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UK Annual Report Tokio Millennium Re

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UK Annual Report Tokio Millennium Re Powered By Docstoc
					       TOKIO MARINE GLOBAL LTD.
       REGISTERED IN ENGLAND AND WALES NO. 02553288
       A MEMBER OF TOKIO MARINE HOLDINGS, INC. (JAPAN)




ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2008
     CONTENTS
     TOKIO MARINE GLOBAL LTD.
     Annual Report For The Year Ended 31 December 2008




Directors, Officers and Professional Advisers                   1


Chief Executive Officer's Report                               2-4


Corporate Goal, Management Philosophy and Corporate Culture     5


Directors' Report                                              6 -9


Statement of Directors' Responsibilities                        10


Independent Auditors' Report                                  11 - 12


Profit and Loss : Technical Account - General Business          13


Profit and Loss : Non-Technical Account                         14


Statement of Total Recognised Gains and Losses                  15


Balance Sheet : Assets                                          16


Balance Sheet : Liabilities                                     17


Statement of Accounting Policies                              18 - 22


Notes to the Financial Statements                             23 - 42
             DIRECTORS, OFFICERS AND PROFESSIONAL ADVISERS
             TOKIO MARINE GLOBAL LTD.
             As at 31 December 2008



EXECUTIVE                             NON-EXECUTIVE                 COMPANY
DIRECTORS                             DIRECTORS                     SECRETARY

Adrian Ballardie                      Clemens von Bechtolsheim      Thomas Marshall
 Chief Underwriting Officer           David Finch

Peter Haynes                          Kunihiko Fujii
 Chief Financial Officer              Fumiaki Namekawa

Yasuyuki Sezaki                       Tadaharu Uehara
 Chief Operating Officer

Harutoshi Tagaya
 Chief Executive Officer



REGISTERED                            EXTERNAL                      INTERNAL
OFFICE                                AUDITOR                       AUDITOR

10th Floor                            PricewaterhouseCoopers LLP    Grant Thornton LLP
2 Minster Court                       Hays Galleria                 Grant Thornton House
Mincing Lane                          1 Hays Lane                   Melton Street
London EC3R 7BB                       London SE1 2RD                London NW1 2EP
United Kingdom                        United Kingdom                United Kingdom



INVESTMENT                            INVESTMENT                    BANKER
MANAGER                               CUSTODIAN

Tokio Marine Rogge                    Mizuho Trust & Banking        Bank of Tokyo-Mitsubishi UFJ Ltd.
 Asset Management Ltd                  (Luxembourg) S.A.            Finsbury Circus House
Sion Hall                             1B Parc d' Activité Syrdall   12-15 Finsbury Circus
56 Victoria Embankment                L-5365 Munsbach               London EC2M 7BT
London EC4Y 0DZ                       Luxembourg                    United Kingdom
United Kingdom




BANKER                                BANKER                        BANKER

National Westminster Bank plc         Lloyds TSB plc                Mizuho Trust & Banking
Fenchurch Street Branch               PO Box 72 Bailey Drive         (Luxembourg) S.A.
116 Fenchurch Street                  Gillingham Business Park      1B Parc d' Activité Syrdall
London EC3M 5AN                       Kent ME8 0SI                  L-5365 Munsbach
United Kingdom                        United Kingdom                Luxembourg




                                                      Page 1
          CHIEF EXECUTIVE OFFICER'S REPORT
          TOKIO MARINE GLOBAL LTD.
          Year Ended 31 December 2008

Introduction
2008 was the fourth year since TMG started operations and it was the first time we experienced both a series
of significant market risk losses, as well as historically large hurricanes such as Ike. In addition, there was an
unprecedented financial crisis which caused huge impairment to the assets of insurance companies. The
present situation differs from 2001 (post-9/11) and 2005 (post-Katrina), in that it is less likely that new
capital will flow into the market to cover the loss of capital. With respect to investment, abrupt interest rate
falls and the weakening of GBP towards the year end have caused significant impact to the financials.


In 2009, the continued falls in interest rates and the weakening of GBP since 2008 will continue to impact our
cash flow and capital. In spite of such circumstances, we continued to focus on marketing, enhancement of
ERM and on strengthening our staff base. As a result, we not only achieved the targeted growth and profit,
but we were able to build a strong organization to cope with any difficulties in the year to come.


Overall comment
GWP for 2008 compared with 2007 has increased by 15.7% and we achieved our top line target. Considering
the soft market environment and despite the shortage of underwriters, this achievement shows that our
continuous marketing effort has started to yield results, accentuated by our AA rating. Property Direct &
Facultative business almost met the target, whilst Treaty business exceeded the target. Due to the reduction
of large projects compared to the previous year and the competitive market environment, the Engineering
Direct & Facultative business was behind target.

During 2008 we continued to strengthen our underwriting team. In the Property Direct & Facultative team, we
promoted our Senior Underwriter to the Head of Property Team and promoted our Underwriting Assistant to
Assistant Underwriter. We employed another Assistant Underwriter in the Engineering Direct & Facultative
team. We also employed a Senior Underwriter and an Assistant Underwriter for the Treaty team.


In addition to developments in the underwriting team, we also strengthened our risk management team to
enhance our ERM. We created the position of Chief Risk Officer to oversee the entire risk management of the
company. These enhancements were in line with our development plans.

I would like to summarise below what we have observed in the market and how we see it affecting our
underwriting activities by line of business:

- Property Direct & Facultative
In the first half of the year, rates continued to deteriorate but seemed to hit the bottom by mid-2008. Since
then, the range of rate reductions started to narrow.

There were rate increases in particular segments of the market where there had been a series of large risk
losses such as mining, petrochemical and steel industries.
Hurricanes Gustav and Ike have definitely impacted the industry but rating movements for US nat cat
business were not noticeable in 2008.

Europe and Asia remained competitive and rates continued to decrease slightly or at best, remained flat.

Because of the financial crisis and credit crunch, the importance of security is more important than ever. We
continue to be seen as a long-term and respected market player.
- Engineering Direct & Facultative
Despite the financial turmoil that was experienced especially in the latter half of the year, our business was
not immediately affected during 2008. Brazil was a particular bright spot. We saw several very large projects
in this territory and the likelihood in 2009 is that this will continue.

Rates, terms and conditions in London market were relatively stable. In territories such as Singapore, the
Middle East, Russia and parts of Latin America, business continued to be competitive.


There seemed to be a lack of recognition of cat exposures by some (re)insurers where the rates/deductibles
did not seem to reflect the risk, e.g. earthquake in South America and wind in the USA.


We continue to be recognised as a respected market player, especially our AA rating which is becoming more
important in the engineering business.
                                                      Page 2
              CHIEF EXECUTIVE OFFICER'S REPORT
              TOKIO MARINE GLOBAL LTD.
              Year Ended 31 December 2008

Overall comment (continued)
- Treaty
In the last two months of the year, a number of reinsurers reported increased losses from hurricanes Gustav
and Ike. At the same time, the credit crunch was seriously impacting claim reserves and investment
strategies; the violent movements of exchange rates did not help the situation.


In executing our strategy, we have reduced US Gulf and Florida exposed business and some businesses that
we cannot expect sustainable profit, thereby replacing these with US north east exposures. The majority of
the treaty portfolio is of a proportional nature and for the most part, renewal terms were as expiring. On loss-
free business, most of our cedants reported that original rates had stabilised but anticipated rates would move
up from mid-2009. Rate increases were reported on loss-affected business, most noticeably on energy
business.

With an enlarged treaty team, we plan to increase our marketing efforts. The growing reputation and the AA
rating enjoyed by TMG, at a time when many of our competitors are weakened by poor results, should lead to
interesting new treaty opportunities in 2009.


Company strategy
The Tokio Marine group has launched its 3 year business plan starting from 2009. The title of the corporate
strategy is “Innovation and Execution 2011”. The core concept is “to be selected by customers for its high
quality and continuous growth”. Quality encompasses “quality of products and services”, “quality of business
processes” and “quality of financial soundness”. Our customers will choose us because of our quality and
sustainability.

I believe we have been implementing the above strategy in developing our business to date. However, quality
must be consistently pursued and continuous improvement is required.

There are three areas that we focus on: diversification of portfolio, enhancement of ERM and continuous
improvement of business processes. In order to stabilize profitability and increase capital efficiency,
diversification of the portfolio is necessary. Diversification includes lines of business, territory, customers and
so forth.

We have been improving ERM since our establishment and enhanced the risk management team during 2008
in preparation for Solvency II.

Business has grown after four years and there are some areas where the existing operation may not
necessarily be efficient. In order to improve efficiency, we need to improve our business processes including
outsourcing services.

Results

2008 was the most challenging year since TMG started its operation in 2005. Like our peers, we had a series
of large losses and nat cat losses such as Hurricane Ike, the third largest US windstorm in history. Although
we were not directly hit by the impairment of assets caused by the financial crisis, the sudden fluctuation of
exchange rates have caused significant impact to our financials.


    Gross written premium was £109 million, an increase of 15.7% from 2007 and exceeded the target of
    £105 million.
    For Property Direct & Facultative business, this remained competitive with GWP increasing by 8.1% to
    £14.4 million from £13.3 million and almost met the target of £15 million.
    For Engineering Direct & Facultative business, the market started to become competitive due to new
    entrants and the decrease of large projects. GWP was £17.5 million, almost £2 million less than the
    previous year.
    For treaty business, this has shown strong developments where GWP has grown to £77.1 million from
    £61.5 million.
    As a result, we achieved an underwriting profit of £4.4 million, and investment return was a solid £14.9
    million. We also had other charges of £17.4 million which largely arose from exchange losses, thereby
    leaving a profit of £1.9 million before tax and £1.2 million after tax.




                                                       Page 3
    CORPORATE GOAL, MANAGEMENT PHILOSOPHY and CORPORATE CULTURE
    TOKIO MARINE GLOBAL LTD.
    Year Ended 31 December 2008




                                  CORPORATE GOAL OF TMG


We aspire to be a Premier Global Insurance Player in providing the best protection and security
for our clients by pursuing state-of-the-art Insurance and Financial Technology.




                            MANAGEMENT PHILOSOPHY OF TMG


In order to achieve the above goal we will:

■    Focus on clients needs and be innovative in providing value added solutions through high
     quality products and services;

■    Focus on profitability to maintain sustainable growth and ensure continuous service to our
     clients;

■    Focus on maintaining strong underwriting discipline with emphasis on quantitative risk
     management; and

■    Focus on having superior risk evaluation and risk analysis capability with a professional
     approach.




                                CORPORATE CULTURE OF TMG


■    We will strive to attain the highest standards of ethics and compliance in the organisation.

■    We will try to be nimble in every aspect of our business.

■    We will support our staff to enhance their competency recognising their importance to our
     business.

■    We will share passion and a challenging spirit with an innovative approach and
     entrepreneurial culture.

■    We will foster integrity, honesty, and an open and fair approach to all our stakeholders.




                                              Page 5
           DIRECTORS' REPORT
           TOKIO MARINE GLOBAL LTD.
           Year Ended 31 December 2008


The directors present the annual report and audited consolidated financial statements of Tokio Marine Global
Ltd. and its subsidiary ("the Group") for the year ended 31 December 2008. These also include the financial
statements of Tokio Marine Global Ltd. ("the Company") on a standalone basis.


