Consolidated Financial Summary (Japanese GAAP)
for the Nine Months Ended December 31, 2017
February 14, 2018
Sony Financial Holdings Inc.
(URL: https://www.sonyfh.co.jp/ index_en.html)
Stock exchange listing: Tokyo Stock Exchange (code number: 8729)
Representative:
Shigeru Ishii, President and Representative Director
Inquiries:
Yasuo Hasegawa, General Manager-Investor Relations Dept.
(Telephone: +81-3-5290-6500)(Fractional amounts of less than ¥1 million are discarded.)Company name:

1. Consolidated financial results for the nine months ended December 31, 2017
(1) Operating results
Ordinary Revenues
Millions of yen% change

Millions of yen% change

Millions of yen% change

1,175,843

12.9

49,517(1.6)

42,48626.0

1,041,307

0.5

50,300(12.4)

33,716(11.8)For the nine months ended
December 31, 2017
For the nine months ended
December 31, 2016
Note: Comprehensive Income:

Profit Attributable to Owners of
the Parent

Ordinary Profit

For the nine months ended December 31, 2017:¥ 48,694 million:

167.0%For the nine months ended December 31, 2016:¥ 18,238 million:(54.7%)Net Income per
Share(Fully Diluted)

Net Income per
Share
For the nine months ended
December 31, 2017
For the nine months ended
December 31, 2016

Yen

Yen

97.67

97.66

77.51

77.51

(2) Financial conditions
Total Assets
As of December 31, 2017
As of March 31, 2017
Note: Net Assets Attributable to Shareholders:

Total Net Assets

Net Asset Ratio

Millions of yen

Millions of yen%

12,271,639
11,471,845

621,875
601,139

5.1
5.2

As of December 31, 2017:¥ 620,199 million

As of March 31, 2017:¥ 599,630 million

2. Dividends
Dividend per Share

Record date
For the year ended
March 31, 2017
For the year ending
March 31, 2018
For the year ending
March 31, 2018
(forecast)

1st quarterYen

2nd quarterYen

3rd quarter
Yen

－

0.00

－

－

0.00

－

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

Year-end
Yen

Annual Total
Yen

55.00

55.00

60.00

60.00

3. Forecast of consolidated financial results for the year ending March 31, 2018
(Percentage figures represent changes from the results of the previous fiscal year.)
Profit Attributable to
Net Income per
Ordinary Revenues
Ordinary Profit
Owners of the Parent
Share
For the year ending
March 31, 2018

Millions of yen% change

Millions of yen% change

Millions of yen% changeYen

1,540,000

11.5

64,000(3.5)

50,00020.1

114.95

Note: Changes in forecast of financial results since the most recent public announcement: None

4. Notes(1) Changes in significant subsidiaries during the period (changes in specified subsidiaries accompanying changes in scope 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: None(b) Changes in accounting policies due to other reasons: None(c) Changes in accounting estimates: None(d) Restatements of the Consolidated Financial Statements: None
(4) Number of shares outstanding (common stock)(a) Number of shares outstanding (including treasury shares)
As of December 31, 2017:
435,027,513 shares
As of March 31, 2017:
435,000,000 shares(b) Number of treasury shares
As of December 31, 2017:
35,775 shares
As of March 31, 2017:
52,975 shares(c) Weighted-average number of shares
For the nine months ended December 31, 2017:434,975,717 shares
For the nine months ended December 31, 2016:
434,988,191 shares
Status of quarterly review proceduresThis document is exempt from quarterly review procedures.

Content of Supplemental Materials
I. Consolidated Financial Statements
1. Consolidated Balance Sheets ……………………………………………………………………………

2

2. Consolidated Statements of Income and Consolidated Statements of Comprehensive Income(Consolidated Statements of Income) ……………………………………………………………………

4(Consolidated Statements of Comprehensive Income) …………………………………..………………

7

3. Note on going concern…………………...……………………...……………………...…………………

8

4. Material changes in stockholders’ equity…………………...……………………...……………………..

8

5. Changes in significant subsidiaries during the period ………………………………...…………………

8

6. Segment Information ……………………………………...……………………………..………………

9

7. Subsequent Events ……………………………………………………………………….……………… 10

II. Attachment
Consolidated Financial Results for the Nine Months Ended December 31, 2017 and Sony Life’s Market
Consistent Embedded Value as of December 31, 2017…………………………………………………… 12* The conference call for explaining the Sony Financial Group financial results will be held at 15:30 (Tokyo),February 14, 2018. Please note that our conference call will be held only in Japanese.
We will upload the presentation materials with speech text on February 14, 2018 after 15:00, the translation of
the conference call (audio) on February 15 and the Q&A summary (text) at a later date on Earnings Releases andPresentation Materials page on our website:
https://www.sonyfh.co.jp/en/financial_info/results/index.html* On February 14, 2018, Sony Financial Holdings Inc.’s (SFH’s) significant subsidiariesーSony Life InsuranceCo., Ltd. (Sony Life), Sony Assurance Inc. (Sony Assurance) and Sony Bank Inc. (Sony Bank)ーwill announce
their financial results for the nine months ended December 31, 2017. SFH has prepared an English-language
summary of those Japanese announcements made by the above subsidiaries, solely for the convenience of nonJapanese readers.

- 1 -I. Consolidated Financial Statements
1. Consolidated Balance Sheets(Millions of yen)
As of March 31, 2017

As of December 31, 2017¥¥

AssetsCash and due from banks

206,481

427,383

Call loans and bills bought

61,900－

Monetary claims purchased

573

6,468

296,877

291,188

Securities

8,857,436

9,443,025

Loans

Money held in trust

1,720,004

1,760,386

Tangible fixed assets

123,614106,685

Intangible fixed assets

30,77632,2170－

Due from agencies
Due from reinsurers

1,438

913

Foreign exchanges

7,268

9,357

148,650

176,590

Net defined benefit asset

2,752

2,936

Deferred tax assets

15,313

15,635Reserve for possible loan losses(1,243)(1,150)

Other assets

Total Assets

¥

- 2 -

11,471,845¥

12,271,639

(Millions of yen)
As of March 31, 2017

As of December 31, 2017¥¥

Liabilities
Policy reserves and others
Reserve for outstanding claims

8,113,153

8,648,281

71,30673,5518,036,118

8,569,205

5,729

5,524

Due to agencies

2,616

1,470

Due to reinsurers

3,737

4,171

Policy reserves
Reserve for policyholders’ dividends

Deposits

2,071,091

2,159,746

Call money and bills sold

70,000119,000

Borrowed money

90,000153,744

Foreign exchanges

108

130

Bonds payable

10,00020,000

Other liabilities

427,866

460,622

Reserve for employees’ bonuses

3,694

2,113

Net defined benefit liability

31,39932,468Reserve for directors’ retirement benefits
Special reserves
Reserve for price fluctuations
Deferred tax liabilities
Deferred tax liabilities on land revaluation
Total Liabilities

366－

46,18247,591

46,18247,591

－

313

488

109

10,870,705

11,649,763

19,90019,927

Net Assets
Common stock
Capital surplus

195,277

191,157

Retained earnings

255,062

274,502

(81)

(55)

470,157

485,532

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

134,849

140,362

Net deferred gains (losses) on hedging instruments, net of taxes(1,154)(988)

Land revaluation, net of taxes(1,465)(2,439)Remeasurements of defined benefit plans, net of taxes(2,756)(2,267)

Total accumulated other comprehensive income

Treasury stock
Total shareholders’ equity

129,472

134,667

Subscription rights to shares

49

79

Non-controlling interests

1,460

1,596

601,139621,875

Total Net Assets
Total Liabilities and Net Assets

¥

- 3 -

11,471,845¥

12,271,639

2. Consolidated Statements of Income and Consolidated Statements of Comprehensive Income(Consolidated Statements of Income)(Millions of yen)

Ordinary Revenues
Ordinary Revenues from the Life Insurance Business

For the nine months ended
December 31, 2016

For the nine months ended
December 31, 2017¥¥

1,041,307

1,175,843

936,806

1,059,433

Income from insurance premiums

704,439

761,351

Investment income

194,629

253,830(Interest income and dividends)

109,689

117,415(Income from monetary trusts, net)

3,366

3,364

(Gains on trading securities, net)

111

57

(Gains on sale of securities)

1,306

0

(Gains on separate accounts, net)

55,932130,185

37,73744,25175,94882,421

74,32381,062

74,27381,016

Other ordinary income
Ordinary Revenues from the Non-life Insurance Business
Underwriting income(Net premiums written)(Interest and dividends on deposits of premiums)

50

46

1,595

1,330

(Interest income and dividends)

994

1,001

(Gains on sale of securities)

650

375

(Transfer to interest and dividends on deposits of premiums)

(50)

(46)

29

28

28,37929,47919,61821,179(Interest income on loans)

11,904

12,783(Interest income and dividends on securities)

7,660

8,340

Fees and commissions

4,941

4,745

Other operating income

3,651

2,855

Investment income

Other ordinary income
Ordinary Revenues from the Banking Business
Interest income

Other ordinary income
Other
Other ordinary income

168

698

173

4,509

173

4,509
(Continued)- 4 -(Millions of yen)

