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Thank you all for calling in today. I am Ishiguro of IR Group. We would now like to begin Tokio Marine Holdings earnings call to share with you fiscal year 2020 first quarter results, which we announced today. Normally, we do not hold a teleconference for our first quarter results, but we decided to hold one today as we also announced FY '20 full year projections, which were not available back in May. Since we are also going to cover projections, we have our group CFO, Mr. Yuasa, to give you the highlight for about 15 minutes or so based on the presentation material, which we uploaded to our website today before we open the floor for questions. We're also joined by representatives from various departments to ensure that we have right persons to respond to your questions.
Also, before we begin this conference call, I would like to remind you that the presentation may contain forward-looking statements based on our current projections. They entail risks as well as uncertainties. Please be advised that actual results may differ from our current projections. Also, this conference call is recorded.
Let us now begin the presentation. Mr. Yuasa, the floor is yours.
I am Yuasa, group CFO. Once again, thank you all very much for participating in our conference call today despite your busy schedule. And as Mr. Ishiguro just mentioned, conventionally, group CFO has not participated in earnings calls. But since we announced our full year projections, I decided to join this conference call today. Let me now present to you actual results as well as projections. Please turn to Page 3 of the presentation material. First, top line results. During the first quarter, on the current -- on the currency-neutral basis, net premiums written increased by 8.3% year-on-year and life insurance premiums declined by 3.8% year-on-year, both of which were affected by COVID-19. And excluding the impact of the coronavirus, we realized steady growth in both domestic and international business.
Next, please turn to Page 4. This is the statutory consolidated net income in the first quarter, mainly due to the impact of COVID-19 by JPY 29.3 billion, net income declined by JPY 13.4 billion over the year to JPY 99.2 billion. Excluding the impact of COVID-19, despite the following net investment profit, which were expected from the beginning of the year in the international business, thanks to a decrease in large and medium-sized losses in TMNF as well as top line growth, net income increased by JPY 15.9 billion from a year ago.
Next, please go to Page 5. Here's adjusted net income, which is calculated by subtracting the impact of cat loss reserve and goodwill, amongst others, from the statutory net income that I just touched upon. Adjusted net income decreased by JPY 6.6 billion to JPY 141 billion. This is also impacted by COVID-19. And excluding the impact, adjusted net income increased by JPY 22.2 billion from a year ago, demonstrating a steady enhancement of our earnings capabilities.
I will now discuss FY '20 full year projections. Please proceed to Page 18. Our full year projections were not available since it was difficult to make a reasonable calculation as of May. But we decided to disclose our projections today because: one, while situations are still quite mixed in different countries in the world, economic activities are now gradually resuming; and second, in the international insurance business that is mainly impacted by COVID-19, first 6 months have passed and we now have visibility into full year performance. Back in May, we projected our underlying adjusted net income of JPY 410 billion on the pre COVID-19 basis. And this time, we are projecting the net income of JPY 310 billion, subtracting JPY 100 billion as the impact of COVID-19. Please go to Page 19 for impacts of COVID-19. In May, we explained the impact on underwriting profit for the full year fiscal 2020 to be JPY 30 billion to JPY 40 billion. This was based on a scenario where the situation in and around May will continue until the end of June, after which economic activities will recover towards the end of the year. This time, we estimate the full year impact to be negative JPY 52 billion, mainly coming from event cancellation and business interruption that explicitly cover communicable diseases, minus JPY 35 billion, which is in line with our original forecast to be JPY 30 billion to JPY 40 billion. In addition to this, a total of JPY 17 billion in additional impact is factored in to our new forecast by including: one, impact of COVID-19 on premiums written in April to June period; and two, impact of nondamage BI that are emerging from litigations overseas regarding coverage, among others. This type of BI, we believe, is not necessarily what we should be paying for. And therefore, we will assert what we should be asserting. However, having said that, we decided to factor it in as conservative estimate. While most up-to-date situation in the field has been taken into account as our best estimate, the possibility of second and third waves of COVID-19 and the extent of economic recovery is quite unpredictable. However, even under such circumstances, the company's losses will not be doubled as explained in May. BI and workers' compensation in the United States, we think, is currently moving in a well-balanced favorable direction, although there are -- there remains some areas of lack of clarity in politics and litigation. We will continue to keep a close eye on the development.
