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SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 20-F

OR

For the fiscal year ended March 31, 2010

OR

OR

Date of event requiring this shell company report

For the transition period from                  to                     

Commission file number: 333-163336

NKSJ Horudingusu Kabushiki Kaisha

(Exact name of registrant as specified in its charter)

NKSJ Holdings, Inc.

(Translation of registrant’s name into English)

Hirohisa Kurumida, +81-3-3349-3000, hirohisa.kurumida@nksj-hd.co.jp, +81-3-3349-6546,

26-1, Nishi-Shinjuku 1-chome, Shinjuku-ku, Tokyo 160-8338, Japan

(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)

Securities registered or to be registered pursuant to Section 12(b) of the Act:

Securities registered or to be registered pursuant to Section 12(g) of the Act:

None

(Title of Class)

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:

Common Stock

(Title of Class)

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report.

On April 1, 2010, the registrant was formed and issued shares of its common stock to the then shareholders of SOMPO JAPAN INSURANCE INC. (“Sompo Japan”) and NIPPONKOA Insurance Company, Limited (“Nipponkoa”) in exchange for the shares of Sompo Japan’s common stock and Nipponkoa’s common stock that they held, at the exchange ratio of one share of the registrant’s common stock for each share of Sompo Japan’s common stock, and 0.9 share of the registrant’s common stock for each share of Nipponkoa’s common stock. As of March 31, 2010, 984,055,299 shares of Sompo Japan’s common stock were outstanding, which were equivalent to 981,055,299 shares of the registrant’s common stock. As of the same date, 752,453,310 shares of Nipponkoa’s common stock were outstanding, which were equivalent to 752,453,310 shares of the registrant’s common stock.

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes  ¨    No  x

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.    Yes  ¨    No  x

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  ¨    No  x

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow.     Item 17  ¨    Item 18  ¨

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x

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NKSJ Holdings, Inc. was formed on April 1, 2010, at which time it issued shares of its common stock to the then shareholders of SOMPO JAPAN INSURANCE INC. and NIPPONKOA Insurance Company, Limited in exchange for the shares of the latter two companies’ common stock that they held (the “Share Exchange”). As a result, NKSJ Holdings, Inc. is now the ultimate parent company of the consolidated group companies of which SOMPO JAPAN INSURANCE INC. and NIPPONKOA Insurance Company, Limited were previously the respective ultimate parent company. Information of the Company as of or for a period ended a date prior to April 1, 2010 that is disclosed in this annual report is information of either (i) SOMPO JAPAN INSURANCE INC. and/or its consolidated group companies, or (ii) NIPPONKOA Insurance Company, Limited and/or its consolidated group companies.

As used in this annual report, references to the “Company” or “NKSJ” are to NKSJ Holdings, Inc. Also, as used in this annual report, references to “we”, “our” and “us” are to the Company and, except as the context otherwise requires, its subsidiaries.

Unless the context otherwise requires, references in this annual report 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 this annual report, “U.S. 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 annual report, “U.S. GAAP” means accounting principles generally accepted in the United States, “IFRS” means the International Financial Standards as issued by the International Accounting Standards Board, and “Japanese GAAP” means accounting principles generally accepted in Japan.

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FORWARD-LOOKING STATEMENTS

This annual report contains forward-looking statements that are based on our current expectations, intentions, assumptions, estimates and projections about our businesses and operations, strategies and plans, about the insurance industry, and about capital markets around the world. Generally, these forward-looking statements can be identified by the use of forward-looking terminology such as “may”, “will”, “expect”, “anticipate”, “estimate”, “plan”, “intend”, “target” or similar words. These statements discuss future expectations, identify strategies, contain projections of results of operations or financial condition, or state other forward-looking information. These forward-looking statements are subject to various risks and uncertainties. Known and unknown risks, uncertainties and other factors could cause the actual results to differ materially from those contained in any forward-looking statement. We cannot promise that the expectations expressed in these forward-looking statements will turn out to be correct. Our actual results could be materially different from and worse than our stated 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 annual report.

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PART I

Not applicable.

Not applicable.

A.     Selected Financial Data.

U.S. GAAP Selected Financial Data of Sompo Japan

The following selected financial data have been derived from Sompo Japan’s consolidated financial statements included in this annual report. These financial statements were prepared in accordance with U.S. GAAP. You should read these data together with the disclosure related to Sompo Japan under Item 5 and Sompo Japan’s consolidated financial statements included in this annual report.

Selected Financial Data Prepared in Accordance with U.S. GAAP

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Notes:

Japanese GAAP Selected Financial Data of Sompo Japan

The following selected financial data have been derived from Sompo Japan’s consolidated financial statements that were prepared in accordance with Japanese GAAP. Such consolidated financial statements were included in Sompo Japan’s annual reports filed with the Japanese authorities pursuant to the Securities and Exchange Law (now the Financial Instruments and Exchange Law) of Japan.

