131203MSAD_e
22/26 Reorganization by Function (3) Reduction in Company Expenses
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00:18:27.6
Now let me describe reductions in business expenses through a reorganization by function. Please turn to page 18. This slide compares expected company expenses in FY2017 with company expenses in FY2011 as the base year. The major factors that will boost company expenses in FY2017 are a consumption tax hike and rises in rates for social security, an increase in loss adjustment expenses associated with the inclusion of affiliates' operations, which is a trade-off for claim payments, costs for Unity, the new integrated IT system, including depreciation, and a natural increase associated with growth in the top line. We expect that the increase in company expenses due to those factors will be approximately 55 billion yen. Meanwhile, we expect that the reorganization by function and cost cutting associated with it will reduce company expenses approximately 50 billion yen. Of that amount, 10.5 billion yen is a reduction in IT system operating costs related to the commencement of operation of Unity, the new integrated IT system, and is shown separately. Overall, we expect that company expenses will increase only around 5 billion yen, with cost increases due to external and internal factors offset by cost cutting through the reorganization.
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