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dollar holdings into yen, and reducing the demand for our products should the broader economy be negatively impacted
by withdrawal of monetary stimulus.
The financial crisis also resulted in new government regulation, including the Dodd-Frank Act. This significant
legislation, intended to reduce risk of another crisis, contains multiple provisions that could impact our business as rules
are finalized and implemented. While it is difficult to isolate the impact of Dodd Frank from other government and central
bank actions and general market conditions since the financial crisis, we believe that the Dodd-Frank Act, in particular
bank capital requirements, limits on proprietary trading and derivatives regulation, has affected the value of our holdings in
banks and other financial institutions, and impacted pricing, liquidity, and our general ability to conduct financial and
capital market transactions. The process of implementing the Dodd-Frank Act is ongoing and continues to involve
additional rulemaking from time to time. The new presidential administration in the United States and Congress have
stated proposals to reform or repeal certain provisions of the Dodd-Frank Act. We cannot predict with any degree of
certainty what impact, if any, the Dodd-Frank Act will have on our U.S. business, financial condition, or results of
operations
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particularly given the election of a new U.S. president in November 2016.
As the effects of the financial crisis continue to linger, other central banks around the world have followed the actions
of the Federal Reserve and taken unprecedented actions. In the case of the ECB, multiple actions were taken to mitigate
the European sovereign and banking crisis, and to stimulate the economies throughout the Eurozone. The Bank of Japan
has undertaken monetary policy actions designed to stimulate the Japanese economy. These governmental interventions
are still being deployed in the form of extremely low short-term interest rates and asset purchases, and thus may continue
to support an environment of historically low or negative interest rates in the near to medium term. There can be no
assurance as to the effect that these governmental actions, other governmental actions taken in the future, or the ceasing
of these governmental actions will have on the financial markets generally, the economies in which we operate, our
competitive position, or our business and financial condition.
Interruption in telecommunication, information technology and other operational systems, or a failure to maintain
the security, confidentiality or privacy of sensitive data residing on such systems, could harm our business.
We depend heavily on our telecommunication, information technology and other operational systems and on the
integrity and timeliness of data we use to run our businesses and service our customers. These systems may fail to
operate properly or become disabled as a result of events or circumstances wholly or partly beyond our control. Despite
our implementation of a variety of security measures, our information technology and other systems could be subject to
physical or electronic break-ins, unauthorized tampering, security breaches or other cyber-attacks, resulting in a failure to
maintain the security, confidentiality or privacy of sensitive data, including personal information relating to customers, or in
the misappropriation of our intellectual property or proprietary information. Although the minor data leakage issues we
have experienced to date have not had a material effect on our business, interruption in telecommunication, information
technology and other operational systems, or a failure to maintain the security, confidentiality or privacy of sensitive data
residing on such systems, whether due to actions by us or others, could delay or disrupt our ability to do business and
service our customers, harm our reputation, subject us to regulatory sanctions and other claims, lead to a loss of
customers and revenues and otherwise adversely affect our business. In addition, the costs to address or remediate
system interruptions or security threats and vulnerabilities, whether before or after an incident, could be significant. While
we continue to invest in the infrastructure of our data security programs, we have been, and will likely continue to be, the
target of unauthorized access, cyber-attacks, computer viruses or other malicious codes, or other computer-related
penetrations.
We operate in an industry that is subject to ongoing changes.
We operate in a competitive environment and in an industry that is subject to ongoing changes from market pressures
brought about by customer demands, legislative reform, marketing practices and changes to health care and health
insurance delivery. These factors require us to anticipate market trends and make changes to differentiate our products
and services from those of our competitors. We also face the potential of competition from existing or new companies in
the United States and Japan that have not historically been active in the supplemental health insurance industry but some
of which have greater financial, marketing and management resources than we do. Failure to anticipate market trends
and/or to differentiate our products and services can affect our ability to retain or grow profitable lines of business.
Further, as employers and brokers are increasingly requesting a full-suite of products from one insurance provider, a
failure to react and adapt to these demands could result in decreased sales or market share. Similarly, a failure to meet
evolving customer demands through innovative product development, effective distribution channels, and continuous
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