perform in our chosen markets.

Next slide, please. My objective is that the Asia Pacific region is a growth and earnings platform for the Dai-ichi Life Group, supporting the ambitions more generally in the international business led by Yamaguchi-san. The ambition for Asia Pacific is to contribute 25% of Dai-ichi Life group adjusted profit by 2030 at a return on equity of greater than 15%.

Today, currently, Asia Pacific contributes around 13% of group adjusted profit and a return on equity of around 13%. So we have a challenge to go together with our ambition, and I'm personally very excited about that. We will do this by supporting our existing businesses to grow, seek new opportunities to grow in existing markets and in new markets, and be disciplined in the allocation of capital.

Our Asia Pacific strategy has prioritized market opportunity based on individual market characteristics and opportunities. And secondly, our ability to successfully compete and win in our chosen markets. As a result, we intend to compete in markets where we have higher confidence we can scale our business and win in the market, and likewise, avoid subscale market positions where we will be challenged to effectively compete. As we roll out this strategy in the future, this may mean our footprint in the Asia Pacific region may be fewer rather than more countries, compared to some of our regional competitors, and we are comfortable with that approach.

Next slide, please. While Asia Pacific is not a homogenous regional market, our strategy identifies 3 existing growth engines in the Asia Pacific region, namely the Oceania region, the Mekong region and India, where these markets are linked by common cultures and common market dynamics. As a very large market and opportunity, India stands on its own in this strategy.

Of course, we have performance and growth expectations for each of our individual businesses in the Asia Pacific region. While within these three engines, in addition, over time, we also expect strong strategic revenue and expense synergies that are obviously -- are more obvious and more easily realized. In addition to meet our 2030 ambition as we expect to grow from our existing 3 Asia Pacific engines, we would also like to add a fourth engine in the Southeast Asia region to the portfolio.

Next slide, please. I would like to now cover our recent investment in Challenger, a listed financial services, retirement and asset management business in Australia. Our Life Insurance business in Australia, TAL, is the leading life insurer with 33% market share. Around half of the revenue of TAL is default group life insurance provided through Australia's superannuation system, which provides life and disability protection to working Australians.

The reason I mentioned TAL as part of the Challenger investment is to illustrate the importance of the superannuation ecosystem in Australia. Superannuation is the largest and fastest-growing nonbank financial services system in Australia and central to the wealth management, asset management, insurance and retirement sectors. Australia's superannuation system is a mandatory retirement savings system for all working Australians, and is one of the leading private retirement systems in the world and currently the fourth largest retirement asset pool globally. By 2030, it is estimated to be USD 4 trillion in size. And in the next decade, Australia is expected to be the second largest retirement system globally, only behind the United States.

In addition, over the next decade, we expect to see significant growth in the retirement market from both demand and supply side factors. Firstly, population demographics. More Australians will be reaching retirement age with more wealth seeking retirement products and solutions. Secondly, government policy tailwinds. Government policy stimulus for the retirement market through the introduction of the retirement income covenant, and financial services reform will aid the retirement sector.

Thirdly, superannuation fund scale. In addition to financial advisers as part of the retirement income covenant, superannuation funds will offer retirement products directly to superannuation fund members. And lastly and fourthly, regulatory support. Capital changes to capital regulations by the local regulator, APRA will support more efficient manufacturing of retirement and longevity products.

So by 2033, it's estimated that 3.6 million retirees will hold 1/4 of the superannuation systems assets, while a further 6.3 million Australians will be approaching retirement with almost half of the systems assets. This represents a profound and large shift in demographics, wealth distribution and a significant opportunity for organizations that are well positioned in the Australian market.

Challenger is the market leader and dominant retirement income provider in Australia. To capitalize on this future opportunity, Dai-ichi Life has acquired 19.9% of Challenger through our Australian subsidiary, TAL, subject to final regulatory approval. And in terms of the ambition for Asia Pacific, the 19.9% shareholding of Challenger will add approximately JPY 9 billion to JPY 10 billion per annum in group adjusted profit.

While both TAL and Challenger will continue to pursue their own competitive strategies in the market, we also see future collaboration opportunities between the two businesses. And an example of that was this week, where in [ Sydney ], a very large Australian superannuation fund has jointly appointed TAL and Challenger as their retirement income provider. And so we see this as a natural extension of our strategy in Australia, and beyond Australia, to expand from protecting people while they are working, to protecting people in retirement.

Next slide, please. And just to finish, finally, I would like to highlight some other achievements in the Asia Pacific region. In Vietnam, despite some challenging market conditions, Dai-ichi Life has achieved the #1 rank for new sales among all foreign life insurers only behind the local insurer [indiscernible]. In Cambodia, we are pleased to have commenced a new partnership with Woori Bank as part of our work to continue to expand our distribution footprint and growth platform in Cambodia.

In Myanmar, it was very sad to see the devastation on local communities from the recent earthquake. Our first priority was the safety of our people and support for impacted communities, and we were on the ground to provide support and provide aid. Nonetheless, as a testimony to the amazing resilience and spirit of our people, the performance of our business has rebounded, and our business in Myanmar continues to perform well.

And lastly, in Thailand, as you may know, we have recently discontinued our strategic partnership and 24% shareholding in Ocean Life, selling our shares back to our joint venture partner.

And that concludes my presentation for today. Once again, it's been a pleasure to speak with you, and I look forward to your questions. Thank you.

Hello everyone. As introduced, my name is Ogata. And as of July 1, I have assumed the post Business Head of New Fields of Business. You see my profile here on the page. And in my 30 years post career, half of that has been spent in strategic consulting, and half of that in a business entity. And I have been working on various new businesses over the course of my career. And I believe that was the expectation behind my getting appointed in my current role.

And today, I'd like to talk about our strategy for new fields of business, as well as the role of Benefits One in that strategy. And also, I'd like to talk about the status of post-merger integration activities at Benefit One. Those are the 3 things I will talk about today.

Next slide, please. So as we have been saying previously, the Dai-ichi Life Group is aiming to transform itself into a kind of infrastructure that supports customers in all aspects of their daily lives, which goes beyond the conventional life insurance business. We're aiming to turn ourselves into an insurance-related service provider. Our group has continued to provide insurance products for over 100 years.

And while we support customers for decades throughout their life, unfortunately, the moment when they feel value is when we pay their claims payment. So there was a gap between what we are doing and the value per see. People are now using smartphones everywhere. And customers use a lot of services through their smartphones, services are at their fingertips. And given the situation, we want to be providing services that support all aspects of our customers' daily lives. In order to do that, we believe that insurance is not enough. We want to provide other things as well in order to provide value. And so as announced earlier, we are changing our trade name to Dai-ichi Life Group, Inc. from FY 2026. So in name and in substance, we really want to show our commitment.

So in turning ourselves into -- transforming into an insurance service provider, I'd like to provide an image of what we envision. This is shown in the chart here. And as members here today will be quite familiar, the group's goal of achieving JPY 600 billion in adjusted profit in 2030, as well as we have a target of achieving JPY 10 trillion in terms of market cap. And in order to increase the market cap and corporate value, we need to increase our profit for the insurance business as well. And we also need to enhance the market's future expectations for our long-term growth as well for insurance and other businesses.

