Presentation Material

Consolidated Financial Results
for the Nine Months Ended December 31, 2013
andSony Life’s
Market Consistent Embedded Valueas of December 31, 2013

Sony Financial Holdings Inc.
F b
February14,
14 2014
Sony Financial Holdings Inc. All Rights Reserved

Content
 Consolidated Operating Results for the Nine Months Ended December 31, 2013

P.3

 Consolidated Financial Forecast for the Fiscal Year Ending March 31, 2014

P.29

 Sony Life’s MCEV and Risk Amount Based on Economic Value

P.31

as of December 31, 2013
 Appendix

P 34
P.34

Disclaimers:
This presentation material contains statements concerning the current plans, expectations, strategies and beliefs of the Sony Financial
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,”p“forecast,” “predict,”pand “possibility”py that describe future operatingpg activities, business p
performance, events or conditions.
“expect,”
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 the forecasts 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 other findings. The
information contained in this presentation does not constitute 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 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 theNine Months Ended December 31, 2013

Sony Financial Holdings Inc. All Rights Reserved

3

Highlights of Consolidated Operating Performancefor the Nine Months Ended December 31, 2013 (1)Consolidated ordinary revenues
Consolidated ordinary profitLife
insurancebusiness

1,047.3

Non-life
insurancebusiness+20.2%

871 5
871.5

Bankingbusiness

61.5
6
5
55.4

IIntersegmentttadjustments*+11.0%

Consolidated

FY12.3Q (9M)(Billions of yen)

FY12.3Q(9M)

FY13.3Q(9M)

Ordinary revenues

784.3

954.8

+170.4+21.7%

Ordinary profit

51.7

53.3

+1.5

+2.9%

Ordinary revenues

63.8

67.4

+3.6

+5.7%

Ordinary profit

1.0

2.7

+1.7

+164.8%

Ordinary revenues

25.1

27.0

+1.8

+7.5%

Ordinary profit

2.5

5.2

+2.7

+110.0%

(1 8)
(1.8)

(1 9)
(1.9)

(0 1)
(0.1)

－

0.1

0.2

+0.0

+42.6%

Ordinary revenues

871.5

1,047.3+175.8+20.2%

Ordinary profit

55.4

61.5

+60.0

+11.0%Net income

32.7

35.3

+2.5

+7.8%

13.3.31

13.12.31

Total assets

8,096.1

8,682.6+586.5+7.2%

Net assets

435.4

456.8

+21.4

+4.9%

Ordinary revenues
Ordinary profit(Billions of yen)

FY13.3Q (9M)(Billions of yen)

Consolidated

ChangeChange from
13.3.31*Ordinary profit in “Intersegment adjustments” is mainly from SFH.
*Comprehensive
Comprehensive income: FY12.3Q
FY12 3Q (9M): ¥46.8¥46 8 billion,
billion FY13
FY13.3Q
3Q (9M): ¥32¥32.3
3 billion
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 Nine Months Ended December 31, 2013 (2) Life Insurance Business: Ordinary revenues increased compared with the same period of the previous

fiscal year mainly because an increase in income from insurance premiums due to an increase in thesale of lump-sum payment endowment insurance and steady growth in policy amount in force. An
increase in the investment income due to higher gains on separate accounts, net resulting from themarket recovery also contributed to the rise in ordinary revenues. Ordinary profit expanded year on year
owing to an increase in the positive spread and a reversal of policy reserves for minimum guarantees forvariable life insurance, despite the negative impact from an increase in provision of policy reserves
resulting from the revision of discount rate used for calculating policy reserves.
 Non-life Insurance Business：Ordinary revenues increased year on year owing to an increase in net

premiums written primarily for its mainstay automobile insurance. Ordinary profit increased year on year
due to a decline in the loss ratio mainly
y led byy the revision of p
premium rates for automobile insurance anda lower car accident ratio owing to the introduction of a new bonus-malus system (non-fleet driver rating
system), in addition to a decline in the expense ratio.
 Banking Business：Ordinary revenues increased year on year due to higher gains on foreign exchangetransactions stemming from customers
customers’ active foreign currency trading and a rise in interest income onloans led by the growing balance of mortgage loans. Ordinary profit expanded year on year due mainly toan improvement in net gains on bond-dealing transactions and a decrease in interest expenses.
 Consolidated ordinary revenues increased 20.2% compared with the same period of the previous fiscal

year, tot ¥1,047.3billion,¥1 047 3billi
owing
i to
t increasesiin
i ordinarydirevenues fromfallll businesses:b i
life
lif iinsurance, nonlife insurance and banking. Consolidated ordinary profit increased 11.0% year on year, to ¥61.5 billion,
owing also to increases in ordinary profits from all the businesses. Consolidated net income was up 7.8%
year on year, to ¥35.3 billion.
Line item amounts are truncated below ¥100 million; percentage change figures are rounded.

Sony Financial Holdings Inc. All Rights Reserved

5Highlights of Operating PerformanceSony Life (Non-consolidated)
Ordinary revenues

Ordinary profit（億円）(Billions of yen)

955.2

784.1

54.7
52.8

+3.6%

+171.0+21.8%

Income from insurance premiums

657.3

738.7

+81.4

+12.4%

Investment income

111.4

194.8

+83.4

+74.9%

Interest income and dividends

80.3

90.2

+9.8

+12.3%

Income from monetary trusts, net

3.9

3.9

+0.0

+1.3%

Gains on sale of securities

2.3

0.6

(1.6)

(71.4%)

Gains on separate accounts, net

24.7

98.7

+74.0

+299.2%

731.2

900.4

+169.1+23.1%

Insurance claims and other payments

215.5

251.4

+35.8

+16.6%

Provision for policy reserves and others

409.5

536.3

+126.8+31.0%

9.4

6.0

(3.4)

