Presentation Materials

Consolidated Financial Resultsfor Nine Months Ended December 31, 2008

Sony Financial Holdings Inc.
February 12, 200900

Disclaimers:
These presentation materials contain statements concerning the current plans, expectations, strategies and beliefs of the SonyFinancial Holdings Group (the “SFH Group”). Any statements contained herein that pertain to future operating performance andthat 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,” “possibility” and similar words 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 SFH Group, based on information that is currently available to it. As
such, these forward-looking statements are subject to various risks and uncertainties, and actual business results may vary
substantially from the forecasts expressed or implied in forward-looking statements. Consequently, investors are cautioned not toplace undue reliance on forward-looking statements. The SFH Group disclaims any obligation to revise forward-looking
statements in light of new information, future events or other findings. The information contained in this presentation does notconstitute or form part of any offer for sale or subscription of or solicitation or invitation of any offer to buy or subscribe for any
securities, nor shall it or any part of it form the basis of or be relied on in connection with any contract or commitment
whatsoever.

1

Disclaimer

1Highlights of Consolidated Operating Performancefor Nine Months Ended December 31, 2008
FY07.3Q

FY08.3Q(9 mos)(9 mos)vs PY(Billion yen)
Ordinary revenues（Billion
yen）

+5.0%

606.1

Ordinary profit

636.6-12.9%

Life insurance
business
Non-life
insurancebusiness
Bankingbusiness

37.8
32.9

FY07.3Q

FY08.3Q(nine months)(nine months)

Corporateandelimination

Consolidated

Ordinary
revenues

547.1

565.8

Ordinary profit

32.7

30.3

-2.3

-7.3%

Ordinary
revenues

41.6

46.1

+4.4

+10.7%

Ordinary profit

3.0

1.4

-1.5

-51.9%

Ordinary
revenues

18.1

25.5

+7.4

+40.8%

Ordinary profit

1.8

0.9

-0.8

-46.7%

Ordinary
revenues

-0.7

-0.8

-0.1

-

Ordinary profit

+18.6

+3.4%

0.1

0.0

-0.0

-42.1%

Ordinary
revenues

606.1

636.6

+30.4

+5.0%

Ordinary profit

37.8

32.9

-4.8

-12.9%Net income

22.7

20.5

-2.1

-9.5%

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

2

During the nine months ended December 31, 2008 (April 1, 2008 throughDecember 31, 2008), consolidated ordinary revenues grew 5.0%
compared with the same period of the previous fiscal year, to ¥636.6
billion, owing to increases in ordinary revenues from all the businesses:
life insurance, non-life insurance and banking.
Consolidated ordinary profit decreased 12.9% compared with the same
period of the previous fiscal year, to ¥32.9 billion, owing to decreases inordinary profit from all the businesses.
Net income decreased 9.5% compared with the same period of theprevious fiscal year, to ¥20.5 billion.

2

Highlights of Consolidated Operating Performance forNine Months Ended December 31, 2008
 In the life insurance business, both new policy amount and policy amount in force (forindividual life insurance and individual annuities) increased. Income from insurance
premiums also grew steadily. However, ordinary profit decreased owing mainly todeteriorations in gains and losses from investments.
 In the non-life insurance business, net premiums written increased as the number of

insurance policies in force, mainly for the mainstay automobile insurance, grew. The
number of automobile insurance policies in force reached 1 million at the end of
December 2008, or nine years and three months after the sales of automobile insurance
commenced. Ordinary profit declined, due mainly to a higher loss ratio.
 In the banking business, gross operating profit expanded as the balance of investment

assets rose in line with business expansion. However, ordinary profit declined owing
primarily to increased general and administrative expenses, mostly system-related
expenses.
 Consolidated ordinary revenues increased ¥30.4 billion, or 5.0%, year on year to ¥636.6

billion. Consolidated ordinary profit decreased ¥4.8 billion, or 12.9%, year on year, to¥32.9 billion. Net income decreased ¥2.1 billion, or 9.5%, year on year, to ¥20.5 billion,
despite a reversal of the reserve for price fluctuations.

3

Highlights of consolidated operating performance for nine months ended
December 31, 20083

Highlights of Operating Performance:
Sony Life (Non-Consolidated)
Ordinary profit（Billion
yen）

+3.4%

546.9

32.8

FY07.3Q(9 mos)

FY08.3Q(9 mos)

546.9

565.5

+18.5

Income from insurance premiums

479.7

489.6

+9.9

+2.1%

Investment income

63.7

72.2

+8.4

+13.3%

Ordinary expenses(Billion yen)

Ordinary revenues

565.5

-8.0%
30.2

FY07.3Q

FY08.3Q(nine months)(nine months)

Ordinary revenues

Note: Figure for new policy amount is the total of individual life insurance and individual
annuities.

