Below is an edited summary of the Q&A session with institutional investors and securities analysts at CLSA Japan Forum on March 1, 2007. Answers to questions were provided by Naoteru Miyato, President and Representative Director of T&D Holdings, Inc., and Sonosuke Usui, Director and Managing Executive Officer of the Company. The contents are partially modified for easy understanding of readers.

Q.	Although business results have been solid, P/EV (share price-EV ratio) is still lower than that of major life insurers in Europe. Are there any new measures to raise P/EV？
A.	Share price is determined by investors and the market. For there to be a fair evaluation, we think it is important to show attractive strategies and business results to investors and the market.

Q.	If other life insurers are listed, what will be the effect on T&D?
A.	Because T&D is the only listed company in Japan at this time, the situation is a bit unfavorable; for example, investors cannot compare us with our competitors and make an accurate evaluation. If other insurers are listed, investors will be able to compare management strategies and business results, and our management initiatives will become clear.

Q.	The competitive environment is getting more severe. What is T&D’s advantage over foreign life insurers?
A.	Foreign insurers choose to develop agent channels in Japan, because it is hard for them to build in-house sales representative channels from scratch. Our three life insurance companies all have competitive sales channels, such as TA/CPA (tax accountant and certified public accountant) channel for Daido, in-house sales representative channel for Taiyo, and financial institution channel for T&D Financial. We aim to maintain superior competitive positions by strengthening our business models based on three elements: markets, sales channels, and products.

Q.	Please explain the competitive situation Daido faces in TA/CPA channels?
A.	It is possible for other companies to conclude insurance agency agreements with TAs/CPAs, because Daido’s agency agreements are not exclusive. In fact, competitors tie up with TAs/CPAs and pay higher commissions. Nevertheless, Daido has been increasing the number of its TA/CPA agents steadily thanks to its knowledge, experience and sufficient support provided by its agent staff, using IT tools and so on. Daido makes it more difficult for competitors to enter into TA/CPA channels by reinforcing its full-support system.

Q.	What is the risk-return relationship for third sector products?
A.	Without considering the risks, the profitability of third sector products is higher than that of death protection products and variable annuities. However, risk-adjusted profitability is not clear, because data on third sector products is insufficient; plus, there is the future risk of increasing benefits in conjunction with advances in medical technology. On the other hand, profitability of death protection products is stable, although not always higher than risk-adjusted profitability of third sector products. We strive to reduce risks and increase profitability through well-balanced sales of death protection and third sector products.

Q.	How would you describe the allocation of management resources to third sector products?
A.	Within the T&D Life Group, Taiyo in particular focuses on selling third sector products, at the same time retaining its core of death protection products, whose profitability is stable. Annualized premiums come 60% to 70% from death protection products and 30% to 40% from third sector products. We aim to ensure the profitability while keeping this balance.

Q.	It seems that premium income has been decreasing. How does that affect EV?
A.	First, please note that insurance premiums on the income statement include premiums for group insurance and group annuities, not just individual insurance and individual annuities. There will likely be a certain effect on EV from decreasing premium income in response to the revised standard life table. We strive to maintain and grow the current EV level by a product strategy that increases profitability as I described above.

Q.	What is the strategy for T&D Asset Management?
A.	In order to make clear our commitment to the asset management business, we will reposition T&D Asset Management as a direct subsidiary of T&D Holdings. Managed assets from outside the group are relatively less than those within the group. We are considering expanding our asset management business to the retail field, for example, selling mutual funds in order to attract individual customers, in collaboration with T&D Financial Life, specialized in OTC sales at banks.

Q.	What is the risk-return profile of alternative investments?
A.	Within the T&D Life Group, Daido especially has invested positively in alternative investments such as hedge funds and private equities. Daido mitigates risks by diversifying investment areas and types, and enjoys stable gains on its alternative investments, reflecting also a positive effect from the passage of time.

Q.	Please explain the ALM policy based on the outlook for interest rates?
A.	Group investment policy is to emphasize investments in yen denominated fixed income assets in response to liability-driven ALM, and to allocate investment risks within tolerable risk levels. We plan to extend asset durations gradually to cope with rises in interest rates, controlling unrealized losses on bonds and maintaining financial soundness.