November 13, 2017
Sony Financial Holdings Inc.

Summary Information on Sony Life’s Financial Results
for the Six Months Ended September 30, 2017
<Contents>
1. Key Performance Results

P. 2

2. Status of Investment Assets (General Account)

P. 4

3. Non-consolidated Balance Sheets

P. 10

4. Non-consolidated Statements of Income

P. 11

5. Reconciliation to Core Profit and Non-consolidated Ordinary Profit

P. 12

6. Loans by Borrower Category

P. 13

7. Risk-monitored Loans

P. 13

8. Solvency Margin Ratio

P. 14

9. Status of Separate Account Assets

P. 16

1

1. Key Performance Results(1) Policy Amount in Force and New Policy Amount
Policy amount in force(Number: Thousand, Amount: 100 millions of yen, %)As of September 30, 2016

As of March 31, 2017

As of September 30, 2017

Category

Individual life insurance

NumberAmount7,019

431,6457,112

443,133

184

9,499

196

10,208

Individual annuities
Subtotal

NumberAmountNumberAmountComparison to
Sep. 30, 2016

Comparison to
Mar. 31, 2017

7,202

102.6

101.3

218

118.6

111.2

Comparison to
Sep. 30, 2016

Comparison to
Mar. 31, 2017

450,687

104.4

101.7

11,503

121.1

112.7

7,203

441,1447,308

453,341

7,421

103.0

101.5

462,191

104.8

102.0

Group life insurance－

17,268－18,510－－－18,873

109.3

102.0

Group annuities

－

122

－

115

－

－

－

107

87.4

92.8

Notes:
1. The policy amount in force for individual annuities are equal to the sum of (a) the funds to be held at the time annuity payments are to commence for policies for which annuity
payments have not yet commenced and (b) the amount of policy reserves for policies for which payments have commenced.
2. The policy amount in force for group annuities is equal to the amount of outstanding policy reserves.
New policy amount(Number: Thousand, Amount: 100 millions of yen, %)For the six months ended September 30, 2016

For the six months ended September 30, 2017

Category
NumberAmount260

23,440Individual life insurance

New policies

Increase fromconversion

23,440－

NumberAmountComparison to
Sep. 30, 2016

215

82.7

Comparison to
Sep. 30, 2016

New policies

20,85489.0

20,854－

Increase fromconversion

19

1,049

1,049

－

24

123.2

1,452

138.4

1,452

－

280

24,49024,490

－

240

85.6

22,30791.1

22,307－

Group life insurance

－

16

16

－

－

397

2,373.8

397

Group annuities

－

－

－

－

－

－

－

－

Individual annuities
Subtotal

Notes:
1. The new policy amount including increase from conversion for individual annuities is equal to the funds held at the time annuity payments commence.
2. The new policy amount for group annuities is equal to the initial premium payment.

(2) Annualized Premiums
Policy amount in force
Category
Individual life insurance(Millions of yen, %)As of
September 30, 2016

As ofMarch 31, 2017

767,484

As of
September 30, 2017
787,005

797,006

Comparison to
Sep. 30, 2016

Comparison to
Mar. 31, 2017

103.8

101.3

Individual annuities

32,19733,85136,502

113.4

107.8

Total

799,681820,856

833,509

104.2

101.5

184,055

187,449

189,603

103.0

101.1

Of which, medical protection, living benefit
protection and other products

New policies(Millions of yen, %)Category

For the six months ended
September 30, 2016

For the six months ended
September 30, 2017

Comparison to
Sep. 30, 2016

Individual life insurance

35,62528,801

80.8

Individual annuities

3,133

3,590

114.6

Total

38,75932,391

83.6

Of which, medical protection, living benefit
protection and other products

8,101

5,991

74.0

Notes:
1. Annualized premiums refer to an amount that is calculated by multiplying individual premium amounts by a coefficient that differs depending on the premium payment methods,
thereby converting the figure to a per-year premium. (For single premium policies, premiums are divided by the number of coverage years.)
2. “Medical protection, living benefit protection and other products” indicates the portion of annualized premiums for medical protection benefits (hospitalization benefits, surgicalprocedure benefits, etc.) and products with living benefit protection (benefits for specific illness, nursing care benefits, etc.).

