Presentation Material

Consolidated Financial Results
for the Nine Months Ended December 31, 2012
andSony Life’s
Market Consistent Embedded Valueas of December 31, 2012

Sony Financial Holdings Inc.
February 14, 20131

Content

 Consolidated Operating Results for the Nine Months Ended December 31, 2012

Consolidated Financial Forecast for the Year Ending March 31, 2013

 Sony Life’s MCEV and Risk Amount Based on Economic Value as of December 31, 2012
Appendix

P. 3
P.26
P.28
P.30

Disclaimers:
This presentation material contains statements concerning the current plans, expectations, strategies and beliefs of the Sony Financial Group. Any statements
contained herein that pertain to future operating performance and that are not historic facts are forward-looking statements. Forward-looking statements may
include—but are not limited to—words such as “believe,” “anticipate,” “plan,” “strategy,” “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 made by the management of
the Sony Financial Group, based on information that is currently available to it. As such, these forward-looking statements are subject to various risks anduncertainties, and actual business results may vary substantially from the forecasts expressed or implied in forward-looking statements. Consequently, investors are
cautioned not to place undue reliance on forward-looking statements. The Sony Financial Group disclaims any obligation to revise forward-looking statements in lightof new information, future events or other findings. The information contained in this presentation does not constitute or form part of any offer for sale or subscriptionof or solicitation or invitation of any offer to buy or subscribe for 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.

2

Content

Consolidated Operating Results for
the Nine Months Ended December 31, 20123

Highlights of Consolidated Operating Performancefor the Nine Months Ended December 31, 2012 (1)Ordinary profit

Ordinary revenues

871.5
786.3
+10.8%(Billions of yen)

FY11.3Q(9M)

FY12.3Q(9M)

Life
Insurance
Business

Ordinary revenues

703.9

784.3

+80.4

+11.4%

Ordinary profit

49.5

51.7

+2.1

+4.4%

Non-life
Insurance
Business

Ordinary revenues

60.1

63.8

+3.6

+6.1%

Ordinary profit

1.6

1.0

(0.6)

(37.8%)

Banking
Business

Ordinary revenues

23.8

25.1

+1.3

+5.5%

Ordinary profit

2.5

2.5

(0.0)

(1.0%)

Intersegment
Adjustments*

Ordinary revenues

(1.5)

(1.8)

(0.2)

－

0.0

0.1

+0.0

+95.1%

Ordinary revenues

786.3

871.5

+85.1

+10.8%

Ordinary profit

53.8

55.4

+1.6

+3.0%

Net income

22.6

32.7

+10.0

+44.5%

55.4
+3.0%

53.8
Consolidated

FY11.3Q (9M)

FY12.3Q (9M)

Ordinary profit

12.3.3112.12.31

Total assets

7,241.4

7,796.7+555.3+7.7%

Net assets

347.8

385.9

+38.1

+11.0%(Billions of yen)(Billions of yen)

Consolidated

ChangeChange from 12.3.31*Amounts in ordinary profit in the “Intersegment adjustments” are mainly from SFH.
*Comprehensive income: FY11.3Q (9M): ¥40.9 billion, FY12.3Q(9M) : 46.8 billion.

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

4

During the nine months ended December 31, 2012, consolidated ordinary
revenues grew 10.8% year on year, to ¥871.5 billion, owing to increases inordinary revenues from the all businesses; life insurance, non-life insurance andbanking.
Consolidated ordinary profit increased 3.0% year on year, to ¥55.4 billion.
Consolidated net income was up 44.5% year on year, to ¥32.7 billion due to anincrease in consolidated ordinary profit and also reflecting the previous period’s
increase in deferred income taxes owing to the partial reversal of deferred tax
assets associated with the reduction in the corporate tax rate.

Highlights of Consolidated Operating Performancefor the Nine Months Ended December 31, 2012 (2) Life insurance business: Ordinary revenues increased year on year due mainly to higher income frominsurance premiums associated with steady growth in policy amount in force, as well as an improvement
in investment income on separate accounts due to the market recovery towards the end of December
2012. Ordinary profit increased due mainly to a decrease in provision of policy reserves for minimum
guarantees for variable life insurance and a recovery from negative spread into positive at Sony Life.
These positive factors surpassed the company’s negative effects stemming from recording higher profit in
the previous period due to the reversal of reserve for outstanding claims related to the Great East Japan
Earthquake and the sale of securities in line with shifting its bond holdings to ultralong-term bonds.
 Non-life insurance business: Ordinary revenues increased year on year owing to an increase in net

premiums written primarily for its mainstay automobile insurance. On the other hand, ordinary profit
decreased year on year owing to an increase in the loss ratio due mainly to higher insurance payments
per claim for automobile insurance.
 Banking business: Ordinary revenues increased year on year due to an increase in net fees andcommissions resulting from Sony Bank’s July 1, 2011 acquisition of SmartLink Network, Inc., whichbecame its consolidated subsidiary. The operating results of SmartLink Network, Inc., are included in
SFH’s scope of consolidation from the beginning of the nine months of this fiscal year ended December
31, 2012, whereas they were included in only part of the previous period. On the other hand, ordinary
profit remained at the same levels as during the same period of the previous fiscal year because higher
interest received on loans due to an increase in the balance of mortgage loans was offset by a decreasein profit related to foreign currency transactions.
 Consolidated ordinary revenues grew 10.8% year on year, to ¥871.5 billion, owing to increases in ordinary

revenues from all businesses. Consolidated ordinary profit increased 3.0% year on year, to ¥55.4 billion,
reflecting an increase in ordinary profit in the life insurance business, whereas ordinary profit from thenon-life insurance and the banking business decreased year on year. Consolidated net income was up
44.5% year on year, to ¥32.7 billion, reflecting the previous period’s increase in deferred income taxes
owing to the partial reversal of deferred tax assets associated with the reduction in the corporate tax rate.
5Here is highlights of consolidated operating performance.