+3.4%

514.1

535.3

+21.2

+4.1%

Insurance claims and otherpayments

179.4

198.3

+18.8

+10.5%

Provision for policy reserve andothers

235.7

153.9

-81.7

-34.7%

Investment expenses

21.9

104.1

+82.1

+373.9%Operating expenses

+0.5%

69.3

69.7

+0.3

Ordinary profit

32.8

30.2

-2.6

-8.0%

Net income

18.1

22.0

+3.9

+22.0%

07.12.31

08.3.3108.12.31

Securities

2,419.4

2,388.9

2,437.4+48.5

Policy reserve

3,324.6

3,375.0

3,527.7+152.6+4.5%

Total net assets

213.8

182.6

149.6

-33.0

-18.1%-70.2%(Billion yen)Sony Life

Ordinary revenues up but ordinary profit down year on year.
New policy amount up 2.8% year on year.
Income from insurance premiums increased owing tosteady growth of policy amount in force.
Contingency reserve and reserve for price fluctuations
were reversed.
Core profit amounted to ¥22.6 billion
Solvency margin ratio as of Dec. 31, 2008 was 1,995.0%,
up 329.6 percentage points from that of Sept 30, 2008.

vs PY

Net unrealized gains/losses onother securities (net of taxes)

Total assets
Separate account assets

Change from08.3.31
+2.0%

114.3

82.7

24.6

-58.0

3,710.3

3,659.7

3,758.7

+98.9

+2.7%

347.8

321.7

273.6

-48.1

-15.0%

Line item amounts are truncated below ¥0.1 billion; percentage change figures are rounded.
The figures above are on a non-consolidated basis.

4

Sony Life’s ordinary revenues for the nine months ended December 31,
2008, on a non-consolidated basis, increased 3.4% from the same periodof the previous fiscal year, to ¥565.5 billion, owing to a higher income frominsurance premiums associated with a steady increase in policy amount inforce.
Ordinary profit decreased 8.0% year on year, to ¥30.2 billion, due to thedeterioration of gains and losses from investments, associated with asignificant fall in Japanese stock market prices. Contingency reserve waspartially reversed in response to lower investment yields associated withfinancial market deterioration.
Net income increased 22.0% year on year, to ¥22.0 billion, owing to apartial reversal of the reserve for price fluctuations in response to losseson transactions and reevaluations of Japanese stocks.

4Overview of Performance:
Sony Life (Non-Consolidated)(Billion yen)
FY07 3Q (9 mos)
New policy amount*1

FY08.3Q (9 mos)

Change2,910.9

2,993.6

48.3

47.7

-1.2%

10.3

10.3

+0.3%

Income from insurance premiums

479.7

489.6

+2.1%

Investment income (loss), net

41.7

-31.9

-

Core profit

19.8

22.6

+13.8%

Annualized premiums from new policies*1
Of which, third sector products

Adjusted net assets*3
Negative spread
Lapse & surrender rate*1,*2

Policy amount in force*1

-

608.8

-

21.0

16.3

-22.4%

4.61%

4.95%

+0.34pt

Change from 07.12.31

07.12.31

08.3.3108.12.31

31,255.0

31,497.3

32,406.6

1,151.5

+3.7%

524.6

530.0

546.1

21.4

+4.1%

3.9

+3.3%

Annualized premiums from insurance in force*1
Of which, third sector products
Solvency margin ratio*3
Notes:

+2.8%

122.0

122.8

126.0

-

1,747.9%

1,995.0%

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

*1 Each figure of new policy amount, annualized premiums from new policies, policy amount in force, annualized premiums from insurance in force and lapse and surrender rate is calculated
as the total of individual life insurance and individual annuities.
*2 The lapse and surrender rate is calculated without offsetting policies that are reinstated.
*3 Adjusted net assets for FY07 3Q (9 mos) and the solvency margin ratio as of December 31, 2007 have been left blank, as these figures were not calculated.

55Sony Life Operating Performance (1)(Trillionsof yen)New Policy Amount

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

New policy amount (9 mos)Number of new policies (9 mos) (Thousands (Billionsof policies)

500

4

+3.0%

379

392

3

2.52

401

413

2.91 +2.8%

2.99

400

of yen)

Of which, third sector (9 mos)

60
50

2.63

Annualized premiums income from new policies (9 mos)

70

-1.2%

49.2

48.3

10.9

10.3

47.7

45.0

300

40
2

200

30
20

1

100

10
0

+0.3%
10.9

10.3

0
FY05.3Q(nine months)

FY06.3Q(nine months)

FY07.3Q(nine months)

FY08.3Q(nine months)

Line item amounts are truncated below ¥10 billion; numbers of policies aretruncated below 1,000 policies; percentage change figures are rounded.

FY05.3Q

FY06.3Q

FY07.3Q

FY08.3Q(nine months)(nine months)(nine months)(nine months)

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

6

New policy amount for the total of individual life insurance and individual annuities
increased 2.8% from the same period of the previous fiscal year, to ¥2,993.6
billion.
The number of new policies also increased, rising 3.0% year on year, to 413
thousand.
Annualized premiums from new policies decreased 1.2% year on year, to ¥47.7
billion. Of this amount, the figure for third-sector products was ¥10.3 billion, up
0.3% year on year.
The primary reason that annualized premiums from new policies decreased,
despite the growth in the new policy amount, was lower sales of individual
annuities. Annualized premiums per policy on individual annuities tends to behigher than on individual life insurance policies.

