Presentation Material

Consolidated Financial Results
for the Fiscal Year Ended March 31, 2017
andSony Lifeʼs Preliminary MCEV
as of March 31, 2017

Sony Financial Holdings Inc.
May 15, 2017
Sony Financial Holdings Inc. All Rights Reserved

Content
 Consolidated Operating Results for the Fiscal Year Ended March 31, 2017
(FY2016)

P.3

 Forecast of Consolidated Financial Results for the Fiscal Year Ending
March 31, 2018 (FY2017)P.31

 Changes in Medium-term Dividend Policy and Dividend Forecast for FY2017

P.33

 Sony Lifeʼs Preliminary MCEV and ESR as of March 31, 2017

P.35

 Appendix

P.38

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

Sony Financial Holdings Inc. All Rights Reserved2Consolidated Operating Results
for the Fiscal Year Ended March 31, 2017
(FY2016)

Sony Financial Holdings Inc. All Rights Reserved3Management Message
Amid an environment of ultralow interest rates, we expeditiously
introduced measures to improve profitability, and all three businesses
steadily expanded their business scale.
 Sony Life ensured profitability through product revisions and product shifts
toward US dollar-denominated insurance and term life insurance. Efforts torecruit Lifeplanner sales employees significantly outpaced plans,
accelerating expansion of Sony Lifeʼs sales foundation. Ordinary profit was
flat, but MCEV increased thanks to expanded business scale and a market
recovery.


Financial
Results for
FY2016

Forecast of
Financial
Results for
FY2017

We forecast that all three businesses will expand their business scale, but
expect ordinary profit to be flat.
 At Sony Life, we expect ordinary profit to be flat due to an increase in theprovision of policy reserves, stemming from the April 2017 revision instandard yields used for calculating policy reserves. However, we anticipate
a rise in MCEV due to the steady accumulation of new 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.
For the foreseeable future, we plan to pay a dividend corresponding tomore than 50% of net income per share.
Dividend Policy/
Shareholder
Returns

Sony Financial Holdings Inc. All Rights Reserved

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

1,362.0+1.4%

1,381.6

FY2015FY2016

1,230.2

1,243.9

+13.6

+1.1%

Ordinary profit

60.2

56.8

(3.4)

(5.7%)

Ordinary revenues

96.9

102.3

+5.4

+5.6%

Ordinary profit

4.6

5.0

+0.3

+6.8%

Bankingbusiness

Ordinary revenues

37.9

38.5

+0.5

+1.5%

Ordinary profit

5.9

5.0

(0.9)

(15.6%)

Intersegment
adjustments*

Ordinary revenues

(3.0)

(3.1)

(0.0)

-

0.2

(0.5)

(0.7)

-

1,362.0

1,381.6

+19.6

+1.4%

Ordinary profit

71.1

66.3

(4.7)

(6.7%)

Profit attributableto owners of theparent

43.3

41.6

(1.7)

(4.0%)(JPY bn)
Life insurance
business
Non-life
insurancebusiness

Ordinary revenues

Ordinary profit
Ordinary revenues(6.7%)

66.3

71.1

Consolidated

Change*Ordinary profit in “Intersegment adjustments” is mainly from SFH. Nursing care business has
been included in the scope of consolidation from FY16.1Q.

(JPY bn)(Note) Comprehensive income : FY2015: ¥71.1 billion, FY2016: ¥21.4 billion

FY2015FY2016(JPY bn)
Consolidated

Net assets
Total assets

Mar. 16Mar. 17

Change from
Mar. 16

604.3

601.1

(3.2)

(0.5%)

10,352.1

11,471.8+1,119.7+10.8%

Sony Financial Holdings Inc. All Rights Reserved

5Highlights of Consolidated Operating Performance(2)

Life Insurance Business: Ordinary revenues increased year on year, due to an increase in investment incomein the separate account, which positive effect was partially offset by a decrease in insurance premium
revenues led by a decline in sales of single premium products. Ordinary profit decreased due to a
deterioration in performance at affiliated companies, although ordinary profit at Sony Life was flat year onyear.
As for Sony Life, positive factors, including 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 inmarket conditions, and an increase in profit from accumulated policies in force, were offset by such negative
factors as a deterioration in net gains/losses on derivative transactions to hedge market risks related tominimum guarantees for variable life insurance and lower gains on sale of securities in the general account.
Non-life Insurance Business: Ordinary revenues rose year on year, owing to an increase in net premiums
written primarily for mainstay automobile insurance. Ordinary profit increased year on year, due mainly to a
decline in provision for reserve for outstanding losses, an increase in underwriting profit and higher
investment income, partially offset by an increase in operating expense.
Banking Business: Ordinary revenues increased year on year due to an increase in interest income on loans
in line with a favorably growing balance of mortgage loans, partially offset by a decrease in interest anddividend income on securities. Ordinary profit decreased year on year due to the lower level of interest rates,
an increase in initial expenses led by a higher execution of mortgage loans, and lower volumes of foreign
currency and investment trust transactions of customers.
Consolidated ordinary revenues increased 1.4% year on year, to ¥1,381.6 billion, owing to increases inordinary revenues from all the businesses: life insurance business, 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 from the 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 Financial Holdings Inc. All Rights Reserved

6

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

Ordinary revenues

1,230.1+1.1%(JPY bn)

FY2015FY2016

1,230.1

1,243.7

+13.5

+1.1%

1,028.0

956.7(71.3)(6.9%)

170.5

245.3

+74.8

+43.9%

Interest income and dividends

141.4

148.2

+6.8

+4.8%

Income from monetary trusts, net

11.9

4.4

(7.4)

(62.5%)

Gains on sale of securities

12.2

1.3

(10.8)(89.3%)

Foreign exchange gains, net

－

14.6

+14.6

－

Gains on separate accounts, net

－

76.4

+76.4

－

1,169.3

1,183.5

+14.2

+1.2%

Insurance claims and other payments

363.3

372.4

+9.0

+2.5%

Provision for policy reserves and others

613.4

596.7

(16.7)(2.7%)

Investment expenses

23.3

36.1

+12.7

+54.7%

－

30.0

+30.0

－

14.7

－

(14.7)(100.0%)

133.3

137.0

+3.7

+2.8%

Ordinary profit

60.7

60.1

(0.6)

(1.0%)Net income

37.0

35.1

(1.9)

(5.2%)

Mar. 16Mar. 17

Change from Mar. 16

Securities

7,273.3

8,093.1+819.8+11.3%

Policy reserves

7,336.5

7,929.9+593.4

+8.1%

482.1

473.5

(8.6)

(1.8%)

150.6

127.7

(22.8)(15.2%)

8,035.4

8,873.6+838.2+10.4%

850.3

989.6

+139.2+16.4%

Ordinary revenues

1,243.7

Income from insurance premiums
Investment income

60.1
60.7

(1.0%)

Ordinary expenses(JPY bn)
FY2015FY2016◆ Ordinary revenues increased year on year.
◆ Income from insurance premiums decreased led
by a decline in sales of single premium products.
◆ Investment income increased due mainly to anincrease in investment income in the separate
account.
◆ Ordinary profit was flat year on year. This wasdue to positive factors, including a decline in theprovision of policy reserves for minimum
guarantees for variable life insurance owing to alower acquisition of new policies and an
improvement in market conditions, and anincrease in profit from accumulated policies inforce, were offset by such negative factors as adeterioration in net gains/losses on derivativetransactions to hedge market risks related tominimum guarantees for variable life insurance
and lower gains on sale of securities in thegeneral account.

