Consolidated Financial Summary (Japanese GAAP)
for the Six Months Ended September 30, 2017
November 13, 2017
Sony Financial Holdings Inc.
(URL: http://www.sonyfh.co.jp/index_en.html)
Stock exchange listing: Tokyo Stock Exchange (code number: 8729)
Representative:
Shigeru Ishii, President and Representative Director
Inquiries:
Yasuo Hasegawa, General Manager - Investor Relations Dept.
(Fractional amounts of less than ¥1 million are discarded.)Company name:

1. Consolidated financial results for the six months ended September 30, 2017
(1) Operating results
Ordinary Revenues
Millions of yen% change

Millions of yen% change

Millions of yen% change

708,324

12.1

32,669(12.0)

21,596(14.0)

631,923(4.6)

37,11628.7

25,11931.2

For the six months ended
September 30, 2017
For the six months ended
September 30, 2016
Note: Comprehensive Income:

Profit Attributable to Owners of
the Parent

Ordinary Profit

For the six months ended September 30, 2017:¥ 24,737 million:

30.8%

For the six months ended September 30, 2016:¥ 18,910 million:

14.7%

Net Income per
Share(Fully Diluted)

Net Income per
Share
For the six months ended
September 30, 2017
For the six months ended
September 30, 2016

Yen

Yen

49.65

49.65

57.75

57.75

(2) Financial conditions
Total Assets
As of September 30, 2017
As of March 31, 2017
Notes: Net Assets Attributable to Shareholders:

Total Net Assets

Net Asset Ratio

Millions of yen

Millions of yen%

11,979,281
11,471,845

597,900
601,139

5.0
5.2

As of September 30, 2017:¥ 596,297 million

As of March 31, 2017:¥ 599,630 million

2. Dividends
Dividend per Share

Record date
For the year ended
March 31, 2017
For the year ending
March 31, 2018
For the year ending
March 31, 2018
(forecast)

1st quarter2nd quarter3rd quarter

Year-end

Annual Total

Yen

Yen

Yen

Yen

Yen

－

0.00

－

55.00

55.00

－

0.00
－

55.00

55.00

Note: Changes in dividend forecast since the most recent public announcement: None

3. Forecast of consolidated financial results for the year ending March 31, 2018
(Percentage figures represent changes from the results of the previous fiscal year.)
Profit Attributable to
Net Income per
Ordinary Revenues
Ordinary Profit
Owners of the Parent
Share
For the year ending
March 31, 2018

Millions of yen% change

Millions of yen% change

Millions of yen% changeYen

1,430,000

3.5

67,0001.0

42,0000.9

96.56

Note: Changes in forecast of financial results since the most recent public announcement: None

4. Notes(1) Changes in significant subsidiaries during the period (changes in specified subsidiaries accompanying changes in scope of
consolidation): None
(2) Changes in accounting policies, accounting estimates and restatements of the Consolidated Financial Statements(a) Changes in accounting policies resulting from the revision of the accounting standards and other regulations: None(b) Changes in accounting policies due to other reasons: None(c) Changes in accounting estimates: None(d) Restatements of the Consolidated Financial Statements: None
(3) Number of shares outstanding (common stock)(a) Number of shares outstanding (including treasury shares)
As of September 30, 2017:
435,027,513 shares
As of March 31, 2017:
435,000,000 shares(b) Number of treasury shares
As of September 30, 2017:
35,775 shares
As of March 31, 2017:
52,975 shares(c) Weighted-average number of shares
For the six months ended September 30, 2017:434,967,663 shares

For the six months ended September 30, 2016:

434,999,925 shares

Note on interim audit proceduresThis document is exempt from interim audit procedures.

Content of Supplemental Materials
Ⅰ. Consolidated Financial Statements
1. Consolidated Balance Sheets ……………………………………………………………………………

2

2. Consolidated Statements of Income and Consolidated Statements of Comprehensive Income(Consolidated Statements of Income) ……………………………………………………………………

4(Consolidated Statements of Comprehensive Income) …………………………………………………

7

3. Consolidated Statements of Changes in Net Assets ……………………………………………………

8

4. Note on going concern……………………………………………………………………………………

11

5. Material changes in stockholders’ equity………………………………………………………………

11

6. Changes in significant subsidiaries during the period…….……………………………………………

11

7. Changes in accounting policies…………………………………………………………………………

11

8. Segment Information ……………………………………………………………………………………

12

9. Subsequent Events ………………………………………………………………………………………

14

Ⅱ. Attachment
Consolidated Financial Results for the Six Months Ended September 30, 2017 and Sony Life’s Market
Consistent Embedded Value as of September 30, 2017 …………………………………………………

16* The conference call for explaining the Sony Financial Group's financial results will be held at 15:00 (Tokyo),
November 13, 2017. Please note that our conference call will be held only in Japanese.
We will upload the presentation materials with speech text on November 13, 2017 after 14:00, the translation of
the conference call (audio) on November 14 and the Q&A summary (text) at a later date on the Earnings
Releases and Presentation Materials page on our website:
http://www.sonyfh.co.jp/en/financial_info/results/index.html* On November 13, 2017, Sony Financial Holdings Inc.’s (SFH’s) significant subsidiaries─Sony Life InsuranceCo., Ltd. (Sony Life), Sony Assurance Inc. (Sony Assurance) and Sony Bank Inc. (Sony Bank)─will announce
their financial results for the six months ended September 30, 2017. SFH has prepared an English-language
summary of those Japanese announcements made by the above subsidiaries, solely for convenience of nonJapanese readers.

- 1 -Ⅰ. Consolidated Financial Statements
1. Consolidated Balance Sheets(Millions of yen)
As of March 31, 2017

As of September 30, 2017¥¥

AssetsCash and due from banks
Call loans and bills bought

206,481
61,900

Monetary claims purchased

274,693
76,900573

7,506

296,877

292,940

Securities

8,857,436

9,244,711

Loans

1,720,004

1,743,902

Tangible fixed assets

123,614130,344

Intangible fixed assets

30,776

31,109Due from agencies0－

Due from reinsurers

1,438

832

Money held in trust

Foreign exchanges

7,268

10,446

148,650

148,745

Net defined benefit asset

2,752

2,863

Deferred tax assets

15,313

15,500Reserve for possible loan losses(1,243)(1,215)

Other assets

Total Assets

¥

- 2 -

11,471,845¥

11,979,281

(Millions of yen)
As of March 31, 2017

As of September 30, 2017¥¥

Liabilities
Policy reserves and others
Reserve for outstanding claims
Policy reserves
Reserve for policyholders’ dividends

8,113,153

8,438,180

71,30673,457

8,036,118

8,358,960

5,729

5,762

Due to agencies

2,616

1,430

Due to reinsurers

3,737

4,364

2,071,091

2,121,161

Call money and bills sold

70,000117,000

Borrowed money

90,000

153,851

Foreign exchanges

108

336

Bonds payable

10,00010,000

Other liabilities

Deposits

427,866

451,651

Reserve for employees’ bonuses

3,694

3,430

Net defined benefit liability

31,39932,326366－

46,182

47,101

46,182

47,101

Deferred tax liabilities－

58

Deferred tax liabilities on land revaluation

488

488

10,870,705

11,381,381

Common stock

19,90019,927

Capital surplus

195,277

191,157

Retained earnings

255,062

252,638

(81)

(55)

470,157

463,668

Net unrealized gains (losses) on other securities, net of taxes

134,849

137,551

Net deferred gains (losses) on hedging instruments, net of taxes(1,154)(1,027)

Land revaluation, net of taxes(1,465)(1,465)Remeasurements of defined benefit plans, net of taxes(2,756)(2,430)Total accumulated other comprehensive income

129,472

132,628

Reserve for directors’ retirement benefits
Special reserves
Reserve for price fluctuations

Total Liabilities
Net Assets

Treasury stock
Total shareholders’ equity

Subscription rights to shares

49

61

Non-controlling interests

1,460

1,541

601,139

597,900

Total Net Assets
Total Liabilities and Net Assets

¥

- 3 -

11,471,845¥

11,979,281

2. Consolidated Statements of Income and Consolidated Statements of Comprehensive Income(Consolidated Statements of Income)(Millions of yen)

Ordinary Revenues
Ordinary Revenues from the Life Insurance Business
Income from insurance premiums
Insurance premiums
Ceded reinsurance commissions
Investment income

For the six months ended
September 30, 2016

For the six months ended
September 30, 2017¥¥

631,923

708,324

563,030

630,822476,763479,629475,923

478,596

840

1,033

80,226

144,945

Interest income and dividends

72,04077,991

Income from monetary trusts, net

2,248

2,246

Gains on trading securities, net

56

22

1,301

0

－

1

Gains on derivatives, net

4,577

－

Foreign exchange gains, net

－

2,078

Gains on sale of securities
Gains on redemption of securities

Other investment income

10Gains on separate accounts, net－

62,604

6,039

6,247

50,27054,79848,96753,81748,93353,786

33

30

1,277

956

Interest income and dividends

661

667

Gains on sale of securities

649

320

0

－

(33)