6Sony Life Operating Performance (2)（Trillionsof yen）

Policy Amount in Force

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

40

+6.6%

4.07
30

3.76
28.7

30.0

(Billions of yen)

Number of policies in force policies)

4.66

5

31.2 +3.7%

Anunalized premiums from insurance in force
600

4.37

Of which, third sector

32.4

524.6

4

3
20

500

497.6

546.1
+4.1%

467.5

400

300

2
200

10
1

0

0
05.12.31

06.12.31

07.12.31

08.12.31

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

100

108.0

115.8

05.12.31

06.12.31

126.0

122.0
+3.3%

0
07.12.31

08.12.31

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

7

Policy amount in force for the total of individual life insurance and individual
annuities grew steadily, to ¥32,406.6 billion as of December 31, 2008, up
3.7% from December 31, 2007.
The number of policies in force increased 6.6% from December 31, 2007,
to 4.66 million policies.
Annualized premiums from total policies as of December 31, 2008, were up
4.1% from December 31, 2007, totaling ¥546.1 billion. Of this amount, thefigure for third-sector products was up 3.3% from December 31, 2007, to¥126.0 billion.

7

Sony Life Operating Performance (3)Income from Insurance Premiums(Billionsof yen)600

Ordinary Profit (Non-Consolidated)(Billionsof yen)+2.1% 489.6

500

40

479.7
425.0

32.8

442.9

-8.0%

30.2

30

400

23.5
300

20

200

10
100

0
0
FY05.3Q(nine months)

FY06.3Q
FY07.3Q(nine months) (nine months)

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

FY08.3Q(nine months)

FY06.3Q

FY07.3Q

FY08.3Q(nine months)(nine months)(nine months)

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

8

Income from insurance premiums grew 2.1% from the same period of theprevious fiscal year, to ¥489.6 billion, associated with a higher policy
amount in force.
Sony Life’s ordinary profit decreased 8.0% year on year, to ¥30.2 billion.

8

Sony Life Operating Performance (4)Core Profit

Negative Spread(Billionsof yen)(Billionsof yen)30

30+13.8%
20

Negative spread (9 mos)

40

40

18.6

28.3

22.6

19.8

Negative spread (full-year)

37.3

26.7
21.0

20

-22.4%

16.3
10

10

0

0
FY06.3Q

FY07.3Q

FY08.3Q(nine months)(nine months)(nine months)

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

FY06

FY07

FY08

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

9Core profit rose 13.8% year on year, to ¥22.6 billion, as a result of an increase
mainly in income from insurance premiums and interest and dividend income.
The negative spread narrowed 22.4% year on year, to ¥16.3 billion, owing to anincrease in interest and dividend income.

9Sony Life Operating Performance (5)Lapse and Surrender Rate*

Solvency Margin Ratio（Individual Life Insurance + Individual Annuities）

(%)
(%)

2,500
Lapse & surrender rate (full-year)
Lapse & surrender rate (1H)

10

2,000

Lapse & surrender rate (9mos)+329.6pt

1,852.0
1,747.9

8

6

5.84

5.79

6.12

4.34

4.61

2.81

3.01

+0.34ｐｔ

4

2.89

1,995.0

1,665.4

1,500

4.95
1,000

3.11
500

2

0

0
FY05

FY06

FY07

FY08

07.3.3108.3.3108.9.30

08.12.31*The lapse and surrender rate is calculated without offsetting policies that are reinstated.

10

For the nine months ended December 31, 2008, as the green line shows,the lapse and surrender rate* for the total of individual life insurance andindividual annuities rose 0.34 percentage point from the same period of theprevious fiscal year, to 4.95%.
The year-on-year rise was mainly due to increased cancellation of policies
from corporate customers and of variable life insurance products. We
believe this increase stemmed from the economic downturn and adeterioration in the investment environment.
The solvency margin ratio is one index of a life insurance company’s
financial soundness. As of December 31, 2008, Sony Life’s solvency
margin ratio was 1,995.0%, up 329.6 percentage points from September
30, 2008. As net unrealized gains on other securities increased owing tohigher bonds prices associated with lower interest rates, and risks against
price fluctuations lowered in line with reduced risk assets such as
Japanese stocks, solvency margin ratio rose compared with that of
September 30, 2008.
Sony Life will continue to work on maintaining its sound financial base.

10

Sony Life Operating Performance (6)Breakdown of General Account Assets

51.6%

52.4%

5.2%
4.6%
0.7%

4.2%
4.3%
0.8%

2.0%
3.0%
0.6%

26.8%

25.0%

22.5%
3.4%

2.5%
2.5%
2.9%

2.4%
3.7%
4.1%

2.3%
6.6%
3.0%

08.3.3108.9.30

08.12.31

3,337.9

3,475.3

3,485.1

3.3%

Total

3.3%

56.5%

Japanese government and corporate bonds
Japanese stocks
Foreign government and corporate bonds
Foreign stocks
Monetary trusts
Policyholder loans
Real estate
Cash and call loans
Other
Notes:
Japanese stocks and convertible bonds (CBs) ingeneral account assets as of December 31, 2008
were as follows:*Figures in brackets, ( ), are as of September 30, 2008

Japanese stocks: ¥83.9 billion (¥173.9 billion)
Of which, Japanese stocks in monetary trusts:¥13.7 billion (¥28.4 billion)
Accounting for 2.4% （5.0%） of the total generalaccount assets.
CBs: ¥367.0 billion (¥399.2 billion)
Of which, CBs in monetary trusts:¥122.7 billion （¥136.7 billion)
Accounting for 10.5% （11.5%） of the total generalaccount assets.