Notes:

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IFRS Selected Financial Data of Nipponkoa

The following selected financial data have been derived from Nipponkoa’s consolidated financial statements included in this annual report. These financial statements were prepared in accordance with IFRS. You should read these data together with the disclosure related to Nipponkoa under Item 5 and Nipponkoa’s consolidated financial statements included in this annual report.

Selected Financial Data Prepared in Accordance with IFRS

Notes:

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Japanese GAAP Selected Financial Data of Nipponkoa

The following selected financial data have been derived from Nipponkoa’s consolidated financial statements that were prepared in accordance with Japanese GAAP. Such consolidated financial statements were included in Nipponkoa’s annual reports filed with the Japanese authorities pursuant to the Securities and Exchange Law (now the Financial Instruments and Exchange Law) of Japan.

Notes:

Exchange Rate Data

Fluctuations in exchange rates between the Japanese yen and U.S. dollar and other currencies will affect the U.S. dollar and other currency equivalent of the yen price of our shares and the U.S. dollar amounts received on conversion of cash dividends. We have translated some Japanese yen amounts presented in this annual report into U.S. dollars solely for your convenience. Unless otherwise noted, the rate used for the translations was ¥93.40 per $1.00. This was the approximate exchange rate in Japan on March 31, 2010. The translation should not be construed as a representation that the yen amounts have been, could have been, or could in the future be converted into U.S. dollars at the above or any other rate.

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The following table presents the noon buying rates for Japanese yen per $1.00 in New York City for cable transfers in foreign currencies as certified for customs purposes by the Federal Reserve Bank of New York for and as of the end of each period indicated.

As of September 24, 2010, the noon buying rate was ¥84.24 per $1.00.

B.     Capitalization and Indebtedness.

Not applicable.

C.     Reasons for the Offer and Use of Proceeds.

Not applicable.

D.     Risk Factors.

You should carefully consider the risks described below before making an investment decision. If any of the risks described below actually occurs, our business, financial condition, results of operations or cash flow could be adversely affected. In that event, the trading prices of our shares could decline, and you may lose all or part of your investment. In addition to the risks listed below, risks not currently known to us or that we now deem immaterial may also harm us and affect your investment.

Risks Relating to the Business Integration

We may fail to realize the anticipated benefits of the business integration due to the challenges of achieving synergy effects and cost savings

In order for the integration efforts associated therewith to be successful, we must realize the anticipated synergy benefits and cost savings from consolidating certain operations of Sompo Japan and Nipponkoa. However, we may not be able to accomplish this business integration process smoothly or successfully. The business integration of certain operations takes time and requires 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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We face significant challenges in bringing closer Sompo Japan’s and Nipponkoa’s 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 business integration may not be realized fully or at all or may take longer to realize than expected.

Our major nonlife insurance subsidiaries are rebuilding their IT systems. In addition to unifying their systems, they are completely upgrading the systems’ basic infrastructure and construction. Such IT system reforms entail a risk of major system failures due to system development or integration in addition to the risk of ordinary failures due to system crashes, malfunctions, or misuse. In light of the risk of such system failures having a material impact on our operations, we have formulated basic policies regarding IT system strategy and risk controls and is endeavoring to implement effective IT system risk controls. However, our earnings and/or financial condition could be adversely affected in the event of a major system failure.

As part of our overall integration effort, we plan to merge our life insurance subsidiaries, Sompo Japan Himawari Life Insurance Co., Ltd., and Nipponkoa Life Insurance Company, Limited, subject to regulatory approval. Both companies are preparing to effectuate the merger by a scheduled effective date of October 1, 2011. Conceivable merger-related risks include those listed below. If any such risks manifest, our earnings and/or financial condition could be adversely affected.

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.

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 caused by an economic downturn or other factors may adversely affect our financial condition and results of operations.

While we currently expect the Japanese economy to follow a gradual recovery path as the improving global economy continues to provide support for exports and production activity, our results of operations and financial condition could be materially adversely affected in the event of a protracted economic downturn.

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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 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, 2010, 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 ¥199.7 billion and ¥121.9 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 and results of operations.

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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, 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.

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 prove to be materially greater than our current loss reserve estimates.

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Because of the uncertainties set forth above, additional liabilities may arise for amounts in excess of the current reserves. 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 contracts were ¥241 billion and ¥296 billion as of March 31, 2010 and 2009, respectively and the amounts of current reserves for outstanding losses and claims related to these financial guarantees were ¥1.2 billion and ¥1.1 billion as of March 31, 2010 and 2009, 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. In addition, Sompo Japan suffered a loss, on a U.S. GAAP basis, of approximately ¥59.9 billion in the year ended March 31, 2009, 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, while Sompo Japan booked profit amounting to ¥26.1 billion on derivative instruments mainly due to improvement of the global financial markets and tightening of spread in fiscal year ended March 31, 2010. The carrying amounts of liabilities related to financial guarantees as of March 31, 2010 and 2009 were ¥112 billion and ¥195 billion, respectively. While Sompo Japan no longer underwrites new financial guarantees and liabilities are established based on known factors at year end, 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, 2010 and 2009 on derivative instruments in connection with financial guarantees were ¥342 billion and ¥582 billion, respectively.

