Presentation Material

Consolidated Financial Resultsf thforthe Nine
Ni Months
M th EEnded
d d DecemberDb 31,
31 2014andS
SonyLife’sLif ’Market Consistent Embedded Valueas off D
Decemberb 31
31, 2014

Sony Financial Holdings Inc.
F b
February13,
13 2015
Sony Financial Holdings Inc. All Rights Reserved

Content
 Consolidated Operating Results for the Nine Months Ended December 31, 2014 P. 3
 Consolidated Financial Forecast for the Year Ending March 31
31, 2015

PP. 29

 Sony Life’s MCEV and Risk Amount Based on Economic Valueas of December 31
31, 2014
 Appendix

P
P. 31
P. 34

Disclaimers:
This presentation material contains statements concerning the current plans, expectations, strategies and beliefs of the Sony Financial Group. Anystatements contained herein that pertain to future operating performance and that are not historic facts are forward-looking statements . Forwardlooking statements may include —but are not limited to—words such as “believe,” “anticipate,” “plan,” “strategy,” “expect,” “forecast,” “predict,” and“possibility” that describe future operating activities, business performance, events or conditions. Forward-looking statements, whether spoken or
written,, are based on judgments
j gmade byy the managementgof the Sonyy Financial Group,p, based on information that is currently
y available to it. As
such, these forward-looking statements are subject to various risks and uncertainties, and actual business results may vary substantially from theforecasts expressed or implied in forward-looking statements. Consequently, investors are cautioned not to place undue reliance on forward-looking
statements. The Sony Financial Group disclaims any obligation to revise forward-looking statements in light of new information, future events or otherfindings. 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.
*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Consolidated Operating Results for
the Nine Months Ended December 31,
31 2014

Sony Financial Holdings Inc. All Rights Reserved

3

Highlights of Consolidated Operating Performancefor the Nine Months Ended December 31, 2014 (1)Consolidated ordinary revenues(Billions of yen)

Consolidated ordinary profit

1 047 8(*))
1,047.8(

1 021 81,021.8(2.5%)

75.8

954.8

925.7

(29.1)(3.0%)

Ordinary profit

53.3

65.9

+12.6

+23.7%

Non-life
Insurancebusiness

Ordinary revenues

67.4

69.9

+2.4

+3.6%

Ordinary profit

2.7

4.4

+1.6

+60.5%

Ordinary revenues

27.4

28.4

+0.9

+3.5%

Ordinary profit

5.2

5.3

+0.0

+0.9%

(1.9)

(2.2)

(0.2)

－

02
0.2

01
0.1

(0 0)
(0.0)

(24 3%)(24.3%)

1,047.8

1,021.8(25.9)(2.5%)

Ordinary profit

61.5

75.8

+14.3

+23.2%Net income

35.3

50.5

+15.1
15.1

+43.0%
43.0%

Ordinary revenues
O diOrdinary
profitfit
Ordinary revenues

Consolidated

FY13.3Q (9M)

FY14.3Q (9M)(Billions of yen)(*) Banking business revised its method of recording ordinary
revenues and ordinary expenses on hedge transactions
from FY14. Ordinary revenues for FY13.3Q have been
retroactively adjusted to reflect the change. Consequently,
consolidated ordinary revenues for FY13.3Q have beenrevised from ¥1,047.3 billion to ¥1,047.8 billion. As
adjustmentsjto ordinary
y revenues were accompaniedpbyyadjustments in the same amount to ordinary expenses,
ordinary profit and net income were unaffected.

ChangeOrdinary revenues

Intersegment
adjustments*
adjustments

61 5
61.5

FY14.3Q
(9M)

Life
I
Insurancebusiness

Bankingbusiness+23.2%

FY13.3Q(9M)*Ordinary profit in “Intersegment adjustments” is mainly from SFH.
*Comprehensive income: FY13.3Q (9M): ¥32.3 billion, FY14.3Q (9M): ¥90.0 billion

Change from 14.3.31

14.3.31

14.12.31

Net assets

467.0

550.0

+82.9

+17.8%

Total assets

8,841.3

9,437.9+596.5+6.7%(Billions of yen)

Consolidated

Sony Financial Holdings Inc. All Rights Reserved

4Highlights of Consolidated Operating Performancefor the Nine Months Ended December 31, 2014 (2)Life Insurance Business
Policy amount in force increased steadily, reflecting a record-high new policy amount during the nine months
ended December 31, 2014. However, ordinary revenues decreased compared with the same period of theprevious fiscal yyear due to a decline in income from insurance pppremiums,, which offset a rise in g
gains oninvestment income. The decline in income from insurance premiums was principally because of the brisk saleof lump-sum payment endowment insurance prior to the sales suspension during the third quarter period(October 1 to December 31) of the previous fiscal year. Ordinary profit increased year on year, due mainly to
two reasons: an increase in g
gains on sales of securities in the ggeneral account and the absence of thenegative impact from the revision of the discount rate used for calculating policy reserves on the interest ratesensitive whole life insurance that was present in the same period of the preceding fiscal year.
Non-life Insurance Business
Ordinaryy revenues expandedpyyear on yyear,, owing
g to an increase in net p
premiums written p
primarily
y formainstay automobile insurance. Ordinary profit grew year on year due to a decline in the loss ratio mainly led
by a lower car accident ratio, as well as the rise in ordinary revenues.
Banking Business
Ordinaryy revenues increased yearyon year,ydue mainlyy to an increase in bond-dealingg transactions. Ordinaryyprofit increased year on year, due mainly to the above-mentioned increase in ordinary revenues, despite arise in operating expense.
Consolidated ordinary revenues decreased 2.5% compared with the same period of the previous fiscal year,to ¥1,021.8 billion, owing
g to a decrease in ordinary
y revenues from the life insurance, whereas ordinaryyrevenues from the non-life insurance and banking businesses increased. Consolidated ordinary profit
increased 23.2% year on year, to ¥75.8 billion, owing to increases in ordinary profit from all the businesses:
life insurance, non-life insurance and banking. Consolidated net income was up 43.0% year on year, to ¥50.5
billion, reflecting
g the rise in ordinaryyp
profit, and the change
g of the calculation p
policyy of the reserve for p
price
fluctuations for Sony Life.
Sony Financial Holdings Inc. All Rights Reserved

