Presentation Materials

Sony Life’s
Market Consistent Embedded Valueas of March 31, 2008

Sony Financial Holdings Inc.
November 28, 2008
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Contents- Highlight of MCEV
- Background of Disclosing MCEV
- Relationships between
Balance Sheets (Japanese GAAP) and MCEV
- Compliance with MCEV Principles- Major Differences between TEV and MCEV- MCEV Results- Reconciliation Analysis from TEV- Sensitivity Analysis- Appendix

P.2
P.3
P.4
P.5
P.6 - 7
P.8 - 11
P.12 - 13
P.14 - 15
P.16 - 19

Disclaimer:These presentation materials contain statements concerning the current plans, expectations, strategies and beliefs of the Sony Financial HoldingsGroup (the “SFH Group”). Any statements contained herein that pertain to future operating performance and that are not historic facts are forwardlooking statements. Forward-looking statements may include—but are not limited to—words such as “believe,” “anticipate,” “plan,” “strategy,”“expect,” “forecast,” “predict,” “possibility” and similar words that describe future operating activities, business performance, events or conditions.
Forward-looking statements, whether spoken or written, are based on judgments made by the management of the SFH Group, based on informationthat is currently available to it. As such, these forward-looking statements are subject to various risks and uncertainties, and actual business results
may vary substantially from the forecasts expressed or implied in forward-looking statements. Consequently, investors are cautioned not to place
undue reliance on forward-looking statements. The SFH Group disclaims any obligation to revise forward-looking statements in light of new
information, future events or other findings. The information contained in this presentation does not constitute or form part of any offer for sale orsubscription of or solicitation or invitation of any offer to buy or subscribe for any securities, nor shall it or any part of it form the basis of or be relied
on in connection with any contract or commitment whatsoever.

Sony Financial Holdings Inc. All Rights Reserved1Highlight of MCEVIn the past we disclosed Sony Life’s Traditional Embedded

Value (TEV) as one of the indices to evaluate thecorporate value of life insurance business, but going
forward, we will disclose Market Consistent Embedded
Value (MCEV), instead of TEV.
Sony Life’s MCEV as of March 31, 2008 was recalculated

in compliance with MCEV Principles*, published in June
2008, by the CFO Forum in Europe.
The results of Sony Life’s MCEV as of March 31, 2008,

were ¥816.5 billion, down ¥17.2 billion compared with
¥833.8 billion of TEV as of March 31, 2008.
* Copyright © Stichting CFO Forum Foundation 2008
* Please see Slide 5 for the details including items that are not compliant with the MCEV Principles

Sony Financial Holdings Inc. All Rights Reserved2Background of Disclosing MCEV
2002

2003

EstablishmentofCFO Forum

2004

2005

PublicationofEEV Principles

2006

2007

MCEV
disclosure
started inEurope2008

2009

Publicationof MCEVPrinciples

Criticisms to TEV Companies ―primarily leading life insurance firms in Europe― have widely disclosed

EEV, since the CFO Forum, comprised of CFOs from major insurance companies inEurope, published EEV Principles in May 2004. EEV Principles attempt to addresscriticisms to TEV, and facilitated the implementation of market consistent valuation
methods, which led many leading insurance companies in Europe to disclose EEV
based on market-consistent approaches.
 Many insurance companies in Europe disclose MCEV as part of their financial reports

and use it as an internal management tools, so the CFO Forum published MCEV
Principles in June 2008 in order to make EV information effective and appropriate forinvestors by streamlining MCEV disclosure standards for international use.
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3Relationships between
Balance Sheets (Japanese GAAP) and MCEV
Difference between market value andbalance sheets (Japanese GAAP)

Stockholders’EquityAdjustednet worth

MCEV
Value ofexistingbusiness
Market valueof admissible
assetsFrictional costs

AssetsLiabilities

Cost of nonhedgeable risks

Present
value ofCertaintyequivalentprofitTime value of
options andguarantees

Best estimate
liabilities-The chart above is a conceptual relationships between MCEV and balance sheets (Japanese GAAP), and is not a conceptual chart of mark-to-market liabilities.
-MCEV consists of “adjusted net worth” and “value of existing business”. The “value of existing business” is calculated by deducting “time value of options andguarantees”, “frictional costs” and “cost of non-hedgeable risks” from the present value of “certainty-equivalent profit”.” Adjusted net worth” is calculated bydeducting “liabilities” on the balance sheets from “market value of admissible assets” and adding back contingency reserves and other reserves categorized in
the liabilities in the balance sheets.
-“Difference between market value and balance sheets” indicates adjustments such as deducting intangible fixed assets from assets in the balance sheets andadding (subtracting) unrealized gains (losses) on real estate (buildings).

