Statement with regard to Section 172(1) of the Companies Act 2006

As required by Section 172(1) of the Companies Act 2006 the Directors act in a way they consider, in good faith, would most likely promote the success of the Company for its shareholder. In doing so they have regard to the Company’s progress and its relationship with its stakeholders. Its stakeholders are its clients, its clients’ insurance brokers, its employees, its shareholder, its suppliers, its regulators, and the community within which it operates. In having this regard the Directors take the following into consideration:

a) Decision-making for the long-term

The Japanese client section of the Company’s business is based on close and often long-term relationships with these clients and the Company’s corporate vision, which is to contribute to the development of Japanese clients and support key business partners, by enabling safety and peace of mind through the global insurance business. The Directors make strategic decisions with this vision in mind. The importance of the long-term nature of these relationships is explicitly acknowledged by the Directors and senior management.

The Company is also required to contribute to achieving the wider long-term strategic aims of its parent company, MSIJ (Mitsui Sumitomo Insurance Group, Japan). This includes meeting profitability targets set by MSIJ, and developing both the Japanese client and non-Japanese client sections of the Company’s business. The Directors plan accordingly, taking into account the volatility arising from the insurance and investment risks, as well as the future volume of business and the various sources from which it can be generated.

The strategy for the non-Japanese client section of the Company’s business is changed when appropriate and with MSIJ’s strategic aims in mind. As noted below in the Future Developments section of this Strategic Report, the Directors have recently made such changes. The different strands of the business, both current and planned for the near future, expose the Company to different levels and types of risks, the monitoring of which is integral to the Company’s business model. The Directors have established a dedicated Risk and Capital Committee to undertake this monitoring, and the analysis and conclusions of this committee are used to inform the Directors’ decisions with the aim of controlling all risks and ensuring the long-term stability and viability of the Company.

b) Company’s employees

The Directors believe the stability of the Company is of primary importance to its employees, and hence aim to ensure its ongoing viability by fulfilling its corporate vision. The remuneration and reward structure is fair and equitable and carefully considered for all staff individually. Performance and career development processes are in place to ensure clear and realistic targets are set and tailored to individual career goals of employees as well as to the needs of the Company.

As the Company’s employees are vital to its continued growth, a number of initiatives across health, wellbeing, diversity, equity and inclusion (“DEI”) are in place to support employees. The Directors recognise that DEI is an essential business enabler and support the creation of a diverse and inclusive employee experience for all, where all employees have access to equal opportunities for growth and development.

c) Business relationships with suppliers, customers and others

The long-term nature of the relationships with its Japanese clients is of central importance to the success of the Company, and these relationships are accordingly closely managed with very high standards of customer service. The Company also deals extensively with insurance brokers who are vital to the servicing of the Company’s clients and with whom strong relationships are therefore maintained. The Company cedes a large portion of its business to reinsurers and hence it works closely with its reinsurers and reinsurance brokers to set up reinsurance programmes that accord with the Company’s strategy. The Directors are aware of the importance of these relationships and ensure staff with the necessary skills and experience are employed to design and negotiate these programmes. A substantial section of the Company’s business is derived from delegated underwriting authorities and the Company therefore works closely with the agencies to whom authority has been delegated to ensure mutually beneficial and suitably controlled arrangements are in place. Given the nature of its business the Company has a limited number of other suppliers and outsourcing partners. These include group companies as well as external parties. Outsourcing partners are managed and controlled in line with the Company’s outsourcing policy. The Directors' aim to maintain mutually beneficial relationships with all such suppliers and outsourcing partners, and pay them within agreed terms.

d) Impact of operations on the community and environment

Due to its relatively small size, the location of its office in the City of London, the nature of its business, which has no tangible product, and the nature of its clientele, which is largely comprised of medium to large sized corporations, the Company has relatively limited effect on its local community and environment. The Company shares its mission with its ultimate holding company, MS&AD Insurance Group Holdings Inc., which is to contribute to the development of a vibrant society and help secure a sound future for the planet, by enabling safety and security through the global insurance and financial services business. It encourages staff to contribute to charitable causes, allowing them a specified number of days per year to undertake voluntary work.

e) High Standards of Business Conduct

Business Conduct is of central importance to the Company and is a regular agenda item for discussion by the Board of Directors and its committees. The Company is regulated by the Financial Conduct Authority (“FCA”) and Prudential Regulation Authority (“PRA”). The Directors are fully aware and supportive of their requirements. Regular training on the topic of Business Conduct is given to Directors and staff under supervision of the Company’s Compliance department. In accordance with the regulations set down by the FCA the Directors ensure compliance with the FCA’s Senior Managers and Certification Regime with its aims of making individual Directors and senior managers individually accountable and setting high standards of personal conduct.

f) Acting fairly between members of the Company

The Company has a single member, being its shareholder, MSIJ. Hence acting fairly between members does not require consideration by the Directors.