Consolidated Financial Summary (Japanese GAAP)
for the Three Months Ended June 30, 2014
August 8, 2014
Sony Financial Holdings Inc.
(URL: http://www.sonyfh.co.jp/web/index_en.html)
Stock exchange listing: Tokyo Stock Exchange (code number: 8729)
Representative:
Katsumi Ihara, President and Representative Director
Inquiries:
Masaaki Konoo, General Manager—Corporate Communications & Investor Relations Dept.
(Fractional amounts of less than ¥1 million are discarded.)Company name:

1. Consolidated financial results for the three months ended June 30, 2014
(1) Operating results
Ordinary Revenues
Ordinary Profit

Net Income

Millions of yen% change

Millions of yen% change

Millions of yen% change

303,250(3.1)

21,98029.1

14,56250.9

313,008

12.9

17,025

10.4

9,647

0.4

For the three months ended
June 30, 2014
For the three months ended
June 30, 2013
Note: Comprehensive Income:For the three months ended June 30, 2014: ¥22,629 million:
For the three months ended June 30, 2013: ¥(13,343) million:

Net Income per
Share(Fully Diluted)

Net Income per
Share
Yen

For the three months ended
June 30, 2014
For the three months ended
June 30, 2013

－％
－％

Yen

33.48

—

22.18

—

(2) Financial conditions
Total Assets

Total Net Assets

Net Asset Ratio

Millions of yen

Millions of yen%

As of June 30, 2014

8,933,605

482,595

5.4

As of March 31, 2014

8,841,382

467,050

5.3

Note: Shareholders' equity:

As of June 30, 2014 : ¥481,307 million
As of March 31, 2014: ¥465,775 million

2. Dividends
Dividend per Share

Record date
For the year ended
March 31, 2014
For the year ending
March 31, 2015
For the year ending
March 31, 2015
(forecast)

1st quarter2nd quarter3rd quarter

Year-end

Annual Total

Yen

Yen

Yen

Yen

Yen

—

0.00

—

30.00

30.00

0.00

—

40.00

40.00

—

Note: Changes in dividend forecast since the most recent public announcement: None

3. Forecast of consolidated financial results for the year ending March 31, 2015
(Percentage figures represent changes from the results of the previous fiscal year.)Ordinary Revenues

For the year ending
March 31, 2015

Ordinary Profit

Net Income per
Share

Net Income

Millions of yen% change

Millions of yen% change

Millions of yen% change

1,191,000(9.8)

77,0001.1

49,00021.0

Yen

112.64

4. Notes(1) Changes in scope of consolidation during the period under review (changes in specified subsidiaries accompanying changes inscope of consolidation): None
(2) Application of special accounting methods for preparing quarterly consolidated financial statements: None
(3) Changes in accounting policies, accounting estimates and restatements of the consolidated financial statements(a) Changes in accounting policies resulting from the revision of the accounting standards and other regulations: Yes(b) Changes in accounting policies due to other reasons: None(c) Changes in accounting estimates: None(d) Restatements of the consolidated financial statements: None
Note: For details, please refer to the section entitled “1.Changes in accounting policies, accounting estimates and restatements of the consolidated
financial statements” under “Ⅰ. Notes Regarding Summary Information” on page 2 of the attachment.

(4) Number of shares outstanding (common stock)(a) Number of shares outstanding (including treasury shares)
As of June 30, 2014:
As of March 31, 2014:(b) Number of treasury shares
As of June 30, 2014:
As of March 31, 2014:(c) Weighted-average number of shares
For the three months ended June 30, 2014:
For the three months ended June 30, 2013:

435,000,000 shares
435,000,000 shares
55 shares
1 share434,999,945 shares
434,999,999 shares

Status of quarterly review procedures
Quarterly review procedures are completed by PricewaterhouseCoopers Aarata in accordance with Article 193-2-1 of the
Financial Instruments and Exchange Law of Japan. However, quarterly consolidated financial statements in this document are notsubject to such quarterly review procedures.

Content of Supplemental Materials
I.

Notes Regarding Summary Information
1.
2.

II.

III.

Changes in accounting policies, accounting estimates and restatements of the consolidated
financial statements・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・

2

Additional Information・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・

2

Consolidated Financial Statements
1.

Consolidated Balance Sheets・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・

2.

Consolidated Statements of Income and Consolidated Statements of Comprehensive Income

3(Consolidated Statements of Income) ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・

5(Consolidated Statements of Comprehensive Income) ・・・・・・・・・・・・・・・・・・・・

8

3.

Segment Information・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・

9

4.

Subsequent Events・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ 10

Attachment
Consolidated Financial Results for the Three Months Ended June 30, 2014 and Sony Life’s
Market Consistent Embedded Value as of June 30, 2014・・・・・・・・・・・・・・・・・・・・・・・ 12* The Conference Call for explaining the Sony Financial Group financial results will be held at 15:30 (Tokyo),
August 8, 2014.
We are sorry for any inconvenience that our Conference Call will be held only in Japanese.
We will upload the Presentation Materials with speech text on August 8, 2014 after 15:00, and its Q&A
summary at a later date on Earnning Releases and Presentation Materials page on our website:
http://www.sonyfh.co.jp/en/financial_info/results/* On August 8, 2014, SFH’s significant subsidiaries: Sony Life Insurance Co., Ltd. (Sony Life), Sony
Assurance Inc. (Sony Assurance) and Sony Bank Inc. (Sony Bank) will announce their financial results forthe three months ended June 30, 2014. SFH prepared an English-language summary of those Japanese
announcements made by the above subsidiaries, solely for convenience of non-Japanese readers.

1

Ⅰ. Notes Regarding Summary Information
1. Changes in accounting policies, accounting estimates and restatements of the consolidated financial statements
Changes in accounting policies(Application of Accounting Standards for Retirement Benefits)
The Sony Financial Group has applied Clause 35 of the “Accounting Standards for Retirement Benefits” (ASBJ Statement No.
26, May 17, 2012) and Clause 67 of the “Guidance on Accounting Standards for Retirement Benefits” (ASBJ Guidance No.
25, May 17, 2012) from the first quarter of the fiscal year under review. Accordingly, the Company has reviewed its
calculation method of retirement benefit obligations and service costs, changed the method of attributing expected benefit toperiods from the point basis and straight-line basis to the benefit formula basis, and changed the method of determination of
the discount rate. Primarily, this change was from a discount rate based on a number of years approximately equal to theaverage remaining service period to a weighted average discount rate for expected retirement benefit payment periods and the
expected payment amount for each expected payment period.
Following Clause 37 of the “Accounting Standards for Retirement Benefits,” which stipulates transitional treatment of the
new standard, the effect of the change in the calculation method of retirement benefit obligations and service costs is adjusted
in retained earnings at the beginning of the three months ended June 30, 2014.
As a result, at the beginning of the first three months of the fiscal year under review, net defined benefit liability decreased¥8,341 million, deferred tax assets fell ¥2,651 million, net defined benefit asset increased ¥274 million, and retained earnings
grew ¥5,965 million. Ordinary profit and income before income taxes for the three months ended June 30, 2014, declined ¥57
million.
2. Additional Information(Changes in presentation method)
In the past, the Sony Financial Group included amounts of interest on interest rate swaps and the like, which are hedging
instrument gains (losses) resulting from interest rate risk hedging on available-for-sale securities, within “Other operating
income” and “Other operating expenses” for the Banking Business. From the first quarter of the fiscal year under review, theGroup has instead included these amounts in “Interest income” and “Interest expenses.”
The Sony Financial Group made this change to clarify hedging effectiveness by correlating the gains (losses) of hedged
assets with the losses (gains) of the hedging instrument. The Group made this change because of the growing importance ofhedge transactions following an increase in the bond investment balance that is hedged.
As a result, ¥318 million presented as “Other operating expenses” in the consolidated statements of income for the threemonths of the previous fiscal year has been restated to ¥198 million for “Other operating income” and ¥516 million for“Interest expenses”.

2

Ⅱ. Consolidated Financial Statements
1. Consolidated Balance Sheets(Millions of yen)
As of March 31, 2014

As of June 30, 2014

Cash and due from banks¥204,546¥129,695

Call loans and bills bought

40,62846,619

Monetary trusts

325,831

327,157

Securities

6,822,151

6,959,437

Loans

1,211,638

1,226,939

Tangible fixed assets

71,56571,257

Intangible fixed assets

36,77435,808AssetsGoodwill

179

159

Others36,59535,649Due from reinsurers

158

105

Foreign exchanges

7,752

7,528

Other assets

100,503

115,405

Net defined benefit asset

1,730

2,066

Deferred tax assets

19,872

13,247

Reserve for possible loan losses(1,769)(1,663)¥8,841,382¥8,933,605

Total Assets3

(Millions of yen)
As of March 31, 2014

As of June 30, 2014

¥6,263,315¥6,409,287

57,40058,4806,201,676

6,346,551

4,237

4,256

Due to agencies

2,169

1,720

Due to reinsurers

650

512

1,889,970

1,829,697

Call money and bills sold

6,000

6,000

Borrowed money

20,00020,000Foreign exchanges

40

119

Bonds payable

20,00020,000

Other liabilities

95,72596,505

Liabilities
Policy reserves and others
Reserve for outstanding claims
Policy reserves
Reserve for policyholders' dividends