(30)

Other ordinary income
Ordinary Revenues from the Non-life Insurance Business
Underwriting income
Net premiums written
Interest and dividends on deposits of premiums
Investment income

Gains on redemption of securities
Transfer to interest and dividends on deposits of premiums
Other ordinary income

25

24

18,516

19,714

12,757

14,005Interest income on loans

7,785

8,457

Interest income and dividends on securities

Ordinary Revenues from the Banking Business
Interest income

4,937

5,510

Interest income on deposits with banks

32

31

Interest income on interest rate swaps

0－

Others interest income

05Fees and commissions

3,404

3,033

Other operating income

2,225

2,104

Other ordinary income

130

570

105

2,988

Other
Other ordinary income

105

2,988
(Continued)- 4 -(Millions of yen)

Ordinary Expenses
Ordinary Expenses from the Life Insurance BusinessInsurance claims and other payments

For the six months ended
September 30, 2016

For the six months ended
September 30, 2017¥¥594,807675,654

531,994

607,188

163,350

187,384

Insurance claims

42,44345,157

Annuity payments

5,617

5,618

Insurance benefits

27,83740,400Surrender payments

83,13990,159Other payments

1,607

1,673

Reinsurance premiums

2,705

4,375

244,117

317,735

Provision for policy reserves and others－

Provision for reserve for outstanding claims

1,104

244,117

316,63000Investment expenses

40,47818,039Interest expenses

15

35

Losses on sale of securities－

0

Losses on redemption of securities

23

2

Losses on derivatives, net－

14,739Foreign exchange losses, net

5,023

－

Provision for reserve for possible loan losses

2

5

Depreciation of real estate for rent and others

896

876

Other investment expenses

2,381

2,380

Losses on separate accounts, net

32,134－

Operating expenses

69,83867,941Other ordinary expenses

14,20916,086

46,56549,843

Underwriting expenses

34,42436,538Net losses paid

24,04624,937

Loss adjustment expenses

3,683

3,672

572

669

Provision for reserve for outstanding losses

1,603

1,046

Provision for underwriting reserves

4,517

6,211

2

1

2

1

12,136

13,302

2

1

Provision for policy reserves
Interest portion of reserve for policyholders’ dividends

Ordinary Expenses from the Non-life Insurance BusinessNet commission and brokerage fees

Investment expenses
Other investment expenses
Operating, general and administrative expenses
Other ordinary expenses(Continued)- 5 -(Millions of yen)

Ordinary Expenses from the Banking Business

For the six months ended
September 30, 2016

For the six months ended
September 30, 2017¥¥

Interest expenses
Interest expenses on deposits

15,78915,002

4,277

3,884

2,518

2,582

Interest expenses on call money and bills sold

－

(35)

Interest expenses on borrowed money

160Interest expenses on bonds

48

21

1,693

1,310

0

5

Fees and commissions

1,687

2,199

Other operating expenses

78

49

9,602

8,822

142

47

457

3,620

457

3,620

37,116

32,669

911

1,039

110

85

0

0

793

919

793

919

7

34

682

297

Income Before Income Taxes

35,522

31,332

Income Taxes - Current

12,237

11,105

Income Taxes - Deferred(1,869)(1,353)

Total Income Taxes

10,368

9,752

Profit25,153

21,57933(16)Interest expenses on interest rate swaps
Others interest expenses

General and administrative expenses
Other ordinary expenses
Other
Other ordinary expenses
Ordinary Profit
Extraordinary Losses
Losses on disposal of fixed assets
Impairment losses
Provision for special reserves
Provision for reserve for price fluctuations
OthersProvision for Reserve for Policyholders’ Dividends

Profit (Loss) Attributable to Non-controlling Interests
Profit Attributable to Owners of the Parent

¥

- 6 -

25,119¥21,596

(Consolidated Statements of Comprehensive Income)(Millions of yen)

Profit

For the six months ended
September 30, 2016

For the six months ended
September 30, 2017¥¥25,153

21,579Other comprehensive income
Net unrealized gains (losses) on other securities, net of taxes(6,658)2,702

Net deferred gains (losses) on hedging instruments, net of taxes

33

127

Remeasurements of defined benefit plans, net of taxes

381

327

Total other comprehensive income(6,243)Comprehensive income¥

18,9103,157¥

24,737(Details)
Comprehensive income attributable to owners of the parent
Comprehensive income attributable to non-controlling interests- 7 -18,87424,75235(15)

3. Consolidated Statements of Changes in Net Assets
For the six months ended September 30, 2016
(Millions of yen)
Shareholders’ Equity
Common stock

Balance at the beginning of
the period
Cumulative effects ofchanges in accounting
policies
Restated balance at the
beginning of the period

Capital surplus

Retained earnings

Treasury stock¥ 19,900¥ 195,277¥ 238,079－－

19,900¥Total shareholders’ equity(0)¥ 453,256

105

－

105

195,277

238,185(0)453,362－－(23,924)－(23,924)－－

25,119－25,119

－

－

(818)

－

(818)

－

－

－

－

－

－

－

376

－

376

¥ 19,900¥ 195,277¥ 238,561(0)¥ 453,738

Changes during the period
Dividends from surplus
Profit attributable toowners of the parent
Adjustments due tochange of scope of
consolidation
Net changes of items
other than shareholders’equityTotal changes during theperiodBalance at the end of theperiod¥Total accumulated other comprehensive income
Net deferred gains
Net unrealized
Total accumulated Subscription rights Non-controlling(losses) on
Remeasurements
gains (losses) on
Land revaluation,otherto shares
interests
hedgingof defined benefit
other securities,
net of taxes
comprehensive
instruments,
plans, net of taxes
net of taxes
incomenet of taxes

Balance at the beginningof the period
Cumulative effects ofchanges in accounting
policies
Restated balance at the
beginning of the period¥ 157,364¥(2,347) ¥(1,465) ¥(3,760) ¥ 149,791

－

－

－

－

－

157,364(2,347)(1,465)(3,760)

－

－

－

－

－

－

¥

1,329

¥ 604,377

－

－

105

149,791－

1,329

604,482

－

－

－

－

(23,924)

－

－

－

－

－

25,119

－

－

－

－

－

－

(818)

(6,658)

33

－

379

(6,245)16

35(6,193)(6,658)

33

－

379

(6,245)16

35(5,817)(2,314) ¥(1,465) ¥1,364¥ 598,665－¥

Total net assets

Changes during the period
Dividends from surplus
Profit attributable toowners of the parent
Adjustments due tochange of scope of
consolidation
Net changes of items
other than shareholders’equityTotal changes during theperiodBalance at the end of theperiod¥ 150,706

¥

- 8 -

(3,380) ¥ 143,546

¥

16

¥

For the six months ended September 30, 2017
(Millions of yen)
Shareholders’ Equity
Common stock

Balance at the beginning of
the period

Capital surplus

Retained earnings

Treasury stock¥ 19,900¥ 195,277¥ 255,062

Issuance of new shares

27

27

Dividends from surplus－¥

Total shareholders’ equity(81)¥ 470,157

－

－

55

－

(23,922)－(23,922)－－

21,596－

21,596

－

(5)

－

26

21

－

5

(5)

－

－

－

－

(92)

－

(92)

－

(4,147)－－(4,147)

－

－

－

－

－

27

(4,119)(2,423)26(6,488)¥ 19,927¥ 191,157¥ 252,638(55)¥ 463,668

Changes during the period

Profit attributable toowners of the parent
Disposal of treasury
sharesTransfer of loss on
disposal of treasury
sharesAdjustments due tochange of scope of
consolidation
Change in ownershipinterest of parent due totransactions with noncontrolling interests
Net changes of items
other than shareholders’equityTotal changes during theperiodBalance at the end of theperiod¥(Continued)- 9 -Total accumulated other comprehensive income
Net deferred gains
Net unrealized
Total accumulated Subscription rights Non-controlling(losses) on
Remeasurements
gains (losses) on
Land revaluation,otherto shares
interests
hedgingof defined benefit
other securities,
net of taxes
comprehensive
instruments,
plans, net of taxes
net of taxes
incomenet of taxes

Balance at the beginning of
the period¥ 134,849¥(1,154) ¥(1,465) ¥(2,756) ¥ 129,472

¥

49

¥

Total net assets

1,460¥ 601,139

Changes during the period
Issuance of new shares

－

－

－

－

－

－

－

55

Dividends from surplus

－

－

－

－

－

－

－

(23,922)

－

－

－

－

－

－

－

21,596

－

－

－

－

－

－

－

21

－

－

－

－

－

－

－

－

－

－

－

－

－

－

－

(92)

－

－

－

－

－

－

－

(4,147)

2,702

127

－

325

3,156

12

80

3,249

2,702

127

－

325

3,156

12

80

(3,238)(1,027) ¥(1,465) ¥1,541¥ 597,900

Profit attributable toowners of the parent
Disposal of treasury
sharesTransfer of loss on
disposal of treasury
sharesAdjustments due tochange of scope of
consolidation
Change in ownershipinterest of parent due totransactions with noncontrolling interests
Net changes of items
other than shareholders’equityTotal changes during theperiodBalance at the end of theperiod¥ 137,551¥- 10 -(2,430) ¥ 132,628

¥

61

¥

4. Note on going concern
Not applicable.

5. Material changes in stockholders’ equity
Not applicable.

6. Changes in significant subsidiaries during the period
Not applicable.
Although not a specified subsidiary, nursing-care provider Proud Life Inc., which was a non-consolidated subsidiary in theprevious consolidated fiscal year, has been included in the scope of consolidation, due to a rise in its importance from the firsthalf of the fiscal year ending March 31, 2018. The company’s results are included in the “other” category in the consolidated
statements of income.

