【 Presentation Materials 】

Sony Life’s
Market Consistent Embedded Valueas of March 31, 2011

Sony Financial Holdings Inc.
May 27, 2011
Sony Financial Holdings Inc. All Rights Reserved0Contents- Highlight of MCEV
- Trends Surrounding MCEV and Sony Life’s Approaches- Compliance with MCEV Principles- MCEV Results- Reconciliation Analysis
from MCEV at the End of the Previous Fiscal Year- Sensitivity Analysis- Appendix

P.2
P.3
P.4
P.5 - 9P.10 - 15
P.16 - 18
P.19 - 24■Opinion of outside specialist
Sony Life requested Milliman, Inc., an external actuarial consulting firm with expert knowledge in the area of MCEV valuations, to review the methodology,
assumptions and calculations and obtained an opinion from Milliman, Inc. Please refer to the press release (“Disclosure of Market Consistent Embedded Value asof March 31, 2011”) for details.

Disclaimer:
These presentation materials contain statements concerning the current plans, expectations, strategies and beliefs of the Sony Financial Holdings Group (the“SFH Group”). Any statements contained herein that pertain to future operating performance and that are not historic facts are forward-looking statements.
Forward-looking statements may include—but are not limited to—words such as “believe,” “anticipate,” “plan,” “strategy,” “expect,” “forecast,” “predict,”“possibility” and similar words 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 SFH Group, based on information that is currently available to it. As such, these forwardlooking statements are subject to various risks and uncertainties, and actual business results may vary substantially from the forecasts expressed or implied inforward-looking statements. Consequently, investors are cautioned not to place undue reliance on forward-looking statements. The SFH Group disclaims any
obligation to revise forward-looking statements in light of new information, future events or other findings. The information contained in this presentation does notconstitute or form part of any 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 ofit form the basis of or be relied on in connection with any contract or commitment whatsoever.

Sony Financial Holdings Inc. All Rights Reserved1Highlight of MCEV
 Sony Life’s MCEV as of March 31, 2011 was ¥853.6 billion, down ¥40.4 billion from March 31, 2010.
 Adjusted net worth as of March 31, 2011, was ¥230.3 billion, up ¥24.1 billion from a year earlier due tohigher profit, primarily resulting from an increase in capital gains from sales of securities under theprocess of shifting our bond holdings to ultralong-term bonds.
 Value of existing business as of March 31, 2011, was ¥623.3 billion, down ¥64.5 billion from a year

earlier, due to a change in the market environment including a lower swap yield.
 Value of new business as of March 31, 2011, was ¥56.8 billion, up ¥1.2 billion from March 31, 2010,reflecting higher sales of insurance policies during the FY2010, which offset the negative effects of adecline in ultralong-term interest rates.
 If we calculated the sum of the present value of certainty-equivalent profit and the time value of options

and guarantees which consists of components of value of existing business by using the JGB yields,
instead of interest swap rates, as of the March 31, 2011, this calculation would have shown an increasein the value of existing business and new business value by ¥47.6 billion and ¥4.8 billion, respectively.
 Sony Life will continuously work on controlling interest rate risk. We will also achieve a continuous growthin corporate value by increasing our new business value.

Sony Financial Holdings Inc. All Rights Reserved2Trends Surrounding MCEV
and Sony Life’s Approaches
Trends surrounding MCEVof the CFO
Forum that are
Actions
Life insurers
in Europe June 2008:
membersof the CFO ForumSony Life’s approaches
Approaches in the pastMarch 31, 2005： Commenced EV disclosures, starting from

Scheduled mandatory EV disclosures in complianceMandatory EV disclosures in compliancewith European Insurance CFO Forum Market
with MCEV
Principles
has
been scheduled
Consistent
EmbeddedValue
Principles©
from theby theendof 2011.
fiscalyear
endingDec. 31, 2011.

