Presentation Materials

Consolidated Financial Resultsfor Six Months Ended September 30, 2008
Sony Financial Holdings Inc.
November 17, 2008

00

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

1

Disclaimer

1Highlights of Group Consolidated Operating
Performance for FY2008 1H
FY07.1H

FY08.1H（Billion yen）

Ordinary profit（Billion
yen）

404.6

Ordinary revenues+4%Life insurance
business

420.0
Non-life
insurancebusiness
Bankingbusiness

27.5

-18%
22.4

FY07.1H

FY08.1H

Corporate andelimination

Consolidated

vs PY

Ordinary
revenues

365.7

372.1

+6.3

+2%

Ordinary profit

24.0

20.0

-3.9

-16%

Ordinary
revenues

27.7

30.7

+2.9

+11%

Ordinary profit

2.0

1.1

-0.8

-42%

Ordinary
revenues

11.5

17.7

+6.1

+53%

Ordinary profit

1.4

1.1

-0.3

-22%

Ordinary
revenues

-0.4

-0.5

-0.1

-

Ordinary profit

0.0

0.0

+0.0

+66%

Ordinary
revenues

404.6

420.0

+15.3

+4%

Ordinary profit

27.5

22.4

-5.0

-18%

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

2

During the six months ended September 30, 2008 (April 1, 2008 throughSeptember 30, 2008), consolidated ordinary revenues grew 4% comparedwith the same period of the previous fiscal year, to ¥420.0 billion owing toincreases in ordinary revenues from all the businesses: life insurance,
non-life insurance and banking.
Consolidated ordinary profit decreased 18% compared with the same
period of the previous fiscal year, to ¥22.4 billion as ordinary profits fromall the businesses declined.
Net income decreased 27% compared with the same period of theprevious fiscal year, to ¥12.1 billion.

2

Highlights of Group Consolidated Operating
Performance for FY2008 1H
 In the life insurance business, both policy amount in force and new policy amount (forindividual life insurance and individual annuities) increased. Ordinary revenues increased
due to higher income from insurance premiums but ordinary profit decreased owing todeterioration of gains and losses from investments, larger amounts of insurance claims
and other payments, and higher operating expenses.
 In the non-life insurance business, ordinary revenues increased as a result of anincrease of underwriting profit, but ordinary profit declined due to higher operating
expenses, mostly system-related expenses, as well as an increased amount of claims
paid, led by those resulting from natural disasters.
 In the banking business, ordinary revenues grew, owing mainly to higher balance ofinvestment assets in line with business expansion. Ordinary profit declined owing tohigher interest expenses, increased general and administrative expenses, mostly
system-related expenses, and amortization of goodwill.
 Consolidated ordinary revenues increased ¥15.3 billion, or 4%, year on year to ¥420.0

billion, as ordinary revenues from the three businesses increased. Consolidated ordinary
profit decreased ¥5.0 billion, or 18%, year on year, to ¥22.4 billion. Net income
decreased ¥4.5 billion, or 27%, year on year, to ¥12.1 billion due to a decreased ordinary
profit.
3

3

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

Ordinary profit

365.6

FY07.1Ｈ

FY08.1H

365.6

371.8

+6.1

+1.7%

Income from insurance
premiums

318.5

327.0

+8.5

+2.7%

Investment income

44.7

43.2

-1.4

-3.2%

341.5

351.8

+10.2

+3.0%

Insurance claims andother payments

117.4

125.8

+8.3

+7.1%

Provision for policy
reserve and others

164.6

140.8

-23.8

-14.5%

Investment expenses

9.0

32.9

+23.9

+264.9%Operating expenses

45.6

46.8

+1.1

+2.6%

Ordinary profit

24.0

19.9

-4.1

-17.1%Net income

13.0

10.8

-2.2

- 17.0%(Billion yen)