7. Changes in accounting policies
Not applicable.

- 11 -

8. Segment Information(1) Outline of reporting segments
The Sony Financial Group consists of three reporting segments: the life insurance business, the non-life insurance businessand the banking business.
●The life insurance business consists of Sony Life Insurance Co., Ltd., AEGON Sony Life Insurance Co., Ltd., and SA
Reinsurance Ltd.
●The non-life insurance business consists of Sony Assurance Inc.
●The banking business consists of Sony Bank Inc., Sony Payment Services Inc. and SmartLink Network Hong Kong
Limited.
(2) Segment Information by reporting segment
For the six months ended September 30, 2016
Millions of yen
Non-life
insurancebusiness

Life insurance
business
Ordinary revenues
External customers
Intersegment
Total
Segment profit
Segment assets
OthersDepreciation
Interest income and dividends
Interest expenses
Equity in earnings (losses) ofaffiliates
Investments in affiliates
Increase in tangible fixed assets
and intangible fixed assets¥¥

563,030
1,508¥

50,2700Bankingbusiness¥

Total

18,516
97¥

631,817
1,606

other

¥

Total

105
－

¥

631,923
1,606

564,538
32,2358,362,193

50,2703,372
177,920

18,614
1,788
2,202,085

633,424
37,396
10,742,199

105
(366)
3,768

633,530
37,03010,745,967

3,617
72,2991,292
12,756

6,449
85,71720
0

6,469
85,717

15

1,539
661
－

4,345

4,361

18

4,380

(1,099)－－(1,099)－(1,099)11,114－－

11,114－

11,114

5,351

¥

2,707

¥

1,383

¥

9,442

¥

10

¥

9,453

For the six months ended September 30, 2017
Millions of yen
Non-life
insurancebusiness

Life insurance
business
Ordinary revenues
External customers
Intersegment
Total
Segment profit
Segment assets
OthersDepreciation
Interest income and dividends¥

Interest expenses
Equity in earnings (losses) ofaffiliates
Investments in affiliates
Increase in tangible fixed assets
and intangible fixed assets¥

630,822
1,609¥

54,7980Bankingbusiness¥

Total

19,714
104¥705,335
1,715

other

¥

Total

2,988
－

¥

708,324
1,715

632,432
24,9259,207,448

54,798
4,587
194,312

19,8193,712
2,592,552

707,050
33,225
11,994,313

2,988
(631)
14,370710,039
32,593
12,008,683

3,567
78,2491,236
14,005

6,838
92,921

307
0

7,146
92,921

35

2,033
667
－

3,923

3,958

275

4,233

(1,221)－－(1,221)－(1,221)

9,838

－

－

9,838

－

9,838

2,737

¥

1,067

¥

- 12 -

1,843

¥

5,647

¥

77

¥

5,725

(3) Reconciliations of the totals of each segment item to corresponding enterprise amounts
Millions of yen
For the six months ended
September 30, 2016
Totals of reporting segments¥

For the six months ended
September 30, 2017633,424

Other
Adjustments for intersegment transactions¥

Ordinary revenues in statement of income¥

707,050

105

2,988

(1,606)(1,715)

631,923¥

708,324

Millions of yen
For the six months ended
September 30, 2016
Totals of reporting segments¥

For the six months ended
September 30, 201737,396

Other¥

33,225

(366)

(631)

Adjustments for intersegment transactions

4

1

Amount not allocated to reporting segments

81

74

¥

Ordinary profit in statement of income

37,116¥

32,669Millions of yen
For the six months ended
September 30, 2016
Totals of reporting segments¥

For the six months ended
September 30, 2017

10,742,199

Other

¥

11,994,313

3,768

14,370Adjustments for intersegment transactions(31,284)(56,437)

Amount not allocated to reporting segments

29,982

27,035¥

Assets in balance sheets

10,744,665¥

11,979,281

Millions of yen
For the six months ended
September 30, 2016
Total
Depreciation¥

Interest income anddividends
Interest expenses
Equity in earnings(losses) of affiliates
Investments in affiliates

Other

Adjustments

6,449 ¥

20

85,717

0

4,361

¥

9

For the six months ended
September 30, 2017
Consolidated
financialstatements
¥

Total

Other

Adjustments

307

¥

18

Consolidated
financialstatements

6,478 ¥

6,838 ¥

¥

7,164

(257)

85,45992,9210(257)

92,663

18

(68)

4,312

3,958

275

(38)

4,194

(1,099)－－(1,099)(1,221)－－(1,221)

11,114－－

11,114

9,838

－

－

9,838

9,442 ¥

10

9,721 ¥

5,647 ¥

77

Increase in tangible
fixed assets and

¥

¥

267

¥

intangible fixed assets- 13 -

¥

1

¥

5,727

9. Subsequent Events
Issuance of Straight Bonds
October 31, 2017—The Board of Directors' passed a comprehensive resolution to issue straight bonds as follows.
Type

Unsecured straight bonds

Total amount of issue

10 billion yen

Issuance period

November 1, 2017 – March 31, 2018

Issue price

100 yen or more per each 100 yen of face value

Interest rate

0.5% or less per annum

Redemption date andmethodUse of funds

No later than 5 years, lump-sum repayment at maturity
Sony Financial Holdings will use the funds for the redemption of the No. 2 Straight Bonds
Decisions on the specific timing of issuance, total amount of issue, interest rate and other

Othersmatters provided for in the items of Article 676 of the Companies Act and all other mattersrequired in connection with the said straight bond issuance shall be entrusted to the President,
Representative Director of the Company within the scope of the resolution.

- 14 -

SFH’s consolidated results* are prepared in accordance with Japanese GAAP. As such, these figures differ in significant respects
from the financial information reported by Sony Corporation, SFH’s parent company, which prepares its financial statements inaccordance with U.S. GAAP.
* SFH’s scope of consolidation includes following companies
Consolidated subsidiaries:
Sony Financial Holdings Inc.
Sony Life Insurance Co. Ltd.
Sony Assurance Inc.
Sony Bank Inc.
Sony Payment Services Inc.
SmartLink Network Hong Kong Limited.
Sony Lifecare Inc.
Lifecare Design Inc.
Proud Life Inc.**
Affiliated companies accounted for under the equity method:
AEGON Sony Life Insurance Co., Ltd.
SA Reinsurance Ltd.
** Proud Life Inc. is included in the scope of consolidation from the first half of the fiscal year ending March 31, 2018.