Principal activity
The Group's principal activities are the underwriting of general non-life in/reinsurance risks as well as the
development of tools to quantify and manage risks.

Following the redefinition of its underwriting portfolio from 1 January 2005, TMG currently underwrites global
commercial business in the London market. The main lines of business are direct and facultative ("D&F")
businesses for property and engineering lines, and treaty proportional and non-proportional businesses across
multiple lines.


Business review
Results and performance
The results for the financial year are set out on pages 13 to 17. The Group generated gross written premiums of
£109,016,125 (2007: £94,190,452) and post-tax profits of £1,168,305 (2007: £13,797,461) during the financial
year. Net assets were £160,239,834 (2007: £150,704,156) at the end of the financial year.

An interim dividend of 3.2p (2007: 1.8p) was paid per ordinary share amounting to £4,000,000 (2007:
£2,250,000) during the year and no final dividends are proposed (2007: £nil).


Business environment
The softening of premium rates in the London market has almost halted and has gradually begun to show signs
of hardening. This bodes well as it enables the Group to remain focused on generating profitable business as
opposed to pursuing top line growth.

Strategy
The Group's overriding goal is to safeguard the business of its clients. To achieve this goal, its strategic focus is
on:

■    Maintaining a sound financial footing. Clients can rely on TMG to hold sufficient capital to cover all claims
     underwritten. TMG also has an unconditional and irrevocable guarantee from its immediate parent in
     Japan.
■    Ensuring a highly accurate evaluation and analysis of the potential hazards faced by its clients. TMG uses
     proprietary and innovative risk modelling techniques based on the Tokio Marine Group's longstanding
     underwriting experience since its establishment in 1879.

■    The determination to be at the forefront of innovation. TMG continues to invest in new pricing and risk
     management tools in order to meet the changing needs of the market, as well as to provide value-added
     solutions for specific challenges faced by clients.

Future outlook

Underpinning the Group's commitment to grow organically is its firm adherence to safeguarding technical
underwriting and maintaining underwriting discipline.

Principal risks and uncertainties
Overall organizational risks
The risk management team oversees the management of all organizational risks and continues to enhance the
mechanisms used to identify, quantify and manage accumulated exposures within the limits of the Group's risk
appetite. The steering of the overall risk strategy is directed by the Risk Committee.


General insurance risk
General insurance risk arises from:
■   inaccurate pricing of risks when underwritten;
■   fluctuations in the timing, frequency and severity of claims and claim settlements relative to expectations;
■   unexpected claims arising from a single source;
■   inadequate claims reserves;
■   inadequate reinsurance protection.
                                                       Page 6
           DIRECTORS' REPORT
           TOKIO MARINE GLOBAL LTD.
           Year Ended 31 December 2008


General insurance risk (continued)
The Group's underwriting strategy is agreed by the Executive Committee and communicated by specific policy
statements and guidelines.

The adequacy of the Group's general insurance reserves is reviewed by the Reserving Committee for approval
by the Executive Committee. The reserves are also subject to peer review by an independent firm of actuaries.

Financial risk
Financial risk arises through the Group's holdings in financial assets, financial liabilities, reinsurance assets and
policyholder/cedant liabilities. The key financial risk is that proceeds from financial assets are insufficient to fund
obligations arising from policies as they fall due. The most important components of financial risk are: interest
rate risk; currency risk; credit risk; and liquidity risk.

The Group adopts Tokio Marine's group-wide integrated risk management system which is used to measure,
monitor and control all risks inherent in the business, including those relating to financial risk. This system
establishes acceptable levels of measurable risks for each financial period and ensures the sufficiency of
shareholders' equity in light of those risks. Risk amounts are monitored to ensure they are maintained within
permissible ranges based on the Group's economic capital model and are reported to the Executive Committee
on a periodic basis.

The Group does not use hedge accounting to manage risks. Instead, it manages risks by calculating the value-at-
risk for major asset components, and the tail value-at-risk for major liability components in the Balance Sheet.
The value-at-risk is an indicator - at a given confidence interval - of the worst loss expected to be suffered over
a specified duration from the measurement date. The tail value-at-risk, on the other hand, measures the loss
expected to be suffered once the given confidence interval is breached.

Interest rate risk
Interest rate risk arises primarily from the Group's investment portfolio which comprise fixed interest securities
and cash deposits. To the extent that claims inflation is correlated with interest rates, liabilities to
policyholders/cedants are also exposed to interest rate risk.

The Group monitors interest rate risk by calculating the mean, Macaulay and modified duration of its investment
portfolio. The various duration indicators measure the sensitivity of assets and liabilities to changes in current
interest rates. There is currently minimal interest rate risk exposure on liabilities to policyholders/cedants as
these are principally short-to-medium tail in duration.


Currency risk
The Group is exposed to currency risk in respect of policyholder/cedant liabilities which are denominated in
currencies other than GBP. The Group seeks to mitigate currency risk by matching the estimated foreign
currency denominated liabilities with assets denominated in the same currency.

Credit risk
Credit risk is the risk that a counterparty will be unable to pay amounts in full when due. Key areas where the
Group is exposed to credit risk are:
■    exposure to investments in cash deposits and fixed interest securities;
■    reinsurers' share of in/reinsurance liabilities;
■    amounts due from reinsurers in respect of claims already paid;
■    amounts due from insurance policyholders and reinsurance cedants; and
■    amounts due from in/reinsurance intermediaries.
The Group monitors its exposure to a single counterparty, or groups of counterparty, and to geographical and
industry segments.

There are no significant credit risks in respect of reinsurers as the Group's reinsurance recoveries are currently
only due from its immediate parent company.


Liquidity risk
Liquidity risk is the risk that cash may not be available to pay obligations when due at a reasonable cost. In
order to meet such calls, the Board sets minimum limits on the maintenance of cash balances, and maximum
limits on investment maturities of 10 year duration or less.



                                                        Page 7
          DIRECTORS' REPORT
          TOKIO MARINE GLOBAL LTD.
          Year Ended 31 December 2008

Key performance indicators
    Key performance indicators            2008             2007          Movement during the financial year

    Gross written premiums           £109,016,125      £94,190,452       Growth during the year is due to an
     and growth thereon                 15.7%            49.0%           increase in premiums written and
                                                                         contract numbers, but is also influenced
                                                                         by the exchange rate fluctuations
                                                                         experienced during the fourth quarter of
                                                                         2008.


    Underwriting profit               £4,391,968        £9,954,070       A decline in profit was caused principally
    and net combined ratio              95.9%             86.2%          by losses from Hurricanes Ike and
                                                                         Gustav, but also by a smaller effect of
                                                                         continuing softening of market conditions
                                                                         in the first three quarters of 2008.


    Investment return                £14,922,509       £9,873,262        Increase in investment return is
    Investments/cash/deposits        £274,136,911     £209,483,442       attributable mainly to unrealised gains on
     and yield thereon                  5.4%              4.7%           bond market values which correlate
                                                                         inversely to the decline in interest rates
                                                                         towards the end of 2008.


    Investments/cash/deposits        £274,136,911     £209,483,442       There continues to be a healthy
    Total assets                     £387,617,472     £283,842,636       composition of
     and composition thereof            70.7%            73.8%           investments/cash/deposits due to the
                                                                         effectiveness of premium cash
                                                                         collections.

    Pre-tax profit                    £1,853,718      £19,883,688        The decrease in return on equity is due
    Opening shareholders' equity     £150,704,156     £138,800,052       mainly to significant losses from the
     and return on equity                1.2%            14.3%           hurricanes and foreign exchange losses
                                                                         from the currency sale of USD into GBP.

    Net admissible assets             £99,208,520     £124,984,922       Net admissible assets have fallen due to
    Minimum capital requirement       £18,780,846     £15,799,260        disallowances   from   overconcentrated
     and solvency cover                   5.3             7.9            bank balances with a counterparty.
                                                                         Despite this, the solvency cover has
                                                                         remained strong.


Directors and their interests
The following persons served as directors during the financial year up to the approval date of this report:

    Names                           Nationalities              Appointed                        Resigned
    Adrian Ballardie                British                    Prior to 1 January   2008          -
    David Finch                     British                    Prior to 1 January   2008          -
    Kunihiko Fujii                  Japanese                   Prior to 1 January   2008          -
    Peter Colin Frank Haynes        British                    1 November 2008                    -
    Ken Kamikochi                   Japanese                   Prior to 1 January   2008          1 July 2008
    Hirotoshi Murakami              Japanese                   Prior to 1 January   2008          1 July 2008
    Fumiaki Namekawa                Japanese                   Prior to 1 January   2008          -
    Yasuyuki Sezaki                 Japanese                   1 July 2008                        -
    Harutoshi Tagaya                Japanese                   Prior to 1 January   2008          -
    Tadaharu Uehara                 Japanese                   Prior to 1 January   2008          -
    Clemens Anton Theodor Wolf
      von Bechtolsheim              German                     Prior to 1 January 2008            -

Under the provisions of the Companies (Disclosure of Directors interests) (Exceptions) Regulations 1985, the
directors of the Group are exempt from disclosing to this Group, any interests they may have in the ultimate
parent undertaking, Tokio Marine Holdings, Inc. (Japan) (formerly Millea Holdings, Inc.)

                                                      Page 8
           INDEPENDENT AUDITORS' REPORT
           TOKIO MARINE GLOBAL LTD.
           Year Ended 31 December 2008


Independent Auditors' Report to the Shareholders of Tokio Marine Global Ltd.

We have audited the group and parent company financial statements (the ‘‘financial statements’’) of Tokio
Marine Global Ltd for the year ended 31st December 2008 which comprise the group and company Profit and
Loss Accounts, the group and company Balance Sheets, the group Statement of Total Recognised Gains and
Losses and the related notes. These financial statements have been prepared under the accounting policies set
out therein.


Respective responsibilities of directors and auditors

The directors’ responsibilities for preparing the Annual Report and the financial statements in accordance with
applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting
Practice) are set out in the Statement of Directors’ Responsibilities.


Our responsibility is to audit the financial statements in accordance with relevant legal and regulatory
requirements and International Standards on Auditing (UK and Ireland). This report, including the opinion, has
been prepared for and only for the company’s members as a body in accordance with Section 235 of the
Companies Act 1985 and for no other purpose. We do not, in giving this opinion, accept or assume
responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it
may come save where expressly agreed by our prior consent in writing.


We report to you our opinion as to whether the financial statements give a true and fair view and are properly
prepared in accordance with the Companies Act 1985. We also report to you whether in our opinion the
information given in the Directors' Report is consistent with the financial statements.


In addition we report to you if, in our opinion, the company has not kept proper accounting records, if we have
not received all the information and explanations we require for our audit, or if information specified by law
regarding directors’ remuneration and other transactions is not disclosed.


We read other information contained in the Annual Report, and consider whether it is consistent with the audited
financial statements. This other information comprises only the Chief Executive Officer’s Report and the
Directors’ Report. We consider the implications for our report if we become aware of any apparent
misstatements or material inconsistencies with the financial statements. Our responsibilities do not extend to
any other information.