Losses on derivatives, net
Losses on separate accounts, net
Operating expenses(JPY bn)

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

Sony Financial Holdings Inc. All Rights Reserved

Change7

Overview of Operating Performance:
Sony Life (Non-consolidated)(JPY bn)

FY2015FY2016

ChangeNew policy amount

5,151.3

4,957.5(3.8%)

Lapse and surrender amount

1,931.4

1,839.3(4.8%)

Lapse and surrender rate

4.72%

4.27%

(0.45pt)

43,149.8

45,334.1+5.1%

Annualized premiums from new policies

85.0

78.1

(8.1%)Of which, third-sector products

15.7

15.7

+0.0%

781.3

820.8

+5.1%

179.7

187.4

+4.3%

Policy amount in force

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

Notes:
1. Figures for new policy amount, lapse and surrender amount, lapse and surrender rate, policy amount in force,
annualized premiums from new policies and annualized premiums from insurance in force are calculated as thetotal of individual life insurance and individual annuities.
2. The lapse and surrender rate shows the ratio derived by dividing the amount of lapses and surrenders,
not adjusted for policy amount decreases, increases, and reinstatements, by the policy amount in force at the
beginning of the fiscal year.

(JPY bn)

FY2015

Gains from investment, net (General account)

161.8

132.7

(18.0%)

Core profit

43.0

83.8

+94.9%

Positive spread

15.3

15.4

+0.7%

Non-consolidated solvency margin ratio

FY2016

ChangeMar. 16Mar. 17

Change from
Mar. 16

2,722.8%

2,568.8%(154.0pt)

Sony Financial Holdings Inc. All Rights Reserved<Reasons for changes>◆ Decreased due to lower salesof variable life insurance
despite favorable sales of U.S.
dollar-denominated insurance
and term life insurance.
◆Decreased due to lower salesof variable life insurance andsingle premium whole life
products despite favorable
sales of term life insurance andU.S. dollar-denominatedinsurance.

◆ Increased due to a decline in
the provision of policy reserves
for minimum guarantees forvariable life insurance owing toa lower acquisition of newpolicies and an improvement inmarket conditions, and anincrease in profit fromaccumulated policies in force.

8

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

606

Number of new policies

629（Thousandsof policies)(18.5%)

513（JPY tn）

6
5

4.77

4.95

5.15

600
500
400

(3.8%)

4300

3（JPY bn）

80

85.0
76.6

(8.1%)

78.1

60

40

200

2
100

1
0

Of which, third-sector

FY2014FY2015FY2016

0

20

+0.0%

15.2

15.7

15.7

FY2014FY2015FY20160Sony Financial Holdings Inc. All Rights Reserved

9Operating Performance :Sony Life (Non-consolidated) (2)Annualized Premiums from New Policies by Product
FY2015（12M） ¥85.0 billion

Yen whole
Endowment/ life 28%
Annuities
28%
U.S. dollarSingle premium denominatedwhole life 2%
Whole life
5%

Protection-type（term life）
37%

FY2016（12M） ¥78.1 billion

Yen whole
Endowment/ life 14%
Annuities
U.S. dollar21%
⼀時払終⾝Singlepremium denominatedwhole life 8%
1%lifeWhole
1%Protection-type（term life）
56%

Sony Financial Holdings Inc. All Rights Reserved

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

Annualized Premiums from Insurance in Force(Individual Life Insurance + Individual Annuities)
Policy amount in force+3.7 %

6.67
50
40

40.9

Annualized premiums from insurance in force

Number of policies in force（JPY tn）

60(Individual Life Insurance + Individual Annuities)

7.04
43.1

+5.1 %

7.30（Millions（JPY bn）
of policies)

8

800

6

600

4

400

2

200

Of which, third-sector

781.3

+5.1%

172.8

179.7

+4.3%

Mar. 15

Mar. 16

735.7

820.8

45.3

30
20
10

0

0
Mar. 15

Mar. 16Mar. 17187.4

0Sony Financial Holdings Inc. All Rights Reserved

Mar. 17

11

Operating Performance :Sony Life (Non-consolidated) (4)Lapse and Surrender Rate*(Individual Life Insurance + Individual Annuities)

（%）

8

6

5.35

4.72

4

4.27
(0.45pt)

20FY2014FY2015FY2016*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

12

Operating Performance :Sony Life (Non-consolidated) (5)Interest Income and Dividends

Income from Insurance Premiums(JPY bn)(JPY bn)

1,000

1,028.0
914.0

956.7

150

133.5

141.4

+4.8%

148.2

(6.9%)

800
100
600

400

50

200

0

0
FY2014FY2015FY2016FY2014

Sony Financial Holdings Inc. All Rights Reserved

FY2015FY2016

13

Operating Performance :Sony Life (Non-consolidated) (6)Ordinary Profit

Core Profit(JPY bn)

80(JPY bn)

83.8
76.5

80

79.6

+94.9%

60

40

60

43.0

60.1

60.7
(1.0%)

40

20

20

0

0

FY2014FY2015(Reference) Impact on core profit

FY2014FY2016(JPY bn)

FY2014FY2015FY2016

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

13.0

15.3

15.4

(10.6)(34.7)

(7.8)

74.1

62.5

76.2

FY2015FY2016(Reference) Main differences from core profit(JPY bn) FY2014

Capital gains (losses) excluding gains orlosses on hedges (*)
Gains (losses) on hedges of variable life
insurance
Provision of contingency reserve (*)

FY2015FY2016

10.7

20.4

(0.4)

(2.3)

3.9

(15.6)

(5.0)

(6.4)

(7.2)

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

Sony Financial Holdings Inc. All Rights Reserved

14

Operating Performance :Sony Life (Non-consolidated) (7)Number of Lifeplanner Sales Employees+321(Number)

4,933

5,000

4,612
4,500

4,329

4,352

Mar. 15

Jun. 15

4,415

4,682

4,751

4,730
+203

4,376

4,000

3,500

3,000
0

Sep. 15

Dec. 15

Mar. 16

Jun. 16

Sony Financial Holdings Inc. All Rights Reserved

Sep. 16

Dec. 16Mar. 17

15

Operating Performance :Sony Life (Non-consolidated) (8)Diversify asset management under the negative interest rate environment(purchase securities in the general account assets)

FY2014（12M）Japanesestocks0.4%

Othersecurities
0.4%

⽶国債 ×%

外国公社債
Foreignbonds3.9%
3.9%

Foreign bonds
Japanese stocks
Other securities

Foreign bonds
Japanese
2.3%
stocks0.5%

外国公社債

Japanese
社債 2.3%
corporate
bonds
11.9%
11.9%
JGBs
国債
85.3%

85.3%

continue to invest in assets that match the liability
characteristics.