If you look at the insurance businesses [ PER ], generally speaking, it's around 10x multiple, which is also true for ourselves. But if you look at other services like IT and digital, the multiple is many times more than that. And so outside of the insurance business, we want to connect new values so that we will be creating expectations for growth that was not possible with just focusing on insurance. That's why we want to contribute to enhancing corporate value. And we believe the new fields of business will help contribute to that purpose.

So strategically speaking, what are we going to do? I'd like to talk about three directions that we want to go in. The first direction is to work on deepening the Benefit One platform, which we acquired. And we want to be expanding our alliance, expanding customer bases where we can cross-sell. And we also want to work on bolt-on M&As, and also use AI and digital capabilities to further improve our services.

The second direction we want to work on is to explore adjacent areas besides Benefit One. So our group has been providing services like our health care app, QOLism. And we have Benefit One's health check services and specific health guidance services. By combining these health care-related services, and by adding on new service, we believe that we can go beyond insurance, looking to promote customers' health. And that's the kind of health care service that we would like to pursue.

Thirdly, expanding into high-growth areas. I mentioned we want to enhance expectations for future profit growth. So insurance Benefit One and adjacent areas. And in addition to that, we see new technologies cropping up every day. So we want those new technologies and new businesses to be a part of our investment. And the world is moving much faster. In 5 years' time, we do not know what kind of new businesses we will see. Generative AI was nonexistent 3 years ago. So that is where we want to constantly look for information in building our new businesses.

And as part of that from this year, we are working with a new business program, creating new business from scratch. And it's a joint company venture program where we solicit ideas from group company employees, including Total Life Plan Designers. So we want to leverage the three methods of new business buy, borrow and build, which is working on M&As, alliances and also working on business development from scratch and then expanding. By doing that, we want to be creating services that previously did not exist.

Next slide, please. And next, I'd like to talk about the role of Benefit One in the new fields of business. As you know, Benefit One operates in a B2B2E platform business model. And so we've been providing benefit services for our corporate clients. And in addition to the benefits package, we also help companies solve challenges in the area of HR accounting and general affairs. So traditionally, Dai-ichi Life Group has mainly been focusing on insurance solutions as a group insurance group annuities and business owners insurance. But by providing together with Benefit One various other services, we'll be able to create more customer touch points and provide more services.

And as you see on the right-hand side, for the 2E services, this is where we can leverage the Benefit Station platform to provide our corporate customers, employees and their families with a broad range of services, including child care, nursing care and health care services that stay close to the daily lives of these people. Now as mentioned earlier, for insurance services, there's a long time before customers build a benefit. But by increasing a lot of new customer touch points, we will be able to create new value.

Now I'd like to talk a little more about how we look to combine our assets and what are we aiming to achieve? The Dai-ichi Life Group has not only provided insurance in the past, it has also provided health care services like QOLism as well as BaaS services, and other asset forming services. So the data we've already got from these services can be combined with Benefit One's Benefit Station uses history data, which makes it possible for us to provide proposals that are best suited to our customers.

For example, if there's a person who has withdrawn a lot of money from the BaaS bank account, who has also used the marriage-related service on Benefit Station, then we can go on to recommend overseas travel and house moving services on Benefit Station. And also using this information, we will also be able to create opportunities for face-to-face consulting with our Total Life Plan Designers, who will be able to give proposals with better understanding of the customers' needs. So by combining a lot of information, we want to tie that to better proposals, better services for our customers, and we want to be building that engine to provide that capability.

Lastly, I'd like to talk about a 1-year plus effort for post-merger integration efforts underway at Benefit One. Through the past year, we've been working at various levels in the PMI process. And working on governance, top management from both companies have held 4 -- steering committees 4 times a year, so that Benefit One and Dai-ichi Life Group members could continuously talk about discussions going forward for future growth of Benefit One.

In addition to the top-level talks and the working level, we have over 50 working groups created where employees on the ground talk bottom-up what can be done, spanning from new product ideas up to cost efficiency improvement ideas. And we are pursuing synergy between Benefit One and the Dai-ichi Life Group. And also in integrating operations, the Dai-ichi Life Group has been sending people to keep post in Benefit One. We also have personnel who are responsible for PMI as well. And in the short term where we have the high expectation is to really use the Dai-ichi Life Group's distribution channel to expand sales of Benefit One services. So we have dedicated groups in place and also have dedicated liaisons who will be working on this.

Next slide, please. So I believe this slide shows the information that you are very interested to know. Recently, what are we seeing in terms of achievements? So on the left-hand side, you have the short-term synergy. Of course, the Benefit Station sales opportunities started last year in May with 400-plus sales reps. And then in autumn, we also had Total Life Plan Designers also work on sales activities for Benefit One. And for Benefit Station services, these are corporate customer services. And so it takes some time for these to be approved. But in terms of on an annual basis, we see almost JPY 4 billion of annualized new membership fees. This is a big growth compared to the current level of our membership fees.

It's easy to talk about these benefits, but many companies are finding that it's quite difficult to achieve. So I've just assumed my current post in July, but the thing that amazed me the most is that we are seeing steady progress and already seeing synergy between the 2 entities.

Besides that, as you can see on the right-hand side, providing insurance products and Benefit One services, and also Total Life Plan Designers developing business in order to expand our corporate customer base. Also, our health care app QOLism become bundled to Benefit Station. So these are various ideas that came from the working level groups, which are now really close to realization. So things that we had a vision for the mid- to long term are already materializing.

So very briefly. Our group, which we are changing the trade name to Dai-ichi Life Group. I talked about our strategy as well as where we are with PMI. As mentioned in the beginning, turning ourselves into an insurance-related service provider, and enabling growth of corporate value is something that we'd like to work on with speed. Thank you very much for your kind attention.

I'm Norio Shiraishi, President of Benefit One. It's nice to see you. I would like to first talk about how the company was founded first.

I used to work in Pasona Japan and Mr. [Son] of the SoftBank and [indiscernible] representative had a meeting, and we talked about that there would be an era of Internet, and we want to do some business around it. So in case of the goods, there is a distribution. But in case of services, there's no distribution.

Well, in case of goods, goods are sold at 7-Eleven and Ito-Yokado and other supermarkets. But in case of services, the services are sold directly by the creator of the services, or in case of the cell phones, it is sold through agents. And so it's very difficult for consumers to compare the services and decide what services to buy. So we wanted to create a kind of social infrastructure where people can see the differences in services and compare services and make decisions.

So the first intention was to create a company like Amazon, which sells services. And I thought -- we thought that the subscription model would be the best by receiving the annual fee, and we sell the service at the cost. And so that's how we started the company. However, the marketing cost would be huge. So there weren't many companies who did that. So about 30 years ago, we started the subscription service company, and we could do that because we sold the services through the companies people work for, and that makes it easier to acquire membership. So in the past, B2B2C was the model. And I believe that we are the first company who started [B2B2E].