2

(3) Major P/L Items

Category(Millions of yen, %)For the six months ended
September 30, 2016

For the six months ended
September 30, 2017

Comparison to
Sep. 30, 2016

Income from insurance premiums

477,426

480,491

100.6

Investment income

80,477145,196

180.4

Insurance claims and other payments

163,350

187,384

114.7

Investment expenses

40,604

18,171

44.8(4) Total Assets(Millions of yen, %)Category
Total assets

As of March 31, 2017
8,873,613

3

As of September 30, 2017
9,208,334

Comparison to
Mar. 31, 2016
103.8

2. Status of Investment Assets (General Account)(1) Status of Investment Assets
1) Investment Environment
During the six months ended September 30, 2017, the Japanese economy expanded modestly, against a backdrop of
improved wages, an accompanying rise in personal consumption and a robust capital expenditure. Year on year, real
GDP growth (2nd preliminary figures1) was positive 0.6% for the April–June quarter (seasonally adjusted annualized
rate of 2.5%), exhibiting positive year-on-year growth. Individual demand factors demonstrating solid growth werepersonal consumption, which was up 0.8%; housing investment, up 1.3%; and public investment, up 6.0%. Nominal
GDP growth for the quarter was positive 0.7% year on year (seasonally adjusted annualized rate of 3.0%). Real GDP
growth2 for the July–September quarter is expected to have continued, with capital expenditure contributing to themodest expansion. Looking at commodity prices, the core consumer price index remained in positive territory, moving
gradually upward. The outlook for a continued rise in commodity prices is unclear, however, due to the impact of
exchange rates.
Bond markets remained within a narrow range. With growing political risk rising in Europe and geopolitical risk due
to such factors as the US military’s aerial bombing of Syria and North Korean missile launches, yields on 10-year
Japanese government bonds (JGBs) fell to around 0%. Meanwhile, overseas interest rates rose amid expectations that
the US and European central banks would scale back their policies of monetary easing, and Japanese interest rates rosein tandem. However, the fluctuation in long-term interest rates was limited, as the Bank of Japan (BOJ) maintained its
yield curve control policy. As of September 30, 2017, the yield on 10-year JGBs was 0.062%, essentially unchanged
from the level as of March 31, 2017.
Stock markets rose to new year-to-date highs. The market focused on the numerous companies with March fiscal
year-ends recording favorable performance, including record-high earnings. Even so, due to rising political uncertainty
in Japan and overseas and a growing distaste for geopolitical risk, the Nikkei Stock Average remained essentially flatfrom June, trading in a narrow range around the ¥20,000 marker. After that point, rising political and military tension
between the United States and North Korea stoked by the latter’s increased nuclear testing caused the Nikkei to drop to¥19,300 at one stage. However, with the North Korean situation having cooled back down since mid-September, key US
stock market indicators recorded new highs on successive days. This strong showing lent positive direction to theJapanese stock market, pushing the Nikkei up from ¥18,909.26 on March 31, 2017, to ¥20,356.28 on September 30,
2017.
The US dollar–yen foreign exchange market remained essentially flat, with a certain degree of amplitude. The yen
appreciated against the dollar at one point, against a backdrop of growing geopolitical risk centered on Asia and a low
rate of growth in US commodity prices, but economic improvement and expectations that revisions to the US tax system
would result in lower taxes caused this appreciation to abate. As of September 30, 2017, the yen was trading at ¥112.73
to the US dollar, depreciating from the March 31, 2017, level of ¥112.19 to the US dollar. In the euro–yen market,
expectations that the European Central Bank would scale back its monetary easing led to consistent yen
depreciation/euro appreciation. As of September 30, 2017, the yen was trading at ¥132.85 to the euro, compared with
¥119.79 to the euro on March 31, 2017.

1
2

Announced on September 8, 2017
Initial preliminary report expected on November 14, 201742) Investment Policy
Sony Life’s investment policy is based on asset liability management (ALM), a strategy stemming from anunderstanding of the characteristics of insurance liabilities and prioritizing investments in assets that have corresponding
characteristics. Specifically, as life insurance policies represent long-term liabilities, we invest primarily inultralong-term Japanese government and corporate bonds that have a long term remaining until maturity. This approachallows us to appropriately control the risks associated with interest rate fluctuations on insurance liabilities. Meanwhile,
we limit our investments in risky assets such as equities.
3) Results of Investment
As of September 30, 2017, general account assets totaled ¥8,124.1 billion, up 3.0%, or ¥240.1 billion, from previous
fiscal year ended March 31, 2017. Within general account assets, Japanese government and corporate bond investment
totaled ¥7,031.1 billion (accounting for 86.5% of total general account assets), foreign government and corporate bonds¥308.7 billion (3.8%), Japanese stocks ¥34.1 billion (0.4%), money held in trust ¥271.9 billion (3.3%), policy loans¥184.5 billion (2.3%), real estate ¥116.6 billion (1.4%), and cash and cash deposits and call loans ¥44.5billion (0.5%).