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

Ordinary profit

955.2

FY13.3Q(9M)

FY14.3Q
(9M)

955.2

925.6

(29.6)(3.1%)

Income from insurance premiums

738.7

675.4

(63.3)(8.6%)

Investment income

194.8

223.3

+28.5

+14.6%

Interest income and dividends

90.2

99.5

+9.3

+10.3%

Income from monetary trusts, net

3.9

3.9

(0.0)

(0.7%)

Gains on sale of securities

06
0.6

8.8

+8 2
+8.2

－

Gains on separate accounts, net

98.7

105.3

+6.6

+6.7%

900.4

858.4

(41.9)(4.7%)

Insurance claims and other payments

251.4

292.5

+41.1

+16.4%

P i i ffor policy
Provisionli reserves andd others
th

536 3
536.3

451 0
451.0

(85 2)(85.2)(15 9%)(15.9%)

Investment expenses

6.0

6.0

+0.0

+0.4%

Operating expenses

85.5

85.4

(0.0)

(0.1%)

Ordinary profit

54.7

67.1

+12.3

+22.5%Net income

31.5

45.2

+13.6

+43.4%

925.6(Billions of yen)

(3.1%)
Ordinary revenues

67.1+22.5%

54.7

FY13.3Q (9M)

Ordinary expenses

FY14.3Q (9M)(Billions of yen)Ordinary revenues decreased while ordinary profit increased year
on year.
◆The decline in income from insurance premiums was principallyppaymentpyendowment
because of the brisk sale of lump-sum
insurance prior to the sales suspension in FY13.3Q (3M).
◆ Investment income increased due mainly to higher gains on saleof securities and higher interest income and dividends on generalaccount assets.
◆Ordinary profit increased year on year due mainly to two reasons:an increase in gains on sales of securities in the general accountand the absence of the negative impact from the revision of the
discount rate used for calculating policy reserves on the interest
rate-sensitive whole life insurance that was present in the same
period of the preceding fiscal year.
◆ Net income was up year on year reflecting the rise in ordinary
profit, and the change of the calculation policy of the reserve for
price
i fl
fluctuations.
t ti
TheTh changeh
was tto accumulate
l t theth reserve up
to required levels from FY14 while it had accumulated the reservein excess of the required levels until FY13.

(Billions of yen)

14.3.31

14.12.31

ChangeChange from 14.3.31

Securities

5,954.7

6,382.6+427.8+7.2%

Policy reserves

6,123.6

6,573.0+449.4

+7.3%

369.2

445.8

+76.6

+20.8%

83.4

122.1

+38.7

+46.4%

6,624.9

7,227.4+602.5
602.5

+9.1%
9.1%

640.5

763.7

+123.1+19.2%Net assets
Net unrealized gains on other securities
Total assets
Separate account assets

Sony Financial Holdings Inc. All Rights Reserved

6Overview of Operating Performance:
Sony Life (Non-consolidated)
FY13.3Q(9M)

FY14.3Q(9M)

ChangeNew policy amount

3,003.1

3,619.0+20.5%

Lapse and surrender amount

1 327 5
1,327.5

1 562 1
1,562.1+17 7%+17.7%

Lapse and surrender rate

3.52%

4.00%

+0.48pt

Policy amount in force

38,863.7

40,593.6+4.5%

Annualized premiums from new policies

48.7

58.0

+19.1%Of which, third-sector products

10.5

11.7

+10.8%

690.8

727.0

+5.2%

166.3

171.7

+3.3%

(Billions of yen)

FY13.3Q(9M)

FY14.3Q(9M)

ChangeGains from investment, net (General account)

90.0

111.9

+24.3%

CCore
profit
fit

56 6
56.6

60 6
60.6

+6.9%
6 9%

Positive spread

5.7

9.4

+64.9%(Billions of yen)

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

Non-consolidated solvency margin ratio

14.3.31

14.12.31

Changefrom 14.3.31

2,358.7%

2,644.2%+285.5pt

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.

<Reasons for changes>◆ Increased due to higher sales of family
income insurance and variable life
insurance.
◆ Increased because some policyholders
switched over to new types of family
income insurance and living benefit
insurance, which were launched in
Oct 2014.
Oct.
2014◆ Increased due to higher sales ofvariable life insurance, educational
endowment insurance and living
benefit insurance.
insurance◆ Core profit increased year on year due
mainly to the absence of the negative
impact from the revision of the discountrate used for calculating policy reserves
on interest rate-sensitive whole life
insurance that was present in the same
period of the preceding fiscal year andpositive spread,p, despitepan increase in p
an increase in provision of policy
reserves for minimum guarantees forvariable life insurance stemming fromits higher sales even in a favorable
market environment.