Ordinary Expenses
Ordinary Expenses from the Life Insurance Business

For the nine months ended
December 31, 2016

For the nine months ended
December 31, 2017¥¥

991,006

1,126,326

896,244

1,021,460

276,009328,628(Insurance claims)

62,524

67,995(Annuity payments)

8,266

8,817

Insurance claims and other payments(Insurance benefits)

75,87796,742(Surrender payments)

122,713

146,090

2,428

2,469

447,069

524,320(Other payments)
Provision for policy reserves and others
Provision for reserve for outstanding claims

462－

446,605

524,31900

Investment expenses

38,80228,479(Interest expenses)

26

61(Losses on sale of securities)－

0(Losses on derivatives, net)

34,27523,990Operating expenses

101,324

102,646

Other ordinary expenses

33,03837,386

Provision for policy reserves
Interest portion of reserve for policyholders’ dividends

Ordinary Expenses from the Non-life Insurance Business

70,451

76,832

Underwriting expenses

52,231

56,402(Net losses paid)

36,941

38,534(Loss adjustment expenses)

5,519

5,574

887

1,002

(Provision for reserve for outstanding losses)

1,503

2,524

(Provision for underwriting reserves)

7,378

8,767

(Net commission and brokerage fees)

Investment expenses

2

1

18,212

20,4094

18

23,603

22,674

6,473

5,789

3,842

3,926

Fees and commissions

2,658

3,414

Other operating expenses

77

83

14,232

13,317

161

70

708

5,359

708

5,359

Operating, general and administrative expenses
Other ordinary expenses
Ordinary Expenses from the Banking Business
Interest expenses(Interest expenses on deposits)

General and administrative expenses
Other ordinary expenses
Other
Other ordinary expenses
Ordinary Profit

50,30049,517(Continued)- 5 -(Millions of yen)

Extraordinary Gains

For the nine months ended
December 31, 2016

For the nine months ended
December 31, 2017¥¥

Gains on disposal of fixed assets－

13,258－13,258

1,400

1,597

111

151

4

0

1,277

1,408

1,277

1,408

7

36

814

122

Income Before Income Taxes

48,08561,056

Income Taxes - Current

16,653

21,413

Income Taxes - Deferred(2,349)(2,881)

Total Income Taxes

14,303

18,532

Profit33,781

42,52465

38

Extraordinary Losses
Losses on disposal of fixed assets
Impairment losses
Provision for special reserves
Provision for reserve for price fluctuations
OthersProvision for Reserve for Policyholders’ Dividends

Profit Attributable to Non-controlling Interests
Profit Attributable to Owners of the Parent

¥

- 6 -

33,716¥42,486

(Consolidated Statements of Comprehensive Income)(Millions of yen)

Profit

For the nine months ended
December 31, 2016

For the nine months ended
December 31, 2017¥¥33,781

42,524

Other comprehensive income
Net unrealized gains (losses) on other securities, net of taxes(17,075)

5,513

Net deferred gains (losses) on hedging instruments, net of taxes

960

166

Remeasurements of defined benefit plans, net of taxes

571

490

Total other comprehensive income(15,543)

Comprehensive income¥

18,238

6,170¥

48,694(Details)
Comprehensive income attributable to owners of the parent
Comprehensive income attributable to non-controlling interests- 7 -18,17048,65467

39

3. Note on going concern
Not applicable.

4. Material changes in stockholders’ equity
Not applicable.

5. Changes in significant subsidiaries during the period
Not applicable.
Although not a specified subsidiary, nursing-care provider Proud Life Inc., which was a non-consolidated subsidiary in theprevious consolidated fiscal year, has been included in the scope of consolidation, due to a rise in its importance from the firsthalf of the fiscal year ending March 31, 2018. The company’s results are included in the “other” category in the consolidated
statements of income.

- 8 -6. Segment Information(1) Segment Information by reporting segment
For the nine months ended December 31, 2016
Millions of yen
Non-life
insurancebusiness

Life insurance
business
Ordinary revenues
External customers
Intersegment
Total
Segment profit¥¥

936,806
2,330
939,137
42,392¥75,948075,9484,999¥Bankingbusiness

¥

¥

Total

28,379143
28,522
3,310

¥

other

1,041,133
2,474
1,043,608
50,702

¥

¥

¥

Total

173
－
173
(535)

¥ 1,041,307
2,474
1,043,781¥
50,167For the nine months ended December 31, 2017
Millions of yen
Non-life
insurancebusiness

Life insurance
business
Ordinary revenues
External customers
Intersegment
Total
Segment profit¥ 1,059,433
2,750
1,062,183¥
40,230¥¥82,421082,422
5,039

Bankingbusiness

¥

¥

Total

29,479165
29,645
5,078

¥

other

1,171,334
2,917
1,174,251
50,348

¥

¥

¥

4,509
－
4,509
(851)

Total

¥ 1,175,843
2,917
1,178,760¥
49,497(2) Reconciliations of the totals of reportable segments’ profit to quarterly consolidated statement of income
Millions of yen

Totals of reporting segments

For the nine months ended
December 31, 2016

For the nine months ended
December 31, 2017

¥

¥

Other
Adjustments for intersegment transactions

6
126

Amount not allocated to reporting segments
Ordinary profit in quarterly consolidated
statement of income

50,702(535)¥

50,300(3) Information on impairment loss on fixed assets and goodwill by reporting segment
Not applicable.

- 9 -50,348
(851)
(133)
153

¥

49,517

7. Subsequent Events
Issuance of Straight Bonds
February 14, 2018—The Board of Directors passed a comprehensive resolution to issue straight bonds as follows.
Type

Unsecured straight bonds(Only to qualified institutional investors)

Total amount of issue

Upper limit 10 billion yen

Issuance period

February 15, 2018 – March 31, 2018

Issue price

100 yen or more per each 100 yen of face value

Interest rate

0.5% or less per annum

Redemption date andmethodUse of funds

No later than 10 years, lump-sum repayment at maturity
Sony Financial Holdings will use the funds for new investment and lending
Decisions on the specific timing of issuance, total amount of issue, interest rate and other

Othersmatters provided for in the items of Article 676 of the Companies Act and all other mattersrequired in connection with the said straight bond issuance shall be entrusted to the President,
Representative Director of the Company within the scope of the resolution.

- 10 -

SFH’s consolidated results* are prepared in accordance with Japanese GAAP. As such, these figures differ in significant respects
from the financial information reported by Sony Corporation, SFH’s parent company, which prepares its financial statements inaccordance with U.S. GAAP.
* SFH’s scope of consolidation includes following companies:
Sony Financial Holdings Inc.
Sony Life Insurance Co. Ltd.
Sony Assurance Inc.
Sony Bank Inc.
Sony Payment Services Inc.
SmartLink Network Hong Kong Limited.
Sony Lifecare Inc.
Lifecare Design Inc.
Proud Life Inc.**
Affiliated companies accounted for under the equity method:
AEGON Sony Life Insurance Co., Ltd.
SA Reinsurance Ltd.
** Proud Life Inc. is included in the scope of consolidation from the second quarter ended September 30, 2017.

Statements made in this press release concerning the current plans, expectations, strategies and beliefs of the Sony Financial Group.
Any statements contained herein that are not historical facts are forward-looking statements or pro forma information. Forwardlooking statements may include-but are not limited to-words such as “believe,” “anticipate,” “plan,” “strategy,” “expect,”“assume,” “forecast,” “predict,” “propose,” “intend” and “possibility” that describe future operating activities, businessperformance, events or conditions. Forward-looking statements, whether spoken or written, may also be included in other materials
released to the public. These forward-looking statements and pro forma information are based on assumptions, decisions andjudgments made by the management of Sony Financial Group companies, and are based on information that is currently available tothem. As such, they 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. Sony Financial Group companies are under no obligation to revise forward-looking statements or pro
forma information in light of new information, future events or other findings. The information contained in this press release does notconstitute or form part of any offer for sale or subscription of or solicitation or invitation of any offer to buy or subscribe to any
securities, nor shall it or any part of it form the basis of or be relied on in connection with any contract or commitment whatsoever inJapan or abroad.