Please go to next page. So this shows the evolution of our company in the past 30 years and the membership is growing steadily. We purchased JTB Benefit and the membership increased very significantly. And currently, the membership exceeded 10 million. And this includes family members. So if we include family members, there are about 30 million members. And in addition to the employee benefit, we have other businesses as well. So I will not go into the details.

The largest one is the employee benefit business. So this is the kind of subscription service and we acquired membership using the term employee benefits. So the Japanese companies have been providing employee benefits in the form of the company resort, or other forms of benefits. So the Japanese companies has a history of providing services to their employees. Some companies have hospitals and also the inns. So they used to use their asset and provided the services. However, we can provide the services for them at the cost, and we started the business about 30 years ago. And there was a financial crisis in 1998, and then people become kind of asset-light mind. And many companies close their company inns and they concluded a contract with a company like us, and use the hotels through such service companies, and that was most cost efficient.

And -- there are different types of services and finance and health care looked most problematic because it was difficult for consumers to understand these services. But actually, these are very profitable businesses the finance and health care. So we wanted to focus on these areas.

In terms of health care. In Japan, the medical cost is very high. And in Japan, we had to reduce the medical cost, and we introduced metabolic syndrome prevention measures. So there was -- the law was passed to prevent that kind of metabolic syndrome. And because -- thanks to that, we started the health care services business as well.

So the current situation -- so we have struggled quite a lot because Japan has faced a deflation and there was a lot of people who wanted employment. And at that time, the companies did not want to focus on human resource because they could easily hire people without much effort. However, now we are facing a workforce shortage. So the small and medium-sized companies have to do something in order to ensure employment recruitment. So employee benefit was only for the regular employees, but because of the law, SMEs had to provide such benefit to employees as well. So however, there are many companies who are not obeying this law, but many companies are now introducing the benefits for -- employee benefits, even for the contract workers as well. And penetration is about 30%. There is a critical mass principle. So if the service exceeds 30%, that would -- the penetration will accelerate after that.

So because we joined Dai-ichi Life Group, we will be able to leverage the manpower of the sales reps of Dai-ichi Life. And that would be a very positive thing for us, and we can get a very good tailwind. And this -- these are the major KPIs in recent days. The number of the membership exceeded 10 million. And the unit price, thanks to the Netflix plan has tripled, and the rating of app has went up to 4.5, and the number of payroll deduction membership doubled, and the number of visits of health checkups increased 1.5x. So we are growing very steadily. And these are the major initiatives for this fiscal year.

We believe that this is a preparatory year. And next year, we will start everything in earnest. So by April next year, we have to prepare our organization and system. And we are now building the sales organization in detail. My major theme is we would like to prepare unification of communication with Dai-ichi Life, so that Dai-ichi Life will think about our business as their own. And we have started the payment business, and we would like to expand that and also the health care business.

I would like to talk a lot about this, but the time is limited, but we believe this will boom next year, and we are now preparing for it now. And eventually, we would like to make all the Japanese people a member -- make all Japanese people our member through their own companies. And we would like to create the largest B2E platform. We would like to provide all the services to employees and consumers, and create a mechanism where the people can compare the services and choose their services, including [health care] and beauty. And I think the finance would be the key area, including insurance. So that need to be visualized and appropriate way of selling need to be introduced. And there will be some changes in laws, and we would like to pursue that area.

I talked about the payment business, but investors said that there will be no fee in 5 to 6 years. It's not because people don't pay the fees, or we would remove the fees, but we are trying to make 120 million people our members. And we are sure that we can do without receiving fees. And we believe that some companies would not pay fees. And if there's no fee, there's no reason why the companies deny joining us. So the new payment system, payroll deduction is introduced. And I think there is also a company like that, but direct withdrawal from the salary payment, you can pay the electricity bills and all types of bills.

We want to try to do that. It's very costly and there's a risk and it's kind of bothersome. So we wanted a different form of payment. And that's payroll deduction. That's less costly and lower risk. So we are thinking about the -- we have created a platform for payroll deduction. And the life insurance company has always done this because there's a discount offered by the life insurance companies for paying the premium by payroll deduction. So I did the research on life insurance company. So all the -- everything like electricity and water bills, all the cost can be paid by payroll deduction, and we can receive fee. We are receiving 3% fee from [indiscernible] and Netflix as well. And so we took 2 years to negotiate with Netflix, but this B2E platform is something that does not exist in the U.S. and Netflix agreed to do this.

Eventually, I'm Senior Managing Executive Director of Dai-ichi Life. And Dai-ichi Life is considered as an insurance company and also financial institution. But for me, insurance and finance are part of the services we provide. So eventually, Dai-ichi Life Group will handle all kinds of services, including insurance and finance, but also health care. I think all the services will be used by combining different types of services. So we can create a new social platform that does not exist in this world today.

So this is maybe the last slide. So now what we are trying to do is to expansion of membership, we would like make 120 million people our members. We can reduce the -- we can do that in 6 to 12 years. We make all of them members, and we can increase the transaction of payroll deduction. And we want to provide all the services at the lowest cost. And also, we would like to propose the optimal service for individuals through the Internet, or using AI, they can find the optimal service for individuals. It really depends on the person, what is the best service for them. If you think about eating, the preference differs from person to person. And what you want today may be different from what you want a week later. So we are offering this using a digital network, but because we joined the Dai-ichi Life Group, we have 35,000 sales reps, the Total Life Plan Designers.

So not just introducing services using digital network, but we can provide that service face-to-face with our customers. So if there's a waiting anniversary coming up for certain customer, then you can offer, or you can suggest them to go to dine with the person's wife at the restaurant. And you can, of course, do that using a digital network, but also you can visit these customers in person and propose that kind of celebration. So you can promote the use of the service using a human network. So we would try this and that. And then we can do something that ordinary IT companies cannot do.

So the things are changing very rapidly in this world. And thanks to our efforts, I think Dai-ichi Life Group and the Benefit One merged very nicely. At first, there are a lot of problems, but now all the employees are very positive about this merger and the turnover has dropped significantly. And there aren't many students who withdraw from working to looking with us. Today, there aren't -- there's a labor shortage, and it's very difficult to recruit people. But thanks to our cooperation with Dai-ichi Life, that problem has been solved.

So Benefit One can help the companies reduce their turnover. And I think this is a solution we can sell. We would like to continue to increase our membership. And eventually, the service will not be limited to Japan, but we would like to provide such social solution that can provide the services to all people. So it's not easy, but if we keep on working, the market capitalization would be JPY 10 trillion or more. So we can -- we would like to continue to work on this. So that is all from me. Thank you very much for listening.

[Statements in English on this transcript were spoken by an interpreter present on the live call]

[Audio Gap]

We ranked #5. And we were having our projected as a mid-tier, so it was already achieved in terms of our objective. And after April, the stock price performance, still struggling, so we would like to improve our corporate value enhancement going forward. Move on to the next page, please.