Deposits

Reserve for employees' bonuses

3,204

1,511

Net defined benefit liability

30,272

22,305250

269

41,65741,965Reserve for directors' retirement benefits
Special reserves

41,65741,965

Deferred tax liabilities

Reserve for price fluctuations

539

577

Deferred tax liabilities on land revaluation

536

536

8,374,332

8,451,010

Total Liabilities
Net Assets
Common stock

19,90019,900Capital surplus

195,277

195,277

Retained earnings

164,790

172,267(0)(0)

Treasury stock

379,967

387,444

Net unrealized gains(losses) on other securities, net of taxes

Total shareholders' equity

92,002

99,810Net deferred gains(losses) on hedging instruments, net of taxes(2,388)(2,371)

Land revaluation, net of taxes(1,513)(1,513)Foreign currency translation adjustments

00Remeasurements of defined benefit plans, net of taxes(2,292)(2,062)

Total accumulated other comprehensive income

85,807

93,862

Minority interests

1,275

1,288

Total Net Assets

467,050

482,595¥8,841,382¥8,933,605

Total Liabilities and Net Assets

42. Consolidated Statements of Income and Consolidated Statements of Comprehensive Income(Consolidated Statements of Income)(Millions of yen)
For the three months ended
June 30, 2013

For the three months ended
June 30, 2014

Ordinary Revenues¥313,008¥303,250

Ordinary Revenues from the Life Insurance Business

280,351

269,855

Income from insurance premiums

221,133

220,371

Investment income

55,75748,039(Interest income and dividends)

28,80332,444(Income from monetary trusts, net)

1,322

1,322

1

195

(Gains on sale of securities)(Gains on derivatives, net)
(Gains on separate accounts, net)
Other ordinary income
Ordinary Revenues from the Non-life Insurance Business
Underwriting income(Net premiums written)

11925,60814,065

3,460

1,444

23,091

24,11622,80323,80322,741

23,434(Interest and dividends on deposits of premiums)

8

11(Reversal of reserve for outstanding claims)

52

357

283

303

Investment income(Interest income and dividends)

292

310

(Gains on sale of securities)－

3(Transfer to interest and dividends on deposits of premiums)

(8)

(11)

4

9

9,565

9,278

Other ordinary income
Ordinary Revenues from the Banking Business
Interest income

6,589

6,535

(Interest income on loans)

3,514

3,477

(Interest income and dividends on securities)

3,054

3,029

Fees and commissions

1,201

1,198

Other operating income

1,735

1,394

778

565

39

150

(Gains on foreign exchange transactions, net)
Other ordinary income(Continued)

5

(Millions of yen)
For the three months ended
June 30, 2013

For the three months ended
June 30, 2014

Ordinary Expenses¥295,983¥281,269

Ordinary Expenses from the Life Insurance Business

267,405

252,940

81,77874,46018,767

18,123

Insurance claims and other payments(Insurance claims)(Annuity payments)

2,371

2,524

(Insurance benefits)

10,076

10,400(Surrender payments)

49,18442,288929

655

150,394

143,462－

1,437

150,391

142,02430Investment expenses

1,872

1,900

(Interest expenses)

96Operating expenses

27,94627,474

Other ordinary expenses

5,414

5,643

21,585

21,242

Underwriting expenses

16,623

15,940(Net losses paid)

11,745

11,170(Loss adjustment expenses)

1,490

1,656

(Net commission and brokerage fees)

311

262

(Provision for underwriting reserves)

3,075

2,850

1

0

－

0

4,958

5,300

1

1

(Other payments)
Provision for policy reserves and others
Provision for reserve for outstanding claims
Provision for policy reserves
Interest portion of reserve for policyholders' dividends

Ordinary Expenses from the Non-life Insurance Business

Investment expenses(Losses on sale of securities)
Operating, general and administrative expenses
Other ordinary expenses(Continued)

6

(Millions of yen)
For the three months ended
June 30, 2013
Ordinary Expenses from the Banking Business
Interest expenses(Interest expenses on deposits)
Fees and commissions
Other operating expenses

For the three months ended
June 30, 2014

¥6,991¥7,086

2,071

2,367

1,258

1,225

406

451

305

27

4,180

4,229

28

10

Ordinary Profit

17,02521,980Extraordinary Losses

1,906

331

Losses on disposal of fixed assets

14

23

Impairment losses

－

0

1,891

308

Provision for reserve for price fluctuations

1,891

308

Provision for Reserve for Policyholders' Dividends

138

146

Income Before Income Taxes

14,981

21,502

Income Taxes

General and administrative expenses
Other ordinary expenses

Provision for special reserves

5,339

6,927

- Current

2,707

6,339

- Deferred

2,631

588

9,641

14,574(6)

12¥9,647¥14,562

Income Before Minority Interests
Minority interests in income(losses)
Net Income7

(Consolidated Statements of Comprehensive Income)(Millions of yen)
For the three months ended
June 30, 2013
Income Before Minority Interests

For the three months ended
June 30, 2014

¥9,641¥14,574(23,519)

7,807

Other comprehensive income
Net unrealized gains(losses) on other securities, net of taxes
Net deferred gains(losses) on hedging instruments, net of taxes

535

17

Foreign currency translation adjustments－(0)Remeasurements of defined benefit plans, net of taxes－

229

Share of other comprehensive income of affiliates accounted forusing equity method

00(22,984)

8,054¥(13,343)¥22,629

Comprehensive income attributable to parent company(13,337)

22,617

Comprehensive income attributable to minority interests

(6)

12

Total other comprehensive income
Comprehensive income(Details)

8

3． Segment Information(1) Segment Information by reporting segment
For the three months ended June 30, 2013
Life insurance
business
Ordinary revenues
External customers
Intersegment
Total
Segment profit

Millions of yen
Non-life
Banking
insurancebusinessbusiness¥280,351
594
280,945\13,370¥23,091
0
23,091\1,342¥9,56549
9,615\2,252

Total¥313,008
644
313,652\16,965(Note) These figures are presented following restatement in accordance with the changes in financial presentation for the first quarter ofthe fiscal year under review, described in “2. Additional Information” to the “I. Notes Regarding Summary Information.”

For the three months ended June 30, 2014
Life insurance
business
Ordinary revenues
External customers
Intersegment
Total
Segment profit

Millions of yen
Non-life
Banking
insurancebusinessbusiness¥269,855
713
270,568¥17,481¥24,116
0
24,116¥2,711¥9,27845
9,324¥1,739Total¥303,250758
304,009¥21,931(2) Reconciliations of the totals of reportable segments' profit to quarterly consolidated statement of income
Millions of yen
For the three months ended
For the three months ended
June 30, 2013
June 30, 2014¥16,965¥21,9311
1
57
47

Totals of reporting segments
Adjustments for intersegment transactions
Amount not allocated to reporting segments
Ordinary profit in quarterly consolidated
statement of income¥17,025(3)Information on impairment loss on fixed assets and goodwill by reporting segment
None9¥21,980

4． Subsequent Events(Acquisition of fixed assets)
At a Board of Directors meeting on July 24, 2014, the life insurance subsidiary (“Sony Life”) resolved to acquire thefixed assets described below and entered into a real estate sale/purchase agreement on July 28, 2014. The transaction
price was determined after giving ample consideration to evaluations of its appropriateness upon reviewing valuations
from multiple third-party real estate assessors.
(1) Reason for the acquisition
Acquired as one of the company’s asset investments(2) Details of the acquired asset
Acquisition
Site Area
Current Status
Asset Details and Location
Price
Asset details: Sony Corporation headquarters site
Location: 7-1, Konan 1-chome, Minato-ku, Tokyo¥52.8 billion

18,165.30 m2

Leased to Sony Life
Location of the Sony Citybuilding owned by Sony Life

(3) Name of current ownerSony Corporation (“Sony”)(4) Transaction schedule
July 24, 2014
Sony Life Board of Directors resolution
July 28, 2014
Conclusion of real estate sale/purchase agreement
September 2014 Transfer of property and change of ownership (expected)
In accordance with information stated above, Sony Life and Sony will conclude a site rental
agreement for the property (expected).
The current leasing agreement with Sony for the Sony City building owned by Sony Life is toremain in place.
(5) Impact on the fiscal year under review
Increase in fixed assets: ¥52.8 billion
Decrease in site leasing payable: ¥1.2 billion
Acquisition costs: ¥1.1 billion

10

SFH’s consolidated results* are prepared in accordance with Japanese GAAP. As such, these figures differ insignificant respects from the financial information reported by Sony Corporation, the SFH’s parent company, which
prepares its financial statements in accordance with U.S. GAAP.
* SFH’s scope of consolidation includes Sony Financial Holdings Inc., Sony Life Insurance Co. Ltd., Sony Assurance Inc., Sony
Bank Inc., SmartLink Network, Inc. and SmartLink Network Hong Kong Limited.*1 It also includes AEGON Sony Life InsuranceCo., Ltd. and SA Reinsurance Ltd., as affiliated companies accounted for under the equity method.
*1
SmartLink Network Hong Kong Limited was not included in the scope of consolidation for the three months ended June 30, 2013.

