Millea Holdings Essay

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Millea Holdings, Inc., a holding company headquartered in Tokyo, Japan, was created  in April 2002 as the  umbrella  structure  for the  international insurance businesses of Tokio Marine and Nichido Fire. Millea Holdings was the first publicly owned holding company in Japan integrating  life insurance  and nonlife insurance  operations.  One of the key objectives in the corporate  vision of Millea Holdings is to become one of the world’s top-tier insurance groups through  customer  trust and to make a positive contribution  to society by offering safety and security products and services.

Millea Holdings breaks its insurance lines into five segments plus another category. These segments and their percent of premiums  written are as follows: fire and allied lines (15.6), hull and cargo (4.2), personal accident  (7.5), voluntary  automobile  (45), compulsory automobile  liability (15), and other  (12.6). The Millea Group  plans to grow its businesses  through the expansion  of products  and services (prevention services and care services), sales channel  expansion as a result  of government  regulatory  liberalization, and  the  expansion  of its global regional  businesses through mergers and acquisitions, equity partnerships, and business alliances.

The  operating   subsidiaries   of  Millea  Holdings  include the following: Tokio Marine & Nichido (nonlife  insurance),   Nisshin   Fire  (nonlife   insurance), Tokio Marine and Nichido Life (life insurance), Tokio Marine & Nichido Financial Life (life insurance, especially variable annuity and life policies), Millea Nihon Kosei (small-amount,  short-term insurance),  Tokio Marine & Nichido Anshin Consulting (agent for nonlife and life insurance, as well as, individual financial consulting services), Tokio Marine & Nichido Career Services (staffing and  employment  services), Tokio Marine Nichido Samuel (operator of elderly care facilities), Tokio  Marine  & Nichido  Facilities (property and equipment  management),  Tokio Marine & Nichido Medical Services (medical care and health-related services), Tokio Marine  & Nichido  Risk Consulting (insurance  underwriting  risk investigations  and risk consulting  services), Millea Mondial (assistance and business  process  outsourcing  services), Millea Real Estate Risk Management  (real estate investment advisory services), Tokio Marine Asia (a subsidiary holding company for Asian insurance  operations  excluding Japan), Tokio Marine Bluebell Re (reinsurance  for variable annuities), and Tokio Marine Seguradora (life and nonlife insurance in Brazil).

The Millea network  of companies,  subsidiaries, affiliates, branches,  offices, and agents has a worldwide presence. In North America it is represented in the United  States, Canada, Bermuda, and the Cayman Islands. In Central and South America it is represented in Mexico, Brazil, and Paraguay. In Europe it  is represented in  the  United  Kingdom,  France, Germany, the Netherlands,  Belgium, Italy, Spain, Ireland, Norway, Denmark,  and Greece. In Eurasia it is in Russia. In the Middle and Near East it is represented in the United Arab Emirates, Saudi Arabia, Bahrain, and Turkey. In Oceania and Micronesia  it is represented in  Australia,  New  Zealand,  Guam, and  the  Commonwealth of the  Northern Mariana Islands. In Asia it is represented in Korea, mainland China,  Hong  Kong, Taiwan,  the  Philippines,  Vietnam,  Thailand, Malaysia, Singapore, Brunei, Indonesia, India, and Myanmar.

Millea Holdings has a market capitalization of some 150 billion yen for the approximately 824,524,375 shares issued. For fiscal year 2007, Millea reported net assets per share of 4,127.60 yen. The Millea Group uses embedded value (EV) and return-on-equity (ROE) as its method of evaluation value and performance in its insurance  businesses. For its fiscal year 2006, Millea had an EV of 335.2 billion yen, which consisted of the sum of its net asset value of 97.6 billion yen and its in-force business value (net earnings) of 237.5 billion yen. Millea contracts  with Tillinghast,  the  financial services consulting  unit  of Towers  Perrin,  to verify its reported EV. The Millea Group targets an adjusted ROE of approximately 5 percent annually.

Millea Holdings is listed on the Tokyo Stock Exchange and the Osaka Stock Exchange. American depository receipts (ADRs) for its common stock are handled by JPMorgan Chase Bank and quoted on the over-the-counter market in the United States. Typical of ownership  patterns  in Japan, about 31.2 percent of its shares are held by some 10 shareholders: State Street Bank and Trust Company (6.2), Moxley & Co. (5.4, representing  the  ADRs), Master  Trust Bank of Japan (4.5), Japan Trustee  Services Bank (3.7), Meiji Yasuda Life Insurance  Company  (2.5), Trust & Custody Services Bank (1.7, retirement trust account  for Mitsubishi  Heavy Industries),  Mizuho Corporate  Bank (1.7), State Street  Bank and Trust Company  505103 (1.6), and  Master  Trust  Bank of Japan (1.4, retirement trust account for Asahi Glass Company).

The consolidated  subsidiaries of Millea Holdings are intensely engaged in a variety of global derivative transactions  for risk management purposes  and to maximize their investment gains. Millea subsidiaries engage in currency-related derivative  transactions that include forward contracts, currency swaps, and currency  options.  For fiscal year 2007, Millea subsidiaries had a total of 2,108,029 million yen in foreign-currency related instruments. Millea subsidiaries engage in equity-related  derivative transactions that  include  equity index futures  and equity index options.  For  fiscal year  2007,  Millea  subsidiaries had a total of 148,423 million yen in equity-related instruments. Millea subsidiaries engage in bondrelated derivative transactions that include bond futures, bond future  options,  and over-the-counter bond options. For fiscal year 2007, Millea subsidiaries had a total of 171,633 million yen in bond-related instruments.

Millea subsidiaries also engage in other derivative transactions  such as credit  derivatives and  weather derivatives, among others. For fiscal year 2007, Millea subsidiaries had a total of 13,707,398 million yen in interest-related instruments, 1,157,328 million yen in credit-related instruments, 72,528 million yen in commodity-related instruments,  and  1,909 million yen in weather-related instruments.


  1. Millea,  (cited   March 2009).

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