So next, on the left, cash holdings at the holdings company. FY 2024 onwards -- and the strategic investment was already explained, including the M&G investment. So we had JPY 275 billion. And for the shareholder, payout was already announced on May 15. And FY 2024 profit-based dividend is going to be the 22 -- 226.7 billion, including share buyback of JPY 100 billion that was announced the same day. And the payout ratio is going to be increased to 45% since -- this fiscal year. For ESR, at the end of March, 210%. For the overseas subsidiaries, applying a new standard -- and we calculate this ESR. And MOCE related internal model change was adopted. Therefore, the application of the new standard for the overseas subsidiary -- and there were some reduction. And that was -- already surpassed the offsetting. And so we maintain the relatively high ESR. And GL for the risk reduction effort, we had the -- promoted the disposal of the domestic shares of JPY 225 billion risk reduction. And also it worked quite well compared to the plan because of the market conditions. And we now see the domestic interest rate is steepening, but at Dai-ichi Life, we have the insurance company specific, the approach for the bond for the liability reserve. We adopt the [indiscernible] method. And on the other hand, in terms of the insurance liability, do -- now promote the direction matching. And continuously we now replace the assets -- and if there is any kind of decline in the market price, we need to recognize some impairments. However, against the current interest rate level, all the liability reserve bonds do not have to make the impairments. And even further interest rate rise, we will take some measures like rebalance. Or the various reserves will be used. And also the held to maturity and other measures will be taken. So that, at the moment, current interest rate level do not affect any kind of impairments necessity, but of course, continuously we will be prepared for the future interest rate increase -- and pros and cons of the all the measures at the moment as well as the future. And we'd like to take some right approach at the right timing.

Move on to the next page, 6. This page talks about the ESR and the ESR applying the new standard and compared to the previous year. And it was 1 percentage point reduction, with 210 percentage point. And the market risk reduction effort as well as the other risk reduction efforts, we now have some improvement in the value of new business and expected profit increase. However, there were some rate increase of the yen. And the mass lapse risk is increased. And the Benefit One acquisition -- we recognized a goodwill deduction. And that's why the eligible capital reduced. That's affecting this ESR. And after the April -- or capital strategy policy and also shareholder payout strategy -- that will be around the expected range of 200 percentage point.

And then in terms of the sensitivity. Compared to the previous -- the explanation. Because of the protective of adopting the new standard, we saw some subsidiary changes in the U.S. dollar interest rate ups and down.

Now move on to the next page, 7. Talks about the group risk profile. The market risk reduction effort, both stock and the interest rate risk, we now work smoothly. And especially for stock risk reduction, we promoted the -- better than the plan, disposal of the domestic shares. And also, interest rate risk reduction moved positively. And overall market risk reduced compared to the previous fiscal year.

And in the year coming this year, we now see the certain level of interest rate rise, but mass lapse risk will be -- is minimal. So we would like to explain in details in the next page.

Page 8, mass lapse risks. There are 2 initiatives. On the left: We now made the partial change on the MOCE calculation for the internal model. So the mass risk -- lapse risk calculation. So the immediate decline policies [ for the in force ], when we calculate the -- such immediate decline, such scenario, MOCE, originally we did not change the policy volume. However, we now apply the -- after the decline, the in force would be adopted for the MOCE calculation. For that, we have a more accurate calculation. And also, as the in-force policies are declining, MOCE also decline. And that's affecting -- the mass lapse risk increase was relatively mild. And that's impact on the ESR -- at the end of March 2025 will be positive 4.6%.

Now we continue to have a study on J-ICS and mass lapse risk. And on the right, you can see the -- some studies underway with the reinsurance companies. And the general policy overall company is now 30% lapse scenario. And the group [indiscernible] 50%. There is a current stress scenario, but compared to the past experience and by company, as you can see, the large-scale insurance companies, compared to the relatively small-sized companies, the surrender ratio or lapse ratio is mild or low, but of course, this is the initial studies. Therefore, we continue to work on this study. And then eventually, we want to have a better quality so that we can adopt it on the internal model.

Page 10. This is shareholder payout policy. The payout ratio is the -- against the profits generated March 2026. And we plan to increase payout ratio to 45%. And at the moment, dividend payout is [ over 40 percentage point ]. And for the share buyback, we already announced JPY 100 billion; and that purchase has already begun.

Now Page 11. This is cash position of the holdings. In November, we released [ the cash ] position outlook -- and already incorporating the latest strategic investment announcement. And the March 2025 subsidiary cash remittance, 86%, but especially the Dai-ichi Life profit level was better than our [ BOY ] outlook. And the cash remittance was also uplifted, as well as the dividend availability. And the U.K. Capula, M&G and holdings cash and payout, we continue to have the strategic investment. And so as you can see, the position would be available -- strategic investment availability would be JPY 50 billion. And also withdraw from the Thailand business -- and there are some free cash flow already reflecting -- and continue to consider including the pipeline opportunities and share buyback or the shareholders' payout policies. We may consider the uplift of the strategic investment envelope of JPY 300 billion.

Now move on to the next page. So this is the relative TSR. And we rank #5 against -- for the 3-year TSR, starting from FY 2022. So the BOJ's domestic interest rate increase is also boosted and we maintained the middle level.

That concludes the presentation. Thank you. Now move on to Kikuta-san.

Thank you very much. My name is Kikuta. So thank you very much for your support on daily basis. We, I truly appreciate your support.

Now please take a look at Page 16. So the mid-term plan. The year 1 is now summarized as follows. Against our plan originally, we believe that the company is progressing well ahead of the plan. And the economic condition was favorable to us. And subsidiaries profit level -- increased profit, as well as capital the efficiency improved. As a result, overall group profit level or capital efficiency, in the year 1 of the mid-term plan, we already surpassed the target of the mid-term plan, but on the other hand, BOJ rate increase; as well as the U.S. President, new administration, the new policies -- over the economic environment changes. And we now see the very vague situations or uncertainty in the business environment. And we believe that this is a very critical year. And last year, we had a very good, successful year, but that itself alone will not gain the trust by the investors, so towards year 2, we would like to solidify this, fortify this year 1 good result; and then try to improve the corporate value.

And in terms of domestic business. We continue to dispose the domestic shares and to reduce the market risk. And the growth driver overseas business or the noninsurance business, which is both businesses, we need to accelerate our growth, both organic and inorganic. And capital circulation management perspective, some business portfolio, we already withdraw. And like that, we continue to have a replacement of the business portfolio. And in terms of the selection of the new organic project, we will have a more stringent and -- discipline in the investment decision. And for the time line for the growth -- or the regional distribution or the cash generation capability will be our key focus when we make decisions. And overall, multifaceted element will be taken into consideration, and focusing on the capital efficiency [ oriented ] management.

Move to the next page, please. So this section describes the direction of initiatives in the second year of the mid-term management plan. Although we have achieved our 2024 profit level and capital efficiency ahead of our 2026 mid-term plan target, there's a gap between our current position in aiming to become an insurance group that ranks among the global top tier and our current position toward our 2026 market capitalization of JPY 6 trillion, which is a gap from our assumption. As I'll explain later, we need to raise the bar and further strengthen our efforts to achieve our goal of becoming a top-tier global insurance company by 2026. If we cannot close the gap, we will not be able to narrow that gap with the global top-tier companies. And thus, this can lead to a further widening of the gap, so we will have a healthy sense of crisis to deal with this situation.