Statements made in this press release with respect to Sony Financial Holdings’ current plans, estimates,
strategies and beliefs and other statements that are not historical facts are forward-looking statements about
the future performance of Sony Financial Holdings. Forward-looking statements include, but are not limited to,those statements using words such as “believe,” “expect,” “plans,” “strategy,” “prospects,” “forecast,”“estimate,” “project,” “anticipate,” “aim,” “intend,” “seek,” “may,” “might,” “could” or “should,” andwords of similar meaning in connection with a discussion of future operations, financial performance, events orconditions. From time to time, oral or written forward-looking statements may also be included in othermaterials released to the public. These statements are based on management’s assumptions, judgments andbeliefs in light of the information currently available to it. Sony Financial Holdings cautions investors that a
number of important risks and uncertainties could cause actual results to differ materially from those discussed
in the forward-looking statements, and therefore investors should not place undue reliance on them. Investors
also should not rely on any obligation of Sony Financial Holdings to update or revise any forward-looking
statements, whether as a result of new information, future events or otherwise. Sony Financial Holdings
disclaims any such obligation. The information contained in this statements does not constitute or form part ofany offer for sale or subscription of or solicitation or invitation of any offer to buy or subscribe for any
securities, nor shall it or any part of it from the basis of or be relied on in connection with any contract orcommitment whatsoever.

For inquiries:
Masaaki Konoo or Hiroko Hanakura
Corporate Communications & Investor Relations Dept.
Sony Financial Holdings Inc.
Telephone: +81-3-5785-1074
E-mail: press@sonyfh.co.jp
Website of Sony Financial Holdings Inc.
http://www.sonyfh.co.jp/index_en.html

11

III. Attachment
Content of Presentation Material

Consolidated Financial Results for the Three Months Ended June 30, 2014 andSony Life’s Market Consistent Embedded Value as of June 30, 2014
・Consolidated Operating Results for the Three Months Ended June 30, 2014・・・・・・・ 3
・Consolidated Financial Forecast for the Year Ending March 31, 2015・・・・・・・・・・ 29
・Sony Life’s MCEV and Risk Amount Based on Economic Value as of June 30, 2014・・・ 31
・Appendix・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ 34

12Presentation Material

Consolidated Financial Results
for the Three Months Ended June 30
30, 2014
andS
SonyLife’sLif ’Market Consistent Embedded Valueas off JuneJ3030, 2014

Sony Financial Holdings Inc.
A
Augustt8
8, 2014
Sony Financial Holdings Inc. All Rights Reserved

Content
 Consolidated Operating Results for the Three Months Ended June 30, 2014

P.3

 Consolidated Financial Forecast for the Year Ending March 31, 2015

P.29

 Sony Life’s MCEV and Risk Amount Based on Economic Valueas of June 30, 2014

P.31

 Appendix

P.34

Disclaimers:
This presentation material contains statements concerning the current plans, expectations, strategies and beliefs of the Sony Financial Group. Anystatements contained herein that pertain to future operating performance and that are not historic facts are forward-looking statements . Forwardlooking statements may include —but are not limited to—words such as “believe,” “anticipate,” “plan,” “strategy,” “expect,” “forecast,” “predict,” and“possibility” that describe future operating activities, business performance, events or conditions. Forward-looking statements, whether spoken or
written, are based on judgments made by the management of the Sony Financial Group, based on information that is currently available to it. As
such, these forward-looking statements are subject to various risks and uncertainties, and actual business results may vary substantially from theforecasts expressed or implied in forward-looking statements. Consequently, investors are cautioned not to place undue reliance on forward-looking
statements. The Sony Financial Group disclaims any obligation to revise forward-looking statements in light of new information, future events or otherfi difindings.
Th
The iinformationfti containedt i d iin thi
this presentationt ti ddoes nott constitutetit t or fform partt off any offer
ff ffor salel or subscriptionb i ti off or solicitation
li it ti or
invitation of any offer to buy or subscribe for any securities, nor shall it or any part of it from the basis of or be relied on in connection with any
contract or commitment whatsoever.

Sony Financial Holdings Inc. All Rights Reserved2Consolidated Operating Results for
the Three Months Ended June 30,, 2014

Sony Financial Holdings Inc. All Rights Reserved

3

Highlights of Consolidated Operating Performancefor the Three Months Ended June 30, 2014 (1)Consolidated ordinary revenues(Billions of yen)

Consolidated ordinary profit

313.0 (*)

(3.1%)+29.1%

303.2

FY13.1Q(Billions of yen)

ChangeOrdinary revenues

280.9

270.5

(10.3)(3.7%)

Ordinary profit

13.3

17.4

+4.1

+30.7%

Non-life
Insurancebusiness

Ordinary revenues

23.0

24.1

+1.0

+4.4%

Ordinary profit

1.3

2.7

+1.3

+102.0%Bankingbusiness

Ordinary revenues

9.6

9.3

(0.2)

(3.0%)

Ordinary profit

2.2

1.7

(0.5)

(22.8%)

Intersegment
adjustments*
adjustments

(0.6)

(0.7)

(0.1)

-

O di
Ordinary
profitfit

Consolidated

FY14.1Q

FY14.1Q

Life
I
Insurancebusiness

21.9

17 0
17.0

FY13.1Q

Ordinary revenues

00
0.0

00
0.0

(0 0)
(0.0)

(18 1%)(18.1%)

Ordinary revenues

313.0

303.2

(9.7)

(3.1%)

Ordinary profit

17.0

21.9

+4.9

+29.1%Net income

9.6

14.5

+4.9
4.9

+50.9%
50.9%(Billions of yen)

14.3.3114.6.30

Change from
14.3.31

Total assets

8,841.3,

8,933.6
,

+92.2

+1.0%

Consolidated(*) Banking business revised its method of recording ordinary
Net assets
467.0
482.5
+15.5
+3.3%
revenues and ordinary expenses on hedge transactions for
FY14.1Q. Ordinary revenues for FY13.1Q have been
retroactively adjusted to reflect the change. Consequently,*Ordinary profit in “Intersegment adjustments” is mainly from SFH.
consolidated ordinary revenues for FY13.1Q have been*Comprehensive income (loss): FY13.1Q: (¥13.3 billion), FY14.1Q: ¥22.6 billion
revised from ¥312.8 billion to ¥313.0 billion. As adjustmentsjtoordinary revenues were accompanied by adjustments in thesame amount to ordinary expenses, ordinary profit and net
income were unaffected.
Line item amounts are truncated below ¥100 million; percentage change figures are rounded.

Sony Financial Holdings Inc. All Rights Reserved

4Highlights of Consolidated Operating Performancefor the Three Months Ended June 30, 2014 (2) Life Insurance Business: Ordinary revenues decreased compared with the same period of the previous

fiscal year. Behind this drop was the fact that income from insurance premiums remained at the samelevel as in the same period of the preceding year, because sales of interest rate-sensitive whole life
insurance rose due to temporarily strong demand led by the revision of insurance premium rates. Also
contributing to the decline in ordinary revenues was the drop in investment income due to lower gains on
separate accounts, net compared with the same period of the previous fiscal year, which benefited from amarket recovery. Ordinary profit increased year on year, due mainly to the absence of the negative impact
from the revision of the discount rate used for calculating policy reserves on the above-mentioned
above mentioned interest
rate-sensitive whole life insurance that was present in the same period of the preceding fiscal year.
 Non-life Insurance Business: Ordinary revenues expanded year on year, owing to an increase in net

premiums written primarily for mainstay automobile insurance. Ordinary profit grew year on year due to a
decline in the loss ratio mainly led by a lower car accident ratio
ratio, as well as the rise in ordinary revenues
revenues.
 Banking Business: Ordinary revenues and ordinary profit decreased year on year, due to lower gains on

foreign exchange transactions stemming from passive foreign currency trading by customers comparedwith the same period of the previous fiscal year when foreign currency exchange rates fluctuated wildly.
 Consolidated ordinary revenues decreased 3.1% compared with the same period of the previous fiscal

year, to ¥303.2 billion. By business segment, ordinary revenues from the life insurance and the banking
businesses decreased, whereas ordinary revenues from the non-life insurance business increased.
Consolidated ordinaryy profitpincreased 29.1% yyear on yyear, to ¥21.9 billion. By
y business segment,gordinaryyprofit from the life insurance and the non-life insurance businesses increased, whereas ordinary profit fromthe banking business decreased. Consolidated net income was up 50.9% year on year, to ¥14.5 billion,
reflecting the rise in ordinary profit, and the change of the calculation policy of the reserve for pricefluctuations in the life insurance business. The change
g was to accumulate the reserve up
p to requiredqlevels from FY14 while it had accumulated the reserve in excess of the required levels until FY13.
Line item amounts are truncated below ¥100 million; percentage change figures are rounded.

Sony Financial Holdings Inc. All Rights Reserved

5Highlights of Operating Performance:
Sony Life (Non-consolidated)
Ordinary revenues

Ordinary profit

281.1(Billions of yen)

270.5

Ordinary revenues
Income from insurance premiums(3.8%)

Investment income

17.6

FY13.1Q+24.6%

FY14.1Q(Billions of yen)

◆ Ordinary profit decreased while ordinary profit increased
year on year.
◆ Income from insurance premiums remained at the same level,owing to the absence of positive impact from the temporarilystrong sale of interest rate
rate-sensitive
sensitive whole life insurance led by
the revision of insurance premium rates despite steady growth inpolicy amount in force.
◆ Investment income decreased due to lower gains on separate
accounts, net compared with the same period of the previous
fiscal year, which benefited from a market recovery.
◆ Ordinary
y profitpincreased yyear on yyear, due mainly
y to the absenceof the negative impact from the revision of the discount rate used
for calculating policy reserves on the above-mentioned interest
rate-sensitive whole life insurance that was present in the same
period of the preceding fiscal year.
◆ Net income was up year on year reflecting the rise in ordinary
profit, and the change of the calculation policy of the reserve for
price
i fl
fluctuations.
iTh
The changeh
was to accumulateltheh reserve up
to required levels from FY14 while it had accumulated the reservein excess of the required levels until FY13.

