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Filed pursuant to Rule 424(b)(3)
Registration No. 333-163336

Prospectus

NKSJ HOLDINGS, INC.

Exchange for Shares of Common Stock of SOMPO JAPAN INSURANCE INC.

Exchange for Shares of Common Stock of NIPPONKOA Insurance Company, Limited

SOMPO JAPAN INSURANCE INC. (“Sompo Japan”) and NIPPONKOA Insurance Company, Limited (“Nipponkoa”) propose to integrate their management and business under a new holding company called NKSJ Holdings, Inc. (“Holdings”). Under this proposal, which has been approved by the boards of directors of Sompo Japan and Nipponkoa, the two companies will become wholly owned subsidiaries of Holdings in a statutory joint share transfer (kyodo-kabushiki-iten) under Japanese law (the “Share Exchange”).

The Share Exchange must be approved by shareholders of Sompo Japan and Nipponkoa at separate meetings to be held at 10 a.m. on December 22, 2009 in Tokyo, Japan. If shareholders of each company approve the Share Exchange, and if the other conditions to the Share Exchange are satisfied, then all outstanding shares of common stock of Sompo Japan and Nipponkoa will be exchanged for shares of common stock of Holdings on or around April 1, 2010.

The Share Exchange cannot be completed unless it is approved at the scheduled shareholders meetings of Sompo Japan and Nipponkoa and certain other conditions are satisfied. The additional conditions and other terms of the Share Exchange are more fully described in this prospectus. For a discussion of these conditions, see “The Share Exchange”.

To attend and vote at the shareholders’ meetings under Japanese law, holders of Sompo Japan and Nipponkoa shares must follow the procedures outlined in convocation notice and the mail-in-ballot material that the companies will separately send to those holders.

This prospectus has been prepared for shareholders of Sompo Japan and Nipponkoa who reside in the United States. It provides detailed information about the Share Exchange. It also provides important information about the shares of Holdings common stock that will be issued in connection with the Share Exchange. You are encouraged to read this document in its entirety.

You should carefully consider the risk factors beginning on page 6 of this prospectus.

In connection with the Share Exchange, holders of Sompo Japan shares will receive one share of Holdings common stock for each share of Sompo Japan’s common stock they hold, and holders of Nipponkoa shares will receive 0.9 shares of Holdings common stock for each share of Nipponkoa’s common stock they hold. For a discussion of treatment of any fraction of a share relating to the Share Exchange under Japanese law, see “The Share Exchange—Structure of the Share Exchange”. Based on these Share Exchange ratios, former Sompo Japan shareholders will hold approximately 59.2% and former Nipponkoa shareholders will hold approximately 40.8% of the outstanding shares of Holdings common stock after the Share Exchange.

Holdings expects to issue 1,661,910,293 shares of its common stock in connection with the Share Exchange. Approximately 21.7% of those shares will be issued to U.S. shareholders of Sompo Japan and Nipponkoa.

Sompo Japan’s shares are traded in yen on the Tokyo Stock Exchange, the Osaka Securities Exchange, the Nagoya Stock Exchange, the Sapporo Stock Exchange and the Fukuoka Stock Exchange. On November 27, 2009, the last reported official price of Sompo Japan’s common stock on the Tokyo Stock Exchange was ¥526 per share. Nipponkoa’s shares are traded in yen on the Tokyo Stock Exchange, the Osaka Securities Exchange and the Nagoya Stock Exchange. On November 27, 2009, the last reported official price of Nipponkoa’s common stock on the Tokyo Stock Exchange was ¥496 per share. Following completion of the Share Exchange, Sompo Japan and Nipponkoa anticipate that shares of Holdings common stock will trade on the Tokyo Stock Exchange and the Osaka Securities Exchange.

You may have dissenters’ rights in connection with the transactions under Japanese law. See page 87 for a further discussion of your dissenters’ rights, if any.

Neither Sompo Japan nor Nipponkoa is asking for your proxy and you are requested not to send a proxy to either company.

This prospectus is first being mailed to U.S. holders of Sompo Japan and Nipponkoa shares on or around December 1, 2009.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense.

The date of this prospectus is December 1, 2009.

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REFERENCES TO ADDITIONAL INFORMATION

Neither Sompo Japan nor Nipponkoa has previously had a reporting obligation in the United States under the Securities Exchange Act of 1934. Following the date of this prospectus until the completion of the Share Exchange, Sompo Japan and Nipponkoa will be, and after the Share Exchange, Holdings will be, subject to reporting obligations and any filings they make will be available via the website of the United States Securities and Exchange Commission, or SEC, at www.sec.gov. You can also obtain any filed documents or other information which may be incorporated by reference herein regarding Sompo Japan or Nipponkoa without charge by written or oral request to:

Please note that copies of documents provided to you will not include exhibits, unless the exhibits are specifically incorporated by reference into the documents or this prospectus.

IN ORDER TO OBTAIN TIMELY DELIVERY, YOU MUST REQUEST THE INFORMATION NO LATER THAN DECEMBER 15, 2009, WHICH IS FIVE BUSINESS DAYS BEFORE YOU MUST MAKE A DECISION REGARDING THE SHARE EXCHANGE.

For additional information about Sompo Japan and Nipponkoa, see “Where You Can Find More Information”.

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Unless the context otherwise requires, references in this prospectus to “Sompo Japan” refer to Sompo Japan and its consolidated subsidiaries, and references to “Nipponkoa” refer to Nipponkoa and its consolidated subsidiaries.

As used in “Business Goals and Strategies of Holdings” in this prospectus, references to “we”, “us” and “our” are to Sompo Japan and Nipponkoa as operating subsidiaries of Holdings following the Share Exchange.

As used in this prospectus, “dollar” or “$” means the lawful currency of the United States of America, and “yen” or “¥” means the lawful currency of Japan.

As used in this prospectus, “U.S. GAAP” means accounting principles generally accepted in the United States, “IFRS” means International Financial Reporting Standards as issued by the International Accounting Standards Board, and “Japanese GAAP” means accounting principles generally accepted in Japan.

In tables appearing in this prospectus, figures may not add up to totals due to rounding.

FORWARD-LOOKING STATEMENTS

This prospectus contains forward-looking statements that are based on the current expectations, assumptions, estimates and projections of Sompo Japan and Nipponkoa about their respective businesses and operations, about their strategies as operating subsidiaries of Holdings following the Share Exchange, about the plans for and by Holdings, about the insurance and other industries, and about capital markets around the world. These forward-looking statements are subject to various risks and uncertainties. Generally, these forward-looking statements can be identified by the use of forward-looking terminology such as “may”, “will”, “expect”, “anticipate”, “estimate”, “plan” or similar words. These statements discuss future expectations, identify strategies, contain projections of results of operations and/or financial condition of Sompo Japan, Nipponkoa and/or Holdings, or state other forward-looking information. Known and unknown risks, uncertainties and other factors could cause the actual results to differ materially from those contained in any forward-looking statement. Sompo Japan and Nipponkoa cannot promise that its expectations expressed in these forward-looking statements will turn out to be correct. The actual results of Sompo Japan or Nipponkoa, or of Holdings, could be materially different from and worse than those expectations. Important risks and factors that could cause actual results to be materially different from those expectations are set forth in “Risk Factors” and elsewhere in this prospectus.

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QUESTIONS AND ANSWERS ABOUT THE SHARE EXCHANGE

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RISK FACTORS

Prior to making a decision on the Share Exchange, you should carefully consider, along with other matters set out in this prospectus, the following considerations:

Risks Relating to the Share Exchange

Sompo Japan and Nipponkoa may fail to realize the anticipated benefits of the Share Exchange due to the challenges of achieving synergy effects and cost savings

In order for the Share Exchange to be successful, Holdings must realize the anticipated synergy benefits and cost savings from consolidating certain operations of Sompo Japan and Nipponkoa. Subject to a set of conditions and assumptions employed by each of Sompo Japan and Nipponkoa, Sompo Japan and Nipponkoa anticipate, on a pre-tax basis, approximately gross ¥10 billion synergy benefit of integration (while incurring a restructuring cost of ¥12 billion) for the year ending March 31, 2011, approximately gross ¥15 billion synergy benefit of integration (while incurring a restructuring cost of ¥18 billion) for the year ending March 31, 2012, approximately gross ¥30 billion synergy benefit of integration (while incurring a restructuring cost of ¥16 billion) for the year ending March 31, 2013, approximately gross ¥40 billion synergy benefit of integration (while incurring a restructuring cost of ¥11 billion) for the year ending March 31, 2014, and approximately gross ¥50 billion synergy benefit of integration (while incurring a restructuring cost of ¥3 billion) for the year ending March 31, 2015.