Traditional Embedded Value (TEV) as ofMarch 31, 2008： Shift EV disclosures from TEV to Market

Consistent Embedded Value (MCEV), starting from MCEV as of

Disclosures in compliance with MCEV December
Principles2008:
is expected to spread, particularly2009-： Reduced the duration mismatch risk between assets andReviewed
the impact of turbulent market conditions
in Europe.
after Lehman's fall.

-Ratio -Ratioof holding
Japanesegovernmentand corporate
bonds
of holding
Japanesegovernmentand corporate(excludingCBs)ingeneralaccount
assetsbonds (excluding CBs) in general account assets
2008.3.31:
62.9% ⇒
2011.3.31:
87.3% 87.3%
2008.3.31:
62.9%⇒ 2011.3.31:

CFO Forum (December 2008)

October
Decidedto conduct a review of the impact of2009:

turbulentconditions on the MCEV
Revisedthemarket
MCEV Principles
Principles,as their application could, in such
● Announced a change to the MCEV Principles tomarketto misleading
results.
reflect
theconditions,
inclusion of aleadliquidity
premium to non-liabilities-Assets-Assets
durationduration
2008.3.31:
8.7 years
2011.3.31:
18.5 years
2008.3.31:
8.7 ⇒
years
⇒ 2011.3.31:
18.5 years→Mitigated interest rate sensitivity

liabilities.
liquid
Expressed
possibilities of partial changes of April2011:
the published
MCEV Principles or of theMarch 2010： Changed Sony Life’s asset management policy andReversed
abovementioned
deadlineof
guidancethe
issuesbased onmandatory
the review
results.
MCEV disclosures.
Declared its continuous commitment toConstructed a product control system and a product development

MCEV Principles
Shifting to the compliance with QIS5 for theof embedded
value anwhich
are market
calculation
CFO Forum
announced
updateonconsistent.
QIS5
technical
specification
was
progress (October 2009)
published in July, 2010.
New Announced was released to MCEV that
added relating to liquidity premium.

dividend policy in certain products
system in reviewing the impact on MCEVApproaches in the futureTaking measures to tasks obtained from MCEV valuation, with an

aim to achieve continuous growth of corporate value
Properly controlling interest rate risk through risk management on

an economic value basis
Managing product profitability on an economic value basis

Copyright Ⓒ Stichting CFO Forum Foundation 2008

Sony Financial Holdings Inc. All Rights Reserved

3Compliance with MCEV Principles
 We have calculated our MCEV in accordance with the calculation methodologies andassumptions in the MCEV Principles. Points of notice regarding MCEV Principles
compliance are as follows.
 The calculated value of MCEV is the value for Sony Life only, and not the consolidated value of

SFH.
 Group MCEV, as prescribed in the MCEV Principles, is not considered in this report, as the report
is for Sony Life on a standalone basis.
 With respect to Sony Life’s subsidiary and its equity method affiliates, we have not evaluated theirlife insurance business but reflected the following values to the calculation of adjusted net worth.
 AEGON Sony Life Insurance is valued as net asset value minus intangible fixed assets and Insurance

Business Law Article 113 deferred assets, multiplied by the participation rate Sony Life Insurance (Philippines) is valued as book value under Japanese GAAP adjusted for unrealized
gains / losses due to foreign exchange rate movement (after-tax)
 Other companies are valued as book value under Japanese GAAP
 Any calculated values of MCEV are not presented separately by segment of subsidiary andaffiliated company.
 We have calculated adjusted net worth based on Japanese GAAP, not on International Financial
Reporting Standards (IFRS).
 While Japanese solvency regime will be revised at the end of March 2012, the calculation isbased on the current solvency margin regime, because it is expected that MCEV would not bematerially different even if required capital were set to the revised regulatory minimum solvency
capital from the end of March 2012. Accordingly, sensitivity to use the current regulatory minimum
solvency capital is not presented.