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

Ordinary profit(Billions of yen)

784.1
703.8

FY11.3Q (9M)

FY12.3Q (9M)

703.8

784.1

+80.3

Income from insurance premiums

602.0

657.3

+55.2

+9.2%

Investment income

83.5

111.4

+27.8

+33.3%

Interest income and dividends

72.5

80.3

+7.8

+10.8%

Income from monetary trusts, net

3.9

3.9

(0.0)

(0.6%)

Gains on sale of securities

7.0

2.3

(4.6)

(66.6%)

Ordinary revenues+11.4%+4.7%

Gains on separate accounts, net

-

24.7

+24.7

-

731.2

+779

+11.9%

Insurance claims and other payments

216.4

215.5

(0.9)

(0.4%)

Provision for policy reserves and others

314.9

409.5

+94.5

+30.0%

Investment expenses(68.3%)

Ordinary expenses

FY11.3Q (9M)

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

+11.4%

653.3

52.8

50.5

Change29.8

9.4(20.3)

Losses on sale of securities

1.8

1.5

(0.2)

(14.1%)

Losses on separate accounts, net

18.7

-

(18.7)(100.0%)
+3.1%

77.6

80.0

+2.3

Ordinary profit

Operating expenses

50.5

52.8

+2.3

+4.7%

Net income

22.2

31.1

+8.8

+40.0%◆ Ordinary revenues and ordinary profit increased year on year.
◆ Income from insurance premiums increased due to a steadyincrease in the policy amount in force.
◆ Investment income increased year on year, reflecting an
improvement in investment income on separate accounts
due to the market recovery towards the end of December 2012.
◆ Ordinary profit increased due mainly to a decrease in provisionof policy reserves for minimum guarantees for variable life
insurance and a recovery from negative spread into positive at
Sony Life. These positive factors surpassed the company’s
negative effects stemming from recording higher profit in theprevious period due to the reversal of reserve for outstanding
claims related to the Great East Japan Earthquake and thesale of securities in line with shifting its bond holdings toultralong-term bonds.

(Billions of yen)

12.3.3112.12.31

ChangeSecurities

4,545.0

4,957.6+412.6

Policy reserves

4,843.0

5,252.5+409.5+8.5%

Total net assets

264.8

298.6

+33.7

+12.8%Net unrealized gains on other securities
Total assets
Separate account assets

+9.1%

34.0

45.7

+11.7

+34.5%

5,222.8

5,660.8+438.0

+8.4%

444.2

487.8

+43.5

+9.8%

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

6

Highlights of Sony Life’s operating performance (Non-consolidated basis) are shown
here.
Sony Life’s ordinary revenues increased 11.4% year on year, to ¥784.1 billion.
Of this amount, income from insurance premiums grew 9.2% from the same period of theprevious fiscal year, to ¥657.3 billion. Investment income increased 33.3% year on year,to ¥111.4 billion, reflecting an improvement in investment income on separate accounts
due to the market recovery towards the end of December 2012.
Ordinary profit increased 4.7% year on year, ¥52.8 billion, due mainly to a decrease inprovision of policy reserves for minimum guarantees for variable life insurance and arecovery from negative spread into positive at Sony Life. These positive factors
surpassed the company’s negative effects stemming from recording higher profit in theprevious period due to the reversal of reserve for outstanding claims related to the Great
East Japan Earthquake and the sale of securities in line with shifting its bond holdings
to ultralong-term bonds.
Moreover, Sony Life recorded losses on sales of shares of subsidiaries and affiliates of¥1.0 billion in extraordinary losses since Sony Life transferred the business of Sony Life
insurance (Philippines) Corporation, wholly owned subsidiary of Sony Life on December
6, 2012.
After accounting for extraordinary losses, provision for reverse for policyholders’dividends, and income taxes, net income was up 40.0% year on year, to ¥31.1 billion,
reflecting the previous period’s increase in deferred income taxes owing to the partial
reversal of deferred tax assets associated with the reduction in the corporate tax rate.

Overview of Operating Performance:
Sony Life (Non-consolidated)<Reasons for changes>

FY11.3Q(9M)

FY12.3Q(9M)

New policy amount

3,227.1

3,215.9

Lapse and surrender amount

1,561.9

1,451.5(7.1%)

Lapse and surrender rate

4.50%

4.03%

(0.47pt)

Policy amount in force

35,807.9

37,203.6

+3.9%

53.1

51.1

(3.7%)

13.0

13.1

+0.9%

627.6

657.8

+4.8%
+5.7%

(Billions of yen)

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

Change(0.3%)

147.3

155.7

(Billions of yen)

FY11.3Q(9M)

FY12.3Q(9M)

Gains from investment, net (general account)

72.5

77.1

+6.5%

Core profit

50.9

57.0

+12.0%

Negative spread

(1.7)

1.1

―

12.3.3112.12.31

Changefrom 12.3.31

1,980.4%

2,240.5%+260.1pt

Non-consolidated solvency margin ratio

ChangeNotes:*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, not adjusted for policy amount decreases,
increases, and reinstatements, by the policy amount in force at the beginning of the fiscal year.
*3. The plus amount in negative spread indicates positive spread.
*4 The non-consolidated solvency margin ratios are calculated based on the current standards applied from the end of fiscal 2011 (March 31, 2012).

◆ Remained at the same level due to lower
sales of family income insurance which
offset higher sales of living benefit
insurance, etc.
◆ Decreased due to the lowering lapse andsurrender rates mainly in term-life
insurance.
◆ Decreased due mainly to lower sales ofcancer hospitalized insurance which
offset higher sales of living benefit
insurance, etc.
◆ Increased due to an increase in interest
income and dividends which offset lower
gains on sale of securities.
◆Increased owing primarily to a decrease inprovision of policy reserves for minimum
guarantees for variable life insurance anda recovery from negative spread into
positive (positive factors) despite
recording higher profit in the previous
period due to the reversal of reserve foroutstanding claims related to the Great
East Japan Earthquake(negative factor).