5

(2) Portfolio of General Account Assets(Millions of yen, %)Category
Cash and deposits, call loans
Securities repurchased under resale agreements
Pledged money for bond borrowing transaction
Monetary claims purchased
Securities under proprietary accounts
Money held in trust
Securities
Japanese government and corporate bonds
Japanese stocks
Foreign securities
Bonds
Stocks, etc.
Other securities
Loans
Real estate
Deferred tax assets
Other assets
Reserve for possible loan losses
Total
Of which, foreign-currency-denominated assets

As of March 31, 2017
Amount40,896－－－－
273,877
7,173,927
6,828,743
37,659305,846
274,306
31,5391,678
180,374
117,525
5,350
92,328(271)
7,884,008
309,046

As of September 30, 2017

Composition
0.5
－
－
－
－
3.5
91.0
86.6
0.5
3.9
3.5
0.4
0.0
2.3
1.5
0.1
1.2
(0.0)
100.0
3.9

Amount44,594－－－－
271,940
7,408,899
7,031,145
34,175341,998
308,71233,285
1,579
184,563
116,664
5,623
92,130(277)
8,124,137
343,337

Composition
0.5
－
－
－
－
3.3
91.2
86.5
0.4
4.2
3.8
0.4
0.0
2.3
1.4
0.1
1.1
(0.0)
100.0
4.2

Note: The amount for real estate is equivalent to the total amount of land, buildings and construction in progress.

(3) Changes in General Account Assets by Category(Millions of yen)

For the six months ended
September 30, 2016

Category
Cash and deposits, call loans
Securities repurchased under resale agreements
Pledged money for bond borrowing transaction
Monetary claims purchased
Securities under proprietary accounts
Money held in trust
Securities(8,064)－－－－(1,445)325,253
235,388(286)
90,23393,928(3,695)
(81)
4,315
2,382
－
1,038
(2)
323,477
92,184

Japanese government and corporate bonds
Japanese stocks
Foreign securities
Bonds
Stocks, etc.
Other securities
Loans
Real estate
Deferred tax assets
Other assets
Reserve for possible loan losses
Total
Of which, foreign-currency-denominated assets

Note: The amount for real estate is equivalent to the total amount of land, buildings and construction in progress.

6

For the six months ended
September 30, 2017
3,698
－
－
－
－
(1,937)
234,971
202,402(3,483)36,152
34,405
1,746
(99)
4,189
(861)
273
(197)
(5)
240,129
34,291

(4) Investment Income(Millions of yen)

Category

For the six months ended
September 30, 2016

Interest income and dividends

For the six months ended
September 30, 201772,291

Interest income from deposits

78,2410

0Interest income and dividends from securities

63,63569,309Interest income from loans

3,171

3,285

Rent revenue from real estate

5,430

5,455

53

191

Other interest income and dividends
Gains on securities under proprietary accounts
Income from money held in trust, net
Income from trading securities, net
Gains on sale of securities

－

－

2,248

2,246

56

22

1,301

0

Gains on sale of Japanese bonds (including JGBs)

14

0

Gains on sale of Japanese stocks, etc.

－

－

1,287

－

－

－

－

1

Gains on sale of foreign securities
Other
Gains on redemption of securities
Gains on derivatives, net

4,577

－

Foreign exchange gains, net

－

2,078

Reversal of reserve for possible loan losses－－

Other investment income
Total

1

0

80,477

82,591(5) Investment Expenses(Millions of yen)

Category

For the six months ended
September 30, 2016

For the six months ended
September 30, 2017

Interest expenses

15

35

Losses on securities under proprietary accounts－－

Losses on money held in trust, net－－

Losses on trading securities, net－－

Losses on sale of securities－

0

Losses on sale of Japanese bonds (including JGBs)－－

Losses on sale of Japanese stocks, etc.

－－

Losses on sale of foreign securities

－

0

Other

－

－

Devaluation losses on securities－－

Devaluation losses on Japanese bonds (including JGBs)－－

Devaluation losses on Japanese stocks, etc.

－－

Devaluation losses on foreign securities

－

－

Other

－

－

Losses on redemption of securities

23

2

Losses on derivatives, net－

14,739Foreign exchange losses

5,023

－

2

5

Provision for reserve for possible loan losses
Write-off of loans
Depreciation of real estate for rent and others
Other investment expenses
Total

7

－

－

946

925

2,458

2,462

8,470

18,171

(6) Valuation Gains (Losses) on Trading-purpose Securities(Millions of yen)
As of March 31, 2017

Category

As of September 30, 2017

Net valuation gains (losses) recorded inincomeBalance sheet amount

2,054

Trading-purpose securities

Net valuation gains (losses) recorded inincomeBalance sheet amount

(162)

(31)

－

Note: The above table includes trading-purpose securities included in “money held in trust,” etc.