FY14.1Q

Change

281.1

270.5

(10.6)(3.8%)

221.3

220.7

(0.6)

(0.3%)

55 8
55.8

48 1
48.1

(7 7)
(7.7)

(13 8%)(13.8%)

Interest income and dividends

28.9

32.5

+3.6

+12.6%

Income from monetary trusts, net

1.3

1.3

(0.0)

(0.0%)

Gains on sale of securities

0.0

0.1

+0.1

-

Gains on separate accounts, net

25.6

14.0

(11.5)(45.1%)

266.9

252.8

(14.1)(5.3%)

Insurance claims and other payments

81.7

74.4

(7.3)

(8.9%)

Provision for policy reserves and others(4.6%)

Ordinary expenses

14.1

FY13.1Q

150.3

143.4

(6.9)

Investment expenses

1.9

1.9

+0.0

+0.6%

Operating expenses

28.0

27.5

(0.4)

(1.7%)

Ordinary profit

14.1

17.6

+3.4

+24.6%Net income

8.0

11.7

+3.7

+46.2%(Billions of yen)

14.3.3114.6.30

Change from
14.3.31

Securities

5,954.7

6,081.0+126.3+2.1%

Policy reserves

6,123.6

6,265.6+142.0+2.3%

Total net assets

369.2

381.8

+12.5

+3.4%

83.4

91.5

+8.1

+9.7%

6,624.9

6,773.9+149.0

+2.2%

640.5

666.9

+26.3

+4.1%

Net unrealized gains on other securities

Total assets
Separate account assets

Line item amounts are truncated below ¥100 million; percentage change figures are rounded.

Sony Financial Holdings Inc. All Rights Reserved

6Overview of Operating Performance:
Sony Life (Non-consolidated)(Billions of yen)

FY13.1Q

FY14.1Q

1,033.3

1,135.8+9.9%

Lapse and surrender amount

456.4

449.4

(1.5%)

Lapse and surrender rate

1.21%

1.15%

(0.06pt)

Policy amount in force

38,160.2

39,559.7

+3.7%

16.8

18.9

+12.0%

New policy amount

Annualized premiums from new policies<Reasons for changes>

Change◆ Increased due to higher sales of U.S.
dollar denominated insurance, variable
life insurance and term-life insurance.
◆ Lapse and surrender rate decreased ineach product.

39
3.9

37
3.7

(5 1%)(5.1%)

677.2

706.5

+4.3%

164.1

168.9

+2.9%

(Billions of yen)

FY13 1Q
FY13.1Q

FY14 1Q
FY14.1Q

Ch
ChangeGains from investment, net (General account)

28.3

32.1

+13.4%

Core profit

15.3

18.7

+22.1%

Positive spread

12
1.2

30
3.0

+150 0%+150.0%Of which,hi h thi
third-sectordt products
d tAnnualized premiums from insurance in force
Of which, third-sector products

Non-consolidated solvency margin ratio

14.3.3114.6.30

2,358.7%

2,463.3%◆ Increased due to higher sales of termlife insurance, endowment insurance,
U.S. dollar denominated insurance,
variable life insurance and educational
endowment insurance.

◆ Increased yyear on yyear,, due mainlyy tothe absence of the negative impact
from the revision of the discount rateused for calculating policy reserves oninterest rate-sensitive whole life
present in the same
insurance that was p
period of the preceding fiscal year.

Change from
14.3.31+104.6pt

Notes:
1. Figures for new policy amount, lapse and surrender amount, lapse and surrender rate, policy amount in force,
annualized premiums from new policies and annualized premiums from insurance in force are calculated as
the total of individual life insurance and individual annuities.
2. The lapse and surrender rate shows the ratio derived by dividing the amount of lapses and surrenders, notadjusted for policy amount decreases, increases, and reinstatements, by the policy amount in force at the
beginning of the fiscal year
Line item amounts are truncated below ¥100 million; percentage change figures are rounded.

Sony Financial Holdings Inc. All Rights Reserved

7

Operating Performance :Sony Life (Non-consolidated) (1)
Number and Amount of New Policies(Individual Life Insurance + Individual Annuities)
New policy amount(Individual Life Insurance + Individual Annuities)

Number of new policies

+8.2%

152

Annualized Premiums from New Policies

Annualized premiums from new policies

154

142

(Thousands ofpolicies)

150(Trillions of yen)

1.5
15,000((Billions of yen)
y )

18.9

20

17.4
1 13
1.13
1.06

1.0
10,000

1.03

+9.9%

Of which, third-sector

16.8+12.0%

15
100
10

50

0.5

5,000

5

4.4

3.9

FY12.1Q

FY13.1Q(5.1%)

3.7

0
0

0

FY12.1Q

FY13.1Q

FY14.1Q

FY14.1Q
New policy amounts are truncated below ¥10 billion; numbers of policies are truncated below 1,000 policies;
Amounts of annualized premiums from new policies are truncated below ¥100 million; percentage change figures are rounded.

Sony Financial Holdings Inc. All Rights Reserved

8Operating Performance :Sony Life (Non-consolidated) (2)
Number and Amount of Policies in Force

Annualized Premiums from Insurance in Force(Individual Life Insurance + Individual Annuities)(Individual Life Insurance + Individual Annuities)

Policy amount in force(Trillions of yen)

50

6.11

+5.0%

Annualized premiums from insurance in force

Number of policies in force

6.33

6.42

(Millions of policies)(Billions of yen)

+1.5%

700

677.2

+4.3%

38.1

+3.7%

39.5

39.0

706.5

696.9

6
40

Of which, third-sector

+1.4%

600
5

+1 2%
+1.2%

500
4

30

400
3

20
2
10

0
13.6.30

14.3.31

300
200

1

100

0

0

+2.9%

14.6.30

164.1

167.0

13.6.30

13.3.31

+1.1%
1 1%

168.9

14.6.30

Amounts of policy amount in force are truncated below ¥100 billion; numbers of policies are truncated below 10,000 policies;
Amounts of annualized premiums from insurance in force are truncated below ¥100 million; percentage change figures are rounded.

Sony Financial Holdings Inc. All Rights Reserved

9Operating Performance :Sony Life (Non-consolidated) (3)Lapse and Surrender Rate*(Individual Life Insurance + Individual Annuities)

(%)

10

Lapse and surrender rate
(Annual)

Lapse and surrender rate
(1Q)

8

5 31
5.31
6

4.61

4

2

1.38

1.21
(0 06pt)(0.06pt)

1.15

0
FY12

FY13

FY14

*The lapse and surrender rate shows the ratio derived by dividing the amount oflapses and surrenders, not adjusted for policy amount decreases, increases, andreinstatements, by the policy amount in force at the beginning of the fiscal year.

Sony Financial Holdings Inc. All Rights Reserved

10Operating Performance :Sony Life (Non-consolidated) (4)Income from Insurance Premiums

Interest Income and Dividends(Billions of yen)

217 9
217.9

(Billions of yen)

40

220.7

221 3
221.3

32.5
(0.3%)

200

28.9

30

25 7
25.7

+12.6%
12 6%

20
100

10

0
FY12.1Q

FY13.1Q

0

FY14.1Q

FY12.1Q

FY13.1Q

FY14.1Q

Line item amounts are truncated below ¥100 million; percentage figures are rounded.

Sony Financial Holdings Inc. All Rights Reserved

11

Operating Performance :Sony Life (Non-consolidated) (5)Core Profit

Ordinary Profit(Billions of yen)

20

(Billions of yen)

18 7
18.7

20

15

14.7

17.6

15.3
+22.1%
22 1%

10

14 1
14.1

14 1
14.1

FY12.1Q

FY13.1Q+24.6%

10

5

0
0
Q
FY12.1Q

FY13.1Q
Q

FY14.1Q
Q(Reference) Impact on core profit
Positive (Negative) spread (*1)
Provision of policy reserves for minimum guarantees forvariable life insurance (*2)
Effects by the revision of policy reserve discount rate
(Interest rate-sensitive whole life insurance ) (*3)

FY14.1Q(Reference) Main differences from Core Profit(Billions of yen)

FY12.1Q FY13.1Q FY14.1Q
(0.5)
1.2
3.0
(4.0)

(0.9)

(2.1)

-

(5.7)

-

*Line item amounts are truncated below ¥100 million; percentage figures are rounded.

(Billi(Billions
off yen))

FY12.1Q
Capital gains
Provision of contingency reserve (*2)

0.4
(0.9)

FY13.1Q
0.0(1.0)

FY14.1Q
0.2(1.2)*1: The minus amount in positive spread indicates negative spread.
*2 “P
*2:
“Provisioni i off policy
li reserves ffor minimum
i iguaranteestffor variable
i bl lif
life iinsurance”” andd“Provision of contingency reserve” are described as negative amount.
*3: The effect of the revision of policy reserve discount rate on interest rate-sensitive whole life
insurance.