Basis of audit opinion

We conducted our audit in accordance with International Standards on Auditing (UK and Ireland) issued by the
Auditing Practices Board. An audit includes examination, on a test basis, of evidence relevant to the amounts
and disclosures in the financial statements. It also includes an assessment of the significant estimates and
judgments made by the directors in the preparation of the financial statements, and of whether the accounting
policies are appropriate to the group’s and company’s circumstances, consistently applied and adequately
disclosed.


We planned and performed our audit so as to obtain all the information and explanations which we considered
necessary in order to provide us with sufficient evidence to give reasonable assurance that the financial
statements are free from material misstatement, whether caused by fraud or other irregularity or error. In
forming our opinion we also evaluated the overall adequacy of the presentation of information in the financial
statements.


Equalisation provisions

Our evaluation of the presentation of information in the group financial statements has had regard to the
statutory requirement for insurance companies to maintain equalisation provisions. The nature of equalisation
provisions, the amounts set aside at 31 December 2008, and the effect of the movement in those provisions
during the year on shareholders' funds, the balance on the general business technical account and group profit
before tax, are disclosed in note 22(c).


                                                    Page 11
         PROFIT AND LOSS : TECHNICAL ACCOUNT - GENERAL BUSINESS
         TOKIO MARINE GLOBAL LTD.
         Year Ended 31 December 2008


                                                                    Group                         Company
                                                                  2008            2007           2008           2007
                                            Notes                    £               £              £              £
EARNED PREMIUMS, NET OF REINSURANCE
  Gross premiums written        1(a),1(b)               109,016,125         94,190,452    109,016,125     94,190,452
  Outward reinsurance premiums                             (149,017)         (103,580)       (149,017)     (103,580)
  Net premiums written                                   108,867,108        94,086,872     108,867,108    94,086,872


Change in the provision for unearned premiums
   Gross amount                               23         (1,113,968)     (22,105,248)      (1,113,968)   (22,105,248)
   Reinsurers' share                          23               6,280             -               6,280           -
                                                         (1,107,688)     (22,105,248)      (1,107,688)   (22,105,248)


Earned premiums, net of reinsurance           2          107,759,420        71,981,624    107,759,420     71,981,624




CLAIMS INCURRED, NET OF REINSURANCE
Claims paid
    Gross amount                  1(a),3                (19,479,244)        (9,539,520)   (19,479,244)    (9,539,520)
    Reinsurers' share               3                      3,187,358          1,716,884      3,187,358      1,716,884

                                                        (16,291,886)        (7,822,636)   (16,291,886)    (7,822,636)
Change in the provision for claims
   Gross amount                          1(a),3,22(a)   (49,536,126)     (25,056,456)     (49,536,126)   (25,056,456)
   Reinsurers' share                       3,22(a)         (502,767)      (3,268,598)        (502,767)    (3,268,598)
                                                        (50,038,893)     (28,325,054)     (50,038,893)   (28,325,054)


Claims incurred, net of reinsurance           3         (66,330,779)     (36,147,690)     (66,330,779)   (36,147,690)




Net operating expenses                        4         (33,745,115)     (23,311,031)     (34,513,573)   (23,963,968)




Change in the equalisation provision      1(a),22(c)     (3,291,558)        (2,568,833)    (3,291,558)    (2,568,833)




BALANCE ON THE TECHNICAL ACCOUNT
 FOR GENERAL BUSINESS                       1(a)          4,391,968         9,954,070       3,623,510       9,301,133




                                                        Page 13
           PROFIT AND LOSS : NON-TECHNICAL ACCOUNT
           TOKIO MARINE GLOBAL LTD.
           Year Ended 31 December 2008


                                                                   Group                          Company
                                                                 2008            2007           2008            2007
                                               Notes                £               £              £               £
BALANCE ON THE TECHNICAL ACCOUNT
 FOR GENERAL BUSINESS                                      4,391,968        9,954,070      3,623,510        9,301,133




INVESTMENT RETURN
    Investment income                           9         10,752,247        9,518,842     10,751,797        9,518,842
    Realised gain/(loss) on investments                       50,370        (305,112)         50,370        (305,112)
    Unrealised gain on investments                         4,470,356        1,039,178      4,470,356        1,039,178
    Investment expenses and charges                        (350,464)        (379,646)      (346,843)        (379,527)
    Total investment return                               14,922,509        9,873,262     14,925,680        9,873,381




OTHER INCOME AND CHARGES
   Other income                                10(a)       1,826,173         1,910,466          8,175        506,111
   Other charges                               10(b)    (19,286,932)       (1,854,110)   (16,977,231)         (3,563)
                                                        (17,460,759)            56,356   (16,969,056)        502,548



OPERATING PROFIT AND PROFIT ON
 ORDINARY ACTIVITIES BEFORE TAX                            1,853,718       19,883,688      1,580,134    19,677,062




Tax charge on profit on ordinary activities     11         (685,413)       (6,086,227)     (588,898)    (6,003,502)




PROFIT FOR THE FINANCIAL YEAR AFTER TAX                   1,168,305     13,797,461          991,236     13,673,560




All amounts relate to continuing activities.




                                                       Page 14
           STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
          TOKIO MARINE GLOBAL LTD.
          Year Ended 31 December 2008


                                                           Group                           Company
                                                      2008              2007          2008             2007
                                        Notes            £                 £             £                £
PROFIT FOR THE FINANCIAL
 YEAR AFTER TAX                                   1,168,305        13,797,461      991,236       13,673,560

Unrealised gain on revaluation
 of group undertaking                    21            -                 -         683,558           122,219

Exchange gain on retranslation of
 brought forward balances                21      11,860,884          358,325     11,860,884          358,325

Exchange gain/(loss) arising
 on consolidation                        21        506,489            (1,682)          -                -



TOTAL RECOGNISED GAINS
 RELATING TO THE YEAR                           13,535,678     14,154,104       13,535,678      14,154,104




                                                 Page 15
          BALANCE SHEET : ASSETS
          TOKIO MARINE GLOBAL LTD.
          As at 31 December 2008


                                                               Group                          Company
                                                          2008               2007           2008             2007
                                           Notes             £                  £              £                £
INVESTMENTS
    Investments in group undertakings       12             -                  -         1,958,256      1,274,698
    Other financial investments             13      170,984,905        152,298,660    170,984,905    152,298,660
    Deposits with ceding undertakings       14        1,654,628          1,483,244      1,654,628      1,483,244
                                                    172,639,533        153,781,904    174,597,789    155,056,602



REINSURERS' SHARE OF TECHNICAL PROVISIONS
    Provision for unearned premiums  23                  6,280                -            6,280              -
    Claims outstanding              22(a)              783,858           1,286,624       783,858         1,286,624
                                                       790,138           1,286,624       790,138         1,286,624



DEBTORS
    Debtors arising out of direct
     insurance operations                   15        6,377,220          5,602,192      6,377,220        5,602,192
    Debtors arising out of
     reinsurance operations                 16       76,426,844         48,989,615     76,426,844       48,989,615
    Other debtors including taxation
     and social security                    17        4,856,569            163,304      4,684,380          163,304
                                                     87,660,633         54,755,111     87,488,444       54,755,111



OTHER ASSETS
   Tangible assets                          18        1,573,366          1,609,787      1,072,471          987,111
   Cash at bank and in hand                         101,497,378         55,701,538     99,984,663       54,905,191
   Deferred tax asset                      11(d)        108,420             72,775         67,990           40,100
                                                    103,179,164         57,384,100    101,125,124       55,932,402



PREPAYMENTS AND ACCRUED INCOME
    Accrued interest                                  3,355,872          2,222,690      3,355,802        2,222,690
    Deferred acquisition costs              24       19,375,048         14,001,043     19,375,048       14,001,043
    Other prepayments and accrued income    19          617,084            411,163        522,662          361,429
                                                     23,348,004         16,634,896     23,253,512       16,585,162




TOTAL ASSETS                                       387,617,472     283,842,635       387,255,007    283,615,901




                                                     Page 16
          STATEMENT OF ACCOUNTING POLICIES
          TOKIO MARINE GLOBAL LTD.
          Year Ended 31 December 2008


Basis of presentation
(a) Basis of preparation
    The Group and Company financial statements are prepared in accordance with:
      ■ The provisions of Section 255A of, and Schedule 9A to, the Companies Act 1985; and
      ■ The Statement of Recommended Practice on Accounting for Insurance Business issued by the
         Association of British Insurers (the "ABI SORP”) dated December 2005 as amended in December
         2006.

    The financial statements have also been prepared in accordance with applicable accounting standards.

(b) Basis of consolidation
    The Group financial statements incorporate the assets, liabilities and results of the Company and its
    subsidiary undertaking drawn up to 31 December each year. The results of its subsidiary undertaking
    acquired or sold during the period are included in the consolidated results from the date of acquisition, or
    up to the date of disposal. On the acquisition of a subsidiary undertaking, all of its assets and liabilities that
    exist at the date of acquisition are recorded at their fair values reflecting their condition at that date.

(c) Exemption from preparing cash flow statement
    The Group availed itself of the exemption under Financial Reporting Standard 1 ("FRS 1") (Revised 1996) -
    Cash Flow Statements - on grounds that it is wholly owned by Tokio Marine Holdings, Inc. (registered in
    Japan) (formerly Millea Holdings, Inc.) which includes a consolidated cash flow statement in its financial
    statements. Accordingly, no cash flow statement is presented.

(d) Exemption from disclosing related party transactions and balances
    The Group availed itself of the exemption under Financial Reporting Standard 8 ("FRS 8") - Related Party
    Disclosures - on grounds that it is wholly owned by Tokio Marine Holdings, Inc. (registered in Japan)
    (formerly Millea Holdings, Inc.). Accordingly, it has not disclosed any transactions or balances with related
    entities.

Basis of accounting
(a) Basis of accounting for underwriting activities
    The results are determined on an annual basis whereby the incurred cost of claims, commissions and
    related expenses are charged against the earned proportion of premiums, net of reinsurance, as described
    below.

(b) Written, earned and unearned premiums
    Premiums written
    Premiums written are recognised within the Profit and Loss Technical Account, with the gross and ceded
    amounts disclosed separately. Premiums written are stated gross of acquisition costs payable to
    intermediaries, but net of any premium levies or indirect taxes.

    Premiums written relate to business incepted during the financial period, together with any differences
    between booked premiums and those previously accrued on contracts which incepted in prior financial
    periods. Premiums written also include accruals of premium estimates due on all incepted contracts, but
    not yet receivable or notified to the Group, less an allowance for cancellations.

    Earned premiums
    Premiums written are earned on a time-apportionment basis to reflect the risk profile of each contract
    written.

    Unearned premium reserves ("UPR")
    Premiums written not earned are deferred within the Balance Sheet as unearned premium reserves
    ("UPR"). UPR will be recognised as earned premiums in future financial periods' Profit and Loss Technical
    Accounts.
(c) Claims incurred
    Claims incurred are recognised within the Profit and Loss Technical Account, with the gross and ceded
    amounts disclosed separately. Claims incurred comprise:
      ■   Claims paid during the financial period;
      ■   Movements in claim provisions during the financial period;
      ■   Related internal and external claims handling costs attributable to the above; and
      ■   Where applicable, deductions for salvage and other recoveries.