(36.0%)

1.5

0.0

(1.5)

(97.0%)

80.0

85.5

+5.4

+6.8%

Ordinary expenses

52.8

54.7

+1.8

+3.6%

Net income

31.1

31.5

+0.3

+1.3%

Ordinary expenses

Losses on sale of securities

FY13.3Q (9M)(Billions of yen)

◆ Ordinary revenues and ordinary profit increased
year on year.
◆ Income from insurance premiums increased due to anincrease in the sale of lump-sum payment endowment
insurance and steady growth in policy amount in force.
◆ Investment income increased due mainly to higher gains
on separate accounts, net resulting from the market
recovery.
◆ Ordinary profit expanded year on year owing to anincrease in the positive spread and a reversal of policy
reserves for minimum guarantees for variable life
insurance despite the negative impact from an increase
insurance,
in provision of policy reserves resulting from the revisionof discount rate used for calculating policy reserves.

Change955.2

Investment expenses

FY12.3Q (9M)

FY13.3Q
(9M)

784.1

Ordinary revenues+21.8%

FY12.3Q(9M)

Operating expenses(Billions of yen)

13.3.31

13.12.31

Change from 13.3.31

Securities

5,211.5

5,793.8+582.3+11.2%

Policy reserves

5 472 95,472.9

6 009 2
6,009.2+536 3+536.3

+9 8%
+9.8%

Total net assets

342.3

358.8

+16.5

+4.8%

80.2

76.4

(3.7)

(4.7%)

5,952.7

6,507.3+554.6

+9.3%

550.6

651.0

+100.4+18.2%Net unrealized gains on other securities,
net of taxes

Total assets
Separate account assets

Sony Financial Holdings Inc. All Rights Reserved

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

6

Overview of PerformanceSony Life (Non-consolidated)<Reasons for changes>

FY12.3Q(9M)

FY13.3Q(9M)

ChangeNew policy amount

3,215.9

3,003.1(6.6%)

Lapse and surrender amount

1 451 5
1,451.5

1 327 5
1,327.5(8 5%)(8.5%)

Lapse and surrender rate

4.03%

3.52%

(0.51pt)

Policy amount in force

37,203.6

38,863.7+4.5%

Annualized premiums from new policies

51.1

48.7

(4.8%)Of which, third-sector products

13.1

10.5

(19.7%)

657.8

690.8

+5.0%

155.7

166.3

+6.8%

FY12.3Q(9M)

FY13.3Q(9M)

ChangeGains from investment, net (General account)

77.1

90.0

+16.6%

Core profit

57 0
57.0

56 6
56.6

(0 6%)(0.6%)

Positive spread

1.1

5.7

+418.2%13.3.31

13.12.31

Changefrom
13.3.312,281.8%

2,404.8%+123.0pt(Billions of yen)

Annualized premiums from insurance in force
Of which, third-sector products(Billions of yen)

Non-consolidated solvency margin ratio◆ Decreased due mainly to lower sales offamily income insurance and interest
rate-sensitive whole life insurance
p highergsale of lump-sum
pdespitepayment endowment insurance.

◆ Decreased mainly in term-life
insurance.
◆ Decreased due to lower sales of
educational endowment insurance andinterest rate-sensitive whole life
insurance despite higher sale of lumpsum payment endowment insurance.
Of which,hi h thi
third-sectordt products,
d t sale
l off
lump-sum payment whole life nursing
care insurance decreased.
◆ Almost unchanged because thenegative impact from provision ofpolicy reserves resulting from therevision of discount rate used for
calculating policy reserves was offset
by an increase in the positive spread
and a reversal of reserves for minimum
guarantees for variable life insurance.

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[ Reference]
4Q(3M) Number and Amount of New Policies

Number of new policies

New policy amount(Trillions of yen)

454

439

3.22

(Thousands of policies)500(5 5%)(5.5%)

415

40,0003.5
35,000

Number of new policies(Thousands of policies)

400

3.21

(Trillions of yen)

3.0
30,0002.5
25,000+31.9%

200

1.5

3.00
(6.6%)

180

137

137

0.96

0.97

1 23
1.23

300

1.0

20,0002.0+26.9%

100

200

1.5
15,0000.5

10,000
1.0

100

5,000
0.5
0

0

FY11.3Q (9M)

FY12.3Q (9M)

FY13.3Q (9M)00
FY10.4Q

FY11.4Q

FY12.4Q

Line item amounts are truncated below ¥10 billion; numbers of policies aretruncated below 1,000 policies; percentage change figures are rounded.

Sony Financial Holdings Inc. All Rights Reserved

8Operating Performance :Sony Life (Non-consolidated) (2)Annualized Premiums from New Policies(Individual Life Insurance + Individual Annuities)
A
Annualized
li d premiumsiffrom new policies
li i[ Reference]
4Q(3M) Annualized Premiums from New Policies

Of which, third-sector

Annualized premiums from new policies
Of which, third-sector(Billions of yen)
60

53.1

(Billions of yen)

51.1

+24.8%

48.7

50

22.0

20

17 2
17.2

(4 8%)(4.8%)
40

17.6

15

30
10
20

+29.1%

5
10

13 0
13.0

13.1

(19 7%)(19.7%)

10.5

3.9

4.0

5.2

FY10.4Q

FY11.4Q

FY12.4Q

00
FY11.3Q (9M)

FY12.3Q (9M)

FY13.3Q (9M)Line item amounts are truncated below ¥100milliom; percentage change figures are rounded.