Statements made in this press release concerning the current plans, expectations, strategies and beliefs of the Sony Financial Group.
Any statements contained herein that are not historical facts are forward-looking statements or pro forma information. Forwardlooking statements may include-but are not limited to-words such as “believe,” “anticipate,” “plan,” “strategy,” “expect,”“assume,” “forecast,” “predict,” “propose,” “intend” and “possibility” that describe future operating activities, businessperformance, events or conditions. Forward-looking statements, whether spoken or written, may also be included in other materials
released to the public. These forward-looking statements and pro forma information are based on assumptions, decisions andjudgments made by the management of Sony Financial Group companies, and are based on information that is currently available tothem. As such, they are subject to various risks and uncertainties, and actual business results may vary substantially from theforecasts 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 this press release does notconstitute 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 or commitment whatsoever inJapan or abroad.
────────────────────────────────────────────────────────────────────────For inquiries:
Investor Relations Dept.
Sony Financial Holdings Inc.
Telephone: +81-3-5290-6500
E-mail: press@sonyfh.co.jp
Website of Sony Financial Holdings Inc.
http://www.sonyfh.co.jp/index_en.html- 15 -

Ⅱ. Attachment
Content of Presentation Material
Consolidated Financial Results for the Six Months Ended September 30, 2017 andSony Life’s Market Consistent Embedded Value as of September 30, 2017
・ Consolidated Operating Results for the Six Months Ended September 30, 2017 …………………………

3・ Consolidated Financial Forecast for the Year Ending March 31, 2018 ……………………………………

27

・ Sony Life’s MCEV and ESR as of September 30, 2017……………………………………………………

29

・ Appendix ……………………………………………………………………………………………………

32- 16 -

Attachment

Presentation Material

Consolidated Financial Results
for the Six Months Ended September 30, 2017
andSony Lifeʼs MCEV as of September 30, 2017

Sony Financial Holdings Inc.
November 13, 2017
Sony Financial Holdings Inc. All Rights Reserved

Content
 Consolidated Operating Results for the Six Months Ended September 30, 2017P.3

 Forecast of Consolidated Financial Results for the Fiscal Year Ending
March 31, 2018 (FY17)

P.27

 Sony Lifeʼs MCEV and ESR as of September 30, 2017

P.29

 Appendix

P.32

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

Attachment

Consolidated Operating Results
for the Six Months Ended September 30, 2017
(FY17.1H)

3

Sony Financial Holdings Inc. All Rights Reserved

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

631.9+12.1%

708.3

Life insurance
business
Non-life
insurancebusiness
Bankingbusiness
Intersegment
adjustments*(12.0%)

37.1

32.6

(JPY bn)

FY16.1H

FY17.1H

Consolidated(JPY bn)

FY16.1H

FY17.1H

Ordinary revenues

564.5

632.4

+67.8

+12.0%

Ordinary profit

32.2

24.9

(7.3)

(22.7%)

Ordinary revenues

50.2

54.7

+4.5

+9.0%

Ordinary profit

3.3

4.5

+1.2

36.0%

Ordinary revenues

18.6

19.8

+1.2

+6.5%

Ordinary profit

1.7

3.7

+1.9

+107.5%

Ordinary revenues

(1.5)

1.2

+2.7

-

Ordinary profit

(0.2)

(0.5)

(0.2)

-

Ordinary revenues

631.9

708.3

+76.4

+12.1%

Ordinary profit

37.1

32.6

(4.4)

(12.0%)

Profit attributableto owners of theparent

25.1

21.5

(3.5)

(14.0%)

Change*Ordinary profit in “Intersegment adjustments” is mainly from SFH and the nursing carebusiness.
Proud Life Inc., a company of nursing care business, has been included in the scope of
consolidation from FY17.2Q.
(Note) Comprehensive income : FY16.1H: ¥18.9 billion, FY17.1H: ¥24.7 billion(JPY bn)
Consolidated

Mar. 17

Change from Mar. 17

601.1

597.9

(3.2)

(0.5%)

11,471.8

11,979.2+507.4+4.4%

Net assets
Total assets

Sep. 17

Sony Financial Holdings Inc. All Rights Reserved

4Attachment

Highlights of Consolidated Operating Performance (2) Life Insurance Business︓Ordinary revenues increased year on year due to an improvementof investment performance in the separate account following a recovery in the financial
market conditions. Investment gains were recorded in this first half compared withinvestment losses in the same period of the previous year. Ordinary profit decreased year
on year due to a deterioration in net gains/losses on derivative transactions to hedge
market risks for available-for-sale securities and lower gains on sale of securities in thegeneral account.

 Non-life Insurance Business: Ordinary revenues expanded year on year owing to an increasein net premiums written for mainstay automobile insurance. Ordinary profit increased year
on year due to a decline in the loss ratio, driven primarily by a lower car accident ratio.

 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, and an increase
in interest income on securities. Ordinary profit increased year on year, due to a decrease inoperating expenses, especially in advertising expenses for the card loan business.

 Consolidated ordinary revenues increased 12.1% year on year, to ¥708.3 billion, owing toincreases in ordinary revenues from all the businesses: life insurance, non-life insurance,and banking businesses. Consolidated ordinary profit decreased 12.0%, to ¥32.6 billion. By
business segment, ordinary profit from the life insurance business decreased whereas
ordinary profit from the non-life insurance and the banking businesses increased. Profit
attributable to owners of the parent was down 14.0% year on year, to ¥21.5 billion due tothe decrease in consolidated ordinary profit.
5

Sony Financial Holdings Inc. All Rights Reserved

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

Ordinary profit(JPY bn)

FY16.1H

FY17.1H

564.4

632.3

+67.9

Income from insurance premiums

477.4

480.4

+3.0

+0.6%

Investment income

80.4

145.1

+64.7

+80.4%

72.2

78.2

+5.9

+8.2%

Ordinary revenues

564.4＋12.0%

632.3

Interest income and dividends(JPY bn)33.2
FY16.1H

26.0

Income from money held in trust, net

2.2

2.2

(0.0)

(0.1%)

1.3

0.0

(1.3)

(100.0%)Gains on derivatives, net

4.5

-

(4.5)

(100.0%)

-

62.6

+62.6

-

Ordinary expenses

531.2

606.2

+75.0

+14.1%

Insurance claims and other payments

163.3

187.3

+24.0

+14.7%

Provision for policy reserves and others

244.1

317.7

+73.6

+30.2%

Investment expenses

40.6

18.1

(22.4)(55.2%)

-

14.7

+14.7

-

32.1

-

(32.1)(100.0%)Losses on derivatives, net

FY17.1H◆ Ordinary revenues increased but ordinary profit
decreased year on year.
◆ Income from insurance premiums was flat year on year
due mainly to a decrease in sales of single premium
whole life insurance although policy amount in force
increased.
◆ Investment income increased due to an improvement ofinvestment performance in the separate account andhigher interest income and dividends in the generalaccount.
◆ Ordinary profit decreased year on year due to a
deterioration in net gains/losses on derivativetransactions to hedge market risks for available-for-salesecurities and lower gains on sale of securities in thegeneral account.

+12.0%

Gains on sale of securities

Gains on separate accounts, net(21.5%)

ChangeLosses on separate accounts, net

70.0

68.1

(1.8)

(2.7%)

Ordinary profit

Operating expenses

33.2

26.0

(7.1)

(21.5%)Net income

22.8

16.9

(5.8)

(25.6%)

Mar. 17

Sep. 17

Securities

8,093.1

8,416.3+323.1+4.0%

Policy reserves

7,929.9

8,246.5+316.6

+4.0%

473.5

469.0

(4.5)

(1.0%)(JPY bn)

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

Sony Financial Holdings Inc. All Rights Reserved

Change from Mar. 17

127.7

129.3

+1.6

+1.3%

8,873.6

9,208.3+334.7

+3.8%

989.6

1,084.1

+94.5

+9.6%

6

Attachment

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

FY16.1H

FY17.1H

2,449.0

2,230.7(8.9%)

Lapse and surrender amount

922.5

873.4

(5.3%)

Lapse and surrender rate

2.14%

1.93%

(0.21pt)

44,114.4

46,219.1+4.8%

Annualized premiums from new policies

38.7

32.3

(16.4%)Of which, third-sector products

8.1

5.9

(26.0%)

799.6

833.5

+4.2%

184.0

189.6

+3.0%

(JPY bn)
New policy amount

Policy amount in force

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

Change◆ Decreased due mainly to lower
sales of term life insurance andfamily income insurance despite
favorable sales of U.S. dollardenominated insurance.
◆ Decreased due mainly to lower
sales of term life insurance andliving benefit insurance despite
favorable sales of U.S. dollardenominated insurance.

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)

FY16.1H

FY17.1H

Gains from investment, net (General account)

72.0

64.4

(10.5%)

Core profit

30.6

43.8

+43.1%

Positive spread

6.5

9.3

+43.1%

Mar. 17

Sep. 17

2,568.8%

2,631.8%

Non-consolidated solvency margin ratio

Change◆ Increased significantly due
mainly to a decline in theprovision of policy reserves forminimum guarantees forvariable life insurance led by arecovery in the financial market
conditions.