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

7

Here is an overview of Sony Life’s operating performance.

Sony Life Operating Performance (1)Annualized Premiums from New Policies

Number and Amount of New Policies(Individual Life Insurance + Individual Annuities)(Individual Life Insurance + Individual Annuities)
New policy amount

Number of new policies

Annualized premiums from new policies

Of which, third-sector(Thousands of policies)

462(Trillions of yen)454

(3.2%)

439

500 (Billions of yen)60

(0.3%)

3.21

400

40,0003.5
35,000

53.9
3.22

3.22

53.1

(3.7%)

51.1

50

3.0
30,000300

2.5
25,0004030

2.0
20,000200

1.5
15,00020

1.0
10,000

+0.9%

100
10

5,000
0.5
0

0
FY10.3Q (9M)

FY11.3Q (9M)

FY12.3Q (9M)Line item amounts are truncated below ¥10 billion; numbers of policies aretruncated below 1,000 policies; percentage change figures are rounded.

12.6

13.0

FY10.3Q (9M)

FY11.3Q (9M)

13.1

0FY12.3Q (9M)Line item amounts are truncated below ¥100 million; percentage change figures are rounded.

8(Left-hand graph)
New policy amount for the total of individual life insurance and individual
annuities remained at the same level as during the same period of the previous
fiscal year at ¥3.21 trillion, due to lower sales of family income insurance which
offset higher sales of living benefit insurance, etc.
New policy amount for the third quarter (Oct-Dec 2012) of this fiscal year
increased 2.3% year on year, to ¥1.2 trillion, with the year-on-year growth raterecovering from the second quarter.
The number of new policies decreased 3.2% year on year, to 439 thousand
policies.
(Right-hand graph)
Annualized premiums from new policies decreased 3.7% year on year, to ¥51.1
billion, due mainly to lower sales of cancer hospitalized insurance which offset
higher sales of living benefit insurance, etc.
Of which, the figure for third-sector insurance products was up 0.9% year on year,to ¥13.1 billion.

Sony Life Operating Performance (2)Annualized Premiums from Insurance in Force

Number and Amount of Policies in Force(Individual Life Insurance + Individual Annuities)(Individual Life Insurance + Individual Annuities)
Policy amount in force

Number of policies in force

Annualized premiums from insurance in force

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

50

5.60

+4.4%
+5.7%

5.92

5.67

(Billions of yen)

6.00

700

627.6
40

35.8

+3.9%

37.2

36.0

5.00

+4.8%

657.8

635.4
+3.5%

600
500

4.00

+3.1%

30

400
3.00

300

20
2.00

200
10

1.00

+5.7%

148.9

100

147.3
0

0.00
11.12.31

12.3.3112.12.31

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

+4.6%

155.7

0
11.12.31

11.3.3112.12.31

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

9Sony Life’s policy amount in force which reflects new policy amount and lapse
and surrender amount, is shown here.
(Left-hand graph)
Policy amount in force for the total of individual life insurance and individual
annuities increased steadily up 3.9% year on year, to ¥37.2 trillion due to an
addition of new policies and a decline in lapse and surrender rate.
The number of policies in force increased 5.7% year on year, to 5.92 million
policies.
(Right-hand graph)
Annualized premiums from insurance in force increased 4.8% year on year, to¥657.8 billion.
Of this amount, the figure for third-sector products was up 5.7% year on year, to¥155.7 billion.

Sony Life Operating Performance (3)Lapse and Surrender Rate*

Non-consolidated Solvency Margin Ratio(Individual Life Insurance + Individual Annuities)＜Annual and 9M＞

Lapse and surrender rate (Annual)(%)

Lapse and surrender rate (9M)

3,000

(%)

10

2,240.5

2,500

1,980.48

6.41(Annual)

2,000

5.93

6

1,720.0+260.1pt

1,500
(9M)

(0.47pt)

4

4.79

4.50

1,000

4.03

2

500

0

0
FY10

FY11

FY12

*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.

11.3.3112.3.3112.12.31

Note: The non-consolidated solvency margin ratios are calculated based on the current
standards applied from the end of fiscal 2011 (March 31, 2012).

10(Left-hand graph)
The lapse and surrender rate for the nine months ended December 31, 2012
decreased 0.47 percentage point year on year, to 4.03%, due to the lowering
lapse and surrender rates primarily for term-life insurance.
(Right-hand graph)
As of December 31, 2012, Sony Life’s non-consolidated solvency margin ratio
was 2,240.5%, up 260.1 percentage points from March 31, 2012.

Sony Life Operating Performance (4)Income from Insurance Premiums(Billions of yen)(Billions of yen)

657.3

700

600

Ordinary Profit

565.5

602.0

70

66.1

60

50.5

+9.2%

52.8
+4.7%

50

500

40

400

30

300

200

20

100

10

0

0
FY10.3Q (9M)

FY11.3Q (9M)

FY12.3Q (9M)

FY10.3Q (9M)

FY11.3Q (9M)

FY12.3Q (9M)Line item amounts are truncated below ¥100 million; percentage change figures are rounded.

11

Sony Life Operating Performance (5)Core Profit

Negative Spread(Billions of yen)

57.0

60
(Billions of yen)

50.9

5

50

4

+12.0%

43.9

3

1.1

2

40

1
0

30

-1
-2

(1.7)

-3

20

-4
-5
-6

10

(5.5)

-7

0

-8

FY10.3Q (9M)

FY11.3Q (9M)

FY12.3Q (9M)

-9-10
FY10.3Q (9M)

FY11.3Q (9M)

FY12.3Q (9M)

(Reference)
Provision of policy reserves of the general account assets for minimum
guarantee for variable life insurance
FY10.3Q (9M)

* The plus amount in negative spread indicates positive spread.