Next is investment. Full year impact is estimated at JPY 48 billion. In May, we showed first quarter results overseas to be minus JPY 32 billion. During Q&A, by way of comparing default losses from credit risk investment during the global financial crisis, we explained the possibility of an additional loss of JPY 30 billion to JPY 40 billion. Our new estimate reflects best estimates of investment units in and outside of Japan based on most of today's situation. This breaks down into minus JPY 15 billion impact in income, such as decline in interest rate and dividend income and minus JPY 33 billion impact in capital, such as default losses of credit risk assets, such as municipal bonds, losses on sales or valuation of stocks.
We often receive questions of CLO or CRE loans. But we have almost no impairment losses as of end of June. If however we see double dip or triple dip, we could be affected in the short term. We will continue to keep close watch. As explained, the company will be impacted by COVID-19 to a certain extent, especially overseas. However, it will be short-lived and will be an earnings event. Under such a situation, the company is working on a corporate strategy in a with COVID-19 and after COVID-19 world. For example, how are we to capture opportunities of a hardening market by leveraging our risk selection capabilities or how to deal with M&A pipeline. Deliberation is ongoing in order to ensure ourselves to achieve our goal of adjusted net income of JPY 500 billion and more than 12% in adjusted ROE. By increasing our stability and profitability over the medium and long term, we intend to respond to the expectations of our shareholders. Your continued support and understanding is greatly appreciated. That is all from me.
We would now like to move on to the Q&A session.
The first question is from Mr. Muraki of SMBC Nikko Securities.
This is Muraki from SMBC Nikko. My first question is related to the full year projections and also assumptions, particularly in the international business, COVID-19 related claims. I would like to get more detailed information. On Page 15, you are expecting JPY 40 billion this time. And other than that, including a decline in top line, you are also expecting JPY 17 billion impact. If you could break this down in more detail. Event cancellation and BI, what is the composition in between the 2? And when it comes to nondamage BI, is it primarily the accumulation that you have over in the United Kingdom? Is that correct? Also in terms of IBNR, as of the end of June, I believe that we got the numbers mostly from Western countries. And as of the end of June, I believe that you do have IBNR. And since the 1st of July, I believe that additional amount has actually not been confirmed much. So if your case is the same as your peers in Western countries, that is another point that I would like to confirm.
And second question is related to the implication on the capital side. Now you have disclosed the projections this time around as of the end of the first half of the year. What is the possibility of resuming your share repurchase? Compared to 3 months back, is there any change in your view? Allianz, for example, has made some updates through the teleconference. Do you have -- have you had a similar change in your view?
My name is [ Nakano ] from International Business Development Department. Thank you for your questions. On your first question related to claim payout breakdown in the international insurance business, with regards to breakdown by line of business, specific detailed numbers are actually not disclosed. I hope that you understand our policy here. But to give you a rough color here, as indicated in the slide, out of the JPY 40 billion overall claim payout expected overseas, about half of which is related to event cancellation -- half is about event cancellation. And with regards to the endorsement, which explicitly covers communicable diseases, out of the remaining JPY 20 billion, half of that is the explicit coverage related to the communicable diseases. And as for the remainder, that is covered by life insurance policies, credit surety as well as other lines of business. And looking at the remainder by line of business, the amount is rather limited.