JGBs

JGBs
国債
95.4%
95.4%

FY2015 (12M）■Promote diversification of investment assets while

・Expand investments in ultralong-term Japanese
corporate bonds (including FILP agency bonds)
・Significantly increase investments in U.S. government
bonds, responding to higher sales of U.S. dollar
denominated insurance policies.

FY2016（12M）
JGBs
Japanese
corporate bonds
Foreign bonds
Japanese stocks

Japanese local
government bonds 0.1%

Japanese
Stocks 0.5%
Foreign
bonds
28.3%

JGBs

国債
JGBs
×%
42.5%

Japanese
社
Corporate
×%
bonds
28.6%

Japanese corporate
bonds
Foreign bonds
Japanese stocks
Japanese local
government bonds

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

Sony Financial Holdings Inc. All Rights Reserved

16

Operating Performance :Sony Life (Non-consolidated) (9)Breakdown of General Account Assets
Mar. 16(JPY bn)Amount<Asset management review>

Mar. 17%

Amount%Japanese bonds(including JGBs)

6,351.1

88.4%

6,828.7

86.6%

Japanese stocks

33.3

0.5%

37.6

0.5%

Foreign bonds

70.1

1.0%

274.3

3.5%

Foreign stocks

23.0

0.3%

31.5

0.4%

Monetary trusts

280.9

3.9%

273.8

3.5%

Policy loans

171.6

2.4%

180.3

2.3%

Real estate*

115.8

1.6%

117.5

1.5%

Cash and call loans

52.5

0.7%

40.8

0.5%

Others

86.4

1.2%

99.1

1.3%

7,185.0

100.0%

7,884.0

100.0%Total

We have continued to accumulate
ultralong-term bonds to match the liability
characteristics of insurance policies withlong-term maturities with the aim of
reducing interest rate risk.
<Bond duration>
Mar. 15 20.3 years
Mar. 16 21.8 years
Mar. 17 21.3 years■ Investment in the monetary trusts ismainly into Japanese government bonds.
■ The holding ratio on the real status ofJapanese government and corporate
bonds including those invested inmonetary trusts in the general accountassets: Mar. 17・・・90.1%（Mar. 16・・・92.3 %）*Real estate is the total of land, buildings, and construction in progress.

Sony Financial Holdings Inc. All Rights Reserved

17

Operating Performance :Sony Life (Non-consolidated) (10)Average Assumed Interest Rate andInvestment Yield for Core Profit

Positive Spread

Average assumed interest rate
Investment yield for core profit(JPY bn)

15.3

15

+0.7%

15.4

（%）

3.00

13.0
2.35
10
2.00

2.12

2.31

2.06

2.24
2.00

5

0

FY2014FY2015FY20161.00
FY2014

Sony Financial Holdings Inc. All Rights Reserved

FY2015FY201618

Operating Performance :Sony Life (Non-consolidated) (11)Non-consolidated Solvency Margin Ratio

（%）

3,000

2,555.0

2,722.8

2,500

2,568.8(154.0pt)

2,000

1,500

1,0000Mar. 15

Mar. 16Mar. 17

Sony Financial Holdings Inc. All Rights Reserved

19Highlights of Operating Performance:
Sony Assurance
Ordinary revenues

96.9

+5.6%

Ordinary profit

102.3

FY2015

Ordinary revenues

+6.8%

4.9

(JPY bn)

FY2016◆ Both ordinary revenues and ordinary profit
increased year on year.
 Ordinary revenues expanded owing to an increasein net premiums written primarily for mainstay
automobile insurance.
◆ Ordinary profit increased due mainly to a decline inprovision for reserve for outstanding losses, anincrease in underwriting profit and higher
investment income, partially offset by an increasein operating expenses.
◆ Net income increased owing to the recording of aloss on disposal of software in progress of ¥0.8
billion as an extraordinary loss in FY2015, in
addition to the increase in ordinary profit.

FY2016

Change

96.9

102.3

+5.4

+5.6%

Underwriting income

95.6

100.3

+4.7

+4.9%

Investment income

1.2

1.9

+0.6

+54.9%

92.2

97.3

+5.1

+5.5%

Underwriting expenses

67.7

70.5

+2.7

+4.1%

Investment expenses

0.0

0.0

(0.0)

(92.6%)

Operating general andadministrative expenses

24.4

26.7

+2.3

+9.6%

Ordinary profit

4.6

4.9

+0.3

+6.8%

Net income

2.5

3.5

+0.9

+35.9%

Ordinary expenses

4.6

FY2015(JPY bn)(JPY bn)

Mar. 16Mar. 17

Change from
Mar. 16

Underwriting reserves

95.7

106.1

+10.4

+10.9%Net assets

28.3

29.4

+1.1

+3.9%

Total assets

172.3

186.5

+14.2

+8.2%

Sony Financial Holdings Inc. All Rights Reserved

20Overview of Operating Performance:
Sony Assurance(JPY bn)

FY2015FY2016<Reasons for changes>

ChangeDirect premiums written

94.3

99.0

+5.0%

Net premiums written

95.5

100.2

+4.9%

Net losses paid

48.1

50.1

+4.3%

Underwriting profit

3.4

3.0

(11.5%)Net loss ratio

57.8%

57.5%

(0.3pt)Net expense ratio

27.1%

28.3%

+1.2ptCombined ratio

84.8%

85.8%

+1.0pt◆ Increased mainly in its
mainstay automobile
insurance.

◆ Increased due to anincrease in system-related
expenses, in addition tohigher marketing costs inline with new productlaunch.

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

FY2015FY2016

ChangeE. I. loss ratio

63.3%

62.3%

(1.0pt)E. I. loss ratio +Net expense ratio

90.4%

90.6%

+0.2ptMar. 16Mar. 17

Number of policies in force

1.79 mn

1.89 mnNon-consolidated
solvency margin ratio

693.5%

730.8%◆ Declined due to a decreasein provision for reserve foroutstanding losses, inaddition to a persistently
low car accident ratio in
automobile insurance.

Change from Mar. 16+0.09 mn

+5.3%

+37.3pt

Note: The number of policies in force is the total of automobile insurance and medical insurance policies.

Sony Financial Holdings Inc. All Rights Reserved21Sony Assuranceʼs Underwriting Performanceby Type of Policy
Net Premiums Written

Direct Premiums Written(JPY ｍn)
Fire

FY2015FY2016348

245(29.6%)－－－

Personal accident

8,679

8,767

+1.0%

Voluntary
automobile

85,30890,001

+5.5%

－

－

－

94,336

99,014+5.0%

MarineCompulsory
automobile liability
Total

FY2015FY2016

Change

Fire

44

24

(43.9%)

Marine44(2)－Personal accident

8,953

9,044

+1.0%

Voluntary
automobile

85,12389,746+5.4%

Compulsory
automobile liability

1,384

1,460

+5.5%

Total

95,549100,274+4.9%*Medical insurance is included in personal accident.