(Billion yen)

11

This is a breakdown of Sony Life’s general account assets as ofDecember 31, 2008, compared with that of March 31, 2008 and
September 30, 2008.
Japanese stocks, including those in category of “monetary trusts”
accounted for 2.4% of total general account assets as of December 31,
2008, declined from 5.0% as of September 30, 2008. Convertible bonds,
that are included both in the category “Japanese government andcorporate bonds” and in the category “monetary trusts” also declined,accounting for 10.5% of total general account assets as of December 31,
2008, down from 11.5% as of September 30, 2008.
Although financial market conditions continued to be extremely unstableeven after January 2009, we maintain an investment policy of increasing
our investment in ultra long-term bonds.

11

Sony Life Operating Performance (7)Net Unrealized Gains/Losses on Available-for-sale Securities with Market Value(Billion yen)Japanese governmentand corporate bonds

08.3.3108.6.30

08.9.30

08.12.31

83.4

28.6

19.0

58.8

9.2

8.4

-19.5

-22.6

Japanese stocks

50.8

63.2

24.1

3.3

Foreign securities

-9.5

-5.8

-12.1

-6.1

Other securities

3.0

3.8

1.9

-0.0

127.8

89.8

33.0

56.0

CBs

Total

Notes:
1) Line item amounts are truncated below ¥100 million.
2) Amounts above include those categorized in “monetary trusts”.
3) Japanese government and corporate bonds of ¥58.8 billion as of December 31, 2008, do not include unrealized gains on held-to-maturity securities of¥69.5billion.
4) As of December 31, 2008, the weighted-average fair value of convertible bonds held by Sony Life was ¥91.4. The average remaining period was 3.8
years (in case Sony Life executes put options, the average remaining period was 2.4 years.)

12

We have disclosed net unrealized gains/losses on available-for-salesecurities with market value on a quarterly basis, starting from March 31,
2008. As of December 31, 2008, net unrealized gains on available-forsale securities amounted to ¥56.0 billion.
While closely monitoring market conditions, Sony Life has conducted
stock-related derivative transactions for the purpose of hedging certain of
its risk assets, such as Japanese stocks.
In the statements of income for the period ended December 31, 2008,
gains of ¥5.0 billion were recorded from the stock-related derivativetransactions which Sony Life started during the three months ended
December 31, 2008.
Impairment losses for the nine months ended December 31, 2008, totaled
to ¥23.4 billion.

12Sony Life Operating Performance (8)Number of Lifeplanner Sales Employees

Number of Independent Agents（agents）（persons）

-61
2,130

2,151

07.12.31

08.3.31

2,080

2,090

08.9.30

08.12.31

2000

+33
4000

3,741

3,779

3,830

3,812

3,714
1000

0
3000

0
07.9.30

07.12.31

08.3.3108.9.30

08.12.31

13

As of December 31, 2008, the number of Lifelplanner sales employees
increased 33 from March 31, 2008, to 3,812 persons.
As Sony Life’s recruitment policy is to not hire Lifeplanner sales employees
in December, their number on December 31, tends to be lower than on
September 30. Accordingly, the number of Lifeplanner sales employees on
December 31 was lower than the September 30 figurein both 2008 and2007.
The number of independent agents declined 61 from March 31, 2008, to
2,090 as of December 31, 2008.

13

Highlights of Operating Performance:
Sony Assurance
Ordinary revenues（Billionyen）

Ordinary profit+10.7%

46.1

41.6

3.0

FY08.3Q(9 mos)(9 mos)Ordinary revenues-51.9%

FY08.3Q(nine months)

Sony AssuranceOrdinary revenues up but ordinary profit down year
on yearOrdinary profit down due to higher loss ratioNumber of automobile insurance policies reached 1
million as of Dec 31, 2008, or 9 years and 3 months
after the sales of automobile insurance commenced.
Net premiums written was ¥45.5 billion owing tostrong sales of automobile insurance policies, its
mainstay products.
Combined ratio was up 2.9pt to 80.3%
Net loss of ¥1.9 billion as extraordinary losses wererecorded

vs PY

41.6

46.1

+4.4

+10.7%

Underwriting income

41.2

45.6

+4.4

+10.7%

Investment income

0.4

0.5

+0.0

+17.4%

38.6

44.6

+6.0

+15.6%

Underwriting expenses

28.9

33.5

+4.5

+15.9%

Investment expenses

0.0

0.1

+0.1

+2,159.9%

Operating, general andadministrative expenses

9.6

11.0

+1.3

+13.9%

3.0

1.4

-1.5

-51.9%

2.5

-1.9

-4.5

-

07.12.31

08.3.3108.12.31

Underwriting reserves

41.2

42.7

49.0

+6.3

+14.9%

Total net assets

15.8

15.3

13.3

-2.0

-13.4%

Ordinary expenses

1.4

FY07.3Q(nine months)

FY07.3Q(Billon yen)

Ordinary profit
Net income (loss)(Billon yen)

Net unrealized gains/losses onother securities (net of taxes)