And another part of your question, or your second question is pertaining to nondamage BI. On that point, we have exposures in the United Kingdom. And also -- we also have U.S. derived business that we have underwritten through Lloyd's. So it is not 100% U.K. It also includes some U.S. exposure. And thirdly, with regards to the numbers, do we have the IBNR as of the end of June? We're planning to disclose the second quarter earnings in the -- in November. And this is something that we intend to cover at that point. So I would like to refrain from making some specific comments. However, we still -- we certainly do expect some in the IBNR. And of course, this time around, we are announcing the full year projections. And we are not planning to complete the buildup as of the end of the second quarter. However, most of the IBNR is expected to be built up in the second quarter. That is our schedule at the moment.
This is Yuasa. With regards to capital management policy, let me respond to your question. In November, we intend to stick to our conventional basic policy. We have a target range. And as long as ESR is within the target range, we would put a higher priority on additional risk-taking or business investment. Or else, we intend to give it back to the shareholders. And of course, we will look at the situations prevalent at that time comprehensively. But at this point in time, we haven't actually calculated the latest ESR. However, of course, first, the stock market is up, interest rates are up and credit spread is now -- is becoming tighter. So compared to the March end position, we assume our ESR has increased. However, depending on the economic conditions going forward, our ESR position will change, and that is another point that we will certainly take into account. So at this point in time, we are not able to share with you our specific view as to whether the possibility of the share repurchase has increased at this point in time or not.
Understood. Now European companies have talked about your authority's position. That are actually becoming quite important in the European business. And you didn't talk about any regulatory concerns. So you're going to look at your own business situations as well as economic conditions to make a final decision?
Yes. This is Yuasa once again. Essentially, political or litigations developments are something that we are going to, of course, continue to monitor. But what we're going to announce in November will be the actual results as of the end of September or as of June for international business. So essentially, the performance that we will announce in November will be based on our current situation. So a number of what -- it wouldn't probably appear in our November announcement. However, we certainly will consider other factors comprehensively as we make the judgment.
Next question [indiscernible] Morgan Stanley Securities, [ Sujino-san ].
The normalized basis number forecast in comparison was that, that you've announced before. The normalized basis is factored -- without factoring COVID-19 and looking at the changes from the previous forecast at this time, there's no recurrent -- ordinary profit according to the disclosure. And I'm not exactly sure which numbers you referred to. There is no numbers available on Page 28. On a normalized basis, non-life domestic business profit is shown. But in your current or new forecast, where is that on an ordinary profit basis? I think according to factoring -- normalized basis, I think it was JPY 24.5 billion. But how does that translate under your new forecast and for international insurance business? Well, that is all. Those are my questions.
We cannot hear. Yes. This is [ Nakai ] speaking from the Corporate Accounting Department of Tokio Marine & Nichido. The assumption -- the basic assumption from normalized basis, the impact of COVID-19 is added only. And the -- we have not made any changes to the assumption for the normalized basis forecast. TMNF ordinary profit on a normalized basis, JPY 24.5 billion, and this time according -- under the current forecast, JPY 21.4 billion.
And business unit profit?
No change from JPY 12.4 billion, which means that in auto, incurred losses in Japan in the first quarter year-on-year has improved significantly.
And according to the previous slide, improvement in incurred losses how much?
That was Page 8. Improvement of JPY 34.7 billion year-on-year. And impact of tax and so forth are taken into account. And therefore -- which has gone down by JPY 12.5 billion. And therefore, JPY 47.5 billion impact, I think, could be expected.
[ Sujino-san ], could you perhaps speak up a little bit?
I'm sorry, I'm speaking from my office. I apologize. I hope you can hear me.
A little bit louder, please. Appreciate, thank you.
Is this better?
Yes. Yes, this is better.
So business unit profit, JPY 124 billion, you said this has not changed. The basis has not changed.
