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In FY2016, amid an environment of ultralow interest rates we
expeditiously introduced measures to improve profitability, and all threebusinesses steadily expanded their business scale.
Sony Life ensured profitability through product revisions and productshifts toward US dollar-denominated insurance and term life insurance.
Efforts to recruit Lifeplanner sales employees significantly outpacedplans, accelerating expansion of Sony Lifeʼs sales foundation.
Ordinary profit was flat, but MCEV increased thanks to expandedbusiness scale and a market recovery.
For FY2017, we forecast that all three businesses will expand theirbusiness operations, but expect ordinary profit to be flat.
At Sony Life, we expect ordinary profit to be flat due to an increasein the provision of policy reserves, stemming from the April 2017 revisionin standard yields used for calculating policy reserves.
However, we anticipate a rise in MCEV due to the steady accumulation ofnew business value.
As the expansion of business scale accelerates, we will determine specificdividend amounts by taking into account not only statutory profit
but also other economic value-based profit indicators.
For FY2017, we plan to maintain the dividend amount at ¥55 per share.
Also, for the foreseeable future, we plan to pay a dividend corresponding
to more than 50% of net income per share.

Consolidated ordinary revenues increased 1.4% year on year, to¥1,381.6 billion, owing to increases in ordinary revenues from all thebusinesses: life insurance, non-life insurance and banking businesses.
Consolidated ordinary profit decreased 6.7% year on year,to ¥66.3 billion, owing to decreases in ordinary profit fromthe life insurance and the banking businesses, whereas ordinary profit
from the non-life insurance business increased.
Profit attributable to owners of the parent was down 4.0% year on year,to ¥41.6 billion, due to the decrease in consolidated ordinary profit.

Sony Lifeʼs ordinary revenues increased 1.1% year on year, to ¥1,243.7
billion, due to an increase in investment income in the separate account,which positive effect was partially offset by a decrease in insurance premium
revenues led by a decline in gains on sale of single premium products.
Ordinary profit was flat year on year, to ¥60.1 billion. This was due topositive factors, including a decline in the provision of policy reserves forminimum guarantees for variable life insurance owing to a lower acquisitionof new policies and an improvement in market conditions,and an increase in profit from accumulated policies in force, were offset
by such negative factors as a deterioration in net gains/losses onderivative transactions to hedge market risks related to minimum
guarantees for variable life insurance and lower gains on sale of securities
in the general account.
Net income decreased 5.2% year on year, to ¥35.1 billion.

(Left-hand graph)
New policy amount for the total of individual life insurance andindividual annuities decreased 3.8% year on year, to ¥4,957.5 billion.
This decrease was due to lower sales of variable life insurance,
despite favorable sales of U.S. dollar-denominated insurance andterm life insurance.
The number of new policies decreased 18.5% year on year,
to 513 thousand policies.
(Right-hand graph)
Annualized premiums from new policies decreased 8.1% year on year,to ¥78.1 billion, due to lower sales of variable life insurance andsingle premium whole life products, despite favorable sales of term life
insurance and U.S. dollar-denominated insurance.
Of which, the figure for third-sector products was flat year on year,to ¥15.7 billion.

These graphs show Sony Lifeʼs product portfolio of annualized premiums
from new policies by product.
(Right-hand graph)
Sony Life has been reinforcing its ability to offer U.S. dollar-denominatedwhole life insurance and term life insurance under the low interest rateenvironment.
In FY2016 (12M), U.S. dollar-denominated whole life insurance accounts
for 8% and protection-type products including term life insurance
accounts for 56% of total product portfolio, showing a steady change inproduct portfolio with a focus on protection-type products.

Sony Lifeʼs policy amount in force which reflects new policy amount andlapse and surrender amount, is shown here.
(Left-hand graph)
Policy amount in force for the total of individual life insurance andindividual annuities increased 5.1% year on year, to ¥45.3 trillion.
The number of policies in force increased 3.7% year on year,to ¥7.30 million polices.
(Right-hand graph)
Annualized premiums from insurance in force increased 5.1% year onyear, to ¥820.8 billion.
Of which, the figure for third-sector products was up 4.3% year on year,to ¥187.4 billion.

The lapse and surrender rate decreased 0.45 percentage points year onyear, to 4.27%.

(Left-hand graph)
Income from insurance premiums decreased 6.9% year on year,to ¥956.7 billion led by a decline in sales of single premium products.
(Right-hand graph)
Interest income and dividends increased 4.8% year on year,to ¥148.2 billion, reflecting an expansion in investment assets
along with business expansion.