ChangefromMar. 17+63.0pt

7

Sony Financial Holdings Inc. All Rights Reserved

Operating Performance :Sony Life (Non-consolidated) (1)
Number and Amount of New Policies

Annualized Premiums from New Policies(Individual Life Insurance + Individual Annuities)
New policy amount（JPY tn）

Annualized premiums from new policies

Number of new policies（Thousandsof policies)

327
280

300

(14.4%)

3

2.61(Individual Life Insurance + Individual Annuities)

240
2.44

(8.9%)

2.23

2（JPY bn）

Of which, third-sector

43.0
38.7

40

(16.4%)

32.3
200

30

20
100

1

10

0

0
FY15.1H

FY16.1H

FY17.1H(26.0%)

7.3

8.1

FY15.1H

FY16.1H

5.9

0Sony Financial Holdings Inc. All Rights Reserved

FY17.1H

8

Attachment

Operating Performance :Sony Life (Non-consolidated) (2)
Number and Amount of Policies in Force

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

50（Millionsof policies) （JPY bn）

7.30

7.20
44.1

+4.8%

Annualized premiums from insurance in force

Number of policies in force+3.0%（JPY tn）(Individual Life Insurance + Individual Annuities)

+1.5%

7.42

800

8

46.2

45.3

40
30

+4.2%

+1.5%

400

4

20
10

Mar. 17

184.0

187.4

Sep. 16Mar. 17

+1.1%

189.6

0

0
Sep. 16

+3.0%

200

2

0

833.5

820.8

600

6

+2.0%

799.6

Of which, third-sector

Sep. 17

Sony Financial Holdings Inc. All Rights Reserved

Sep. 17

9

Operating Performance :Sony Life (Non-consolidated) (3)Lapse and Surrender Rate*(Individual Life Insurance + Individual Annuities)（%）

Lapse and surrender rate
(Annual)

Lapse and surrender rate
（1H）

10

8

6

4.72

4.27

4

2

(0.21pt)

2.33

2.14

FY15

FY16

1.93

0
FY17

*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

10Attachment

Operating Performance :Sony Life (Non-consolidated) (4)Interest Income and Dividends

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

508.7

500

480.4

477.4

78.2

80

69.8

＋0.6%

400

72.2
＋8.2%

60

300
40
200
20

100

0

0
FY15.1H

FY16.1H

FY15.1H

FY17.1H

FY16.1H

FY17.1H

11

Sony Financial Holdings Inc. All Rights Reserved

Operating Performance :Sony Life (Non-consolidated) (5)Ordinary Profit

Core Profit(JPY bn)(JPY bn)43.8

40+43.1%

40

33.2

30.6

30

26.0

30

22.8

20

20

14.4

10

10

0

0
FY15.1H

FY16.1H

FY17.1H

FY15.1H(JPY bn)
Positive spread
Provision of policy reserves for minimum
guarantees for variable life insurance (*)

FY16.1H

FY17.1H(Reference) Main differences from core profit(Reference) Impact on core profit

Others(21.5%)

FY15.1H

FY16.1H(JPY bn) FY15.1H

FY16.1H

FY17.1H

Capital gains (losses) excluding gains orlosses on hedges (*)

10.3

5.0

(5.6)

Gains (losses) on hedges of variable life insurance

1.4

1.0

(8.5)

(3.1)

(3.4)

(3.6)

FY17.1H

7.3

6.5

9.3

(22.1)(11.6)

(4.0)

29.2

35.7

38.6

Provision of contingency reserve (*)*“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

12

Attachment

Operating Performance :Sony Life (Non-consolidated) (6)
Number of Lifeplanner Sales Employees+223(Number)

5,000
4,612

4,682

4,933

4,751

4,730

Sep. 16

Dec. 16

4,974

4,942
＋32

4,500

4,000

3,500

3,000
0

Mar. 16

Jun. 16Mar. 17

Jun. 17

Sep. 1713

Sony Financial Holdings Inc. All Rights Reserved

Operating Performance :Sony Life (Non-consolidated) (7)Breakdown of General Account Assets
Mar. 17<Asset management review>Sep. 17

Amount%Japanese bonds(including JGBs)

6,828.7

86.6%

7,031.1

86.5%

Japanese stocks

37.6

0.5%

34.1

0.4%

Foreign bonds

274.3

3.5%

308.7

3.8%

Foreign stocks

31.5

0.4%

33.2

0.4%

Money held in trust

273.8

3.5%

271.9

3.3%

Policy loans

180.3

2.3%

184.5

2.3%

Real estate*

117.5

1.5%

116.6

1.4%

Cash and call loans

40.8

0.5%

44.5

0.5%

Others

99.1

1.3%

99.0

1.2%

7,884.0

100.0%

8,124.1

100.0%(JPY bn)

Total

Amount%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. 16 21.8 years
Mar. 17 21.3 years
Sep. 17 21.2 years■ Investment in the money held in trust is
mainly into Japanese bonds.
■ The holding ratio on the real status ofJapanese bonds including those invested
in the money held in trust in the generalaccount : Sep. 17・・・89.9%（Mar. 17・・・90.1%）*Real estate is the total of land, buildings, and construction in progress.

Sony Financial Holdings Inc. All Rights Reserved

14

Attachment

Operating Performance :Sony Life (Non-consolidated) (8)Non-consolidated Solvency Margin Ratio
（%）

3,000

2,722.8

2,631.8

2,568.8

2,500+63.0pt

2,000

1,500

1,000
0

Mar. 16Mar. 17

Sep. 1715Sony Financial Holdings Inc. All Rights Reserved

Highlights of Operating Performance:
Sony Assurance
Ordinary revenues

Ordinary profit
FY16.1H

FY17.1H

50.2

54.7

+4.5

+9.0%

Underwriting income

48.9

53.8

+4.8

+9.9％

Investment income

1.2

0.9

(0.3)

(25.1%)

46.8

50.2

+3.3

+7.1％

Underwriting expenses

34.6

36.7

+2.1

+6.1％

Operating general andadministrative expenses

12.2

13.4

+1.1

+9.7%

Ordinary profit

3.3

4.5

+1.2

+36.2%Net income

2.4

3.3

+0.8

+35.5%

Mar. 17

Sep. 17

Underwriting reserves

106.1

112.3

+6.2

+5.9%

Net assets

29.4

31.0

+1.6

+5.5%

Total assets

186.5

194.2

+7.7

+4.2%

(JPY bn)

+9.0%

50.2

54.7

Ordinary revenues

4.5

Ordinary expenses+36.2%

3.3(JPY bn)

FY16.1H

FY17.1H◆Both ordinary revenues and ordinary profit
increased year on year.
◆Ordinary revenues expanded owing to anincrease in net premiums written for
mainstay automobile insurance.
◆Ordinary profit increased due to a decline in
the loss ratio, driven primarily by a lower car
accident ratio.

(JPY bn)

Sony Financial Holdings Inc. All Rights Reserved

ChangeChange from
Mar. 17

16

Attachment

Overview of Operating Performance:
Sony Assurance
FY16.1H(JPY bn)

FY17.1H<Reasons for changes>

ChangeDirect premiums written

48.3

53.1

+9.9%

Net premiums written

48.9

53.7

+9.9%

Net losses paid

24.0

24.9

+3.7%

Underwriting profit

2.0

3.6

+73.2%Net loss ratio

56.7%

53.2%

(3.5pt)Net expense ratio

26.6%

26.6%

+0.0ptCombined ratio

83.3%

79.8%

(3.5pt)◆ Increased in its mainstay
automobile insurance.

◆ Remained flat due to anincrease in net premiums
written, in addition to a proper
control on overall operating
expenses.

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

FY16.1H

FY17.1H

ChangeE. I. loss ratio

63.3%

59.6%

(3.7pt)E. I. loss ratio +Net expense ratio

89.9%

86.2%

(3.7pt)◆ Declined due to a lower car
accident ratio in automobile
insurance.

Notes:
E.I. loss ratio = (Net losses paid + Provision for reserve for outstanding losses + Loss adjustment expenses) /Earned premiums [Earthquake insurance and compulsory automobile liability insurance are excluded from theabove calculation.]Mar. 17

Sep. 17

Change from Mar. 17

Number of policies in force

1.89 mn

2.01 mn+0.12 mnNon-consolidated
solvency margin ratio

730.8%

784.1%+6.6%+53.3pt

17

Sony Financial Holdings Inc. All Rights ReservedSony Assuranceʼs Underwriting Performanceby Type of Policy
Direct Premiums Written

Net Premiums Written

FY16.1H

FY17.1H

117

102(12.1%)－－－

Personal accident

4,388

4,348

(0.9%)

Voluntary
automobile

43,814

48,664+11.1%－－－

48,31953,116+9.9%(JPY ｍn)
Fire
MarineCompulsory
automobile liability
Total

Net losses paid

FY17.1H

4

2(45.3%)

(11)

3

－

Personal accident

1,228

1,361

+10.8%

Voluntary
automobile

22,17522,915

+3.3%

649

655

+0.9%

24,04624,937+3.7%

Fire
MarineCompulsory
automobile liability
Total

FY17.1H

Fire

12

8

(37.5%)

Marine

(2)

(0)

－

Personal accident

4,527

4,452

(1.6%)

Voluntary
automobile

43,68648,545+11.1%

709

780+10.0%

48,93453,786+9.9%

Compulsory
automobile liability
Total

Change*Medical insurance is included in personal accident.