FY11.3Q (9M)
4.5

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

YonY Change
1.2

(4.4)

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

12(Left-hand graph)
Negative spread became ¥1.1 billion of positive spread, driven by an increase ininterest income and dividends.
(Right-hand graph)Core profit increase 12.0% year on year, to ¥57.0 billion owing primarily to adecrease in provision of policy reserves for minimum guarantees for variable life
insurance and a recovery from negative spread into positive (positive factors)
despite recording higher profit in the previous period due to the reversal ofreserve for outstanding claims related to the Great East Japan
Earthquake(negative factor).

Sony Life Operating Performance (6)Number of Lifeplanner Sales Employees(Number)

4,500
4,066
[49]

4,026
[51]

4,023
[62]

3,996
[66]

4,116
[71]

4,098
[79]

+35

4,031
[87]

4,071
[82]

4,000

(40)

3,500

3,000
0
11.3.3111.6.30

11.9.30

11.12.31

12.3.3112.6.30

12.9.30

12.12.31

Note: Figures in [] show the number 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 requirements.
* “Lifeplanner” is a registered trademark of Sony Life Insurance Co., Ltd.

13

The number of Lifeplanner sales employees as of December 31, 2012, was
4,031, down 40 from September 30, 2012 and up 35 from December 31, 2011.
From the first quarter of this fiscal year, SFH began disclosing the number ofLifeplanner sales employees (rehired on a fixed-term contract basis after
retirement) included in the overall numbers.

Sony Life Operating Performance (7)Breakdown of General Account Assets
12.3.31<Asset management review>

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

3,975.7

83.2%

4,370.5

84.5%

Japanese stocks

45.0

0.9%

28.5

0.6%

Foreign securities

59.6

1.2%

60.5

1.2%

Foreign stocks

30.5

0.6%

24.4

0.5%

Japanese government and corporate
bonds: Continue to accumulate
ultralong-term bonds in FY12

[Lengthened asset duration]
11. 3. 31 18.5 year
12. 3. 31 19.2 year
12. 12. 31 19.1 year

Monetary trusts

288.2

6.0%

293.2

5.7%

Policy loans

138.7

2.9%

142.0

2.7%

Real estate

72.9

1.5%

71.5

1.4%

Cash and call loans

64.8

1.4%

58.1

1.1%

102.6

2.1%

123.7

2.4%

4,778.5

100.0%

5,172.9

100.0%

Others

Total■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, 2012: 90.2%(As of March 31, 2012: 89.2%)

14Here ins a breakdown of Sony Life’s general account assets as of December 31,
2012, compared with March 31, 2012.
As Sony Life continued its investment in ultralong-term bonds, mainly Japanese
government and corporate bonds, their ratio rose to 90.2% as of December 31,
2012.
Going forward, Sony Life will invest most of new money acquired from income
from insurance premiums in ultralong-term bonds in order to properly control
interest rate risk on insurance liabilities.

Highlights of Operating Performance:
Sony Assurance
Ordinary revenues

FY11.3Q(9M)

FY12.3Q
(9M)

60.1

63.8

+3.6

Underwriting income

59.4

63.0

+3.5

+6.0%

Investment income

0.6

0.7

+0.0

+14.2%

58.4

62.7

+4.3

+7.4%

Underwriting expenses

44.1

47.6

+3.4

+7.8%

Investment expenses

0.0

0.0

+0.0

157.0%

Operating, general andadministrative expenses

14.2

15.0

+0.8

+6.3%

Ordinary profit

1.6

1.0

(0.6)

(37.8%)Net income

0.5

0.5

+0.0

+13.3%

12.3.3112.12.31

Ordinary profit(Billions of yen)

63.8

Ordinary revenues

60.1
+6.1%

Ordinary expenses(37.8%)

1.0

1.6
FY11.3Q (9M)

FY12.3Q (9M)

Change+6.1%(Billions of yen)

◆ Ordinary revenues increased but ordinary
profit decreased year on year.
◆ Ordinary revenues increased year on year,
owing to an increase in net premiums written,
as the number of insurance policies in force
grew primarily for automobile insurance.
◆ Ordinary profit decreased year on year, owing
to a rise in the loss ratio due mainly to higher
insurance payments per claim for automobile
insurance.

(Billions of yen)

Change from 12.3.31

Underwriting reserves

67.3

71.0

+3.7

+5.5%

Total net assets

18.0

18.7

+0.7

+4.2%

123.3

+4.7

+4.0%

Total assets

118.6

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

15

Sony Assurance’s ordinary revenues increased 6.1% year on year, to ¥63.8
billion, owing to an increase in net premiums written, as the number of insurance
in force grew primarily for automobile insurance.
Ordinary profit decreased 37.8% year on year, to ¥1.0 billion, owing to anincrease in the loss ratio due mainly to higher insurance payments per claim for
automobile insurance.
Consolidated net income was up 13.3% year on year, to ¥0.5 billion, reflecting
the previous period’s increase in deferred income taxes owing to the partial
reversal of deferred tax assets associated with the reduction in the corporate tax
rate.

Overview of Operating Performance:
Sony Assurance<Reasons for changes>(Billions of yen)

FY11.3Q(9M)

FY12.3Q(9M)◆ Increased owing to an increase in thenumber of policies in force for
automobile insurance.

ChangeDirect premiums written

58.8

62.1

+5.7%

Net premiums written

59.4

62.9

+6.0%

Net losses paid

32.9

35.0

+6.3%

Underwriting profit

1.1

0.3

(69.7%)Net loss ratio

61.8%

62.4%

+0.6ptNet expense ratio

25.5%

25.5%

0.0pt

Combined ratio

87.4%

87.9%

+0.5pt◆ Increased owing mainly to an increasein the number of insurance payments
due to the higher number of policies inforce for automobile insurance.