Ordinary revenues

+1.7%

371.8

vs PY

Ordinary revenues

Ordinary expenses

24.0

FY07.1H-17.1%
19.9

FY08.1H

07.9.30

08.3.3108.9.30

Securities

2,410.9

2,388.9

2,449.0+60.0

Policy reserve

3,253.5

3,375.0

3,514.8+139.7+4.1%

Total net assets

228.9

182.6

135.1

-47.5

-26.0%(Billion yen)Sony Life

Ordinary revenues up but ordinary profit down year on year.
New policy amount up 0.8% year on year.
Income from insurance premiums increased owing tosteadygrowth of policy amount in force.
Core profit amounted to ¥16.5 billion
The lapse and surrender rate rose 0.10 percentage point
year on year, to 3.11%

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

Total assets
Notes Each figure for new policy amount, policy amount in force and lapse and surrender
rate is calculated as the total of individual life insurance and individual annuities.
The lapse and surrender rate is calculated without offsetting policies that are
reinstated.

Separate account assets

Change from 08.3.31
+2.5%

134.4

82.7

21.3

-61.4

-74.2%

3,607.1

3,659.7

3,785.3+125.5

+3.4%

347.0

321.7

310.0

-11.7

-3.7%

Line item amounts are truncated below ¥100 million; percentage change figures are rounded.
The figures above are on a non-consolidated basis.

4

Sony Life’s ordinary revenues, on a non-consolidated basis, increased
1.7% from the same period of the previous fiscal year, to ¥371.8 billion,
owing to a higher income from insurance premiums associated with asteady increase in policy amount in force.
Ordinary profit decreased 17.1% year on year, to ¥19.9 billion, due tolarger amounts of insurance claims and other payments and operating
expenses, as well as the deterioration of gains and losses frominvestments, associated with the decrease in the fair market value of
securities stemmed from the worldwide financial market disruption.
Net income dropped 17.0% year on year, to ¥10.8 billion, reflecting adecrease in ordinary profit.

4

Overview of Performance:
Sony Life (Non-Consolidated)(Billion yen)
FY07 1H
New policy amount*1

FY08.1H

Change1,879.3

1,894.7+0.8.%

31.2

30.9-0.9 %

6.5

6.5-1.2 %

Income from insurance premiums

318.5

327.0

+2.7%

Investment income, net

35.7

10.3

-71.1%

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

13.9

16.5

+18.5%

Adjusted net assets

675.0

544.6

-19.3%

Negative spread

14.4

10.6

-26.4%

3.01%

3.11%

+0.1ptLapse & surrender rate*1,*2

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

Change from 07.9.30

07.9.30

08.3.3108.9.30

30,878.7

31,497.3

32,065.4

1,186.7

+3.8%

517.4

530.0

540.9

23.4

+4.5%

4.0

120.5

122.8

124.5

1,870.0%

1,747.9%

1,665.4%

Amount%+3.4%-204.6pt

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

*1 Each figure of new policy amount, annualized premiums from new policies, policy amount in force, annualized premiums from insurance in force and lapse andsurrender rate is calculated as the total of individual life insurance and individual annuities.
*2 The lapse and surrender rate is calculated without offsetting policies that are reinstated.

55Sony Life Operating Performance (1)New Policy Amount

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

Number of new policies (full year)(Trillionsof yen)

New policy amount (1H)

4

512
3.39

3

517

(Billionsof yen)Number of new policies (1H)
New policy amount (full year)(Thousandsof policies)

600 70

Annualized premiums from new policies (1H)

Third sector products (full year)

Third sector products (1H)

65.5

63.4

61.7

524
500

3.80

3.42

Annualized premiums from new policies(full year)

60
50

400

40

+3.3%
2

247

250

264

255

300

30

31.5
29.3

1.64

1.69

1.87

1.89

200

+0.8%

1

100

0

0
FY05

FY06

FY07

FY08
(1H)

Line item amounts are truncated below ¥100 million; numbers of policies aretruncated below 1,000 policies; percentage change figures are rounded.