Total assets

Change from08.3.31

0.0

-0.0

-0.1

-0.1

-

74.3

78.6

82.2

+3.5

+4.6%

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

14

For the nine months ended December 31, 2008, Sony Assurance posted a
10.7% increase in ordinary revenues compared with the same period of theprevious fiscal year, to ¥46.1 billion, primarily due to strong sales of its mainstay
automobile insurance, which raised net premiums written.
Ordinary profit decreased 51.9% year on year, to ¥1.4 billion, owing mainly to anincreased amount of claims paid, led by those resulting from natural disasters.
For the purpose of enhancing system and operational efficiency, Sony
Assurance began developing new systems in the fiscal year ended March 31,
2007. However, the company subsequently decided to suspend thisdevelopment and to overhaul its development policy. Accordingly, some software
assets that were previously recorded as intangible fixed assets (software) and forwhich future use is uncertain were disposed of, resulting in losses on disposal of
fixed assets of ¥3.76 billion, which were recorded as extraordinary losses.
As a result, net loss of ¥1.9 billion was recorded.
Although Sony Assurance has suspended new system development, thecompany will upgrade current systems as is necessary for products, services andother strategic purposes. Therefore, the suspension of new system development
has no impact on the company from an operational standpoint.

14

Overview of Performance: Sony Assurance(Billion yen)
FY07. 3Q (9 mos)

FY08. 3Q (9 mos)

Change+10.9%

Direct premiums written

40.9

45.3

Net premiums written

41.1

45.5

+10.7%Net losses paid

19.1

22.0

+15.1%

Underwriting profit

2.6

1.0

-58.7%Net loss ratio

52.3%

54.4%

+2.1ptNet expense ratio

25.1%

25.9%

+0.8ptCombined ratio

77.4%

80.3%

+2.9ptNumber of policies in force

07.12.31

08.3.3108.12.31

1.00 million

1.02 million

1.12 million

Change from 07.12.31+0.11 million+11.9%Net expense ratio is equal to the ratio of total underwriting costs to net premiums written
Net loss ratio is equal to the ratio of net losses paid and loss adjustment expenses to net premiums written.
The number of policies in force is the total of automobile insurance and medical and cancer insurance, which accounts for more than 99% of net premiums written.
These numbers are truncated below 10,000 policies.
Line item amounts are truncated below ¥100 million. Percentage figures are rounded.

15

Overview of Sony Assurance’s performance15

Sony Assurance’s Performance of Underwritingby type of policy
Net premiums written（Million Yen） Direct premiums written
FY07. 3Q
(9 mos)

FY08. 3Q
(9 mos)

Fire

11

13

+10.9%Fire

Marine38

32-16.0%

MarinePersonal accident

4,839

5,159

+6.6%

Voluntary
automobile

35,85539,997

Compulsory
automobile liability
Total

265
-

-

Personal accident

4,707

4,959

+5.3%

+11.5%

Voluntary
automobile

36,01240,152+11.5%---

40,92045,377+10.9%

378-12.4%

41,17745,580+10.7%

Total

Change00Marine1711-35.1%

Personal accident

897

1,001

+11.6%

17,936

20,715+15.5%

333

363

+8.8%

19,18522,092+15.1%

Total+32.7%（Million Yen）
FY08. 3Q
(9 mos)Fire

Compulsory
automobile liability

Change-432

FY07. 3Q
(9 mos)Voluntary
automobile

FY08. 3Q
(9 mos)200

Compulsory
automobile liability

Net losses paid

（Million Yen）

FY07. 3Q
(9 mos)Change-37.6%

Line item amounts are truncated below ¥1 million. Percentage figures are rounded.

16

16

Sony Assurance Operating Performance (1)Net Premiums Written andNumber of Policies in Force(Millions of policies)(Billions of yen)

Other
Personal accident insurance
Voluntary automobile insurance
Number of policies in force+11.9%
FY07.3Q

80
70

0.93

60

0.82
50

Ordinary Profit (losses)

・

3Q (9 mos)

Full-year4

1.12

1.00 1.02

50.4

45.2

(Billions of yen)

1

3.0

3

2.8

55.0
+10.7%

41.1

45.5-51.9%

2.0

2

1.8
1.4

40
0.5

30

1

20

0
10
0

FY07.3Q

FY05

FY06

FY08.3Q

0

FY07(nine months)(nine months)

The number of policies in force is the total of automobile insurance and medical
and cancer insurance, which accounts for more than 99% of net premiums written.
Most personal accident insurance is medical and cancer insurance.
Line item amounts are truncated below ¥100 million for net premiums written andtruncated below 10,000 for the number of policies in force.

-0.3
-1

-0.7
FY05

FY06

FY07

FY08.3Q(nine months)

Amounts are truncated below ¥1 million.

17

In terms of insurance underwriting performance, the number of automobile
insurance policies in force reached 1 million, as of December 31, 2008,
which was nine years and three months after the sales of automobile
insurance commenced. The number of policies in force, for the total of
automobile insurance and medical and cancer insurance, grew steadily to
1.12 million as of December 31, 2008, up 11.9% from that of December 31,
2007.
Owing mainly to an increased number of automobile insurance policies inforce, direct premiums written and net premiums written grew 10.9% and10.7%, year on year, to ¥45.3 billion and ¥45.5 billion, respectively.
Ordinary profit decreased 51.9% year on year, to ¥1.4 billion.

