MS&AD Insurance Group Holdings, Inc.
Climate Impact & Sustainability Data (2016, 2023)
Reporting Period: 2016
Environmental Metrics
Total Carbon Emissions:119,950 tCO2e/year
Total Energy Consumption:610,984 MWh/year
ESG Focus Areas
- Climate change
- Aging society
- Local community vitality
- Natural capital deterioration
Environmental Achievements
- Reduction in electric power usage: 21,539 thousand kWh
- Reduction in CO2 emissions (due to higher adjusted emission coefficient by electricity companies)
Social Achievements
- Number of Employees Participating in Social Contribution Activities: 16,507
- Employee satisfaction level: 4.4 points (out of 6)
- Customer satisfaction (accident response for automobile insurance): 95.5%
- Customer recommendation rate: 91.9%
- Increase in the share of managers who are female, to 5.5%
Governance Achievements
- Appointment of independent Outside Directors, constituting more than a third of the Board of Directors
- Establishment of Nomination Committee and Remuneration Committee
- Introduction of performance-based remuneration
Climate Goals & Targets
Long-term Goals:
- Create a world-leading insurance and financial services group
Medium-term Goals:
- Group Core Profit of ¥220 billion and Group ROE of 7.5%
- Reduce the aggregate expense ratio for MSI and ADI to 32.2%
- Weight of international business to account for 50% of profit
Environmental Challenges
- Frequent accidents and disasters
- Extensive natural disasters caused by climate change
- Mounting burden of nursing/medical care due to demographic aging
- Decreasing vitality of local communities
- Deteriorating earnings environment in voluntary automobile insurance
- Ultra-low interest rates (negative interest rates)
- Intense competition in direct insurance market
- Large-scale natural disasters impacting underwriting profit
- Softening trend in reinsurance markets
Mitigation Strategies
- Sophistication of risk management, especially for natural disasters
- Risk dispersion and appropriate risk control
- Revision of premium rates
- Diversified investment based on ALM
- Cost reduction initiatives (¥60 billion target)
- Systems integration of claims services
- Strengthening of ERM
- Acquisition of MS Amlin
- Strengthening of alliances with local partners
- Development of new products and services
- Use of Big Data, FinTech, and ICT
- Risk reduction by defining target levels for the medium-to-long term and by defining sales goals
Supply Chain Management
Climate-Related Risks & Opportunities
Physical Risks
- Large-scale natural disasters (earthquakes, typhoons, floods)
Transition Risks
- Regulatory changes related to climate change
- Market shifts towards renewable energy
Opportunities
- Development of insurance products for renewable energy businesses
Sustainable Products & Innovation
- Insurance products for renewable energy businesses
- Telematics-based auto insurance
Awards & Recognition
- Awards for Excellence in Integrated Reporting
- Internet IR Excellence Award 2015
- Innovation in Insurance Awards 2016
- General Insurance Company of the Year (MSIG Insurance (Malaysia) Bhd.)
Reporting Period: 2023
Environmental Metrics
Total Carbon Emissions:57,222 tCO2e/year (Scope 1+2)
Renewable Energy Share:23%
Total Energy Consumption:727,336 GJ/year
Water Consumption:690 thousand ὗ/year
Waste Generated:7,646 tons/year
ESG Focus Areas
- Symbiosis with the global environment (Planetary Health)
- Safe and secure society (Resilience)
- Happiness of diverse people (Well-being)
Environmental Achievements
- Greenhouse gas emission reduction rate (Scope 1 + 2) -35.3% (versus FY2019)
- Renewable energy implementation rate 23.0%
- Greenhouse gas emission reduction rate (Scope 3) -50% by 2030, Net zero by 2050
- Renewable energy consumption rate 60% by 2030, 100% by 2050
Social Achievements
- Launched MSA Care, a healthcare service, introduced in more than 2,500 companies
- Number of policies in force for products that help solve health-related social issues 2.22 million cases
- Number of policies in force for asset-building products to support longevity 70,000 cases
- Number of companies supporting human rights–related measures 1,047 cases
Governance Achievements
- Established the “Group Risk Response Conference”, attended by officers from the holding company and domestic Group insurance companies
- Improved the independence and objectivity of the Board of Directors
- Implemented a business improvement plan in response to administrative action for price-fixing and fraudulent insurance claims
Climate Goals & Targets
Long-term Goals:
- Net zero emissions by 2050
- 100% renewable energy consumption rate by 2050
Medium-term Goals:
- Reduce GHG emissions across approximately 3,300 major domestic business partners by 37% compared with FY2019 by FY2030
- Achieve 60% renewable energy consumption rate by 2030
- Increase percentage of female managers to 30% by 2030
- Increase percentage of female line managers to 15% by 2030
Short-term Goals:
- Reduce water consumption by 10% by 2025
- Increase number of policies in force for asset-building products to 100,000 by 2025
- Increase number of policies in force for products that help solve health-related social issues to 2.6 million by 2025
- Support 1,000 companies with human rights–related measures by 2025
- Achieve annual average 18% premium growth rate for products that contribute to the decarbonization of society and a circular economy by 2025
- Support 10,000 cases for the resolution of issues faced by regional companies by 2025
- Achieve annual average 20% growth rate of the number of subscriptions for products that contribute to improving social resilience by 2025
Environmental Challenges
- Price-fixing and fraudulent insurance claims by agents in the non-life insurance industry
- Shrinking domestic non-life insurance market due to declining population and birth rate
- Increasing severity and frequency of natural disasters globally due to climate change
- Cyberattacks and other emerging risks in the digital age
Mitigation Strategies
- Returned to the Group’s “Mission, Vision, and Values” and implemented major reforms of business style
- Implemented premium rate increases and disciplined underwriting
- Reduced strategic equity holdings to zero by 2030
- Developed alternative sourcing strategies and enhanced risk management capabilities
- Increased investment in digital human resources and AI technologies
- Strengthened governance and compliance frameworks
Supply Chain Management
Responsible Procurement
- Communication with outside vendors
- Periodic inspections of outside vendors
- Human rights risk management support
Climate-Related Risks & Opportunities
Physical Risks
- Typhoons, hurricanes, storm surges
- Torrential rain, flooding
- Hail and snow damage
- Heat waves and extreme heat
- Forest fires
- Dry spells and droughts
- Depletion of water resources
- Degradation of ecosystem services
Transition Risks
- Advances in net zero and nature-positive technologies
- Rising carbon prices
- Strengthening of environment-related regulations
- Increased climate/nature-related litigation
Opportunities
- Increased demand for products and services that contribute to net zero and nature positivity
- Development of energy-efficient products
- New business opportunities in climate change adaptation and mitigation
Reporting Standards
Frameworks Used: International Integrated Reporting Framework, Guidance for Collaborative Value Creation, TCFD, TNFD
Certifications: ISO 10002
Third-party Assurance: KPMG AZSA Sustainability Co., Ltd.
Sustainable Products & Innovation
- Flood Risk Finder
- MS&AD Cyber Risk Finder
- Telematics auto insurance
- Carbon Neutral Support Agreement
- EV Replacement Expense Clause
- Clothing Recycling Expense Compensation
- Marine Pollution Response Additional Expense Compensation Clause
- Reforestation Expense Compensation Clause
- Weather derivatives