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4Compliance with the MCEV Principles
We have calculated Sony Life’s MCEV in accordance with the calculation
methodologies and assumptions in the MCEV Principles. Points of notice
regarding MCEV Principles compliance are as follows.
 The calculated value of MCEV is the value for Sony Life only, and not theconsolidated value of Sony Financial Holdings Inc.
 With respect to Sony Life’s subsidiary, Sony Life Insurance (Philippines)

Corporation and its equity method affiliate, AEGON Sony Life Planning Co.,
Ltd., we have not evaluated their life insurance business but reflected theirbook values in the calculation of adjusted net worth. Values of subsidiary andaffiliated companies were not changed in sensitivity tests.
 Any calculated values of MCEV are not presented separately by segment ofsubsidiary and affiliated company.
 We have calculated adjusted net worth based on Japanese GAAP, not on

International Financial Reporting Standards (IFRS).
 We have not conducted movement analysis from the prior period, as we did

not calculate MCEV on March 31, 2007.

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5

Major Differences between TEV & MCEV (1)MCEV
9Total net assets section

Adjusted
Net Worth

9Reserve for price fluctuations
9Contingency reserve
9Reserve for possible loan losses
9Net unrealized gains/losses on land and buildings
9Unfunded pension liability (deducting item)

TEV (Discount rate 6.0%)
9Total net assets section(Excluding net unrealized gains/losses
on bonds)
9Reserve for price fluctuations
9Contingency reserve
9Reserve for possible loan losses
9Net unrealized gains/losses on land
9Unfunded pension liability (deductingitem)

9Intangible fixed assets (deducting item)

Value ofExisting
Business

Present value of certainty-equivalent profit(Discount rate: Risk free rate)
Time value of options and guarantees (deducting item)（The difference between the present value of certaintyequivalent profit and the present value of stochastic futureprofits）
Frictional costs (deducting item)（The present value of investment cost and taxes on assetsbacking the required capital at each point of time in the future）
Cost of non-hedgeable risks (deducting item)（Allowance for the uncertainty of non-economic assumptions,the cost of non-hedgeable economic risks as well as other risks
that are not reflected on the other assumptions.)

Present value of future after-tax profits(Discount rate: Risk free rate + Riskpremiums)
Cost of capital (deducting item)
Cost of minimum guarantee for existing
variable life insurance (deducting item)

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Major Difference between TEV & MCEV (2)MCEV

TEV (Discount rate 6.0%)<New money yield>

Deterministic method(Calculation of certainty equivalent)
Investment yield

Japanese yen interest rate swap rate

Stochastic method
Market consistent yield based on economic assumptions

Discount rate

Deterministic method(Calculation of certainty equivalent)
Japanese yen interest rate swap rate

Stochastic method

Implied forward rate of Japanese government bonds<Investment of existing assets>- Bonds are held to maturity except for CBs- Unrealized gains on CBs, etc. are reflected to adjusted net
worth and the remaining amount is reinvested inJapanese government bonds- Amount of stocks and other assets at the valuation date iskept level to the extent it is within an internal thresholdtargetRisk free rate (10-year JGB yield)+
Risk premium (4.5%)

Interest rate of each scenario

Time value of options
and guarantees

Difference from the present value of certainty-equivalent profits
calculated by conducting stochastic projections, using thestochastic economic assumptions scenarios.

Minimum guarantee for variable life insurance

Frictional costs (MCEV)/ Cost of capital (TEV)Frictional costs are the present value of investment costs andtaxes on assets backing required capital. The required
capital is the larger of , either, the amount required tomaintain the assumed level of solvency margin ratio of 600%,
or the amount of technical provision and solvency risk capital
stipulated by QIS4 of the EU Solvency II held in excess ofstatutory policy reserves (excluding contingency reserves).

Cost of capital is the spread between the investment yield andthe discount rate applied to the amounts of capital andsurplus that will be required to maintain the assumed
level of solvency margin ratio (600%).