Sony Financial Holdings Inc. All Rights Reserved

9Operating Performance :Sony Life (Non-consolidated) (3)Number and Amount of Policies in Force

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

Policyy amount in force

Number of p
policies in force
Annualized premiums from insurance in force(Millions of policies)

Of which, third-sector
third sector(Trillions of yen)
+5.9%
50

40

6.04

5 92
5.92

37.2

+3.8%

(Billions of yen)

6.27
6

+4.5%

657 8
657.8

37.7

+3.1%

+5.0%

38.8

690.8

669.9

5

+2 9%
+2.9%
4

30

3
20
2
10
1

0

+6.8%

155 7
155.7

158 6
158.6

+4.8%
4 8%

166.3

0

12.12.31

13.3.31

13.12.31

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

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

Sony Financial Holdings Inc. All Rights Reserved

10Operating Performance :Sony Life (Non-consolidated) (4)Lapse and Surrender Rate*(Individual Life Insurance + Individual Annuities)
Lapse and surrender rate (Annual)
Lapse and surrender rate (9M)
(%)

5.93

5.31

(0.51pt)

4.50

4.03
3 52
3.52

*The
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

11

Operating Performance :Sony Life (Non-consolidated) (5)Income from Insurance Premiums

Interest Income and Dividends(Billions of yen)(Billions of yen)

800

738.7

600

602.0

90
80

657.3

700

+12.4%

90.2
80.3
72.5

+12.3%

70
60

500

50

400

40
300
30
200

20

100

10

0
FY11.3Q (9M)

FY12.3Q (9M)

FY13.3Q (9M)

0
FY11.3Q (9M)

FY12.3Q (9M)

FY13.3Q (9M)Line item amounts are truncated below ¥100 million; percentage figures are rounded.

Sony Financial Holdings Inc. All Rights Reserved

12

Operating Performance :Sony Life (Non-consolidated) (6)Core Profit((Billions of yen)y )Ordinary Profit*Included ¥3.9 billion of a reversal of reserve for outstanding
claims related to the Great East Japan Earthquake.

50.9*
50

60

56.6

57.0

60

(Billions of yen)

(0.6%)

50

+3.6%

40

40

30

30

20

20

10

10

0

0
FY11.3Q (9M)
(Reference) Impact on core profit

50.5

54.7

52.8

FY12.3Q (9M)

FY11.3Q (9M)

FY13.3Q (9M)(Billions of yen)

FY11.3Q FY12.3Q FY13.3Q
(9M)
(9M)
(9M)

FY12.3Q (9M)

(R f
(Reference))M
Main
i diffdifferences ffrom CoreCP
Profitfit
FY11.3Q(9M)

FY13.3Q (9M)(Billi(Billions
off yen))

FY12.3Q(9M)

FY13.3Q
(9M)

(1.7)

1.1

5.7

Capital gains (losses)

2.4

(0.8)

1.2

Effects by the revision of policy reserve discount rate

－

－

(8.0)

Provision of contingency reserve

(2.7)

(3.0)

(2.9)

Reversal of policy reserves for minimum guarantees forvariable life insurance in the general account assets

(5.6)

(1.2)

0.9

Positive (Negative) spread*The plus amount in negative spread indicates positive spread.

*“Provision of policy reserves for minimum guarantees for variable life insurance
in the general account assets” and “Provision of contingency reserve” aredescribed as negative amount.
Line item amounts are truncated below ¥100 million; percentage figures are rounded.

Sony Financial Holdings Inc. All Rights Reserved

13

Operating Performance :Sony Life (Non-consolidated) (7)Number of Lifeplanner Sales Employees(Number)
+46

4,500
4,121
[76]

4,105
[86]

4,085
[96]

4,046
[102]

4,133
4
133
[105]

4,127
4
127
[109]

4,125
[110]

4 092
4,092
4,031
[121]
[87]
(33)

4,000

3 500
3,500

3,000012.3.3112.6.30

12.9.30

12.12.31

13.3.3113.6.30

13.9.30

13.12.31

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
g but who continue to work as Lifeplannerpsales
employees that meet certain sales conditions and other requirement.
* “Lifeplanner” is a registered trademark of Sony Life.

Sony Financial Holdings Inc. All Rights Reserved

14

Operating Performance :Sony Life (Non-consolidated) (8)Breakdown of General Account Assets
13.3.31(Billions of yen)

13.12.31

Amount%Amount

%4,561.0

84.4%

5,016.2

85.7%

Japanese stocks

31.1

0.6%

36.4

0.6%

Foreign securities

62.0

1.1%

74.9

1.3%

Foreign stocks

25.4

0.5%

27.4

0.5%

306.1

5.7%

301.5

5.1%

Japanese governmentand corporate bonds

Monetary trusts<Asset management review>
On the asset side, we lengthened the duration of
securities held to match the liability characteristics
of insurance policies with long-term maturities withthe aim of reducing interest rate risk
risk.
Japanese government and corporate bonds:
Continue to accumulate ultralong-term bonds in FY13.
<Bond duration>
Mar. 31, 2012 19.2 years
Mar. 31, 2013 19.9 years
Dec. 31,, 2013

Policy loans

145.0

2.7%

150.8

2.6%

Real estate

70.3

1.3%

67.0

1.1%

Cash and call loans

103.3

1.9%

62.6

1.1%

Others

97.7

1.8%

119.1

2.0%

5 402 1
5,402.1

100 0%
100.0%

5 856 25,856.2

100 0%
100.0%

Total

19.6 yearsy■ 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 general account assets:As
soof Dec.
ec 331,, 2013:
0 3 9090.8%,
8%, ((Assoof Mar.
a 331,, 2013:
0 3 9090.1%)%)

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

Sony Financial Holdings Inc. All Rights Reserved

15

Operating Performance :Sony Life (Non-consolidated) (9)Non-consolidated Solvency Margin Ratio

(%)