FY16.1H(JPY ｍn)

FY16.1H(JPY ｍn)

ChangeChangeSony Financial Holdings Inc. All Rights Reserved

18

Attachment

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

Net Premiums Written andNumber of Policies in Force
Voluntary automobile insurance
Others(JPY bn)

60

1.82

1.75

+10.9%(JPY bn)(mn of policies)

2.01
53.7

48.9

47.5

Adjusted ordinary profit

Ordinary profit

Personal accident insurance

Number of policies in force

4.4

+9.9%

6.2

6

+27.8%

2
0.7

1.5

4.9
4.2

4

27
2.7

40
1

48.5

33
3.3

4.5
+36.2%

2

20
0.5

0
FY15.1H

00
FY15.1H

FY16.1H

FY17.1H

FY16.1H*Adjusted ordinary profit = Ordinary profit + Provision for catastrophe reserve(Reference) Provision for catastrophe reserve(JPY bn)

The number of policies in force is the total of automobile insurance andmedical insurance policies.
Most of personal accident insurance is medical insurance.

FY17.1H

FY15.1H

Provision for catastrophe reserve

FY16.1H

1.5

FY17.1H

1.5

1.7*Provision for catastrophe reserve is described as positive amount.

19

Sony Financial Holdings Inc. All Rights Reserved

Operating Performance:
Sony Assurance (2)Earned/Incurred Loss Ratio +Net Expense Ratio
Earned/Incurred loss ratio(Reference) Combined Ratio＜参考＞(Net Loss Ratio+ Net Expense Ratio)
Net loss ratio

Net expense ratio

（%）

（%）

100

100

90.4

90.6

89.1

89.9

86.2

63.3

62.3

62.4

63.3
(3.7pt)

59.6

85.8

60

82.7

83.3

79.8
(3.5pt)

57.8

57.5

55.9

56.7
(3.5pt)

53.2

40

40

20

84.8
80

(3.7pt)80

60

Net expense ratio

27.1

28.3

FY15

FY16

+0.0pt

26.7

20

26.6

26.6

FY16.1H

FY17.1H

0
FY15.1H

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.]

27.1

28.3

FY15

FY16

+0.0pt

26.7

26.6

26.6

FY15.1H

FY16.1H

FY17.1H

0

Notes: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 Reserved20

Attachment

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

（%）

800

693.5%

784.1%

730.8%+53.3pt

600

400

200

0
Mar. 16Mar. 17

Sep. 1721

Sony Financial Holdings Inc. All Rights Reserved

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

18.6

+6.5%

<Consolidated>

19.8(JPY bn)

FY16.1H

FY17.1H

ChangeConsolidated ordinary revenues

18.6

19.8

+1.2

+6.5%

Consolidated ordinary profit

1.7

3.7

+1.9

+108.0%

Profit attributable to owners of
the parent

1.1

2.4

+1.2

+111.8%<Non-consolidated>+108.0%(JPY bn)3.7

1.7
FY16.1H

FY16.1H

FY17.1H

Ordinary revenues(JPY bn)

16.9

18.0

+1.1

+6.6%

Gross operating profit

10.0

10.5

+0.5

+5.1%

Net interest income

FY17.1H＜Consolidated＞◆Ordinary revenues increased year on year due to an increase ininterest income on loans in line with a favorably growing balanceof mortgage loans, and an increase in interest income on
securities. Ordinary profit increased year on year, due to adecrease in operating expenses, especially in advertisingexpenses for the card loan business.
＜Non-consolidated＞◆Both gross operating profit and net operating profit increased.
・Net interest income increased due to an increase in interest
income on loans and interest income and dividends on securities.
・Net fees and commissions decreased due mainly to lower fees
and commissions on mortgage loans, in addition to higher fees
paid for loan guarantees reflecting the growing loan balance.
・Net other operating income decreased due mainly to a decreasein gains on foreign exchange transactions.

Change

8.4

10.1

+1.6

+19.7%Net fees and commissions

(0.5)

(1.5)

(1.0)

－

Net other operating income

2.1

2.0

(0.0)

(4.2%)

General and administrative
expenses

8.4

7.6

(0.7)

(8.8%)Net operating profit

1.6

2.9

+1.2

+75.8%

Ordinary profit

1.6

3.4

+1.8

+110.9%Net income

1.1

2.3

+1.1

+107.1%(JPY bn)
Net assets
Net unrealized gains onother securities, net of taxes
Total assets

Sony Financial Holdings Inc. All Rights Reserved

Mar. 17

Sep. 17

Change from
Mar. 17

81.3

83.2

+1.9

+2.4%

4.7

5.8

+1.0

+22.4%

2,424.2

2,578.8+154.5+6.4%

22

Attachment

Overview of Operating Performance:
Sony Bank (Non-consolidated) (1)(JPY bn)Sep. 16Mar. 17

Customer assets

2,095.7

2,227.1

Deposits

1,989.6

Yen
Foreign currencies
Investment trusts
Loans
Mortgage loans
Card loans
OthersNumber of accounts
Non-performing assets ratio(Based on Financial
Reconstruction Law)

<Reasons for changes>

Change from
Mar. 17

Sep. 17
2,284.8

+57.7

+2.6%

2,112.9

2,165.2

+52.2

+2.5%

1,649.7

1,764.9

1,800.5

+35.5

+2.0%

339.9

348.0

364.6

+16.6

+4.8%

106.1

114.1

119.6

+5.5

+4.8%

1,460.6

1,539.6

1,559.3

+19.6

+1.3%

1,362.9

1,452.4

1,477.9

+25.4

+1.8%

15.3

18.0

18.9

+0.8

+4.6%

*1

82.3

69.0

62.4

(6.5)

(9.5%)

1.19 mm1.24 mm1.29 mm

+0.05
mm

+4.0%

0.21%

0.19%

0.15%

(0.04pt)

9.57%

9.75%

9.43%

(0.32pt)◆ Increased in yen ordinary
deposit balance due mainly to anincrease in newly accumulated
funds via the increased numberof accounts, as well as theconversion from foreign
currencies backed by yen
depreciation.
◆ Increased in the U.S. dollardenominated time deposit
balance due to the promotional
effect from the rise in U.S.
interest rates, despite theconversion into yen led by a shift
in the trend from yen
appreciation to yen depreciation.
◆ Rose due to a steady increase inmortgage loans, despite aleveling off in demand forrefinancing these loans.

*2

Non-consolidated Capital *3
adequacy ratio(domestic criteria)*1 Loans in others include corporate loans of ¥62.4 billion*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 page 26.
Capital adequacy ratios has been calculated by applying fundamental internal rating based approach (FIRB) from March 31, 2017.

23

Sony Financial Holdings Inc. All Rights Reserved

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

FY16.1H

FY17.1H

10.0

10.5

+0.5

+5.2%

①

9.7

11.3

+1.5

+16.3%

②

(0.2)

(1.3)

(1.0)

ー

0.5

0.5

+0.0

+0.8%

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

9.4

10.0

+0.5

+5.5%

Operating expenses and otherexpenses ③

8.4

7.6

(0.7)

(8.9%)Net operating profit (core profit)＝(A)－③

1.0

2.3

+1.2

+119.7%Gross operating profit*1

Net interest income

Net fees and commissions*2
Net other operating income*3<Reference> Interest Spread(Managerial Accounting Basis)

Change■Managerial accounting basis
The following adjustments are made to the figures on a financial account for profits andlosses more appropriately.
*1: Net interest income: Includes profits and losses associated with fund investment
recorded in net other operating income, including gains or losses from currency swap
transactions.
*2: Net fees and commissions: Includes profits and losses for customer dealings in foreign
currency transactions recorded in net other operating income.
*3: Net other operating income: After the above adjustments (*1 and *2), mainly consistsof profits and losses for bond and derivative dealing transactions.
■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.

Yield on investment

Yield on financing

Interest spread
（%）

1.5

1.19
1

0.93

1.13
(0.02pt)

0.91

0.5

0.26

0.22

0
FY16.1H

FY17.1H

Note: Interest spread=(Yield on investment)-(Yield on financing)Sony Financial Holdings Inc. All Rights Reserved24

Attachment

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

Loans

Foreign currency deposits

Yen Deposits(JPY bn)

2,165.2

2,112.9
1,923.5

2,000

348.0

OthersMortgage loans

+52.2

364.6

(JPY bn)

1,500

1,559.3

1,539.6
1,344.1

87.1

+19.6

81.3

107.0

335.5

1,500

1,000
1,477.9
1,800.5

1,000

1,587.9

1,452.4

1,764.9

1,237.1

500

500

0
Mar. 16Mar. 170Sep. 17Mar. 16Mar. 17

Sep. 17*Corporate loans of ¥62.4 billion. Card loans of ¥18.9 billion.