Now please turn to the next page. I'd like to talk about the increase of the group's adjusted -- or the profit and ROE, which are the KPIs of the medium-term management plan. First, regarding adjusted ROE, which [ exceeded ] 10% in the previous fiscal year, it is important to cultivate the ability to stably secure the same level while taking into account changes in the business environment. In addition, as I explained in my explanation last November, the global top-tier companies have reached even higher ROE than when the medium-term plan was formulated. In light of this, we believe that the level we should aim for is also required to go one step higher and further. Therefore, we have reached the level of ROE -- we are aiming for 2026 to 12% of -- more compared with the initial 10% and have also raised our target level for 2030 to be 14%. So we will continue to make every effort to improve our capital efficiency.

And this would lead to our group's revised profit forecast for 2025. And the profit plan was formulated based on the economic assumption at the end of March, so -- which resulted in a forecast of JPY 410 billion as a profit plan that reflects our conservative approach compared to our other companies, but we expect to secure over JPY 400 billion as we did in the previous year. Our earnings base is steadily increasing in depth compared to a few years ago, so while encouraging organic growth at domestic and or -- for seeds companies, we believe that we can achieve the newly set profit level of over JPY 450 billion by 2026. And by providing early monetization [ of the organic ] growth projects through careful selection and timely execution of investments in response to changes in this business environment.

Also we are also considering raising the profit level to JPY 600 billion by 2030, which was originally targeted at the beginning of the plan based on the status of monetization of growth investment projects that have been -- we have been working on since the start of the medium-term management plan [ and changes in ] economic environment so that inflation and rising interest rates. We'll provide a new explanation of this matter as soon as our initial study is completed.

Now please turn to the next page, please, Page 20. So regarding our policy for capital strategy products, we would like to present the current pipeline and the direction of allocation to each business -- respect to the JPY 450 billion profit target we are aiming for 2026. So core direction to expand our business domain from insurance business to insurance service business remains unchanged. And on the other hand, including investment to M&G, we'll continue to position the insurance domain in which we have expertise as our core business. And also, in addition to flexible deal execution, mainly in overseas business, leveraging protectives acquisition business that belongs to the world's largest life insurance market, we'll also carefully select projects that will contribute to strengthening our group's competitiveness.

And in terms of asset management business, we are now expected to double its profit level to JPY 20 billion in 2026. So we would like to also strengthen other projects so that the customer contact points could be strengthened, utilizing the Benefit One ecosystem and -- which we consider important to our long-term business strategy. So towards the achievement of JPY 450 billion in fiscal '26, we carefully select our deal pipeline and also both strengthen our current cash generation and capability and long-term earnings base.

Next, I would like to also give explanation about the investment in M&G of the U.K., which was announced at the end of last week. So here I would like to invite Mr. Kai, our executive officer in-charge.

Thank you very much. I am Kai, executive officer in charge of this business.

So I'd like to explain about our investments in M&G in U.K. So please refer to Page 21. The acquisition of this M&G, which is engaged in the life insurance and asset management business in the U.K. and other European countries, is expected to result in an estimated investment amount of approximately JPY 160 billion based on the current share price and exchange rates. So this is according to our decision made at the company. So this M&G was an asset management business under the umbrella of the former U.K. presidential group, 1 of the 3 largest brands in the U.K. And it became independent after a spun-off in 2019.

And with regards to insurance business, it says here BPA business from several years ago. They have been -- resumed their acquiring new policies. And other than that -- so they have closed book business that have been delegated to them from presidential group. And they have stable business foundation. Also, with the asset management business, that helps their profitability. Overall business as a group, we see high -- or I mean they have their high dividend yield. So it is expected to enable the project to secure an IRR above our company's hurdle rate.

And also the reentry into BPA business and also expected continuing expansion in the U.K. life insures market is expected to offset a certain amount of closed book shrinkage and increase the sustainability of cash flow, enabling us to recover the investment amount of early as approximately 10 years. And specifically, since we are acquiring shares through market purchases, there will be no premium. And also, looking at our method of acquisition of own shares, this would also be an advantage to our business.

And now to the next page. Also this project will provide us with an access point in the European market, where we previously did not have a business [ phase ]. So M&G is a successor to the former president's group. So especially in the U.K., they have a strong brand power in the sales channel. And with that, the asset management business is also [ placed ] with a competitive edge. And also this significant advantage is also seen in the BPA business, which requires a high level of reliability. And M&G's growth capacity: They are based in an asset management business, and that's the core of everything that we are focusing on. So with regard to asset management business, M&G has a rich investment track record as well as the founding power of M&G. And in recent years, M&G has been promoting the strengthening of the alternative area, with high growth potential, including the acquisition of several alternative assets management companies. And also our group and M&G have agreed to collaborate in terms of mutual investment management and insurance sales as well.

M&G has an extensive investment track record and sales network in the European market, so -- which is a capability that the company does not have right now. And in addition, our group had -- asset management companies with strong capabilities in specific areas such as Canyon at U.S. and Capula in the U.K. So these can also complement M&G's asset management capabilities as well. So as both companies are engaged in the 2 businesses of insurance and asset management, there are various possibilities for collaboration, such as product development, utilizing the resources from both companies so we can create a good synergy with deepened understanding of what we do.

So through the investment in the company with high cash generating ability, we will strengthen the cash profit base, increase the cash generation ability and work to enhance the sophistication of capital cycle management.

That's all from my side. Mr. Kikuta, back to you, please.

Thank you very much, Mr. Kai.

Now let's go forward, and please turn to Page 28.

So with regard to domestic equity sales plan for risk reduction purchases. So in Dai-ichi Life's plan for equity sales, in fiscal '24, we completed approximately JPY 500 billion in sales of equity, more than our annual plan, bringing our rate of progress to 40% against the JPY 1.2 trillion in sales target for the mid-term plan period. As a result, we were able to reduce the amount of equity risk to -- by approximately JPY 200 billion, including market value fluctuations, and made steady progress towards reducing the cost of capital. We'll continue to make progress in the current fiscal year and beyond to ensure that we are on track to achieve our plan to increase the balance of domestic equities to a maximum of JPY 1.5 trillion at the fiscal 2030 end.

And the right-hand side of the material shows our domestic equity trading execution operations. In light of the revised disclosure guidelines in January of this year -- so the investment in the sales of the domestic stocks are illustrated here. At Dai-ichi Life, while [ basing ALM ] management on the corresponding insurance liabilities, we conduct balanced asset management, with the objective of stable investment from a long-term perspective.

And also, in principle, domestic equities are held for pure investment purchases. And the investment execution department makes independent [ curating ] decisions based on an economic rationale. In light of the content of the revised disclosure guidelines, the company has now clarified the independence of the investment executives for [indiscernible] in the disclosure as well as reiterated that the company always trades in response to changes in the market environment. In addition, in line with the intent of the disclosure guidelines, we have strengthened our internal information management system by making it even stricter. So those are the responses from our group side as well. And the information explained will be also permeated to our investee companies and will be posted on our company and Dai-ichi Life's websites in the near future so that -- we would like to have your deepened understanding of what we are promoting right now.