31.2

-0.9%

30.9

20
14.5

14.4

13.3

10

-1.2%

7.1

6.8

6.5

6.5

FY05

FY06

FY07

FY08

0
（1H）
Line item amounts are truncated below ¥100 million. Percentage figures are rounded.

6

New policy amount for the total of individual life insurance and individual
annuities increased 0.8% from the same period of the previous fiscal year, to¥1,894.7 billion. The number of new policies also increased, rising 3.3% year on
year, to 264 thousand.
Annualized premiums from new policies decreased 0.9% year on year, to ¥30.9
billion. Of this amount, the figures for the third-sector products dropped 1.2%
year on year, to ¥6.5 billion.

6

Sony Life Operating Performance (2)Policy Amount in Force

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

Policy amount in force

Number of policies in force+6.9%（Trillion of yen）

40

369
30

28.3

384

399

29.0 29.6

414

428

443

(Billions of yen)（millionpolicies）

458

+3.8%

30.2

30.8 31.4

32.0

5

500

4

Annualized premiums
Of which, third sector products

600

461.7

474.2

488.8

504.6

517.4

+4.5%
530.0

540.9

400

3
300

20
2
200

+3.4%
10

1

0

0

100

109.4

113.9

117.4

120.5

122.8

124.5

106.2

05.9.30

06.3.3106.9.30

07.3.3107.9.30

08.3.3108.9.30

005.9.30 06.3.30 06.9.30 07.3.31 07.9.30 08.3.31 08.9.30
Line item amounts are truncated below ¥100 billion; numbers of policies aretruncated below 10,000 policies; percentage change figures are rounded.

Line item amounts are truncated below ¥100 million.

7

Policy amount in force for the total of individual life insurance and individual
annuities grew steadily, to ¥32,065.4 billion as of September 30, 2008, up 3.8%
from September 30, 2007.
The number of policies in force increased 6.9% from September 30, 2007, to
4,584 thousand policies.
Annualized premiums from total policies as of September 30, 2008, were up
4.5% from September 30, 2007, totaling ¥540.9 billion. Of this amount, the figure
for the third-sector products was up 3.4% from September 30, 2007, to ¥124.5
billion.

7

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

（Billion yen）

Income from insurance premiums (1H)

800

Ordinary Profit (Non-Consolidated)

Income from insurance premiums (full year)

50
700
600

Ordinary profit (1H)

Ordinary profit (full year)

648.4
580.5

605.5

39.2

40

500

+2.7%
400
300

282.5

290.2

318.5

30

23.3 24.3

327.0

24.0

-17.1%

19.9
20

16.2

14.8

200

10
100
0

0
FY05

FY06

FY07

FY08

（1H）
Line item amounts are truncated below ¥100 million. Percentage figures are rounded.

FY05

FY06

FY07

FY08
（1H）

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

8

Income from insurance premiums grew 2.7% from the same period of theprevious fiscal year, to ¥327.0 billion, associated with a higher policy
amount in force.
Sony Life’s ordinary profit decreased 17.1% year on year, to ¥19.9 billion.

8

Sony Life Operating Performance (4)Core Profit

Negative Spread（Billion yen）

（Billion yen）

Core profit (1H)

40Core profit (full year)

40

Negative spread (1H)

Negative spread (full year)

37.3
33.1

30

28.5

30

24.3

+18.5%

20

16.5

15.7
13.3

26.7

23.5
20

16.2

17.7
14.4

13.9

-26.4%

10.6
10

10

0

0
FY05

FY06

FY07

FY08
（1H）

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

FY05

FY06

FY07

FY08
（1H）

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

9Core profit rose 18.5% year on year, to ¥16.5 billion, due to an increase inincome from insurance premiums and in interest income and dividends.
The negative spread narrowed 26.4% year on year, to ¥10.6 billion, owing
to an increase in interest and dividend income.