(7) Fair Value Information on Securities
a. Fair value information on securities with market value (except trading-purpose securities)(Millions of yen)
As of March 31, 2017
Category

As of September 30, 2017

Net unrealized gains (losses)

Carrying
amountFair value

6,068,671

7,514,255

277,372

303,356－

Net unrealized gains (losses)

Carrying
amountFair value

Unrealized
gains

Unrealized
losses1,445,584

1,521,504

75,9196,259,143

7,642,698

25,98327,876

1,893

322,255

347,298

－

－

－

－

－

896,527

1,069,920

173,392

174,667

1,274Japanese government and corporate bonds

852,604

1,013,331

160,726

160,726

Japanese stocks

13,68527,082

13,396

13,455

Foreign securities

Held-to-maturity securities
Policy-reserve-matching bonds
Stocks of subsidiaries and affiliated companies
Available-for-sale securities

Unrealized
gains

Unrealized
losses1,383,554

1,465,251

81,69625,042

26,878

1,836

－

－

－

－

898,642

1,073,776

175,133

175,640

507－

847,244

1,004,641

157,397

157,404

6

58

13,68529,82916,143

16,17532

30,071

29,193

(878)

337

1,215

37,54739,030

1,483

1,951

468

Bonds

18,545

17,996

(548)

337

886

25,864

26,201

336

804

468

Stocks, etc.

11,525

11,196

(329)

－

329

11,682

12,829

1,147

1,147

－

Other securities

165

313

147

147

－

165

274

108

108

－

Monetary claims purchased

－

－

－

－

－

－

－

－

－

－

Certificates of deposit

－

－

－

－

－

－

－

－

－

－

Others

－

－

－

－

－

－

－

－

－

－

Total

7,242,571

8,887,532

1,644,961

1,724,048

79,087

7,480,042

9,063,772

1,583,729

1,667,770

84,040Japanese government and corporate bonds

6,942,338

8,595,523

1,653,185

1,707,293

54,1087,146,132

8,722,816

1,576,684

1,643,696

67,012

Japanese stocks

13,68527,082

13,396

13,45558

13,68529,82916,143

16,17532

Foreign securities

286,381

264,612(21,768)

3,151

24,920320,058

310,851(9,206)

7,789

16,996

Bonds

274,855

253,416(21,439)

3,151

24,590308,376

298,022(10,353)

6,642

16,996

Stocks, etc.

11,525

11,196

(329)

－

329

11,682

12,829

1,147

1,147

－

Other securities

165

313

147

147

－

165

274

108

108

－

Monetary claims purchased

－

－

－

－

－

－

－

－

－

Certificates of deposit
－
－
－
－
－
－
－
－
－
Others
－
－
－
－
－
－
－
－
－
Notes:
1. The above table includes assets which are permitted to be treated as equivalent to securities defined in the Financial Instruments and Exchange Act of Japan.
2. Carrying amount and net unrealized gains (losses) on money held in trust, including items other than trading-purpose securities, amounted to ¥232,443 million and ¥39,941 million, respectively.

b. Carrying amounts of securities without market value
Category(Millions of yen)
As of
September 30, 2017

As ofMarch 31, 2017

Held-to-maturity securities－－

Unlisted foreign bonds－－

Others－－－－Stocks of subsidiaries and affiliated companies

16,312

12,476

Available-for-sale securities

Policy-reserve-matching bonds

9,896

9,193

Unlisted domestic stocks (except OTC stocks)

159

159

Unlisted foreign stocks (except OTC stocks)

608

683

Unlisted foreign bonds

－

－

9,127

8,349

26,20921,669Others
Total

8

－
－
－

c. Fair Value information consisting of that stated in the previous table-a and foreign exchange and other gains (losses) for table-b(Millions of yen)
As of March 31, 2017
Category

Carrying
amountFair value

As of September 30, 2017

Net unrealized gains (losses)
Unrealized
Unrealized
gains
lossesCarrying
amountFair value

Net unrealized gains (losses)
Unrealized
Unrealized
gains
losses

6,068,671

7,514,255

1,445,584

1,521,504

75,9196,259,143

7,642,698

1,383,554

1,465,251

81,696

Policy-reserve-matching bonds

277,372

303,356

25,98327,876

1,893

322,255

347,298

25,042

26,878

1,836

Stocks of subsidiaries and affiliated companies

16,312

16,312－－－

12,476

12,476－－－

Available-for-sale securities

906,423

1,083,838

177,414179,270

1,856

907,836

1,087,407

179,570

180,175604

Japanese government and corporate bonds

852,604

1,013,331

160,726

160,726－

847,244

1,004,641

157,397

157,404

6

Japanese stocks

13,84527,242

13,396

13,45558

13,84529,98916,143

16,17532

Held-to-maturity securities

30,68030,947

266

1,482

1,215

38,23140,748

2,517

2,985

468

Bonds

18,545

17,996

(548)

337

886

25,864

26,201

336

804

468

Stocks, etc.