Sony Financial Holdings Inc. All Rights Reserved

4

MCEV Results(Billions of yen)

10.3.31

MCEV

11.3.31

Change

894.0

853.6

(40.4)

Adjusted net
worth

206.2

230.3

+24.1

Value ofexisting
business

687.8

623.3

(64.5)Of which, newbusiness value

55.6

56.8

+1.2

Sony Financial Holdings Inc. All Rights Reserved

5

MCEV Results(Breakdown of Adjusted Net Worth 1)(Billions of yen)

10.3.3111.3.31

ChangeAdjusted net worth

206.2

230.3

+24.1

Total net assets

191.3

215.4

+24.1

9.6

16.8

+7.1

48.5

51.6

+3.1

0.0

0.0

+0.0

(20.5)(22.2)(1.7)

Unrealized gains or losses on land andbuildings

12.5

11.2

(1.3)

Unfunded pension liabilities

(6.6)

(6.4)

+0.2

Intangible fixed assets(13.9)(18.4)(4.5)

Tax effect equivalent of above seven items(10.7)(11.8)(1.0)

Valuation gain or loss on subsidiaries andaffiliated companies *

(4.0)

(5.8)

(1.8)

Reserve for price fluctuations
Contingency reserve
Reserve for possible loan losses
Unrealized gains or losses onheld-to-maturity securities*Valuation gain or loss on subsidiaries and affiliated companies included mainly values of AEGON Sony Life Insurance and Sony Life insurance(Philippines) in the calculation of adjusted net worth.

Sony Financial Holdings Inc. All Rights Reserved

6

MCEV Results(Breakdown of Adjusted Net Worth 2)(Billions of yen)

10.3.3111.3.31

ChangeAdjusted net worth

206.2

230.3

+24.1

Free surplus

206.2

230.3

+24.1

－

－

－

Required capital As of March 31, 2011, all amount of adjusted net worth was regarded as

free surplus, which showed Sony Life’s financial soundness.
 Japanese solvency regime are to be revised at the end of March 2012.

However, the calculation is based on the current solvency margin regime,
because it is expected that MCEV would not be materially different even if
required capital were set to the revised regulatory minimum solvency capitalfrom the end of March 2012.

Sony Financial Holdings Inc. All Rights Reserved

7

MCEV Results(Value of Existing Business)
Value of existing
business(Billions of yen)

881.4
(61.7)(Billion of yen)

10.3.3111.3.31

ChangeValue of existing business

687.8

623.3

(64.5)A) Present value ofcertainty-equivalent profit

887.2

881.4

(5.8)

B) Time value of options
and guarantees(37.7)(61.7)(24.1)C) Frictional costs(11.5)(31.7)(20.2)(150.2) (164.7)(14.5)(31.7)
623.3(164.7)

A

B

C

D

D) Cost of non-hedgeable
risks

11.3.31Sony Financial Holdings Inc. All Rights Reserved

8

MCEV Results (New Business Value)
Breakdown of
new business value

10.3.3111.3.31

Change

55.6

56.8

+1.2

E) Present value ofcertainty-equivalent profit

76.9

79.0

+2.2

F) Time value of options
and guarantees

(4.1)

(5.5)

(1.4)

G) Frictional costs

(0.3)

(0.3)

(0.0)

(16.8)(16.4)+0.4

10.3.3111.3.31

ChangeValue of new business

55.6

56.8

+1.2

Present value of premiumincome

875.4

953.1

+77.7

New business margin

6.4%

6.0%

(0.4pt)(Billions of yen)
Value of new business(Billions of yen)

79.0
(5.5)

(0.3)
56.8
(16.4)H) Cost of non-hedgeablerisks
New business margin(Billions of yen)

E

F

G

H

11.3.31*The present value of premium income is calculated applying the same
assumptions as those for the calculation of new business value.