NonNon-hedgeable risks

Calculated based on the method prescribed in QIS4 of the EU
Solvency II framework with the cost of capital approach, theuncertainty of the risk-free rates beyond the 50th year has
been considered as an interest risk, in addition to life
insurance underwriting risks and operational risks.

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7

Results of MCEV<As of March 31, 2008>(Billions of yen)

MCEV

Items

TEV
(Discountrate of 6.0%)

MCEV - TEV

Adjusted net worth

248.5

194.8

53.7

Value of existing business

568.0

638.9

-71.0

EV816.5

833.8

-17.2

New business value

48.2

28.9

19.3

Sony Financial Holdings Inc. All Rights Reserved8Results of MCEV (Adjusted Net Worth)(Billions of yen)
Items

TEVMCEV

Adjusted net worth
Required capitalFree surplus

Items(Discount rate of 6.0%)

248.5

194.8

53.7

0.0

0.00.0248.5

194.853.7

TEV

MCEV

Adjusted net worth

MCEV - TEV(Discount rate of 6.0%)

MCEV - TEV

248.5

194.8

53.7

Total net assets section

182.7

136.9

45.7

Reserve for price fluctuations

24.1

24.1

－

Contingency reserve

61.8

61.8

－Reserve for possible loan losses

0.00.0－

Unrealized gains/losses on land andbuildings

29.0

8.4

20.6

Unfunded pension liability

-3.5

-3.5

－

Intangible fixed assets

-8.1

－-8.1

Tax effect equivalent of above six items

-37.4

-32.9

-4.5

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9Results of MCEV (Value of existing business)
Value of existing business(Billions of yen)(Billions of yen) Items

810.4

Value of existing business

-94.8

-16.3

As ofMarch 31, 2008

568.0

A) Present value ofcertainty-equivalent profit

810.4B) Time value of optionsand guarantees-94.8C) Frictional costs-16.3D) Cost of non-hedgeable
risks-131.5568.0-131.5

ABCDSony Financial Holdings Inc. All Rights Reserved

10Results of MCEV (New business value)
New business value(Billions of yen) Items

76.3

New business value

-13.2

-0.7

48.2
-14.2

EFG

(Billions of yen)
As ofMarch 31, 2008

48.2

E) Present value ofcertainty-equivalent profit

76.3F) Time value of options
and guarantees-13.2G) Frictional costs-0.7H) Cost of nonhedgeable risks-14.2

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11

Reconciliation analysis from TEV（Billions of yen）

EVNew business
value

833.8

28.9

(1) Model revisions

4.90.5(2) Time value of options and guarantees

-74.2

-8.3

(3) Frictional costs

-0.5

-0.0

(4) Cost of non-hedgeable risks-131.5-14.2(5) Impact of investment yield and discount rate

130.3

41.3

(6) Adjusted net worth

53.7－816.548.2

Amount of impact

TEV as of March 31, 2008MCEV as of March 31, 2008

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12

Reconciliation analysis from TEV< As of March 31, 2008>

4.9

833.8

53.7816.5

130.3
-74.2

-0.5
-131.5(Of which,new business value)
0.5

-8.3

41.3
-0.0

-14.2

(3)

(4)

48.2

28.9

TEV

(1)

(2)

(5)

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(6)

MCEV

(Billionsofyen)

13Sensitivity Analysis(Billions of yen)

Assumption

Change in Assumption

MCEV

Change inAmountRate ofChange

No change

816.5

－－

100bp decrease

526.9- 289.6-35%100bp increase

949.3

132.8

16%

10% decrease

786.4

-30.2

- 4%

10% increase

847.0

30.5

4%

25% increase

815.1-1.4- 0%25% decrease

819.1

2.50%

Interest swaption
Implied volatility

25% increase

795.6

-20.9

-3%

Maintenance expenses

10% decrease

825.8

9.3

1%

Lapse and surrender rates

x 0.9

835.0

18.5

2%

Death protection
products x 0.95

852.3

35.7

4%

Third-sector and annuity
products x 0.95

815.0

-1.5

- 0%

Morbidity rates

x 0.95

839.1

22.6

3%

Required capital

Statutory required
minimum level

831.5

15.0

2%

Base
Interest rates

Equity/property market value
Equity/property ImpliedVolatility

Mortality rates

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Sensitivity of new business value(Billions of yen)