                                                     Page 18
          STATEMENT OF ACCOUNTING POLICIES
          TOKIO MARINE GLOBAL LTD.
          Year Ended 31 December 2008

Basis of accounting (continued)
(c) Claims incurred (continued)
    Claims provisions and related reinsurance recoveries
    Claims provisions within the Balance Sheet comprise the following:
      ■ Estimated costs of claims notified but not yet settled at the financial period end (“outstandings");
      ■ Incurred but not reported claims at the financial period end (“IBNRs");
      ■ Related internal and external claims handling costs attributable to the above; and
      ■ Salvage and subrogration deductions, plus other non-reinsurance recoveries where applicable.
    Claims provisions are estimated at each financial period end based on best available information. The
    Group takes all reasonable steps to ensure that it has appropriate information regarding its estimated
    claim exposures and these are set so that no adverse run-off deviation is envisaged. Given the
    uncertainties in establishing claims provisions, it is likely that the final liability will prove different from the
    original estimates established. Where such uncertainty is deemed considerable, a degree of caution is
    exercised in setting claims provisions.

    Notified outstanding claims
    In estimating outstanding claims within the Balance Sheet, the Group considers the claim circumstances as
    reported, including any information available from loss adjusters.
    The Group's gross outstanding claim estimates of large losses are based on best estimates of claims given
    the currently available information from: industry assessments of exposures; preliminary claims
    information obtained from policyholders, cedants and brokers to-date; and a review of in-force contracts.
    Actual gross losses from these events may vary materially from initial estimates due to the inherent
    uncertainties in making such determinations.
    Incurred but not reported ("IBNR") claims
    The estimation of IBNR claims within the Balance Sheet is generally subject to a greater degree of
    uncertainty than the estimation of notified outstanding claims as less information is available. IBNR claims
    may often not be apparent to the insured until many years have passed following the event which trigger
    such claims. Business classes where the proportion of IBNR claims are high in relation to total claims
    provisions will typically display greater variations between initial estimates and the final outcomes because
    of greater difficulties estimating these. Business classes where claims are typically reported relatively
    quickly after the claim event tend to display lower levels of volatility.

    In calculating IBNR claims, the Group applies the three reserving methods of a priori loss ratio, link ratio
    and Bornhuetter Ferguson. The Group then selects the most appropriate method based on information
    derived by underwriters and actuaries during the initial pricing of the business, supplemented by industry
    data where appropriate.
    These methods consider, among other things, premium rate changes, claims inflation and changes in
    terms and conditions that have been observed in the market.
    Included in the IBNR is a margin to take into account uncertainties in its estimation that arise from the fact
    that the claims experience is underdeveloped and that industry benchmark data is used in the reserving
    methodologies.

    Direct contracts, assumed facultative contracts
    These contracts comprise principally Property and Construction/Engineering All Risks. These are short-to-
    medium tail in nature and there is generally not expected to be a significant delay between the occurrence
    of the claim and the claim being reported to the Group.

    Assumed treaty contracts
    These contracts currently comprise a mixed portfolio of property, liability, accident/health and financial
    lines. These are short-to-medium tail in nature and there is generally not expected to be a significant delay
    between the occurrence of the claim and the claim being reported to the Group.

    Reinsurance recoveries
    For ceded outstanding claims within the Balance Sheet, a separate estimate is made of the amounts that
    will be recoverable from reinsurers based upon the gross provision.
    For ceded IBNR claims within the Balance Sheet, these are assumed to be consistent with the historical
    pattern of recoveries, and adjusted to reflect changes in the Group’s reinsurance programme over time.

    An assessment is also made of their recoverability having regard to market data on the financial strength
    of the underlying reinsurers and their associated default probabilities.

                                                      Page 19
            STATEMENT OF ACCOUNTING POLICIES
           TOKIO MARINE GLOBAL LTD.
           Year Ended 31 December 2008

Basis of accounting (continued)
(d) Unexpired risk provisions ("URP")
      Unexpired risk provisions (“URP”) are established within the Balance Sheet for any deficiencies arising
      when unearned premium reserves ("UPR"), net of associated deferred acquisition costs ("DAC") are
      insufficient to meet expected claims and expenses. No account is taken of future investment return
      arising from investments supporting the URP and UPR. The expected claims are calculated based on
      information available at the Balance Sheet date.

      Unexpired risk surpluses and deficits are offset where business classes are managed together and a
      provision is made if an aggregate deficit arises.
(e) Equalisation provisions
      Amounts are set aside as equalisation provisions in accordance with the FSA's Handbook for the purpose
      of mitigating exceptionally high loss ratios in future financial periods. Equalisation provisions are not
      liabilities because they are in addition to the claims provisions established as described in 2(c) above.
      Notwithstanding this, they are required by Schedule 9A to the Companies Act 1985 to be categorised
      together with technical provisions.

(f)   Acquisition costs
      Acquisition costs
      Acquisition costs within the Profit and Loss Technical Account represent both external commissions and
      internal expenses associated with acquiring insurance contracts written during the financial period.
      Acquisition costs also include reinsurance commissions and profit participations - both receivable and
      payable. Acquisition costs are recognised in the financial period in which the related premiums are
      earned, with the gross and ceded amounts disclosed separately.

      Deferred acquisition costs ("DAC")
      Acquisition costs which relate to unearned premium reserves ("UPR") are recognised within the Balance
      Sheet as deferred acquisition costs ("DAC"). DAC will be charged in future financial periods' Profit and
      Loss Technical Accounts.
(g) Financial investments
      Debt securities are carried within the Balance Sheet at bid market values prevailing at the Balance Sheet
      date, or those prevailing during the last trading day before that date. Deposits with credit institutions and
      deposits with ceding undertakings are both carried within the Balance Sheet at book values.

(h) Investments in group undertakings
      Investments in group undertakings are valued on the Balance Sheet at current values which utilise net
      book values as a proxy. Movements in the Balance Sheet values are taken to the Revaluation Reserve
      through the Statement of Total Recognised Gains and Losses.
(i)   Investment return
      Investment return is recognised within the Profit and Loss Non Technical Account and comprises:
        ■ Investment income earned during the financial period;
        ■ Investment expenses, charges or interest incurred during the financial period;
        ■ Movements in unrealised market value gains/losses during the financial period; and
        ■ Realised investment gains/losses arising from the sale of investments during the financial period.
      Investment income
      Investment income comprises:
        ■ Interest on bank balances, which are accounted for on an accruals basis; and
        ■ Coupons on bonds, which are accounted for on an accruals basis.
      Investment expenses, charges or interest
      These are recognised on an accruals basis.
      Movements in unrealised gains/losses
      Unrealised gains/losses on investments arising during the financial period represent the difference
      between: current market value of investments at the Balance Sheet date, and their acquired cost if
        ■ The
           purchased during the financial period; or
       ■   The current market value of investments at the Balance Sheet date, and their market value at the
           last Balance Sheet date if purchased in previous financial periods.
      Realised gains/losses
      These represent the difference between the net sales proceeds and acquired cost. Any unrealised
      gains/losses previously recognised will be reclassified as realised gains/losses upon the sale of
      investments.
                                                      Page 20
           STATEMENT OF ACCOUNTING POLICIES
           TOKIO MARINE GLOBAL LTD.
           Year Ended 31 December 2008


Basis of accounting (continued)
(j)   Other income
      Fee income from group undertakings relate to income receivable by a subsidiary of the Company, Tokio
      Marine Technologies, LLC ("TM Tech") and comprises:
       ■   Fee income that is recognised in proportion to the costs incurred in undertaking all software
           development and consulting activities necessary to support TM Tech's group-related clients'
           operations.

       ■   Licensing income from granting usage of its internally developed 'core technology' software.


(k) Foreign currency translations and settlements
      The Group operates in the three functional currencies of GBP/EUR/USD. All non-GBP/EUR/USD transactions
      are translated into GBP/EUR/USD at the actual rates prevailing on the respective dates of the transactions.

      The Group's reporting currency is GBP. The net investment method is used whereby all Balance Sheet
      assets/liabilities denominated in the functional currencies of GBP/EUR/USD are translated at closing rates
      into GBP, whereas all Profit and Loss transactions are translated at average rates into GBP.


       ■   The translation of all Profit and Loss transactions at average rates into GBP represents a change from
           previous financial years wherein all Profit and Loss transactions then were translated at closing rates
           into GBP. This new method which applies average rates for the year is better suited since monetary
           volumes of Profit and Loss transactions arise evenly throughout the year.

       ■   There is no impact on the Profit and Loss Account result, the Statement of Total Recognised Gains
           and Losses, and on the retained profit on the Balance Sheet - be it on restating the 2007 financial
           year's results according to the new method, or on restating the 2008 financial year's results
           according to the old method.

      Exchange gains/losses arising from the retranslation, into GBP, of opening Balance Sheet assets/liabilities
      from previous to current closing rates are taken to the Profit and Loss Reserve through the Statement of
      Total Recognised Gains and Losses.

      Exchange gains/losses arising from the retranslation, into GBP, of the Profit and Loss Account from average
      to closing rates are taken to the Profit and Loss Non-Technical Account.

      Exchange gains/losses arising on consolidation, into GBP, of its subsidiary undertaking are taken to the
      Profit and Loss Reserve through the Statement of Total Recognised Gains and Losses.

      Exchange gains/losses arising from cash settlements of Balance Sheet assets/liabilities, and from internal
      transfers of Balance Sheet assets/liabilities between the three functional currency ledgers of GBP/EUR/USD
      are taken to the Profit and Loss Non-Technical Account.




                                                    Page 21
           STATEMENT OF ACCOUNTING POLICIES
           TOKIO MARINE GLOBAL LTD.
           Year Ended 31 December 2008


Basis of accounting (continued)
(l)   Operating leases
      Operating lease rentals are charged to the Profit and Loss Technical Account evenly over the period of the
      lease.

(m) Current and deferred taxation
      Current tax
      Current tax is recognised in the Profit and Loss Non Technical Account and reflects:
       ■ Estimated tax charges/credits associated with the current financial period's taxable profits/losses;
       ■ Changes in previously estimated tax charges/credits associated with previous financial periods'
           taxable profits/losses.

      Deferred tax
      Deferred tax assets/liabilities within the Balance Sheet arise from differences in timing between the
      recognition of taxable profits/losses in the financial statements, versus their recognition in the tax
      computation.

      Provision is made for all material timing differences, including revaluations of investment gains/losses
      recognised within the Profit and Loss Non Technical Account. Using the liability method, deferred tax is
      calculated at rates at which it is expected the tax will arise. This provision is not discounted.


(n) Pension costs
      The Group only operates a defined contribution pension scheme. Contributions to the scheme are charged
      to the Profit and Loss Technical Account and represent the amounts payable during the current financial
      period. Contributions are accumulated and invested by an independent scheme manager across a portfolio
      of assets which are held separately from the Group's assets.