25

Sony Financial Holdings Inc. All Rights Reserved

Operating Performance:
Sony Bank (Non-consolidated) (2)Balance of Securities by Credit Rating
AAA

AA

BBB

OthersA

Non-Consolidated Capital Adequacy Ratio(Domestic Criteria)

（%）

15

(JPY bn)

800

600

690.0
620.9

631.2

10

9.89

9.75

+58.8

9.43
(0.32pt)

400

5

200
0
Mar. 160Mar. 16Mar. 17

Sep. 17Mar. 17

Sep. 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 Reserved26

Attachment

Forecast of Consolidated Financial Results
for the Fiscal Year Ending March 31, 2018
(FY17)

27

Sony Financial Holdings Inc. All Rights Reserved

Forecast of Consolidated Financial Results for FY17
Forecast of consolidated financial results for FY17 is unchanged from the forecast announced on April 28, 2017,
while the full-year forecast of the non-life insurance business is revised upward.
(JPY bn)

FY16（Actual）

Consolidated ordinary revenues

1,381.6

Life insurance business

FY17（Forecast）
1,430.0

Changes

FY17.1H（Actual）

Progress rates

+3.5%

708.3

49.5%

1,243.9

1,276.1

+2.6%

632.4

49.6%

Non-life insurance business

102.3

108.9⇒110.0+6.4%⇒+7.5%

54.7

50.3%⇒49.8%

Banking business

38.5

40.6

+5.4%

19.8

48.8%

Consolidated ordinary profit

66.3

67.0

+1.0%

32.6

48.8%

Life insurance business

56.8

56.4

(0.7%)

Non-life insurance business

5.0

4.6⇒6.5(8.0%)⇒+30.0%

24.9

44.2%

Banking business

5.0

6.6

+30.6%

4.5

99.7%⇒70.6%

3.7

56.2%

Profit attributable to owners of theparent

41.6

42.0

+0.9%

21.5

51.4%

<Segment information for ordinary revenues and ordinary profit>■Life Insurance Business
In FY17.1H, ordinary revenues exceeded our initial expectations, as an improved market environment promoted an increase in investment
income in the separate account. Ordinary profit was in line with our forecasts at the beginning of the fiscal year.
Negative factors included the fact that anticipated sales of securities did not occur, as well as worsening profits on derivative transactions
related to minimum guarantees for variable life insurance. Among positive factors, a lower-than-expected level of new policies lowered
initial-period costs, and operating expenses were shifted to a different period.
We maintain our forecast for the full-year, taking into consideration the business environment from FY17.3Q onward.
■Non-life Insurance Business
In FY17.1H, ordinary revenues were essentially in line with our expectations. Ordinary profit for FY17.1H exceeded our expectations as
the loss ratio was lower than our initial expectations.
We have revised upward the full-year forecast after partially revising projections in the loss ratio and the expense ratio from FY17.3Q
onward, and reflecting operating results in FY17.1H.
■Banking Business
In FY17.1H, ordinary revenues and ordinary profit were essentially in line with our expectations, so we maintain our full-year forecasts.

Sony Financial Holdings Inc. All Rights Reserved28

Attachment

Sony Lifeʼs MCEV and ESR
as of September 30, 2017

A part of the calculations of MCEV adopted simplified method except that as of March 31, 2017.
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.

29

Sony Financial Holdings Inc. All Rights ReservedSony Lifeʼs MCEV
ChangefromMar. 17

ChangefromJun. 17Mar. 17

Jun. 17

Sep. 17

1,441.1

1,478.2

1,523.1

+82.0

+44.9

Adjusted net worth

1,657.7

1,624.2

1,611.8(45.9)(12.5)

Value of existing business(216.7)(146.0)(88.7)+128.0+57.3(JPY bn)

FY16.4Q(3M)

FY17.1Q(3M)

FY17.2Q(3M)

FY17.1H(6M)

New business value

14.1

12.2

17.2

29.4

New business margin

3.8%

4.6%

6.4%

5.5%

(JPY bn)

MCEV

Notes:
1. Calculated MCEV as of June 30, 2017 onward by using updated economic assumptions and lapse and surrender rate from March 31, 2017.
2. New business value is calculated accumulating new business value for each month based on economic assumptions at the end of each month.

 Reasons for changes in MCEV
・MCEV as of September 30, 2017 increased ¥44.9 billion form June 30, 2017 due mainly to a rise ininterest rates in Japanese yen.
New business value/ New business margin
・New business margin for FY17.2Q (3M) was up 1.8 percentage points from FY17.1Q (3M), due mainly
to a change in product mix and a rise in interest rates.
・New business value for FY17.2Q (3M) was ¥17.2 billion, up ¥4.9 billion from FY17.1Q (3M), due to a risein new business margin.
*Please refer to the appendix page 46 for trend on JGB yields.

Sony Financial Holdings Inc. All Rights Reserved30

Attachment

Sony Lifeʼs ESR(JPY bn)

Mar. 17

Jun. 17

Sep. 17

Insurance risk*

937.5

933.6

939.1

Market-related risk

405.1

349.3

366.5

308.9

263.1

273.7

Operational risk

28.1

28.1

28.1

Counter party risk

1.9

2.5

1.9

(392.0)(372.2)(379.4)

980.6

941.3

956.3

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. 17

Jun. 17

Sep. 17

1,476.6

1,505.1

1,547.2

151%

160%

162%

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 September 30, 2017 amounted to ¥956.3 billion, up ¥14.9 billion
from June 30, 2017, due mainly to a increase in interest rate risk reflecting a rise in interest rates in Japanese yen.
 ESR as of September 30, 2017 was 162%, up 2pt from June 30, 2017.
Sony Financial Holdings Inc. All Rights Reserved

31

AppendixSony Financial Holdings Inc. All Rights Reserved

32

Attachment

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 (32*) *As of November 13, 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 19% of the amount of new mortgage loans for FY17.1H (6M)

Sony Life accounts for 21% of the balance of mortgage loans as of September 30, 2017

*Sony Life started handling banking agency business in January 2008.

Sony Assuranceʼs Auto Insurance Sold by Sony Life
■Sony Life accounts for approx. 3% of new automobile policies for FY17.1H (6M)
*Sony Life started handling automobile insurance in May 2001.

Sony Financial Holdings Inc. All Rights Reserved

33

Recent Topics 2＜Highlights on and after FY17.2Q＞
2017-07-02

Sony Life began providing Web policy guides and agreements

2017-07-10

Sony Lifecare converted Yuuai Holdings Co., Ltd. (YHD) to a wholly owned subsidiary（YHD changed its corporate name to Proud Life Inc. on Aug. 1, 2017）2017-08-08

Sony Bank began providing cloud funding platform “Sony Bank GATE”

2017-08-10

Sony Life established a joint venture, Sony Life Financial Advisors Pte. Ltd., with Starts
Securities Co., Ltd. in Singapore

2017-09-01

Sony Bank opened “CONCULTING PLAZA” in Ginza, Tokyo

2017-09-06

Sony Lifecare announced to open its 3rd “SONARE” brand nursing care home in Nerima-Ku,
Tokyo by Autumn 20182017-09-19

Sony Life launched a service to acquire medical certificates on behalf of policyholders

2017-10-02

Sony Life commenced sale of new product: “U.S. Dollar-Denominated Single Premium
Whole Life Insurance (Non-Notification Type)” and “U.S. Dollar-Denominated Living Benefit
Whole Life Insurance (Living Standard Type)”

2017-10-05

Sony Assurance began offering a web-based insurance claims service, allowing
policyholders to make medical insurance claims via its website

2017-10-09
2017-11-01

Sony Bank Began issuing “Takashimaya Platinum Debit Card” through an alliance withTakashimaya Co., Ltd. and Takashimaya Credit Co., Ltd.
Sony Assurance expanded its “Secom accident on-site rush service” for automobile
insurance policyholders
Sony Financial Holdings Inc. All Rights Reserved34

Attachment

Sony Lifeʼs Product Portfolio
Annualized Premiums from New Policies by Product

FY16（12M）

Yen whole
life円建終⾝
14%
円建終⾝
Endowment/ 円建終⾝
14%
14%
U.S.
dollar19%
Annuities
denominated21%
whole life 8%Single premium
Whole life 1%¥78.1 billion

FY17.2Q（3M）¥16.2 billion

Yen whole
life 8%

Protection-type（term life）
56%

FY17.1Q（３M）¥16.1 billion

U.S. dollardenominatedwhole life 11%

Endowment/
Annuities
31%

Yen whole
life 8%円建終⾝
Endowment/U.S. dollar14%
Annuities
denominated27%
whole life 11%

Protection-type（term life）
50%

Protection-type（term life）
54%

35

Sony Financial Holdings Inc. All Rights ReservedSony Lifeʼs Asset Management
Diversify Asset Management under the Negative Interest Rate Environment(purchase securities in the general account)

FY15 (12M）

Japanesestocks0.5%Foreign
bonds
2.3%

JGBs
Japanese corporate bonds
Foreign bonds
Japanese stocks

FY16 (12M）
JGBs

Japanese
corporate
bonds
11.9%

国債
95.4%

Japanese corporate bonds

Japanese local
government
bonds 0.1%

Japanese stocks

国債

Japanese
corporate
bonds
28.6%

Japanese local government85.3%
bondsJapanesestocks
0.4%

FY17.1H (6M）
Foreign
bonds
12.0%

JGBs

Foreign
bonds
28.3%

Foreign bonds

・Increase investments in U.S. government
bonds, responding to higher sales of U.S. dollar
denominated insurance policies.