- 11 -

II. Attachment
Content of Presentation Material
Consolidated Financial Results for the Nine Months Ended December 31, 2017 andSony Life’s Market Consistent Embedded Value as of December 31, 2017
・ Consolidated Operating Results for the Nine Months Ended December 31, 2017 …………………………

3・ Consolidated Financial Forecast for the Year Ending March 31, 2018 ……………………………………

28

・ Sony Life’s MCEV and ESR as of December 31, 2017 ……………………………………………………

30

・ Appendix ……………………………………………………………………………………………………

33- 12 -

Attachment

Presentation Material

Consolidated Financial Results
for the Nine Months Ended December 31, 2017
andSony Lifeʼs MCEV as of December 31, 2017

Sony Financial Holdings Inc.
February 14, 2018
Sony Financial Holdings Inc. All Rights Reserved

Content
 Consolidated Operating Results for the Nine Months Ended December 31, 2017P.3

 Forecast of Consolidated Financial Results for the Fiscal Year Ending
March 31, 2018 (FY17)

P.28

 Sony Lifeʼs MCEV and ESR as of December 31, 2017

P.30

 Appendix

P.33

Disclaimers:
This presentation material contains statements concerning the current plans, expectations, strategies and beliefs of the SonyFinancial Group. Any statements contained herein that are not historical facts are forward-looking statements or pro forma
information. Forward-looking statements may include̶but are not limited to̶words such as “believe,” “anticipate,” “plan,”“strategy,” “expect,” “assume,” “forecast,” “predict,” “propose,” “intend” and “possibility” that describe future operating activities,business performance, events or conditions. Forward-looking statements, whether spoken or written, may also be included in othermaterials released to the public. These forward-looking statements and pro forma information are based on assumptions, decisions
and judgments made by the management of Sony Financial Group companies, and are based on information that is currently
available to them. As such, they are subject to various risks and uncertainties, and actual business results may vary substantiallyfrom the forecasts expressed or implied in forward-looking statements. Consequently, investors are cautioned not to place undue
reliance on forward-looking statements. Sony Financial Group companies are under no obligation to revise forward-looking
statements or pro forma information in light of new information, future events or other findings. The information contained in thispresentation 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 to any securities, nor shall it or any part of it form the basis of or be relied on in connection with any contract orcommitment whatsoever in Japan or abroad.
*Unless otherwise indicated, in these materials figures less than the indicated unit have been truncated, while ratios and percentage changes have been rounded.
Also, a “–” is used where percentage changes exceed 1,000% and in cases where one or both comparisons are negative.
* “Lifeplanner” is a registered trademark of Sony Life.

Sony Financial Holdings Inc. All Rights Reserved2

Attachment

Consolidated Operating Results
for the Nine Months Ended December 31, 2017
<FY17.3Q (9M)>Sony Financial Holdings Inc. All Rights Reserved

3Management Message
 Taking into account performance of the life insurance business in

FY17.3Q (9M), we have revised upward our full-year forecast for
consolidated ordinary revenues, downward for consolidated ordinary
profit, and upward for profit attributable to owners of the parent.
Business continues to grow steadily at Sony Life, Sony Assurance andSony Bank.

 At Sony Life, thanks to positive performance in new products launchedin October 2017, new policy amount and new business value inFY17.3Q (3M) grew solidly quarter on quarter.

 In line with our medium-term dividend policy, after taking into accountsuch factors as the operating environment, business growth and the
expansion of profit based on economic value, we have revised upward
our FY17 year-end dividend forecast from ¥55 to ¥60 per share.

Sony Financial Holdings Inc. All Rights Reserved

4Attachment

Highlights of Consolidated Operating Performance (1)Consolidated ordinary revenues
Consolidated ordinary profit

1,041.3+12.9%

1,175.8

Life insurance
business
Non-life
insurancebusiness
Bankingbusiness
Intersegment
adjustments*(1.6%)

49.5

50.3(JPY bn)

FY16.3Q (9M)

FY17.3Q (9M)

(JPY bn)

FY16.3Q(9M)

FY17.3Q(9M)

Ordinary revenues

939.1

1,062.1+123.0+13.1%

Ordinary profit

42.3

40.2

(2.1)

(5.1%)

Ordinary revenues

75.9

82.4

+6.4

+8.5%

Ordinary profit

4.9

5.0

+0.0

+0.8%

Ordinary revenues

28.5

29.6

+1.1

+3.9%

Ordinary profit

3.3

5.0

+1.7

+53.4%

Ordinary revenues

(2.3)

1.5

+3.8

－

Ordinary profit

(0.4)

(0.8)

(0.4)

－

1,041.3

1,175.8+134.5+12.9%

Ordinary profit

50.3

49.5

(0.7)

(1.6%)

Profit attributableto owners of theparent

33.7

42.4

+8.7

+26.0%

Ordinary revenues
Consolidated

Change*“Intersegment adjustments” is mainly from SFH and the nursing care business.
Proud Life Inc., a company of nursing care business, has been included in the scope of
consolidation from FY17.2Q.
(Note) Comprehensive income : FY16.3Q (9M): ¥18.2 billion, FY17.3Q (9M) : ¥ 48.6 billion(JPY bn)
Consolidated

Net assets
Total assets

Change from
Mar. 17Mar. 17

Dec. 17

601.1

621.8

+20.7

+3.4%

11,471.8

12,271.6+799.7+7.0%Sony Financial Holdings Inc. All Rights Reserved

5Highlights of Consolidated Operating Performance (2) Life Insurance Business︓Ordinary revenues grew year-on-year due to steady investment performance inthe separate account and higher income from insurance premiums, owing to a steady rise in the policy
amount in force. Ordinary profit decreased year on year due to a higher provision of policy reserve
relating to the acquisition of new policies reflecting a revision in the standard yields used for calculating
policy reserves, lower gains on sale of securities in the general account and a deterioration in net
gains/losses on derivative transactions to hedge market risks for available-for-sale securities. On theother hand, gains/losses related to market fluctuations for variable life insurance* improved year on year,
which partially offset the negative impact of the above-mentioned decreases in ordinary profit.

*Total of (a) the provision of policy reserves for minimum guarantees for variable life insurance according to market fluctuations and(b) net gains/losses on derivative transactions to hedge market risks for the products Non-life Insurance Business: Ordinary revenues expanded year on year, owing to an increase in net

premiums written for mainstay automobile insurance. Due to a lower car accident ratio, offset by a rise inadvertising and other operating expenses, ordinary profit was flat year on year despite a decline in theloss ratio.
 Banking Business︓Ordinary revenues rose year on year due to increases in interest income on loans inline with a favorably growing balance of mortgage loans and on investment securities. Ordinary profit
grew year on year, due to a decrease in operating expenses, especially in advertising expenses for thecard loan business.
 Consolidated ordinary revenues increased 12.9% year on year, to ¥1,175.8 billion, owing to increases inordinary revenues from all the businesses: life insurance, non-life insurance and banking businesses.
Consolidated ordinary profit decreased 1.6% year on year, to ¥49.5 billion. By business segment,
ordinary profit from the life insurance business decreased, ordinary profit from the non-life insurance
business was flat and ordinary profit from the banking business rose. Profit attributable to owners of theparent, however, was up 26.0% year on year, to ¥42.4 billion. This increase was due to a gain on
disposal of fixed assets from a sale of the real estate held for investment of ¥13.2 billion in the life
insurance business, which was recorded in extraordinary gains in FY17.3Q (3M).
Sony Financial Holdings Inc. All Rights Reserved

6

Attachment

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

938.9

Ordinary profit(JPY bn)

1,062.0+13.1%

Ordinary revenues

45.1
33.2

(JPY bn)

FY16.3Q (9M)938.9

1,062.0+123.0

762.8

+57.3

+8.1%

Investment income

195.0

254.3

+59.3

+30.4%

110.0

117.7

+7.7

+7.0%

3.3

3.3

(0.0)

(0.1%)(100.0%)

1.3

0.0

(1.3)

Foreign exchange gains, net

24.2

2.8

(21.4)(88.4%)

Gains on separate accounts, net

55.9

130.1

+74.2

+132.8%893.7

1,020.1+126.3+14.1%

Insurance claims and other payments

276.0

328.6

+52.6

+19.1%

Provision for policy reserves and others

447.0

524.3

+77.2

+17.3%

Investment expenses

38.9

28.6

(10.3)(26.5%)

34.2

23.9

(10.2)(30.0%)

101.6

102.9

+1.3

+1.3%

45.1

41.9

(3.2)

(7.2%)

－

13.2

+13.2

－

31.2

37.5

+6.3

+20.4%

Losses on derivatives, net◆ Ordinary revenues increased but ordinary profit decreased.
◆ Income from insurance premiums increased owing to a steady rise in
the policy amount in force.
◆ Investment income increased due to an increase in gains on separate
accounts, net.
◆ Ordinary profit decreased due to a higher provision of policy reserve
relating to the acquisition of new policies reflecting a revision in thestandard yields used for calculating policy reserves, lower gains onsale of securities in the general account and a deterioration in net
gains/losses on derivative transactions to hedge market risks foravailable-for-sale securities. On the other hand, gains/losses related
to market fluctuations for variable life insurance* improved year on
year, which partially offset the negative impact of the abovementioned decreases in ordinary profit.
*Total of (a) the provision of policy reserves for minimum guarantees forvariable life insurance according to market fluctuations and (b) net
gains/losses on derivative transactions to hedge market risks for the products+13.1%

Gains on sale of securities

Ordinary expenses

FY17.3Q (9M)

Change705.4

Income from money held in trust, net

41.9

FY17.3Q(9M)

Income from insurance premiums

Interest income and dividends(7.2%)

FY16.3Q(9M)

Operating expenses
Ordinary profit
Gains on disposal of fixed assets
Net income

Mar. 17

Dec. 17

Securities

8,093.1

8,628.5+535.3+6.6%

Policy reserves

7,929.9

8,454.2+524.3

+6.6%
+3.8%

(JPY bn)

Net assets
Net unrealized gains on other securities
Total assets
Separate account assets

Change from Mar. 17

473.5

491.5

+17.9

127.7

131.2

+3.4

+2.7%

8,873.6

9,450.5+576.9

+6.5%

989.6

1,161.7+172.1+17.4%

7

Sony Financial Holdings Inc. All Rights Reserved

Overview of Operating Performance:
Sony Life (Non-consolidated)
FY16.3Q(9M)

FY17.3Q(9M)

New policy amount

3,499.7

3,445.4(1.6%)

Lapse and surrender amount

1,371.1

1,330.3(3.0%)

Lapse and surrender rate

3.18%

2.94%

(0.24pt)

44,633.9

46,763.4+4.8%

Annualized premiums from new policies

54.1

51.9

(4.1%)Of which, third-sector products

11.2

9.3

(16.8%)

807.3

842.4

+4.3%

185.1

190.7

+3.0%

(JPY bn)

Policy amount in force

Annualized premiums from insurance in force
Of which, third-sector products

Change＜Reasons for changes＞◆ Decreased due mainly to lower
sales of term life insurance
despite favorable sales of U.S.
dollar-denominated insurance.
◆ Decreased due mainly to lower
sales of term life insurance andliving benefit insurance despite
favorable sales of U.S. dollardenominated insurance, variable
life insurance and individual
annuities.