Sony Financial Holdings Inc. All Rights Reserved

12

Operating Performance :Sony Life (Non-consolidated) (6)
Number of Lifeplanner Sales Employees
+101
101

(Number)

4,500

4,133
[105]

4,127
[109]

4,125
,
[110]

4,228
[146]

4,216
[138]

4,092
4
092
[121]

+12

4,000

3 500
3,500

3,000
0

13.3.3113.6.30

13.9.30

13.12.31

14.3.3114.6.30

Note: Figures in [ ] show the numbers of Lifeplanner sales employees (rehired on a fixed-term contract basis after retirement) included in the overall
numbers, those who have reached retirement age but who continue to work as Lifeplanner sales employees that meet certain sales conditions
and other requirement.
* “Lifeplanner” is a registered trademark of Sony Life.

Sony Financial Holdings Inc. All Rights Reserved

13

Operating Performance :Sony Life (Non-consolidated) (7)Breakdown of General Account Assets
14.3.31<Asset management review>

14.6.30(Billions of yen)Amount%Amount%Japanese governmentand corporate bonds

5,190.0

86.7%

5,289.0

86.6%

Japanese stocks

33.2

0.6%

34.2

0.6%

Foreign bonds

79.8

1.3%

84.1

1.4%

Foreign stocks

26.9

0.4%

25.7

<Bond duration>
Mar. 31, 2013: 19.9 years

0.4%

Monetary trusts

305.3

5.1%

306.6

5.0%

Policy loans

154.1

2.6%

155.2

2.5%

Real estate

66.5

1.1%

66.0

1.1%

Cash and call loans

32 6
32.6

0 5%
0.5%

36 7
36.7

0 6%
0.6%

Others

95.6

1.6%

109.1

1.8%

5 984 3
5,984.3

100 0%
100.0%

6 107 06,107.0

100 0%
100.0%Total

We have continued to accumulate ultralongterm bonds to match the liability
characteristics of insurance policies withlong term matlong-term
maturities
rities with
ith the aim of red
reducing
cing
interest rate risk.

Mar. 31, 2014: 19.7 years
Jun. 30, 2014: 19.5 years■ Investment in the monetary trusts is mainly into
Japanese government and corporate bonds.
■ The holding ratio on the real status of Japanese
government and corporate bonds including
those invested in monetary trusts in the generalaccount assets: As of Jun. 30, 2014: 91.7%(As of Mar. 31, 2014: 91.8%)

Line item amounts are truncated below ¥100 million; percentage change figures are rounded.

Sony Financial Holdings Inc. All Rights Reserved

14

(Reference)Sony Life Acquires Sony Corporation’s Headquarters Site
On July 28, 2014, Sony Life entered into an agreement to acquire Sony Corporation’s
headquarters site.
【Overview of Acquired Property】
Property acquired: Sony Corporation headquarters site
・Location: Konan, Minato-ku, Tokyo, Japan・Area: 18,165.3 m2・Acquisition price: ¥52.8 billion (¥2.91 million/m2)
・Expected acquisition date: By the end of September 2014
Current leasing agreement on building owned by Sony Lifeand leased to Sony Corporation:・Lease income receivable: ¥7.7 billion/year (building)・Rental income payable: ¥2.0 billion/year (land)・Book value of building: ¥28.1 billion (as of March 31, 2014)
・Floor space: 162,887.57 m2
As one element of investment income in its general account, Sony Life believes that this investment is fully appropriate from thestandpoint of economical rationality. Sony Life has for some time owned the Sony Corporation headquarters building. Believing thatcombining the site with the building would be beneficial in terms of generating stable investment income, Sony Life resolved toacquire the site.
As this transaction is between a parent company and an entity in its corporate group, Sony Life recognizes the need to ensure fulltransparency in its decision-making, and has accordingly obtained valuations from multiple third-party real estate assessors todetermine an appropriate price.
*Leasing
Leasing agreement on building between Sony Corporation and Sony Life is to remain in place.

Note: For reference, nearby land is publicly assessed at ¥3.34 million/m2 (As of January 1, 2014)
Line item amounts are truncated below ¥100 million

Sony Financial Holdings Inc. All Rights Reserved

15

Operating Performance :Sony Life (Non-consolidated) (8)Non-consolidated Solvency Margin Ratio

(%)

3,000

2,500

2,281.8

2,463.3

2,358.7+104 6 t+104.6pt

2,000

1,500

1,000
0
13.3.3114.3.3114.6.30

Sony Financial Holdings Inc. All Rights Reserved

16

Operating Performance :AEGON Sony Life Insurance*AEGON Sony Life Insurance sells individual variable annuities.

Number and Amount of Policies in Force

Number and Amount of New Policies
New policy amount

Number of new polices [ ]Policy amount in force(Thousands ofpolicies)(Billions of yen)

50

300

10
39.6
[6 8]
[6.8]

45
40

8

30

40
35

6

30
150

20

10

45

200

25

15

50

265.8
[43.2]

236.4[38 2][38.2]

250

30.5
[5.2]

35

Number of policies in force [ ](Thousands of policies)(Billions of yen)

25

113.3
[16.7]

4

20

100

7.4
[1.0]

15

2

10

50

5
0

5

0
FY12.1Q

FY13.1Q

FY14.1Q

00
13.6.30

Net income ((losses)) for AEGON Sonyy Life Insurance and SA Reinsurance
FY13.1Q(Billions of yen)

14.3.3114.6.30

ChangeFY14.1Q

AEGON Sony Life Insurance

(0.9)

(1.2)

(0.3)

SA Reinsurance

(0.3)

0.7

+1.0

AEGON Sony Life Insurance and SA Reinsurance are equity method companies
companies, 50
50-50
50 joint venture established by Sony Life and
AEGON Group.
SA Reinsurance prepares its financial statements in accordance with U.S. GAAP. 50% of the net income (losses) for AEGON Sony Life
Insurance and SA Reinsurance are recognized as investment profit (losses) on equity method in the SFH’s consolidated net income.

Line item amounts are truncated below ¥ 100 million;
numbers of policies are truncated below 100 policies.

Sony Financial Holdings Inc. All Rights Reserved

17

Highlights of Operating Performance:
Sony Assurance
Ordinary revenues

Ordinary profit

+4.4%

23.0

FY13.1Q

FY14.1Q

23.0

24.1

+1.0

+4.4%

Underwriting income

22 8
22.8

23 8
23.8

+0 9
+0.9

+4 4%
+4.4%

Investment income

0.2

0.3

+0.0

+7.2%

21.7

21.4

(0.3)

(1.6%)

Underwriting expenses

16.7

16.0

(0.6)

(4.1%)

Investment expenses

0.0

0.0

(0.0)

(99.7%)

Operating general andadministrative expenses

5.0

5.3

+0.3

+6.7%

Ordinary profit

1.3

2.7

+1.3

+101.9%Net income

0.8

1.8

+0.9

+113.2%(Billions of yen)

Ordinary revenues

24.1

2.7

Ordinary expenses+101.9%1.3

FY13.1Q

FY14.1Q(Billions of yen)

◆ Ordinary revenues and ordinary profit increased
year on year.
◆ Ordinary revenues increased year on year, due
to an increase in net premiums written primarily
for its mainstay automobile insurance.
◆ Ordinary profit grew year on year due to a
decline in the loss ratio mainly led by a lower
car accident ratio, as well as the rise in ordinary
revenues.

ChangeChange from
14.3.3114.3.3114.6.30

Underwriting reserves

78.0

80.8

+2.8

+3.7%

T t l nett assets
Total
t

21 4
21.4

23 3
23.3

+1 9
+1.9

+9 0%
+9.0%

Total assets

142.7

144.4

+1.7

+1.2%

(Billions of yen)Line item amounts are truncated below ¥100 million; percentage change figures are rounded.

Sony Financial Holdings Inc. All Rights Reserved

18

Overview of Operating Performance:
Sony Assurance

FY13.1Q(Billions of yen)<Reasons for changes>

ChangeFY14.1Q

Direct premiums written

22.4

23.1

+3.1%

Net premiums written

22.7

23.4

+3.0%

Net losses paid

11 7
11.7

11 1
11.1

(4 9%)(4.9%)

Underwriting profit

1.0

2.4

+123.7%Net loss ratio

58.2%

54.7%

(3.5pt)Net expense ratio

23 8%
23.8%

24 4%
24.4%

+0 6pt+0.6ptCombined ratio

82.0%

79.1%

(2.9pt)◆ Increased mainly in its mainstay
automobile insurance.
◆ Declined due mainly to a lower car
accident ratio.

◆ Increased due mainly
y to highergsystem-related expenses.

Notes:Net loss ratio = (Net losses paid + Loss adjustment expenses ) / Net premiums written.
Net expense ratio = Expenses related to underwriting / Net premiums written

Number of policies in force
Non-consolidated
solvency margin ratio

14.3.3114.6.30

Change from 14.3.31

1.61 million

1.63 million

527.6%

569.6%+0.02 million+1.4%+42.0pt

Note: The number of policies in force is the total of automobile insurance and medical and cancer insurance,
which accounts for 99% of net premiums written.

Line item amounts are truncated below ¥ 100 million; numbers of policies aretruncated below 10,000 policies; percentage change figures are rounded.