JGBs
85.3%

Japanesestocks 0.5%

・Expand investments in ultralong-term Japanese
government and corporate bonds (including FILP
agency bonds), based on the asset investment policy tomatch the liability characteristics of insurance policies.

JGBs
42.5%

Japanese corporate bonds
Foreign bonds

Japanese
corporate
bonds
31.1%

JGBs
56.5%

Japanese stocks

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 Reserved36

Attachment

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)

Note: The above table includes money held in trust other than trading-purpose securities.

Valuation gains (losses) on trading-purpose securities（JPY bn）

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

37Sony Financial Holdings Inc. All Rights ReservedSony Lifeʼs Interest Income and Dividends (Details)（JPY mn）

FY16.1H

FY17.1H

ChangeCash and deposits
Japanese bonds(including JGBs)
Japanese stocks

00+62.5%

59,83061,875

+3.4%

260

282

+8.5%

Foreign securities

3,512

7,027

+100.1%31124+293.8%

Loans

3,171

3,285

+3.6%

Real estate

5,430

5,455

+0.5%

53

191

+254.6%

72,291

78,241+8.2%

Other securities

Others
Total

Sony Financial Holdings Inc. All Rights Reserved38

Attachment

Sony Lifeʼs Capital Gains/Losses
FY16（JPY mn）
Capital gains
Income from money held in trust, net
Income from trading securities, net

FY17

1Q (3M)

2Q (6M)

3Q (9M)

4Q (12M)

1Q (3M)

2Q (6M)

14,501

11,79625,628

16,114

124

2,098

－

－

－

－

－

-

7

49

103

134

11

19

Gains on sale of securities

917

1,301

1,306

1,308

0

0

Gains on derivatives, net

8,821

4,577

－

－

－

-

Gains on hedges of variable life insurance

4,955

1,042

－

－

－

-

Gains on hedges of available-for-sale securities

3,021

1,386

－

－

－

-

－

－

24,218

14,670

49

2,078

－

－

2,375

2,375

－

-

4,754

5,868

－

－

63

-

3,407

5,688

39,88232,276

7,441

16,257

－

－

－

－

－

-

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

34,27530,0507,015

14,739Losses on hedges of variable life insurance－－

14,292

15,666

4,247

8,555

Losses on hedges of available-for-sale securities

－

－

2,265

2,460

1,713

2,767

Foreign exchange losses, net
Losses on sale of foreign bonds*

3,139

5,023

－

－

－

-

(1,681)(2,375)

－

－

－

-

2,226

426

1,518

(16,162)(7,316)(14,159)

Other capital losses

267

665

5,606

Net capital gains (losses)

11,094

6,108(14,253)

Sony Financial Holdings Inc. All Rights Reserved

Total of gains on sale ofsecurities and foreign exchange
gains on sale of foreign bonds:
FY17.2Q (6M): ¥0 million
FY16.2Q (6M): ¥3,676 million.

* (losses) represents
positive figures.

Notes on Sony Lifeʼs Capital Gains/Losses aredisclosed in page 40.

39

Sony Lifeʼs Capital Gains/Losses (continued)(Note1)・Foreign exchange gains, net for FY17.1Q (3M) include foreign exchange losses of ¥242 million relating to U.S. dollar-denominated insurance.
Losses on derivatives, net include foreign exchange losses relating to U.S. dollar-denominated insurance of ¥515 million.
Moreover, other capital losses include the reversal of policy reserves for U.S. dollar-denominated insurance of ¥63 million relating to foreignexchange fluctuation.
・Foreign exchange gains, net for FY17.2Q (6M) include foreign exchange gains of ¥1,583 million relating to U.S. dollar-denominated insurance.
Losses on derivatives, net include foreign exchange losses relating to U.S. dollar-denominated insurance of ¥2,489 million.
Moreover, other capital losses include the provision of policy reserves for U.S. dollar-denominated insurance of ¥853 million relating to foreignexchange fluctuation.
(Note 2)・ 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.
（Note3）・ The figures of income (losses) from money held in trust, net, income (losses) from trading securities, net, gains (losses) on derivatives andforeign exchange gains (losses), net were recorded after offsetting gains and losses of each item.

Sony Financial Holdings Inc. All Rights Reserved40

Attachment

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

1,500

1,457.7

1,437.4
1,324.2

1,290.7

1,260.0

1,250

1,098.9

1,189.0
1,050.7

1,115.8

1,114.8

FY17.1Q

FY17.2Q

1,000
750
500
250
0
FY15.1Q

FY15.2Q

FY15.3Q

FY15.4Q

FY16.1Q

FY16.2Q

FY16.3Q

FY16.4Q

41

Sony Financial Holdings Inc. All Rights ReservedSony Lifeʼs Quarterly Trend on
Annualized Premiums from New Policies
Quarterly Trend on Annualized Premiums from New Policies
Of which, third-sector

Annualized premiums from new policies(JPY bn)

25
22.3

20.6

23.9

22.7

20

19.1

20.5
18.2
15.3

15

16.1

16.2

3.1

2.8

FY17.1Q

FY17.2Q

10

5
3.9

3.4

FY15.1Q

FY15.2Q

4.6

3.6

4.1

3.9

3.1

FY15.4Q

FY16.1Q

FY16.2Q

FY16.3Q

4.4

0
FY15.3Q

Sony Financial Holdings Inc. All Rights Reserved

FY16.4Q

42

Attachment

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(JPY bn)40

Number of new polices [ ](Thousandsof policies)

15

41.3
[7.9]

36.6
[6.1]

Policy amount in force(JPY bn)

600

476.7
[80.6]
10

25.6
[5.5]
20

0

Number of policies in force [ ]501.7[85.9]

519.7[89.9](Thousandsof policies)

120

400

80

5

200

40

0

0

0

FY15.1H
FY16.1H
FY17.1H
Net income (losses) for AEGON Sony Life Insurance and SA Reinsurance(JPY bn)
FY16.1H
FY17.1H
ChangeAEGON Sony Life Insurance

(1.9)

(2.4)

(0.4)

SA Reinsurance

(0.3)

(0.0)

+0.2

Sep. 16Mar. 17

Sep. 17

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.

43

Sony Financial Holdings Inc. All Rights Reserved

Method of Measuring Risk Amount
Based on Economic Value (1)Market-related Risk*1
Sony LifeInterest rate risk
Fluctuations in net asset
value based on economic
value in response to theshocks in the rightcolumns.
The same applies below.

Percentage increases or decreases differ for each currency and term.
As for measuring interest rate risk in Japanese yen, introduced
principal component analysis, where yield curve changes are
disaggregated into three components, parallel shift, twist andbutterfly, and the yield curve is shocked by each component.

(Reference) EU Solvency II Implementing Measures(Delegated Regulation)
Different percentage changes in interest rates are set for eachterm, from one year to 20 years.
For terms longer than 20 years and through 90 years,
percentage changes are set using linear interpolation, withnegative 29% as the percentage change for 20 years andnegative 20% as the percentage change for 90 years(Example)
For Yen 30-year, 64% decrease (parallel shift), 19% decrease(twist), 4% decrease (butterfly)

Equity risk

Listed equities 45%, Other securities 70%

Global 39%, Others 49%*2

Real estate risk

Actual real estate

Same as on the left

25%

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

Credit risk

Currency risk

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

Credit risk = (market value) x (risk coefficient for each credit
rating and duration)(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◆Revision in the risk factors of market-related risk
・ In FY17.1Q, Sony Life partially revised the risk factors of market-related risk.
・ Regarding interest rate risk in Japanese yen, the rate of change in interest rates for 40 years or less was updated based on recent market data, andthe rate of change in interest rates beyond 40 years was revised, taking into account such factors as ICS(＊3) deliberations. The main result was adecrease in interest rate risk compared with March 31, 2017, due mainly to a decrease in the rate of change in Japanese yen beyond 40 years.
Notes＊1. Principal items as of September 30, 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.
＊3. Capital requirements for internationally active insurance groups (IAIGs) being formulated by the International Association of Insurance Supervisors (IAIS).

Sony Financial Holdings Inc. All Rights Reserved

44

Attachment

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

Notes
＊1. Principal items as of September 30, 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 Reserved

45

Trend on JGB Yields (Par rate)

As of the endof each monthSony Financial Holdings Inc. All Rights Reserved

46

Attachment

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

47

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

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48