(Left-hand graph)Core profit rose 94.9% year on year, to ¥83.8 billion, due to a decline in
the provision of policy reserves for minimum guarantees for variable life
insurance owing to a lower acquisition of new policies and an improvement
in market conditions, and an increase in profit from accumulated policies inforce.
(Right-hand graph)
Ordinary profit was flat year on year, to ¥60.1 billion, owing to the above
mentioned positive factors in core profit were offset by such negative factors
as a deterioration in net gains/losses on derivative transactions to hedge
market risks related to minimum guarantees for variable life insurance andlower gains on sale of securities in the general account.

The number of Lifeplanner sales employees as of March 31, 2017, was4,933, was up 203 from December 31 2016 and up 321 from March 31,
2016.
In FY2016, Sony Life hired 685 new Lifeplanner sales employees, showingthat the number of Lifeplanner sales employees steadily increased.

These graphs show Sony Lifeʼs new purchases of securities in the generalaccount assets.
(Right-hand graph)
Based on ALM perspective, Sony Life has promoted diversification of
investment assets while investing in assets that match the liability
characteristics.
In line with higher sales of U.S. dollar-denominated insurance,
in FY2016 (12M), Sony Life invested 42.5% in Japanese government
bonds (JGBs), 28.6% in Japanese corporate bonds, 28.3% in foreign
bonds, 0.5% in Japanese stocks and 0.1% in Japanese local government
bonds, showing that investment in securities other than JGBs hasincreased.

Here is a breakdown of Sony Lifeʼs general account assets as of March 31,2017, compared with that as of March 31, 2016.

(Left-hand graph)
Positive spread for FY2016 was flat year on year, to ¥15.4 billion.
We expect to maintain secure positive spread, due to lower averageassumed interest rate in line with new policy acquisition although
an investment yield for core profit has been declined.

As of March 31, 2017, Sony Lifeʼs non-consolidated solvency margin ratio
was 2,568.8%, down 154.0 percentage points from March 31, 2016,
remaining at a high level.

Sony Assurance reached record high in ordinary revenues, ordinary profit
and net income.
Sony Assuranceʼs ordinary revenues increased 5.6% year on year,to ¥102.3 billion, due to an increase in net premiums written primarily
for its mainstay automobile insurance.
Ordinary profit increased 6.8% year on year, to ¥4.9 billion, due mainly
to a decline in provision for reserve for outstanding losses, an increase inunderwriting profit and higher investment income, partially offset
by an increase in operating expenses.
Net income increased 35.9% year on year, to ¥3.5 billion, owing to
the recording of a loss on disposal of software in progress of ¥0.8 billion
as an extraordinary loss in FY2015, in addition to the increase inordinary profit.

(Left-hand graph)
The number of policies in force for the total of automobile insurance andmedical insurance increased 5.3% year on year, to 1.89 million policies.
Net premiums written increased 4.9% year on year, to ¥100.2 billion due
to stable sales of automobile insurance.
(Right-hand graph)
Ordinary profit increased year on year as described before.
Adjusted ordinary profit is an profit indicator on a managerial accounting
basis. The figure is calculated by adjusting the amount ofprovision(reversal) for catastrophe reserve to ordinary profit.
Adjusted ordinary profit was ¥8.1 billion.

(Left-hand graph)
The Earned/Incurred (E.I.) loss ratio was down 1.0 percentage points
year on year, to 62.3%, owing to a decrease in provision for reserve foroutstanding losses, in addition to a persistently low car accident ratio in
automobile insurance.
The net expense ratio was up 1.2 percentage points year on year,
to 28.3%, owing to an increase in system-related expenses in addition tohigher marketing costs in line with new product launch.
Consequently, the sum of the E.I. loss ratio and the net expense ratio
was up 0.2 percentage points year on year, to 90.6%.
(Right-hand graph)
The net loss ratio was down 0.3 percentage points year on year,
to 57.5%.
This is different from the E.I. loss ratio, which reflects an increase ora decrease in provision for reserve for outstanding losses.
The combined ratio (the sum of the net loss ratio and the net expenseratio) was up 1.0 percentage points year on year, to 85.8%.

As of March 31, 2017, Sony Assuranceʼs non-consolidated solvency
margin ratio was 730.8%, rose 37.3 percentage points from a year
earlier, showing that Sony Assurance has maintained a financial
soundness.

Sony Bankʼs consolidated ordinary revenues increased 1.5% year on year,to ¥38.5 billion, due to an increase in interest income on loans in line witha favorably growing balance of mortgage loans, partially offset
by a decrease in interest and dividend income on securities.
Consolidated ordinary profit decreased 15.7% year on year, to ¥5.0 billion,
due to the lower level of interest rates, an increase in initial expenses
led by a higher execution of mortgage loans, and lower volumes offoreign currency and investment trust transactions of customers.
On a non-consolidated basis, Sony Bankʼs ordinary revenues were flatyear on year and ordinary profit decreased year on year.
Gross operating profit decreased 2.6% year on year, to ¥21.1 billion
as the same reasons as described in the consolidated basis.
Net operating profit decreased 20.4% year on year, ¥4.6 billion due toan increase in general and administrative expenses.