17

Sony Assurance Operating Performance (2)< Reference>

Combined Ratio(Net expense ratio + Net loss ratio)

Net expense ratio + Earned/Incurred loss ratio（%）

Net expense ratio

Earned/Incurred loss ratio

100+3.9pt

89.9

89.0

86.5

90.4

Net expense ratio

（%）

80
80

60

63.6

+3.1pt62.3

61.4

Net loss ratio

100+2.9pt

80.3

79.9

80.3

53.6

53.5

52.3

26.7

25.1

25.9

FY07

FY07.3Q(nine months)

FY08.3Q(nine months)

77.4

64.5

60

40

+2.1pt

54.4

40

20

26.3

26.7

25.1

+0.8pt

25.9

20

26.3

0
FY06

FY07

FY07.3Q(nine months)

FY08.3Q(nine months)

Net expense ratio is equal to the ratio of total underwriting costs to net premiums written.
Earned/Incurred loss ratio is equal to the ratio of the sum of net losses paid, loss adjustment
expenses and accumulation in provision for reserve for outstanding losses to earned premium.
*Note that earthquake insurance and compulsory automobile liability
insurance are excluded from the above calculation.

+0.8pt0
FY06

Net expense ratio is equal to the ratio of total underwriting costs to net premiums written.
Net loss ratio is equal to the ratio of net losses paid and loss adjustment expenses to net
premiums written.

18

To help you understand the actual condition of Sony Assurance, which is in a growth phase,at left we show the combined ratio calculated using the earned/incurred loss ratio rather
than the net loss ratio.
For the nine months ended December 31, 2008, the earned/incurred loss ratio rose 3.1
percentage points from the same period of the previous fiscal year. If the 0.8-precentagepoint impact of changes in the calculation of underwriting reserves for personal accident
insurance during the nine months ended December 31, 2007, is excluded, as well as the
0.8-percentage-point effect of natural disasters, the earned/incurred loss ratio for the ninemonths ended December 31, 2008 would have been 63.0%, up 1.5 percentage points.
Although the ratio during the nine months ended December 31, 2008 was higher thanduring the same period of the previous fiscal year, the ratio maintained a stable trend
throughout the fiscal year ended March 31, 2007, 2008, and thereafter.
The net expense ratio rose 0.8 percentage point year on year, to 25.9%, owing to anincrease primarily in system-related expenses, which more than offset operational efficiency
improvement.
The chart at the right shows the net loss ratio. This ratio increased 2.1 percentage points
year on year, to 54.4%, due to the impact of natural disasters. As a result, the combined
ratio (the sum of the net loss ratio and the net expense ratio) rose 2.9 percentage points
year on year, to 80.3%.

18

Highlights of Operating Performance:
Sony Bank (Non-Consolidated)
Ordinary
profitOrdinary
revenues（Billionyen）

25.5+40.7%

18.1

2.0-17.7%

1.7
FY07.3Q(nine months)

FY07.3Q(9 mos)

FY08.3Q(9 mos)Ordinary revenues

18.1

25.5

+7.3

+40.7%

Gross operating profit

7.9

9.4

+1.4

+18.4%Net interest income

3.8

3.8

+0.0

+0.5%

Net fees and commissions

0.3

0.2

-0.0

-7.9%

Net other operating income

3.8

5.2

+1.4

+38.6%

General and administrative expenses

5.8

7.6

+1.8

+31.0%

Ordinary profit

2.0

1.7

-0.3

-17.7%Net income

2.5

1.0

-1.5

-60.4%

07.12.31

08.3.3108.12.31

Securities

441.7

488.7

798.5

+309.7+63.4%

Loans

331.6

347.0

431.6

+84.5

+24.4%

Deposits

980.6

1,144.3

1,339.2+194.8+17.0%

1,097.4

1,247.3

1,417.9+170.5+13.7%

38.5

35.7

40.6

+4.9

+13.8%（Billion yen）

FY08.3Q(nine months)

Sony Bank
 Ordinary revenues up but ordinary profit down year
on year.
 Ordinary revenues up due to higher balance ofassets Despite increased gross operating profit, ordinary
profit down due to higher general & administrative
expenses, mostly system-related expenses.
 Net income decreased due to an absence ofdeferred tax assets which was topped in the same
period of the previous fiscal year.
 Capital adequacy ratio (domestic criteria) was
14.38%, up 5.23 percentage points from March 31,
2008（Billion yen）

Customer assets
Net assets

vs PY

Change from08.3.31

Net unrealized gains/losses onother securities (net of taxes)

Total assets
Capital adequacy ratio(Domestic criteria)

-4.7

-9.0

-15.2

-6.2

－

1,058.1

1,211.0

1,416.3+205.3+17.0%

10.79%

9.15%

14.38%+5.23pt

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

19

For the nine months ended December 31, 2008. Sony Bank’s ordinary
revenues increased 40.7% compared with the same period of the previous
fiscal year, to ¥25.5 billion, due mainly to an increase in interest income,as the balance of investment assets rose in line with business expansion.
Although gross operating profit increased, ordinary profit decreased 17.7%
year on year, to ¥1.7 billion, as the general and administrative expenses,
mostly system-related expenses, expanded.
Net income dropped to ¥1.0 billion, down 60.4% year on year, reflecting
the decrease in ordinary profit and due to an absence of deferred tax
assets that were topped up in the nine months ended December 31, 2007.