Assumption

Change in Assumption

MCEV

Change inAmountRate of Change

No change

48.2

－－

100bp decrease

21.1

-27.2

-56%

100bp increase

58.7

10.5

22%

10% decrease

48.4

0.2

0%

10% increase

48.0

-0.3

-1%

25% increase

46.7-1.5-3%25% decrease

49.6

1.3

3%

Interest swaption
Implied volatility

25% increase

46.1-2.2-4%

Maintenance expenses

10% decrease

49.3

1.12%

Lapse and surrender rates

x 0.9

51.02.86%

Death protection products
x 0.9550.92.76%

Third-sector and annuity
products x 0.95

48.2

0.00%

Morbidity rates

x 0.95

50.8

2.65%

Required capital

Statutory required
minimum level

48.9

0.61%

Base
Interest rates

Equity/property market value
Equity/property Implied
Volatility

Mortality rates

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15Appendix

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EV(1) Restrictions from a Financial
Accounting Standpoint Japanese GAAP

Imageof on
profitsin eachfiscalProfits
Based
IndividualFiscalYearsyear

 Statutory accounting principles set byregulatory bodies to govern insurers inJapan
 Places high importance on ensuring aninsurer’s financial soundness and solvency,from the standpoint of protecting
policyholders
 Conservative policy reserve Policy acquisition costs are all charged toexpenses of the fiscal year as incurred.

40200-20

12

34

5

678

910Japanese
GAAP
U.S. GAAP-40-60-80

 US-GAAP
ImageCumulativeof cumulative
profits
Profits

 Generally accepted accounting principle inU.S.
 Objective is to disclose insurer’s operating
performance and financial conditions tovarious stakeholders including investors
 Policy reserves based on more realistic
assumptions
 Acquisition costs are capitalized andamortized.

1201008060
40200-20-40-60-80

JapaneseGAAP

1234

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56

7

8

910U.S. GAAP

17

EV (2)
Embedded value (EV) is the sum of adjusted net worth as calculated from the balance sheets andthe future value of existing business.
Conceptual Diagram ofEmbedded Value

Value of exisitingbusiness

Additional valueFuture value ofnew business
Market value
Appraisal value

Embeddedvalue (EV)

Adjusted net worth
The present value of expected future profits calculated using various kinds of assumptions
which are based on the company’s experience available as of the valuation date.
Value of existing
business

Profits

Profits

Profits

Profits

Profits

2007

2008

2009

2010

2011

Adjusted net worth =Total net assets in the balance sheets + reserve for price fluctuations(#) + contingency reserves(#)+ reserve for possible loan losses(#) + net unrealized gains/losses on land and buildings (#) –unfunded pension liability(#) – Intangible fixed assets(#)(#) Calculated on after-tax basis

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Standard Methodologies described in
QIS4 of EU Solvency II Market Risk
 For equity risk, using a shock of 32% fall in the value
 For currency risk, using a downward shock of 20%
 For interest rate risk, using the interest rate movements pre-defined by each maturityz Interest rate up (from 1.37 times to 1.94 times), Interest rate down ( from -0.31 times to -0.51 times) Combined by using a correlation matrix above Life Underwriting Risk
 For mortality risk, using a shock of a (permanent) 10% increase in mortality rates for each age.
 For longevity risk, using a shock of a (permanent) 25% decrease in mortality rates for each age.
 For lapse riskz Increase by 50% in the assumed rates of lapsation in all future yearsz Decrease by 50% in the assumed rates of lapsation in all future years

Maximum amount of thesez 30% of the sum of surrender as a mass lapse event

 For expense risk, using a shock of increase of 10% in future expenses compared to best estimate

anticipations, and increase by 1% per annum of the expense inflation rate compared toanticipations
 For disability risk, using a shock of increase of 35% in disability rates for the next year, together
with a (permanent) 25% increase (over best estimate) in disability rates at each age in followingyears.
 Cost of Capital Approach (Σ Required Capital in all future years x Cost of capital rate x

Discount rate) Required capital is an economic capital required to carry out obligations in line with a 99.5%

confidence level over a one-year time as stipulated in QIS4.

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19For inquiries:
Sony Financial Holdings Inc.
Corporate Communications & Investor Relations Department
TEL：+81-(0)3-5785-1074

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