In particular, for the fiscal year ending March 31, 2013, we currently expect the gross amounts of synergy benefit above to consist, in part, of approximately ¥16 billion of estimated cost reductions for sharing product-development functions, IT systems and back office operations, approximately ¥3 billion of estimated cost reductions through joint use of infrastructure and joint placement of orders, and approximately ¥11 billion of estimated efficiencies attributable to sharing and improvement of corporate know-how (including joint implementation of Sompo Japan’s retail business model reform project (“PT-R”) as discussed in “Business of Sompo Japan—Operations—New Retail Market Business Model Reform Project—‘PT-R’”, loss prevention through joint promotion of Nipponkoa’s “eco-safety drive” initiatives, integration of risk consulting services, and other measures such as enhancing efficiency in life insurance sales operations and customer centers’ productivity). For the fiscal year ending March 31, 2015, we currently expect the gross amounts of synergy benefit above to consist, in part, of approximately ¥34 billion of estimated cost reductions for sharing product-development functions, IT systems and back office operations, approximately ¥3 billion of estimated cost reductions through joint use of infrastructure and joint placement of orders, and approximately ¥13 billion of estimated efficiencies attributable to sharing and improvement of corporate know-how (including joint implementation of Sompo Japan’s retail business model reform project (“PT-R”) as discussed in “Business of Sompo Japan—Operations—New Retail Market Business Model Reform Project—‘PT-R’”, loss prevention through joint promotion of Nipponkoa’s “eco-safety drive” initiatives, integration of risk consulting services, and other measures such as enhancing efficiency in life insurance sales operations and customer centers’ productivity).

The description of anticipated amounts of synergy benefit (or any related restructuring cost), immediately above, have been produced as of October 30, 2009 solely by Sompo Japan and Nipponkoa and may differ from the numbers, projections, assumptions or other conditions related to synergy benefit (or any related restructuring cost) of the business integration used or otherwise understood by any or all financial advisor(s) as of the date of their respective fairness opinion, which was July 29, 2009.

Sompo Japan and Nipponkoa may not be able to accomplish this business integration process smoothly or successfully. The business integration of certain operations following the Share Exchange will take time and will require the dedication of significant management resources, which may temporarily distract management’s attention from other strategic opportunities and from day-to-day operation matters.

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Sompo Japan and Nipponkoa expect to face significant challenges in bringing closer their respective organizations, business cultures, procedures and operations, including integration of their IT infrastructures. If we are not able to successfully manage the consolidation process and create a more unified business culture, the anticipated benefits of the Share Exchange and subsequent consolidation may not be realized fully or at all or may take longer to realize than expected.

The exchange ratio is fixed and will not be adjusted to reflect changes in the market values of Sompo Japan and Nipponkoa common stock; as a result, the value of Holdings common stock you receive in the transaction may be less than when you vote on the Share Exchange

Upon the completion of the Share Exchange, each share of Sompo Japan’s common stock will be exchanged for one share of Holdings common stock, and each share of Nipponkoa’s common stock will be exchanged for 0.9 shares of Holdings common stock. The ratios at which Sompo Japan’s and Nipponkoa’s common stock will be exchanged for Holdings common stock are fixed, and will not be adjusted for changes in the market prices of either company’s common stock. Therefore, even if the relative market values of Sompo Japan’s or Nipponkoa’s common stock change, the number of shares of Holdings common stock to be received by shareholders of those companies in the Share Exchange will not change.

Any change in the prices of either company’s common stock occurring prior to the effective date of the Share Exchange will affect the value that holders of Sompo Japan’s or Nipponkoa’s common stock receive in the transaction. The value of the Holdings common stock to be received in the Share Exchange (which will occur approximately three months after the general meetings of shareholders) may be higher or lower than the indicative value as of the date of this prospectus and/or as of the date of the general meetings of shareholders, depending on the then prevailing market prices of Sompo Japan’s and Nipponkoa’s common stock.

As publicly traded equity securities, the shares of Sompo Japan’s and Nipponkoa’s common stock are subject to the general price fluctuations in the market and have experienced significant volatility in the past. Stock price changes may result from a variety of factors that are beyond the control of Sompo Japan and Nipponkoa, including actual changes in, or investor perception of businesses, operations and prospects of Sompo Japan or Nipponkoa. Regulatory developments, as well as current or potential legal proceedings, and changes in general market and economic conditions may also affect the stock price of Sompo Japan or Nipponkoa.

You should obtain and review recent market quotations for Sompo Japan’s and Nipponkoa’s common stock before voting on the Share Exchange. There can be no assurances as to the future market prices of Sompo Japan’s and Nipponkoa’s common stock before the completion of the Share Exchange, nor of the market price of Holdings’ common stock at any time after the completion of the Share Exchange.

Due to regulatory approvals and various other conditions to which the Share Exchange is subject, the Share Exchange may not be completed as scheduled or at all

The respective obligations of Sompo Japan and Nipponkoa under the Business Integration Agreement to complete the Share Exchange are subject to a number of specified conditions, including obtaining or satisfying all regulatory approvals, permits, consents and requirements necessary for the consummation of the transaction. Regulatory authorities in Japan or elsewhere may seek to block or delay the Share Exchange, or may impose conditions that reduce the anticipated benefits of the Share Exchange or make it difficult to complete as planned.

Also, Sompo Japan and/or Nipponkoa may not successfully obtain the shareholder approval from their respective shareholders regarding the Share Exchange. Even if such approvals were given, the Share Exchange will be subject to fulfillment of conditions imposed by Japanese and other regulatory authorities. Sompo Japan and Nipponkoa will be required to obtain further shareholder approval in the event that any of the conditions imposed by Japanese or other regulatory authorities materially alter any aspect of the Share Exchange as previously approved.

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In addition, there are risks that the arrangements of business integration as contemplated in the Business Integration Agreement dated October 30, 2009 and all other related agreements executed thereafter will be changed due to unforeseeable events. Even if the arrangements remained the same, the business integration process may not proceed as originally planned due to such events as dislocation in the financial markets and rapid deterioration of the economic conditions.

Furthermore, Sompo Japan and Nipponkoa have the right to terminate the Business Integration Agreement at any time prior to the completion of the transaction, upon the parties’ mutual written consent. Either party may also terminate the Business Integration Agreement upon an unremedied material breach of the agreement by the other party, occurrence of a material adverse change in the financial conditions or management conditions of either party or the ability of either party to perform the Share Exchange, or occurrence of other events prescribed in the Business Integration Agreement included in this prospectus as Annex A. Accordingly, even if the terms of the Share Exchange are approved at the general meetings of shareholders of Sompo Japan and Nipponkoa, there is no assurance that the Share Exchange will ultimately be completed as scheduled or at all.

Significant costs will be incurred in the course of the Share Exchange and subsequent consolidation of the business operations of the two companies

The costs related to the Share Exchange are expected to be significant. Sompo Japan estimates that its transaction-related costs associated with the Share Exchange will amount to approximately ¥1.2 billion and Nipponkoa estimates that its transaction-related costs associated with the Share Exchange will amount to approximately ¥3.4 billion. These expenses include financial advisory, legal and accounting fees and expenses, filing fees, printing expenses and other related charges. In addition, Sompo Japan and Nipponkoa may also incur significant costs where dissident shareholders exercise their appraisal rights. Sompo Japan and Nipponkoa may also incur additional unanticipated expenses in connection with the Share Exchange and the planned consolidation of certain operations.

In connection with the completion of the Share Exchange, it will not be possible to trade shares of Sompo Japan or Nipponkoa common stock during certain periods

In connection with the Share Exchange, Sompo Japan and Nipponkoa shares will be delisted from the Tokyo Stock Exchange, the Osaka Securities Exchange and the Nagoya Stock Exchange. Sompo Japan shares will also be delisted from the Sapporo Stock Exchange and the Fukuoka Stock Exchange. The delistings of Sompo Japan and Nipponkoa shares are expected to occur on or around March 29, 2010, about three trading days before April 1, 2010, the date Holdings shares are expected to be listed on the First Sections of the Tokyo Stock Exchange and the Osaka Securities Exchange. As a result, holders of Sompo Japan and Nipponkoa shares will not be able to trade those shares, or the Holdings shares they will be entitled to receive when the Stock Exchange is completed, during the applicable gap in trading. Accordingly, these holders will be subject to the risk of not being able to liquidate their shares during a falling market, whether for Japanese equities generally or for Sompo Japan, Nipponkoa or Holdings shares in particular. Conversely, those holders will be subject to the risk of missing an opportunity or opportunities to sell into a booming market during the applicable gap in trading.