Net losses paid
(JPY ｍn)(JPY ｍn)

ChangeFY2015FY2016

ChangeFire1

6+298.1%Marine46(6)－Personal accident

2,472

2,615

+5.8%

Voluntary
automobile

44,32046,263+4.4%

Compulsory
automobile liability

1,270

1,301

+2.5%

Total

48,11150,181+4.3%

Sony Financial Holdings Inc. All Rights Reserved

22

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

Net Premiums Written andNumber of Policies in Force
Voluntary automobile insurance
Others100

Ordinary profit

Number of policies in force(JPY bn)120

Personal accident insurance

1.70
91.7

1.79

+5.3%

95.5

+4.9%

(ｍn ofpolicies)

1.89
100.2
9.0

1.4

1.5

80

89.7

8.1

(JPY bn)

80

7.6

7.1

+6.2%

60

40

60

Adjusted ordinary profit

4.2

4.9

+6.8%

4.6

1

20
40

0.5
20

0
FY20140

0FY2014FY2015FY2016

The number of policies in force is the total of automobile insurance and medical
insurance policies.
More than 90% of personal accident insurance is medical insurance.

FY2015FY2016*Adjusted ordinary profit = Ordinary profit + Provision for catastrophe reserve(Reference) Provision for catastrophe reserve(JPY bn)

Provision for catastrophe reserve

FY20142.8

FY20153.0

FY2016
3.1*Provision for catastrophe reserve is described as positive amount.

Sony Financial Holdings Inc. All Rights Reserved

23

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

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

（%）

100

(Reference) Combined Ratio
Net expense ratio

（%）

91.0

90.4

+0.2pt

90.6

80

100

84.3

84.8

+1.0pt57.8(0.3pt)85.8

80(1.0pt)

60

64.3

62.3

63.3

40

60

57.6

40
+1.2pt

20

57.5

26.7

27.1

+1.2pt28.3

0FY2014FY2015FY2016

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

20

26.7

27.1

28.3

FY2014FY2015FY20160Notes: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

24

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

730.8%

800

629.6%

693.5%

600+37.3pt

400

200

0
Mar. 15

Mar. 16Mar. 17

Sony Financial Holdings Inc. All Rights Reserved25

Highlights of Operating Performance:
Sony Bank (Consolidated/Non-consolidated)<Consolidated>

Consolidated ordinary revenues
Consolidated ordinary profit

37.9

+1.5%

(15.7%)

5.9(JPY bn)

38.5

5.0

FY2016

ChangeConsolidated ordinary
revenues

37.9

38.5

+0.5

+1.5%

Consolidated ordinary profit

5.9

5.0

(0.9)

(15.7%)

Profit attributable to ownersof the parent

3.9

3.3

(0.5)

(15.3%)FY2015FY2016

Ordinary revenues

34.8

35.1

+0.2

+0.6%

Gross operating profit

21.6

21.1

(0.5)

(2.6%)Net interest income

16.5

17.9

+1.3

+8.4%

Net fees and commissions

0.1

(1.5)

(1.7)

－

Net other operating income

5.0

4.7

(0.2)

(4.5%)

General and administrative
expenses

15.9

16.5

+0.5

+3.3%

Net operating profit

5.7

4.6

(1.1)

(20.4%)

Ordinary profit

5.8

4.6

(1.2)

(20.9%)Net income

3.9

3.1

(0.7)

(18.8%)

Mar. 16Mar. 17

77.4

81.3

+3.9

+5.0%

3.3

4.7

+1.4

+43.4%

2,126.5

2,424.2+297.6+14.0%<Non-consolidated>(JPY bn)(JPY bn)

FY2015FY2015FY2016<Consolidated>◆ Ordinary revenues increased due to an increase in interest
income on loans in line with a favorably growing balance ofmortgage loans, partially offset by a decrease in interest anddividend income on securities.
◆ Ordinary profit decreased due to the lower level of interest
rates, an increase in initial expenses led by a higher executionof mortgage loans, and lower volumes of foreign currency andinvestment trust transactions of customers.
<Non-consolidated>◆ Both gross operating profit and net operating profit decreased.
・Net interest income increased due to a rise in interest
income on loans.
・Net fees and commissions decreased due to an increase ininitial expenses led by a higher execution of mortgage loans.
・Net other operating income decreased due to lower fees andcommissions from foreign currency transactions of customers.

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

Sony Financial Holdings Inc. All Rights Reserved

ChangeChange from
Mar. 1626

Overview of Operating Performance:
Sony Bank (Non-consolidated) (1)Change from
Mar. 16Mar. 16Mar. 17

Customer assets

2,034.4

2,227.1+192.6+9.5%

Deposits

1,923.5

2,112.9+189.4+9.9%

Yen

1,587.9

1,764.9+177.0+11.1%

335.5

348.0

+12.4

+3.7%

110.9

114.1

+3.1

+2.9%

Loans outstanding

1,344.1

1,539.6+195.4+14.5%

Mortgage loans

1,237.1

1,452.4+215.3+17.4%

Card loans

10.5

18.0

+7.5

+71.7%

Others

96.5

69.0
*1

(27.4)+28.5%

1.13 mn

1.24 mn+0.11 mn+9.8%

Non-performing assets ratio *2(Based on Financial
Reconstruction Law)

0.23%

0.19%

(0.04pt)

Capital adequacy ratio *3(domestic criteria)

9.89%

9.75%

(0.14pt)(JPY bn)

Foreign currency
Investment trusts

Number of accounts<Reasons for changes>◆ Increased in yen ordinary
deposits increased due mainly
to newly accumulated funds
via the increased number ofaccounts, as well as theconversion from foreign
currencies backed by yen
depreciation.
◆ Increased despite theconversion from foreign
currencies into yen, led by yen
depreciation.

◆ Expanded reflecting higher
demand for refinancing
mortgage loans.

*1 Loans in others include corporate loans of ¥69.0billion*2 Non-performing loans (loans based on the Financial Reconstruction Act) /Total loan exposure*3 Please refer to the graph of the non-consolidated capital adequacy ratio (domestic criteria) on P30.
Capital adequacy ratios has been calculated by applying fundamental internal rating based approach (FIRB) from March 31, 2017.

Sony Financial Holdings Inc. All Rights Reserved27

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

FY2015FY2016

Change

21.6

21.0

(0.5)

(2.6%)

Yield on investment
Interest spread

Net interest income*1

①

18.8

20.6

+1.8

+9.6%

Net fees and commissions*2

②

0.9

(0.9)

(1.9)

ー

Net other operating income*3

1.8

1.4

(0.4)

(23.0%)

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

19.7

19.6

(0.1)

(0.6%)

Operating expenses and otherexpenses ③

15.9

16.5

+0.6

+3.9%

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

3.8

3.1

(0.7)

(19.2%)

Yield on financing

（%）

1.5

1.20
1.0

0.93

1.19
+0.01pt

0.94
0.94■Managerial accounting basis
The following adjustments are made to the figures on a financial account for profits andlosses more appropriately.

0.5

0.27

*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.