12,134

12,950

815

1,145

329

12,366

14,546

2,180

2,180

－

Other securities

9,293

12,317

3,024

3,606

581

8,515

12,028

3,512

3,609

97

Monetary claims purchased

－

－

－

－

－

－

－

－

－

－

Certificates of deposit

－

－

－

－

－

－

－

－

－

－

Others

－

－

－

－

－

－

－

－

－

－

Total

7,268,780

8,917,763

1,648,982

1,728,652

79,6697,501,712

9,089,879

1,588,167

1,672,304

84,137

Japanese government and corporate bonds

67,012Foreign securities

6,942,338

8,595,523

1,653,185

1,707,293

54,1087,146,132

8,722,816

1,576,684

1,643,696

Japanese stocks

22,20835,605

13,396

13,45558

18,032

34,175

16,143

16,17532

Foreign securities

294,940

274,316(20,623)

4,296

24,920329,032

320,858(8,173)

8,822

16,996

Bonds

274,855

253,416(21,439)

3,151

24,590308,376

298,022(10,353)

6,642

16,996

Stocks, etc.

20,08420,900

815

1,145

329

20,65522,836

2,180

2,180

－

Other securities

9,293

12,317

3,024

3,606

581

8,515

12,028

3,512

3,609

97

Monetary claims purchased

－

－

－

－

－

－

－

－

－

－

Certificates of deposit

－

－

－

－

－

－

－

－

－

－

Others

－

－

－

－

－

－

－

－

－

－

(8) Fair Value Information on Money held in trust (General Account)(Millions of yen)
As of March 31, 2017
Category

Money held in trust

As of September 30, 2017

Net unrealized gains (losses)

Balance sheet
amountFair value

273,877

273,877

Unrealized
gains

Unrealized
losses－－－Net unrealized gains (losses)

Balance sheet
amountFair value

271,940

271,940

Unrealized
gains

Unrealized
losses－－－Note: The above table includes ¥50 million of jointly invested money held in trust.

Money held in trust for investment(Millions of yen)
As of March 31, 2017

Category

As of September 30, 2017

Net valuation gains (losses)
recorded in income

Balance sheet amount－Money held in trust for investment

Net valuation gains (losses)
recorded in income

Balance sheet amount

－

－

－

Money held in trust for held-to-maturity, policy-reserve-matching and other(Millions of yen)
As of March 31, 2017

Category

Carrying
amountAs of September 30, 2017

Net unrealized gains (losses)
Fair value

Unrealized
gains

Unrealized
lossesCarrying
amountNet unrealized gains (losses)
Fair value

Unrealized
gains

Unrealized
lossesMoney held in trust for held-to-maturity

－

－

－

－

－

－

－

－

－

－

Money held in trust for policy-reserve-matching

－

－

－

－

－

－

－

－

－

－

231,907273,826

41,91941,919－231,948

271,889

39,941

39,941－Other money held in trust
Note: Money held in trust include cash and call loans, etc.

9

3. Non-consolidated Balance Sheets(Millions of yen)
As ofMar. 31, 2017

As of
Sep. 30, 2017

AmountAmountAssets:Cash and deposits
Cash
Deposits
Call loans
Money held in trust
Securities
Japanese government bonds
Japanese local government bonds
Japanese corporate bonds
Japanese stocks
Foreign securities
Other securities
Loans
Policy loans
Commercial loans
Tangible fixed assets
Land
Buildings
Leased assets
Construction in progress
Other tangible fixed assets
Intangible fixed assets
Software
Other intangible fixed assets
Due from agencies
Due from reinsurers
Other assets
Other receivable
Prepaid expenses
Accrued income
Money on deposits
Initial margins of futures markets
Variation margins of futures markets
Derivative
Advance payments
Others
Prepaid pension costs
Deferred tax assets
Reserve for possible loan losses
Reserve for investment losses

47,0162
47,013
61,900273,877
8,093,192
6,664,639
1,767
310,466
86,954782,064
247,299
180,374
180,33934
118,441
83,00734,4421075
906
19,356
19,3479
0
1,393
74,24535,316
1,651
18,621
5,269
7,302
435
5,212
370
65
2,376
5,350
(271)
(3,640)42,375－42,37576,900271,940
8,416,379
6,791,148
1,755
385,123
86,117877,051
275,183
184,563
184,531
32
117,508
83,00733,581875
835
19,486
19,4788－
788
70,59832,681
2,171
18,415
5,311
7,097
3,487
920
436
76
2,447
5,623
(277)
－