3,000

+123.0pt

2,500

2,404.8

2,281.8

2,000

1,980.4
1,500

0
1,000

12.3.3113.3.31

13.12.31

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
policyy amount
New p
Number of new policies[ ](Billions of yen)

127.8
[22.2](Thousands ofpolicies)

20

160

18

140

16

80.0

27.3
[3.9]

40.0

80

8

60

FY12.3Q (9M)

25
20
76 1
76.1
[10.2]

57.7
[7.5]

15
10

40

4

0.0
FY11.3Q (9M)

10
6

10.6
10
6
[1.4]

30

100

12

(Thousands ofpolicies)

35

120

14

60.0

199 0
199.0
[31.7]

180

22

100.0

Policy amount in force
Number of policies in force[ ]

200

24

120.0

20.0

(Billions of yen)

2

20

0

0

5
0
12.12.31

FY13.3Q (9M)

13.3.31

13.12.31*AEGONAEGON Sony Life Insurance is an equity method company
company, 50-50 joint venture established by Sony Life and AEGON Group
Group.

(Billions of yen)

FY12.3Q(9M)

FY13.3Q(9M)(Reference)
FY12

ChangeOrdinary revenues

31.3

137.0

+105.6+336.5%

58.6

O diOrdinary
profitfit (losses)
(l
)

(1 7)
(1.7)

(2 5)
(2.5)

(0 7)
(0.7)

－

(2 4)
(2.4)

Net income (losses)

(1.8)

(2.6)

(0.7)

－

(2.5)

Sony Financial Holdings Inc. All Rights Reserved

Line item amounts are truncated below ¥ 100 million;
numbers of policies are truncated below 100 policies;
percentage change figures are rounded17

Highlights of Operating PerformanceSony Assurance
Ordinary revenues

63.8

Ordinary profit+5.7%(Billions of yen)

67.4

1.0
FY12.3Q (9M)

FY13.3Q (9M)(Billions of yen)

◆ Ordinary revenues and ordinary profit increased
year on year.
◆ Ordinary revenues increased year on year, due toan increase in net premiums written primarily for
its mainstay automobile insurance◆ Ordinary profit increased year on year due to a
decline in the loss ratio mainly led by the revisionof premium rates for automobile insurance and alower car accident ratio owing to the introductionof a new bonus-malus system (non- fleet driver
rating system), in addition to a decline in the
expense ratio.

Change

67.4

+3.6

+5.7%

Underwriting income

63.0

66.5

+3.5

+5.6%

Investment income

0.7

0.8

+0.1

+19.9%

62.7

64.6

+1.9

+3.1%

Underwriting expenses

47.6

49.2

+1.6

+3.4%

Investment expenses

0.0

0.0

(0.0)

(62.3%)

Operating, general andadministrative expenses

15 0
15.0

15 4
15.4

+0 3
+0.3

+2 1%
+2.1%

Ordinary profit

1.0

2.7

+1.7

+164.8%Net income

0.5

1.7

+1.1

+191.4%13.3.31

13.12.31

Ordinary expenses+164.8%

FY13.3Q(9M)

63.8

Ordinary revenues

2.7

FY12.3Q(9M)(Billions of yen)

Change from
13.3.31

Underwriting reserves

70.6

76.3

+5.7

+8.2%

Total net assets

19.9

21.7

+1.8

+9.2%

Total assets

127.4

136.9

+9.5

+7.5%

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

Sony Financial Holdings Inc. All Rights Reserved

18

Overview of Performance:
Sony Assurance<Reasons for changes>
FY12.3Q (9M)

FY13.3Q (9M)

Direct premiums written

62.1

65.5

+5.4%

Net premiums written

62.9

66.5

+5.6%

Net losses paid

35.0

35.0

(0.0%)

Underwriting profit

0.3

1.9

+478.3%Net loss ratio

62.4%

59.7%

(2.7pt)Net expense ratio

25.5%

24.6%

(0.9pt)Combined ratio

87.9%

84.3%

(3.6pt)(Billions of yen)（億円）

Change◆ IncreasedId primarilyi
il iin it
its mainstay
i t
automobile insurance.
◆ Decreased mainly led by therevisioni i off premium
i
rates
t for
f
automobile insurance and a lower
car accident ratio owing to theintroduction of a new bonus-malus
system.
◆ Declined due to a proper control of
insurance acquisition cost, in
addition to a rise in automobile
insurance premiums.

Notes:Net loss ratio = (Net losses paid + Loss adjustment expenses ) / Net premiums written.
pratio = Expensesprelated to underwritingg / Net p
premiums written
Net expense

Number of policies in force
Non-consolidated
solvency margin ratio

13.3.31

13.12.31

Change from 13.3.31

1.55 million

1.59 million+0.04 million

504.2％

547.7%+43.5pt+2.8%

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 are truncated below 10,000 policies;
percentage change figures are rounded.

Sony Financial Holdings Inc. All Rights Reserved19Sony Assurance’s Underwriting Performanceby Type of Policy
Direct Premiums Written

Net Premiums Written

FY12.3Q(9M)

FY13.3Q(9M)

Change

Fire

171

184

+7.2%

Marine－－－Personal accident*

5,883

6,234

+6.0%

Voluntary automobile

56,12959,151

+5.4%

－

－

－

62 18562,18565 56965,569

+5 4%
+5.4%

(Millions of yen)Compulsory
automobile liability
Total

Net losses paid
FY13.3Q(9M)

Change
g

Fire

0

1

+108.7%

Marine160101(37.0%)

P
Personall accident*
id t*

1 467
1,467

1 537
1,537

+4.8%
4 8%

Voluntary automobile

32,66232,559(0.3%)

Compulsory
automobile liabilityy

750

840

+12.1%

35,04135,040(0.0%)