Sony Financial Holdings Inc. All Rights Reserved

7

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

Annualized Premiums from New Policies(Individual Life Insurance + Individual Annuities)(Individual Life Insurance + Individual Annuities)

New policy amount

Annualized premiums from new policies

Number of new policies(Thousands ofpolicies)(Trillions of yen)

439
39
4

3.21
3

+11 6%+11.6%

415

463

500

(Billions of yen)

58.0

60

51.1

3.61
400

Of which,which third-sector

50

48.7

+19.1%

3.00+20.5%

40
300

30
2

200

20
1

00

100

0

FY12.3Q (9M)

FY13.3Q (9M)

FY14.3Q (9M)

+10.8%

10

13 1
13.1

10.5

11 7
11.7

FY13.3Q (9M)

FY14.3Q (9M)

0FY12.3Q (9M)Sony Financial Holdings Inc. All Rights Reserved

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

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

Policyy amount in force

+5.2%

6 33
6.33

50

6.59

(Billions of yen)

7

800

+4.2%

690.8

+5.2%

38.8

+4.5%

40.5

39.0

5

727 0
727.0

696.9

6
40

Of which, third-sector(Millions of policies)(Trillions of yen)

6 27
6.27

Annualized premiums from insurance in force

Number of p
policies in force

+4.3%

600

+3.8%

4

30

400
3

20
2
10

200

1

0

0
13.12.31

14.3.31

14.12.31

+3.3%

166.3

167.0

13.12.31

14.3.31

+2.8%
2 8%

171.7

0

Sony Financial Holdings Inc. All Rights Reserved

14.12.31

9

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

Lapse and surrender rate
(9M)

(%)

10

8

6

5.31
4.61

4

4.03

3.52

4.00
+0.48pt

2

0
FY12

FY13

FY14

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

Sony Financial Holdings Inc. All Rights Reserved

10(Reference) Sony Life’s Quarterly Trend on New Policy Amount,
Lapse and Surrender Rate and Net Increase
Net Increase

New Policy Amount/ Lapse and Surrender Rate
(Individual Life Insurance + Individual Annuities)(Individual Life Insurance + Individual Annuities)
Net increase (3M)

New policy amount (3M)
(Billions of yen)(Billions of yen)

1,600

1,491.6

1,400

1,201.9
1,200

700

640.9

600

1,128.3
500

496.8

506.5

FY12.3Q (3M)

FY13.3Q (3M)

1 000
1,000
400
800
300
600
200

400

100

200
0
FY12.3Q (3M)

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

FY14.3Q (3M)

FY13.3Q

0
FY14.3Q (3M)

FY14.3Q

p and surrender rate ((3M))
Lapse

1.35%

1.18%

1.75%

Lapse and surrender rate (9M)

4.03%

3.52%

4.00%

Sony Financial Holdings Inc. All Rights Reserved

11

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

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

800

99.5

100

738.7

90.2
675.4

657.3
(8.6%)

80.3+10.3%

80

600
60
400
40
200
20

0
FY12.3Q (9M)

FY13.3Q (9M)

FY14.3Q (9M)

0FY12.3Q (9M)Sony Financial Holdings Inc. All Rights Reserved

FY13.3Q (9M)

FY14.3Q (9M)

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

Ordinary Profit(Billions of yen)(Billions of yen)

80

80

70

70

60

57.0

60.6

60

56.6

54.7

52 8
52.8

+6.9%

50

67.1
+22 5%+22.5%

50

40

40

30

30

20

20

10

10

0

0
FY12.3Q (9M)

FY13.3Q (9M)

FY14.3Q (9M)

(R f
(Reference)) IImpactt on core profit
fit
Positive spread
Provision of policy reserves for minimum
guarantees for variable life insurance (*1)
Effects by the revision of policy reserve
discount rate (Interest rate-sensitive whole
life insurance ) (*2)

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

FY12.3Q (9M) FY13.3Q (9M) FY14.3Q (9M)
1.1
5.7
9.4
(1.2)

0.9

(3.3)

-

(5.7)

-

FY13.3Q (9M)

FY14.3Q (9M)

(R f
(Reference))M
Main
i diffdifferences fromf
Core
C
ProfitP fi(Billions of yen)
FY12.3Q (9M) FY13.3Q (9M) FY14.3Q (9M)
Capital gains (loss)

(0.8)

1.2

10.4

Provision of contingency reserve (*1)

(3.0)

(2.9)

(3.8)

*1: “Provision of policyy reserves for minimum guaranteesg
for variable life insurance” and“Provision of contingency reserve” are described as negative amount.
*2: The effect of the revision of policy reserve discount rate on interest rate-sensitive whole life
insurance in May 2013.

Sony Financial Holdings Inc. All Rights Reserved

13

Operating Performance :Sony Life (Non-consolidated) (6)
Number of Lifeplanner Sales Employees+124(Number)

4,500

4,133
4
133
[105]

4,127
4
127
[109]

4,125
4
125
[110]

13.6.30

13.9.30

4,092
[121]

4,216
[138]

4,228
[146]

4,248
[150]

4,216
[[155]
55]
(32)

4,000

3 500
3,500

3,000
0

13.3.31

13.12.31

14.3.3114.6.30

14.9.30

14.12.31

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 but who continue to work as Lifeplanner sales employees that meet certain sales conditions
and other requirement.

Sony Financial Holdings Inc. All Rights Reserved

14

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

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

5,190.0

86.7%

5,472.2

84.7%

Japanese stocks

33.2

0.6%

38.9

0.6%

Foreign bonds

79.8

1.3%

104.6

1.6%

Foreign stocks

26.9

0.4%

28.0

0.4%

Monetary trusts

305.3

5.1%

315.8

4.9%

Policy loans

154.1

2.6%

160.2

2.5%

Real estate

66.5

1.1%

118.0

1.8%

Cash and call loans

32.6

0.5%

124.4

1.9%

Others

95.6

1.6%

101.1

1.6%

5 984 3
5,984.3

100 0%
100.0%

6 463 7
6,463.7

100 0%
100.0%Total

We have continued to accumulate ultralongterm bonds to match the liability
characteristics of insurance policies withlong term maturities with the aim of reducing
long-terminterest rate risk.
<Bond duration>
M 31,
Mar.
31 20132013: 19
19.9
9 yearsMar. 31, 2014: 19.7 years
Dec. 31, 2014: 20.3years■ Investment in the monetary trusts is mainly into
Japanese government and corporate bonds.
■ The holding ratio on the real status of Japanese
government and corporate bonds including
those invested in monetary trusts in the generalaccount assets: As of Dec. 31, 2014: 89.6%(As of Mar. 31, 2014: 91.8%)