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 thetotal 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,
not adjusted for policy amount decreases, increases, and reinstatements, by the policy amount in force at the
beginning of the fiscal year.

FY16.3Q(9M)

FY17.3Q(9M)

Gains from investment, net (General account)

100.0

95.4

(4.6%)

Core profit

65.8

70.6

+7.3%

Positive spread

11.1

13.9

+25.2%(JPY bn)

Non-consolidated solvency margin ratio

ChangeMar. 17

Dec. 17

ChangefromMar. 17

2,568.8%

2,711.1%+142.3pt

Sony Financial Holdings Inc. All Rights Reserved◆ Increased due mainly to anincrease in profit fromaccumulated policies in force
and a rise in positive spread
despite a higher provision ofpolicy reserve relating to theacquisition of new policies
reflecting a revision in thestandard yields used for
calculating policy reserves.

8Attachment

Operating Performance :Sony Life (Non-consolidated) (1)
Number and Amount of New Policies

Annualized Premiums from New Policies(Individual Life Insurance + Individual Annuities)
New policy amount（JPY tn）

6(Individual Life Insurance + Individual Annuities)
Annualized premiums from new policies

Number of new policies（Thousandsof policies)

501

500

388

5

(1.2%)

384

400

4.05

4

Of which, third-sector（JPY bn）

70

65.8

60

54.1

51.9

(4.1%)

50

3.49(1.6%)

3.44

300

40

3
200

2

30
20

100

1

0

0
FY15.3Q (9M)

FY16.3Q (9M)10(16.8%)

12.0

11.2

FY15.3Q (9M)

FY16.3Q (9M)

9.3

0FY17.3Q (9M)

FY17.3Q (9M)9Sony Financial Holdings Inc. All Rights Reserved

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)
Policy amount in force

60
50

7.30

7.25
44.6

+4.8%

Annualized premiums from insurance in force

Number of policies in force（Millionsof policies) （JPY bn）+3.4%（JPY tn）(Individual Life Insurance + Individual Annuities)

+2.6%

7.49

800

807.3

+4.3%

842.4

820.8
+2.6%

46.7

45.3

6

+3.2%

40

8

Of which, third-sector

30

600

4

400

2

200

20
10
0

0
Dec. 16Mar. 17

Dec. 17

+3.0%

185.1

187.4

Dec. 16Mar. 17

+1.7%

190.7

0

Sony Financial Holdings Inc. All Rights Reserved

Dec. 17

10

Attachment

Operating Performance :Sony Life (Non-consolidated) (3)Lapse and Surrender Rate*(Individual Life Insurance + Individual Annuities)
Lapse and surrender rate
(12M)

（%）

Lapse and surrender rate
（9M）

8

6

4.72

4.27

4

(0.24pt)

3.60
2

3.18

2.94

0
FY15

FY16

FY17

*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.

11

Sony Financial Holdings Inc. All Rights Reserved

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

800

754.8

762.8
705.4

Interest Income and Dividends(JPY bn)

120
＋8.1%

117.7
105.5

100

600

110.0
＋7.0%

80
400

60
40

200

20
0

0
FY15.3Q (9M)

FY16.3Q (9M)

FY17.3Q (9M)

FY15.3Q (9M)Sony Financial Holdings Inc. All Rights Reserved

FY16.3Q (9M)

FY17.3Q (9M)12

Attachment

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

Core Profit(JPY bn)

70

65.8

+7.3%

(JPY bn)

70.6

49.0

50

60

45.1

(7.2%)

41.9

40

50
40

30

35.1

30

20

20

10

10
0

0
FY15.3Q (9M)

FY16.3Q (9M)

FY17.3Q (9M)

(Reference) Impact on core profit(JPY bn)

FY15.3Q (9M)

FY16.3Q (9M)

FY15.3Q(9M)

FY16.3Q(9M)

FY17.3Q
(9M)

11.7

11.1

13.9

(24.2)

(4.5)

(4.8)

Capital gains (losses) excluding gains or losses onhedges (*)
Gains (losses) on hedges of variable life insurance

47.6

59.2

61.6

Provision of contingency reserve (*)

Positive spread
Provision of policy reserves for minimum
guarantees for variable life insurance (*)
Others

FY17.3Q (9M)

(Reference) Main differences from core profit(JPY bn)

FY15.3Q(9M)

FY16.3Q(9M)

FY17.3Q
(9M)

19.7

0.0

(9.4)

(0.6)

(14.2)(13.5)

(4.9)

(6.2)

(5.6)

*“Provision of policy reserves for minimum guarantees for variable life insurance” and “Provision of contingency reserve” are described as negative amount.
Capital gains (losses) exclude gains or losses on hedges of variable life insurance.

13

Sony Financial Holdings Inc. All Rights Reserved

Operating Performance :Sony Life (Non-consolidated) (6)
Number of Lifeplanner Sales Employees+238(Number)

5,000
4,612

4,682

4,933

4,751

4,730

Sep. 16

Dec. 16

4,942

4,968

4,974
(6)

4,500

4,000

3,500

3,000
0

Mar. 16

Jun. 16Mar. 17

Jun. 17

Sony Financial Holdings Inc. All Rights Reserved

Sep. 17

Dec. 17

14

Attachment

Operating Performance :Sony Life (Non-consolidated) (7)Breakdown of General Account Assets
Mar. 17<Asset management review>Dec. 17

Amount%Japanese bonds(including JGBs)

6,828.7

86.6%

7,145.8

86.2%

Japanese stocks

37.6

0.5%

36.6

0.4%

Foreign bonds

274.3

3.5%

325.4

3.9%

Foreign stocks

31.5

0.4%

32.6

0.4%

Money held in trust

273.8

3.5%

270.1

3.3%

Policy loans

180.3

2.3%

186.5

2.3%

Real estate*

117.5

1.5%

92.6

1.1%

Cash and call loans

40.8

0.5%

75.2

0.9%

Others

99.1

1.3%

123.5

1.5%

7,884.0

100.0%

8,288.7

100.0%(JPY bn)

Total

Amount%We have continued to accumulate
ultralong-term bonds to match the liability
characteristics of insurance policies withlong-term maturities with the aim of
reducing interest rate risk.
<Bond duration>
Mar. 16 21.8 years
Mar. 17 21.3 years
Dec. 17 21.2 years■ Investment in the money held in trust is
mainly into Japanese bonds.
■ The holding ratio on the real status ofJapanese bonds including those invested
in the money held in trust in the generalaccount : Dec. 17・・・89.5%（Mar. 17・・・90.1%）*The decrease in real estate was owing to a sale of the realestate held for investment in FY17.3Q.

*Real estate is the total of land, buildings, and construction in progress.

Sony Financial Holdings Inc. All Rights Reserved

15

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

3,000

2,722.8

2,568.8

2,500

2,711.1+142.3pt

2,000

1,500

1,000
0

Mar. 16Mar. 17

Dec. 17

Sony Financial Holdings Inc. All Rights Reserved

16

Attachment

Highlights of Operating Performance:
Sony Assurance
Ordinary revenues

Ordinary profit
FY16.3Q(9M)

FY17.3Q
(9M)

75.9

82.4

＋6.4

+8.5%

Underwriting income

74.3

81.0

+6.7

+9.1%

Investment income

1.5

1.3

(0.2)

(16.6%)

70.9

77.3

＋6.4

+9.1%

Underwriting expenses

52.5

56.7

＋4.1

+8.0%

Operating general andadministrative expenses

18.3

20.6

＋2.2

+12.3%

Ordinary profit

4.9

5.0

＋0.0

+0.9%

Net income

3.6

3.6

＋0.0

+0.9%

Mar. 17

Dec. 17

Underwriting reserves

106.1

114.9

+8.7

+8.3%

Net assets

29.4

31.6

+2.2

+7.7%

Total assets

186.5

196.1

+9.6

+5.2%

(JPY bn)

82.4

+8.5%

75.9

Ordinary revenues

Ordinary expenses
+0.9%

5.0

4.9
(JPY bn)

FY16.3Q (9M)

FY17.3Q (9M)

◆Ordinary revenues increased but ordinary
profit was flat year on year.
◆Ordinary revenues expanded owing to anincrease in net premiums written for
mainstay automobile insurance.
◆Due to a decline in the loss ratio, driven by alower car accident ratio, offset by a rise inadvertising and other operating expenses,
ordinary profit was flat year on year.