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:

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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.

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 “Information on the Company—Business of Sompo Japan—Investments” and “Information on the Company—Business of Nipponkoa—Investments” contained in Item 4.B of this annual report. 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, 2010, Japanese equities available-for-sale represented 22.5% (¥1,152.0 billion) of total investments other than investments in affiliates for Sompo Japan on a U.S. GAAP and 27.1% (¥711.4 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.

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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.

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.

Contingencies may affect our financial condition and results of operations

We endeavor to ensure operational continuity through such means as formulating business continuity plans for contingencies such as a major Tokyo earthquake and H1N1 influenza pandemic. Nonetheless, depending on the severity of such a crisis, our earnings and/or financial condition could be adversely affected by disruption of normal business 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.

Negative rumors may adversely affect our financial condition and results of operations

If negative rumors about our group or insurance industry are propagated by the mass media, Internet message boards, or other such means, we could suffer a loss of public trust as a result of such rumors, whether

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accurate or not, influencing the perceptions of customers and/or investors. In such an event, we would endeavor to minimize the impact by responding appropriately to the rumors in a timely manner, but if a negative rumor gains widespread notoriety, our earnings and/or financial condition could be adversely affected.

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. On October 23, 2009, Nipponkoa received another administrative order from the FSA due to undue delays in claim payments caused by inadequate claim handling processes.

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, Nipponkoa on April 13, 2007 and on November 24, 2009. 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.

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.

Risks of Owning the Shares

Since we are 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

NKSJ, as a holding company, depends on dividends, distributions and other payments from its subsidiaries to fund dividend payments and to fund all payments on its obligations. Many of NKSJ’s operating subsidiaries, including Sompo Japan and Nipponkoa, are subject to certain dividend restrictions. Restrictions or any regulatory action related thereto could impede access to funds that NKSJ will need to make payments on its obligations or dividend payments. This will be so even though the amount of surplus at NKSJ’s level that may be used to pay NKSJ’s dividends will be larger than that of Sompo Japan and Nipponkoa combined. To the extent NKSJ’s

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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 are not able to declare or pay dividends unless we meet specified financial criteria on a “parent-only” basis. Generally, we are 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 Item 10.B “Memorandum and Articles of Association—Dividends—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.

Investors holding less than a unit of shares have limited rights as shareholders

Pursuant to the Corporation Law relating to joint stock corporations and other related legislation, NKSJ’s articles of incorporation 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, NKSJ’s shares of common stock constituting less than one unit are not permitted to be sold on the stock exchanges.

The foregoing disadvantages of holders of NKSJ’s shares constituting less than one unit are mitigated by two mechanisms. First, a holder of shares of NKSJ’s common stock constituting less than one unit may at any time request NKSJ to purchase those shares. Alternatively, a holder of such shares may request NKSJ to sell to such holder the number of shares necessary to raise its share ownership to a whole unit, provided that NKSJ is obliged to comply with such request only when NKSJ 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 Item 10.B “Memorandum and Articles of Association—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, NKSJ currently intends that it will terminate its duty to file reports under the Exchange Act as soon as the conditions for termination are met, which is expected to occur on or shortly after April 1, 2011. If NKSJ terminates its duty to file reports under the Exchange Act, thereafter its shareholders will need to obtain NKSJ’s 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.

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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, usually 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.

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

NKSJ is 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.

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UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

The following unaudited pro forma condensed consolidated financial information has been prepared on an IFRS basis and gives effect to the establishment of NKSJ, under which Sompo Japan and Nipponkoa became 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 annual report (see Note 3 “Unaudited reverse reconciliation information of Sompo Japan between U.S. GAAP and IFRS”) and the historical IFRS consolidated financial information of Nipponkoa included in this annual report, 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 NKSJ, 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 annual report, and (2) the historical IFRS consolidated financial statements (and related notes) and the selected consolidated financial data of Nipponkoa included elsewhere in this annual report.

The unaudited pro forma condensed consolidated balance sheet as of March 31, 2010 gives effect to the Share Exchange as if it had occurred on March 31, 2010. 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, 2010.

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 NKSJ.

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 ¥348,577 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 ¥3,000 million on a pre-tax basis (¥1,917 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 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, 2010

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, 2010

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

The following describes the determination of purchase price and the purchase price allocation.

a. Purchase price

The following table shows the calculation of the purchase price.