If the Share Exchange does not qualify as a tax-free exchange, U.S. holders of Sompo Japan shares will recognize U.S. taxable gain or loss, as the case may be

If the Share Exchange does not qualify as a tax-free exchange under Section 351 of the Internal Revenue Code of 1986, as amended (the “Code”), the Share Exchange would generally not be tax-free for U.S. federal income tax purposes and would instead likely be treated as a fully taxable exchange in which U.S. holders (as defined under “Taxation—Material U.S. Federal Income Tax Consequences”) would be treated as having sold their Sompo Japan shares for an amount equal to the fair market value of the Holdings shares (including any fractional Holdings share deemed received) in the Share Exchange. In such a circumstance, a U.S. holder (1) would recognize gain or loss equal to the difference between (i) the sum of the fair market value of the

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Holdings shares received in the Share Exchange and the amount of any cash received in redemption of a fractional share thereof and (ii) such U.S. holder’s adjusted tax basis in its Sompo Japan shares, (2) would take a tax basis in the Holdings shares received in the Share Exchange equal to the fair market value of such Holdings shares on the date such Holdings shares were received and (3) would start a new holding period in the Holdings shares received in the Share Exchange commencing on the day after the Share Exchange is completed. Although Sompo Japan expects the Share Exchange to be completed in accordance with terms that permit the Share Exchange to qualify as a tax-free exchange under Section 351 of the Code, the U.S. tax authorities have not issued a ruling stating that the Share Exchange will be tax-free, nor will any such ruling be requested by Sompo Japan. As a result, no assurance can be given that the U.S. tax authorities will not assert that the Share Exchange should be treated other than as described above. If you are a U.S. holder and the Share Exchange fails to qualify as a tax-free exchange under Section 351 of the Code, you would likely have greater U.S. taxable income and pay more U.S. federal income tax than you would if the Share Exchange did qualify as a tax-free exchange under Section 351 of the Code. All U.S. holders of Sompo Japan shares should review the discussion of the U.S. federal income tax treatment of the Share Exchange under “Taxation—Material U.S. Federal Income Tax Consequences—The Share Exchange”, and consult their own tax advisors as to the possible consequences of the Share Exchange failing to qualify as a tax-free exchange under Section 351 of the Code in their individual circumstances.

U.S. holders of Nipponkoa shares who participate in the Share Exchange will recognize U.S. taxable gain

Regardless of whether the Share Exchange qualifies as a tax-free exchange under Section 351 of the Internal Revenue Code of 1986, as amended, U.S. holders of Nipponkoa shares will be deemed to have received a taxable dividend from Nipponkoa as a result of the Share Exchange. As such, for U.S. federal income tax purposes: (1) a U.S. holder of Nipponkoa shares will be required to include in gross income, as a deemed dividend, an amount generally equal to the excess, if any, of (i) the sum of the fair market value of the Holdings shares received in the Share Exchange and the amount of any cash received in redemption of a fractional share thereof over (ii) the U.S. holder’s tax basis in its Nipponkoa shares exchanged therefor; (2) a U.S. holder’s tax basis in the Holdings shares received pursuant to the Share Exchange will equal the sum of such U.S. holder’s tax basis in its Nipponkoa shares surrendered in the Share Exchange and the amount such U.S. holder includes in its gross income as a deemed dividend; (3) a U.S. holder’s holding period in the Holdings shares received pursuant to the Share Exchange will include the holding period of the U.S. holder’s Nipponkoa shares surrendered in the Share Exchange; and (4) a U.S. holder will be required to attach IRS Form 5471 to its U.S. federal income tax or information return that it would normally file for its taxable year in which the Share Exchange occurs. All U.S. holders of Nipponkoa shares should review the discussion of the material U.S. federal income tax consequences of the Share Exchange set forth below under “Taxation—Material U.S. Federal Income Tax Consequences—The Share Exchange”, and should consult their own tax advisors as to the potential U.S. federal income tax consequences of participating in the Share Exchange in their individual circumstances.

U.S. holders of Nipponkoa shares who participate in the Share Exchange may be required to pay U.S. federal income tax even though no cash will be distributed in the Share Exchange

U.S. holders of Nipponkoa shares who participate in the Share Exchange will be subject to U.S. federal income tax on an amount generally equal to the excess, if any, of (1) the sum of the fair market value of the Holdings shares received in the Share Exchange and the amount of any cash received in redemption of a fractional share thereof over (2) the U.S. holder’s tax basis in its Nipponkoa shares exchanged therefor. However, because no cash will be distributed in the Share Exchange (other than cash received in redemption of a fractional Holdings share), a U.S. holder of Nipponkoa shares who participates in the Share Exchange will likely have to pay tax in respect of income that is not distributed currently, and may never be distributed.

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Risks Relating to Our Business

If economic conditions in Japan continue to worsen, our financial condition and results of operations may be adversely affected

We derive most of our insurance underwriting revenues from Japan. In addition, a substantial majority of the investments in our investment portfolio are Japanese equity securities, bonds and loans. Accordingly, our financial condition and results of operations are very dependent on economic conditions in Japan.

Starting in mid-2007 in the United States and Europe, and particularly during the second half of 2008, the financial services industry and the securities markets generally were materially and adversely affected by significant declines in the values of nearly all asset classes and by a serious lack of liquidity. During calendar year 2008 and thereafter, the business environment in Japan has been extremely adverse for many of our operations.

Our non-life insurance operations have traditionally depended upon the Japanese automobile insurance market, but the market has been shrinking in size, in terms of dollar amount of coverage written, in recent periods. This shrinkage can be attributed to several factors. First, although the total number of vehicles registered in Japan has remained relatively flat in recent years, the average premiums per vehicle have been declining as consumers shifted to smaller and less expensive cars. Also more people with good driving records are becoming eligible for preferential premium rates upon renewal of their policies, leading to a corresponding reduction in our premium revenue. Under these circumstances, deteriorating economic conditions may even start to adversely affect the total number of vehicles registered in Japan, further reducing the premiums to be written by us. For that reason, an economic downturn may further exacerbate our non-life insurance operations and our financial condition.

An economic downturn does not just affect our financial condition and results of operations by way of smaller business volume. We own a substantial amount of equity stock in other financial institutions to cement our business relationships. While we are currently working to reduce our ownership of those equity securities, decline in stock market associated with the economic downturn should continue to adversely affect our financial condition and results of operations.

The current economic conditions in Japan and around the world are adverse to us, and we expect that these conditions will not improve for some time in the future. Until they do, we expect our business, results of operations and financial condition to be adversely affected.

Deregulation, consolidation and the entry of new competitors have intensified competition in the Japanese insurance industry

The insurance industry overall is undergoing a process of consolidation as industry participants seek to enhance their product and geographic reach, client base, operating efficiency and general market power through merger and acquisition activities. These larger entities may seek to use the benefits of consolidation to, among other things, implement price reductions for the products and services they purchase. If competitive pressures compel us to reduce our prices, our operating margins would decrease. As the insurance industry consolidates, competition for customers may become more intense and the importance of acquiring and properly servicing each customer will become greater. We could incur greater expenses relating to customer acquisition and retention, which could reduce our operating margins. In addition, insurance companies that merge may be able to enhance their negotiating position when buying reinsurance and may be able to spread their risks across a larger capital base so that they require less reinsurance.

Japan’s current Insurance Business Law enacted in April 1996 contains provisions designed to deregulate and increase competition in the life and non-life insurance business in Japan. The Insurance Business Law has provisions permitting life insurance companies and non-life insurance companies to enter each other’s business

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through subsidiaries. The Insurance Business Law also permits the entry of foreign insurance companies with global operations into the Japanese insurance market and the entry of new competitors that have traditionally been engaged in non-insurance business activities. Furthermore, an amendment to the Law Concerning the Non-Life Insurance Rating Organization in 1998 has allowed non-life insurers to set their own premium rates, which has effectively opened the door to premium rate competition. We operate in a business environment in which competition has intensified and accelerated due to these measures.