(JPY bn)

ChangeChange from
Mar. 1717Sony Financial Holdings Inc. All Rights Reserved

Overview of Operating Performance:
Sony Assurance(JPY bn)

FY16.3Q(9M)

FY17.3Q(9M)<Reasons for changes>

ChangeDirect premiums written

73.3

80.0

+9.2%

Net premiums written

74.2

81.0

+9.1%

Net losses paid

36.9

38.5

+4.3%

Underwriting profit

3.4

3.7

+9.0%

Net loss ratio

57.2%

54.4%

(2.8pt)Net expense ratio

26.3%

27.1%

+0.8ptCombined ratio

83.5%

81.5%

(2.0pt)◆ Increased in its mainstay
automobile insurance.

◆ Increased due to a rise inadvertising and otheroperating expenses.

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

FY16.3Q(9M)

FY17.3Q(9M)

ChangeE. I. loss ratio

62.9%

61.8%

(1.1pt)E. I. loss ratio +Net expense ratio

89.2%

88.9%

(0.3pt)◆ Declined due to a lower car
accident ratio in automobile
insurance.

Note: E.I. loss ratio = (Net losses paid + Provision for reserve for outstanding losses + Loss adjustment expenses) / Earned
premiums [Earthquake insurance and compulsory automobile liability insurance are excluded from the above calculation.]Mar. 17

Dec. 17

Number of policies in force

1.89 mn

2.06 mnNon-consolidated
solvency margin ratio

730.8%

809.9%

Change from
Mar. 17+0.16 mn

+8.8%

+79.1pt

Sony Financial Holdings Inc. All Rights Reserved

18

Attachment

Sony Assuranceʼs Underwriting Performanceby Type of Policy
Net Premiums Written

Direct Premiums Written
FY16.3Q(9M)

FY17.3Q
(9M)

170

148

(12.7%)－－－

Personal accident

6,583

6,515

(1.0%)

Voluntary
automobile

66,56373,379+10.2%－－－

73,31780,043+9.2%

FY16.3Q(9M)

FY17.3Q(9M)

55(4.7%)(9)2－

Personal accident

1,919

2,029

+5.7%

Voluntary
automobile

34,03435,501

+4.3%

991

995

＋0.4%

36,941

38,534+4.3%(JPY ｍn)
Fire
MarineCompulsory
automobile liability
Total

Fire

18

11

(36.6%)

Marine(2)0－Personal accident

6,811

6,671

(2.0%)

Voluntary
automobile

66,371

73,200+10.3%

Compulsory
automobile liability

1,074

1,132

+5.3%

Total

74,27381,016+9.1%

Change*Medical insurance is included in personal accident.

Fire
MarineCompulsory
automobile liability
Total

FY17.3Q(9M)(JPY ｍn)

Net losses paid
(JPY ｍn)

FY16.3Q(9M)

ChangeChange19

Sony Financial Holdings Inc. All Rights Reserved

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

Net Premiums Written andNumber of Policies in Force
Voluntary automobile insurance
Others(JPY bn)

80(JPY bn)

2.06+11.7%

1.77
71.7

1.84
74.2

+9.1%

2

1.5

60

48.5

1

0.5

20

7.3
6

4

6.0

5.0
33
4.9

27
3.8

0
FY15.3Q (9M)

FY16.3Q (9M)

FY17.3Q (9M)

The number of policies in force is the total of automobile insurance andmedical insurance policies.
Most of personal accident insurance is medical insurance.

+0.9%

2

0
FY15.3Q (9M)

0

7.6

+3.4%

(mn of policies)

81.0

40

Adjusted ordinary profit

Ordinary profit

Personal accident insurance

Number of policies in force

FY16.3Q (9M)

FY17.3Q (9M)

*Adjusted ordinary profit = Ordinary profit + Provision for catastrophe reserve(Reference) Provision for catastrophe reserve(JPY bn)

Provision for catastrophe reserve

FY15.3Q(9M)

2.2

FY16.3Q(9M)
2.3

FY17.3Q(9M)
2.5*Provision for catastrophe reserve is described as positive amount.

Sony Financial Holdings Inc. All Rights Reserved20

Attachment

Operating Performance:
Sony Assurance (2)Earned/Incurred Loss Ratio +Net Expense Ratio
Earned/Incurred loss ratio(Reference) Combined Ratio＜参考＞(Net Loss Ratio+ Net Expense Ratio)
Net loss ratio

Net expense ratio

（%）

（%）

100

100

90.4

90.6

89.7

88.9

89.2

63.3

62.3

63.1

62.9

60

83.5

81.5
(2.0pt)

57.8

57.5

27.1

28.3

56.8

57.2
(2.8pt)

54.4

40

40

20

83.4

80

61.8

(1.1pt)

85.8

84.8

(0.3pt)80

60

Net expense ratio

27.1

28.3

FY15

FY16

+0.8pt

26.6

20

26.3

27.1

FY16.3Q(9M)

FY17.3Q

0
FY15.3Q+0.8pt

26.6

26.3

27.1

FY15.3Q

FY16.3Q(9M)

FY17.3Q

0(12M)
Notes:
Earned/Incurred loss ratio = (Net losses paid + Provision for reserve foroutstanding losses + Loss adjustment expenses) / Earned premiums[Earthquake insurance and compulsory automobile liability insurance are excluded
from the above calculation]

FY15

(12M)

FY16

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

21

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

（%）

800

693.5%

730.8%

809.9%+79.1pt

600

400

200

0
Mar. 16Mar. 17

Dec. 17

Sony Financial Holdings Inc. All Rights Reserved

22

Attachment

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

28.5

+3.9%

<Consolidated>(JPY bn)

FY16.3Q(9M)

FY17.3Q（9M)

Consolidated ordinary revenues

28.5

29.6

+1.1

+3.9%

Consolidated ordinary profit

3.3

5.1

+1.8

+54.5%

Profit attributable to owners of
the parent

2.1

3.3

+1.1

+54.2%

FY16.3Q(9M)

FY17.3Q(9M)

29.6

Change<Non-consolidated>+54.5%

5.1(JPY bn)

3.3(JPY bn)

FY16.3Q (9M)

Ordinary revenues

25.9

26.9

+0.9

+3.7%

Gross operating profit

15.5

15.6

+0.0

+0.6%

Net interest income

13.0

15.3

＋2.2

+17.3%Net fees and commissions

(1.1)

(2.4)

(1.3)

－

Net other operating income

3.5

2.7

(0.8)

(22.5%)

General and administrative
expenses

12.4

11.6

(0.8)

(7.0%)Net operating profit

3.0

4.0

+0.9

+31.8%

Ordinary profit

3.0

4.6

+1.5

+52.7%Net income

2.0

3.1

＋1.0

+50.6%

FY17.3Q (9M)＜Consolidated＞◆Ordinary revenues rose year on year due to increases in interest
income on loans in line with a favorably growing balance ofmortgage loans and on investment securities.
◆Ordinary profit grew year on year, due to a decrease in operating
expenses, especially in advertising expenses for the card loanbusiness.
＜Non-consolidated＞◆Gross operating profit was flat and net operating profit increased.
・Net interest income increased due to increases in interest
income on loans and on investment securities.
・Net fees and commissions decreased due mainly to lower fees
and commissions on mortgage loans, in addition to higher fees
paid for loan guarantees reflecting the growing loan balance.
・Net other operating income decreased due mainly to a decreasein gains on foreign exchange transactions.

Change(JPY bn)
Net assets
Net unrealized gains onother securities, net of taxes
Total assets

Mar. 17

Dec. 17

Change from
Mar. 17

81.3

84.7

+3.4

+4.2%

4.7

6.4

+1.7

+35.8%

2,424.2

2,626.2+201.9+8.3%

23Sony Financial Holdings Inc. All Rights Reserved

Overview of Operating Performance:
Sony Bank (Non-consolidated) (1)Change from
Mar. 17

Dec. 16Mar. 17

Dec. 17

Customer assets

2,227.3

2,227.1

2,338.2+111.0+5.0%

Deposits

2,117.3

2,112.9

2,213.4+100.4+4.8%

Yen

1,772.1

1,764.9

1,847.0

+82.0

+4.6%

345.1

348.0

366.4

+18.3

+5.3%

110.0

114.1

124.7

+10.6

+9.3%

1,504.4

1,539.6

1,573.8

+34.2

+2.2%

1,409.0

1,452.4

1,495.2

+42.7

+2.9%

17.0

18.0

18.6

+0.5

+3.2%

(9.1)

(13.3%)(JPY bn)

Foreign currencies
Investment trusts
Loans
Mortgage loans
Card loans
OthersNon-consolidated Capital *2
adequacy ratio(domestic criteria)

*1

78.3

69.0

59.9

9.00%

9.75%

9.46%

(0.29pt)<Reasons for changes>◆ Increased in yen ordinary deposit
balance due mainly to anincrease in newly accumulated
funds via the increased numberof accounts, as well as theconversion from foreign
currencies backed by yen
depreciation.
◆ Increased in the U.S. dollardenominated time deposit
balance due to the promotional
effect from the rise in U.S.
interest rates, despite a decreasein ordinary deposit balance led
by yen depreciation.
◆ Rose due to a steady increase inmortgage loans, despite adecrease in demand forrefinancing these loans.