Please go to the next page. So as I explained today, the group is steadily transforming itself to achieve its goal of JPY 6 trillion in the market capitalization by 2026 and JPY 10 trillion [ by ] 2030. And the economic and business environment is constantly changing, but as I explained earlier, we believe that this goal is not unreachable. As I have indicated, we will raise our profit target for fiscal 2026. And that gap I explained earlier can be offset. And we would like to also -- not only reaching the profit target for fiscal '26 [ and review ] our target for 2030, as well as we'll also plan to raise our capital efficiency targets as well. We'll continue to drive towards our stated goals while maintaining a balance between investment in growth and shareholder returns, in order to win the confidence of the market and the investors. So with that, we look forward to your continued support and understanding.

Thank you very much for your attention. That concludes my explanation.

Thank you very much. Now we'd like to move on to the Q&A session, to be conducted in Japanese. So please raise your hand, if you are with us in this venue. [Operator Instructions] We would now like to begin the Q&A session.

SMBC Nikko, Muraki-san, floor is yours.

SMBC Nikko and Muraki speaking. 2 questions. First is about the strategic investment. So during the mid-term plan, JPY 300 billion available funds. As a few hundred billions are still available, are you going to increase these funds from JPY 300 billion to more? And M&G and others, you have challenger, Capula and Canyon. And there are quite a lot of investment in the minority investment. That is my impression. So [indiscernible] was also in -- had a minority investment. And you exited, right? So for those minority investment, why -- is the intention behind? And certain investment -- you try. And then if you cannot enjoy some synergies and you may need to exit. Is that your understanding? Or are you willing, continue to have this minority investment? That is my first question.

My second question is that the mass surrender -- mass lapse risks. So Page 8, on the right, you showed us the simulation like mass lapse risks. So for the -- there are some [ JFSA ], so the reputational risks and the credit risks. So in terms of the amount to be reduced -- can be considered for the disclosed figures. Can we assess that from the discussed number? And what market is concerning. It depends on the interest rate [indiscernible] saving type of products will go up. And there are certain existing policies, and surrender or lapse is underway. And you now have a lot of studies and internal investigation. What is -- can you please share the current status?

Thank you for your questions. So the first question, I can answer. My -- second question will be answered by CFO Nishimura-san. The first, budget for the strategic investment. Yes, at the moment, JPY 50 billion to JPY 100 billion. That will be the -- around the available funds, but we are not studying the possible increase of this budget. But this year and next year -- or FY 2024 also, we had a very strong bottom line. So FY 2025, bottom line is -- become more rich, then we may have the availability to increase such budget, but basically we don't plan to increase at the moment. But if there is any shortfall or if there is any project that needs more funds, then we may have to [indiscernible] for the sell-out of the -- our domestic stocks and so forth and then try to allocate such money. And in terms of the minority investment, true: Indeed it's been a while that we have been the minority shareholder, but the asset management and the insurance, they are slightly different by nature. And for Capula, for the future, we would like to take the majority stake. So we have the option like that, but -- sorry, Canyon. I was talking about the Canyon for the future option for becoming a majority, but the -- such kind of a very characterized type of companies like Canyon. We -- Capula or type of companies, it's rather difficult to take some majority situation. So depends on the company's situation and the future option for the growth. Then we will continue to be minority, but if there is any opportunities, yes, we would like to have the majority. It depends on the nature of the company.

And then the liability, for the insurance liability. As the insurance company, we can have a very precise assessment. So ideally it is better to do that kind of assessment, but in the -- recently the global strategic investment opportunity, cash opportunity is -- generating capability is very strong. Or the [ growth probability ] is very strong. And the cash contribution will be very early stage. Those projects are not really available. So from that perspective, very promising and very productive companies needs very high valuation. And the needs or -- needs of the market is very strong. From those perspective, starting from the minority investment would be the ideal option for us. And in the future, the life insurance companies, we already entered in the minority shareholder. [ There ] are already listed, so eventually we may need to exit if there is any kind of isolation from our expectations. And also, if there is a -- agreed by both parties, then we would like to consider next step in the right time line.

So in terms of the minority shareholding -- but still, even minority -- but we are the largest shareholder, so we -- if the -- any stakes that has a more controlling shareholder other than us, then it is difficult for us to influence on such company. So no controlling shareholder and, hopefully, listed company. Those are the ones we would like to select from the insurance industry.

So your second question, for the mass lapse risks. So Page 8 graph, our analysis or study. Across all the insurance companies and data was -- analyzed -- and what was the surrender or lapse. And because of the reputational risks, -- and what was the credit risks and so forth affecting such lapse. Whenever the interest rate goes up, the saving products would be more chosen. And then there will be some replacement from the existing business to new business. So we are also studying such scenarios. And Dai-ichi Life has been offering single-premium saving products. So putting certain restrictions of sales. In the Frontier life was more of a front line for the sales of such products so that we were managing the risks, but of course, Frontier or protective, those companies who are selling single-premium products -- then when the customers are leaving -- what was the increase in the principle? And when there is a churning from the existing business to new saving products, then what will be the implications? We are making such simulations as well. And we do not see the potential big risk of the lapse risk at the moment, having such analysis.

My follow-up question is that the [indiscernible] attached to single-premium saving would be the risks, but other than that, what kind of -- the type of products, like installment or like protection type of products. Whenever the interest rate goes up rapidly, some blocks from products that should do -- better for the policyholder to surrender or lapse. Well, basically the protection type of products would be used as a discount for the -- whenever they [ hold ].

So I believe there is no such other blocks that must have certain risks, but basically the risk is a saving products and the single premium. Then there is the potential certain risks of the mass lapse. That's why we -- in order to control that, we have the [ MVA ] and to -- not to see such -- the mass lapse at the same time.

Now we would like to invite Tsujino, Mr. Tsujino, from BofA Securities Japan.

First of all, on Page 11, you mentioned about free cash. And you can see that free cash is compared with the fiscal '25 and '24. You have here included in the [ '25 ] and [ 25/3 ] -- it have TAL that had contributed to this high number. So I want to look at what could happen in the period ending [ '26 March ]. And you see there is a dip here. And going onward, how you plan to have this number to be evolved. And another question: For this year -- and interest from [ this year's ] investments that had been impacting the holdings business. And M&G, I think itself is fine with me personally, but last year, Benefit One -- so looking at these directions, whether Benefit One is [indiscernible] to execute through to have a cushion for that. So cash generation and also the profitability, to the earnings, when do you expect to have the improvement effect?

Thank you for the questions. So on the first point, I would like to invite Mr. Nishimura. And I would like to have Kai-san, in charge of Benefit One, to explain about it. And if needed, I would like to give some supplementary explanations.