Sony Financial Holdings Inc. All Rights Reserved

19Sony Assurance’s Underwriting Performanceby Type of Policy
Direct Premiums Written

Net Premiums Written

FY13.1Q

FY14.1Q

Change

Fire

55

62

+13.2%

Marine－－－Personal accident

2,044

2,134

+4.4%

Voluntary automobile

20,321

20,920

+2.9%

－

－

－

22 42022,42023,117

+3 1%
+3.1%

(Millions of yen)Compulsory
automobile liability
Total

FY13.1Q

FY14.1Q

Change

Fire

74

8

(88.4%)

Marine4450+13.5%

Personal accident

2,124

2,218

+4.4%

Voluntary automobile

20,257

20,868+3.0%

Compulsory
automobile liability

241

289

+19.9%

22,741

23,434+3.0%
3.0%(Millions of yen)

Total

*SURE, medical and cancer insurance is included in personal accident.

Net losses paid
FY13.1Q

FY14.1Q

Change

Fire

0

1

－

Marine32

47+46.3%

Personal accident

463
63

541
41

+16.8%
16 8%

Voluntary automobile

10,994

10,288(6.4%)

Compulsory
automobile liability

255

291

+14.3%

11,745

11,170(4.9%)(Milli(Millions
off yen))

Total

Sony Financial Holdings Inc. All Rights Reserved

Line item amounts are truncated below ¥ 1 million;
percentage change figures are rounded.

20

Operating Performance:
Sony Assurance (1)Ordinary Profit andAdjusted Ordinary Profit

Net Premiums Written andNumber of Policies in Force
Voluntary automobile insurance
Personal accident insurance
Number of policies in force
Others(Billions of yen)
4

(Millions of policies)(Billions of yen)

30

+4.6%

1.6

23.4 0.3
1.4
2.2

22.7

21.4

+3 0%
+3.0%

20

Adjustedjordinary
yp
profit

3.4

3.5

1.8

1.63

1 56
1.56

1 51
1.51

Ordinaryy profit
p

20.8

2.7

2.5

12
1.2

2

1

1.5

0.8

10

3

+101.9%

1.7
1.3

1

07
0.7

0.8

0.6
0.5

0.4
02
0.2

0

0

FY12.1Q

FY13.1Q

FY14.1Q

0
FY12 1Q
FY12.1Q

FY13 1Q
FY13.1Q

Provision for catastrophe reserve
The number of policies in force is the total of automobile insurance and medical
and cancer insurance policies, which account for 99% of net premiums written.
More than 90% of personal accident insurance is medical and cancer insurance.

FY14 1Q
FY14.1Q*Adjusted ordinary profit = Ordinary profit + Provision for catastrophe reserve(Reference) Provision for catastrophe reserve(Billions of yen)
FY12.1Q
FY13.1Q
FY14.1Q
+0.１

+0.4

+0.7

*Provision for catastrophe reserve is described as positive amountLine item amounts are truncated below ¥100 million; numbers of policies aretruncated below 10,000 policies; percentage change figures are rounded.

Sony Financial Holdings Inc. All Rights Reserved

21

Operating Performance:
Sony Assurance (2)Earned/Incurred Loss Ratio +Net Expense Ratio
E
Earned/Incurredd/Id loss
l
ratio
ti
(%)
100

98.9

(Reference) Combined Ratio(Net Loss Ratio+ Net Expense Ratio)
N t loss
Net
l
ratio
ti

N t expense ratio
Net
ti

(%)

93.8

93.4

100

89.2

89.0
82.4

80

60

68.9

60
(7.2pt)

63.2
58.0

82.0

79.1

59.9
59.3

58.2 (3.5pt)
54.7

40

40

20

84.4

(2.9pt)

65.2

68.2

84.9

80

(6.6pt)72.9

N t expense ratio
Net
ti

26.0

25.6

20

+0.6pt

24.5

23.8

24.4

FY13.1Q

FY14.1Q

26.0+0.6pt

25.6
24.5

23.8

24.4

FY12.1Q

FY13.1Q

FY14.1Q

0

0
FY12

FY13

FY12.1Q

Notes:
Earned/Inc rred loss ratio = (Net losses paid + Provision
Earned/Incurred
Pro ision for reserve
reser e for outstandingo tstanding
losses + Loss adjustment expenses) / Earned premiums[Earthquake insurance and compulsory automobile liability insurance are excluded
from the above calculation.]

FY12

FY13

Notes:Net loss ratio = (Net losses paid + Loss adjustment expenses ) / Net premiums written
Net expense ratio = Expenses related to underwriting / Net premiums writtenSony Financial Holdings Inc. All Rights Reserved

22

Operating Performance:
Sony Assurance (3)Non-consolidated Solvency Margin Ratio

(%)

800

504 2%
504.2%

569.6%

527 6%
527.6%+42.0pt

400

013.3.3114.3.3114.6.30

Sony Financial Holdings Inc. All Rights Reserved

23

Highlights of Operating Performance:
Sony Bank (Consolidated/Non-consolidated)
Consolidated ordinary revenues
Consolidated ordinary profit

9.6<Consolidated>(Billions of yen)

9.3

FY13.1Q

FY14.1Q

9.6

9.3

Consolidated ordinary revenues(3.0%)(30%)

Change(0.2)(3.0%)

Consolidated ordinary profit

2.2

1.7

(0.5)

(22.9%)

Consolidated net income

1.4

1.1

(0.3)

(22.7%)

FY13.1Q

FY14.1Q

Ordinary revenues

8.9

8.6

(0.3)

(3.8%)

Gross operating profit

5.9

5.2

(0.6)

(10.5%)(7.8%)<Non-consolidated>(Billions of yen)

22
2.2

1.7
(22.9%)

FY13.1Q

FY14.1Q(Billions of yen)

Net interest income

4.5

4.1

(0.3)

Net fees and commissions((0.0))((0.2))((0.2))―Net other operating income

1.4

1.3

(0.0)

(4.5%)

3.6

3.7

+0.0

+2.5%
(31.0%)

General and administrative expenses<Consolidated>◆Both ordinary revenues and ordinary profit decreased year on
yyear, due to lower gains
g
on foreigng exchange
g transactions
stemming from passive foreign currency trading by customers
compared with the same period of the previous fiscal year
when foreign currency exchange rates fluctuated wildly.
<Non-consolidated>◆Both gross operating profit and net operating profit decreased
year on year, due to lower gains on foreign exchangetransactions as the same reason as in the consolidated results.
・Net interest income decreased year on year. Behind this drop
was lower interest income on securities under the loweringinterest rates.
・Net fees and commissions decreased year on year due tohigher expenses on a growing balance of mortgage loans.
・Net
Net other operating income decreased year on year due tolower gains on foreign exchange transaction despite an
improvement in net gains on bond-dealing transaction.

ChangeNet operating profit

2.2

1.5

(0.7)

O di
Ordinary
profit
fit

22
2.2

17
1.7

(0 5)
(0.5)

(25 4%)(25.4%)Net income

1.4

1.1

(0.3)

(23.9%)(Billions of yen)
Total net assets
Net unrealized gains onother securities, net of taxes
Total assets

14.3.3114.6.30

Change from 14.3.31

72.7

73.4

+0.7
0.7

+1.0%
1.0%

7.2

6.8

(0.4)

(5.5%)

2,056.7

1,998.1(58.5)(2.8%)((*)) Sony Bank revised its method of recording ordinary revenues and ordinary expenses on hedge transactions
for FY14.1Q. Ordinary revenues for FY13.1Q have been retroactively adjusted to reflect the change.
Line item amounts are truncated below ¥100 million; percentage change figures are rounded.

Sony Financial Holdings Inc. All Rights Reserved

24Overview of Operating Performance:
Sony Bank (Non-consolidated) (1)<Reasons for changes>
Change from
14.3.3113.6.30

14.3.3114.6.30

Customer assets

1,965.6

2,007.5

1,950.0(57.5)(2.9%)

Deposits

1,849.0

1,890.0

1,829.7(60.3)(3.2%)

Yen

1 466 91,466.9

1 526 4
1,526.4

1,462.8(63 6)(63.6)(4 2%)(4.2%)

382.1

363.5

366.9

+3.3

+0.9%

Investment trusts

116.5

117.4

120.2

+2.8

+2.4%

L
Loans
outstandingt t di

989 1
989.1

1 057 4
1,057.4

1 071 6
1,071.6

+14 2
+14.2

+1 3%
+1.3%

Mortgage loans

878.1

949.3

962.7

+13.4

+1.4%

Others

111.0

108.1

108.9*1

+0.7

+0.7%

11.89%

11.72%

11.68%(Billions of yen)

Foreign currency

Capital adequacy ratio *2(domestic criteria)◆ Yen deposit balance decreased under
persistently low interest rates.
◆ Foreign currency deposit balanceslightly increased as the volume ofcustomers’ purchase of foreign
currencies was larger than that of
their sales under a narrow range of
exchange rates.

◆ Loan balance steadily increased
a y in mortgageo gage loans.
oa smainly(0.04pt)*1 Loans in others include corporate loans of ¥103.2 billion*2 Please refer to the graph of the nonnon-consolidated
consolidated capital adeq
adequacy
ac ratio (domestic criteria) on P28

Line item amounts are truncated below ¥100 million; percentage change figures are rounded.