*1 Loans in others include corporate loans of ¥59.8 billion*2 Please refer to the graph of the non-consolidated capital adequacy ratio (domestic criteria) on page 27.
Capital adequacy ratios has been calculated by applying fundamental internal rating based approach (FIRB) from March 31, 2017.

Sony Financial Holdings Inc. All Rights Reserved24

Attachment

Overview of Operating Performance:
Sony Bank (Non-consolidated) (2)<Reference> On Managerial Accounting Basis
FY16.3Q(9M)

FY17.3Q
(9M)

15.5

15.6

+0.1

+0.7%

①

15.0

17.0

+1.9

+13.1%

②

(0.6)

(2.1)

(1.4)

－

Net other operating income*3

1.0

0.6

(0.3)

(37.0%)

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

14.4

14.9

+0.5

+3.5%

Operating expenses and otherexpenses ③

12.4

11.6

(0.8)

(7.1%)Net operating profit (core profit)＝(A)－③

1.9

3.3

+1.3

+71.5%(JPY bn)
Gross operating profit
Net interest income*1

Net fees and commissions*2<Reference> Interest Spread(Managerial Accounting Basis)

ChangeYield on financing

Yield on investment
Interest spread
（%）

1.5

1.20
0.94

1

■Managerial accounting basis
The following adjustments are made to the figures on a financial account for profits andlosses 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), mainly consistsof profits and losses for bond and derivative dealing transactions.
■Core profit
Profits and losses exclude net other operating income, which includes those on bond andderivative dealing transactions, and stands for Sony Bankʼs basic profits.

1.12(0.04pt)

0.90

0.5

0.26

0.22

0
FY16.3Q（9M）

FY17.3Q（9M）

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

25

Sony Financial Holdings Inc. All Rights Reserved

Operating Performance:
Sony Bank (Non-consolidated) (1)
Deposits
Yen Deposits

Loans

Foreign currency deposits

Mortgage loans(JPY bn)

2,213.4

2,112.9
2,000

1,923.5348.0+100.4366.4

Others(JPY bn)

1,500

1,344.1

87.1

+34.2

1,500

1,000

1,477.9
1,495.2

1,847.01,800.5
1,587.9
1,587.9

78.5*

107.0

335.5

1,000

1,573.8

1,539.6

1,452.4
1,452.4

1,764.9
1,764.9

1,237.1
1,237.1

500
500

0

0
Mar. 16Mar. 17

Dec. 17Mar. 16Mar. 17

Dec. 17*Corporate loans of ¥59.8 billion. Card loans of ¥18.6 billion.

Sony Financial Holdings Inc. All Rights Reserved26

Attachment

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

Balance of Securities by Credit Rating
AAA

AA

BBB

OthersA（%）(JPY bn)
800

15

631.2

620.9
600

400

675.1
23.3

26.1

16.3

307.0

+43.8

303.0

10

165.2

9.89

304.4

106.6

200

(Domestic Criteria)

9.75

9.46
(0.29pt)

5

135.3
233.3

126.3

160.2

Mar. 16Mar. 1700Dec. 17Mar. 16Mar. 17
Dec. 17
Notes:
1. 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 the bank.
2. Capital adequacy ratios has been calculated by applying fundamental internalrating based approach (FIRB) from March 31, 2017.

Sony Financial Holdings Inc. All Rights Reserved

27

Forecast of Consolidated Financial Results
for the Fiscal Year Ending March 31, 2018
(FY17)

Sony Financial Holdings Inc. All Rights Reserved28

Attachment

Forecast of Consolidated Financial Results for FY17
We have revised upward our full-year forecast for consolidated ordinary revenues, downward consolidated ordinary profit
and upward profit attributable for owners of the parent from the forecast announced on April 28, 2017.
(JPY bn)

FY16（Actual）

FY17（Forecast）

Changes

FY17.3Q（Actual）

Progress rates

Consolidated ordinary revenues

1,381.6

1,430.0⇒1,540.0+3.5%⇒+11.5%

1,175.7

82.2%⇒76.4%

Life insurance business

1,243.9

1,276⇒1,388.9+2.6%⇒+11.7%

1,062.1

83.2%⇒76.5%

Non-life insurance business

102.3

110.0

+7.5%

40.6

+5.4%

74.9%

Banking business

38.5

82.4
29.6

73.0%

Consolidated ordinary profit

66.3

67.0⇒64.0+1.0%⇒(3.5%)

49.5

73.9%⇒77.4%

Life insurance business

56.8

56.4⇒52.4(0.7%)⇒(7.8%)

40.2

71.3%⇒76.8%

Non-life insurance business

5.0

6.5

+30.0%

6.6+30.6%

77.5%

Banking business

5.0

5.0
5.0

76.9%

Profit attributable to owners of
the parent

41.6

42.0⇒50.0+0.9%⇒+20.1%

42.4

101.2%⇒85.0%<Ordinary Revenues and Ordinary Profit by Business>■Life insurance businessWe have revised upward our full-year forecast for ordinary revenues because performance in FY17.3Q (9M) exceeded our initial expectations. We have revised
downward our full-year forecast for ordinary profit because performance in FY17.3Q (9M) was lower than expected. In FY17.3Q (9M), the new policy amount fell
below our initial expectations. As a result, expenses related to the acquisition of new policies were lower, which had a positive effect on profit. However, adeterioration in net gains/losses on derivative transactions to hedge market risks for available-for-sale securities and lower gains on sale of securities in thegeneral account had a negative impact on profit. As the negative factors outweighed the positive factors, profit decreased. Meanwhile, taking into consideration
our posting of a gain on disposal of sale of fixed assets in FY17.3Q (3M), we also expect the gain on sale of securities in the general account for the full year to fall
below our initial expectations.
■Non-life insurance business
In FY17.3Q (3M), ordinary revenues were firm, essentially in line with our forecast as of November. An increase in the loss ratio in FY17.3Q (3M) caused ordinary
profit to be slightly lower than we had forecast in November, but fluctuated within our range of expectations. We maintain our full-year forecasts for ordinary
revenues and ordinary profit.
■Banking business
Ordinary revenues and ordinary profit during FY17.3Q (9M) were essentially in line with our expectations. As we anticipate no significant changes in FY17.4Q(3M), we maintain our full-year forecasts.

Sony Financial Holdings Inc. All Rights Reserved

29Sony Lifeʼs MCEV and ESR
as of December 31, 2017

A part of the calculations of MCEV adopted simplified method except that as of March 31, 2017.
Please keep in mind that the validity of these calculations has not been verified by outside specialists.
*In this part, figures, ratios and percentages changes have been rounded.

Sony Financial Holdings Inc. All Rights Reserved30

Attachment

Sony Lifeʼs MCEV
ChangefromMar. 17

ChangefromSep. 17Mar. 17

Sep. 17

Dec. 17

1,441.1

1,523.1

1,509.6+68.5(13.5)

Adjusted net worth

1,657.7

1,611.8

1,717.1+59.3+105.3

Value of existing business(216.7)(88.7)(207.5)+9.1(118.8)(JPY bn)

FY16.4Q(3M)

FY17.1Q(3M)

FY17.2Q(3M)

FY17.3Q(3M)

FY17.3Q(9M)

New business value

14.1

12.2

17.2

19.9

49.2

New business margin

3.8%

4.6%

6.4%

6.0%

5.7%

(JPY bn)

MCEV

Notes:
1. Calculated MCEV as of September 30, 2017 onward by using updated economic assumptions and lapse and surrender rate from March 31, 2017.
2. New business value is calculated accumulating new business value for each month based on economic assumptions at the end of each month.

 Reasons for changes in MCEV
・MCEV as of December 31, 2017 decreased ¥13.5 billion form September 30, 2017 due mainly to adecrease in interest rates in Japanese yen.
New business value/ New business margin
・New business value for FY17.3Q (3M) was ¥19.9 billion, up ¥2.7 billion from FY17.2Q (3M), due to afavorable acquisition of new policies .
・New business margin for FY17.3Q (3M) was down 0.4 percentage points from FY17.2Q (3M), due mainly
to a decrease in interest rates.
*Please refer to the appendix page 46 for trend on JGB yields.

31Sony Financial Holdings Inc. All Rights ReservedSony Lifeʼs ESR(JPY bn)

Insurance risk*Mar. 17

Sep. 17

Dec. 17

937.5

939.1

970.4

405.1

366.5

352.5

308.9

273.7

257.2

Operational risk

28.1

28.1

29.5

Counter party risk

1.9

1.9

2.8

(392.0)(379.4)(383.1)

980.6

956.3

972.2

Market-related risk
Of which, interest rate risk**

Variance effect
The risk amount based on
economic value(* ) Risk amount excluding the variance effect within Life module and Health module.
(**) Risk amount excluding the variance effect within market-related risk.