Sony Financial Holdings Inc. All Rights Reserved

15

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

(%)

3,000

2,644.2
2,500

2,281.8

2,358.7+285.5pt

2,000

1,500

1,000013.3.3114.3.31

14.12.31

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
New policy amount

Number of new polices [ ](Billi(Billions
off yen))

127.8[22.2]

140

107.5[18.1]
107.5

120
100

(Thousands ofpolicies)

Policy amount in force(Billions of yen)

24

350

20

300
250

16

80

200

Number of policies in force [ ] (Thousands of
338.5 policies)339[55.2]

199.0[31.7]

50

236.4
236
4
[38.2]

40

12

30

60
40

60

150
8

27.3
[3.9]

20

100

20

4

0

0

FY12.3Q (9M) FY13.3Q (9M) FY14.3Q (9M)
Net income (losses) for AEGON Sony Life Insurance and SA Reinsurance

50

10

0

0
13.12.31

14.3.31

14.12.31

Change(Billions of yen)

FY13.3Q (9M)

FY14.3Q (9M)

AEGON Sony Life Insurance

(2.6)

(3.6)

(0.9)

SA Reinsurance

0.4

1.0

＋0.5

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 SFH’s consolidated net income.

Sony Financial Holdings Inc. All Rights Reserved

17Highlights of Operating Performance:
Sony Assurance
Ordinary revenues

67.4

Ordinary profit+3.6%

FY13.3Q(9M)

FY14.3Q
(9M)

67.4

69.9

+2.4

+3.6%

Underwriting income

66.5

68.9

+2.3

+3.6%

Investment income

0.8

0.9

+0.0

+4.1%

64.6

65.4

+0.7

+1.1%

Underwriting expenses

49.2

48.9

(0.3)

(0.6%)

Investment expenses

0.0

0.0

(0.0)

(48.6%)

Operatingp
gg
general andadministrative expenses

15 4
15.4

16 4
16.4

+1 0
+1.0

+6 8%
+6.8%

Ordinary profit

2.7

4.4

+1.6

+60.4%Net income

1.7

3.1

+1.3

+79.6%(Billions of yen)

69.9

Ordinary revenues

Ordinary expenses

4.4+60.4%

27
2.7

FY13.3Q (9M)

FY14.3Q (9M)

Change(Billions of yen)

◆ Ordinary revenues and ordinary profit increased
year on year.
◆ Ordinary revenues increased year on year, due
to an increase in net premiums written primarily
for its mainstay automobile insurance.
◆ Ordinary profit grew year on year due to a
decline in the loss ratio mainly led by a lower
car accident ratio, as well as the rise in ordinary
y profitpfor FY14.3Q ((9M))
revenues. Ordinary
reached record high.

(Billions of yen)

14.3.31

14.12.31

Change from
14.3.31

Underwriting reserves

78.0

84.7

+6.7

+8.6%

Net assets

21.4

25.0

+3.6

+17.1%

Total assets

142.7

152.1

+9.4

+6.6%

Sony Financial Holdings Inc. All Rights Reserved

18

Overview of Operating Performance:
Sony Assurance

FY13.3Q (9M)

FY14.3Q (9M)

Direct premiums written

65.5

67.9

+3.6%

Net premiums written

66.5

68.9

+3.6%

Net losses paid

35.0

33.6

(4.0%)

Underwriting profit

1.9

3.5

+84.5%Net loss ratio

59.7%

56.2%

(3.5pt)Net expense ratio

24 6%
24.6%

25.3%

+0
0.7pt
7pt

Combined ratio

84.3%

81.5%

(2.8pt)(Billions of yen)（億円）

Change<Reasons for changes>◆ Increased mainly in its mainstay
automobile insurance.
◆ Declined due mainly to a lower car
accident ratio.

◆ Increased due mainly to higher
system-related expenses, a rise ininsurance acquisition cost and a
consumption tax rate rise.

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

Number of policies in force
Non-consolidated
solvency margin ratio

14.3.31

14.12.31

Change from 14.3.31

1.61 million

1.67 million+0.06 million

527.6％

625.4%+4.0%+97.8pt

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

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

Net Premiums Written

FY13.3Q(9M)

FY14.3Q(9M)

Change

Fire

184

206

+11.8%

Marine－－－Personal accident

6,234

6,425

+3.1%

Voluntary automobile

59,151

61,319

+3.7%

－

－

－

65 56965,56967,950

+3 6%
+3.6%

(Millions of yen)Compulsory
automobile liability
Total

FY13.3Q(9M)

FY14.3Q(9M)

Change

Fire

92

28

(69.3%)

Marine118

101(14.2%)

Personal accident

6,440

6,642

+3.1%

Voluntary automobile

58,95961,163+3.7%

Compulsory
automobile liability

931

995

+6.8%

66,542

68,931+3.6%
3.6%(Millions of yen)

Total

*Medical and cancer insurance is included in personal accident.