Adjusted basis or normalized basis, RP was JPY 24.5 billion to JPY 21.4 billion, but the incurred losses in the first quarter has increased by JPY 35 billion or so just on a year -- first quarter basis. The difference for the normalized basis would include an impact of JPY 12.5 billion. So JPY 47.5 billion must have been the impact, which was not taken into account in May. And if you take those factors into account, this is after tax. So the JPY 47.5 billion after-tax portion could be improved. And the recurring profit, of course, there will be decrease from reversal of catastrophe loss reserves. So there could be a decrease from JPY 124 billion to JPY 214 billion.
And are you expecting some deterioration after first quarter? Is that reflected in the numbers?
Well, in the first quarter, COVID-19 impact has had a positive impact. And on a normalized basis, even by incorporating COVID-19, we're just seeing -- are seeing that impact for the full year. And I think that is your question. There are some structural issues. As for incurred premiums -- incurred losses -- incurred losses, sorry, this is reflected in P&L. And therefore, there is some positive impact in the first quarter. In the meantime, there's a decrease in premiums and the reversal of catastrophe loss reserves, which will be a decrease. Those are expected going forward. And therefore, earned premium will decrease and the decline will be seen in the reversal of nat cat reserves. And so what we're seeing in the first quarter, the impact will gradually diminish over the full year. And you talked about BUP. We will see impact for the catastrophe loss reserve reversal. But the minus of earned premium -- or the decrease in earned premiums is something that we expect to see eventually going forward.
JPY 214 billion, that's under the new forecast? JPY 214 billion in recurring profit, this remains unchanged?
Correct.
So you're only factoring in up until first quarter, and there'll be -- there are, therefore, no changes in your numbers after Q2?
I am not very clear on this. I would like to speak to you again off-line.
This is [ Tao ] speaking from Corporate Accounting Department. I would like to talk about consolidated basis process. Consolidated basis is on -- without COVID impact, JPY 410 billion was incorporated -- estimated. But with -- factoring in COVID impact, we have changed that number. So COVID-19 impact on a consolidated basis is JPY 145 billion. Later on, we would like to follow-up with you on details.
Next, Mr. Watanabe from Daiwa Securities.
Yes. This is Watanabe from Daiwa Securities. With regards to domestic auto business, let me ask you 2 questions. First, what is the assumptions behind the guidance this time around? As the traffic volume declines, the accident rate has declined, this fiscal year, how much decline are you now assuming in terms of the claim payout? What is your assumption behind projection this time around? That is my first question. My second question is, in the first quarter, with regards to the calculation method of the underwriting reserve for the automotive business, I believe that you're using simplified -- the method where you have probably applied the numbers from the past 3 historical years. And you're also disclosing the positive JPY 145 billion in the first quarter. And what is, again, calculation method behind this number?
My name is [ Nomoyama ] from Personal Lines Underwriting Department of TMNF. On your first question related to the traffic volume decline of the auto business as well as others, what is our assumptions behind the projections? Now at this point in time, in April and May, the traffic volume declined by 20% to 30%, whereas accident rate declined by 20% to 30%. And as a result, in the first quarter, as indicated on Page 8, net incurred losses declined by JPY 24.6 billion. However, in and after June -- in June and also July on a year-on-year basis, accident rate has essentially come back to where it was a year ago. And therefore, in the first quarter, there was a JPY 24.6 billion decline in the payout. And we believe that was rather -- and we believe that was a snapshot number. However, we are not expecting the number to inflate significantly going forward. However, depending on whether we are actually going to be hit by the second or potentially third wave, the number could vary. So we have to look at the situation as we go along.
My name is [ Nakai ] from Corporate Accounting Department of TMNF. On your second question, let me actually clarify your question. Your question is pertaining to underwriting reserve, right?
Yes.
Okay. With regards to the underwriting reserve, the results in the first year, yes, as you have rightly pointed out, we are using a simplified method looking back the past 3 years to calculate the underwriting results for the first year. And for this fiscal year that we're in, the loss ratio is expected to be improved significantly this fiscal year, which is actually different from what we are actually observing. And therefore, as the net incurred losses declined, the underwriting results for the first year should be canceled off to some extent. And therefore, we are planning to make some provisions for the reserve. And therefore, net incurred losses improved by JPY 36 billion because of the impacts of COVID-19, part of which is canceled off in the underwriting results for the first year.