(JPY bn)

MCEV + Frictional costs
ESR

Mar. 17

Sep. 17

Dec. 17

1,476.6

1,547.2

1,539.3

151%

162%

158%

Notes:
1. The risk amount based on economic value refers to the total amount of Sony Lifeʼs risks comprehensively examined by a market consistent approach,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 standard method.
3. ESR=(MCEV + Frictional costs) / Risk amount based on economic value.

 The risk amount based on economic value as of December 31, 2017 amounted to ¥972.2 billion, up ¥15.9 billion
from September 30, 2017, due mainly to an increase in insurance risk associated with accumulated policies in force.
 ESR as of December 31, 2017 was 158%, down 3pt from September 30, 2017 due to an increase in risk amountbased on economic value and a decrease in MCEV.
Sony Financial Holdings Inc. All Rights Reserved

32

Attachment

AppendixSony Financial Holdings Inc. All Rights Reserved

33

Recent Topics 1
AEGON Sony Life Insurance

Launch of sales: December 1, 2009
Common stock: ¥31 billion (including capital reserves of ¥15.5 billion)
Equity ownership: Sony Life insurance Co Ltd 50%, AEGON international B.V. 50%
Marketing products: Individual Variable Annuities
Sales Channels: Lifeplanner sales employees and partner Banks (31*) *As of February 14, 2018

SA Reinsurance Ltd

Established: October 29, 2009
Common stock: ¥15.9 billion
Equity ownership: Sony Life insurance Co., Ltd. 50%, AEGON international B.V. 50%
Business: Reinsurance business*AEGON Sony Life Insurance and SA Reinsurance are equity method companies, 50-50 joint ventures established by Sony Life and AEGON Group.

Sony Bankʼs Mortgage Loans through Sony Life
■Sony Life accounts for 18% of the amount of new mortgage loans for FY17.3Q (9M)Sony Life accounts for 20% of the balance of mortgage loans as of December 31, 2017

*Sony Life started handling banking agency business in January 2008.

Sony Assuranceʼs Auto Insurance Sold by Sony Life
■Sony Life accounts for approx. 3% of new automobile policies for FY17.3Q (9M)*Sony Life started handling automobile insurance in May 2001.

Sony Financial Holdings Inc. All Rights Reserved34

Attachment

Recent Topics 2＜Highlights on and after FY17.3Q＞
2017-10-02

Sony Life commenced sale of new product: “U.S. Dollar-Denominated Single Premium Whole Life Insurance(Non-Notification Type)” and “U.S. Dollar-Denominated Living Benefit Whole Life Insurance (Living
Standard Type)”

2017-10-05

Sony Assurance began offering a web-based insurance claims service, allowing policyholders to makemedical insurance claims via its website

2017-10-09

Sony Bank began issuing “Takashimaya Platinum Debit Card” through an alliance with Takashimaya Co., Ltd
and Takashimaya Credit Co., Ltd.

2017-11-01

Sony Assurance expanded its “Secom accident on-site rush service” for automobile insurance policyholders

2017-11-29

Sony Financial Holdings issued ¥10 billion of No.3 unsecured corporate bonds

2017-12-01

Sony Assurance promote tie-up with auto repair shops which were certificated by TÜV Rheinland Japan Ltd.

2017-12-14

Sony Bank began offering “WealthNavi for Sony Bank” an automated asset investment service, incollaboration with WealthNavi Inc.

2017-12-18

Sony Bank relocated its headquarter in Chiyoda-ku, Tokyo.

2018-01-04

Sony Life started direct insurance claims payment service to medical facilities providing advanced medicalcare

2018-01-09

Sony Life announced to revise its insurance premium rates on certain tern life insurance products within
individual life insurance, in line with April 2018 revisions to the Standard Mortality Table
Sony Financial Holdings Inc. All Rights Reserved

35Sony Lifeʼs Insurance Premium Rates RevisionSony Life revised its insurance premium rates in line with April 2018 revisions to the Standard Mortality
Table. Within individual life insurance, these rate revisions were applied to certain term life insurance
products with policy dates on or after February 2, 2018, or April 2, 2018.
Effective dates and principal products on which rates were revised（１）Principal products on which insurance premium rates were revised for policy dates on or after
February 2, 2018 (applied to new policies and renewed policies)◆Non-participating Family Income Insurance◆Non-participating Decreasing Term Life Insurance◆Non-participating Level Premium Plan Term Life Insurance with No Surrender Value◆Non-participating Level Premium Plan Term Life Insurance with No Surrender Value(disability/nursing care type)（２）Principal products on which insurance premium rates are to be revised for policy dates on or after
April 2, 2018 (applied to new policies and renewed policies)◆Non-participating Level Premium Plan Term Life Insurance◆Non-participating Level Premium Plan Term Life Insurance (non-smoker preferred risk)◆Non-participating Level Premium Plan Term Life Insurance with Reduced Surrender Value(disability/nursing care type)
Note: Insurance premium rates will not be otherwise revised on whole life insurance, endowment
insurance, medical insurance, and so on.
Sony Financial Holdings Inc. All Rights Reserved36

Attachment

Sony Lifeʼs Product Portfolio
Annualized Premiums from New Policies by Product

FY17.3Q（9M）FY16（12M）

Yen whole
life 6%¥51.9 billion¥78.1 billion

Yen
whole
Endowment/
U.S. dollarlife 14%
Annuities
denominated21%
whole life 8%
Yen single-premium
whole life 1%
Protection-type（term-life）
56%

円建終⾝
14%

Endowment/Annuities
30%

U.S. dollardenominatedsingle-premium
U.S. dollar- whole life 4%

denominatedwhole life 13%

Protection-type（term-life）
47％

37

Sony Financial Holdings Inc. All Rights ReservedSony Lifeʼs Asset Management
Purchase Securities in the General AccountFY16（12M）

Japanese local
government
bonds 0.1%

Japanesestocks 0.5%

Japanese
corporate
Bonds
28.6%

Japanesestocks 0.5%

Foreign
bonds
11.8%

国債
95.4%

Foreign
bonds
28.3%

FY17.3Q (9M)

JGBs
42.5%

Japanese
corporate
Bonds
30.3%

国債
85.3%

JGBs
57.3%

社債
28 6%

Notes:
1. Japanese corporate bonds include FILP agency bonds and Government-guaranteed bonds.
2. The graphs above are asset allocation for the relevant period. Total invested amount for the relevant period as 100%.
(excluding, investment in subsidiaries and affiliates, and strategic investments)

Sony Financial Holdings Inc. All Rights Reserved38

Attachment

Sony Life: Fair Value Information on Securities(General Account Assets)
Fair Value Information on Securities
Fair value information on securities with market value (except trading-purpose securities)

Note: The above table includes money held in trust other than trading-purpose securities.

Valuation gains (losses) on trading-purpose securities（JPY bn）

Note: The above chart includes trading-purpose securities included in “money held in trust”, etc

39Sony Financial Holdings Inc. All Rights ReservedSony Lifeʼs Interest Income and Dividends (Details)（JPY mn）

FY16.3Q (9M)

FY17.3Q (9M)

ChangeCash and deposits
Japanese bonds(including JGBs)
Japanese stocks

00+62.5%

90,44593,504

+3.4%

345

380

+10.1%

Foreign securities

6,017

10,479+74.2%

Other securities

177

127

(28.4%)

Loans

4,784

4,957

+3.6%

Real estate

8,148

8,048

(1.2%)

144

290+100.5%110,064

117,788+7.0%

Others
Total

Sony Financial Holdings Inc. All Rights Reserved40

Attachment

Sony Lifeʼs Capital Gains/Losses
FY16
4Q
(12M)

11,79625,628

16,114

124

2,098

2,851

－

－

－

－

－

－

7

49

103

134

11

19

47

Gains on sale of securities

917

1,301

1,306

1,308

0

0

0

Gains on derivatives, net

8,821

4,577

－

－

－

－

－

Capital gains
Income from money held in trust, net
Income from trading securities, net

2Q
(6M)

14,501
－

FY17
3Q
(9M)

（JPY mn）

1Q
(3M)

1Q
(3M)

2Q
(6M)

3Q
(9M)

Gains on hedges of variable life insurance

4,955

1,042

－

－

－

－

－

Gains on hedges of available-for-sale securities

3,021

1,386

－

－

－

－

－

－

－

24,218

14,670

49

2,078

2,804
－

Foreign exchange gains, net
Gains (losses) on sale of foreign bonds
Other capital gains
Capital losses
Losses on money held in trust, net

－

－

2,375

2,375

－

－

4,754

5,868

－

－

63

－

－

3,407

5,688

39,88232,276

7,441

16,25725,809

－

－

－

－

－

－

－

Losses on trading securities, net

－

－

－

－

－

－

－

Losses on sale of securities

－

－

－

－

－

0

0

Devaluation losses on securities

－

－

－

－

－

－

－

Losses on derivatives, net－－

34,27530,0507,015

14,73923,990Losses on hedges of variable life insurance－－

14,292

15,666

4,247

8,555

13,515Losses on hedges of available-for-sale securities

－

－

2,265

2,460

1,713

2,767

5,877

3,139

5,023

－

－

－

－

－

(1,681)(2,375)

－

－

－

－

267

665

5,606

2,226

426

1,518

11,094

6,108(14,253)(16,162)

Foreign exchange losses, net
Losses on sale of foreign bonds*
Other capital losses
Net capital gains (losses)(7,316)

Total of gains on sale ofsecurities and foreign exchange
gains on sale of foreign bonds:
FY17.3Q : ¥0 million
FY16.3Q : ¥3,681 million－ * (losses) represents
positive figures.