Net losses paid
FY13.3Q(9M)

FY14.3Q(9M)

ChangeFire12+43.7%

Marine10182(18.3%)

Personal accident

1 3
1,537

1 14
1,714

+11.5%
11 %Voluntary automobile

32,55930,935(5.0%)

Compulsory
automobile liability

840

918

+9.3%

35,04033,653(4.0%)(Millions of yen)

Total

Sony Financial Holdings Inc. All Rights Reserved

20

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

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

80

O di
Ordinary
profitfit

Adj t d ordinary
Adjusteddiprofitfit

70(Billions of yen)

90

1.54

1.59

+5.3%

1.67

(Millions ofpolicies))
p

1.6

80
70

62 9
62.9

68.9

66.5
66
5
+3.6%

60

6.6
61.1

50

1.1

6.6
60
50

1.2
1

30
20

30

0.6

10

20

0.4

10

0.2

0

0
FY12.3Q

FY13.3Q+60.4%

40

0.8

40

4.4

1.4

FY14.3Q

The numberTh
b off policies
li i iin fforce iis th
the ttotalt l off automobilet
bil iinsurance andd medical
di land cancer insurance policies, which account for 99% of net premiums written.
More than 90% of personal accident insurance is medical and cancer insurance.

0

2.7

3.3

1.0
(0.1)
FY12 3Q (9M)
FY12.3Q

FY13 3Q (9M)
FY13.3Q

FY14 3Q (9M)
FY14.3Q*Adjusted ordinary profit = Ordinary profit + Provision for catastrophe reserve(Reference) Provision for catastrophe reserve(Billions of yen)
FY12.3Q (9M) FY13.3Q (9M) FY14.3Q (9M)
Provision for catastrophe reserve
(1.1)
0.6
2.1
*Provision for catastrophe reserve is described as positive amountSony 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

93.8

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

Net expense ratio

100

93.3

88.8
(4.5pt)

73 4
73.4
72.9

68.7

68.2

(5.2pt)

89 2
89.2

84.9

87 9
87.9

84.3

80

63.5

60

81.5
(2.8pt)

62.4
63.2

59.7

59.3

(3.5pt)

56.2

40

40

20

Net expense
p
ratio

(%)

98.9

80

60

＜参考＞ (Reference) Combined Ratio

26.0

25.6

20

+0.7pt

25.5

24.6

26.0

25.6

25.3

+0.7pt

25.5

24.6

25.3

FY12.3Q

FY13.3Q

FY14.3Q

0

0
FY12

FY13

FY12.3Q

FY13.3Q

FY14.3Q

FY12

FY13

(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.](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

625.4%
504 2%
504.2%

527 6%
527.6%+97.8pt

400

013.3.3114.3.31

14.12.31

Sony Financial Holdings Inc. All Rights Reserved

23

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

27.4

+3.5%

+0.9%

<Consolidated>

28.4(Billions of yen)

5.3

FY14.3Q(9M)

ChangeConsolidated ordinary revenues

27.4

28.4

+0.9

+3.5%

yp
profitConsolidated ordinary

5.2

5.3

+0.0

+0.9%

Consolidated net income

3.2

3.2

(0.0)

(0.4%)<Non-consolidated>(Billions of yen)52
5.2

FY13.3Q (9M)

FY13.3Q(9M)

FY14.3Q (9M)(Billions of yen)<Consolidated>◆Ordinary revenues increased year on year due mainly to anincrease in bondbond-dealing
dealing transactions.
transactions Consolidated ordinary
profit increased year on year due mainly to an improved
performance of its consolidated subsidiaries, whereas nonconsolidated profit resulted in a decrease.
<Non-consolidated>◆Gross operating profit increased year on year. Net operating
profit decreased due to an increase in general and administrative
expenses.
・Net interest income decreased year on year, due mainly to lower
interest income on securities under the lowering interest rates.
・Net fees and commissions remained at the same level, because
higher fees received for mortgage loan business were offset byhigher fees paid for ATM usage.
・Net other operating income increased due to higher gains on
foreign exchange transactions and an increase in gains on
bond-dealing transactions including sale of bonds.

FY13.3Q(9M)

FY14.3Q(9M)

ChangeOrdinary revenues

25.6

26.4

+0.8

+3.1%

Gross operating profit

16.4

16.6

+0.1

+1.0%

Net interest income

13.1

12.5

(0.6)

(4.7%)Net fees and commissions

(0.2)

(0.2)

(0.0)

―

Net other operating income

3.5

4.3

+0.8

+23.3%

General and administrative
expenses

10.9

11.4

+0.4

+4.4%

Net operating profit

5.5

5.3

(0.2)

(4.9%)

Ordinary profit

5.4

5.2

(0.1)

(2.5%)Net income

3.3

3.3

(0.0)

(2.3%)(Billions of yen)

14.3.31

Net assets
Net unrealized gains onother securities, net of taxes
Total assets

14.12.31

Changeg from 14.3.31

72.7

75.6

+2.8

+3.9%

7.2

6.6

(0.5)

(8.3%)

2 056 72,056.7

2 044 3
2,044.3(12 3)(12.3)(0 6%)(0.6%)(*) Sony Bank revised its method of recording ordinary revenues and ordinary expenses on hedge transactions
from FY14. Ordinary revenues for FY13.3Q (9M) have been retroactively adjusted to reflect the change.

Sony Financial Holdings Inc. All Rights Reserved

24Overview of Operating Performance:
Sony Bank (Non-consolidated) (1)<Reasons for changes>
Change from
14.3.31

13.12.31

14.3.31

14.12.31

Customer assets

1,972.9

2,007.5

1,989.0(18.4)(0.9%)

Deposits

1,857.4

1,890.0

1,863.6(26.3)(1.4%)

Yen

1 504 4
1,504.4

1 526 4
1,526.4

1,531.6

+5
5.1
1

+0
0.3%
3%

353.0

363.5

331.9

(31.5)(8.7%)

Investment trusts

115.4

117.4

125.3

+7.8

+6.7%

L
Loans
outstandingt t di

1 025 1
1,025.1

1 057 4
1,057.4

1 121 81,121.8

+64 4
+64.4

+6 1%
+6.1%

Mortgage loans

917.0

949.3

1,011.6

+62.3

+6.6%

Others

108.1

108.1

110.1

+2.0

+1.9%

11.92%

11.72%

11.23%(Billions of yen)

Foreign currency

Capital adequacy ratio *2(domestic criteria)*1◆ Yen deposit balance remained at
the same levels under persistently
low interest rates, despite apositive effect of converting fromforeign currencies to yen in yen
depreciation.
◆ Foreign currency deposit balance
decreased due to an increase in
selling to lock in profits led by yen
depreciation.
◆ Loan balance steadily increased
mainly in mortgage loans.