Total Assets

8,873,613

9,208,334

As ofMar. 31, 2017

As of
Sep. 30, 2017

AmountAmountLiabilities:
Policy reserves and others
Reserve for outstanding claims
Policy reserves
Reserve for policyholders' dividends
Due to agencies
Due to reinsurers
Other liabilities
Collateral for securities lending transactions
Accrued income tax
Other payables
Accrued expenses
Unearned revenue
Deposits received
Deposits received for guarantee
Variation margins of futures markets
Derivative liabilities
Lease obligations
Asset retirement obligations
Suspense receipt
Reserve for employees' retirement benefits
Reserve for directors' retirement benefits
Reserve under the special laws
Reserve for price fluctuations
Deferred tax liabilities

7,968,639
32,965
7,929,944
5,729
2,616
3,663
353,812
310,608
8,095
2,137
17,923
1,067
2,094
5,420
446
614
10
2,156
3,235
24,67811946,00546,005488

8,286,407
34,0698,246,575
5,762
1,430
4,286
373,876
325,800
7,954
7,432
17,230
966
860
5,441
－
5,032
9
2,198
949
25,858－46,90946,909488

Total Liabilities

8,400,024

8,739,257

Net Assets:
Common stock
Capital surplus
Capital reserve
Retained earnings
Legal retained earnings
Other retained earnings
Unappropriated retained earnings
Total shareholders' equity
Net unrealized gains (losses) on other securities, net of taxes
Land revaluation, net of taxes
Total valuation and translation adjustments
Total Net Assets
Total Liabilities and Net Assets

70,0005,865
5,865
271,416
30,318241,098
241,098347,281
127,772(1,465)
126,307473,589
8,873,613

70,0005,865
5,865
265,303
34,938230,364
230,364
341,168
129,373(1,465)
127,907
469,076
9,208,334

10

4. Non-consolidated Statements of Income(Millions of yen)

Ordinary Revenues
Income from insurance premiums
Insurance premiums
Ceded reinsurance commissions
Investment income
Interest income and dividends
Interest income from deposits
Interest income and dividends from securities
Interest income from loans
Rent revenue from real estate
Other interest income and dividends
Income from money held in trust, net
Gains on trading securities, net
Gains on sale of securities
Gains on redemption of securities
Gains on derivatives, net
Foreign exchange gains, net
Other investment income
Gains on separate accounts, net
Other ordinary income
Income for annuity riders
Income for deferred payment of claims
Reversal of reserves for outstanding claims
Other ordinary income
Ordinary Expenses
Insurance claims and other payments
Insurance claims
Annuity payments
Insurance benefits
Surrender payments
Refund to policyholders
Reinsurance premiums
Provision for policy reserves and others
Provision for reserve for outstanding claims
Provision for policy reserves
Interest on policyholders' dividend reserve
Investment expenses
Interest expenses
Losses on trading securities, net
Losses on redemption of securities
Losses on derivatives, net
Foreign exchange losses, net
Provision for reserve for possible loan losses
Depreciation of real estate for rent and others
Other investment expenses
Losses on separate accounts, net
Operating expenses
Other ordinary expenses
Payments of deferred claims
Taxes
Depreciation and amortization
Provision for reserve for employees' retirement benefits
OthersOrdinary Profit
Extraordinary Gains
Reversal of reserve for investment loss
Extraordinary Losses
Losses on disposal of fixed assets
Impairment losses
Provision for reserve under the special laws
Provision for reserve for price fluctuations
Valuation loss on stocks of affiliated companies
Provision for Reserve for Policyholders' Dividends
Income Before Income Taxes
Income Taxes -Current
Income Taxes -Deferred
Total Income Taxes
Net Income

For the six months ended
September 30, 2016

For the six months ended
September 30, 2017

AmountAmount564,426
477,426
476,586840
80,477
72,2910
63,635
3,171
5,430
53
2,248
56
1,301
－
4,577
－
1
－
6,522
1,523
1,974
238
2,785
531,204
163,350
42,443
5,617
27,837
83,1391,607
2,705
244,117－244,117040,604
15
－
23
－
5,023
2
946
2,458
32,13470,056
13,075
2,312
6,173
2,670
1,904
13
33,221
－
－
830
49
0
780
780
－
682
31,70910,452(1,568)
8,883
22,825