Sony Financial Holdings Inc. All Rights Reserved

25

Overview of Operating Performance:
Sony Bank (Non-consolidated) (2)<Reference> On Managerial Accounting Basis
FY13.1Q

FY14.1Q

59
5.9

52
5.2

(0 6)
(0.6)

4.5

4.4

(0.0)

(2.1%)

0.4

(0.0)

(0.5)

(119.5%)g income*3
Net other operating

0.8

0.8

((0.0))((1.4%))

Gross operating profit (core profit)(A)＝①＋②

5.0

4.4

(0.6)

(12.2%)

Operating expenses and otherexpenses
③

3.5

3.6

+0.0

+1.1%

Net operating profit (core profit)＝(A)－③

1.4

0.7

(0.6)

(45.0%)(Billions of yen)

Gross operating profit
Net interest income*1①

Net fees and commissions*2②<Reference> Interest Spread(Managerial Accounting Basis)

ChangeYield on investment(10 6%)(10.6%)■Managerial accounting basis

Yield on financing

Interest spread
(%)

1.5

1.22
0.94

1

1.18
(0.03pt)

0.91

0.5

g adjustmentsjare made to the figuresgon a financial account for p
profits and
The following

0.28

0 27
0.27

FY13 1Q
FY13.1Q

FY14 1Q
FY14.1Q

losses more appropriately.
*1: Net interest income: Includes profits and losses associated with fund investment recorded in
net other operating income, including gains or losses from currency swap transactions.
*2: Net fees and commissions: Includes profits and losses for customer dealings in foreign
currency transactions recorded in net other operating income.
*3: Net other operating income: After the above adjustments (*1 and *2), consists of profits andlosses for bond and derivative dealing transactions.
■Core profit

0

Note: Interest spread=(Yield on investment)-(Yield on financing)

Profits and losses exclude net other operating income, which includes those on bond andderivative dealing transactions, and stands for Sony Bank’s basic profits.

Line item amounts are truncated below ¥100 million; percentage change figures are rounded.

Sony Financial Holdings Inc. All Rights Reserved

26

Operating Performance:
Sony Bank (Non-consolidated) (1)Loans

Deposits
Yen depositspForeigng currency
y depositspMortgageg g loans

Others(Billions of yen)

1,200(Billions of yen)

2,000

1,071.6

1,057.4

1,857.4

1,890.0

1,829.7(60.3)

366.9

1,500

1,000

970.2

+14.2

108.9

*corporate loansof ¥103.2 billion

800

962.7

600
1,000
1,462.8

400
500
200

0

0
13.3.3114.3.3113.3.3114.6.30

14.3.3114.6.30

Line item amounts are truncated below ¥100 million.

Sony Financial Holdings Inc. All Rights Reserved

27

Operating Performance:
Sony Bank (Non-consolidated) (2)Non-Consolidated Capital Adequacy Ratio

Balance of Securities by Credit Rating
AAA
BBB

AA
A
Others(%)
15(Billions of yen)
1,000

(Domestic Criteria)

11.98

908.8

(0.04 pt)

11.68

780.5

773.8

800

11.72

10
+6.7

600

5
400

200
0
13.3.31013.3.3114.3.3114.6.30

14.3.3114.6.30*Calculated based on the standard FSA Notification No. 19 (2006), which establishes
standards based on Article 14-2 of the Banking Act of Japan for determining thecapital adequacy of a bank in light of the assets held by the bank.
Sony bank calculates this ratio based on Basel III from March 31, 2014
Line item amounts are truncated below ¥100 million.

Sony Financial Holdings Inc. All Rights Reserved28

Consolidated Financial Forecast
for the Year Ending March 31, 2015

Sony Financial Holdings Inc. All Rights Reserved

29

Consolidated Financial Forecast
for the Year Ending March 31, 2015
C
Consolidated
lid t d Financial
Fi
i l Forecast
F
t for
f the
th YearY
Ending
E di
March
M
h 31,
31 2015 isi unchangedhd fromf
theth forecastft announced
d on May
M 14,
14 2014(Billions of yen)

FY2013(Actual)

FY2014(Forecast)

ChangeConsolidated ordinary revenues

1,320.4*

1,191.0(9.8%)

Life iinsurance b
Lifbusinessi
Non-life insurance businessBanking business

1 196 6
1,196.6

1 061 91,061.9

89.8
36.4*

92.4
36.6

(11.3%)
(11
3%)
+2.8%
+0.3%

Consolidated ordinary profit

76.1

77.0

+1.1%

Life insurance business
Non-life insurance businessBanking business

67 2
67.2

67 4
67.4

+0 2%
+0.2%

3.0
5.6

3.9
5.3

+29.8%(6.0%)

40.5

49.0+21.0%

Consolidated net income<Segment information for ordinary revenues and ordinary profit>■ Life Insurance Business
Ordinary revenues are expected to decrease because we do not expect such increases in lump-sum payment insurance premiums and investment income on separate
account due to market recovery as recorded in FY13. However, we expect steady growth in policy amount in force. Ordinary profit is expected to be nearly at the same level
as in FY13. This is because we expect a higher provision for policy reserves related to minimum guarantees for variable life insurance policies, as well as an increase inoperating expenses due to the consumption tax rate rise. We do not expect any negative impact from a rise in provision of policy reserves resulting from the revision of the
discount rate used for calculating policy reserves in FY13.
FY13■ Non-life Insurance Business
Ordinary revenues are expected to increase in line with growth in net premiums written, primarily for mainstay automobile insurance. Ordinary profit is expected to increase
from FY13 . We do not revise upward ordinary profit although the loss ratio for FY14.1Q was lower than we had expected. This is because we expect some negative effects
from a fluctuating car accident ratio and natural disasters which might increase provision of reserve for outstanding losses. We also expect operating expenses to possibly
increase from FY14.2Q onward.
■ Banking Business
Ordinary revenues are expected to be stable, because we anticipate stable business growth even in persistently low interest rates. Ordinary profit is expected to decrease
because we do not believe that foreign exchange transactions will be as vigorous as FY13, and we expect higher operating expenses due to our initiatives designed tostrengthen our settlement function for future growth. However, we expect gross operating profit to stably increase.
<Consolidated net income>Net income is expected to grow significantly year on year. This is because Sony Life changed its calculation policy of the reserve for price fluctuations to accumulate thep to requiredqlevels from FY14 while it had accumulated the reserve in excess of the requiredqlevels until FY13.
reserve up(*) Since the banking business revised its method of recording ordinary revenues and ordinary expenses on hedge transactions for FY14.1Q, ordinary revenues for FY13 have been retroactively
adjusted to reflect the change. Consequently, consolidated ordinary revenues and ordinary revenues of the banking business for FY13 have been revised.
Line item amounts are truncated below ¥100 million; percentage change figures are rounded..

Sony Financial Holdings Inc. All Rights Reserved30Sony Life’s MCEV and
Risk Amount Based on Economic Valueas of June 30, 2014

Please keep in mind that the validity of these calculations of MCEV as of June 30
30, 2014,
2014 has not been verified by outside specialists.
specialists
A part of the calculations of MCEV as of June 30, 2014, adopted simplified method.

Sony Financial Holdings Inc. All Rights Reserved

31Sony Life’s MCEV as of June 30, 2014
(Billions of yen)

14.3.3114.6.30

Change from
14.3.311,221.3,

1,260.0,+38.7

Adjusted net worth

722.1

758.4

+36.2

Value of existing business

499.1

501.7

+2.5

MCEV

14.3.31
New business value

New business margin(Billions of yen)

14.6.3055.2 (12M)

16.9 (3M)

5.2%

5.5%

Notes:
1. New business margin equals new business value divided by present value of premium income.
2. Calculated MCEV as of June 30, 2014 by using updated economic assumptions and lapse and surrender rate as of March 31, 2014.

 Reasons for changes in MCEV
・MCEV as of June 30, 2014, increased ¥38.7 billion from March 31, 2014, due mainly to an acquisition of newpolicies and yield curve changes in Japanese yen. (lowering interest rates under 40 years)
 New business value and new business margin
・New business value as of June 30, 2014 was ¥16.9 billion, (¥67.6 billion / annualized) reflecting brisk sales of new policies.
・New business margin as of June 30, 2014, was up 0.3% from March 31, 2014, due mainly to the absence of the FY13 negative
impact of a substantial increase in sale of lump-sum payment endowment insurance and the strong sale led by the revision of
insurance premium rates on interest rate-sensitive
rate sensitive whole life insurance.
*Please see page 43 for trend on JGB yields.

Sony Financial Holdings Inc. All Rights Reserved32Sony Life’s Risk Amount Based on Economic Valueas of June 30, 2014
(Billions of yen)

14.3.3114.6.30

Insurance risk

654.5

663.9

Market-related risk

240.0

265.0

Of which, interest rate risk*

180.9

202.8

Operational risk

26 3
26.3

26 1
26.1

Counter party risk

1.3

1.7

(257.8)(269.3)

664.3

687.3

Variance effect
The risk amount based on economic value(*) Interest amount excluding the variance effect within market-related risk.
(Billions of yen)

MCEV

14.3.311,221.3

14.6.30
1,260.0

 Maintained capital adequacy by controlling market-related risk.
Notes:
1. The risk amount based on economic value refers to the total amount of Sony Life’s risks, comprehensively examined and including insurance risk andmarket-related risk.
2. The solvency risk capital on an economic value basis is calibrated at VaR (99.5) over one year and based on the internal model, which is a similar but
modified model based on the EU Solvency II (QIS5) standard method.
3. Calculated MCEV as of June 30, 2014 by using updated economic assumptions and lapse and surrender rate as of March 31, 2014.