19

Overview of Performance:
Sony Bank (Non-Consolidated)（Billion Yen）

Change from 08.3.31
07.12.31

Customer assets

08.3.3108.12.31

Amount(or number)%

1,097.4

1,247.3

1,417.9+170.5+13.7%

980.6

1,144.3

1,339.2+194.8+17.0%

Yen

781.8

892.6

1,070.3+177.6+19.9%

Foreign currency

198.7

251.7

268.8

+17.1

+6.8%

116.8

102.9

78.7

-24.2

-23.5%

331.6

347.0

431.6

+84.5

+24.4%

323.9

338.8

423.0

+84.1

+24.8%

7.6

8.1

8.5

+0.3

+4.7%

556

610

701

+91

+14.9%

Deposits

Investment trusts
Loans
Mortgage loans
Other
Number of accounts (thousand)Line item amounts are truncated below ¥100 million. Percentage figures are rounded.

20

Overview of Sony Bank’s performance (non-consolidated)

20

Sony Bank Operating Performance (1)Customer Assets (Deposits + Investment Trusts)
and Number of Accounts(Billion yen)

2,000

Yen deposits
Foreign currency deposits
Investment trusts(Billions of yen)

Number of accounts (thousand)

610
491

Loans

670

556

Mortgage loans

701

Other

500

431.6

1,417.9

1,500

1,433.1
1,247.3

Investment 400
trusts:¥78.7 bil
Foreigncurrency
deposits:¥268.8 bil

1,097.4
1,000

400.0

300

331.6

Other

347.0

¥8.5 bil

284.7

Mortgage
loans

848.8

¥423.0 bil
Yen200
deposits:¥1,070.3 bil

500
100

0

0
07.3.3107.12.31

08.3.3108.9.30

08.12.31

Amounts are truncated below ¥100 million; numbers of accounts are truncatedbelow 1 thousand.

07.3.3107.12.31

08.3.3108.9.30

08.12.31

Amounts are truncated below ¥100 million.

21

As of December 31, 2008, customer assets (the sum of deposits andinvestment trusts) grew 13.7%, from March 31, 2008, to ¥1,417.9 billion,
primarily due to an increase in yen deposits.
As for the breakdown of customer assets as of December 31, 2008,
deposits amounted to ¥1,339.2 billion, up 17.0%, from March 31, 2008.
Investment trusts were ¥78.7 billion, down 23.5% from March 31, 2008.
Loans expanded steadily to ¥431.6 billion, up 24.4%, from March 31, 2008.
The majority of loans accounted for mortgage loans, which amounted to¥423.0 billion.
As of December 31, 2008, the number of accounts was up 91 thousand
from March 31, 2008, to 701 thousand accounts.

21

Sony Bank Operating Performance (2)Gross Operating Profit, General and
Administrative Expenses, Ordinary Profit(Billion
yen)

12

10

Ordinary profit (9 mos)
Orfinary profit (full-year)
General and administrative expenses (9 mos)
General and administrative expenses (full-year)
Gross operating profit (9 mos)
Gross operating profit (full-year)

9.4

（％）
20

10.9

9.0
9.4

8.1
7.6

8

6.7

10.79

+31.0%

9.15

8.88

08.3.3108.9.30

5.8

5.1
2.7-17.7％

2.2

2

11.49
10

5.8

4

+5.23pt

7.6

7.9

6.7

14.38

15

+18.4%

7.0

6

Non-consolidated Capital Adequacy Ratio(Domestic Criteria)

2.0

1.5

1.3

5

1.7

0.8
0
07.3.31

0
FY05

FY06

FY07

FY08.3Q(nine months)

Amounts are truncated below ¥100 million.

07.12.31

08.12.31

Notes: Capital adequacy ratios were calculated based on the standard stipulated in the
Financial Services Agency Public Announcement No. 19 of 2006. The capital
adequacy ratio as of December 31, 2008, newly adopted the special exception of
the standard mentioned above, in accordance with the FSA public ministerial
announcement No. 79 of 2008.

22

Looking at profitability, as orange line shows, Sony Bank’s gross operating profit increased 18.4%
from the same period of the previous fiscal year, to ¥9.4 billion, owing mainly to higher net otheroperating income. However, as shown in yellow line, general and administrative expenses
expanded 31.0% year on year, to ¥7.6 billion, due mainly to an increase in system-related
expenses, resulting in ordinary profit of ¥1.7 billion, down 17.7% year-on-year, as shown in theyellow bar.
As shown in the right graph, capital adequacy ratio (domestic criteria) as of December 31, 2008
was 14.38%, maintaining a sound level. The primary reason for the 5.23-percentage-point risefrom that of September 30, 2008 was due to an exclusion of unrealized losses on available-forsale securities in calculating the capital adequacy ratio as of December 31, 2008, by adopting thespecial exception of the standard stipulated by FSA, as described in the notes under the rightgraph.
In addition, during the three months ended December 31, 2008, Sony Bank’s capital was raisedby ¥6.0 billion, by allocating its shares to Sony Financial Holdings. The capital was raised by¥12.0 billion for the nine months ended December 31, 2008, as another ¥6.0 billion capitalincrease was implemented in the six months ended September 30, 2008.
Net unrealized losses on other securities, net of taxes, totaled ¥15.2 billion as of December 31,
2008, deteriorated by ¥6.2 billion from March 31, 2008, owing primarily to a decline in prices such
as Japanese corporate bonds. As Sony Bank made evaluations on the floating-rate Japanese
government bonds that Sony Bank holds as available-for-sale securities, based on reasonably
estimated amounts starting in the three months ended December 31, 2008, “Net unrealized losses
on other securities, net of taxes” increased by ¥3.5 billion.