11

632,357
480,491
479,458
1,033
145,196
78,241069,309
3,285
5,455
191
2,246
22
0
1
－
2,078
0
62,605
6,670
2,298
2,448
－
1,922
606,285
187,384
45,157
5,618
40,40090,1591,673
4,375
317,735
1,104
316,630018,17135
0
2
14,739
－
5
925
2,462
－
68,157
14,836
4,512
6,016
2,642
1,661
4
26,072
3,640
3,640
5,083
2
0
904
904
4,176
297
24,331
8,173
(829)
7,344
16,986

5. Reconciliation to Core Profit and Non-consolidated Ordinary Profit(Millions of yen)

For the six months ended
September 30, 2016
Core profit

A

For the six months ended
September 30, 2017

30,68743,898

11,796

2,098

Income from money held in trust, net－－

Income from trading securities, net

4919

Gains on sale of securities

1,301

0

Gains on derivatives, net

4,577

－

－

2,078

Capital gains

Foreign exchange gains, net
Other capital gains

5,868

－

5,688

16,257

Losses on money held in trust, net－－

Losses on trading securities, net－－

Losses on sale of securities－

0

Devaluation losses on securities－－

Losses on derivatives, net－

14,739

5,023

－

665

1,518

Capital losses

Foreign exchange losses, net
Other capital losses
Net capital gains (losses)

B

6,108

(14,159)

Core profit plus net capital gains (losses)

A+B

36,79529,739－－Gains from reinsurance－－

Reversal of contingency reserve－－

Reversal of specific reserve for possible loan losses－－

Others

－

－

3,574

3,666

－

－

3,471

3,613

Provision for specific reserve for possible loan losses

1

3

Provision for reserve for possible loan losses for specific foreign countries－－

Write-off of loans－－

Other one-time gains

Other one-time losses
Losses from reinsurance
Provision for contingency reserve

OthersNet other one-time gains (losses)
Ordinary profit

101

49

C

(3,574)(3,666)

A+B+C

33,221

26,072

Notes:
1. Core profit for the six months ended September 30, 2017 (A) includes income gains of ¥2,246 million in income from money held in trust along with interest income anddividends of ¥3 million in income from trading securities, net. Other capital costs include the provision for policy reserves and others of ¥853 million for currency market
fluctuations of products dominated in foreign currencies; other capital losses include impairment losses of ¥664 million from investment partnership.
"Others" of other one-time losses included provision of additional policy reserve of ¥49 million.
2. Core profit for the six months ended September 30, 2016 (A) includes income gains of ¥2,248 million in income from money held in trust along with interest income anddividends of ¥6 million in income from trading securities, net. Other capital gains include the reversal of policy reserves and others of ¥5,868 million for currency market
fluctuations of products dominated in foreign currencies; other capital losses include impairment losses of ¥665 million from investment partnership.
"Others" of other one-time losses included provision of additional policy reserve of ¥101 million.

126. Loans by Borrower Category(Millions of yen, %)Category

As of March 31, 2017

As of September 30, 2017

Bankrupt and quasi-bankrupt loans--

Doubtful loans--

Sub-standard loans--

Subtotal[% to total]
Normal loans
Total

-

-

[-]

[-]

431,372440,669

431,372440,669

Notes:

1.Bankrupt and quasi-bankrupt loans are loans to borrowers who are subject to bankruptcy, corporate reorganization, rehabilitation or other similar
proceedings and other borrowers in serious financial difficulties.
2. Doubtful loans are loans to borrowers (other than bankrupt and quasi-bankrupt borrowers) with deteriorated financial condition and results ofoperations from which it is unlikely that the principal and interest on the loans will be recovered.
3. Sub-standard loans are loans on which principal and/or interest are past due for three months or more (excluding loans described in notes 1. and 2.
above) and loans on which terms and conditions have been amended in favor of the borrowers (e.g. reduction of the original interest rate, deferral ofinterest payments, extension of principal repayments or debt waiver) in order to support the borrowers’ recovery from financial difficulties(excluding loans described in notes 1. and 2. above and loans on which principal and/or interest are past due for three months or more).
4. Normal loans are all other loans.

7. Risk-monitored Loans
Not applicable13

8. Solvency Margin Ratio(Millions of yen)

Category

As of March 31, 2017

Total solvency margin(A)

As of September 30, 2017

1,176,229

1,228,795

Common stock, etc.