(o) Tangible fixed assets
      The costs of acquiring tangible fixed assets are capitalised on the Balance Sheet within the following
      categories, and depreciated on a straight line basis over the estimated useful lives stipulated below:
       ■   Leasehold improvements        3   to 10 years
       ■   Furniture/fixtures/fittings   2   years
       ■   Computer hardware             2   years
       ■   Computer software             2   to 3 years
       ■   Office equipment              2   years




                                                           Page 22
          NOTES TO THE FINANCIAL STATEMENTS
          TOKIO MARINE GLOBAL LTD.
          Year Ended 31 December 2008


1.   SEGMENTAL INFORMATION
(a) Analyses by class of business
                                                                       Group
                                                                        2008

                                        Gross         Gross          Gross        Gross        Reinsu-
                                    premiums      premiums          claims     operating         rance Underwriting
                                       written       earned       incurred     expenses       balances profit/(loss)
                                                                          (refer Note 4)
                                             £            £             £              £              £            £
     Direct and assumed facultative business
      Fire and other damage
        to property                 31,965,387   29,779,775 (12,929,450)     (9,371,133)    (113,655)      7,365,537
                                    31,965,387   29,779,775 (12,929,450)     (9,371,133)    (113,655)      7,365,537

     Assumed treaty business
      Non proportional
        reinsurance                 5,385,517     3,576,885    (2,055,828)     (620,506)          -          900,551
                                    5,385,517     3,576,885    (2,055,828)     (620,506)          -          900,551


     Assumed treaty business
      Proportional reinsurance    71,665,221     74,545,497 (54,030,092) (23,753,476)       2,655,509      (582,562)
                                  71,665,221     74,545,497 (54,030,092) (23,753,476)       2,655,509      (582,562)



                                 109,016,125 107,902,157 (69,015,370) (33,745,115)          2,541,854      7,683,526

                                                                      Change in equalisation provision    (3,291,558)


                                                                                   Underwriting profit     4,391,968



                                                                      Company
                                                                        2008

                                        Gross         Gross          Gross        Gross        Reinsu-
                                    premiums      premiums          claims     operating         rance Underwriting
                                       written       earned       incurred     expenses       balances profit/(loss)
                                                                          (refer Note 4)
                                             £            £             £              £              £            £
     Direct and assumed facultative business
      Fire and other damage
        to property                 31,965,387   29,779,775 (12,929,450) (10,027,626)       (113,655)      6,709,044
                                    31,965,387   29,779,775 (12,929,450) (10,027,626)       (113,655)      6,709,044

     Assumed treaty business
      Non proportional
        reinsurance                 5,385,517     3,576,885    (2,055,828)     (643,099)          -          877,958
                                    5,385,517     3,576,885    (2,055,828)     (643,099)          -          877,958

     Assumed treaty business
      Proportional reinsurance    71,665,221     74,545,497 (54,030,092) (23,842,848)       2,655,509      (671,934)
                                  71,665,221     74,545,497 (54,030,092) (23,842,848)       2,655,509      (671,934)

                                 109,016,125 107,902,157 (69,015,370) (34,513,573)          2,541,854      6,915,068


                                                                      Change in equalisation provision    (3,291,558)

                                                                                   Underwriting profit     3,623,510



                                                     Page 23
          NOTES TO THE FINANCIAL STATEMENTS
          TOKIO MARINE GLOBAL LTD.
          Year Ended 31 December 2008


1.   SEGMENTAL INFORMATION (continued)
(a) Analyses by class of business
                                                                      Group
                                                                       2007
                                        Gross         Gross         Gross         Gross        Reinsu-
                                    premiums      premiums         claims      operating         rance    Underwriting
                                       written       earned      incurred      expenses       balances     profit/(loss)
                                                                          (refer Note 4)
                                             £            £             £              £              £               £
     Direct and assumed facultative business
      Fire and other damage
        to property               32,734,332     24,577,988 (13,896,032)    (9,663,600)     (120,391)         897,965
                                  32,734,332     24,577,988 (13,896,032)    (9,663,600)     (120,391)         897,965

     Assumed treaty business
      Non proportional
        reinsurance                1,094,872       669,105      (284,793)     (402,828)           -           (18,516)
                                   1,094,872       669,105      (284,793)     (402,828)           -           (18,516)


     Assumed treaty business
      Proportional reinsurance    60,361,248     46,838,111 (20,415,151) (13,244,603)      (1,534,903)     11,643,454
                                  60,361,248     46,838,111 (20,415,151) (13,244,603)      (1,534,903)     11,643,454



                                  94,190,452     72,085,204 (34,595,976) (23,311,031)      (1,655,294)     12,522,903

                                                                      Change in equalisation provision    (2,568,833)


                                                                                   Underwriting profit      9,954,070



                                                                     Company
                                                                       2007
                                        Gross         Gross         Gross         Gross        Reinsu-
                                    premiums      premiums         claims      operating         rance    Underwriting
                                       written       earned      incurred      expenses       balances     profit/(loss)
                                                                          (refer Note 4)
                                             £            £             £              £              £               £
     Direct and assumed facultative business
      Fire and other damage
        to property               32,734,332     24,577,988 (13,896,032) (10,212,067)       (120,391)         349,498
                                  32,734,332     24,577,988 (13,896,032) (10,212,067)       (120,391)         349,498

     Assumed treaty business
      Non proportional
       reinsurance                 1,094,872       669,105      (284,793)     (423,591)           -           (39,279)
                                   1,094,872       669,105      (284,793)     (423,591)           -           (39,279)

     Assumed treaty business
      Proportional reinsurance    60,361,248     46,838,111 (20,415,151) (13,328,310)      (1,534,903)     11,559,747
                                  60,361,248     46,838,111 (20,415,151) (13,328,310)      (1,534,903)     11,559,747

                                  94,190,452     72,085,204 (34,595,976) (23,963,968)      (1,655,294)     11,869,966


                                                                      Change in equalisation provision    (2,568,833)

                                                                                   Underwriting profit      9,301,133




                                                      Page 24
          NOTES TO THE FINANCIAL STATEMENTS
          TOKIO MARINE GLOBAL LTD.
          Year Ended 31 December 2008


1.   SEGMENTAL INFORMATION (continued)
(b) Analyses by geographical area

                                                                       Group
                                                                       2008

                                    By destination                       By origin
                                            Gross            Gross    Profit/(loss)   Profit/(loss)            Net
                                        premiums         premiums           before       after tax        assets/
                                           written          written             tax                   (liabilities)
                                                 £             £                £              £           £
     United Kingdom                     3,040,869    109,016,125        1,853,718      1,168,305 160,239,834
     Europe                             7,458,309           -                -              -           -
     Asia and Australia                 6,765,820           -                -              -           -
     Africa and Middle East             4,685,373           -                -              -           -
     North, Central and
      South America                  11,755,680               -                -              -              -
     Worldwide                       75,310,074               -                -              -              -

                                    109,016,125      109,016,125        1,853,718      1,168,305 160,239,834



                                                                      Company
                                                                       2008

                                    By destination                       By origin
                                            Gross            Gross    Profit/(loss)   Profit/(loss)            Net
                                        premiums         premiums           before       after tax        assets/
                                           written          written             tax                   (liabilities)
                                                 £             £                £              £           £
     United Kingdom                     3,040,869    109,016,125        1,580,134        991,236 160,239,834
     Europe                             7,458,309           -                -              -           -
     Asia and Australia                 6,765,820           -                -              -           -
     Africa and Middle East             4,685,373           -                -              -           -
     North, Central and
      South America                  11,755,680               -                -              -              -
     Worldwide                       75,310,074               -                -              -              -

                                    109,016,125      109,016,125        1,580,134        991,236 160,239,834




                                               Page 25
          NOTES TO THE FINANCIAL STATEMENTS
          TOKIO MARINE GLOBAL LTD.
          Year Ended 31 December 2008


1.   SEGMENTAL INFORMATION (continued)
(b) Analyses by geographical area (continued)

                                                                     Group
                                                                     2007

                                 By destination                        By origin
                                         Gross             Gross    Profit/(loss)   Profit/(loss)            Net
                                     premiums          premiums           before       after tax        assets/
                                        written           written             tax                   (liabilities)
                                             £             £                 £               £           £
     United Kingdom                  3,966,889    94,190,452        19,883,688      13,797,461 150,704,156
     Europe                         10,690,036          -                 -               -           -
     Asia and Australia              4,090,274          -                 -               -           -
     Africa and Middle East          6,033,340          -                 -               -           -
     North, Central and             16,003,846
      South America                                         -                -              -              -
     Worldwide                      53,406,067              -                -              -              -

                                    94,190,452    94,190,452        19,883,688      13,797,461 150,704,156



                                                                    Company
                                                                     2007

                                 By destination                        By origin
                                         Gross             Gross    Profit/(loss)   Profit/(loss)            Net
                                     premiums          premiums           before       after tax        assets/
                                        written           written             tax                   (liabilities)
                                             £             £                 £               £           £
     United Kingdom                  3,966,889    94,190,452        19,677,062      13,673,560 150,704,156
     Europe                         10,690,036          -                 -               -           -
     Asia and Australia              4,090,274          -                 -               -           -
     Africa and Middle East          6,033,340          -                 -               -           -
     North, Central and             16,003,846
      South America                                         -                -              -              -
     Worldwide                      53,406,067              -                -              -              -

                                    94,190,452    94,190,452        19,677,062      13,673,560 150,704,156




                                             Page 26
          NOTES TO THE FINANCIAL STATEMENTS
          TOKIO MARINE GLOBAL LTD.
          Year Ended 31 December 2008


2.   EARNED PREMIUMS, NET OF REINSURANCE
                                                                          Group and Company
                                                                                 2008
                                                                        Gross Reinsurance           Net
                                                                            £           £             £

     Premiums written                                              109,016,125   (149,017) 108,867,108
     Change in the provision for unearned premiums (refer Note 23) (1,113,968)       6,280 (1,107,688)
     Earned premiums                                              107,902,157    (142,737) 107,759,420

                                                                          Group and Company
                                                                                 2007
                                                                        Gross Reinsurance           Net
                                                                            £           £             £

     Premiums written                                              94,190,452    (103,580) 94,086,872
     Change in the provision for unearned premiums               (22,105,248)         -   (22,105,248)
     Earned premiums                                               72,085,204    (103,580)   71,981,624



3.   CLAIMS INCURRED, NET OF REINSURANCE
                                                                          Group and Company
                                                                                 2008
                                                                        Gross Reinsurance           Net
                                                                            £           £             £

     Claims paid
      Claims and allocated loss adjustment expenses paid         (19,288,710)    3,187,358 (16,101,352)
      Unallocated loss adjustment expenses paid (refer Note 4)      (190,534)         -       (190,534)
                                                                 (19,479,244)    3,187,358 (16,291,886)



     Change in the provision for claims (refer Note 22(a))
      Outstanding claims reserve movement                        (15,704,447)    (130,027) (15,834,474)
      Claims incurred but not reported reserve movement          (33,152,731)    (372,740) (33,525,471)
      Unallocated loss adjustment expense reserve movement          (678,948)         -       (678,948)
                                                                 (49,536,126)    (502,767) (50,038,893)