Sony Financial Holdings Inc. All Rights Reserved

33

AppendixSony Financial Holdings Inc. All Rights Reserved34

Recent Topics 1
AEGON Sony Life Insurance
Launch of sales: December 1, 2009
Common stock: ¥24 billion (including capital surplus of ¥12 billion)
Equityy ownership: Sonyy Life insurance Co Ltd 50%, AEGON international B V 50%
Marketing products: Individual Variable Annuities
Sales Channels: Lifeplanner sales employees and partner Banks (20*) *As of Aug. 8, 2014

SA Reinsurance Ltd
Established： October 29
29, 2009
Common stock: ¥8 billion
Equity ownership: Sony Life insurance Co., Ltd. 50%, AEGON international B.V. 50%
Business： Reinsurance business*AEGONAEGON Sony Life Insurance and SA Reinsurance are equity method companies, 50
50-50
50 joint ventures established by Sony Life and AEGON Group.

Sony Bank’s Mortgage Loans through Sony Life
■Sonyy Life accounts for 24% of the balance of mortgage
g g loans as of Jun. 30, 2014
Sony Life accounts for 17% of the amount of new mortgage loans for FY14.1Q*Sony Life started handling banking agency business in January 2008.

S
Sony
Assurance’s
A
’ A
Auto
t Insurance
I
Sold
S ld bby S
Sony Lif
Life■Sony Life accounts for approx. 5% of new automobile policies for FY14.1Q*Sony Life started handling automobile insurance in May 2001.

* “Lifeplanner” is a registered trademark of Sony Life.

Sony Financial Holdings Inc. All Rights Reserved

35

Recent Topics 2<Highlights for FY2014.1Q>
2014-04-01“Sony Lifecare Inc.” was established as a holding company to oversee theGroup’s operations in the nursing care business.

2014 04 21
2014-04-21

S
Sony
A
Assurance
B
Began
Offering
Off i “Policyholders'“P li h ld ' Apps”
A” ffor smart-phone.
t h2014-05-02

Sony Life commenced sale of a new product: “Specialty Endowment Insurance.”

2014-06-18

Sony Bank began offering “Omakase Money Receiving Service”

2014-07-09

Sony Life closed its representative office in Beijing.

2014-08-01

Sony Bank entered tie-up with “Sony Real Estate” in mortgage loans

Sony Financial Holdings Inc. All Rights Reserved36Sony Life: Fair Value Information on Securities(General Account Assets)
Fair Value Information on Securities
Fair Value Information on Securities(Billions of yen)

N t DerivativeNote:
D i ti financial
fi
i l products
d t suchh as principal
i i l protectedt t d 30 year notes
t withith Nikk
Nikkeii 225 iindex-linked
d li k d coupons are iincluded
l d d iin th
the “Held-to-maturity-securities”“H ld tt ititi ” above.
b
Principal protected 30 year notes with Nikkei 225 index-linked coupons
As of March 31, 2013; Carrying amount: ¥43.3 billion, Fair market value: ¥52.2 billion, Net unrealized gain (losses): ¥8.8 billion
As of March 31, 2014; Carrying amount: ¥43.8 billion, Fair market value: ¥56.0 billion, Net unrealized gain (losses): ¥12.2 billion
As of June 30, 2014 ; Carrying amount: ¥43.9 billion, Fair market value: ¥57.3 billion, Net unrealized gain (losses): ¥13.4 billion

V l tiValuation
gains
i (losses)(l) on trading-purposet disecurities
iti(Billions of yen)

Notes: Amounts above include those categorized as “monetary trusts.”

Line item amounts are truncated below ¥100 million.

Sony Financial Holdings Inc. All Rights Reserved

37Sony Life’s Interest Income and Dividends (Details)(Millions of yen)

FY13.1Q

ChangeFY14.1Q

Cash and deposits
Japanese governmentand corporate bonds
Japanese stocks

00+88.9%

23,64926,173+10.7%

48

63+32.2%

Foreign securities

1,253

2,230

+77.9%

1156+401.9%

Loans

1 394
1,394

1 457
1,457

+4 5%
+4.5%

Real estate

2,560

2,570

+0.4%

10

5

(41.1%)

28,92632,557+12.6%

Other securities

Others
Total

Line item amounts are truncated below ¥1 million; percentage change figures are rounded.

Sony Financial Holdings Inc. All Rights Reserved38Sony Life’s Quarterly Trend on New Policies Amount
Quarterly Trend on New Policy Amount(Billions of yen)

1,201.9

1,200.0

1 238 71,238.7
1,033.3

947.4

1,000.0

1,135.8

1,128.3

1,066.5

886 2
886.2

841.4
800.0
600 0
600.0
400.0
200.0
0.0
FY12 1Q
FY12.1Q

FY12 2Q
FY12.2Q

FY12 3Q
FY12.3Q

FY12 4Q
FY12.4Q

FY13 1Q
FY13.1Q

FY13 2Q
FY13.2Q

FY13 3Q
FY13.3Q

FY13 4Q
FY13.4Q

FY14 1Q
FY14.1Q

Line item amounts are truncated below ¥100 million.

Sony Financial Holdings Inc. All Rights Reserved

39Sony Life’s Quarterly Trend on
Annualized Premiums from New Policies
Quarterly Trend on Annualized Premiums from New Policies
Annualized premiums from new policies

Of which, third-sector(Billions of yen)

24 0
24.0

22.0

22.0
19.0

20.0
18.0
80
16.0

18.9

18.5

17.4

16 8
16.8
15.2

14.6
13.2

14.0
12.0
10.0
8.0
6.0
4.0

4.4

2.0

50
5.0

52
5.2
3.9

3.6

3.0

3.6

2.9

3.7

FY13.4Q
3 Q

FY14.1Q
Q

0.0
Q
FY12.1Q

FY12.2Q
Q

FY12.3Q
3Q

FY12.4Q
Q

FY13.1Q
3 Q

FY13.2Q
3 Q

FY13.3Q
3 3Q

Line item amounts are truncated below ¥100 million.

Sony Financial Holdings Inc. All Rights Reserved

40

Method of Measuring Risk Amount
Based on Economic Value (1) Market-related Risk*1

Interest rate risk
Fluctuations in net asset
value based on economic
value in response to theshocks in the right columns.
The same applies below.

Sony Life(Reference) EU Solvency II (QIS5)

Percentage increases or decreases differ for eachcurrency and term
term.
As for measuring interest rate risk in Japanese yen,introduced principal component analysis, where yield
curve changes are disaggregated into threecomponents, parallel shift, twist and butterfly, and theyield curve is shocked by each component
component.

Percentage increases or decreases differ for eachcurrency and term but no lower than 1%(Example)
For Yen 30-year, 30% decrease(Example)
For Yen 30-year, 34% decrease (parallel shift),
28% decrease (twist), 7% decrease (butterfly))

Equity risk

Listed equities 45%, Other securities 70%

Global 30%, Others 40%*2

Real estate risk

Actual real estate 25%

Real estate 25%

Credit risk = (market value) x (risk coefficient for eachcredit rating) x duration

Credit risk

Note that durations have caps and floors, depending
on credit ratings.

Same as on the left

(Example)
Rating A: Risk coefficient (1.4%), cap (23), floor (1)30% downside fluctuation

Currency risk

25% downside fluctuation

Notes
1. Principal
p items as of June 30, 2014.
2. Standard risk coefficients are global: 39%/other: 49%. Symmetric adjustment (an adjustment of±10% of the average value of the stock price index during a defined period in
the past) is applied; as of the QIS5 trial introduction (December 31, 2009), these were 30%/40%.

Sony Financial Holdings Inc. All Rights Reserved

41

Method of Measuring Risk Amount
Based on Economic Value (2) Insurance Risk*1

Sony Life(Reference) EU Solvency II (QIS5)

Mortality risk

Mortality rate increases by 15% for each year elapsed Same as on the leftLongevity risk

Mortality rate decreases by 20% for each year
elapsedSame as on the left

L
Lapse
risk
i k

Th largestThelt amountt off these;th*2

Th largestThelt amountt off these;th•Lapse rate increases by 50% for each year elapsed• Increases by 50% in the assumed rates of• Lapse rate decreases by 50% for each year elapsed

lapsation for Life module, 20% for Health module• 30% of policies on which surrender value is in•Decreases by 50% in the assumed rates ofexcess of best estimate liability are immediately
surrendered• 30% of policies (70% for group annuities, etc.) on

lapsation for Life modmodule,le 20% for Health modmodulelewhich surrender value is in excess of best
estimate liability are immediately surrendered

E
Expenserisk
i kDisability risk

O
Operatingti
expenses increaseibyb 10% ffor eachh yearelapsedRate of inflation rises by 1%

Same as on the left

Rate of occurrence increases by 35% in the first fiscal Rate of occurrence increases by 35% in the firstyear, rising by 25% for each year thereafteryearfiscal year
year, rising by 25% for each year thereafter.
thereafter
Recovery rate decreases by 20%.

Notes
1. Principal items as of June 30, 2014.
2. At Sony Life, lapse risk is calculated by computing and adding together the largest amount of three options for each insurance policy

Sony Financial Holdings Inc. All Rights Reserved

42

JGB Yields

As of the end of each monthSony Financial Holdings Inc. All Rights Reserved

43

Contact:
Communications & Investor Relations Department
Sony Financial Holdings Inc.
Inc
TEL： +81-3-5785-1074

Sony Financial Holdings Inc. All Rights Reserved

44