I understand. Let me actually ask you a follow-up question on the first question. As an assumption behind the projection this year, are you assuming the accidents to decline on a year-on-year basis?
Yes. Let me take that question. This is [ Nomoyama ] from Personal Lines Underwriting Department. On a year-on-year basis -- on a full year basis, yes, we're expecting some decline in the accident rate. In the first quarter, the number of the reported accidents declined by 20% to 30% based on which we're expecting some decline on the full year basis as well.
I see. So 20% to 30% decline in the first quarter is actually not an additional benefit that you are factoring in, in addition to overall general assumption of decrease in accident rate?
No. That is actually the buffer that we have built in now.
From JPMorgan Securities, Otsuka-san.
Page 19, at the very bottom, overseas insurance, JPY 42 billion minus, JPY 32 billion minus for January-June period. January to June, if you split that to Jan to March and April to June, how was the situation? Or how do you analyze the situation? This is a breakdown of JPY 32.4 billion. And also, from June to December, I think you're expecting some increase of JPY 10 billion. What are the reasons for that? That is my first question.
[ Nambu ], Financial Planning Department of Tokio Marine Holdings. Thank you for the question. Your first question for overseas insurance, split between January to March and April to June. As we've disclosed, JPY 32.4 billion is for January to March -- for January to June. Basically, this is due to losses from valuation of -- or sales of shares. And January and March, basically, this is valuation losses. But for January and June, there's also loss from sales of equities. So valuation loss has improved, but there has been some losses that we can anticipate. That's one point. And the other point is credit risk associated to impairment losses and impairment loss has increased compared to January and March period. So it has increased in the March -- April to June period. And that's why our visibility in the number has not changed or improved that much. And the plus of JPY 10 billion for the full year, this is primarily -- well, it basically comes from credit risk overall. We're expecting impairment losses. It's not particular names or companies, but credit risk overall could entail losses.
I'm sorry. JPY 32.4 billion breakdown, you do not disclose the breakdown for January to March and April through June? No details disclosed.
Are you asking about January to March?
My question is JPY 32.4 billion, if you separate that out into 3 months, how much was it? That is my question. What is the breakdown of JPY 32.4 billion?
JPY 33.6 billion is for January to March. And the breakdown, as I mentioned, is basically a loss from valuation of securities and valuation loss, JPY 27 billion approximately, and also JPY 6 billion for credit -- related to credit. April to June, plus JPY 1.2 billion. Valuation losses has been recovered, but looking at the performance of stock, so we have sold some, and there were also some credit risks that has changed during those months.
Understood. My second question is related. JPY 43.3 billion for overseas underwriting, what is the breakdown of this for January and June? And you're expecting an upside of JPY 14 billion from there. What is the breakdown for that?
[ Nakano ], International Business Development Department of Tokio Marine Holdings. For the first quarter, as described in other parts of the slide, about JPY 5 billion in impact is expected. And the second quarter, therefore, as you can see, is the difference of the numbers that you see. And then impact on adjusted net income, overall, as we've been explaining, decrease in premium income, and there's also uncertainties in BI. Those are taken into account. And that -- those represent the difference.
Which means that JPY 43.3 billion and the JPY 53 billion, the difference between these 2 numbers is JPY 17 billion in negative for overseas insurance. It's basically primarily coming from that. Is that a correct or fair understanding?
Let me respond to that. I am [ Tao ], Corporate Accounting Department. The difference between JPY 57 billion and JPY 43.3 billion is -- incorporates the uncertainties concerning nondamage BI. There are some that has already been incurred as of end of June, which will be deposits -- which will not, therefore, be reflected as a positive upside in the second half or second quarter. FCA in the U.K. in August, the policy wording for nondamage BI, I think will present a clear perspective.