(0.49pt)*1 Loans in others include corporate loans of ¥104.8 billion*2 Please refer to the graph of the non-consolidated capital adequacy ratio (domestic criteria) on P28

Sony Financial Holdings Inc. All Rights Reserved25Overview of Operating Performance:
Sony Bank (Non-consolidated) (2)<Reference> On Managerial Accounting Basis
FY13.3Q(9M)(Billions of yen)
Gross operating profit

FY14.3Q(9M)<Reference> Interest Spread(Managerial Accounting Basis)

ChangeYield on investment

16.3

16.5

+0.1

+1.0%

Net interest income*1

①

13.7

13.7

(0.0)

(0.2%)(%)

Net fees and commissions*2

②

0.6

0.4

(0.2)

(38.7%)

1.5

20
2.0

24
2.4

+0 4
+0.4

+22 1%+22.1%Net other operating income*3

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

14.3

14.1

(0.2)

(2.0%)

Operating expenses and otherexpenses

10.8

11.3

+0.4

+4.1%

3.5

2.7

(0.7)

(20.7%)Net operating profit (core profit)＝(A)－③③■Managerial accounting basis
The following adjustments are made to the figures on a financial account for profits and

1.21

1.25

0.93

1

*2: Net fees and commissions: Includes profits and losses for customer dealings in foreign
currency transactions recorded in net other operating income.
*3: Net other operating income: After the above adjustments (*1 and *2), consists of profits andlosses for bond and derivative dealing transactions.
■Core profit

1.20(0.01pt)

0.92

0.75
0.5

0.27

0.28

FY13.3Q (9M)

FY14.3Q (9M)

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.

Yield on financing

Interest spread

0.25
0Note: Interest spread=(Yield on investment)-(Yield on financing)

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

Sony Financial Holdings Inc. All Rights Reserved

26

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

Deposits
Yen depositspForeigng currency
y depositspMortgageg g loans

Others(Billions of yen)

1,200(Billions of yen)

2,000

1,057.4
1,857.4

1,890.0 (26.3)
363.5

1,863.6
331.9

1,000

970.2

108.1

+64.4

1,121.8
110 1
110.1*corporate loansof ¥104.8 billion

800

1,500

1,526.4

1,531.6

949.3

1,011.6

14.3.31

14.12.31

600

1,000
400
500

200

0

0
13.3.3114.3.31

14.12.31

13.3.31Sony Financial Holdings Inc. All Rights Reserved

27

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

Balance of Securities by Credit Rating
AAA
BBB(Domestic Criteria)

AA
A
Others(%)

15(Billions of yen)

1,200

11 98
11.98
1,000

(0 49pt)(0.49pt)

11.72

11.23

908.8
10

773.8
38

800

742 2
742.2
(31.6)

600
5
400

200
0
13.3.310333
13.3.3114.3.3133

14.12.31
3

14.3.31

14.12.31*Calculated based on the standard FSA Notification No. 19 (2006), which establishes
standards
sta
da ds based oon Article
t c e 14-2 oof tthee Banking
a
g Act
ct o
of Japa
Japan foro detedetermining
g ttheecapital adequacy of a bank in light of the assets held by the bank.
Sony bank calculates this ratio based on Basel III from March 31, 2014

Sony Financial Holdings Inc. All Rights Reserved28

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

Sony Financial Holdings Inc. All Rights Reserved29Consolidated Financial Forecast
for the Year Ending March 31, 2015
C
Consolidated
ordinary revenues, ordinary profit
f and net income have been revised upward.
FY13(Actual)FY14.3Q(9M) Actual

FY14(Forecast)

Change1,320.4

1,191.0⇒1,318.0(9.8%)⇒(0.2%)

1,021.8

77.5%

1,196.6

1,061.9⇒1,187.4(11.3%）⇒(0.8%)

925.7

78.0%

89.8

93.0

+3.5%

69.9

75.2%

36.4

36.6⇒37.8+0.3%⇒+3.6%

28.4

75.2%

Consolidated ordinary profit

76 1
76.1

77 0⇒91 0
77.0⇒91.0+1 1%⇒+19 5%+1.1%⇒+19.5%

75 8
75.8

83 4%
83.4%

Life insurance business

67.2

67.4⇒79.5+0.2%⇒+18.2%

65.9

82.9%

Non-life insurance business

3.0

4.5

+49.8%

4.4

99.5%

Banking business

5.6

5.3⇒7.0(6.0%)⇒24.2%

5.3

75.9%

40.5

49.0⇒55.0+21.0%⇒+35.8%

50.5

91.9%

(Billions of yen)
Consolidated ordinary revenues
Life insurance business
Non-life insurance businessBanking business

Consolidated net income

*2

*2

*1

Progress rate

Notes;
1. The forecast of FY14 consolidated net income takes into account the assumed impact of a reversal of deferred tax assets, accompanying the corporate income tax cut, which was approved by the Cabinet.
2. Since the banking business revised its method of recording ordinary revenues and ordinary expenses on hedge transactions for FY14, ordinary revenues for FY13 have been retroactively
adjusted to reflect the change. Consequently, consolidated ordinary revenues and ordinary revenues of the banking business for FY13 have been revised.