     Claims incurred                                             (69,015,370)    2,684,591 (66,330,779)

                                                                          Group and Company
                                                                                 2007
                                                                        Gross Reinsurance           Net
                                                                            £           £             £

     Claims paid
      Claims and allocated loss adjustment expenses paid          (9,306,278)    1,716,884   (7,589,394)
      Unallocated loss adjustment expenses paid (refer Note 4)      (233,242)         -        (233,242)
                                                                  (9,539,520)    1,716,884   (7,822,636)



     Change in the provision for claims
      Outstanding claims reserve movement                         (1,906,458) (2,704,925) (4,611,383)
      Claims incurred but not reported reserve movement          (22,775,744)   (563,673) (23,339,417)
      Unallocated loss adjustment expense reserve movement          (374,254)        -       (374,254)
                                                                 (25,056,456) (3,268,598) (28,325,054)


     Claims incurred                                             (34,595,976) (1,551,714) (36,147,690)
                                                  Page 27
          NOTES TO THE FINANCIAL STATEMENTS
          TOKIO MARINE GLOBAL LTD.
          Year Ended 31 December 2008


4.   NET OPERATING EXPENSES
                                                                        Group
                                                                      2008          2007
                                                                     Gross         Gross
                                                                   and Net       and Net
                                                                        £             £

     Acquisition costs
      Acquisition costs and profit commissions                 (27,409,749) (19,630,722)
      Change in deferred acquisition costs and
       deferred profit commissions (refer Note 24)                1,248,644    3,844,700
                                                               (26,161,105) (15,786,022)

     Administrative expenses
      Gross administrative expenses                             (8,663,410)   (7,995,298)
      Transferred to unallocated loss adjustment
       expenses paid (refer Note 3)                                 190,534       233,242
      Transferred to investment expenses                            141,028       237,047
      Transferred to acquisition costs                              747,838          -
     Administrative expenses (refer Note 5)                     (7,584,010)   (7,525,009)


                                                               (33,745,115) (23,311,031)



                                                                       Company
                                                                      2008          2007
                                                                     Gross         Gross
                                                                   and Net       and Net
                                                                        £             £

     Acquisition costs
      Acquisition costs and profit commissions                 (27,409,751) (19,630,723)
      Change in deferred acquisition costs and
       deferred profit commissions (refer Note 24)                1,248,644    3,844,700
                                                               (26,161,107) (15,786,023)
     Administrative expenses
      Gross administrative expenses                             (9,431,866)   (8,648,234)
      Transferred to unallocated loss adjustment
       expenses paid (refer Note 3)                                 190,534       233,242
      Transferred to investment expenses                            141,028       237,047
      Transferred to acquisition costs                              747,838          -
     Administrative expenses (refer Note 5)                     (8,352,466)   (8,177,945)


                                                               (34,513,573) (23,963,968)




                                                     Page 28
          NOTES TO THE FINANCIAL STATEMENTS
          TOKIO MARINE GLOBAL LTD.
          Year Ended 31 December 2008


5.   ADMINISTRATIVE EXPENSES
                                                                  Group                      Company
                                                                2008          2007          2008          2007
                                                                  £             £             £             £

     Staff related costs                               (3,958,742) (3,275,396)        (3,958,742)   (3,275,396)
     Auditors' remuneration (refer Note 8)               (173,000)   (193,500)          (173,000)     (193,500)
     Legal and other professional fees                   (701,802)   (512,245)          (701,802)     (512,245)
     Outsourcing fees                                    (959,877)   (864,461)          (959,877)     (864,461)
     IT related costs                                  (1,645,868)   (701,732)        (1,645,868)   (1,354,669)
     Other administrative expenses                       (144,721) (1,977,675)          (913,177)   (1,977,674)
                                                       (7,584,010) (7,525,009)        (8,352,466)   (8,177,945)


6.   STAFF COSTS

(a) Staff numbers
                                                                  Group                     Company
                                                                2008          2007         2008       2007
                                                              Number        Number       Number     Number

     Average number of employees (including directors)
     employed during the financial year
      Underwriting                                                15            13            15            13
      Claims                                                       1             1             1             1
      Risk                                                        21            21             4             4
      Finance                                                      9             7             8             6
      IT                                                           6             4             5             3
      Administration, Human Resources
         and Compliance                                            4             3             3             2
      Management                                                  10             3             6             2
                                                                  66            52            42            31



(b) Staff costs
                                                                  Group                      Company
                                                                2008          2007          2008          2007
                                                                  £             £             £             £

     Aggregate payroll costs of employees (including directors)
     employed during the financial year
      Wages and salaries                                 3,930,689        3,226,833    2,644,889     2,121,830
      Social security costs                                326,205          266,425      251,894       202,555
      Other pension costs                                  258,453          182,752      209,354       167,947
                                                         4,515,347        3,676,010    3,106,137     2,492,332




                                                    Page 29
           NOTES TO THE FINANCIAL STATEMENTS
          TOKIO MARINE GLOBAL LTD.
          Year Ended 31 December 2008


7.   DIRECTORS' EMOLUMENTS
                                                                                           Group and Company
                                                                                            2008        2007
                                                                                              £           £

     Aggregate emoluments                                                                736,540       683,141
     Group contributions to money purchase pension schemes                                23,610        22,532
     Sums paid to third parties for directors' services                                   50,000        50,000
                                                                                         810,150       755,673



                                                                                           Group and Company
                                                                                            2008        2007
                                                                                              £           £

     Highest paid director
      Aggregate emoluments                                                               248,645       258,733
                                                                                         248,645       258,733

     Retirement benefits are accruing to one director (2007: one) under the money purchase pension scheme.



8.   AUDITORS' REMUNERATION
     During the year, the Group obtained the following services from the Group's auditor as detailed below:

                                                                 Group                       Company
                                                               2008          2007           2008          2007
                                                                 £             £               £            £

     Audit services (refer Note 5)
      Fees payable to the company's auditor for audit of
       the company and group financial statements        (156,000)       (177,500)     (156,000)     (177,500)
                                                         (156,000)       (177,500)     (156,000)     (177,500)
     Non-audit services (refer Notes 5 and 10(b))
      Audit of the company's subsidiaries, pursuant
       to legislation                                      (24,580)       (28,967)          -                 -
      Other services pursuant to legislation, including
       the audit of the regulatory return                  (17,000)       (16,000)      (17,000)       (16,000)
                                                           (41,580)       (44,967)      (17,000)       (16,000)

                                                          (197,580)      (222,467)     (173,000)     (193,500)




                                                     Page 30
           NOTES TO THE FINANCIAL STATEMENTS
          TOKIO MARINE GLOBAL LTD.
          Year Ended 31 December 2008


9.   INVESTMENT INCOME
                                                                  Group                      Company
                                                                 2008         2007           2008        2007
                                                                    £            £              £           £

     Income from debt securities
      and other fixed income securities                   4,463,610       4,623,323     4,463,610    4,623,323
     Income from deposits with ceding undertakings
      and other deposits                                        64,274     109,586         64,274      109,586
     Income from deposits with credit institutions
      and cash at bank and in hand                        6,224,363       4,785,933     6,223,913    4,785,933
                                                         10,752,247       9,518,842    10,751,797    9,518,842



10. OTHER INCOME AND OTHER CHARGES

(a) Other Income                                                  Group                      Company
                                                                 2008         2007           2008        2007
                                                                   £            £              £           £

     Interest receivable on corporation
      tax repayments                                          5,676             213         5,676          213
     Fee income from group undertakings                   1,817,998       1,404,355           -           -
     Gain on tangible fixed assets disposals                   -            360,666          -         360,666
     Premium on ceding of building lease                       -            145,232          -         145,232
     Other income                                             2,499            -            2,499         -
                                                          1,826,173       1,910,466         8,175      506,111



(b) Other Charges                                                 Group                      Company
                                                                 2008         2007           2008        2007
                                                                   £            £              £           £

     Non-technical expenses:
      Staff related costs                               (1,620,633) (1,345,059)               -           -
      Auditors' remuneration (refer Note 8)                (24,580)    (28,967)               -           -
      Legal and other professional fees                   (139,533)   (140,266)               -           -
      Outsourcing fees                                      (2,010)     (1,878)               -           -
      Depreciation on owned tangible fixed asset          (300,661)   (146,014)               -           -
      Operating lease rentals on land and buildings        (39,786)    (33,030)               -           -
      Business travel                                      (86,494)    (77,558)
      Other administrative expenses                        (95,756)    (73,563)               -           -
                                                        (2,309,453) (1,846,335)               -           -
     Loss on tangible fixed assets disposals                    (683)       (4,212)          (435)        -
     Interest payable on corporation tax payments            (46,993)          -          (46,993)        -
     Exchange loss on cash settlements                   (2,938,876)        (3,563)    (2,938,876)     (3,563)
     Exchange loss on revaluation of Profit and Loss
      Account from average to closing rates and on
      internal transfers of Balance Sheet assets/liabilities
      between functional currencies                    (13,990,927)            -      (13,990,927)        -
                                                       (19,286,932) (1,854,110)       (16,977,231)     (3,563)




                                                      Page 31
          NOTES TO THE FINANCIAL STATEMENTS
          TOKIO MARINE GLOBAL LTD.
          Year Ended 31 December 2008


11. CORPORATION TAX
(a) Tax (charge)/credit on profit on ordinary activities
                                                                  Group                    Company
                                                                2008          2007        2008        2007
                                                                   £             £           £           £

    United Kingdom corporation tax at 28.5% (2007: 30%)
     Current tax on income for the year                 (427,335) (5,918,278)         (427,335) (5,918,278)
     Adjustments in respect of previous financial years (189,453)    (25,627)         (189,453)    (25,627)
                                                        (616,788) (5,943,905)         (616,788) (5,943,905)

    Foreign corporation tax
     Current tax on income for the year                     (109,236)      (97,393)        -           -
     Adjustments in respect of previous financial years        15,803      (24,562)        -           -
                                                             (93,433)     (121,955)        -           -

    Total current tax (refer Note 11(b))                    (710,221) (6,065,860)     (616,788) (5,943,905)



    UK deferred tax movements
     Origination and reversal of timing differences          (62,617)      (69,177)    (62,617)    (69,177)
     Adjustment in respect of previous financial years         90,507         9,580      90,507       9,580
                                                               27,890      (59,597)      27,890    (59,597)

    Foreign deferred tax movements
     Origination and reversal of timing differences           (3,082)       39,230         -           -
     Adjustment in respect of previous financial years           -            -            -           -
                                                              (3,082)       39,230         -           -

    Total deferred tax movements (refer Note 11(d))           24,808       (20,367)     27,890     (59,597)


    Tax on profit on ordinary activities                    (685,413) (6,086,227)     (588,898) (6,003,502)




                                                  Page 32
          NOTES TO THE FINANCIAL STATEMENTS
          TOKIO MARINE GLOBAL LTD.
          Year Ended 31 December 2008


11. CORPORATION TAX (continued)

(b) Factors affecting tax (charge)/credit for the year

    The tax assessed on the profit on ordinary activities for the year is different than that resulting in applying
    the standard rate of corporation tax in the UK of 28.5% (2007: 30%). The differences are reconciled
    below:
                                                                    Group                       Company
                                                                  2008         2007            2008          2007
                                                                     £            £               £             £

