Asset Management: Basic Policy and Process
With the primary objective of providing for stable pension, insurance claims, and insurance benefits payments over the long-term, and while taking into consideration the characteristics of life insurance policy liabilities, Dai-ichi Life conducts asset management focused on fixed interest-bearing assets based on Asset Liability Management (ALM).
In addition, upon sufficiently establishing the soundness of management, we seek to manage assets effectively by holding equities and foreign securities with acceptable risks. Moreover, we use our finely tuned risk management system to monitor risks and improve the efficiency of asset management.
Our asset management process incorporates analysis and verification as appropriate, utilizing feedback on information relating to asset management risks and returns. In addition, we work together with the Product Development and Management Unit in a framework that ensures liability information is constantly reflected and ALM is thoroughly implemented.
Status of Assets
In fiscal 2016, Dai-ichi Life continued to invest mainly in fixed-income assets, such as bonds and corporate bonds, in accordance with our mid to long-term asset management policy, while in response to the continued low interest rate environment, we restrained the accumulation of policy reserve-matching bonds, mainly super-long-term government bonds. In addition, we proactively invested in foreign bonds with currency hedges considering the efficiency of our fixed-income portfolio, in order to promote ALM and improve profitability. Risk assets such as domestic stocks and foreign securities, which are mainly to improve our investment profitability through diversification, were allocated flexibly while paying attention to market trends. Investments and loans in new fields were also promoted, and the quality of the portfolio was improved.
Asset Composition (General Account)
Responsible Investment in Our Asset Management
Dai-ichi Life has been engaging in investment considering our social responsibility as an institutional investor (defined as Responsible Investment), which is one of our key initiatives for enhancement of our asset management. Our responsible investment consists of 1) ESG Investment (ESG means environment, society and corporate governance) that seeks both to gain better returns and to solve social challenges, and 2) Stewardship Activities that aim to improve the corporate value of our investee companies. Dai-ichi Life systematically implements ESG Investment and Stewardship Activities, respectively governed by "ESG Investment Policy" and "Stewardship Activities Policy". In 2015, Dai-ichi Life signed the United Nations Principles for Responsible Investment (PRI), by which we seek to continuously improve our responsible investment processes through PRI's annual reporting and assessment.
Strengthening the Governance System for Responsible Investment
In fiscal 2017, Dai-ichi Life established the Responsible Investment Center and the Responsible Investment Committee to further strengthen the governance system for responsible investment.
The Responsible Investment Center has a responsibility for stewardship activities (i.e. voting and engagement), which had previously been divided into two teams, in order to enhance the expertise of stewardship activities and to further strengthen the management system for conflict of interest.
The Responsible Investment Committee is responsible for deliberating important policies related to responsible investment and the exercise of important voting rights that require individual judgment. The Committee also confirms the results of stewardship activities and the status of ESG investment activities. In principle, more than half of the committee members are experts from outside the company. In addition, the executive officer in charge of the Compliance Control Department, which is responsible for managing conflicts of interest, is also the committee member and checks the exercise of voting rights from the viewpoint of preventing conflicts of interest.
The Audit and Supervisory Board, which comprises a majority of outside members, conducts an audit of the deliberation and confirmation process of the Committee from a third-party perspective, thereby further enhancing the monitoring system.
System for Promoting Stewardship Activities