On February 4, 2015, we have revised upward our consolidated financial forecasts for the year ending March 31, 2015, from the forecast announced on May 14, 2014.
■Life insurance businessWe have revised upward our full-year forecasts for ordinary revenues and ordinary profits from the forecast announced on May 14, 2014, because operating results for thenine months ended December 31,, 2014 exceeded our previouspforecast due mainlyy to an increase in investment income including
gg
gains on sale of securities.
■Non-life insurance businessWe have stayed our forecast for ordinary revenues and ordinary profit unchanged from the forecast announced in November 2014.
■Banking businessWe have revised upward our full-year forecasts for ordinary revenues and ordinary profits from the forecast announced on May 14, 2014, because operating results for thenine months ended December 31, 2014 exceeded our previous forecast due mainly to an increase in gains on bond-dealing transactions including sale of bonds.

Sony Financial Holdings Inc. All Rights Reserved30Sony Life’s MCEV and
Risk Amount Based on Economic Valueas of December 31, 2014

Please keep
p in mind that the validity
y of these calculations of MCEVC
as of Dec. 331,, 2014,
0 , has not been verified byy outside specialists.
p
A part of the calculations of MCEV as of Dec. 31, 2014, adopted simplified method.

Sony Financial Holdings Inc. All Rights Reserved31Sony Life’s MCEV as of December 31, 2014
(Billions of yen)

14.3.3114.9.30

14.12.31

Change from
14.3.31

Change from
14.9.30

1,221.3

1,313.1

1,234.9+13.6(78.2)

Adjusted net worth

722.1

833.4

1,171.2+449.0+337.7

Value of existing business

499.1

479.7

63.8

(435.4)(415.9)MCEV

14 3 3114.3.31

14 9 30
14.9.30

14 12 31
14.12.31

New business value

55.2 (12M)

30.3 (6M)

28.2 (9M)

New business margin

5.2%

5.1%

2.9%

(Billions of yen)

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

 Reasons for changes in MCEV
・MCEV as of Dec. 31, 2014 decreased ¥78.2 billion from Sep. 30, 2014, due mainly to a significant decline in interest rates in Japanese yen.
・MCEV as of Dec. 31, 2014 increased ¥13.6 billion from Mar. 31, 2014, reflecting to an acquisition of new policies, a lower inflation rate and arise in stock price despite a significant decline in interest rates in Japanese yen.
 New business value
・New business value as of Dec. 31, 2014 was ¥28.2 billion (9M).
This is because new business value for this third quarter ended Dec
Dec. 31
31, 2014 (FY14(FY14.3Q)
3Q) gained ¥11.7¥11 7 billion
billion, and new business value forthe six months ended Sep. 30, 2014 of ¥30.3 billion (6M) decreased ¥13.7 billion, to ¥16.5 billion, reflecting mainly a significant decline ininterest rates in Japanese yen during this third quarter.
 New business margin
・New
New business margin as of Dec
Dec. 31
31, 2014 was down from Sep
Sep. 30
30, 2014 and Mar
Mar. 31
31, 2014 due mainly to lower interest rates in Japaneseyen.
*Please see page 41 for changes on new business value*Please see page 44 for trend on JGB yields

Sony Financial Holdings Inc. All Rights Reserved32Sony Life’s Risk Amount Based on Economic Valueas of December 31, 2014
(Billions of yen)

14.3.3114.9.30

14.12.31

Insurance risk

654.5

673.3

709.6

Market-related risk

240.0

279.0

290.5

Of which, interest rate risk*

180.9

206.6

219.7

Operational risk

26 3
26.3

26 4
26.4

23 8
23.8

Counter party risk

1.3

1.4

3.0

(257.8)(276.4)(291.4)

664.3

703.7

735.5

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

MCEV

14 3 3114.3.311,221.3

14 9 30
14.9.30
1,313.1

14 12 31
14.12.31
1,234.9

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

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: ¥26 billion (including capital surplus of ¥13 billion)*
Equityy ownership: Sonyy Life insurance Co Ltd 50%, AEGON international B.V. 50%
Marketing products: Individual Variable Annuities
Sales Channels: Lifeplanner sales employees and partner Banks (20*)

SA Reinsurance Ltd
Established： October 29
29, 2009
Common stock: ¥11 billion*
Equity ownership: Sony Life insurance Co., Ltd. 50%, AEGON international B.V. 50%
Business： Reinsurance businessNote) AEGON Sony Life Insurance and SA Reinsurance are equity method companies, 50-50 joint ventures established by Sony Life and AEGON Group.
*As of Feb.13, 2015

Sony Bank’s Mortgage Loans through Sony Life
■Sony Life accounts for 23% of the balance of mortgage loans as of December 31, 2014
Sony Life accounts for 16% of the amount of new mortgage loans for FY14.3Q (9M)*Sony Life started handling banking agency business in January 2008.

Sony Assurance’s
Assurance s Auto Insurance Sold by Sony Life
■Sony Life accounts for approx. 5% of new automobile policies for FY14.3Q (9M)*Sony Life started handling automobile insurance in May 2001.