0.25

0.0

*3: Net other operating income: After the above adjustments (*1 and *2), mainly consistsof profits and losses for bond and derivative dealing transactions.

FY2015FY2016■Core profit
Profits and losses exclude net other operating income, which includes those on bond andderivative dealing transactions, and stands for Sony Bankʼs basic profits.

Note: Interest spread=(Yield on investment)-(Yield on financing)Sony Financial Holdings Inc. All Rights Reserved

28

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

Foreign currency deposits

Mortgage loans+189.4(JPY bn)

2,000

Loans

1,878.2
327.2

1,923.5

2,112.9

Others(JPY bn)

2,000

348.0

1,539.6

335.5+195.4

1,500

1,500

1,344.1
1,187.1

87.1*

107.0

112.8

1,452.4

1,000

1,000

1,551.0

1,587.9

1,764.9

1,074.3

1,237.1

Mar. 15

Mar. 16

500

500

0

0
Mar. 15

Mar. 16Mar. 17Mar. 17*Corporate loans of ¥69.0 billion, Card loans of ¥18.0 billion

Sony Financial Holdings Inc. All Rights Reserved

29

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

Balance of Securities by Credit Rating
AAA
BBB(JPY bn)800

AA
A
Others(Domestic Criteria)

（%）
15

730.0
620.9

+10.3

631.2

600

10.65

9.89

(0.14pt)

9.75

10

400
5

200

0

0
Mar. 15

Mar. 16Mar. 17Mar. 15
Mar. 16Mar. 17
Notes:
1. Calculated based on the standard FSA Notification No. 19 (2006), which
establishes standards based on Article 14-2 of the Banking Act of Japan for
determining the capital adequacy of a bank in light of the assets held by the bank.
2. Capital adequacy ratios has been calculated by applying fundamental internalrating based approach (FIRB) from March 31, 2017.

Sony Financial Holdings Inc. All Rights Reserved30Forecast of Consolidated Financial Results
for the Fiscal Year Ending March 31, 2018
(FY2017)

Sony Financial Holdings Inc. All Rights Reserved31Forecast of Consolidated Financial Results for FY2017
Consolidated ordinary revenues are expected to increase, consolidated ordinary profit andprofit attributable to owners of the parent are expected to be essentially flat.
FY2016 (Actual)
Consolidated ordinary revenues
Life insurance business
Non-life insurance businessBanking business
Consolidated ordinary profit
Life insurance business
Non-life insurance businessBanking businessProfit attributable to owners of the parent

FY2017 (Forecast)

Change1,381.6

1,430.0+3.5%

1,243.9
102.3
38.5

1,276.1
108.9
40.6

+2.6%
+6.4%
+5.4%

66.3

67.0

+1.0%

56.8
5.0
5.0

56.4
4.6
6.6

(0.7%)(8.0%)+30.6%

41.6

42.0

+0.9%

For FY2017, stable business growth is expected to continue in all the businesses.
Consolidated ordinary revenues are expected to increase, while consolidated ordinary profit and profit attributable to owners of the parent are expected to be
essentially flat.
<Segment information for ordinary revenues and ordinary profit＞■Life insurance business
Ordinary revenues are expected to increase year on year because we anticipate stable increases in insurance premium revenues.
Ordinary profit is expected to be almost flat because we expect the provision of policy reserves to rise in line with revision in standard yields used for calculating
policy reserves even though we expect an improvement in net gains/losses on derivative transactions to hedge market risks related to minimum guarantee forvariable life insurance as well as an increase in profit from accumulated policies in force.
■Non-life insurance business
Ordinary revenues are expected to increase year on year, in line with growth in net premiums written, primarily for automobile insurance.
Ordinary profit is expected to decrease year on year because we expect the loss ratio to be higher due to higher provision for reserve for outstanding losses
than in FY2016.
■Banking business
Ordinary revenues are expected to increase year on year, due to stable business growth, reflecting a growing balance of mortgage loans and strengthened
foreign currency business
Ordinary profit is expected to increase year on year, due mainly to efforts to appropriately control operating expenses and the increase in ordinary revenues.
*Please see P41 for the detail of Life insurance business forecast.

Sony Financial Holdings Inc. All Rights Reserved

32Changes in Medium-term Dividend Policy
and Dividend Forecast for FY2017

Sony Financial Holdings Inc. All Rights Reserved33Changes in Medium-term Dividend Policy and
Dividend Forecast for FY2017
As the expansion of business scale accelerates, we will determine specificdividend amounts by taking into account not only statutory profit but also othereconomic value-based profit indicators<Medium-term Dividend Policy>
 SFH aims for steady increases in dividends in line with earnings growth over the medium tolong term, while securing sufficient internal reserves to ensure the financial soundness ofGroup companies and to invest in growth fields. Management will examine earnings growthover the medium to long term by taking into account not only statutory profit but also othereconomic value-based profit indicators that are more suitable for valuing the growth of thelife insurance business. Furthermore, management will determine specific dividend amounts
for each fiscal year by taking into account a comprehensive range of factors surrounding theSony Financial Group.
■ Profit attributable to owners of the parent and dividend results/forecast

Profit attributable to owners of the parent

Net income per share
Dividend per share

FY2013

FY2014FY2015FY2016(Plan)(Forecast)¥40.5 billion¥54.4 billion¥43.3 billion¥41.6 billion¥42.0 billion¥93.11¥125.10¥99.67¥95.69¥96.65

¥30

¥40

¥55

¥55

¥55

57.5%

57.0%

FY2017* For the foreseeable future, we plan to pay a dividend corresponding to more than 50% of net income per share.
(Reference) Dividend payout ratio

32.2%

32.0%

Sony Financial Holdings Inc. All Rights Reserved

55.2%

34

Sony Lifeʼs Preliminary MCEV and ESR
as of March 31, 2017MCEV as of March 31, 2016 is restated by using ultimate forward rates (UFR).
The calculation of MCEV as of March 31, 2016 (after restated) and as of March 31, 2017, in accordance with
the MCEV principles and verified by outside specialists, is scheduled to be announced on May 22, 2017.
A part of the calculations of MCEV adopted simplified method for that as of December 31, 2016.
Please keep in mind that the validity of these calculations has not been verified by outside specialists.

*In this part, figures, ratios and percentages changes have been rounded.

Sony Financial Holdings Inc. All Rights Reserved35Sony Lifeʼs MCEV
ChangefromMar. 16

ChangefromDec. 16Mar. 16

Dec. 16Mar. 171,330.1

1,282.7

1,441.1+111.0+158.4

Adjusted net worth

2,074.4

1,831.1

1,657.7(416.7)(173.4)

Value of existing business(744.4)(548.4)(216.7)+527.7+331.7

FY15.4Q(3M)

FY16.1Q(3M)

FY16.2Q(3M)

FY16.3Q(3M)

FY16.4Q(3M)

FY16.4Q(12M)

New business value

3.9

(0.2)

5.0

10.2

14.1

29.1

New business margin

1.2%(0.0%)

1.6%

4.0%

3.8%

2.2%

(JPY bn)

MCEV(JPY bn)

Notes:
1. Calculated MCEV as of December 31, 2016 by using updated economic assumptions and lapse and surrender rate from March 31, 2016.
2. New business value for FY16 is calculated accumulating new business value for each month based on economic assumptions at the end of eachmonth. New business value for FY15.4Q (3M) is calculated accumulating new business value for each quarter based on economic assumptions at theend of each quarter.