In addition, changes in the financial services market, including the full liberalization of over-the-counter sales of insurance products at banks in December 2007, accelerated competition in both price and quality of insurance products. Such increased competition may adversely affect our financial condition and results of operations.

Change in the regulatory regime governing Japanese insurance businesses may adversely affect our financial condition and results of operations

Insurance businesses in Japan are subject to a set of comprehensive legal and accounting regulations and frameworks. The existing regulatory regime may change, and there may arise new rules or regulations, in manners we do not currently foresee. Upon such events, the regulatory regime may, among others, cause our premium and other revenues to decrease, or require us to increase the level of our underwriting funds, thereby adversely affecting our financial condition and results of operation.

Japan is prone to natural disasters, which can result in substantial claims on non-life insurance policies

Japan is historically vulnerable to earthquakes, typhoons, windstorms, floods and other types of natural disasters, the frequency and severity of which are inherently unpredictable. These types of natural disasters can have a serious impact on us depending on their frequency, their nature and scope, the amount of insurance coverage we have written in respect of them, the amount of claims for losses, the timing of such claims and the extent to which our liability is covered by reinsurance. As of March 31, 2009, the amounts of natural disaster risk of Sompo Japan and Nipponkoa, calculated as part of computing the solvency margin ratio pursuant to Articles 86 and 87 of the Enforcement Regulations of the Insurance Business Law and the Japanese Ministry of Finance’s Notification No. 50, issued in 1996, were ¥202.9 billion and ¥112.2 billion, respectively.

We set our premium rates at levels we believe are adequate to accommodate the effect of disasters. We also cede certain of the relevant risks to reinsurers under reinsurance policies. However, the occurrence of a natural disaster, or a series of natural disasters, the severity, frequency or nature of which we did not predict, or for which we are not adequately reinsured, could significantly affect our financial condition or results of operations.

Our financial results may be materially adversely affected by unpredictable events

Our business, results of operations and financial condition may be materially adversely affected by unpredictable events and their consequences. Unpredictable events include single or multiple man-made or natural events that, among other things, cause unexpectedly large market price movements, increases in claims or deterioration of economic conditions of certain countries or regions, such as the terrorist attack on the United States on September 11, 2001, the outbreak of Severe Respiratory Syndrome (SARS) in Asia in 2003 and the recent outbreaks of the bird and swine flu and other events.

Similarly, business interruptions, regulatory breaches, human errors, employee misconduct and external fraud, among others, are all part of the operational risk inherent in our business. Such events can potentially result in financial loss or harm to our reputation, or otherwise hinder our operational effectiveness. Our management attempts to control this risk and keep operational risk at appropriate levels. There is no assurance, however, that any of our control measures will prove effective, and we may incur losses from time to time due to operational risk.

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We may be required to increase our reserves in case of unforeseen losses, which may adversely affect our financial condition and results of operations

Claim and claim adjustment expense reserves (loss reserves) represent management’s estimate of ultimate unpaid cost of losses and loss adjustment expenses for claims that have been reported and claims that have been incurred but not yet reported. Loss reserves do not represent an exact calculation of liability, but instead represent management estimates, generally utilizing actuarial expertise and projection techniques, at a given accounting date. These loss reserve estimates are expectations of what the ultimate settlement and administration of claims will cost upon final resolution in the future, based on our assessment of facts and circumstances then known, review of historical settlement patterns, estimates of trends in claims severity and frequency, expected interpretations of legal theories of liability and other factors. In establishing reserves, we also take into account estimated recoveries from reinsurance, salvage and subrogation.

The process through which we estimate loss reserves involves a high degree of judgment and is subject to a number of variables. These variables can be affected by both internal and external events, such as changes in claims handling procedures, economic inflation, legal trends and legislative changes, among others. The impact of many of these items on ultimate costs for claims and claim adjustment expenses is difficult to estimate. Loss reserve estimation difficulties also differ significantly by product line due to differences in claim complexity, the volume of claims, the potential severity of individual claims, the determination of occurrence date for a claim and reporting lags (the time between the occurrence of the policyholder event and when it is actually reported to the insurer).

As historical loss experience develops and additional claims are reported and settled, we continually refine our loss reserve estimates in a regular ongoing process. Informed judgment is applied throughout the process, including the application, on a consistent basis over time, of various individual experiences and expertise to multiple sets of data and analyses. Different experts may choose different assumptions when faced with material uncertainty, based on their individual backgrounds, professional experiences and areas of focus. Hence, such experts may at times produce estimates materially different from each other. Experts providing input to the various estimates and underlying assumptions include actuaries, underwriters, claim personnel and lawyers, as well as other company management. Therefore, management may have to consider varying individual viewpoints as part of its estimation of loss reserves.

We consider all significant facts and circumstances known at the time loss reserves are established. Due to the inherent uncertainty underlying loss reserve estimates including but not limited to the future settlement environment, final resolution of the estimated liability will be different from that anticipated at the reporting date. Therefore, actual paid losses in the future may yield a materially different amount than currently reserved—favorable or unfavorable.

Because of the uncertainties set forth above, additional liabilities may arise for amounts in excess of the current reserves. For example, Sompo Japan suffered a loss, on a U.S. GAAP basis, of approximately ¥59.9 billion and ¥152.6 billion in the years ended March 31, 2009 and 2008, respectively, on derivative instruments in connection with financial guarantees, due in part to the recent dislocation in the global financial markets and the prolonged sub-prime mortgage problem in the United States. The carrying amounts of liabilities related to these derivative instruments as of March 31, 2009 and 2008 were ¥195 billion and ¥171 billion, respectively. While Sompo Japan no longer underwrites new financial guarantees, the actual losses and claims associated with the outstanding guarantees may exceed its reserve for outstanding losses and claims should the global economic and financial conditions further deteriorate. Sompo Japan’s outstanding guarantees as of March 31, 2009 and 2008 on derivative instruments in connection with financial guarantees were ¥582 billion and ¥746 billion, respectively. Also, Sompo Japan entered into certain financial guarantee contracts which are accounted for as insurance contracts. The amounts of outstanding financial guarantees accounted for as insurance were ¥296 billion and ¥440 billion as of March 31, 2009 and 2008, respectively and the amounts of current reserves for outstanding losses and claims related to these financial guarantees were ¥1.1 billion and ¥0.2 billion as of March 31, 2009 and 2008, respectively. Our actual liabilities may prove to be greater than initially calculated due to unforeseen losses, adversely affecting our financial condition and results of operations.

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We are subject to risks associated with reinsurance

Reinsurance is a form of insurance that insurance companies buy for their own protection. We use reinsurance to provide greater capacity to write larger policies and to control our exposure to extraordinary losses or catastrophes. An insurance company, referred to as a reinsured, reduces its possible maximum loss on risks by giving, or ceding, a portion of its liability to another insurance company, referred to as a reinsurer. Reinsurance is subject to prevailing market conditions, both in terms of price, which could affect our profitability, and in terms of availability, which could affect our ability to offer insurance. Following the events of September 11, 2001, the Asian Tsunami in 2004, Hurricane Katrina in 2005 and other recent natural disasters, availability of reinsurance generally has been more limited and prices for reinsurance have been higher. Further large catastrophes could make it difficult or impossible to obtain the reinsurance coverage we seek on terms acceptable to us. Furthermore, even if we obtain the reinsurance coverage we seek on terms acceptable to us, we remain vulnerable to credit risk with respect to our ability to recover amounts due from our reinsurers, as the ceding of liabilities to reinsurers does not relieve us of our liability as the direct insurer to policyholders under the contracts with respect to which liabilities have been ceded.

We may not succeed in executing our growth strategies outside of Japan

Our strategy includes expanding our businesses in markets outside of Japan.

Each of the following additional factors, among others, could affect our future international operations:

Our domestic operations are subject to various risks, and our failure to remain competitive may adversely affect our financial condition and results of operations

In addition to the non-life insurance business, we commit a substantial amount of capital to various domestic operations, including life insurance and other businesses. Continuation of these operations may require us to make further capital commitment, prevent us from laying out stable business foundation amidst fierce competition with the established competitors, and subject us to peculiar risks associated with life insurance products and other services. These risks and competitive pressures may result in our failure to achieve the results we had initially contemplated, adversely affecting our financial condition and results of operations.