Sony Financial Holdings Inc. All Rights Reserved

9

Reconciliation Analysis from MCEV
at the End of the Previous Fiscal Year (1)(Billions of yen)Free surplus(a)Requiredcapital(b)

Value ofexisting
business (c)MCEV(a)-(c)Total

MCEV as of March 31, 2010
(1) Adjustments to MCEV as of March 31, 2010

206.2
(7.7)

－
－

687.8
－

894.0
(7.7)

Adjusted MCEV as of March 31, 2010

198.5

－

687.8

886.3

（2）New business value

－

－

56.8

56.8

（3）Expected existing business contribution (risk-free rate)

0.9

－

12.5

13.4

(4) Expected existing business contribution (in excess of risk-free rate)

0.7

－

8.2

8.9

3.1
(33.9)

－

－

(3.1)
33.9

－

(6) Experience variances

(9.5)

－

8.0

(1.5)

(7) Assumption changes－－(11.5)(11.5)(8) Other operating variance

－

－

0.5

0.5

(9) Operating MCEV earnings (2)～(8) total

(4.8)

－

71.4

66.6

(10) Economic variances

36.7

－

(135.9)(99.3)－－－－

Total MCEV earnings

31.9

－

(64.5)(32.7)

Closing adjustments

(0.1)

－

－

(0.1)

230.3

－

623.3

853.6

（5）Transfers from value of existing business and required capital to free surplus
Of which, transfer from new business value(11) Other non operating variance

MCEV as of March 31, 2011

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10

Reconciliation Analysis from MCEV
at the End of the Previous Fiscal Year (2)＜10.3.31＞＜11.3.31＞+13.4(Billions of yen)

894.0

+56.8
886.3

+8.9
+0.5
(1.5)

(11.5)

(7.7)

853.6
(99.3)(0.1)

Operating MCEV earnings
MCEV Adjustments Adjusted
MCEV
as of
as of
March 31,
March 31,
2010
2010

FY10
New
businessvalue

Expected existing Expected existing
businessbusiness
contribution
contribution(in excess of(risk-free rate）
risk-free rate）

Experience Assumption
Economic Adjustments
varianceschanges Other variances

Sony Financial Holdings Inc. All Rights Reserved

MCEV
as of
March 31,2011

11

Reconciliation Analysis from MCEV
at the End of the Previous Fiscal Year (3)(Billions of yen）

Free surplus(a)Requiredcapital(b)

Value ofexisting
business (c)MCEV(a)-(c)Total

MCEV as of March 31, 2010
(1) Adjustments to MCEV as of March 31, 2010

206.2
(7.7)

－
－

687.8
－

894.0
(7.7)

Adjusted MCEV as of March 31, 2010

198.5

－

687.8

886.3

－

－

56.8

56.8

(2) New business value(1)

Adjustment to MCEV as of March 31, 2010
These adjustments reflect changes in dividends paid to shareholders.

(2)

New business value
This figure reflects increases resulting from the acquisition of new business during the year ended March 31, 2011.

Sony Financial Holdings Inc. All Rights Reserved

12

Reconciliation Analysis from MCEV
at the End of the Previous Fiscal Year (4)(Continue)(Billions of yen）

Free
surplus(a)Requiredcapital(b)

Value ofexisting
business(c)

MCEV(a)-(c)Total(3)Expected existing business contribution (risk-free rate)

0.9

－

12.5

13.4

(4) Expected existing business contribution (in excess of risk-free rate)

0.7

－

8.2

8.9

3.1
(33.9)

－
－

(3.1)
33.9

－
－

(5)Transfers from value of existing business and required capital to free surplus(3)

Expected existing business contribution (risk-free rate)
This figure includes the release of the portion for the year ended March 31, 2011 of the time value of options and guarantees and the cost of non-hedgeable
risks, in addition to the release of the expected existing business contributions at a risk-free rate from the opening MCEV (as of March 31, 2010).

(4)

Expected existing business contribution (in excess of risk-free rate)
This figure reflects the profit expected in excess of the risk-free rate generated by holding assets such as ordinary corporate bonds, convertible bonds, loans,stocks and real estate. The expected yield used to calculate the expected existing business contribution in excess of the risk-free rate for the year ended
March 31, 2011 was 0.808%, which was developed by reflecting our view of the market environment and annual investment plans for the year against theasset balance at the end of the previous fiscal year.