◆ Increased owing to higher insurance
payments per claim and loss
adjustment expenses for automobile
insurance.

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

Number of policies in force
Non-consolidated
solvency margin ratio

12.3.3112.12.31

1.49 million

1.54 million

557.8%

525.0%

Change from 12.3.31+0.05 million(32.8pt)+3.9%◆ Increased due to an increase in
the number of policies in force for
automobile insurance.

Note:*1 The number of policies in force is the total of automobile insurance and medical and cancer insurance, which
accounts for 99% of net premiums written.
*2 The non-consolidated solvency margin ratios are calculated based on the current standards applied from the endof fiscal 2011 (March 31, 2012).

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

16

Here is an overview of Sony Assurance’s operating performance.

Sony Assurance’s Underwriting Performanceby Type of Policy
Net Premiums Written

Direct Premiums Written( Millions of yen)

FY11.3Q(9M)

FY12.3Q(9M)

Change

Fire

118

171

+45.3%

Marine－－－Personal accident *

5,517

5,883

+6.6%

Voluntary automobile

53,17756,129+5.6%

Compulsory
automobile liability
Total

－

－

－

58,812

62,185+5.7%

Net Losses Paid
( Millions of yen)

FY11.3Q(9M)

FY12.3Q(9M)

FY12.3Q(9M)

Change

Fire

68

80

+16.4%

Marine50105108.5%

Personal accident *

5,681

6,073

+6.9%

Voluntary automobile

52,97855,922

+5.6%

647

805

+24.4%

59,426

62,987+6.0%

Compulsory
automobile liability
Total

Change400(98.0%)

Marine104160+53.8%

Personal accident*

1,352

1,467

+8.5%

Voluntary automobile

30,806

32,662

+6.0%

647

750

+15.9%

32,95135,041

+6.3%

Total

FY11.3Q(9M)*SURE, medical and cancer insurance is included in personal accident

Fire

Compulsory
automobile liability( Millions of yen)Line item amounts are truncated below ¥1 million;
percentage change figures are rounded.

17

This slide show direct premiums written, net premiums written and net losses
paid by type of policy.

Sony Assurance Operating Performance (1)Net Premiums Written <9M> andNumber of Policies in Force (as of Dec. 31)
Voluntary automobile insurance
Others

Personal accident insurance(Millions of policies)

Number of policies in force(Billions of yen)

80

1.47

1.36

+5.2%

50

0.5 54.9
5.5

1.54(Billions of yen)

1.6

70
60

Ordinary Profit

62.9 0.9

0.7 59.4

6.0

5.6

2.5

2.3

1.2
2

+6.0%

52.9

1.4

3

55.9

40

1
0.8

1.6

48.9
30

(37.8%)

1.5

1.0

0.6
1

20

0.4

10

0.2

0.5

0

0
FY10.3Q(9M)

FY11.3Q(9M)

FY12.3Q(9M)0
FY10.3Q (9M)

FY11.3Q (9M)

FY12.3Q (9M)

The number of policies in force is the total of automobile insurance and medical
and cancer insurance policies, which account for 99% of net premiums written.
More than 99% of personal accident insurance is medical and cancer insurance.
Line item amounts are truncated below ¥100 million; number of policies aretruncated below 10,000 policies; percentage change figures are rounded.

18(Left-hand graph)
Number of policies in force for the total of automobile insurance and medical andcancer insurance increased, up 5.2% year on year, to 1.54 million policies.
Net premiums written posted a 6.0% year-on-year increase, to ¥62.9 billion.
(Right-hand graph)
Ordinary profit decreased year on year, owing to the increase in the loss ratio as
described in the previous pages.

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

Combined Ratio(Net Loss Ratio + Net Expense Ratio)<Reference>

Net loss ratio

Net expense ratio

(%)

100

95.2

98.1
93.4

98.9

97.0

Net expense ratio

(%)

100

85.6

+1.9pt89.0
84.7+0.5pt

80

80

87.9

87.4

73.4
71.5 +1.9pt
60

72.4
69.7

68.4

+0.6pt

59.8

60.0

40

40

20

62.4
61.8

63.3

60

20

25.5

25.7

25.0

25.5

25.7

25.5 +0.0pt 25.5

25.0

25.5

25.5

+0.0pt
0

0
FY10

FY11

YonY comparison

FY10.3Q

FY11.3Q

FY12.3Q

9M Comparison

Note:
Earned/Incurred 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.]

FY10

FY11

YonY cpmparison

FY10.3Q

FY11.3Q

FY12.3Q

9M Comarison

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

19(Left-hand graph)
To help you understand the actual condition of Sony Assurance, which is in a
growth phase, we show the earned/incurred loss ratio, which is the accrual-basis
loss ratio.
For the nine months ended December 31, 2012, the E.I. loss ratio increased 1.9
percentage points year on year, to 73.4%, due mainly to higher insurance
payments per claim for automobile insurance.
The net expense ratio remained at the same level as during the same period of
the previous fiscal year to 25.5%, owing to an appropriate control on operating
expenses.
Consequently, the sum of the E.I. loss ratio and the net expense ratio increased
1.9 percentage points year on year, to 98.9%.
(Right-hand graph)
The net loss ratio rose 0.6 percentage point compared with the same period of
the previous fiscal year, to 62.4%, due to the same reason as the E.I. loss ratio
did.
The combined ratio (the sum of the net loss ratio and the net expense ratio) rose
0.5 percentage point year on year, to 87.9%.

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

(%)

1,200

800

631.0%

557.8%(32.8pt)

525.0%

400

011.3.3112.3.3112.12.31

Note: The non-consolidated solvency margin ratios are calculated based on the current standards applied from the end of fiscal 2011 (March 31, 2012).

20

As of December 31, 2012, Sony Assurance’s non-consolidated solvency margin
ratio was 525.0%, down 32.8 percentage points from March 31, 2012.