Our foreign assets and liabilities are exposed to foreign currency fluctuations, which could adversely affect our financial condition and results of operations

Our assets and liabilities are denominated, in part, in foreign currencies such as the U.S. dollar, the euro and the pound sterling. A decrease in the fair value of assets or an increase in the fair value of liabilities as a result of foreign currency fluctuations could adversely affect our financial position. Fluctuations in foreign exchange rates may also give rise to foreign currency translation gains or losses.

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Our investment activities entail risks, which may adversely affect our financial condition and results of operations

We invest our policyholders’ premiums in a portfolio of assets, as more fully described in “Business of Sompo Japan—Investments” and “Business of Nipponkoa—Investments”. Our investment in these assets entails the normal risks associated with these kinds of investments, including the risk that changes in market prices, interests rates, market indices, levels of volatility, price correlations, liquidity or other market factors might result in losses for a specific position or portfolio and the risk that a counterparty to a transaction might fail to perform under its contractual commitment, resulting in our incurring losses.

Particularly important to our financial condition and results of operations is our investment in, and exposure to, the Japanese stock market. To the extent our investment portfolio includes corporate stocks, it will be subject to frequent and volatile changes in their values. As of March 31, 2009, Japanese equities available for sale represented 19.6% (¥932.4 billion) of total investments other than investments in affiliates for Sompo Japan on a U.S. GAAP basis and 23.8% (¥620.4 billion) of the same for Nipponkoa on an IFRS basis. While we are working to reduce our ownership of equity securities in general, the vulnerability of our capital structure and operational viability to the frequent and volatile changes in those securities’ values will remain to the extent we continue to hold such equity securities.

We are also subject to interest rate risk due to our investments in fixed income instruments including loans as well as deposit-type insurance and long-term insurance liabilities. When the market interest rates rise, the value of the bonds we hold may decline. When the market interest rates decline, we risk suffering a decrease in interest revenue. We may also suffer a loss where the available interest rates on fixed income instruments for our asset management operation go lower than the originally guaranteed yields for our savings-type and life insurance policies. Since liabilities exceed investment assets exposed to interest rate risk, a decrease in interest rates decreases the value of our portfolio and thereby adversely affects our financial condition.

Our operations and financial condition may suffer where we experience liquidity shortage

While we own large amounts of highly liquid assets in anticipation of future capital requirements including claim payments, we may suffer liquidity shortage where natural disasters, increase in the cancellation of policies or dislocation in the markets force us to borrow money at higher rates than otherwise or dispose of securities in the market on terms significantly less favorable than otherwise. Such or other similar circumstances may adversely affect our financial condition and results of operations.

We are subject to the credit risk of our investment targets and loan counterparties

Our operating performance and financial condition may materially suffer where, due to declined creditworthiness of the issuers of securities we own or bankruptcy of our loan counterparties, we suffer depreciation in value of those securities or fail to collect interest or principal on the loans extended by us.

A downgrade in the financial strength ratings of our operating subsidiaries could limit our ability to market products, increase the number of policies being surrendered and hurt our relationships with customers and trading counterparties

Financial strength ratings purport to measure an insurer’s ability to meet policyholder obligations, and these ratings are an important factor affecting public confidence in most of our products, our competitiveness, and our cost of capital. In addition to our intrinsic financial soundness, external factors such as the ratings of Japanese government bonds and market confidence in Japan’s overall financial system may affect a downgrade, or potential downgrade, of the financial strength ratings of our group companies. Financial strength ratings are subject to reevaluation by the rating agencies at any time. Any negative evaluation may limit our ability to sell our insurance and annuity products, adversely affect our reinsurance business and adversely affect the terms and conditions of the business we conduct with trading counterparties.

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We are subject to risk of litigation and other legal proceedings

As an institution engaged in the insurance and other related businesses in and outside of Japan, we regularly strive to ensure our full compliance with all the relevant laws, including the corporate, antitrust, financial and insurance laws of Japan as well as local laws applicable overseas.

Notwithstanding such compliance measures, however, we are subject to the risk of litigation for damages and other legal proceedings in the ordinary course of our business. Adverse developments related to future legal proceedings could have a material adverse effect on our financial condition and results of operations.

Unauthorized disclosure of personal information held by us may adversely affect our business

As part of our insurance business, we obtain and manage a large volume of personal information relating to our customers. There have recently been many cases of improper access to and/or disclosure of personal information and records in the possession of corporations and institutions, including leakage of credit card information from online automobile insurance providers. The standards relating to protection of personal information that apply to us have become more stringent under the Law Concerning Protection of Personal Information and rules, regulations and guidelines relating thereto. The provisions of this law applicable to us became effective on April 1, 2005. Although we exercise care in protecting the confidentiality of personal information and take steps to ensure security of such information, if any material unauthorized disclosure of personal information does occur, our credibility and brand image may suffer. We may also be required to compensate for economic loss arising out of a failure to protect such information, thereby materially adversely affecting our results of operations and financial condition.

System failures may adversely affect our reputation, operations and financial condition

Our operations rely heavily on computer and other information systems, and, therefore, system failure risk is inherent in our business. System failures due to unexpected events, the wrongful use of these systems due to deficient or defective security measures or failures due to deficient or defective development or operation of information systems could result in adverse effects on our operations, increased direct or indirect costs due to recovery operations as well as impaired reputation and credibility due to press coverage of such failures. We seek to manage and minimize our system failure risk and have implemented a contingency plan that would allow us to continue our operations in the event of a system failure. However, notwithstanding our mitigating measures, any significant system failure could still materially adversely affect our operations and financial condition.

Japanese life insurance and non-life insurance companies have been subject to increasing scrutiny and regulatory actions in connection with under-payment and non-payment of claims and benefits

As the product offerings of Japanese life and non-life insurance companies have expanded, in recent years the Financial Services Agency of Japan, or the FSA, has more closely scrutinized disclosure made to policyholders and instances in which insurers have failed to pay claims and benefits payable to insured parties. For example, Sompo Japan received administrative orders from the FSA on May 25, 2006 to suspend a part of its business operations and to improve business operations as a result of its failure in certain claim payments and improper conducts and practices under several lines of insurance. On March 14, 2007, Nipponkoa received administrative orders from the FSA for partial suspension of business and for improvement of business in connection with inadequate non-payment in connection with third sector products.

We take these administrative orders with the utmost seriousness. In response to the FSA orders, Sompo Japan submitted a business improvement plan to the FSA on June 26, 2006, and Nipponkoa on April 13, 2007. Under these plans, we believe we are improving and strengthening governance systems, claims payment and product development administration systems, policyholder protection and benefits, and the legal compliance system. However, given the increasing regulatory scrutiny and administrative orders, we cannot fully assure that we will not be the subject to further review or sanctions in the future.

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In addition, the matters relating to under-payment and non-payment of insurance claims, and related negative media attention, could have a negative impact on the public perception of life and non-life insurers in Japan, which could cause customers to avoid insurance and investment products offered by insurance companies in favor of competing products offered by banks, securities companies and other financial service providers.

Our pension-related costs could increase as a result of revised assumptions or changes in our pension plans

Our pension-related costs and projected benefit obligations are calculated based on assumptions regarding projected returns on pension plan assets and various actuarial assumptions relating to the plans. If actual results differ from our assumptions or we revise our assumptions in the future, due to changes in the stock markets, interest rate environment or otherwise, our pension-related costs and projected benefit obligations could increase. In addition, any future changes to our pension plans could also lead to increases in our pension-related costs and projected benefit obligations. As a result, our financial condition and results of operations could be materially and adversely affected. For the year ended March 31, 2009, Sompo Japan recorded losses on plan assets, in the amount of ¥1,101 million, mainly due to the deterioration of financial markets during the recent global financial crisis. Nipponkoa also recognized the shortfall from the projected returns, which amounted to ¥66 million, for the year ended March 31, 2009.