 Reasons for changes in MCEV
・MCEV as of March 31, 2017 increased ¥158.4 billion from December 31, 2016, due mainly to an acquisition of new policies
and a rise in interest rates in Japanese yen.
 New business value
・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.
*Please refer to the appendix P52 for trend on JGB yields.

Sony Financial Holdings Inc. All Rights Reserved36Sony Lifeʼs ESR(JPY bn)

Mar. 16

Dec. 16Mar. 17

Insurance risk*

989.3

980.2

937.5

Market-related risk

324.2

369.5

405.1

255.2

288.5

308.9

Operational risk

31.4

31.1

28.1

Counter party risk

2.0

2.4

1.9

(374.4)(390.4)(392.0)

972.4

992.9

980.6

Of which, interest rate risk**

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

(JPY bn)

MCEV + Frictional costs
ESR

Mar. 16

Dec. 16Mar. 17

1,366.5

1,325.5

1,476.6

141%

134%

151%

Notes:
1. The risk amount based on economic value refers to the total amount of Sony Lifeʼs risks comprehensively examined by a market consistent approach,including insurance risk and market-related risk.
2. The solvency risk capital on an economic value basis is calibrated at VaR (99.5) over one year and based on the internal model, which is a similar
but modified model based on the EU Solvency II standard method.
3. ESR=(MCEV + Frictional costs) / Risk amount based on economic value.

 The risk amount based on economic value as of 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 interest rates.
ESR as of March 31, 2017 was 151%, up 17pt from December 31, 2016 due mainly to a decrease in a risk amount and an increasein MCEV.
 Sony Life will continue to improve ESR levels by accumulating new business value through reinforcing its sales capabilities as well as
ensuring profitability.

Sony Financial Holdings Inc. All Rights Reserved37

Appendix

Sony Financial Holdings Inc. All Rights Reserved38

Recent Topics 1
AEGON Sony Life Insurance

Launch of sales: December 1, 2009
Common stock: ¥30 billion (including capital reserves of 15 billion)
Equity ownership: Sony Life insurance Co Ltd 50%, AEGON international B.V. 50%
Marketing products: Individual Variable Annuities
Sales Channels: Lifeplanner sales employees and partner Banks (30*) *As of May 15, 2017

SA Reinsurance Ltd

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

Sony Bankʼs Mortgage Loans through Sony Life
■Sony Life accounts for 21% of the balance of mortgage loans as of March 31, 2017
Sony Life accounts for 20% of the amount of new mortgage loans for FY2016*Sony Life started handling banking agency business in January 2008.

Sony Assuranceʼs Auto Insurance Sold by Sony Life
■Sony Life accounts for approx. 4% of new automobile policies for FY2016*Sony Life started handling automobile insurance in May 2001.

Sony Financial Holdings Inc. All Rights Reserved

39

Recent Topics 2
2016-04-01

Sony Lifecare Group opened its first newly built nursing care home “SONARE Soshigaya-Okura” in Tokyo

2016-05-02

Sony Life commenced sale of a new product: “Level Premium Plan Term Life Insurance with Reduced Surrender Value(Disability/Nursing Care Type)” and “Level Premium Plan Term Life Insurance with No Surrender Value (Disability/Nursing Care Type)”

2016-06-23

SFH changed its President, Representative Director

2016-07-01

Sony Life opened a representative office in Singapore

2016-07-04

SFH and Sony Life relocated their headquarters to Chiyoda-ku, Tokyo

2016-10-01

Sony Life commenced sale of new product: “Non-participating Group Welfare Term Life Insurance”

2016-10-03

Sony Life adopted paperless insurance procedures for its policyholders

2016-10-25

Sony Life acquired an entity stake in ClearView Wealth Limited (Australia) and announced business alliance (entered into cooperation agreement
on Jan. 13, 2017)2016-10-31

Sony Bank began offering U.S. dollar-denominated active funds on investment trusts and revised the service site

2016-11-07

Sony Bank began offering foreign currency settlement services for teenage customers for Sony Bank WALLET

2016-12-01

Sony Assurance began offering new discount premiums for new customers who contracted automobile insurance via Internet (increased discount rates
from ¥8,000 to ¥10,000)

2017-01-04

Sony Bank began offering new preferential services called “Club S”

2017-01-10

Sony Assurance commenced sale of new product: “ZiPPi” medical insurance to indemnify hospital inpatient expenses and revised “SURE”
medical and cancer insurance

2017-02-01

Sony Assurance and Yahoo! JAPAN announced to begin joint research with a view to developing telematics insurance products andservices for individuals using driving behavior data from car navigation systems

2017-02-20

Sony Lifeʼs Lifeplanner Sales Employees began handling Sumitomo Mitsui Trust Bankʼs life insurance trusts and other services

2017-03-01

Sony Life established a joint venture “IBJ Life Design Support Inc.” with IBJ Inc.

2017-03-01

Sony Bank began issuing cards with a Sony Bank WALLET / “PlayStation” design through an alliance with Sony Interactive Entertainment Inc.

2017-04-02

Sony Life commenced sale of new product: “Living Benefit Decreasing Term Life Insurance (Living Standard Type / Non-Participating Type)”

2017-04-14

Sony Lifecare announced to convert Yuuai Holdings to a subsidiary2017-04-28

Sony Bank announced changes of its President, Representative Director

2017-05-01

Sony Lifecare Group opened its second newly built nursing care home “SONARE Urawa” in Saitama PrefectureSony Financial Holdings Inc. All Rights Reserved

40Analysis on Ordinary Profit for Life Insurance Business(JPY bn)

56.8(12.0)

Expenses related to the provisionof policy reserves for minimum
guarantees for variable life
insurance

Increase in profit owing to
growing policy amount in force

Impact of revision in standard
yields used for calculating
policy reserves and others

FY2016

Gains on sale of securities

+6.0

(1.4)

56.4

Others

+4.0

+3.0

（※2）

（※1）

FY2017 (Forecast）（※1）Including higher expenses in line with new policies and changes in product mix for new policies and others. However, excluding changes inprovision of policy reserves for minimum guarantees for valuable life insurance.
（※2）Including changes in provision of policy reserves for minimum guarantees for valuable life insurance and gains (losses) on hedges of variable life insurance.