324,181339,389

Reserve for price fluctuations

46,00546,909Contingency reserve82,46386,0760

2

Net unrealized gains on other securities (before tax deductions) and net deferredgains or losses on hedging instruments (before tax deductions)
x 90% (100% if losses)

159,672

161,613

Net unrealized gains on real estate multiplied by 85% (100% if losses)

30,84730,847

－

－

442

2,202

Deferred tax assets

82,98088,894

Excess amount of policy reserves based on Zillmer method

495,984

511,960－－

The portion of the excess amount of policy reserves based on Zillmer method
and subordinated debt that is not included in the margin(42,891)(37,381)

Deductible items(3,457)(1,721)(B)

91,576

93,380Insurance risk

R1

24,16924,251

Third-sector insurance risk

R8

8,541

8,537

Assumed interest rate risk

R2

31,356

31,811Minimum guarantee risk

R718,14019,361

Asset management risk

R333,55433,742Business management risk

R4

2,315

2,354

2,568.8%

2,631.8%

General reserve for possible loan losses

Amount excluded from deferred tax assets
Unallocated portion of reserve for policyholders' dividends

Subordinated debt

Total risk

(R1+R8)2+(R2+R3+R7)2 +R4

Solvency margin ratio
(A)/

B

100

Notes:
1. The figures are calculated based on provisions in Articles 86 and 87 of the Ordinance for Enforcement of the Insurance Business Act of Japanand the Ministry of Finance Public Notice No. 50 of 1996.
2. Minimum guarantee risk is calculated based on the standardized approach.

14

(Reference) Consolidated Solvency Margin Ratio
Although Sony Life is not required to prepare consolidated financial statements since it does not have consolidated subsidiaries,
Sony Life discloses consolidated solvency margin ratio consolidated with it's affiliated companies quarterly.
(Millions of yen)

Category

As of March 31, 2017

Total solvency margin

As of September 30, 2017

1,162,007

1,212,807

Common stock, etc.

322,640

337,211

Reserve for price fluctuations

46,00546,909Contingency reserve82,46386,076

Catastrophe reserve－－

General reserve for possible loan losses
Net unrealized gains on other securities (before tax deductions) and net
deferred gains or losses on hedging instruments (before tax deductions) ×
90% (100% if losses)

02

159,672

161,613

Net unrealized gains on real estate multiplied by 85% (100% if losses)

30,84730,847

Total amount of unrecognized net actuarial differences, and unrecognizedprior service cost

(3,565)(3,129)

－

－

442

2,202

Deferred tax assets

82,98088,894

Excess amount of policy reserves based on Zillmer method

495,984

511,960－－

The portion of the excess amount of policy reserves based on Zillmer
method and subordinated debt that is not included in the margin(44,432)(39,560)

Deductible items(11,031)(10,222)88,302

90,710(A)

Amount excluded from deferred tax assets
Unallocated portion of reserve for policyholders' dividends

Subordinated debt

Total risk

R12+R52+R8+R9)2+(R2+R3+R7)2+R4+R6(B)

Insurance risk

R1

24,16924,251

Ordinary insurance risk

R5

－

－

Major Catastrophe risk

R6

－

－

Third-sector insurance risk

R8

8,541

8,537

－

－

Insurance risk of small-amount short-term insurance providers

R9

Assumed interest rate risk

R2

31,356

31,811Minimum guarantee risk

R718,14019,361

Asset management risk

R330,09930,934

Business management risk

R4

2,246

2,297

2,631.8%

2,674.0%

Solvency margin ratio(A)/ B

100

Notes:
1. The figures are calculated based on provisions in Articles 86-2 and 88 of the Ordinance for Enforcement of the Insurance Business Act ofJapan and Public Notice of Financial Services Agency No. 23 of 2011.
2. Minimum guarantee risk is calculated based on the standardized approach.

15

9. Status of Separate Account Assets(1) Balance of Separate Account Assets(Millions of yen)

Category

As of March 31, 2017

Individual variable life insurance and individual variable annuities

As of September 30, 2017
989,605

1,084,196－－

989,605

1,084,196

Group annuities
Total separate accountNote: Assets relating to individual variable life insurance and individual variable annuities are jointly invested at Sony Life.

(2) Policy Amount in Force (Separate Account)
Individual variable life insurance(Number: Thousand, Amount: Millions of yen)

As of March 31, 2017

Category

NumberAs of September 30, 2017

AmountNumberAmountVariable life insurance (whole life type)845

8,680,668

844

8,557,187

Variable life insurance (limited term type)97

421,300

107

499,866

Variable life insurance (term type)1

38,716

3

141,244944

9,140,684

955

9,198,298

Total
Note: Amounts include the rider portion of variable life insurance.

Individual variable annuities(Number: Thousand, Amount: Millions of yen)

As of March 31, 2017

Category

NumberIndividual variable annuities

As of September 30, 2017

Amount106

600,331

NumberAmount128

733,382

Note: The amount of individual variable annuities is equal to the sum of (a) the funds to be held at the time annuity payments are to commence for policies for whichannuity payments have not yet commenced and (b) the amount of policy reserves for policies for which payments have commenced.

16