(5)

Transfer from value of existing business and required capital to free surplus
This figure indicates changes in the free surplus by transferring the profit for the year ended March 31, 2011 from the existing business value to the freesurplus and from changes in the required capital. The transfer of profit, the former item, includes the transfer of expected profit that it was assumed would be
realized during the year ended March 31, 2011 under the MCEV calculation as of March 31, 2010, and the transfer of profit for the year ended March 31,
2011 calculated under the new business value for the year ended March 31, 2011, which is added in (2). The value of MCEV itself does not change as aresult of this transfer as the transfer merely constitutes an internal shift among MCEV components.

Sony Financial Holdings Inc. All Rights Reserved

13

Reconciliation Analysis from MCEV
at the End of the Previous Fiscal Year (5)(Billions of yen)(Continue)(Billions of yen）

Requiredcapital(b)Free surplus(a)Value ofexisting
business (c)MCEV(a)-(c)Total(6) Experience variances

(9.5)

－

8.0

(1.5)

(7) Assumption changes－－(11.5)(11.5)(8) Other operating variance

－

－

0.5

0.5

(6)

Experience variances
These variances show the impact on MCEV of the actual versus assumed differences in non-economic expected profit for the year ended
March 31, 2011 under the MCEV calculation as of March 31, 2010, and of the differences between actual policies in force as of March 31,
2011, and those that were projected to be in force on March 31, 2010 using persistency assumptions. The primary causes of the former item
are an increase in IBNR claim reserve to account for benefits due to the Great East Japan Earthquake and changes in intangible fixed assets
and valuation gain or loss on subsidiaries and affiliated companies reflected in adjusted net worth.
These variances reflect the impact of one-time expenses incurred during the year ended March 31, 2011, if applicable.

(7)

Assumption changes
This figure indicates the impact of changes in the assumptions, mainly on mortality and morbidity rates, lapse and surrender rates andoperating expense rates. While maintenance expense rates and mortality changes increased the value of existing business, its decrease due
to lapse and surrender rate changes was more significant.

(8)

Other operating varianceThis represents the impact of improvements and corrections of the model used in calculating MCEV, including the effect due to the change ofthe calculation method of required capital from being based on EU Solvency II QIS4 to the internal model approach which is similar to but
modified based on QIS5.

Sony Financial Holdings Inc. All Rights Reserved

14

Reconciliation Analysis from MCEV
at the End of the Previous Fiscal Year (6)(Continue)(Billions of yen）

Free surplus(a)Value ofexisting
business(c)Requiredcapital(b)

MCEV(a)-(c)total(9) Operating MCEV earnings (2)～(8) total

(4.8)

－

71.4

66.6

(10) Economic variances

36.7

－

(135.9)(99.3)－－－－

Total MCEV earnings

31.9

－

(64.5)(32.7)

Closing adjustments

(0.1)

－

－

(0.1)

MCEV as of March 31, 2011

230.3

－

623.3

853.6

(11) Other non operating variance(9)

Operating MCEV earnings
This figure shows the aggregate amount of items (2) through (8).

(10) Economic variances
These variances show the impact of actual to assumed differences in economic assumptions, such as market interest rates and implied volatilities, that werereflected in the market environment when calculating MCEV as of March 31, 2010 on future values and the impact of the actual to assumed difference in
expected asset investment income that were assumed would be realized during the year ended March 31, 2011, under MCEV as of March 31, 2010.
Most of the difference is created by the former factor, of which major reasons for decreases in the value of existing business include an update of economic
scenarios due to the change in the market environment such as a decrease in interest swap rates and a change of the implied volatilities, accounting for adecrease in the present value of certainty-equivalent profit by ¥118.6 billion, as well as increases in the time value of options and guarantees, in the cost of
non-hedgeable risks, and in the frictional costs by ¥4.8 billion, ¥10.6 billion and ¥1.8 billion, respectively.
(11) Other non operating variance
There are no differences based on other factors.
(12) Closing adjustments
It reflects the impact of valuation gains or losses caused by the foreign exchange rate on Sony Life Insurance (Philippines) Corporation.

