Group Risk Management System
The Company has established the "Basic Policy on Group Risk Management" and strive to foresee and control risks that may affect the management of the Group. We also strive to build a risk management system that enables the Company to maintain the quality of its services and products and continue its business even in unforeseen circumstances by constantly preparing response activities in anticipation of environmental changes.
【Risk Management System】

(1) Promotion of ERM
At the Compay, under the leadership of the Board of Directors, the Corporate Planning Department and Risk Management Department are playing a central role in the promotion of ERM (Enterprise Risk Management). The Board of Directors has established an ERM framework in the "Basic Policy on Group Risk Management" and disseminates it to all Group companies, while specific arrangements, etc. are stipulated in the "Group ERM Regulations." In addition, the "Group Risk Appetite Policy" sets targets for soundness and profitability, and serves as the basis for the mid-term management plan.
The "Group Risk Management Committee," consisting mainly of full-time Directors and Executive Officers of the Company and Anicom Insurance, discusses the status of the Group's individual risk management and risks assessed on an integrated basis, and reports regularly to the Board of Directors.
(2) Risk Profile
In order to correctly recognize the risks that our group possesses, we have created risk profiles based on a comprehensive identification of risks, including emerging risks (risks that may newly emerge in the future and have a significant impact on the Group's management), and regularly create risk profiles based on this identification. In addition, the Risk Management Department verifies the comprehensiveness of various risks, including risks that cannot be handled by individual Group companies, such as spillover risks within the Group, and quantitatively evaluates risks and monitors the risk situation.
(3) Sophistication of internal modeling
The Company identifies and measures risks that may affect the management of the Group, and periodically verifies the soundness of the Group's operations by comparing them with the status of capital and other assets held by the Company.
The Company has also established an internal model as a method for measuring the amount of risk and capital adequacy, and is working to enhance the model based on analysis of various risks.
(4) Stress test
The Risk Management Department periodically conducts stress scenarios, including hypothetical scenarios that have never occurred in the past, reverse stress tests, and sensitivity tests to identify and manage risks that may have a serious impact on the Group's management that are difficult to identify through the measures described in (2) and (3) above, and to analyze their impact on the capital adequacy. The Company analyzes the impact on capital adequacy, etc. In the event that a serious impact is anticipated, the Company is prepared to promptly consider and implement countermeasures.
(5) Risk Appetite Policy and Capital Allocation
The Corporate Planning Department formulates the "Group Risk Appetite Policy" and the Group's mid-term management plan. Based on those, the Corporate Planning Department implements capital allocation and sets risk limits for each subsidiary, risk category, and other appropriate units with the aim of ensuring management stability, and periodically monitors (limit management) the status of compliance with these limits.
In the event of a potential violation of the limits, the Company is prepared to promptly consider and implement countermeasures such as risk reduction, reallocation, and capital reinforcement.
【Concepts of risk, return, and capital】

(6) Crisis Management Policy
The Company has established the "Group Crisis Management Policy" to appropriately respond to situations in which large-scale disasters, accidents, or harmful rumors may endanger human lives, assets, or its activities, or seriously affect its relationships with customers, agents, etc. The Company shall strive to minimize economic losses and quickly restore normal operations.