Risks of Owning the Shares

Since we will be a holding company, our ability to pay operating and financing expenses and dividends depends on the financial performance of our principal operating subsidiaries. Our ability to pay dividends also depends on our own dividend-paying capacity

Once established, Holdings, as a holding company, will depend on dividends, distributions and other payments from its subsidiaries to fund dividend payments and to fund all payments on its obligations. Many of Holdings’ operating subsidiaries, including Sompo Japan and Nipponkoa, will be subject to certain dividend restrictions. Restrictions or any regulatory action related thereto could impede access to funds that Holdings will need to make payments on its obligations or dividend payments. This will be so even though the amount of surplus at Holdings’ level that may be used to pay Holdings’ dividends will be larger than that of Sompo Japan and Nipponkoa combined. To the extent Holdings’ ability to pay dividend hinges upon its operating subsidiaries’ ability to distribute funds to Holdings, such ability is more limited than the current ability of Sompo Japan and Nipponkoa, respectively, to pay dividends.

Under the Corporation Law of Japan, or the Corporation Law, we will not be able to declare or pay dividends unless we meet specified financial criteria on a “parent-only” basis. Generally, we will be permitted to pay dividends only if we have retained earnings on a non-consolidated balance sheet basis as of the end of the preceding fiscal year (determined in accordance with Japanese GAAP). For a more complete description of the restriction on payment of dividends, see “Description of Holdings Common Stock—Restriction on Distribution of Surplus”.

Our shareholders of record on a record date may not receive the dividend they anticipate

The customary dividend payout practice of publicly listed companies in Japan may significantly differ from that widely followed or otherwise deemed necessary or fair in foreign markets. Our dividend payout practice is no exception. While we intend to publicly announce dividend forecasts on a regular basis, we ultimately determine the actual dividend payment amount to our shareholders of record on a record date, including whether we will make any dividend payment to such shareholders at all, after the expiry of such record date. For the foregoing reasons, our shareholders of record on a record date may not receive the dividend they anticipate.

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Investors holding less than a unit of shares will have limited rights as shareholders. Moreover, due to the share exchange ratio, holders of Nipponkoa shares are relatively more likely to own Holdings’ shares constituting less than one unit than are holders of Sompo Japan shares

Pursuant to the Corporation Law relating to joint stock corporations and other related legislation, Holdings’ Articles of Incorporation will provide that 1,000 shares of common stock constitute one “unit”. The Corporation Law imposes significant restrictions and limitations on holdings of shares that do not constitute whole units. In general, holders of shares of a Japanese corporation’s common stock constituting less than one unit do not have the right to vote and any other rights of a shareholder in respect of those shares, other than those provided by its articles of incorporation. Under the rules of the Japanese stock exchanges, Holdings shares of common stock constituting less than one unit will not be permitted to be sold on the stock exchanges. In addition, because holders of Nipponkoa common stock are to receive 0.9 Holdings shares for each of their Nipponkoa share pursuant to the share exchange ratio, holders of Nipponkoa shares are relatively more likely to own Holdings shares constituting less than one unit—1,000 Holdings shares—than are holders of Sompo Japan shares, who will receive one Holdings share for each of their Sompo Japan shares.

The foregoing disadvantages of holders of Holdings shares constituting less than one unit will be mitigated by two mechanisms. First, a holder of shares of Holdings’ common stock constituting less than one unit will at any time be able to request Holdings to purchase those shares. Alternatively, a holder of such shares will be able to request Holdings to sell to such holder the number of shares necessary to raise its share ownership to a whole unit, provided that Holdings will be obliged to comply with such request only when Holdings owns a sufficient number of shares to accommodate such request. For a more complete description of the unit share system and its effect on the rights of holders of our shares, see “Description of Holdings Common Stock—Unit Share System”. Nevertheless, to the extent the above mechanisms fail to offset the disadvantages associated with holding less than a whole unit of shares, such shareholders will have limited rights as shareholders than otherwise.

Rights of shareholders under Japanese law may be more limited than under the laws of other jurisdictions

Our Articles of Incorporation, our board of directors’ Regulations, the Corporation Law and the Insurance Business Law of Japan govern our corporate affairs. Legal principles relating to such matters as the validity of corporate procedures, directors’ fiduciary duties and liabilities, and shareholders’ rights may be different from those that would apply to a non-Japanese company. Shareholders’ rights under Japanese law may not be as extensive as shareholders’ rights under the laws of other countries or jurisdictions within the United States. You may have more difficulty in asserting your rights as a shareholder than you would as a shareholder of a corporation organized in another jurisdiction. In addition, Sompo Japan and Nipponkoa currently intend that Holdings, which will succeed to their duty to file reports under the Exchange Act upon the completion of the Share Exchange on April 1, 2010, will terminate such duty as soon as the conditions for termination are met, which is expected to occur on or shortly after April 1, 2011. If Holdings terminates its duty to file reports under the Exchange Act, thereafter its shareholders will need to obtain Holdings’ information from public filings it will make, press releases and announcements it will issue and materials that it will directly send shareholders, in each case pursuant to Japanese law or otherwise voluntarily.

Because of daily price range limitations under Japanese stock exchange rules, you may not be able to sell your shares of our common stock at a particular price on any particular trading day, or at all

Stock prices on Japanese stock exchanges are determined on a real-time basis by the equilibrium between bids and offers. These exchanges are order-driven markets without specialists or market makers to guide price formation. To prevent excessive volatility, these exchanges set daily upward and downward price fluctuation limits for each stock, based on the previous day’s closing price. Although transactions may continue at the upward or downward limit price if the limit price is reached on a particular trading day, no transactions may take place outside these limits. Consequently, an investor wishing to sell at a price above or below the relevant daily limit may not be able to sell his or her shares at such price on a particular trading day, or at all.

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It may not be possible for investors to effect service of process within the United States upon us or our directors, executive officers or corporate auditors, or to enforce against us or those persons judgments obtained in U.S. courts predicated upon the civil liability provisions of the U.S. federal or state securities laws

Once established, our holding company will be a joint stock corporation organized under the laws of Japan. All of our directors, executive officers and corporate auditors reside outside of the United States. Many of our and their assets are located in Japan and elsewhere outside the United States. It may not be possible, therefore, for U.S. investors to effect service of process within the United States upon us or these persons or to enforce against us or these persons judgments obtained in the U.S. courts predicated upon the civil liability provisions of the federal securities laws of the United States. We believe that there is doubt as to the enforceability in Japan, in original actions or in actions to enforce judgments of U.S. courts, of liabilities predicated solely upon the U.S. federal or state securities laws.

If a U.S. holder acquires more than 10% of Holdings’ shares, the “controlled foreign corporation” rules of the U.S. federal income tax laws may apply to such U.S. holder

In general, a non-U.S. corporation that is not an insurance company is treated as a controlled foreign corporation (“CFC”) only if “United States shareholders” (as defined below) of such company collectively own, directly, indirectly or constructively, more than 50% of the total combined voting power or total value of such company’s stock for an uninterrupted period of 30 days or more during the relevant tax year. Sompo Japan and Nipponkoa expect that Holdings will be treated as a non-U.S. corporation that is not an insurance company for this purpose. Any U.S. person who owns, directly, indirectly or constructively, 10% or more of the total combined voting power of all classes of stock of a foreign corporation will be considered to be a “United States shareholder” of that foreign corporation. Additionally, any U.S. person that is treated as a “United States shareholder” of Holdings would be treated as owning an equivalent proportion of the shares of Holdings’ subsidiaries, Sompo Japan and Nipponkoa, and therefore would be treated as a “United States shareholder” of each such subsidiary.

Each “United States shareholder” of a CFC who owns, directly, indirectly or constructively, shares in the CFC on the last day of the CFC’s taxable year must include in its gross income for U.S. federal income tax purposes its pro rata share of the CFC’s “subpart F income”, even if the subpart F income is not distributed. Subpart F income that a “United States shareholder” includes in income is not treated as a dividend eligible for the special tax rate for non-corporate U.S. investors applicable to “qualified dividend income”. Sompo Japan and Nipponkoa anticipate that substantially all of their respective income will be subpart F income and anticipate that substantially all of Holdings’ income will be subpart F income. As a result, if you are a U.S. holder (as defined under “Taxation—Material U.S. Federal Income Tax Consequences”) and you own, directly, indirectly or constructively, 10% or more of Holdings’ shares, the CFC rules may cause you to be subject to U.S. federal income tax on income that you have not yet received and to lose eligibility for the special U.S. federal income tax rate applicable to non-corporate U.S. investors for “qualified dividend income”.