Sony Financial Holdings Inc. All Rights Reserved

15

Sensitivity Analysis＜11. 3.31＞(Billions of yen)
Assumption
Base

Change in Assumption＜10.3.31＞
AmountChangeMCEV% Change

MCEV

AmountChange% Change

No change

853.6

－

－

894.0

－

－

100bp decrease

739.2(114.4)

(13%)

782.9

(111.1)(12％)

100bp increase

890.9+ 37.3

+ 4%

918.5

+24.5

+3％

If applied
JGB interest rate

901.2

+ 47.6+ 6%

Stock / Real estate market value

10％ decrease

837.1(16.5)

(2%)

878.2

(15.8)(2％)

Stock / Real estate implied volatility

25％ increase

847.0

(6.6)

(1%)

890.0

(4.1)

(0％)

Interest swaption implied volatility

25％ increase

845.5

(8.1)

(1%)

888.5

(5.5)

(1％)

Maintenance expenses

10％ decrease

864.1+ 10.5

+ 1%

904.8

+10.8

+1％

Lapse & surrender rates

x 0.9

875.6

+ 22.0

+ 3%

919.9

+25.8

+3％

Mortality rates

Death protection products: x
0.95

889.1

+ 35.5

+ 4%

925.4

+31.3

+4％

Third-sector and annuity
products X 0.95

849.9

（3.7)

(0%)

890.9

(3.1)

(0％)

x 0.95880.1+ 26.5

+ 3%

920.5

+26.5

+3％

Interest rates

Morbidity rates■Changes in adjusted net worth within the amount of change in MCEV are shown in the table below. Of items not specified in this table, only the value ofexisting business has been changed while adjusted net worth remains the same.
Assumption

Change in Assumption

Amount Change

Amount Change

100bp decrease

534.2

391.0

100bp increase(415.5)(326.3)

Stock / Real estate market value

10％ decrease(13.1)(13.3)

Stock / Real estate implied volatility

25％ increase

0.1

(0.1)

Interest rates

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16

Sensitivity of New Business Value(Billions of yen)
Assumption＜11. 3.31＞
Change inAssumption＜10.3.31＞
New
BusinessValue

AmountChange% Change

New
BusinessValue

AmountChange% Change

No change

56.8

－

－

55.6

－

－

100bp decrease

13.1(43.7)

(77%)

25.8

(29.8)(54%)

100bp increase

82.9

+26.1

+46%

70.1

+14.5

+26%

If applied
JGB interest rate

61.6

+ 4.8

+ 8%

Stock / Real estate market value

10％ decrease

56.8

(0.0)

(0%)

55.6

(0.0)

(0%)

Stock / Real estate implied volatility

25％ increase

56.5

(0.3)

(0%)

55.4

(0.2)

(0%)

Interest swaption implied volatility

25％ increase

55.8

(1.0)

(2%)

54.3

(1.3)

(2%)

Maintenance expenses

10％ decrease

58.0

+1.2

+ 2%

56.8

+1.2

+2%

Lapse & surrender rates

x 0.9

61.6

+4.8

+ 8%

60.4

+4.8

+9%

Death protection
products: x 0.95

59.4

+2.6

+5%

57.9

+2.3

+4%

Third-sector andannuity products
X 0.95

56.5

(0.3)

(1%)

55.4

(0.2)

(0%)

x 0.95

59.0

+2.2

+ 4%

58.4

+2.8

+5%

Base

Interest rates

Mortality rates

Morbidity rates

Sony Financial Holdings Inc. All Rights Reserved

17Interest Rates Sensibility and Others<Interest rates sensibility>This sensitivity represents the impact of an immediate parallel shift of the domestic and foreignswap curve as of March 31, 2011, and the impact if the government bond yield were usedinstead of a swap yield. Adjusted net worth would change as the market value of bonds andother assets held were to change, while this is not applicable to the case if the government bondyield were used.