And depending on that guidance, will this JPY 17 billion number change?
This is [ Nakano ] speaking from International Business Development. For FCA's statement, our estimate is that it will probably take until September. But the JPY 17 billion already incorporates those aspects as part of our best estimate.
Next, Sato-san from Mizuho Securities.
Yes. I have 2 questions on Page 19 related to the underwriting side of the impact. Let me give some clarifications. First, on the domestic side, domestic non-life business, JPY 5 billion listed here. Improvement of the underwriting results and the effect that is canceled off by the underwriting results for the first year. What is the net impact in between the 2? If you could perhaps answer this first question first.
My name is [ Nakai ] from Corporate Accounting Department of TMNF. To break this down to JPY 5 billion as for the underwriting profit, about JPY 15 billion post-tax and increased underwriting reserve is approximately JPY 10 billion for the first quarter.
This JPY 10 billion underwriting reserve burden. Does that come in -- come through the fourth quarter?
No. With regards to auto, we talked about the provisions for underwriting results for the first year for the auto business. So that is what I just mentioned.
I see. Second, in the international business, you have factored in some uncertainties. And perhaps related to the last question of the previous person, over in the United Kingdom, litigations. Even if the rulings are actually given in the high court, I believe it is quite possible that it would be elevated to Supreme Court. And are you assuming that there will be certain rulings given as a final ruling by the end of the year? Is that your assumption behind these uncertainties? And of the JPY 17 billion, I don't know how much is actually -- in fact is related to nondamage BI. However, against the maximum risk, how much have you factored in as uncertainties this time around?
This is [ Nakano ] from International Business Development Department of Holdings. With regards to nondamage BI, related to, in particular, FCA rulings, to be quite frank with you, the specific schedule of final rulings to be given, we actually do not have any specific schedule in our mind. However, to some extent, if there is any actually provisions that we actually have to build this fiscal year, then we intend to do so. So again, we have included the best estimates that we have currently. And on your second question related to the max exposure -- maximum exposure, including the local actuaries, we have come up with the best estimate. And I won't be able to share with you specific percentage against the exposure, but we have included the best estimate.
So I should understand that putting aside the issue of whether you would assume a worst-case scenario or not, you haven't actually factored in the maximum exposure as uncertainties. Is that correct?
No. We are not expecting a full exposure based on the maximum exposure. However, we have factored in the best estimate that we can come up with at this point in time.
Tokai Tokyo Research Center, Majima-san, please.
This is Majima speaking. I have 2 questions. Page 19, overseas, underwriting insurance, event cancellation is included. And do you say JPY 40 billion? Explicitly, you've stated that. But event cancellation is where the event organizer have already issued a cancellation? Or is it -- does it not include events that are already currently being scheduled? I'm specifically referring to the Olympic and Paralympic games scheduled for next year. At this point in time, events that are being scheduled could be canceled going forward that you would need to pay losses or claims? What is the possibility for that?
And my second question is for auto insurance. Accidents is a decline and loss ratio is around 40%. Assuming that loss ratio will stay around 40%, you would need to be setting aside catastrophe loss reserve, a significant amount. In your current year forecast or plan, loss ratio for auto remaining low and increase in catastrophe loss reserve. Is that factored in to your full year forecast? That's my second question.
[ Nakano ], International Business Development Department of Holdings Company. As for the subject events for the event cancellation estimate, naturally, what has been already reported, event cancellation or postponement losses incurred as a result is separately estimated. But there could be losses that we could incur going forward, and IBNR is built up, set aside as a result. And therefore, not everything is reported, I must say. But from what we can foresee, reasonably, it is factored in. It is not that we are factoring in events that are scheduled way into the future.