U.S. federal income tax laws also provide that if a U.S. person disposes of stock in a foreign corporation and such person was a “United States shareholder” at any time during the five-year period ending on the date of such disposition when the corporation was a CFC, any gain from the sale or exchange of such stock will be treated as ordinary income to the extent of the CFC’s earnings and profits during the period that such U.S. person held the shares (with certain adjustments). As a result, if a U.S. holder owns, directly, indirectly or constructively, 10% or more of Holdings’ shares, the CFC rules may cause any gain from the sale of such U.S. holder’s Holdings shares to be taxed at a higher rate than if the CFC rules did not apply. The CFC rules are complex but, if applicable to a U.S. holder, will generally result in a U.S. holder being obligated to pay U.S. tax on the income of Holdings before Holdings makes cash distributions to a U.S. holder in respect of such income. All U.S. holders should review the discussion of the U.S. federal income tax treatment of holding and disposing of Holdings shares under “Taxation—Material U.S. Federal Income Tax Consequences—Holding and Disposing of Holdings Shares Received in the Share Exchange”, and consult their own tax advisors as to whether and how the CFC rules might apply to them in their individual circumstances.

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Under certain circumstances, U.S. holders may be required to pay taxes on their pro-rata share of certain of Holdings’ non-U.S. insurance subsidiary’s related person insurance income

Different definitions of “United States shareholder” and “CFC” are applicable in the case of a foreign corporation that earns “related person insurance income” (“RPII”). RPII generally includes any “insurance income” attributable to policies of insurance or reinsurance with respect to which the person that is insured, directly or indirectly, is a “United States shareholder” or a person related to such a shareholder. In general, “insurance income” is income (including premium and investment income) attributable to the issuing of any insurance or reinsurance contract which is not “exempt insurance income” and which would be taxed under applicable provisions of U.S. federal income tax laws relating to insurance companies if it was the income of a domestic insurance company. For purposes of determining whether income is RPII, a person is indirectly insured by a reinsurance company to the extent the reinsurance company reinsures an insurance contract under which the person is directly insured. For purposes of determining the amount of RPII from Holdings’ subsidiaries (Sompo Japan and Nipponkoa) that must be included in the income of U.S. holders of Holdings shares, unless an exception applies, the term “United States shareholder” includes all U.S. persons who own, directly or indirectly, any amount (rather than 10% or more) of Holdings’ shares. Additionally, Sompo Japan and Nipponkoa will be treated as CFCs for RPII purposes if such “United States shareholders” collectively own, directly, indirectly or constructively, 25% or more of Holdings’ shares (by vote or value) for an uninterrupted period of at least 30 days during any taxable year.

If a U.S. holder were a “United States shareholder” and the RPII rules described above were to apply, such “United States shareholder” would nevertheless not be taxed currently on undistributed RPII from Holdings’ non-U.S. insurance company subsidiaries if (1) direct or indirect insureds, or persons related to such insureds for purposes of the RPII rules, whether or not U.S. persons, are treated at all times during the taxable year as owning less than 20% of the voting power and less than 20% of the value of the shares of such non-U.S. insurance subsidiary, (2) RPII (determined on a gross basis) is less than 20% of such non-U.S. insurance company subsidiary’s gross insurance income for the taxable year or (3) such non-U.S. insurance company subsidiary makes certain U.S. tax elections which neither Sompo Japan nor Nipponkoa expect to make. However, if none of the exceptions of the previous sentence apply and a U.S. holder (as defined under “Taxation—Material U.S. Federal Income Tax Consequences”) owns, directly, indirectly or constructively, Holdings shares at the end of any taxable year (which in general would be December 31), such U.S. holder will generally be required to include in its gross income for U.S. federal income tax purposes its share of the RPII of Holdings’ non-U.S. insurance company subsidiaries for the entire taxable year, determined as if such RPII were distributed proportionately only to “United States shareholders” holding Holdings shares at the end of the taxable year, but limited to Holdings’ current year earnings and profits reduced by such U.S. holder’s pro rata share, if any, of certain prior year deficits in earnings and profits. Some of the factors that determine the extent of RPII in any period may be beyond Holdings’ control and certain exceptions to the inclusion in U.S. taxable income of RPII distributions attributable to RPII income previously taxed to a prior shareholder will likely be unavailable to U.S. holders who receive Holdings shares in the Share Exchange. Consequently, there can be no assurance that U.S. holders will not be required to include RPII in their income. In addition, a U.S. holder may be required to comply with certain information reporting requirements, regardless of whether such U.S. holder is required to include RPII in income. Failure to comply with such information reporting requirements may result in penalties.

Treasury Regulations interpreting the RPII provisions of the Code exist only in proposed form. It is not certain whether these Treasury Regulations will be adopted in their proposed form or what changes, if any, might ultimately be made or whether any such changes, as well as any interpretation or application of the RPII rules by the IRS, the courts or otherwise, might have retroactive effect. Accordingly, the meaning of the RPII provisions and their application to Holdings is uncertain. In addition, there can be no assurance that the IRS will not challenge any determination by Holdings as to the amount, if any, of RPII that should be includible in such U.S. holder’s income or that the amounts of the RPII inclusions will not be subject to adjustment based upon subsequent IRS examination. The RPII rules are complex but, if applicable to a U.S. holder, will generally result in a U.S. holder being obligated to pay U.S. tax on Holdings’ RPII before Holdings makes cash distributions to a

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U.S. holder in respect of such RPII. All U.S. holders should review the discussion of the U.S. federal income tax treatment of holding and disposing of Holdings shares in “Taxation—Material U.S. Federal Income Tax Consequences—Holding and Disposing of Holdings Shares Received in the Share Exchange—Related Person Insurance Income Rules”, and consult their own tax advisors as to whether and how the RPII rules might apply to them in their individual circumstances.

If Sompo Japan, Nipponkoa or Holdings is treated as a passive foreign investment company for U.S. federal income tax purposes, U.S. holders may suffer adverse U.S. federal income tax consequences

In general, a non-U.S. corporation will be a “passive foreign investment company” (“PFIC”) if (1) 75% or more of its income constitutes “passive income” or (2) 50% or more of its assets produce, or are held for the production of, passive income. For this purpose, “passive income” is defined to include income of the kind which would be foreign personal holding company income under Section 954(c) of the Code and generally includes interest, dividends, annuities and other investment income. If Sompo Japan or Nipponkoa is classified as a “PFIC” for any taxable year during which a U.S. holder (as defined under “Taxation—Material U.S. Federal Income Tax Consequences”) held Sompo Japan shares or Nipponkoa shares and did not have certain elections in effect, then such U.S. holder may be subject to adverse U.S. federal income tax rules in respect of the Share Exchange and/or holding Holdings shares. In particular, if Sompo Japan or Nipponkoa is currently or was previously treated as a PFIC with respect to a U.S. holder but Holdings is not treated as a PFIC with respect to such U.S. holder at the time of the Share Exchange, then, under proposed Treasury Regulations, the disposition of Sompo Japan shares or Nipponkoa shares, respectively, in the Share Exchange might constitute a fully taxable transaction to such U.S. holder for U.S. federal income tax purposes. Sompo Japan does not believe that it is currently, or has been in its prior taxable years, properly treated as a PFIC and Nipponkoa does not believe that it is currently, or has been in its prior taxable years, properly treated as a PFIC. However, the determination of whether either Sompo Japan or Nipponkoa is a PFIC is made annually and is based on the activities, income and assets of Sompo Japan and Nipponkoa, respectively, all of which are subject to change. Accordingly, no assurance can be given that Sompo Japan and Nipponkoa are not, and have not been, PFICs. U.S. holders should consult their own tax advisors with respect to how the PFIC rules could affect the U.S. federal income tax consequences of the Share Exchange.

Additionally, if Holdings is classified as a PFIC, a U.S. holder of Holdings shares would be subject to an additional tax on certain U.S. taxes deemed deferred at the time of receipt of an “excess distribution” with respect to such Holdings shares unless such U.S. holder elected to be taxed on its pro rata share of Holdings’ earnings, whether or not such earnings were distributed. In general, a shareholder receives an “excess distribution” if the amount of the distribution is more than 125% of the average distribution with respect to the stock during the three preceding taxable years (or shorter period during which the shareholder held the stock). The additional tax is generally equivalent to an interest charge on taxes that are deemed due during the period the shareholder owned the shares, computed by assuming that the excess distribution was taxed in equal portions at the highest applicable tax rate throughout the shareholder’s period of ownership. The interest charge is equal to the applicable rate imposed on underpayments of U.S. federal income tax for such period. In addition, if Holdings is classified as a PFIC, dividends on Holdings’ shares would not be eligible for the special tax rate available to non-corporate U.S. investors applicable for “qualified dividend income”. Sompo Japan and Nipponkoa do not expect Holdings to be classified as a PFIC for the taxable year of the Share Exchange and do not expect Holdings to become a PFIC in the foreseeable future. However, the determination of whether Holdings is a PFIC is made annually and is based on the activities, income and assets of Holdings and its subsidiaries, all of which are subject to change. Accordingly, no assurance can be given that, in the taxable year of the Share Exchange, Holdings will not be a PFIC, nor that Holdings will not become a PFIC in a subsequent taxable year. U.S. holders should consult their own tax advisors with respect to how the PFIC rules could affect the sale or other taxable disposition of Holdings shares received in the Share Exchange or the receipt of any distributions with respect to such Holdings shares.