    Profit on ordinary activities before tax               1,853,718      19,883,688     1,580,134     19,677,062

    Profit on ordinary activities before tax multiplied by the
     standard rate of corporation tax in the United Kingdom
     at 28.5% (2007: 30%)                                    (526,881) (5,965,106)        (450,295) (5,903,119)

    Factors affecting charge:
     United Kingdom:
      Expenses not deductible for tax purposes                 (40,770)     (71,773)       (40,770)       (71,773)
      Capital allowances in excess of depreciation              (5,250)       66,313        (5,250)         66,313
      Profit in sale of non qualifying fixed
       asset additions                                            -           14,726           -            14,726
      Chargeable gains                                            -         (24,425)           -          (24,425)
      Movement in technical provisions                          68,980          -            68,980           -
      Adjustment to tax charge in respect
       of previous financial years                         (189,453)        (25,627)      (189,453)       (25,627)
                                                           (166,493)        (40,786)      (166,493)       (40,786)
     Foreign:
      Expenses not deductible for tax purposes                  (2,553)      (2,441)            -             -
      Income not taxable for tax purposes                          -            -               -             -
      Capital allowances in excess of depreciation              (7,241)      (7,353)            -             -
      Prepaid expenses deductible in current year                 5,621      (5,941)            -             -
      Higher tax rates on foreign earnings                     (28,003)     (20,870)            -             -
      Exchange gains not taxable for tax purpose                  (951)        1,199            -             -
      Profit in sale of non qualifying fixed
        asset additions                                            478          -               -             -
      Adjustment to tax charge in respect
        of previous financial years                              15,803     (24,562)            -             -
                                                               (16,846)     (59,968)            -             -
    Current tax charge for the year
     (refer Note 11(a))                                    (710,220) (6,065,860)          (616,788) (5,943,905)




                                                     Page 33
            NOTES TO THE FINANCIAL STATEMENTS
            TOKIO MARINE GLOBAL LTD.
           Year Ended 31 December 2008

11. CORPORATION TAX (continued)
(c)   Components of current corporation tax debtors/(creditors)

                                                                                           Group                    Company
                                                                                         2008          2007        2008        2007
                                                                                            £             £           £           £

      Corporation tax in respect of current financial year                           4,540,741          -      4,520,458        -
       (refer Note 17, 25)
      Corporation tax in respect of prior financial years                             (61,940)   (4,010,886)    (61,940) (4,005,016)
       (refer Note 17, 25)
                                                                                     4,478,801   (4,010,886)   4,458,518 (4,005,016)

(d) Components of deferred tax assets/(liabilities)

                                                                         Group                               Company
                                                                           Non-                                   Non-
                                                             Current     current         Total       Current    current        Total
                                                                   £           £            £              £          £           £

      Tangible fixed assets depreciation less/(greater) than   capital allowances:
       At beginning of year                                    -        49,335         49,335           -        40,100       40,100
       Exchange gain on retranslation of brought forward
        balances from last to this year closing rates          -          3,296         3,296           -          -            -
       Movement during year                                    -         18,595        18,595           -        13,827       13,827
       Exchange gain on retranslation of in-year
        movement from average to closing rates                 -          1,274         1,274           -          -            -
       At end of year                                          -         72,500        72,500           -        53,927       53,927

      Prepaid/accrued items:
       At beginning of year                             19,723              -          19,723           -           -           -
       Exchange gain on retranslation of brought forward
         balances from last to this year closing rates   7,040             -             7,040          -           -           -
       Movement during year                            (7,525)             -           (7,525)          -           -           -
       Exchange loss on retranslation of in-year
         movement from average to closing rates           -              (2,013)       (2,013)          -           -           -
       At end of year                                   19,238           (2,013)        17,225          -           -           -

      Legal fees:
       At beginning of year                                    -          3,717         3,717           -           -           -
       Exchange gain on retranslation of brought forward
        balances from last to this year closing rates          -          1,326         1,326           -           -           -
       Movement during year                                    -          (325)         (325)           -           -           -
       Exchange loss on retranslation of in-year
        movement from average to closing rates                 -           (87)          (87)           -           -           -
       At end of year                                          -          4,631         4,631           -           -           -

      Deferred acquisition costs:
       At beginning of year                                    -           -             -              -          -            -
       Movement during year                                  14,063        -           14,063           -        14,063       14,063
       At end of year                                        14,063        -           14,063           -        14,063       14,063

      Total:
       At beginning of year                             19,723           53,052        72,775           -        40,100       40,100
       Exchange gain on retranslation of brought forward
         balances from last to this year closing rates   7,040            4,622        11,662           -          -            -
       Movement during year                              6,538           18,270        24,808           -        27,890       27,890
       Exchange loss on retranslation of in-year
         movement from average to closing rates           -               (825)         (825)           -          -            -
       At end of year                                   33,301           75,119       108,420           -        67,990       67,990
      There were no unprovided deferred tax assets/liabilities at year end (2007: £nil).




                                                               Page 34
         NOTES TO THE FINANCIAL STATEMENTS
         TOKIO MARINE GLOBAL LTD.
         Year Ended 31 December 2008


12. INVESTMENTS IN GROUP UNDERTAKINGS
                                                                                        Company
                                                                                      2008          2007
                                                                                         £             £
   Historic cost
    At beginning of year                                                         1,122,450       527,566
    Additions during the year                                                         -          594,884
    At end of year                                                               1,122,450     1,122,450

   Revaluation
    At beginning of year (refer Note 21)                                           152,248        30,029
    Movements during year (refer Note 21)                                          683,558       122,219
    At end of year                                                                 835,806       152,248

   Net book value
    At end of this year                                                          1,958,256     1,274,698

    At end of last year                                                          1,274,698       557,595


                                                                                              Retained
                                                                               Capital and    profit for
                                                                               reserves at   year ended
                                  Class of          Country of                     31            31
                       Principal  shares Percentage  incorpo-                   December     December
   Group undertakings   activity    held   holding     ration                     2008          2008
                        Software
                      development                      United
   Tokio Marine           and                        States of                    USD           USD
   Technologies, LLC  consultancy Ordinary  100%      America                  2,864,726      334,454



13. OTHER FINANCIAL INVESTMENTS
                                                     Group and Company           Group and Company
                                                        Historical cost             Market value
                                                         2008           2007         2008        2007
                                                             £             £            £           £
   Debt securities and other fixed income securities
    Listed on the London Stock Exchange              44,737,579   30,687,169    47,012,265    29,938,955
    Listed on other investment exchanges             46,124,687   50,791,142    47,045,365    50,264,364
                                                     90,862,266   81,478,311    94,057,630    80,203,319

   Deposits with credit institutions               76,927,275     72,095,341    76,927,275    72,095,341
                                                   76,927,275     72,095,341    76,927,275    72,095,341


                                                  167,789,541 153,573,652      170,984,905 152,298,660



14. DEPOSITS WITH CEDING UNDERTAKINGS
                                                                                     Group and Company
                                                                                      2008        2007
                                                                                         £           £

   Deposits with cedants                                                         1,654,628     1,483,244
                                                                                 1,654,628     1,483,244




                                                 Page 35
        NOTES TO THE FINANCIAL STATEMENTS
        TOKIO MARINE GLOBAL LTD.
        Year Ended 31 December 2008

15. DEBTORS ARISING OUT OF DIRECT INSURANCE OPERATIONS
                                                                                             Group and Company
                                                                                              2008        2007
                                                                                                 £           £
   Amounts falling due within one year
    Amounts due from intermediaries - non-group undertakings                              6,377,220    5,602,192
                                                                                          6,377,220    5,602,192

16. DEBTORS ARISING OUT OF REINSURANCE OPERATIONS
                                                                                             Group and Company
                                                                                              2008         2007
                                                                                                 £            £
   Amounts falling due within one year
    Amounts due from non-group undertakings                                              63,244,366   47,076,798
    Amounts due from group undertakings                                                  13,182,478    1,912,817
                                                                                         76,426,844   48,989,615

17. OTHER DEBTORS INCLUDING TAXATION AND SOCIAL SECURITY
                                                               Group                          Company
                                                              2008           2007             2008         2007
                                                                 £              £                £            £
   Amounts falling due within one year
    Value added tax recoverable                           210,068        147,548            210,068     147,548
    Corporation tax receivable (refer Note 11(c))       4,478,801           -             4,458,518        -
    Other debtors                                         167,700         15,756             15,794      15,756
                                                        4,856,569        163,304          4,684,380     163,304

18. TANGIBLE ASSETS
                                                                                 Group
                                                                                 2008
                                                                       Furniture/
                                                                         fixtures/
                                                        Computer           fittings
                                                        hardware        and office        Leasehold
                                                     and software      equipment      improvements         Total
                                                                £                 £               £           £
   Book cost
    At beginning of year                             1,289,175           285,046           779,747     2,353,968
    Exchange gain on retranslation of brought forward
     balances from last to this year closing rates     264,396            12,987               -         277,383
    Additions during year                              432,369            47,876               -         480,245
    Disposals during year                             (19,273)          (13,995)               -        (33,268)
    At end of year                                      1,966,667        331,914           779,747     3,078,328

   Accumulated depreciation
    At beginning of year                               476,263           238,355            29,563      744,181
    Exchange loss on retranslation of brought forward
     balances from last to this year closing rates      47,097             8,057              -          55,154
    Charge during year                                 523,966            55,161            77,975      657,102
    Exchange loss on retranslation of in-year
     movement from average to closing rates             76,432             3,928               -          80,360
    Eliminated on disposals during year               (18,699)          (13,136)               -        (31,835)
    At end of year                                      1,105,059        292,365           107,538     1,504,962

   Net book value
    At end of this year                                   861,608         39,549           672,209     1,573,366
    At end of last year                                   812,912         46,691           750,184     1,609,787

                                                    Page 36
         NOTES TO THE FINANCIAL STATEMENTS
         TOKIO MARINE GLOBAL LTD.
         Year Ended 31 December 2008


18. TANGIBLE ASSETS (continued)
                                                                        Company
                                                                          2008
                                                               Furniture/
                                                                 fixtures/
                                                  Computer         fittings
                                                  hardware      and office        Leasehold
                                               and software    equipment      improvements         Total
                                                          £               £               £           £

    Book cost
     At beginning of year                           548,350       248,656          779,746    1,576,752
     Additions during year                          396,206        46,442             -         442,648
     Disposals during year                         (14,063)      (13,484)             -        (27,547)
     At end of year                                930,493       281,614           779,746    1,991,853



    Accumulated depreciation
     At beginning of year                           344,300       215,779           29,562       589,641
     Charge during year                             238,001        40,465           77,975       356,441
     Eliminated on disposals during year           (13,908)      (12,792)             -         (26,700)
     At end of year                                568,393       243,452           107,537      919,382



    Net book value
     At end of this year                           362,100        38,162           672,209    1,072,471

     At end of last year                           204,050        32,877           750,184      987,111