Total

FY13.3Q(9M)

Change

Fire

80

92

+14.8%

Marine105118+12.6%

Personal accident*

6,073

6,440

+6.0%

Voluntary automobile

55,922

58,959+5.4%

Compulsory
automobile liability

805

931

+15.7%

Total

62 98762,98766 542
66,542

+5 6%
+5.6%

(Millions of yen)

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

FY12.3Q(9M)(Millions of yen)

FY12.3Q(9M)

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
OthersNumber of policies in force(Billions of yen)
80
1 47
1.47
70
60

0.7 59.4
5.6

1.54
0.9

62.9
6.0

52.9

(Billions of yen)

(Millions of policies)

+2.8%

55.9

50
40

Personal accident insurance

1.59

O di
Ordinary
profitfit

Adj
Adjustedd ordinarydiprofit
fi

3.3

3.7
3.2

2.7

1.6

+5.6%

66.5 1.1
6.4

2.7
1.4
2.2
1.2
17
1.7

58.9

+164.8%

1.6

1

1.0

1.2
0.8

0.7
0.7

30

06
0.6

20

0.4

10

0.2

(0.1)

0.2
-0.3
FY11.3Q (9M)

FY12.3Q (9M)

FY13.3Q (9M)

*Adjusted ordinary profit = Ordinary profit + Provision for catastrophe reserve

00
FY11.3Q

FY12.3Q

FY13.3Q(Reference) Provision for catastrophe reserve
FY11.3Q(9M)
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.

(0.9)(Billions of yen)

FY12.3Q(9M)

FY13.3Q
(9M)

(1.1)

0.6

*Reversal for catastrophe reserve is described as negative amount.
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

21

Operating Performance:
Sony Assurance (2)Earned/Incurred Loss Ratio +Net Expense Ratio
Earned/Incurred loss ratio

(%)
100

98.9

98.1

(Reference) Combined Ratio(Net Loss Ratio+ Net Expense Ratio)
Net loss ratio

Net expense ratio

97.0

Net expense ratio

(%)

98.9
93.3

100

89 2
89.2

89.0
(5.6pt)

71.5
72.4

72.9

(4.7pt)68.7

84.3(3.6pt)

73.4

61.8

60
63.3

63.2

25.7

26.0

62.4
(2.7pt)

59.7

40

40

20

87.9

80

80

60

87.4

25.7

26.0

20

(0.9pt)

25.5

25.5

24 6
24.6

FY12.3Q

FY13.3Q

25.5

25.5

FY11.3Q

FY12.3Q(0.9pt)

24.6

0

0
FY11

FY12

(1Y)

FY11.3Q(9M)

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.]

FY11

FY12

(1Y)

FY13.3Q(9M)

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

557.8%

504 2%
504.2%

547.7%+43.5pt

400

012.3.3113.3.31

13.12.31

Sony Financial Holdings Inc. All Rights Reserved

23

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

25.1<Consolidated>C
lid t dFY12.3Q(9M)

FY13.3Q(9M)

Consolidated ordinary revenues

25.1

27.0

+1.8

+7.5%

Consolidated ordinary profit

28
2.8

52
5.2

+2 3
+2.3

+82 6%+82.6%

Consolidated net income

2.2

3.2

+0.9

+43.4%

FY12.3Q(9M)

FY13.3Q(9M)

Ordinary revenues

22.8

25.1

+2.3

+10.4%

Gross operating profit

13.3

16.4

+3.1

+23.5%Net interest income

13.1

15.0

+1.9

+14.9%Net fees and commissions

(0.0)

(0.2)

(0.2)

―

Net other operating income

0.1

1.6

+1.4

+718.1%

General and administrative expenses

10.5

10.9

+0.3

+3.7%

Net operating profit

28
2.8

55
5.5

+2 7
+2.7

+96 4%+96.4%

Ordinary profit

2.6

5.4

+2.7

+104.8%Net income (loss)

(0.1)

3.3

+3.5

―

13.3.31

13.12.31

67.8

71.9

+4.1

+6.1%

6.5

6.6

+0.0

+1.3%

2,005.0

2,025.0

+19.9

+1.0%

27.0

(Billions of yen)

+7.5%

5.2

<Non-consolidated>+82.6%(Billions of yen)

2.8
FY12.3Q (9M)

ChangeFY13.3Q (9M)(Billions of yen)<Consolidated>◆Ordinary revenues increased year on year due to higher gains on
foreign exchange transactions stemming from customers’ active
f i currency trading
foreignt di andd a risei iin iinteresttt iincome on lloans lleddby the growing balance of mortgage loans. Ordinary profit
expanded year on year due mainly to an improvement in net
gains on bond-dealing transactions and a decrease in interest
expenses.
<Non-consolidated>◆ Both gross operating profit and net operating profit increased
year on year.
-Net interest income increased owing to a rise in interest income
on loans led by the growing balance of mortgage loans, and adecrease in interest expenses.
-Net other operatingpg income increased due mainly
y to higher
g
g
gains
on foreign exchange transactions stemming from customers’
active foreign currency trading, in addition to an improvement in
net gains on bond-dealing transactions.