1,819(14,159) (22,958)

Notes on Sony Lifeʼs Capital Gains/Losses are disclosed in page 42.

Sony Financial Holdings Inc. All Rights Reserved

41Sony Lifeʼs Capital Gains/Losses (continued)(Note1)・Foreign exchange gains, net for FY17.1Q (3M) include foreign exchange losses of ¥242 million relating to U.S. dollar-denominated insurance.
Losses on derivatives, net include foreign exchange losses relating to U.S. dollar-denominated insurance of ¥515 million.
Moreover, other capital losses include the reversal of policy reserves for U.S. dollar-denominated insurance of ¥63 million relating to foreignexchange fluctuation.
・Foreign exchange gains, net for FY17.2Q (6M) include foreign exchange gains of ¥1,583 million relating to U.S. dollar-denominated insurance.
Losses on derivatives, net include foreign exchange losses relating to U.S. dollar-denominated insurance of ¥2,489 million.
Moreover, other capital losses include the provision of policy reserves for U.S. dollar-denominated insurance of ¥853 million relating to foreignexchange fluctuation.
・Foreign exchange gains, net for FY17.3Q (9M) include foreign exchange gains of ¥2,189 million relating to U.S. dollar-denominated insurance.
Losses on derivatives, net include foreign exchange losses relating to U.S. dollar-denominated insurance of ¥3,445 million.
Moreover, other capital losses include the provision of policy reserves for U.S. dollar-denominated insurance of ¥1,155 million relating to foreignexchange fluctuation.
(Note 2)・ Foreign exchange losses, net for FY16.1Q (3M) include foreign exchange losses of ¥4,280 million relating to U.S. dollar-denominated insurance.
Moreover, other capital gains include the reversal of policy reserves for U.S. dollar-denominated insurance of ¥4,754 million relating to foreignexchange fluctuation.
・Foreign exchange losses, net for FY16.2Q (6M) include foreign exchange losses of ¥6,720 million relating to U.S. dollar-denominated insurance.
Gains on derivatives, net include foreign exchange gains relating to U.S. dollar-denominated insurance of ¥1,337 million.
Moreover, other capital gains include the reversal of policy reserves for U.S. dollar-denominated insurance of ¥5,868 million relating to foreignexchange fluctuation.
・Foreign exchange gains, net for FY16.3Q (9M) include foreign exchange gains of ¥21,805 million relating to U.S. dollar-denominated insurance.
Losses on derivatives, net include foreign exchange losses relating to U.S. dollar-denominated insurance of ¥17,445 million.
Moreover, other capital losses include the provision of policy reserves for U.S. dollar-denominated insurance of ¥4,941 million relating to foreignexchange fluctuation.
・Foreign exchange gains, net for FY16.4Q (12M) include foreign exchange gains of ¥12,389 million relating to U.S. dollar-denominated insurance.
Losses on derivatives, net include foreign exchange losses relating to U.S. dollar-denominated insurance of ¥12,010 million.
Moreover, other capital losses include the provision of policy reserves for U.S. dollar-denominated insurance of ¥1,560 million relating to foreignexchange fluctuation.
(Note3）・ The figures of income (losses) from money held in trust, net, income (losses) from trading securities, net, gains (losses) on derivatives andforeign exchange gains (losses), net were recorded after offsetting gains and losses of each item.

Sony Financial Holdings Inc. All Rights Reserved42

Attachment

Sony Lifeʼs Quarterly Trend on New Policy Amount
Quarterly Trend on New Policy Amount(JPY bn)

1,500

1,457.7

1,437.4
1,324.2

1,290.7

1,260.0

1,250

1,098.9

1,189.0
1,050.7

1,115.8

1,114.8

FY17.1Q

FY17.2Q

1,214.7

1,000
750
500
250
0
FY15.1Q

FY15.2Q

FY15.3Q

FY15.4Q

FY16.1Q

FY16.2Q

FY16.3Q

FY16.4Q

FY17.3Q

43

Sony Financial Holdings Inc. All Rights ReservedSony Lifeʼs 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(JPY bn)

25
22.3

20.6

23.9

22.7

20

19.1

20.5

19.5
18.2
15.3

15

16.1

16.2

3.1

2.8

3.3

FY17.1Q

FY17.2Q

FY17.3Q

10

5
3.9

3.4

FY15.1Q

FY15.2Q

4.6

3.6

4.1

3.9

3.1

FY15.4Q

FY16.1Q

FY16.2Q

FY16.3Q

4.4

0
FY15.3Q

FY16.4Q

Sony Financial Holdings Inc. All Rights Reserved

44

Attachment

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(JPY bn)60

Number of new polices [ ](Thousandsof policies)

53.3[10.5]

53.2
[8.9]

15

37.9
[8.0]

40

10

Policy amount in force

Number of policies in force [ ](JPY bn)

600

489.1
[82.7]

501.7[85.9]

523.1[90.9](Thousandsof policies)

120

400

80

40

20

5

200

0

0

0

0

FY15.3Q (9M)
FY16.3Q (9M)
FY17.3Q (9M)
Net income (losses) for AEGON Sony Life Insurance and SA Reinsurance(JPY bn)
FY16.3Q (9M)
FY17.3Q (9M)
ChangeDec. 16

AEGON Sony Life Insurance

(3.1)

(3.3)

(0.2)

SA Reinsurance

(2.7)

(0.2)

+2.5

Mar. 17

Dec. 17

AEGON Sony Life Insurance and SA Reinsurance are equity method companies, 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 andSA Reinsurance are recognized as investment profit (losses) on equity method in the SFHʼs consolidated net income.

45

Sony Financial Holdings Inc. All Rights Reserved

Method of Measuring Risk Amount
Based on Economic Value (1)Market-related Risk*1
Sony LifeInterest rate risk
Fluctuations in net asset
value based on economic
value in response to theshocks in the rightcolumns.
The same applies below.

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

(Reference) EU Solvency II Implementing Measures(Delegated Regulation)
Different percentage changes in interest rates are set for eachterm, from one year to 20 years.
For terms longer than 20 years and through 90 years,
percentage changes are set using linear interpolation, withnegative 29% as the percentage change for 20 years andnegative 20% as the percentage change for 90 years(Example)
For Yen 30-year, 64% decrease (parallel shift), 19% decrease(twist), 4% decrease (butterfly)

Equity risk

Listed equities 45%, Other securities 70%

Global 39%, Others 49%*2

Real estate risk

Actual real estate

Same as on the left

25%

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

Credit risk

Currency risk

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

Credit risk = (market value) x (risk coefficient for each credit
rating and duration)(Example)
Rating A: Duration (Dur): 5-10 years(Example)
Rating A: Risk coefficient (1.4%), cap (23), floor (1)Risk coefficient=7.0% + 0.7% x (Dur – 5 )35% downside fluctuation

25% downside fluctuation◆Revision in the risk factors of market-related risk
・ In FY17.1Q, Sony Life partially revised the risk factors of market-related risk.
・ Regarding interest rate risk in Japanese yen, the rate of change in interest rates for 40 years or less was updated based on recent market data, andthe rate of change in interest rates beyond 40 years was revised, taking into account such factors as ICS(＊3) deliberations. The main result was adecrease in interest rate risk compared with March 31, 2017, due mainly to a decrease in the rate of change in Japanese yen beyond 40 years.
Notes＊1. Principal items as of December 31, 2017.
＊2. Symmetric adjustment (an adjustment of ±10% of the average value of the stock price index during a defined period in the past) is applied.
＊3. Capital requirements for internationally active insurance groups (IAIGs) being formulated by the International Association of Insurance Supervisors (IAIS).

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Attachment

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

Sony Life(Reference) EU Solvency II Implementing Measures(Delegated Regulation)

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 elapsed

Same as on the left

Lapse risk

The largest amount of these;*2

The largest amount of these;• 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• 30% of policies on which surrender value is inexcess of best estimate liability are immediately
surrendered

lapsation for Life module, 50% for Health module• Decreases by 50% in the assumed rates oflapsation for Life module, 50% for Health module• 40% 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 elapsed
Rate of inflation rises by 1%

Same as on the left

Disability risk

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

Notes
＊1. Principal items as of December 31, 2017.
＊2. 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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47

Trend on JGB Yields (Par rate)

As of the end of each monthSony Financial Holdings Inc. All Rights Reserved48

Attachment

Trend on Risk-free Rate (Japanese yen/ Par rate)

Convergence
period:20 yearLast liquid point: 40 year

*For above risk-free rate, we employ the Smith-Wilson method for extrapolation so that the 60-year forward rate will coverage on the UFR (3.5%).

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49

Contact︓
Investor Relations Department
Sony Financial Holdings Inc.
TEL︓+81-3-5290-6500

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