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

+5.5%

23.8

(0.9%)

25.1<Consolidated>

2.8

2.9

(Billions of yen)

FY11.3Q(9M)

FY12.3Q(9M)

Consolidated ordinary revenues

23.8

25.1

+1.3

+5.5%

Consolidated ordinary profit

2.9

2.8

(0.0)

(0.9%)

Consolidate net income

1.1

2.2

+1.1

+95.0%

FY11.3Q(9M)

FY12.3Q(9M)

Ordinary revenues

22.1

22.8

+0.6

+2.8%

Gross operating profit

13.6

13.3

(0.3)

(2.2%)Net interest income

12.0

13.1

+1.0

+8.9%

Net fees and commissions

0.07(0.00)(0.07)―Net other operating income

1.4

0.1

(1.2)

(86.8%)

10.2

10.5

+0.3

+3.0%

Net operating profit

3.1

2.8

(0.3)

(11.3%)

Ordinary profit

2.9

2.6

(0.2)

(8.9%)Net income (loss)

1.6

(0.1)

(1.7)

-

12.3.3112.12.31<Non-consolidated>(Billions of yen)

FY11.3Q (9M)

ChangeFY12.3Q (9M) (Billions of yen)<Consolidated>◆ Consolidated ordinary revenues increased year on year due to anincrease in net fees and commissions resulting from Sony Bank’s
acquisition of SmartLink Network, Inc. which became its
consolidated
subsidiary. Consolidated ordinary profit remained at the same levels.
Consolidated net income increased due to recording deferred tax
assets on the sale of Sony Bank Securities on August 1, 2012.
<Non-consolidated>◆ Gross operating profit decreased year on year.
-Net interest income increased owing to an increase in interest
income on loans led by a growing balance of mortgage loans anda decrease in interest expenses.
-Net fees and commissions slightly decreased as Sony Bank
stopped charging for FX transactions.
-Net other operating income decreased reflecting lower gains onbond dealing transactions.
◆ Net operating profit decreased owing to higher general andadministrative expenses led primarily by personal reinforcement
for business expansion.
◆ Net income (loss) decreased owing to recording extraordinary
losses (¥2.8 billion) on the sale of Sony Bank Securities Inc.

General and administrative
expenses(Billions of yen)
Total net assets
Net unrealized gains on othersecurities (net of taxes)

Total assets

ChangeChange from 12.3.31

62.7

64.4

+1.6

+2.6%

1.7

4.0

+2.3

+130.3%

1,890.5

2,002.9+112.4+5.9%

Line item amounts are truncated below ¥100 million except for net fees and commissions;percentage change figures are rounded.

21

Sony Bank’s consolidated ordinary revenues increased year on year due to anincrease in net fees and commissions resulting from Sony Bank’s July 2011acquisition of SmartLink Network, Inc., which became its consolidated subsidiary.
Consolidated ordinary profit remained at the same level as during the same
period of the previous fiscal year.
Consolidated net income increased due to recording deferred tax assets on thesale of Sony Bank Securities Inc. on August 1, 2012.
On a non-consolidated basis, Sony Bank’s gross operating profit decreased 2.2%
from a year earlier, to ¥13.3 billion, because higher interest income on loans due
to a growing balance of mortgage loans were offset by a decrease in profit
related to foreign currency transactions.
Net operating profit decreased 11.3% year on year, to ¥2.8 billion, as general andadministrative expenses increased due mainly to the personnel reinforcement forbusiness expansion.
Sony Bank’s non-consolidated net income (loss) decreased owing to recording
extraordinary losses of ¥2.8 billion on the sale of the aforementioned subsidiary,Sony Bank Securities Inc., resulting in a loss of ¥0.1 billion.

Overview of Operating Performance:
Sony Bank (Non-consolidated) (1)11.12.31

12.3.3112.12.31

Change from
12.3.31

Customer assets

1,783.4

1,864.3

1,973.0+108.7+5.8%

Deposits

1,688.3

1,762.2

1,868.4+106.1+6.0%

Yen

1,334.0

1,390.5

1,488.9

+98.3

+7.1%

354.3

371.7

379.4

+7.7

+2.1%

Investment trusts

95.0

102.0

104.6

+2.5

+2.5%

Loans outstanding

805.9

835.5

929.7

+94.2

+11.3%

Mortgage loans

722.7

749.6

830.6

+81.0

+10.8%

Others

83.2

85.9

99.1

+13.1

+15.3%

11.86%

11.58%

10.71%(0.87pt)

9.85％

9.63%

8.91％

(0.72pt)(Billions of yen)

Foreign currency

Capital adequacy ratio(domestic criteria) *2
Tier1 ratio*1*1 Loans in others include corporate loans of ¥92.5 billion.
*2 Please refer to the graph of the non-consolidated capital adequacy ratio (domestic criteria) on P25.

<Reasons for changes>◆ Yen deposits increased due to thepositive effect of special offer forsummer 2012 bonus season, andshifting customer assets from foreign
currencies to yen deposits backed byyen depreciation towards the end of
December 2012.

◆Foreign currency deposits increased
reflecting a positive impact fromforeign exchange conversion (+¥19.3 billion), despite a negative
impact from converting more foreign
currencies into yen led by yen
depreciation towards the end of
December 2012.
◆ Loan balance increased due to a
growing balance of mortgage loans,in addition to a higher corporate loanbalance centered on syndicatedloans.

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

22

Here is an overview of Sony Bank’s operating performance.