We break down gross operating profit on a managerial accounting basis
to facilitate an understanding of operational sources of revenues andprofits.
(Left-hand table)
Net interest income increased 9.6% year on year, to ¥20.6 billion,
led by a favorable growing balance of mortgage loans and an increase ininvestment income on foreign currencies.
Net fees and commissions was negative ¥0.9 billion while that forFY2015 was positive ¥0.9 billion. This is because of an increase in initialexpenses led by a higher execution of mortgage loans, and lower fees
and commissions associated with decreased volumes of foreign currency
and investment trust transactions of customers.
Consequently, gross operating profit on a core profit basis decreased
0.6% year on year, to ¥19.6 billion. Net operating profit on a core profit
basis decreased 19.2% year on year, to ¥3.1 billion, due to an increase ingeneral and administrative expenses.
(Right-hand graph)
The yield on investment for FY2016 was 1.19%.
The yield on financing for FY2016 was 0.25%.
Consequently, interest spread for FY2016 was 0.94%.

(Left-hand graph)
As of March 31, 2017, deposits (the sum of Japanese yen and foreign
currency deposits) amounted to ¥2,112.9 billion, up ¥189.4 billion fromMarch 31, 2016. Of this amount, the yen deposit balance amounted to¥1,764.9 billion, up ¥177.0 billion from March 31, 2016, as yen ordinary
deposits increased due mainly to newly accumulated funds via theincreased number of accounts, as well as the conversion from foreign
currencies backed by yen depreciation.
The yen-denominated balance of foreign currency deposits amounted
to ¥348.0 billion, up ¥12.4 billion from March 31, 2016, despite theconversion from foreign currencies into yen, led by yen depreciation.
(Right-hand graph)
The loan balance as of March 31, 2017 expanded ¥195.4 billion fromMarch 31, 2016, to ¥1,539.6 billion, reflecting higher demand forrefinancing mortgage loan which recorded the highest amount of
new loans per year.

(Left-hand graph)
As of March 31, 2017, the balance of securities amounted to¥631.2 billion, up ¥10.3 billion from March 31, 2016.
Sony Bank continuously invests in highly rated bonds.
(Right-hand graph)
As of March 31, 2017, Sony Bankʼs non-consolidated capital adequacy
ratio (domestic criteria) was 9.75%, down 0.14 percentage points fromMarch 31, 2016, maintaining financial soundness.

For FY2017, stable business growth is expected to continue in all thebusinesses: life insurance, non-life insurance, and banking.
Consolidated ordinary revenues are expected to increase in all thebusinesses.
Consolidated ordinary profit is expected to be almost flat year on year,
as ordinary profit in the life insurance business is likely to be flat,
while the ordinary profit in the banking business is expected to increase.
Similarly to the ordinary profit, profit attributable to owners of the parent
is expected to be almost flat compared with the preceding fiscal year.

For FY2017, we expect to a dividend of ¥55 per share, the same level asin FY2016.
We have changed our medium-term dividend policy.
The Group anticipate stable growth in its business scale over themedium-term.
However, the characteristics of statutory accounting and other factors
are making it more difficult to express the growth status of business
operations in the life insurance business using statutory profit.
For that reason, we will stop using a target dividend payout ratio ofstatutory profit; instead we will shift to a dividend policy in line with theGroupʼs growth status.
While maintaining our basic policy of providing stable dividends,
we will aim to increase dividends steadily in line with earnings growthover the medium to long term, which viewpoint remains unchanged fromthe original policy.
Going forward, however, rather than profit based on statutory accounting
requirements, we will place more importance on increases in the amountof MCEV and other profit indicators based on economic value that better
indicate the growth status of the life insurance business, using thisinformation to make comprehensive decisions regarding dividend
amounts.

Sony Lifeʼs MCEV as of March 31, 2017 was ¥1,441.1 billion, increased¥158.4 billion from December 31, 2016, due mainly to an acquisition ofnew policies and a rise in interest rates in Japanese yen.
New business value was steadily increased due to a favorable sales
and a rise in interest rates in Japanese yen, consequently, that for
FY16.4Q (3M) was ¥14.1 billion while that for FY16.4Q (12M) was¥29.1 billion.

The risk amount based on economic value as of March 31, 2017
amounted to ¥980.6 billion, down ¥12.3 billion from December 31, 2016,
due mainly to a decrease in insurance risk reflecting a rise in interestrates.
ESR as of March 31, 2017 was 151%, up 17 percentage points fromDecember 31, 2016 due mainly to a decrease in a risk amount andan increase in MCEV.