And this is [ Nakai ] from the Corporate Accounting Department. Full year forecast assumption for catastrophe loss reserve for the full year. For auto, loss ratio could go up, in other words return. We, therefore, do not anticipate the loss ratio to stay around 40%. And therefore, we are expecting reversal of catastrophe loss reserve. In the meantime, loss ratio could improve.
Understood. Loss ratio -- where do you expect loss ratio for auto to settle?
Level of loss ratio for auto, I would like to refrain from commenting. But 2.2 point increase on a normalized basis but will decrease with the impact of COVID-19. If incurred, premium will go down at the same level as the first quarter. That is -- will be the impact to be anticipated.
This is Ishiguro speaking. Majima-san, if I could supplement. For individual lines of business, we refrain from making comments, but for all lines, 92.6% combined ratio, negative 6 points year-over-year. Auto accounts for a large part of that. I appreciate if you could understand. Thank you very much.
Next question is from Mr. Sasaki of Merrill Lynch Japan.
Yes. This is Sasaki from Merrill Lynch. I have 2 questions. First, on the full year projections on the international business. In the supplementary material, you are showing a slight increase in the first quarter, and you're also expecting a slight increase in the full year basis as well. In and after April in the international business, how has the top line been trending? As much as you could, if you could share the latest situation, that will be appreciated. And also, as the market gets hardened, what is the impact coming through to your business? That is my first question. And secondly, related to the impact of COVID-19, going forward, you're actually saying that you're making a conservative assumption here. But I understand why you are actually saying that you are on the conservative side. As much as you could, again, if you could give a little bit more color here, please.
This is [ Nakano ] from International Business Development Department of the Holdings. Let me take both of your questions. First, related to the premiums in the international insurance business. The top line decline is appearing most in the automotive line of business outside Japan. Mainly in emerging countries, we have been underwriting auto policies. But because of the COVID-19, as the new car registration declined, accordingly, auto premiums compared to the pre COVID-19 basis has declined. To give you one -- and also as travel has been restricted globally, the top line related to travel insurance has declined. And as the economic activity slow down, the premiums that are calculated affected -- linked to economic activities. In those lines of business, we're also expecting a decline in top line. Second, in terms of the impact of the market hardening. As you are well aware, across different lines of business, situations do vary. Having said that, double-digit rate increase is expected in some lines of business. And therefore, going forward, in some lines of business, we believe that there will be some positive impact that we'll be able to see that could result into top line growth or improvement of profitability to some extent. Having said that, at this point in time, we haven't actually included those upside as the actual benefit that we have confirmed.
And on your second question, with regards to the uncertainties concerning nondamage BI, why are we actually putting the estimates on the conservative side? When we say conservative here, of course, still related to the business interruption business or the policies. As we discussed earlier related to, for example, FCA case, a lot of things are actually not certain. And with regards to whether we are actually held liable or not, there are still uncertainties -- a lot of uncertainties remaining. In some companies, they have opted to actually not make any provisioning at all before the situations become clear. However, we rather are taking a policy of trying to actually make some provisions based on our best estimates. That is the implication behind this conservative estimate that we have now.
Now to clarify, once again, you are actually disclosing this full year projections under a quite different format compared to your conventional format. Is there any particular implication behind this change?
This is Ishiguro. Let me respond to that question. Well, at the beginning of the year or as of May, on the pre COVID-19 basis, of course, we have actually done our usual disclosure, if you will. However, this time around, we have come up with an estimate in terms of the magnitude of the impact of the COVID-19 with which we have disclosed the full year projections. And with regards to more specific detailed numbers on the P&L as well as others, of course, you can make some assumptions based on strategy report, for example. However, we actually do intend to disclose more detailed information in November.
I think we still have some more time. Is there anyone else with a question? We still have some more time to take questions. Perhaps there are no more questions. With this, we would like to close the Q&A session. Thank you very much for joining us today.
[Statements in English on this transcript were spoken by an interpreter present on the live call.]