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

ChangeChange from
13.3.31

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

Sony Financial Holdings Inc. All Rights Reserved

24Overview of Performance:
Sony Bank (Non-consolidated) (1)<Reasons for changes>
Change from
13.3.3112.12.31

13.3.31

13.12.31

Customer assets

1,973.0

1,974.3

1,972.9(1.4)(0.1%)

Deposits

1,868.4

1,857.4

1,857.4

+0.0

+0.0%

Yen

1 488 91,488.9

1 467 2
1,467.2

1,504.4

+37
37.2
2

+2
2.5%
5%

379.4

390.2

353.0

(37.2)(9.5%)

Investment trusts

104.6

116.9

115.4

(1.4)

(1.3%)

Loans outstanding

929 7
929.7

970 2
970.2

1 025 1
1,025.1

+54 9
+54.9

+5 7%
+5.7%

Mortgage loans

830.6

860.3

917.0

+56.6

+6.6%

Others

99.1

109.8

108.1

(1.7)

(1.6%)

10.71%

11.98%

11.92%(0.06pt)

8.91％

8.85%

9.12%

+0.27pt((Billions of yen)y )Foreign currency

Capital adequacy ratio(domestic criteria) *2
Tier 1 ratio*1◆ Yen deposits increased fromMarch 31, 2013 due to an effect ofconverting from foreign currencies
to yen.

◆ Foreign currency deposit balance
decreased due to an increase in
selling to lock in profits led by yen
depreciation
depreciation.
◆ Loan balance increased due an
increase in the balance ofmortgage loans.

*1
1 Loans in others include corporate loans of ¥102
¥102.2
2 billion
billion.
*2 Please refer to the graph of the non-consolidated capital adequacy ratio (domestic criteria) on P28.

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

Sony Financial Holdings Inc. All Rights Reserved25Overview of Performance:
Sony Bank (Non-consolidated) (2)<Reference> On Managerial Accounting Basis<Reference> Interest Spread(Managerial Accounting Basis)

FY12.3Q(9M)

FY13.3Q
(9M)

13.2

16.3

+3.1

+23.6%

13.0

13.7

+0.6

+5.0%

(%)

Net fees and commissions*2 ②

0.4

0.6

+0.2

+47.0%

2.00

Net other operating income*3

(0 2)
(0.2)

20
2.0

+2 2
+2.2

－

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

13.5

14.3

+0.8

+6.5%

(Billions of yen)
Gross operating profit
Net interest income*1①

Operating expenses and otherexpenses ③

10.4

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

3.0

10.8
3.5

ChangeYield on investment

+0.3
+0.4

Yield on financing
gInterest spread

1.50

1.28

1.21

+3.8%

1.00

0.91

0.50

0.37

+0.02pt

00.93
0.93
93

+15.5%■ Managerial accounting basis
Th ffollowingThell i adjustments
dj t
t are maded tto ththe fifigures on a fifinancial
i l accounting
ti b
basis
i tto
account for profits and 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*2:
foreign currency transactions recorded in net other operating income.
*3: Net other operating income: After the above adjustments (*1 and *2), consists ofprofits and losses for bond and derivative dealing transactions.
■ Core profit
Profits and losses exclude net other operating income,income which includes those on
bond and derivative dealing transactions, and stands for Sony Bank’s basic profits.

0.27

0.00
FY12.3Q (9M)

FY13.3Q (9M)

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

Foreigng currency
y depositsp

Others(Billions of yen)
1,200(Billions of yen)

1,025.1
2,000

1,762.2

1,857.4

1,857.4
+0.0

970.2

1,000

+54.9

835.5
353.0

108.1

*Corporate loansof ¥102.2 billion.

800

1,500

917.0

600
1,000

1,504.4
400

500

200

0

0
12.3.3113.3.31

13.12.31

12.3.3113.3.31

13.12.31

Line item amounts are truncated below ¥100 million.

Sony Financial Holdings Inc. All Rights Reserved

27

Operating Performance:
Sony Bank (Non-consolidated) (2)Balance of Securities by Credit Rating
AAA
BBB

AA
A
Others

Non-Consolidated Capital Adequacy Ratio(Domestic Criteria)
Capital adequacy ratio

Ti 1 ratio
Tier1
ti

(%)

15

(Billions of yen)
1,200

11.98
11.58
1,000

912.9

(0 06pt)(0.06pt)

11 92
11.92

+0.27pt

9.12

908.8
782.5

10

800

9.63

(126.2)

8.85

600

5
400

200

0
12.3.31012.3.3113.3.31

13.12.31

13.3.31

13.12.31*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 the capital adequacy of a bank in light of the assets held by thebank.
Amounts are truncated below ¥100 million.

Sony Financial Holdings Inc. All Rights Reserved28

Consolidated Financial Forecast
for the Fiscal Year Ending March 31, 2014

Sony Financial Holdings Inc. All Rights Reserved29Consolidated Financial Forecast
for the Fiscal Year Ending March 31, 2014
C
Consolidated
lid t d ordinarydirevenues, ordinarydiprofitfit andd nett iincome hhave bbeen revisedi d upward.
d(Billions of yen)

FY2012(Actual)

FY2013(Forecast)

Changed from FY2012

Consolidated ordinary revenues

1,259.0

1,222.0⇒1,304.0
1,222.0
1,304.0(2.9%) ⇒+3.7%
3.7%Life insurance business
Non-life insurance businessBanking business

1,142.3
84.7
34.3

1,099.9⇒1,179.8
89.5
34.9

(3.7%)⇒+3.3%
+5.7%
+1.7%

Consolidated ordinary profit

79 2
79.2

69 0⇒75 0
69.0⇒75.0(12 9%)⇒(5 4%)(12.9%)⇒(5.4%)

Life insurance business
Non-life insurance businessBanking business

72.7
2.3
3.9

61.4⇒65.7
3.8
5.2(15.5%)⇒(9.7%)+60.2%+31.5%

C
Consolidated
lid t d nett income
i

45 0
45.0

37 0 40 037.0⇒40.0(17 9%) (11 2%)(17.9%)⇒(11.2%)