From this fiscal year the sensitivity result if the government bond yield were used has been
additionally presented, because the government bond yield can be considered more appropriate
to discount liability cash flows for the internal risk management purpose, as asset and liability
interest rate risk management is pursued by investing funds held for future insurance claim
costs mainly in ultra-long term government bonds. As of March 31, 2011, the value of existing
business under the calculation based on the government bond yield surpassed that based on aswap yield because interest swap rates were lower than Japanese government bond yields forthe ultralong-term interest rates.

<Others>

Frictional costs and the cost of non-hedgeable risks do not change in the sensitivity tests.

Values of subsidiaries and affiliated companies are not changed except for stock market value
sensitivity where the stock value of subsidiaries and affiliated companies are altered.



The impact of changing more than one assumption at a time is not congruent with the sum ofimpacts for each assumption.
Sony Financial Holdings Inc. All Rights Reserved

18Appendix

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19

Assumptions
Assumptions are described in the press release on and after P14. Of the assumptions, some of economic assumptions are shown below.

<Implied volatilities of interest swaptions><Risk-free rate*>
JGB interest rates

Swap rate

10.3.31(JPY)

11.3.31(JPY)

Term ofswap

Term ofoption1 year

1 year

40.3%

53.8%

Term

10.3.3111.3.31

Term

10.3.3111.3.31

1 year

0.45%

0.36%

1 year

0.12%

0.15%

5 year

0.76%

0.62%

5 year

0.56%

0.50%

5 year

1 year

41.8%

60.1%

10 year

1.46%

1.29%

10 year

1.40%

1.26%

5 year

5 year

27.1%

32.5%

20 year

2.19%

2.02%

20 year

2.18%

2.07%

5 year

7 year

23.4%

26.7%

30 year

2.32%

2.16%

30 year

2.30%

2.19%

40 year

2.37%

2.24%

40 year

2.34%

2.34%

5 year10 year

20.9%

23.6%

50 year

2.42%－

50 year－－

10 year1 year

30.3%

40.6%

*The interest swap rate of Japanese yen is used as a risk-free rate.

10 year

5 year

23.6%

28.2%

<Implied volatilities of stocks>

10 year

7 year

21.4%

25.3%

10 year

10 year

20.4%

24.0%

15 year1 year

25.2%

32.6%

15 year

5 year

22.2%

26.7%

15 year

7 year

21.4%

25.3%

15 year

10 year

21.0%

24.8%

Term

09.3.31
Japan
TOPIX

10.3.31
U.S.
S&P

Japan
TOPIX

U.S.
S&P

1 year

18.5%

19.4%

20.3%

19.9%

5 year

20.5%

22.1%

19.9%

21.6%

10 year

22.2%

28.4%

22.1%

25.7%

Sony Financial Holdings Inc. All Rights Reserved

20Comparison of Interest Swap Rates(%)

2.5
11.3.3110.3.31
2

1.5

1

0.5

R
30
Y

R

R
20
Y

40
Y

R
15
Y

1Y
R
2Y
R
3Y
R
4Y
R
5Y
R
6Y
R
7Y
R
8Y
R
9Y
10 R
Y
R

0

(Data Source: Bloomberg)Sony Financial Holdings Inc. All Rights Reserved21

Comparison of Interest Rates Between
Swap and JGB (As of March 31, 2011)(%)

