Daiichi Life's Asset Management (General Account)

We have formulated an asset management policy for the medium to long term designed to achieve stable long-term returns, which are required for life insurance asset management. Based on the direction of the medium- to long-term asset management policy, we formulate a short-term policy as guidance for each fiscal year so that we can respond flexibly to changes in the insurance market and the investment environment and further enhance returns.

Insurance products have diverse characteristics, and we have set classifications by product features to ascertain detailed liability information. The result of this analysis is reflected promptly in the formulation and revision of the asset management policy and in actual asset management execution. In this way, we aim to construct an asset portfolio that is better aligned with product characteristics through asset and liability management (ALM).

Since safety is also a requirement for management of life insurance assets, our asset management policy is formulated in line with rigorous investment risk management standards. In addition, we conduct daily measurement and evaluation of the results of our actual investment activities and the status of assets held, as well as risk monitoring.

The life insurance business is highly public in nature, being closely involved with stability and improvement of national living standards, economic development and the achievement of a sustainable society. Therefore, in addition to profitability, safety, and liquidity, we conduct asset management with due consideration for our public role as a life insurer. As part of this, we are actively promoting responsible investment (sustainable financing and investment, stewardship activities).

Regarding the investment policy for fiscal 2026, we will continue to maintain a portfolio centered on yen-denominated bonds and other fixed-income assets based on our risk-taking policy and medium- to long-term asset management policy. In addition, we will also continue risk reduction efforts to ensure financial soundness against financial market fluctuations and improve capital efficiency. To ensure profitability and further diversify portfolio risks, we will actively invest in selective credit investments, infrastructure investments and financing, alternative investments and real assets.

To construct our investment portfolio tailored to the characteristics of life insurance products, the Asset Management Policy is formulated by the "Investment Planning Division" and "Product Development and Management Division". The asset allocation is determined according to this policy, and the "Investment Division" in collaboration with the functions supporting investment operations, executes security selection and investments in individual asset classes with the aim of achieving relatively superior returns in each asset market. The "Risk Management Division", "Credit Research Division", and "Investment Administration Division" conduct risk management and performance measurement related to asset management. Furthermore, to strengthen our investment capabilities, we focus on talent development through trainee assignments to domestic and overseas financial institutions and asset management companies, as well as job rotation programs. In addition, we have established an organizational framework for stable asset management by assigning personnel based on their specialization and experience to the "Investment Planning Division", "Investment Division", "Risk Management Division", and "Investment Administration Division".

• *We have entrusted Daiichi Life Group, Inc. with certain investment execution functions in the areas of equity investment, fixed income investment, alternative investment, and structured finance, as well as some of the credit research functions and functions related to the planning and promotion of responsible investment, by consolidating these functions within the Group.

Our asset management process is based on a PDCA cycle. First, the "Investment Planning Division" and "Product Development and Management Division" formulate asset management policies according to the characteristics of the liabilities, and implement asset allocation and the investments in accordance with these policies. Next, the "Risk Management Division" and the "Investment Administration Division" measure and analyze the performance and risks, and feed the results back to the "Investment Planning Division" and "Product Development and Management Division". Based on this feedback, the "Investment Planning Division" and "Product Development and Management Division" will consider measures to improve asset management policy for the following year. In this cycle, the co-operation with the "Product Development and Management Division" is incorporated as an important function and factor, and designed to reflect liability information at all times while ensuring our thorough application of ALM.

Investment risk refers to market risk (the risk of suffering a loss due to changes in the value of the assets owned because of changes in market conditions such as interest rates, exchange rates, and share prices), credit risk (the risk of suffering a loss due to a decline in or complete loss of asset value because of a deterioration in the financial condition of credit recipients), and real estate investment risk (the risk of suffering a loss due to a drop in income from real estate due to changes in rent, etc. or a decrease in the value of the real estate itself).

The Company manages investment risk to maintain the soundness of its assets while remaining mindful of the risk-return balance over the medium to long term.

The Risk Management Department is in charge of managing investment risk. The department conducts centralized risk management of market risk, credit risk, and real estate risk for all of our assets in coordination with departments responsible for business execution. At regular meetings of the ERM Committee, management shares information regarding each risk to form a system that contributes to decision-making. The effectiveness and appropriateness of these risk management functions are verified by the Internal Audit Department. The Board of Directors and Executive Management Board receive status reports on risk management, and use this information as a basis for making decisions. Furthermore, the Audit & Supervisory Board Members perform audits of the overall risk management of the Company, starting with the management.

◆System for Managing Asset Management Risk