On Page 11, here the profit for the period ended March. We have [ 46 ]. And also the free cash flow ended '25 March is [ 375 ]. And there's a gap of [ 500 ]. So for that, well, in [ March '25 ], we had a large increase because we withdrew from Thai. And this was [ a plus alpha effect ], and Dai-ichi Life's profit was also very favorable. So we have 6%. That's an increase in the payout ratio for -- as well as TAL. We had investment [indiscernible] and also there is an increase in the dividend payout ratio. And for right now we are now on the assumption [ up to 90% ] for that fiscal year, but we are going to enhance our returns from our subsidiaries. So in Dai-ichi Life's case, as Mr. Kikuta mentioned, we are going to sell our shares; and at the same time, looking at Frontier. If the change in the capital requirement happens, we may end up with some remaining charge. And for protective, we have 50% for the payout. And also we are going to strengthen our capital; at the same time, have growth. In TAL, we are going to release some of the capitals. That's our phase right now. So we are also going to strengthen our return on the cash position as well. So we would like to set 90% for -- with regard to our profit.

The second point, as for Benefit One's profit contribution and potential for growth. Well, on single -- basis starts [ 50 ]. And by 2030, as we mentioned at the timing of acquisition's, it's like 3 to 3.8x. So the contribution would be like 2-5-0 or -- give or take. And after the acquisition, we had due diligence and also PMI. So there are some positive factors coming out. So the lapse rate is very low compared with our assumptions. And the unit price by all the contracts are also high. So on those points, we think that we can reap the benefit and secure profit. And recently, the expected synergy, the main point is that we're going to ask Dai-ichi Life's customer using Benefit One's platform -- and we had a very stretched, ambitious target. And we see -- or we are not reaching that goal, but we are seeing synergy effect, especially for large enterprise and SME customers included as well, perhaps. Or distribution channel and sales channel are leveraged to promote the value of Benefit One.

So we didn't have a relationship with certain customer level, but we are creating touch points with those kind of customer segments. And also, little by little, we are seeing the result of selling the insurance product to those kind of customers.

So from TAL, here it's like 1-3-0. That could continue.

Well, for protective, 50% the profits. That have been set. And we have internal communications. And for TAL, they have capital requirement locally, so we are not tying that to profit. So we don't have agreement in percentage-wise, but we are [ at a phase ] of a fairly good payout.

So Benefit One's profit. Are you expecting to have it going up at certain timing significantly?

Well, little by little, as a growth rate, it's about 10%, give or take, like 7% or 8%. That's our overall image in terms of growth and profit. And for that, we have Benefit's [indiscernible]. The number of customers using that platform is going to increase. And our assumption is also aligned with this growth of ratio.

So for Benefit One, in adding to the explanations. Well, Benefit One, we are seeing a favorable movement in terms of [indiscernible] this year. And it's a welfare program, so the systems -- if we are to enter all the information, including sales, there are certain lags. So with related lags -- and at the same time, well, last year and also this year a little bit as well, we are now investing into systems to upgrade. So those are some of the negative factors that have reflected in this number. And Benefit One's business model, if the sales increases, of course, the cost is not going to increase with that. So if the top line is -- increases, the profit could be higher, meaning that we may have an efficient operation in place that's crucial for us for this type of business to secure profit.

Daiwa Securities, Watanabe-san, floor is yours.

Watanabe from Daiwa Securities. I have 2 questions. So first is Page 21, M&G. So the equity holdings. So what is the -- equity method is applied. And what is the profit contribution? And asset management, you said, but they have quite unique capabilities on the risk tapering, so how do you evaluate their possibilities? Page 10 is my second question, about the buyback. So you increased the payout ratio and reduced the buyback -- reduction. So we understand that direction, but can you please share more color on the buyback policy? So in the past year, [ 275 billion ]; and now JPY 450 billion. That is a new -- the target you have, 50% of that. Then the buyback will be JPY 50 billion reduction. So that is my view, but can you please clarify that?

Thank you. So first question is answered by Kai-san. And second question, Mr. Nishimura-san can answer. If necessary, I can add.

Thank you. Number one, M&G. So the adjusted profit and how to incorporate that, from M&G. So in the next page, you can see in details -- sorry. On next page, Page 23 [24, 23.]. So on the left, you can see the adjusted operating profit this company's profit level is shown, and this is IFRS 17 basis. Profit is shown. So IFRS 17 incorporates various elements. So as I said, the reason why we wanted to have this company is that 16 billion or so, quite a big profit that they can generate. And how we adjust that profit into our book, we are now studying that. So the cash generation capability that they have, JPY 16 billion -- so that will be also the good attractiveness. And the next one is BPA business. The -- so this is BPA -- because this is the annuity buyout -- and asset management capability as well as brand capability -- well, brand equity is very essential. So we can leverage on this, [ a potential's ] brand equity. And then 3 years or so, they -- we started to sell these products. Already market share is 3%, so this is quite promising for the growth. And the annuity buyout business: So for the future, uncertainty is relatively high. Therefore, whenever we make decision for investment, we -- rather than having the assessment that the BPA business will grow -- but rather, they have a more stable cash-generating capability. And we were -- we have that kind of [ simulation ] for their future growth, but still this is very promising for the future growth.

Second question, which is the share buyback indication. So in terms of the share buyback, what is the level that the company is implementing? I'm sure the market is interested in that. And I know that this is a big responsibility. And the total share payout ratio is 50%, but payout ratio is already reaching 45% target, so what will be the share buyback? We need to explain in details [indiscernible]. Yes, we acknowledge your needs, but in terms of the more concentrated period -- that our ROE will be surpassing our cost of capital. Until that, we will focus on implementing that share buyback in a large scale -- and then FY 2024 surpassing the ROE, surpassing the cost of capital. And EPS 10 percentage point increase or ROE between 10% to 12% and [indiscernible] 14%, that is our expectation. So to do that, share buyback is implemented. Then those will -- contributing for both ROE and cost of capital. So that would, of course, accelerate our achievement of that target. So while we are focusing on the payout ratio increase and we know that we need to have a more tenacious explanation on every period for the share buyback.

And how about the EPS growth rate, 30 percentage point, that will be contributing for the buyback -- coming from the buyback. So do you have a kind of idea? So EPS and -- in breakdown. And we will achieve the EPS, a 2 percentage point increase [ through ] the buyback. We don't have that kind of understanding.

Well, thank you. In terms of the buyback approach, this year, cost of capital and 10 percentage points or above ROE achieved, but this positive equity spread will be continued. With that assumption, we can reduce the buyback. In other words, on a single year basis, we are not able to assess that this market condition continues, so we would like to monitor carefully whether we can maintain this ROE and cost of capital and then make decision.

Now we would like to invite Mr. Sato, JPMorgan Securities Japan, to have his question.

I'm Sato from JPMorgan. I have 2 questions. First: So fiscal '26 target has been revised. On that, for the profit, it's going up. And with that, [ ROE ] target is over 12%. So this is just for our confirmation of the numbers. So if you look at the profit and the revised on average to the end, the denominator side, that has been a slight decrease from the previous explanations, according to my understanding. So is there some hindrance or some kind of factors that may suppress the profit? So is there an effect after 1 year of the reduction? And with that confirmation: As Mr. Kikuta had been repeating, the profit of JPY 400 billion, and also JPY 6 trillion as a market cap. And the latter target may see some distance in order to achieve that. So this distance or buffer, what is the main reason behind this? So I would like to confirm on that point.