On February 6, 2014, we have revised upward our consolidated financial forecast for ordinary revenues, ordinary profit and net income for the fiscal year ending March 31,
2014, from the forecast announced on May 9, 2013. This is because the operating results for the nine months ended December 31, 2013, exceeded our previous estimates inall the businesses. Forecasts of the non-life insurance and the banking businesses were revised upward on November 15, 2013, reflecting favorable operating results during
the first half of this fiscal year.
■Life insurance businessWe have revised our full-year forecast for ordinary revenues and ordinary profit from our previous forecast announced in May 2013 because operating results for the ninemonths ended December 31, 2013, exceeded our previous estimates, resulting mainly from the market recovery. Since financial conditions are uncertain after January 2014,
our updated forecast reflects financial conditions as of the end of January 2014.
■Non-life insurance business
The forecast for ordinary revenues remains unchanged from the forecast announced in November 2013 because we expect net premiums written in automobile insurance tocontinue to increase steadilysteadily. The forecast for ordinary profit remains unchanged because we expect a stably low loss ratio in the fourth quarter despite a temporary rise in theloss ratio reflecting a surge in provision of reserve for outstanding losses in this third quarter.
■Banking business
The forecast for ordinary revenues remains unchanged from the forecast announced in November 2013 because ordinary revenues are expected to increase due to higher
gains on foreign exchange transactions stemming from customers’ active foreign currency trading and a rise in interest income on loans led by the growing balance of mortgage
loans. The forecast for ordinary profit remains unchanged despite an increase in net interest income because we expect to record a temporary loss related to bondtransactions in the fourth q
quarter.
In its calculation of the reserve for price fluctuations, Sony Life has accumulated reserves in excess of required levels. However, Sony Life will change this policy to one of accumulating reserves
up to required levels from the fiscal year ending March 31, 2015.
Line item amounts are truncated below ¥100 million; percentage change figures are roundedSony Financial Holdings Inc. All Rights Reserved30Sony Life
Life’ss MCEV and
Risk Amount Based on Economic Valueas of December 31, 2013

Sony Financial Holdings Inc. All Rights Reserved31Sony Life’s MCEV as of December 31, 2013
13.3.3113.9.31

13.12.31

Change from
13.3.31

Change from
13.9.30

1 064 7
1,064.7

1 158 2
1,158.2

1 186 91,186.9+122 2+122.2

+28 7
+28.7

Adjusted net worth

770.8

682.1

698.5

(72.4)+16.4

Value of existing business

293.9

476.1

488.4

+194.6+12.4(Billions of yen)

MCEV

Notes:
1. Calculated MCEV for policies in force as of September 30 and December 31, 2013 by using updated lapse and surrender rate and economic assumptions.
2. Adopted simplified method for a part of MCEV calculations as September 30 and December 31, 2013.

(Billi(Billions
off yen))

New business value
New business margin13.3.31133 3141.6 (12M)
3.5%

13.9.3013
9 30
29.7 (6M)
6.3%

13.12.31
13
12 31
45.2 (9M)
5.5%((*)) New business marging equalsq
new business value divided byyppresent value of p
premium income.

 MCEV as of December 31, 2013 increased ¥28.7 billion from September 30, 2013, due mainly to an
acquisition of new policies.
 New business margin as of December 31, 2013 was up from March 31, 2013, due mainly to higher interest
rates in the ultra-long term and the revision of Sony Life’s insurance premium rates on some of its
products in April 2013. New business margin was down from September 30, 2013, due mainly to anincrease in the sale of lump-sum payment endowment insurance.
*Please see page 43 for trend on JGB yields.

* Please keep in mind that the validity of these calculations has not been verified by outside specialists.
Sony Financial Holdings Inc. All Rights Reserved32Sony Life’s Risk Amount Based on Economic Valueas of December 31, 2013
(Billions of yen)

13.3.3113.9.30

13.12.31

Insurance risk

605.6

610.4

621.1

Market-related risk

289.9

260.1

260.8

234.2

201.0

198.3

Operational risk

26 0
26.0

25 2
25.2

27 9
27.9

Counter party risk

2.3

1.5

2.0

Variance effect(262.5)(253.7)(256.9)The risk amount based on economic value

661.3

643.5

654.8

Of which, interest rate risk*(Billions of yen)

MCEV

13.3.3113.9.30

1,064.7

1,158.2

13.12.31
1,186.9(*) Interest amount excluding the variance effect within market-related risk.

 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
and market-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.

* Please keep in mind that the validity of these calculations has not been verified by outside specialists.

Sony Financial Holdings Inc. All Rights Reserved

33

Appendix

Sony Financial Holdings Inc. All Rights Reserved34

Recent Topics 1
AEGON Sony Life Insurance
Launch of sales: December 1, 2009
Common stock: ¥22 billion (including capital surplus of ¥11 billion)
Equity ownership: Sony Life insurance Co
Co., Ltd
Ltd. 50%
50%, AEGON international B
B.V.
V 50%
Marketing products: Individual Variable Annuities
Sales Channels: Lifeplanner sales employees and partner Banks (15*) *As of Feb. 14, 2014
SA Reinsurance Ltd.
Established： October 29, 2009
Common stock: ¥8 billion
q y ownership:p Sonyy Life insurance Co., Ltd. 50%, AEGON international B.V. 50%
EquityBusiness： Reinsurance business* AEGON Sony Life Insurance and SA Reinsurance are equity method companies, 50-50 joint ventures established by Sony Life and AEGON Group.

Sonyy Bank’s Mortgage
g g Loans throughg Sonyy Life■Sony Life accounts for 24% of the balance of mortgage loans as of December 31, 2013
Sony Life accounts for 18% of the amount of new mortgage loans for FY13.3Q (9M)
*SonySony Life started handling banking agency business in January 2008
2008.

Sony Assurance’s Auto Insurance Sold by Sony Life
■Sony Life accounts for approx. 5% of new automobile policies for FY13.3Q (9M)
*SonySony Life started handling automobile insurance in May 2001
2001.
* “Lifeplanner” is a registered trademark of Sony Life.