Sony Financial Holdings Inc. All Rights Reserved41Sony Lifeʼs Product Revisions
 FY16 Product Revisions(Sales suspension)
May: Single premium whole life insurance (non-notification type), Semi-participating
individual annuities, Semi-participating endowment insurance (short-term
payment), and Non-participating endowment insurance (short-term payment)
Jul.: Single premium semi-participating whole life nursing-care insurance
Oct.: Interest rate-sensitive whole life insurance(Premium revisions)Apr.: Single premium whole life insurance (non-notification type)
Jul.: Semi-participating endowment insurance, Non-participating endowment insurance
Oct.: Variable life insurance (whole life type), Limited payment whole life insurance,
Living benefit whole life insurance (living standard type), Living benefit insurance(whole life type), Whole life nursing-care insurance (reduced surrender value),
Semi-participating whole life nursing-care insurance, Specialty endowment
insurance, Whole-life cancer insurance

 FY17 Premium Revisions

Apr.: Long-term level premium plan term life insurance (with disability benefit),
Cancer hospitalization insurance and other products
Sony Financial Holdings Inc. All Rights Reserved42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)
Mar. 15(JPY bn)
Held-to-maturity securities
Policy reserve matching bonds
Available-for-sale securities

Mar. 16

Fair value

6,068.6

7,514.2

1,445.5

41.3

277.3

303.3

25.9

Fair value

5,383.9

7,410.1

2,026.2

-

251.2

292.5

Fair value

4,878.7

5,718.2

839.4

-

-

Carrying
amountCarrying
amountMar. 17Net
unrealized
gains(losses)Net
unrealized
gains(losses)Net
unrealized
gains(losses)

Carrying
amount1,007.8

1,176.6

168.8

887.9

1,091.6

203.6

896.5

1,069.9

173.3

Japanese government andcorporate bonds

974.6

1,120.1

145.5

854.3

1,040.3

186.0

852.6

1,013.3

160.7

Japanese stocks

13.4

29.4

16.0

13.6

25.6

12.0

13.6

27.0

13.3

Foreign securities

19.4

26.4

6.9

19.8

25.2

5.4

30.0

29.1

(0.8)

Other securities

0.3

0.6

0.3

0.1

0.3

0.1

0.1

0.3

0.1

5,886.6

6,894.9

1,008.3

6,523.1

8,794.3

2,271.1

7,242.5

8,887.5

1,644.9

Total

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, 2015; Carrying amount: ¥44.2 billion, Fair market value: ¥57.5 billion, Net unrealized gain (losses): ¥13.2 billion
As of Mar. 31, 2016; Carrying amount: None
As of Mar. 31, 2017; Carrying amount: None

Valuation gains (losses) on trading-purpose securities
Mar. 15
Balance sheet
amountNet valuation gains(losses)recorded in income

Mar. 16
Balance sheet
amountNet valuation gains(losses)recorded in income(JPY bn)

Mar. 17
Net valuation
gains (losses)
Balance sheet
amountrecorded inincome

1.0
2.2
0.0
0.1
Note: The above chart includes trading-purpose securities included in “monetary trusts,” etc

2.0Sony Financial Holdings Inc. All Rights Reserved

(0.1)

43

Sony Lifeʼs Interest Income and Dividends (Details)(JPY ｍn)

FY2015FY2016

Change00+286.6%

115,655

121,103+4.7%

Japanese stocks

522

527

+0.9%

Foreign securities

7,246

8,886

+22.6%

Other securities

1,519

255

(83.2%)

Loans

6,174

6,377

+3.3%

Real estate

10,261

10,869

+5.9%

71

265

+269.9%141,450

148,284+4.8%

Cash and deposits
Japanese governmentand corporate bonds

Others
Total

Sony Financial Holdings Inc. All Rights Reserved

44Sony Lifeʼs Capital Gains/Losses
FY15

FY16

1Q
(3M)

2Q
(6M)

3Q
(9M)

4Q
(12M)

1Q
(3M)

2Q
(6M)

3Q
(9M)

4Q
(12M)

6,258

12,246

19,762

27,387

14,501

11,79625,628

16,114

Income from monetary trusts, net

1,846

3,631

7,119

7,119

－

－

－

－

Income from trading securities, net

－

－

－

41

7

49

103

134

Gains on sale of securities

3,631

6,591

12,193

12,204

917

1,301

1,306

1,308

Gains on derivatives, net

－

1,676

－

4,768

8,821

4,577

－

－

Gains on hedges of variable life insurance

－

1,420

－

3,939

4,955

1,042

－

－

Gains on hedges of available-for-sale securities

－

－

－

117

3,021

1,386

－

－

780

146

435

－

－

－

24,218

14,670

(64)

(64)

(64)

－

－

－

2,375

2,375

－

199

13

3,253

4,754

5,868

－

－

2,839

518

758

2,951

3,407

5,688

39,88232,276

Losses on monetary trusts, net

－

－

－

－

－

－

－

－

Losses on trading securities, net

75

419

143

－

－

－

－

－

Losses on sale of securities

－

－

－

－

－

－

－

－

Devaluation losses on securities

－

－

－

－

－

－

－

－

2,097

－

515

－

－

－

34,27530,050

1,970

－

699

－

－

－

14,292

15,666

－

－

－

－

－

－

2,265

2,460

－

－

－

2,798

3,139

5,023

－

－

－

－

－

64

(1,681)(2,375)－－

Other capital losses

665

99

99

153

267

665

5,606

2,226

Net capital gains (losses)

3,419

11,72819,00324,435

11,094

6,108(14,253)(16,162)(JPY mn)
Capital gains

Foreign exchange gains, net
Gains (losses) on sale of foreign bonds*
Other capital gains
Capital losses

Losses on derivatives, net
Losses on hedges of variable life insurance
Losses on hedges of available-for-sale securities
Foreign exchange losses, net
Losses on sale of foreign bonds*** (losses) represents negative figures.

** (losses) represents positive figures.

In FY16,
recorded ¥3,683
million as a totalof gains on saleof securities andforeign exchange
gains on sale offoreign bonds.

Notes on Sony Lifeʼs Capital Gains/Losses are disclosed in page 46.