19. OTHER PREPAYMENTS AND ACCRUED INCOME
                                                         Group                        Company
                                                        2008         2007             2008         2007
                                                           £            £                £            £

    Prepaid rent deposit                            19,546        20,845            14,193       16,938
    Prepaid rent                                   136,179          -              136,179         -
    Prepaid other expenses                         461,359       390,318           372,290      344,491
                                                   617,084       411,163           522,662      361,429



20. SHARE CAPITAL
                                                                                     Group and Company
                                                                                      2008         2007
                                                                                         £            £

    Allotted, called up and fully paid
     125,000,000 ordinary shares of £1 each                                    125,000,000 125,000,000

    Authorised
     250,000,000 ordinary shares of £1 each                                    250,000,000 250,000,000




                                              Page 37
        NOTES TO THE FINANCIAL STATEMENTS
        TOKIO MARINE GLOBAL LTD.
        Year Ended 31 December 2008

21. RECONCILIATION OF MOVEMENTS IN TOTAL SHAREHOLDERS' FUNDS
                                                                                      Group
                                                                                      2008
                                                                                                          Total
                                                                                       Profit and shareholders'
                                                                    Share capital   loss account         funds
                                                                                £              £             £
   At beginning of year                                             125,000,000     25,704,156 150,704,156
    Exchange gain on retranslation of brought forward
      balances from last to this year closing rates                         -        11,860,884     11,860,884
    Retained profit                                                         -         1,168,305      1,168,305
    Exchange gain arising on consolidation                                  -           506,489        506,489
    Dividends paid                                          -               -       (4,000,000)    (4,000,000)
   At end of year                                                   125,000,000     35,239,834 160,239,834

                                                                                      Group
                                                                                      2007
                                                                                                          Total
                                                                                       Profit and shareholders'
                                                                    Share capital   loss account         funds
                                                                                £              £             £
   At beginning of year                                             125,000,000     13,800,052 138,800,052
    Exchange gain on retranslation of brought forward
      balances from last to this year closing rates                         -           358,325        358,325
    Retained profit                                                         -        13,797,461     13,797,461
    Exchange loss arising on consolidation                                  -            (1,682)        (1,682)
    Dividends paid                                          -               -       (2,250,000)    (2,250,000)
   At end of year                                                   125,000,000     25,704,156 150,704,156

                                                                            Company
                                                                              2008
                                                                                                          Total
                                                                     Revaluation       Profit and shareholders'
                                                    Share capital       reserve     loss account         funds
                                                               £               £                £            £
   At beginning of year                             125,000,000         152,248     25,551,908 150,704,156
    Revaluation gain on group undertaking
      (refer Note 12)                                      -            683,558            -          683,558
    Exchange gain on retranslation of brought forward
      balances from last to this year closing rates        -                -        11,860,884     11,860,884
    Retained profit                                        -                -           991,236        991,236
    Dividends paid                                         -                -       (4,000,000)    (4,000,000)
   At end of year                                   125,000,000         835,806     34,404,028 160,239,834

                                                                            Company
                                                                              2007
                                                                                                          Total
                                                                     Revaluation       Profit and shareholders'
                                                    Share capital       reserve     loss account         funds
                                                               £               £                £            £
   At beginning of year                             125,000,000          30,029     13,770,023 138,800,052
    Revaluation gain on group undertaking
      (refer Note 12)                                      -            122,219            -          122,219
    Exchange gain on retranslation of brought forward
      balances from last to this year closing rates        -                -           358,325        358,325
    Retained profit                                        -                -        13,673,560     13,673,560
    Dividends paid                                         -                -       (2,250,000)    (2,250,000)
   At end of year                                   125,000,000         152,248     25,551,908 150,704,156


                                                Page 38
         NOTES TO THE FINANCIAL STATEMENTS
         TOKIO MARINE GLOBAL LTD.
         Year Ended 31 December 2008


22. TECHNICAL PROVISIONS

(a) Claims outstanding
                                                                        Group and Company
                                                                               2008
                                                                                   Unallocated
                                                                           Claims         loss
                                                    Outstanding      incurred but adjustment
                                                         claims      not reported     expense      Total claims
                                                       reserves          reserves    reserves      outstanding
                                                              £                 £            £                £

    Gross
     At beginning of year                             11,837,173     42,471,616        755,001     55,063,790
     Exchange loss on retranslation of brought forward
      balances from last to this year closing rates    3,326,981     11,371,034        204,331     14,902,346
     Increase during year
      (refer Note 3)                                  15,704,447     33,152,731        678,948     49,536,126
     Exchange loss on retranslation of in-year
      movement from average to closing rates           3,364,573       7,193,172       146,721     10,704,466
     At end of year                                  34,233,174      94,188,553      1,785,001 130,206,728



    Reinsurers' share
     At beginning of year                                  913,885      372,739            -        1,286,624
     Decrease during year
       (refer Note 3)                                 (130,027)        (372,739)           -        (502,766)
     At end of year                                        783,858          -              -          783,858



(b) Movements in prior accident years' provision for claims outstanding
    The following favourable/(adverse) changes were experienced during the year:

                                                                                Group and Company
                                                                                       2008
                                                                             Non-
                                                                     catastrophe    Catastrophe          Total
                                                                           losses         losses        losses
                                                                                £              £             £

    Gross
     Direct and assumed facultative business
      Fire and other damage to property                                   68,307           -           68,307
      Credit and suretyship                                                 -              -             -
     Assumed treaty business
      Proportional reinsurance                                       (3,952,858)      (152,595)    (4,105,453)
      Non-proportional reinsurance                                      (77,854)           -          (77,854)
                                                                     (3,962,405)     (152,595)     (4,115,000)




                                                 Page 39
         NOTES TO THE FINANCIAL STATEMENTS
         TOKIO MARINE GLOBAL LTD.
         Year Ended 31 December 2008


22. TECHNICAL PROVISIONS (continued)
(c) Equalisation provision
                                                                                                     Group and
                                                                                                      Company
                                                                                                         2008
                                                                                                             £

    At beginning of year                                                                             5,649,535
    Increase during year                                                                             3,291,558
    At end of year                                                                                   8,941,093

    The increase in the equalisation provision during the year has had the effect of reducing the balance on the
    Consolidated Profit and Loss Technical Account for general business and the profit before taxation for the
    year by £3,291,558 (2007: £2,568,833).



23. PROVISION FOR UNEARNED PREMIUMS
                                                                                                     Group and
                                                                                                      Company
                                                                                                         2008
                                                                                                             £

    Gross
     At beginning of year                                                                           67,099,575
     Exchange gain on retranslation of brought forward
      balances from last to this year closing rates                                                 19,225,461
     Increase during year (refer Note 2)                                                             1,113,968
     Exchange loss on retranslation of in-year
      movement from average to closing rates                                                         (499,796)
     At end of year                                                                                 86,939,208




    Reinsurers' share
     At beginning of year                                                                                  -
     Increase during year (refer Note 2)                                                                  6,280
     At end of year                                                                                       6,280



24. DEFERRED ACQUISITION COSTS
                                                                               Group and Company
                                                                                      2008
                                                                                                          Total
                                                                        Deferred       Deferred        deferred
                                                                      acquisition         profit     acquisition
                                                                           costs    commissions           costs
                                                                                £             £                £

    Gross
     At beginning of year                                            12,676,660        1,324,383    14,001,043
     Exchange loss on retranslation of brought forward
      balances from last to this year closing rates                   3,803,820              963     3,804,783
     Increase/(decrease) during year (refer Note 4)                   2,131,399        (882,755)     1,248,644
     Exchange loss on retranslation of in-year
      movement from average to closing rates                            315,998            4,580       320,578
     At end of year                                                  18,927,877          447,171    19,375,048

    There are no reinsurers' share for the above (2007: £nil).
                                                   Page 40
         NOTES TO THE FINANCIAL STATEMENTS
         TOKIO MARINE GLOBAL LTD.
         Year Ended 31 December 2008


25. OTHER CREDITORS INCLUDING TAXATION AND SOCIAL SECURITY
                                                                 Group                      Company
                                                               2008          2007          2008         2007
                                                                  £             £             £            £

    Amounts falling due within one year
     Insurance premium tax payable                           97,245         41,343        97,245       41,343
     Corporation tax payable (refer Note 11(c))                -         4,010,886          -       4,005,016
     Other creditors - non-group undertakings                76,690        123,274        76,690      123,274
     Other creditors - group undertakings                   125,058        132,603          -            -
                                                            298,993      4,308,106      173,935     4,169,633



26. OTHER ACCRUALS AND DEFERRED INCOME
                                                                 Group                      Company
                                                               2008          2007          2008         2007
                                                                  £             £             £            £

    Accrued   professional fees                             238,939       391,008       199,493       310,000
    Accrued   outsourcing fees                               59,719       221,660        59,515       221,518
    Accrued   rent                                          428,469          -          428,469          -
    Accrued   other expenses                                264,489       404,805        66,732       397,694
                                                            991,616      1,017,473      754,209       929,212



27. GUARANTEES, FINANCIAL COMMITMENTS AND CONTINGENT LIABILITIES
(a) Guarantees
    A credit line with the Bank of Tokyo-Mitsubishi has been extended for USD 77,726,977 at the end of the
    financial year (2007: USD 33,277,307) pursuant to the issuance of several letters of credit to
    policyholders/cedants in the United States of America.
    A bank balance that is held in trust with National Westminster Bank plc for £7,850 at the end of the
    financial year (2007: £7,850) has been assigned to the Group's insurance premium tax representative in
    France.

(b) Capital commitments
    Capital commitments, contracted but for which no provision has been made at the end of the financial
    year, were £nil (2007: £nil).

(c) Annual commitments
    Annual commitments in respect of non-cancellable operating leases are as follows:
                                                              Group                         Company
                                                                2008          2007          2008         2007
                                                            Land and      Land and      Land and     Land and
                                                            Buildings     Buildings     Buildings    Buildings
                                                                    £             £             £            £

    Operating leases which expire:
     Within one year                                          97,040       184,886        94,895      170,075
     Between one and five years                               12,047        83,403          -          47,300
     After five years                                        527,552       509,355       427,345      509,355
                                                            636,639       777,644       522,240       726,730


(d) Contingent liabilities
    There is a possible exit charge due upon termination of a supply contract amounting to £53,000 (2007:
    £53,000).

                                                  Page 41
        NOTES TO THE FINANCIAL STATEMENTS
        TOKIO MARINE GLOBAL LTD.
        Year Ended 31 December 2008


28. IMMEDIATE AND ULTIMATE PARENT UNDERTAKINGS
   Tokio Marine & Nichido Fire Insurance Co., Ltd. (Japan) is the immediate parent. This company's
   registered office is located at 2-1 Marunouchi 1-chome, Chiyoda-ku, Tokyo 100-8050, Japan.

   Tokio Marine Holdings, Inc. (Japan) (formerly Millea Holdings, Inc) is the ultimate parent. This company's
   registered office is located at Tokyo Kaijo Nichido Building Shinkan 9F, 1-2-1 Marunouchi, Chiyoda-ku,
   Tokyo 100-0005, Japan.
   Copies of both companies' financial statements are available from the addresses provided above.




                                                 Page 42

				
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