Overview of Operating Performance:
Sony Bank (Non-consolidated) (2)<Reference> On Managerial Accounting Basis<Reference> Interest Spread(Managerial Accounting Basis)

FY11.3Q(9M)

FY12.3Q
(9M)

13.5

13.2

Net interest income*1 ①

12.6

13.0

+0.4

+3.3%

Net fees and commissions*2 ②

0.7

0.4

(0.3)

(42.0%)Net other operating income*3

0.1

(0.2)

(0.3)

―

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

13.4

13.5

+0.0

+0.6%

Operating expenses and otherexpenses ③

10.4

10.4

+0.0

+0.6%

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

3.0

3.0

+0.0

+0.9%

(Billions of yen)

ChangeYield on investment

Gross operating profit(0.3)(2.2%)

Yield on financing

Interest spread

(%)
2.0

1.5

1.36
1.28

●Managerial accounting basis
The following adjustments are made to the figures on a financial accounting basis to accountfor profits and losses more appropriately.
*1: Net interest income: Includes profits and losses associated with fund investment recorded in
net other operating income, including gains or losses from currency swap transactions.
*2: Net fees and commissions: Includes profits and losses for customer dealings in 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.

1.0

0.5

0.95

0.41

(0.04pt)

0.91

0.37

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

0.0
FY11.3Q (9M)

FY12.3Q (9M)

Note: Interest spread=(Yield on investment)-(Yield on financing)Line item amounts are truncated below ¥100 million; percentage change figures are rounded.
The calculation method on a managerial accounting basis was partly changed from this fiscal year . Accordingly, the figures for FY11.3Q were retroactively calculated.

23

We break down gross operating profit on a managerial accounting basis tofacilitate an understanding of operational sources of revenues and profits.
(Left-hand table)
Net interest income on a managerial accounting basis amounted to ¥13.0 billion,¥0.4 billion up year on year, due to business expansion, mainly in its mortgage
loans, which offset a decrease in profit related to foreign currency transactions.
Net fees and commissions amounted to ¥0.4 billion, ¥0.3 billion down year on
year, owing mainly to a decrease in gains on customer dealings in foreign
currency transactions, influenced by the movements of foreign exchange market.
Consequently, both gross operating profit and net operating profit on a core profit
basis remained at the same levels as during the same period of the previous
fiscal year, amounted to ¥13.5 billion and ¥3.0 billion respectively.
(Right-hand graph)
The yield on investment for FY12.3Q was 1.28%.
The yield on financing was 0.37%.
Consequently, the interest spread was 0.91%.

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

Loans

Foreign currency deposits

Mortgage loans

Others(Billions of yen)

1,200(Billions of yen)

2,000

1,868.4

1,000

379.4

800

929.7

1,762.2 +106.1

835.5

1,649.1
1,500

99.1

*Corporate loansof ¥92.5billion.

+94.2

722.4

600

1,000

830.6
400

1,488.9
500
200

0

0
11.3.3112.3.3112.12.31

11.3.3112.3.3112.12.31

Line item amounts are truncated below ¥100 million.

24(Left-hand graph)
As of December 31, 2012, deposits (the sum of Japanese yen and foreign
currency deposits) amounted to ¥1,868.4 billion, up ¥106.1 billion from March 31,
2012.
Of which, yen deposits increased ¥98.3billion, to 1,488.9 billion, due to thepositive effect of special offer for summer 2012 bonus season, and shifting
customer assets from foreign currencies to yen deposits backed by yen
depreciation towards the end of December 2012.
Foreign currency deposits increased ¥7.7 billion, to ¥379.4 billion, reflecting a
positive impact from foreign exchange conversion, despite a negative impact
from converting more foreign currencies into yen led by yen depreciation towards
the end of December 2012.
(Right-hand graph)
Loans expanded to ¥929.7 billion, up ¥94.2 billion, from March 31, 2012, due to a
growing balance of mortgage loans, in addition to a higher corporate loanbalance centered on syndicated loans.

Operating Performance:
Sony Bank (Non-consolidated) (2)Balance of Securities by Credit ratingsAAA
BBB(Domestic criteria)

AA
A
OthersCapital adequacy ratio

Tier1 ratio(%)(Billions of yen)

1,200

1,000

Non-consolidated Capital Adequacy Ratio

15

940.1

912.9

951.8

11.58

+38.9

10.84
800

(0.87pt)

10.71

10

10.41

8.91

9.63
(0.72pt)

600

400

5

200

0

0

11.3.3112.3.3112.12.31

11.3.3112.3.3112.12.31*Calculated based on the standard FSA Notification No. 19 2006), which establishes
standards based on Article 14-2 of the banking Act of Japan for determining the capital
adequacy of a bank in light of the assets held by the bank.
Line item amounts are truncated below ¥100 million.

25(Left-hand graph)
As of December 31, 2012, the balance of securities increased ¥38.9 billion, to¥951.8 billion from March 31, 2012.
Sony Bank continuously invests in highly rated bonds.
(Right-hand graph)
As of December 31, 2012, Sony bank’s non-consolidated capital adequacy ratio(domestic criteria) was 10.71%, down 0.87 percentage point from Mach 31, 2012.
Sony bank will continue to maintain a sound financial position.

Consolidated Financial Forecast
for the Year Ending March 31, 201326

Consolidated Financial Forecast
for the Year Ending March 31, 2013
Ordinary revenues, ordinary profit and net income were revised upward.

(Billions of yen)

FY11

FY12

FY12

ActualRevised Forecast

Previous Forecast

ChangeFY12 revised forecast vs.
FY12 previous forecast

1,078.0

1,157.0

1,115.0+42.0Life insurance business

967.5

1,038.1

994.5

+43.6

Non-life insurance business

80.0

85.0

85.0

-

Banking business

32.5

34.5

34.5

-

Consolidated ordinary profit

74.6

74.0

67.0

+7.0

Life insurance business

68.1

68.5

61.5

+7.0

Non-life insurance business

2.6

2.6

-

Banking business

2.8
3.4

3.6

3.6

-

Consolidated net income

32.8

41.0

37.0

+4.0

Consolidated ordinary revenues■Life insurance business:
SFH revises upward its consolidated financial forecast for the year ending March 31, 2013. This is because the operating results in bothordinary revenues and ordinary profit for the nine months ended December 31, 2012 exceeded our previous forecast.
■Non-life insurance business
The forecast of ordinary revenues and ordinary profit remains unchanged from the previous forecast.
■Banking business
The forecast of ordinary revenues and ordinary profit remains unchanged from the previous forecast.
Notes:
1. Line item amounts are truncated below ¥100 million.
2. On February 7, 2013, we revised the financial forecast announced on May 10, 2012.