2.5
JGB interest rates
Swap interest rates
2

1.5

1

0.5

R
30
Y

R

R
20
Y

40
Y

R
15
Y

1Y
R
2Y
R
3Y
R
4Y
R
5Y
R
6Y
R
7Y
R
8Y
R
9Y
R
10
Y
R

0

(Data Source: Bloomberg)Sony Financial Holdings Inc. All Rights Reserved

22Comparison Between Standard Methodologies
Described in QIS5 of EU Solvency II (Excerpt) andSony Life’s Internal Model (1)We set our required capital as the larger of the amount of capital required for the current solvency margin ratio of600% or the amount of capital to cover risks based on the internal model.
For the previous fiscal year we defined the amount of capital to cover risks based on the internal model as thetotal amount of technical provision and solvency risk capital stipulated by QIS4 of the EU Solvency II held inexcess of statutory policy reserves (excluding contingency reserve).
From this fiscal year we have changed to the internal model, a similar but modified model based on the QIS5
standard method.
Market Risk
QIS5
 For equity risk, using a shock of 30% (for global) or 40% (for others) (Note1) fall in the value
 For currency risk, using a downward shock of 25%
 For interest rate risk, using the interest rate movements pre-defined by each maturity
 Interest rate up (from 1.25 times to 1.70 times), Interest rate down (Note2) ( from -0.25 times to -0.73 times)
Sony LifeFor equity risk, using a shock of 45% (for listed stocks) and 100% (for stocks of subsidiaries and affiliated companies) fall inthe value For currency risk, using a downward shock of 30%
 For interest rate risk, using the interest rate movements pre-defined by each maturity
 Interest rate up (from 1.52 times to 4.19 times), Interest rate down (Note2) ( from -0.23 times to -0.66 times)
Note 1:QIS5 risk multipliers are global:39%/other:49%, but 30%/40% are used, as a symmetric adjustment(an adjustment within ±10%, based on the average of the stock price index over a specified period in the past) is applied.
Note 2: Regarding interest rate risk, a minimum 1% decrease must be applied, and the floor for all standards is set to 0%.

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23Comparison Between Standard Methodologies
Described in QIS5 of EU Solvency II (Excerpt) andSony Life’s Internal Model (2) Life Underwriting Risk
QIS5
 For mortality risk, using a shock of a (permanent) 15% increase in mortality rates for each age.
 For longevity risk, using a shock of a (permanent) 20% decrease in mortality rates for each age.
 For lapse risk
Maximum amount of these; Increase by 50% in the assumed rates of lapsation for Life module, 20% for Health module* Decrease by 50% in the assumed rates of lapsation for Life module, 20% for Health module* 30% or 70% of the sum of surrender as a mass lapse event
 For expense risk, using a shock of a 10% increase in future expenses compared to best estimate anticipations, andincreasing 1% per annum of the expense inflation rate compared to anticipations
 For disability risk, using a shock of a 35% increase in disability rates for the next year, together with a (permanent)
25% increase (over best estimate) in disability rates at each age in following years.
Sony Life
 For mortality risk, using a shock of a (permanent) 15% increase in mortality rates for each age.
 For longevity risk, using a shock of a (permanent) 20% decrease in mortality rates for each age.
 For lapse risk
Maximum amount of these; Increase by 50% in the assumed rates of lapsation for Life module, 50% for Health module* Decrease by 50% in the assumed rates of lapsation for Life module, 50% for Health module* 30% of the sum of surrender as a mass lapse event
 For expense risk, using a shock of a 10% increase in future expenses compared to best estimate anticipations, andincreasing 1% per annum of the expense inflation rate compared to anticipations
 For disability risk, using a shock of a 35% increase in disability rates for the next year, together with a (permanent)
25% increase (over best estimate) in disability rates at each age in following years.
*Referring to the QIS5 approach, it is classified that accidental and health (A&H) products belong to the Health module and the other products belong to the Life module.
Because diversification effect is considered between the Life and Health modules, this change decreases the total insurance underwriting risk.

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24For inquiries:
Sony Financial Holdings Inc.
Corporate Communications & Investor Relations Department
TEL：+81-(0)3-5785-1074

Sony Financial Holdings Inc. All Rights Reserved25