Sony Financial Holdings Inc. All Rights Reserved35

Recent Topics 2<Highlights for FY2013.3Q>
10/28/2013 Sony Bank launched new service: automatic saving plans for foreign currency deposits.
10/31/2013 Sony Bank closed its representative office in Sydney.
11/11/2013

The Sonyy Financial Groupp entered the nursing
g care business, acquiringq
g Senior Enterprisep
Corporation as a wholly owned subsidiary of SFH.

12/2/2013

Sony Bank introduced paperless procedures to open bank accounts.

Sony Bank announced plans to issue the new Sony Card with an enhanced credit and12/19/2013 settlement function through a tie-up with Sumitomo Mitsui Card Company, with this credit
card being offered to customers from February 7, 2014.
1/2/2014

Sony Life started selling new educational endowment insurance (non-participating type).

1/10/2014

Sony Bank enhanced its settlement function by starting withdrawal services for credit card
paymentspyfor Sumitomo Mitsui Card holders.

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

Valuation gains (losses) on trading-purpose securities(Billions of yen)

Notes: 1) Line item amounts are truncated below ¥100 million. 2) Amounts above include those categorized as “monetary trusts.”

Sony Financial Holdings Inc. All Rights Reserved37Sony Life’s Interest Income and Dividends (Details)(Millions of yen)

FY12.3Q (9M)

FY13.3Q (9M)

ChangeCash and deposits
Japanese governmentand corporate bonds
Japanese stocks

00(35.4%)

64,73972,947+12.7%

351

234(33.2%)

Foreign securities

2,802

4,872

+73.8%

Other securities

177

172

(2.9%)

Loans

4 085
4,085

4 264
4,264

+4 4%
+4.4%

Real estate

8,143

7,716

(5.2%)

5723(58.6%)

80,357

90,232+12.3%

Others
Total

Line item amounts are truncated below ¥1 million

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)

New policy amount

1,200
1,054.4
1,000

1,201.9

1,175.4

1 238 71,238.7

1,066.5
997.3

976.1

1,128.3
1,033.3

947.4
841.4

800
600
400
200
0
FY11.1Q FY11.2Q FY11.3Q FY11.4Q FY12.1Q FY12.2Q FY12.3Q FY12.4Q FY13.1Q FY13.2Q FY13.3Q
Line item amounts are truncated below ¥100 million.

Sony Financial Holdings Inc. All Rights Reserved39Sony 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

22.0

22.0

19.8

20.0
18.0

17.1

16.0

19.0
17.6

18.5

17.4

16.8

16.0
14.6

13.2

14.0
12.0
10.0
8.0
6.0
4.0
2.0

4.2

3.8

4.9

4.0

4.4

5.0

5.2

3.6

3.9

3.0

3.6

00
0.0
FY11.1Q FY11.2Q FY11.3Q FY11.4Q FY12.1Q FY12.2Q FY12.3Q FY12.4Q FY13.1Q FY13.2Q FY13.3Q
Line item amounts are truncated below ¥100 million

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40

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

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

Equity risk

Sony Life(Reference) EU Solvency II (QIS5)-For each currency, uses whatever interest rateincrease or decrease generates the largest loss
- Percentage increases or decreases differ for eachcurrency and term (example: yen 10-year, 49%
decrease)
However, a minimum decrease of 1% with minimum
interest rate of 0%-For each currency, uses whatever interest rateincrease or decrease generates the largest loss
-Percentage increases or decreases differ foreach currency and term
(example, yen 10-year, 31% decrease)
However, a minimum decrease of 1% withminimum interest rate of 0%-Listed equities and REIT 45% decline-Global 30%-Unlisted equities 55%-Others 40% (Note 2)-Other securities 70%-Subsidiaries, affiliated companies and strategic
investment 100%
Real estate risk

Actual real estate 25%

Same as on the left

Credit risk

Credit risk = (market value) x (risk coefficient foreach credit rating) x adjusted duration
Note that adjusted durations have caps and floors,
depending on credit ratings.
(Example)
Rating A: Risk coefficient (1.4%),(1 4%) cap (23),(23) floor (1)Same as on the left

Currency risk

30% downside fluctuation

25% downside fluctuation

Notes
1. Principal items as of December 31, 2013. Market-related risk quantification follows the QIS5 approach in principle. However, Sony Life modified it to make it moresuitable to Japanese market by adapting the past and latest data of the market which is different from the method prescribed in QIS5.
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%.

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41

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

Sony Life
Mortality risk

(Reference) EU Solvency II (QIS5)

Mortality rate increases by 15% for each year elapsed

Same as on the leftLongevity risk Mortality rate decreases by 20% for each year elapsed

Same as on the left

Lapse risk

The largest amount of these*;

The largest amount of these;-Lapse rate increases by 50% for each year elapsed-Lapse rate decreases by 50% for each year elapsed-Increase by 50% in the assumed rates of lapsation
for Life module
module, 20% for Health module-30% of policies on which surrender value is in excess
of best estimate liability are immediately surrendered-Decrease by 50% in the assumed rates of lapsation
for Life module, 20% for Health module-30% of policies (70% for group annuities, etc.) on
which surrender value is in excess of best estimate
liability are immediately surrendered

Expense risk

Operating expenses increase by 10% for each year
elapsedSame as on the left

Rate of inflation rises by 1%
Disability risk

Rate of occurrence increases by 35% in the first fiscal
year, rising by 25% for each year thereafter

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

* At Sony Life, lapse risk is calculated by computing and adding together the largest amount of three options for each insurance policy.

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42Appendix：JGB Yields

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43

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

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44