22

Consolidated Operating Performance
Forecast for FY2008(Billions of yen; line item amounts are truncated below ¥100 million; changes are rounded)
FY08
Previous
Forecast
B

FY08
Updated
Forecast
C

Consolidated ordinary revenues
Life insurance business
Non-life insurance businessBanking business

822.1

884.0

741.3
55.6

FY07

The reason of revisions
ChangeChange

C/B

C/A

854.0

-3.4%

+ 3.9%

793.0

761.0

-4.0%

+ 2.7%

60.7

60.7

-

+ 9.2%

25.9

33.5

32.0

-4.5%

+ 23.6%

Consolidated ordinary profit
Life insurance business
Non-life insurance businessBanking business

44.5

37.0

37.0

-

-16.9%

39.0

34.0

36.0

+5.9%

-7.7%

2.8

2.1

2.1

-

-25.0%

2.4

1.4

-0.4

-

-

Consolidated net income

24.2

21.0

21.0

-

-13.2%A■Consolidated
Ordinary revenues forecast revised downward as ordinary revenues mainly inthe life insurance business are likely to be lower than the original forecast. Nochange in ordinary profit and net income.

■Life insurance business
Ordinary revenues forecast revised downward as actual results of singlepayment premiums income and other have been lower than the original
forecast and decline in gains/losses on separate accounts associated with thefall in the Japanese stock market. Ordinary profit forecast revised upward dueto the partial reversal of contingency reserve implemented in FY08.3Q.

■Banking business
Considering the impact of decline in securities prices associated with thefinancial market changes, ordinary revenues forecast revised downward, andrevised the forecast of ordinary income turning to ordinary losses.

Consolidated Ordinary Revenues(Billionsof yen)Banking business
Non-life insurance businessLife insurance business
822.1

758.7

800

Consolidated Ordinary Profit(Billions of yen)

854.0

50
45

759.2

40

653.2

Banking business
Non-life insurance business 44.5
Life insurance business

37.0

35

600

30

25.3

25

400

(Forecast)

20

18.3

12.2

(Forecast)

15

200

10
5
0

0
FY04

FY05

FY06

FY07

FY08

-5

FY04

FY05

FY06

FY07

FY08

23

Here is the consolidated financial results forecast for the fiscal year ending March 31,
2009.
Consolidated ordinary revenues forecast for the year ending March 31, 2009 was revised
downward from the original ¥884.0 billion to ¥854.0 billion, as the actual results of ordinary
revenues from the life insurance business for the nine months ended December 31, 2008,
were lower than the formerly announced forecast and other factors. The forecast on
consolidated ordinary profit and net income are unchanged.
As for forecasts of ordinary revenues and ordinary profit from each business for the year
ending March 31, 2009, ordinary revenues and ordinary profit from the life insurance
business were revised. In the life insurance business, compared to the formerly
announced forecast, single-payment insurance premiums and others were lower, andgains on separate accounts declined due to a drop in Japanese stock market prices,
resulting in the downward revisions of ordinary revenues from the original ¥793.0 billion to¥761.0 billion. In addition, due to the partial reversal of contingency reserve in the third
quarter ended December 31, 2008, ordinary profit were revised upward from the original¥34.0 billion to ¥36.0 billion.
In the banking business, considering the impact of a drop in the fair market value of
securities held and other factors associated with the recent changes in the financial market
environment, revisions were made downward for ordinary revenues from the original ¥33.5
billion to ¥32.0 billion, and for ordinary profit (losses) from the original ¥1.4 billion ofordinary profit to ¥0.4 billion of ordinary losses.
Forecasts of the non-life insurance business are unchanged.
Please see the slide P.24 for the recent topics of the Sony Financial Holdings Group.
As for the differences between Japanese GAAP and U.S. GAAP, please refer to the“Reference” of our Preliminary Consolidated Financial Results for FY08. 3Q press release,which was announced on January 29, 2009.

23

Recent Topics
Sony Bank’s Mortgage Loans through Sony Life

FY08.3Q (9 mos）

Approx. 35% of the amount of new mortgage loans
accounts for the sales through Sony Life
•Sony Life started handling banking agency business in Jan. 2008.

Sony Assurance’s Auto Insurance Sold by Sony Life
Approx. 7% of the new automobile policies accounts
for the sales through Sony Life
*Sony Life started handling automobile insurance in May 2001.

Recent topics
 Oct.1, 2008

SFH announced to obtain AA- issuer ratings from Rating & Investment
Information, Inc. (R&I)

 Oct. 14, 2008

Sony Bank obtained AA- senior debt ratings from Japan Credit Rating
Agency, Ltd. (JCR)

Sony Life opened Beijing liaison office in PRC

 Nov. 12, 2008

SFH injected capital to Sony Bank Nov. 28, 2008

Sony Life announced MCEV as of March 31, 2008

 End of Dec. 2008

Sony Assurance’s number of automobile insurance policies reached
1 million.

 Jan. 19, 2009

Sony Assurance started selling pet insurance
24

Recent topics

24

Contact:

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

25

Contacts

25