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SELECTED CONSOLIDATED FINANCIAL DATA OF SOMPO JAPAN

U.S. GAAP Selected Financial Data

The following selected financial data as of and for each of the two years ended March 31, 2009 are derived from the audited U.S. GAAP consolidated financial statements of Sompo Japan. These financial statements were prepared in accordance with U.S. GAAP. You should read these data together with “Sompo Japan Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Sompo Japan’s consolidated financial statements included elsewhere in this prospectus.

Notes:

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Japanese GAAP Selected Financial Data

The following selected consolidated financial data as of and for each of the five years ended March 31, 2009 are derived from the Japanese GAAP consolidated financial statements of Sompo Japan for those periods.

Japanese GAAP differs in certain significant respects from U.S. GAAP. For a description of the significant differences between Japanese GAAP and U.S. GAAP as they relate to Sompo Japan, and a reconciliation from U.S. GAAP to Japanese GAAP of Sompo Japan’s stockholders’ equity and net income as of and for the year ended March 31, 2009, you should read “Annex F: Unaudited Reverse Reconciliation of Selected Financial Information of Sompo Japan” included in this prospectus. Unless otherwise indicated, the financial information of Sompo Japan included in this prospectus is presented on a consolidated basis under U.S. GAAP.

Notes:

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SELECTED CONSOLIDATED FINANCIAL DATA OF NIPPONKOA

IFRS Selected Financial Data

The following selected financial data as of and for each of the two years ended March 31, 2009 are derived from the audited IFRS consolidated financial statements of Nipponkoa. You should read these data together with “Nipponkoa Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Nipponkoa’s consolidated financial statements elsewhere included in this prospectus.

Notes:

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Japanese GAAP Selected Financial Data

The following selected consolidated financial data as of and for each of the five years ended March 31, 2009 are derived from the Japanese GAAP consolidated financial statements of Nipponkoa for those periods.

Japanese GAAP differs in certain significant respects from IFRS. For a description of the significant differences between Japanese GAAP and IFRS as they relate to Nipponkoa, and a reconciliation from IFRS to Japanese GAAP of net income and total assets as of and for the year ended March 31, 2009, you should read “Annex H: Unaudited Reverse Reconciliation of Selected Financial Information of Nipponkoa” included in this prospectus. Unless otherwise indicated, the financial information of Nipponkoa included in this prospectus is presented on a consolidated basis under IFRS.

Notes:

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UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION

The following unaudited pro forma condensed consolidated financial information has been prepared on an IFRS basis and gives effect to the establishment of Holdings, a holding company under which Sompo Japan and Nipponkoa will become wholly-owned subsidiaries following the Share Exchange. This unaudited pro forma condensed consolidated financial information is based on the acquisition method of accounting under IFRS 3(Revised), after giving effect to the pro forma adjustments described in the accompanying notes. This unaudited pro forma condensed consolidated financial information is also based on and derived from the unaudited IFRS basis consolidated financial information of Sompo Japan, which is converted from the audited U.S. GAAP consolidated financial statements included in this prospectus (see Note 3 “Unaudited reverse reconciliation of Sompo Japan between U.S. GAAP and IFRS”) and the historical IFRS consolidated financial information of Nipponkoa included in this prospectus, together with the related notes.

For financial information purposes under IFRS, as a result of the application of the acquisition method of accounting in connection with establishing Holdings, the purchase price of Nipponkoa shares upon the Share Exchange has been allocated on a preliminary basis to Nipponkoa’s assets and liabilities based on the estimated fair values of those assets and liabilities. The assets and liabilities of Sompo Japan have been reflected at their historical cost bases.

This unaudited pro forma condensed consolidated financial information should be read in conjunction with (1) the historical U.S. GAAP consolidated financial statements (and related notes) and the selected consolidated U.S. GAAP financial data of Sompo Japan included elsewhere in this prospectus, and (2) the historical IFRS consolidated financial statements (and related notes) and the selected consolidated financial data of Nipponkoa included elsewhere in this prospectus.

The unaudited pro forma condensed consolidated balance sheet as of March 31, 2009 gives effect to the Share Exchange as if it had occurred on March 31, 2009. The unaudited pro forma condensed consolidated income statement gives effect to the Share Exchange as if it had occurred at the beginning of the year ended March 31, 2009.

The unaudited pro forma condensed consolidated financial information is presented for illustrative purposes only. This information is not necessarily indicative of the operating results or financial position that might have occurred had the Share Exchange occurred on the dates indicated, nor is it necessarily indicative of future operating results or financial position of Holdings.

As a result of the Share Exchange, the excess of the fair value of Nipponkoa’s adjusted net assets over their cost will be recognized as other operating income, amounting to ¥314,330 million. In addition, Sompo Japan and Nipponkoa will incur restructuring costs in connection with completing the transaction and integrating the management and businesses of Sompo Japan and Nipponkoa. These non-recurring costs, which consist principally of costs associated with information systems integration, are estimated to be approximately ¥60,000 million on a pre-tax basis for the five-year period beginning from the year ending March 31, 2011 through the year ending March 31, 2015. The portion of such costs expected to be incurred within the 12 months following the consummation of the Share Exchange is estimated to be approximately ¥12,000 million on a pre-tax basis (¥7,668 million, net of tax). The impact of these costs is not included in the unaudited pro forma consolidated financial information.

The unaudited pro forma condensed consolidated financial information does not reflect the transaction costs or any additional unanticipated transaction costs to be incurred through the date of the Share Exchange or thereafter, nor do they reflect any anticipated synergies or cost savings. In addition, the unaudited pro forma condensed consolidated income statement does not reflect the other operating income described above.

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UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET

UNDER IFRS AS OF MARCH 31, 2009

The accompanying notes are an integral part of this

unaudited pro forma condensed consolidated financial information.

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UNAUDITED PRO FORMA CONDENSED CONSOLIDATED INCOME STATEMENT

UNDER IFRS FOR THE YEAR ENDED MARCH 31, 2009

The accompanying notes are an integral part of this

unaudited pro forma condensed consolidated financial information.

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NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION

Note 1    Purchase price

The following describes the determination of purchase price, the sensitivity analysis of purchase price and the purchase price allocation.

The following table shows the calculation of the purchase price.

If TOPIX (a stock market index in Tokyo Stock Exchange) shifted 10% (or -10%) from the index, the purchase price of Nipponkoa would increase (or decrease) by ¥38,463 million and the fair value of equity securities held by Nipponkoa would increase (or decrease) by ¥73,174 million, resulting in an increase (or a decrease) in a gain from the bargain purchase by ¥34,711 million.

The sensitivity analysis above is based on the assumptions that the change in Sompo Japan’s stock price and the price of equity securities held by Nipponkoa would be consistent with the movement in TOPIX. Note that the correlation is not necessarily actual one.

Following table shows purchase price allocation derived from the acquisition.

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Note 2    Pro forma adjustments

The pro forma adjustments related to the unaudited pro forma condensed consolidated balance sheet as of March 31, 2009 assumes the establishment of Holdings took place on March 31, 2009. The pro forma adjustments to the unaudited pro forma condensed consolidated income statement for the year ended March 31, 2009 assumes the establishment of Holdings took place on April 1, 2008.

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Note 3    Unaudited reverse reconciliation information of Sompo Japan between U.S. GAAP and IFRS

Sompo Japan’s audited consolidated financial statements have been prepared in accordance with U.S. GAAP, which differs in certain material respects from IFRS. The effects of the transition to IFRS are as follows:

Reconciliation of consolidated balance sheet as of March 31, 2009