Consolidated Solvency Margin Ratio
Sompo Holdings, Inc. (the "Company") is the insurance holding company which is the top of the Sompo Holdings Group (the "Group"). The Group is an insurance company group and operates property and casualty insurance business and life insurance business at the Company's subsidiaries, etc.
In addition to reserves to cover payments for claims, benefits and maturity refunds, etc., it is necessary for insurance companies to maintain sufficient solvency in order to cover against risks which exceed their normal estimates, i.e. the occurrences of catastrophe, a big decline in value of assets held by insurance companies, etc.
(C) Consolidated Solvency Margin Ratio, which is calculated in accordance with the Insurance Business Act, etc. is the ratio of "solvency margin of insurance company group by means of its capital, reserves, etc." ((A) Total Consolidated Solvency Margin) to "risks which will exceed its normal estimates" ((B) Total Consolidated Risks).
Solvency margin ratio is one of the indicators for the regulatory authorities to monitor financial soundness of insurance companies. Solvency margin ratio exceeding 200% would indicate adequate capability to meet payments of possible insurance claims and others.