Sony Financial Holdings Inc. All Rights Reserved

45Sony Lifeʼs Capital Gains/Losses (continued)(Note 1)・ Foreign exchange losses, net for FY16.1Q (3M) include foreign exchange losses of ¥4,280 million relating to U.S. dollar-denominated insurance.
Moreover, other capital gains include the reversal of policy reserves for U.S. dollar-denominated insurance of ¥4,754 million relating to foreignexchange fluctuation.
・Foreign exchange losses, net for FY16.2Q (6M) include foreign exchange losses of ¥6,720 million relating to U.S. dollar-denominated insurance.
Gains on derivatives, net include foreign exchange gains relating to U.S. dollar-denominated insurance of ¥ 1,337 million.
Moreover, other capital gains include the reversal of policy reserves for U.S. dollar-denominated insurance of ¥5,868 million relating to foreignexchange fluctuation.
・Foreign exchange gains, net for FY16.3Q (9M) include foreign exchange gains of ¥21,805 million relating to U.S. dollar-denominated insurance.
Losses on derivatives, net include foreign exchange losses relating to U.S. dollar-denominated insurance of ¥ 17,445 million.
Moreover, other capital losses include the provision of policy reserves for U.S. dollar-denominated insurance of ¥4,941 million relating to foreignexchange fluctuation.
・Foreign exchange gains, net for FY16.4Q (12M) include foreign exchange gains of ¥12,389 million relating to U.S. dollar-denominated insurance.
Losses on derivatives, net include foreign exchange losses relating to U.S. dollar-denominated insurance of ¥ 12,010 million.
Moreover, other capital losses include the provision of policy reserves for U.S. dollar-denominated insurance of ¥1,560 million relating to foreignexchange fluctuation.
（Note2）・ Foreign exchange gains, net for FY15.1Q (3M) include foreign exchange gains of ¥673 million relating to U.S. dollar-denominated insurance.
Moreover, other capital losses include the provision of policy reserves for U.S. dollar-denominated insurance of ¥656 million relating to foreignexchange fluctuation.
・ Foreign exchange gains, net for FY15.2Q (6M) include foreign exchange gains of ¥164 million relating to U.S. dollar-denominated insurance.
Moreover, other capital gains include the reversal of policy reserves for U.S. dollar-denominated insurance of ¥199 million relating to foreignexchange fluctuation.
・ Foreign exchange gains, net for FY15.3Q (9M) include foreign exchange gains of ¥19 million relating to U.S. dollar-denominated insurance.
Moreover, other capital gains include the reversal of policy reserves for U.S. dollar-denominated insurance of ¥13 million relating to foreignexchange fluctuation.
・ Foreign exchange losses, net for FY15.4Q (12M) include foreign exchange losses of ¥3,094 million relating to U.S. dollar-denominated insurance.
Moreover, other capital gains include the reversal of policy reserves for U.S. dollar-denominated insurance of ¥3,253 million relating to foreignexchange fluctuation.
（Note3）・ The figures of income (losses) from monetary trust, net, income (losses) from trading securities, net, gains (losses) on derivatives and foreignexchange gains (losses), net were recorded after offsetting gains and losses of each item.

Sony Financial Holdings Inc. All Rights Reserved

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

1,491.6

1,500
1,250
1,000

1,437.4

1,457.7

1,324.2 1,290.7
1,152.5

1,135.8
991.5

1,260.0
1,098.9

1,189.0
1,050.7

750
500
250
0
FY14.1Q FY14.2Q FY14.3Q FY14.4Q FY15.1Q FY15.2Q FY15.3Q FY15.4Q FY16.1Q FY16.2Q FY16.3Q FY16.4Q

Sony Financial Holdings Inc. All Rights Reserved

47Sony Lifeʼs Quarterly Trend on
Annualized Premiums from New Policies
Quarterly Trend on Annualized Premiums from New Policies
Annualized premiums from new policies

Of which, third-sector(JPY bn)

25

22.3

21.8
20

18.9

20.6

19.1

18.5

17.2

23.9

22.7
20.5
18.2
15.3

15

10

5

5.1
3.7

2.8

3.5

3.9

3.4

4.6

3.6

4.1

3.9

3.1

4.4

0
FY14.1Q FY14.2Q FY14.3Q FY14.4Q FY15.1Q FY15.2Q FY15.3Q FY15.4Q FY16.1Q FY16.2Q FY16.3Q FY16.4Q

Sony Financial Holdings Inc. All Rights Reserved

48

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

163.2[26.8]

Number of policies in force [ ](Thousandsof policies)

501.7

100

(JPY bn)(Thousandsof policies)(JPY bn)

200

Policy amount in force

Number of new polices [ ]

600

444.2
[73.4]

500

30

150

[85.9]

80

400

71.5
100

[11.8]

70.8[14.2]

20

300
200

60
390.4
40

[63.5]

10

50

20

100

0
FY2014FY2015000Mar. 15

FY2016

Mar. 16Mar. 17

Net income (losses) for AEGON Sony Life Insurance and SA Reinsurance(JPY bn)
AEGON Sony Life Insurance
SA Reinsurance

FY2015FY2016

Change

(3.2)

(4.4)

(1.2)

1.8

(2.6)

(4.4)

AEGON Sony Life Insurance and SA Reinsurance are equity method companies, 50-50 joint venture established by Sony Life and AEGON Group.
SA Reinsurance prepares its financial statements in accordance with U.S. GAAP. 50% of the net income (losses) for AEGON Sony Life Insurance andSA Reinsurance are recognized as investment profit (losses) on equity method in the SFHʼs consolidated net income.

Sony Financial Holdings Inc. All Rights Reserved

49

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 rightcolumns.
The same applies below.

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

Percentage increases or decreases differ for eachcurrency and 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.

Different percentage changes in interest rates areset for each term, from one year to 20 years.
For terms longer than 20 years and through 90
years, percentage changes are set using linear
interpolation, with negative 29% as the percentagechange for 20 years and negative 20% as thepercentage change for 90 years.

(Example)
For Yen 30-year, 33% decrease (parallel shift),
28% decrease (twist), 8% decrease (butterfly)

Equity risk

Listed equities 45%, Other securities 70%

Global 39%, Others 49%*2

Real estate risk

Actual real estate 25%

Same as on the left

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

Credit risk = (market value) x (risk coefficient foreach credit rating and duration)

Credit risk

Currency risk

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

(Example)
Rating A: Duration (Dur): 5-10 years(Example)
Rating A: Risk coefficient (1.4%), cap (23), floor (1)Risk coefficient=7.0% + 0.7% x (Dur – 5 )35% downside fluctuation

25% downside fluctuation

Notes
1. Principal items as of March 31, 2017.
2. Symmetric adjustment (an adjustment of±10% of the average value of the stock price index during a defined period in the past) is applied.

Sony Financial Holdings Inc. All Rights Reserved50

Method of Measuring Risk Amount
Based on Economic Value (2) Insurance Risk*1
Sony Life(Reference) EU Solvency II Implementing Measures(Delegated Regulation)

Mortality risk

Mortality rate increases by 15% for each year elapsed

Same as on the leftLongevity risk

Mortality rate decreases by 20% for each year elapsed

Same as on the left

Lapse risk

The largest amount of these; *2

The largest amount of these;•Lapse rate increases by 50% for each year elapsed• Increases by 50% in the assumed rates of• Lapse rate decreases by 50% for each year elapsed• 30% of policies on which surrender value is inexcess of best estimate liability are immediately
surrendered

lapsation for Life module, 50% for Health module•Decreases by 50% in the assumed rates oflapsation for Life module, 50% for Health module• 40% of policies (70% for group annuities, etc.) on

which surrender value is in excess of best
estimate liability are immediately surrendered

Expense risk

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

Same as on the left

Disability risk

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

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

Notes
1. Principal items as of March 31, 2017.
2. At Sony Life, lapse risk is calculated by computing and adding together the largest amount of three options for each insurance policy

Sony Financial Holdings Inc. All Rights Reserved51Trend on JGB Yields (Par rate)

As of the end of each monthSony Financial Holdings Inc. All Rights Reserved52Trend on Risk-free Rate (Japanese yen/ Par rate)
Convergence
period:20 yearLast liquid point: 40 year

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

Sony Financial Holdings Inc. All Rights Reserved

53

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

Sony Financial Holdings Inc. All Rights Reserved54