Sony Financial Holdings Inc. All Rights Reserved35

Recent Topics 2<Highlights for FY2014.3Q>
2014-10-01
2014
10 01

Sony Lifecare Group announced the opening of the first newly built nursing care home
i T
in
Tokyo
k in
i spring,i
2016

2014-10-02

Sony Life commenced sales of Living Benefit Whole Life Insurance (Living Standard
Type) and Living Standard Special Provision 20142014-11-13

Sony Assurance announced to launch a PHYD(Pay-How-You-Drive) type of automobile
insurance “Gentle Driving Cash-Back Plan” in February 16, 20152014-12-16

Sony Bank started offering “Exchange Rate-Linked Deposits”

2015-01-07

Sony Assurance announced to open a customer service office in Kumamoto prefecture

2015-02-05

Sony Life announced to commence sale of Lump-sum Payment Whole Life Insurance(N(No-notification
tifi ti Type)T) on May
M 2,
2 2015

Sony Financial Holdings Inc. All Rights Reserved36Sony Life: Fair Value Information on Securities(General Account Assets)
Fair Value Information on Securities
Fair value information on securities with market value (except trading-purpose securities) (Billions of yen)

Notes:
1. The above table includes monetary trusts other than trading-purpose securities.
2.Derivative financial products such as principal protected 30 year notes with Nikkei 225 index-linked coupons are included in the “Held-to-maturity-securities” above.
Principal protected 30 year notes with Nikkei 225 index-linked coupons
As of Mar. 31, 2013; Carrying amount: ¥43.3 billion, Fair market value: ¥52.2 billion, Net unrealized gain (losses): ¥8.8 billion
As of Mar. 31, 2014; Carrying amount: ¥43.8 billion, Fair market value: ¥56.0 billion, Net unrealized gain (losses): ¥12.2 billion
As of Dec
Dec. 31,
31 2014; Carrying amount: ¥44.1¥44 1 billion,
billion Fair market value: ¥58¥58.5
5 billion,
billion Net unrealized gain (losses): ¥14¥14.3
3 billion

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

Note: The above chart includes trading-purpose securities included in “monetary trusts,” etc.

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

FY13.3Q (9M)

ChangeFY14.3Q (9M)

Cash and deposits
Japanese governmentand corporate bonds
Japanese stocks

00(23.9%)

72,94780,022

+9.7%

234

299

+27.6%

Foreign securities

4,872

6,645

+36.4%

Other securities

172

355

+105.8%

Loans

4 264
4,264

4 439
4,439

+4 1%
+4.1%

Real estate

7,716

7,744

+0.4%

23

56

+138.0%90,232

99,563+10.3%

Others
Total

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

1 600
1,600

1,491.6

1,400
1,200
1,000

1,201.9
1,066.5

1,238.7
1,135.8,

1,128.3
1,033.3

991.5

947.4
841.4

886.2

800
600
400
200
0
FY12 1Q FY12.2Q
FY12.1Q
FY12 2Q FY12.3Q
FY12 3Q FY12.4Q
FY12 4Q FY13.1Q
FY13 1Q FY13.2Q
FY13 2Q FY13.3Q
FY13 3Q FY13.4Q
FY13 4Q FY14.1Q
FY14 1Q FY14.2Q
FY14 2Q FY14.3Q
FY14 3Q

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
A
Annualized
li d premiumsiffrom new policies
li i

Of which, third-sector(Billions of yen)

25

22.0

21.8

19.0

20

17.4

172

16 8
16.8
15.2

14.6

15

18.9

18.5

13.2

10

5

4.4

50
5.0

52
5.2
3.9

3.6

3.0

3.6

5.1
2.9

3.7

FY13.4Q

FY14.1Q

28

0
FY12.1Q

FY12.2Q

FY12.3Q

FY12.4Q

FY13.1Q

FY13.2Q

FY13.3Q

Sony Financial Holdings Inc. All Rights Reserved

FY14.2Q

FY14.3Q

40

Sony Life’s Changes on New Business Value under
Lower Interest Rates(Billions of yen)

FY14.3Q (3M)
Sep. 30, 2014 (6M)((13.7)*)

New businessvalue:11.7

30.3
New businessvalue:30.3
Ne businessNewb sinessmargin:5.1%

Sep. 30, 2014 (6M)

Dec. 31, 2014 (9M)

New businessvalue:28.2
New businessmargin:2.9%

28.2

New businessvalue: 16.5

Assumptions as of Sep. 30, 2014

Assumptions as of Dec. 31, 2014

*Effected amount by valuating new business value as of Sep. 30, 2014 (6M) mainly with interest rates as of Dec. 31, 2014

Sony Financial Holdings Inc. All Rights Reserved

41

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

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

Sony Life(Reference) EU Solvency II (QIS5)

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

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

Equity risk

Listed equities 45%, Other securities 70%

Global 30%, Others 40%*2

Real estate risk

Actual real estate 25%

Real estate 25%

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

Credit risk

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

Same as on the left

(Example)
Rating A: Risk coefficient (1.4%), cap (23), floor (1)Currency risk

30% downside fluctuation

25% downside fluctuation

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

Sony Financial Holdings Inc. All Rights Reserved

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

Sony Life(Reference) EU Solvency II (QIS5)

Mortalityy risk

Mortalityy rate increases by
y 15% for each yyear elapsedpSame as on the leftLongevity risk

Mortality rate decreases by 20% for each year
elapsedSame 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

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

lapsation for Life module, 20% for Health module
which surrender value is in excess of best
estimate liability are immediately surrendered

Expense risk

Disability risk

Operating expenses increase by 10% for each year
elapsedRate of inflation rises by 1%

Same as on the left

Rate of occurrence increases by 35% in the first fiscal Rate of occurrence increases by 35% in the firstyear, risingi ibby 25% forf eachh year thereafterthftfi
fiscall year, rising
i i bby 25% forf eachh year thereafter.
thft
Recovery rate decreases by 20%.

Notes
1. Principal items as of Dec. 31, 2014.
2. At Sony Life, lapse risk is calculated by computing and adding together the largest amount of three options for each insurance policy

Sony Financial Holdings Inc. All Rights Reserved

43

JGB Yields

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

44

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

Sony Financial Holdings Inc. All Rights Reserved

45