And having said that, the second question is how are you going to look at ESR in the future? So target range. It's like 170, 200 give or take. It has been going. And I know that there are, of course, some revisions and adjustments to be made. And this time, the change itself have been incorporated in this. And you see 210%. And buyout is still upward range. And going forward, the ESR, in the future, it's above 200, well, compared with the past. Is it -- can be considered that it's constantly maintained out, this number, as the number illustrates and indicates. Or are there anything that could be other factors and you have to wait for the final -- this number at the upper end. So I want to confirm about your interpretation on [indiscernible].

Thank you very much. ESR. So first of all, on your number, I can invite Nishimura-san. And aspiration story that I have been explaining on the latter half of the question, maybe I'll give some explanation. And ESR, maybe we can ask Nishimura-san to have explanation again.

Yes. So the confirmation of the numbers. So we are not incorporating major factors for the denominator. So if the profit is 400 billion, maybe 2% ROE could be achieved. So that's our overall plan. And going on ESR side first, especially with the accounting method changing [ and ] overseas, there was a onetime downward change. And of course, that number [indiscernible], so we are setting some buffers. And relative numbers include that, with the expected and strengthening, ESR could be deteriorated for a slight portion, so we need that buffer to visit. For ESR, generally speaking, in Dai-ichi Life, if the ESR goes upward, how we can release that portion to use for our capital circulation, that's being considered internally within our company, but it's separate from cash. So we cannot use that for investment in a full amount, so we have to look at buffers and also time lines, so that we don't invest that in excess. So we can use other tools, including reinsurance and other factors relevant, to control this number.

And the rest of your question. As you have rightly pointed out, right now, [ TR ], if we are to use that fully, this adjusted profit about 400 billion. There is a gap against 600 billion. Of course, we admit that. And in that sense, we would like to continuously look at this target that could be going upward, excess of 450 billion. And at the same time, [ TR ] should be increased. So we're going to improve the portfolio, and that's very necessary and important. As for profit, in that sense, right now what we are doing is organic as well as inorganic deals and projects. And also [ a yen ] potential strengthening could be following. And [ PR ] portfolio and also Japan's domestic insurance business, we have a potential for growth. And as a result, the [ TR ] is not that much high. In that sense, how we can have [indiscernible] high. With the growth potential and the capital-light business, that portion can be increased. That's crucial for our business. So asset management and also nonlife insurance business and overseas business, these weights can be increased so that we can have more higher valuations, with the higher profit.

So the valuation and the profit should concurrently be improved. And with that effort, we can achieve the aspiration. In order to do that, we will do everything we can to implement this.

So ESR range. Of course, the yen strengthening. Of course, you can be in a better position, but maybe in that sense, rather than verbally speaking about the buffer, maybe you should revise your target. So are there any discussion on changing this range?

Well, recently, we do not have a specific topic that we can communicate here, but with the yen appreciation potentially in the future, what we can do or we have to consider is, of course, in our review process internally -- and if we could give update, of course, we will communicate that to you.

For the next question, Tokai Tokyo Intelligence Labs, Mashima-san, floor is yours.

Two questions about -- finance related. So Page 5. In your explanation -- interest rate rise. And there is a possibility of impairment -- and the liability reserve-related bonds. So to some extent, there is no immediate future to do the impairment. That's what you explained, but on the other hand, Dai-ichi Life, the securities they have in others, they have the securities, like JPY 2 trillion worth of the securities they have. What kind of securities, like 10 years or 20 years? That will be naturally affecting the impairment. So over JPY 2 trillion other securities, they hold. Can you explain in details?

And number two. At the last page, Page 28. Dai-ichi Life Group domestic stock investment stance is shown on the right. And so it says the pure investment objective for holding, it says, as the number one bullet point. What is the affecting in the corporate accounting or corporate -- so as you say, like equity stake, company -- are there any, like, a joint investment or -- that will be -- also be recorded in corporate accounting? So I just want to understand whether this is long-term asset holdings for the pure investment purpose.

Well, thank you. So Kai-san, he used to be the -- investment management division, so he can explain for the number one.

So the other securities in Dai-ichi Life: The short-term bond -- corporate bonds, mostly. And then partially, the structured finance is also included in this. So the duration is very short, so the rate hike impact would be minimal. And that means no impact on -- negative impact on the impairment as well as the loss of profit, but of course, if there is, any kind of spread would be improvement. And whenever it's necessary, there should be some replacement of the securities.

So my -- I can answer for the second question. So in corporate accounting -- so this is the holding -- or cross-holdings. Other than that, all the pure investment -- so that is linked to the funds for insurance. So the cross-holdings -- so the Dai-ichi Life corporate accounting, the largest portion would be the cross-holdings like Mizuho and Resona, their shares. Other than that, for the -- at the holdings level for the corporate, not the general accounting, so corporate accounting. So they have the -- some business related. And some minor cross-holdings. There are some small balance. Basically, majority would be the ones that I gave you earlier for the banking names, banking stocks.

Now we would like to invite Takemura-san from Morgan Stanley.

So I'm Morgan Stanley [indiscernible] securities, Takemura -- sorry. I'm attending through online. I have 2 questions here. So there may be some overlap with the previous questions. The first point, as mentioned, Page 5, this is about the risks associated with the loss on sales. So you are declaring that you're going to hold this up to maturity. And that is, of course, to avoid a loss on sales. And is that a viable option for your company? So I want to confirm on that point. And if not, are there any things like limitation? Or from the audit company sites, there's an advice. Or maybe there's a decision to avoid the damage on flexibility. So I want to know about the background of this. The second point is also covered in the previous questions, M&G and how it's going to contribute to your profitability and earnings. So adjusted profit, I think you are going to look into the actual situation. And looking at JGAAP standard, this payout of JPY 16 billion, this is included, reflecting the profit and [ still be taxed ]. And then the rest would be the profit according to JGAAP. Is my understanding correct? And if, this 15%, that exceeds 20%, there could be specific special treatment that it's not going to be taxed, so I want to know about how it's going to be taxed under JGAAP.

Thank you very much. So on both points, I would like to ask Nishimura-san for the explanation.

Yes. So right now, for this bond for -- there is a distance for [indiscernible] deferral in terms of these bonds held to match the policy reserves, so there are many treatments in terms of accounting. And if at this time -- if the interest risks -- interest rate rises up to the year-end -- and how it's going to be reflected in your numbers, for that, [ to prepared ] for this type of bond, on certain condition, we have the intention to hold it until maturity. And whether we have that capability, even in various stress scenarios, we're going to confirm everything. And if there is a potential for recovery in the time lines if that's proved, we think there is a way to avoid lost here. And M&A and contribution to profit, as Kai-san mentioned, IFRS 17-based profit could be volatile, so -- of course, it's a holding company, so on adjusted profit basis, it's more relative to cash condition, in the cash. It's about JPY 16 billion or so in terms of looking at the payout, so that could be close to or actual situation.

And as for tax, you are right. So in the U.S., it's not going to be incurred in the profit. That would be under the potential taxation in JGAAP.

So we are still opening the line for your question. It looks like there is no more questions, so we would like to close the session. Thank you very much for your attendance today. Thank you.

[Statements in English on this transcript were spoken by an interpreter present on the live call.]