27

As operating results for the nine months ended December 31, 2012 exceeded
our previous forecast in the life insurance business, SFH revises upward its
consolidated financial forecast for the year ending March 31, 2013.
The updated consolidated forecast reflects the movements of financial market inearly January 2013 and other factors.
However, the figures stated above may differ from actual results for a variety ofreasons.

Sony Life’s MCEV
andRisk Amount Based on Economic Valueas of December 31, 201228

Sony Life’s MCEV and Risk Amount Based on
Economic Value as of December 31, 2012

(Billions of yen)

MCEV

12.3.3112.12.31(JGB yield)(JGB yield)

Change1,041.5

1,079.4+37.8

Adjusted net worth

409.2

450.3

+41.1

Value of existing business

632.4

629.1

(3.3)

(1) Calculated MCEV for policies in force as of December 31, 2012 by using updated lapse and surrender rate and economic assumptions.
(2) Adopted simplified method for a part of MCEV calculations as of December 31, 2012.

(Reasons for change)
 MCEV increased due to the steady addition of new business value.

(Billions of yen)

The risk amount based on economic value

12.3.31551.5

12.12.31

Change

602.6

+51.1

Note: Measurement of risk based on economic value takes one-year VaR to be 99.5% and is measured using an internal model that refers to the
EU Solvency II (QIS5) standard model.

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

29

Sony Life’s MCEV as of December 31, 2012 amounted to ¥1,079.4 billion , up
¥37.8 billion from March 31, 2012, due to the steady addition of new businessvalue.
The risk amount based on economic value as of December 31, 2012 was ¥602.6
billion.

Appendix

30

Recent Topics 1
AEGON SONY LIFE INSURANCE Sales Update
Launch of sales：December 1, 2009
Common stock：¥20 billion (including capital surplus of ¥10 billion)
Equity ownership：Sony Life insurance Co., Ltd. 50%, AEGON・international B.V. 50%
Marketing products: Individual Variable Annuities (2 types, 4 products*)
Sales Channels: Lifeplanner sales employees and partner Banks (9*) *As of February14, 2013
Financial Highlights for FY12.3Q(9M):Number of new policies: 3,974, New policy amount: ¥27.3 billion
Number of policies in force: 7,560, Policy amount in force: ¥57.7 billion (As of December 31, 2012)

Sony Bank’s Mortgage Loans through Sony Life
■Sony Life accounts for 25% of the balance of mortgage loans
as of December 31, 2012
Sony Life accounts for 24% of the amount of new mortgage loans for FY12.3Q(9M).
*Sony Life started handling banking agency business in January 2008.

Sony Assurance’s Auto Insurance Sold by Sony Life
■ Sony Life accounts for approx. 5% of new automobile policies for FY12.3Q(9M).
* Sony Life started handling automobile insurance in May 2001.

“Lifeplanner” is a registered trademark of Sony Life Insurance Co., Ltd.

31

(Recent Topics 1)

Recent Topics 2<Highlight for FY12.3Q>
2012-10-01 Sony Assurance made a commitment of an initial response by an appointed staff member within an hour after receiving an
accident report for automobile insurance policyholders
2012-10-11 Sony Assurance added a GPS system to its free application, “Trouble Navigation” for smart phone users
2012-10-19 Sony Life launched the second phase of its “Co-Creation Project”
2012-10-22 Sony Bank began offering Chinese Yuan(CNH), South African Rand and Swedish Krona for foreign currency deposits
2012-11-01 Sony Assurance revised automobile insurance details including a discount on paperless insurance policies and establishinga new rider, commencing on or after November 1, 20122012-11-14 Sony Financial Holdings announced the dividend forecast (increased dividend) for the year ending March 31, 2013.
2012-12-01 Sony Bank reduced exchange transaction fees for its all twelve foreign currency deposits and revised preferential system.
2012-12-06 Sony Life transferred the business of Sony Life Insurance (Philippines) Corporation2013-1-14

Sony bank launched new financial products intermediary services with Monex Group

2013-1-28

Sony bank began providing Windows 8 application, “Easy Foreign Currency Chart”

2013-1-31

Sony Financial Holdings issued No. 2 unsecured corporate bonds(The bonds were raised as a loan aimed at reinforcing Sony Bank’s financial base on February 1. 2013)32(Recent Topics2)

Sony Life: Fair Value Information on Securities(General Account Assets)
Fair Value Information on Securities
zFair value information on securities with market value (except trading-purpose securities)(Billions of yen)zValuation gains (losses) on trading-purpose securities(Billions of yen)

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

33(Sony Life: Fair Value Information on Securities)

Sony Life’s Interest Income and Dividends (Details)(Thousands of yen)

FY11.3Q(9M)

FY12.3Q(9M)

Change

8

8

+7.0%

56,949,370

64,739,220+13.7%

Japanese stocks

527,819

351,448(33.4%)

Foreign securities

2,294,520

2,802,992+22.2%

Other securities

241,659

177,645(26.5%)

Loans

4,022,561

4,085,144+1.6%

Real estate

8,438,666

8,143,397(3.5%)

74,081

57,550(22.3%)

72,548,689

80,357,408+10.8%Cash and deposits
Japanese government andcorporate bonds

Others
Total

Line item amounts are truncated below ¥1,000

34(Sony Life’s Interest Income and Dividends (Details))

34

Contact:
Corporate Communications & Investor Relations Department
Sony Financial Holdings Inc.

TEL： +81-3-5785-1074

35