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

Solvency Margin Ratio（Individual Life Insurance + Individual Annuities）
（％）
（％）

2,000

Lapse and surrender rate (full year)

1,852.0

1,870.0- 204.6pt
1,747.9

Lapse and surrender rate (1H)
10

1,665.4

1,500
8

5.84

5.79

6.12

6

1,000

+0.10ｐｔ
4

2.89

2.81

3.01

3.11
500

2

0

0
FY05

FY06

FY07

FY08 1H

07.3.3107.9.30

08.3.3108.9.30*The lapse and surrender rate is calculated without offsetting policies that are reinstated.

10

The lapse and surrender rate for the total of individual life insurance andindividual annuities rose 0.10 percentage point from the same period of theprevious fiscal year, to 3.11%.
Sony Life’s solvency margin ratio, one indicator of the financial soundnessof a life insurance company, remained high, at 1,665.4% as of September
30, 2008. Sony Life will continue working to maintain its sound financial
base.

10

Sony Life Operating Performance (6)Breakdown of General Account Assets
Japanese government and corporate bonds
Japanese stocks
Foreign government and corporate bonds

50.8%

51.6%

52.4%

7.6%
4.3%
0.7%

5.2%
4.6%
0.7%

4.2%
4.3%
0.8%

24.4%

26.8%

25.0%

3.1%

2.6%
4.0%
2.5%

Total

3.3%

3.3%

2.4%
3.7%

2.5%
2.5%
2.9%

4.1%

07.9.30

08.3.3108.9.30

3,260.1

3,337.9

3,475.3

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

Japanese stocks: ¥173.9 billion (¥206.2 billion)
Of which, Japanese stocks in monetary trusts:¥28.4 billion (¥33.3 billion)
Accounting for 5.0% （6.2％） of the total generalaccount assets.
CBs: ¥399.2 billion (¥427.0 billion)
Of which, CBs in monetary trusts:¥136.7 billion （¥139.4 billion)
Accounting for 11.5% （12.8%） of the total generalaccount assets.

(Billion yen)

11

This is a breakdown of Sony Life’s general account assets as of
September 30, 2008, compared with that of September 30, 2007 andMarch 31, 2008.
Japanese stocks, including those in category of “monetary trusts”
accounted for 5.0% of total general account assets as of September 30,
2008, while convertible bonds, that are included both in the category“Japanese government and corporate bonds” and in the category“monetary trusts” accounted for 11.5% of total general account assets.
Although financial market conditions have been extremely unstable since
October 2008, we maintain an investment policy of gradually increasing
our investment in ultra long-term bonds.

11

Sony Life Operating Performance (7)Net Unrealized Gains/Losses on
Available-for-sale Securities with Market Value

08.3.3108.6.30<Reference>
Announced on October 29, 2008

08.9.30（Billion yen）
（Billion yen）

Japanese governmentand corporate
bonds

83.4

28.6

19.0

CBs

9.2

8.4

-19.5

50.8

63.2

24.1

Foreign securities

-9.5

-5.8

-12.1

Other

3.0

3.8

1.9

127.8

89.8

33.0

Japanese stocks

Net unrealized
gains/losses
on securities
as of October24, 2008(Trial calculation)

Available-for-salesecurities-39.6

Japanese stocks-22.8

CBs and other-28.6

Stock-related derivativetransactions

13.6

Notes:

Total

Line item amounts are truncated below ¥100 million.
Amounts above include those categorized in “monetary trusts”.
Japanese government and corporate bonds of ¥19.0 billion as of September 30, 2008, do notinclude unrealized gains on held-to-maturity securities of ¥2.9 billion.

1) Net unrealized gains/losses on available-for-sale securities in the chart
above are calculated by subtracting the book value from the fair value
and differ from the “net unrealized gains/losses on other securities, net oftaxes” in the financial statements.
2) As of October 24, 2008, the weighted-average fair value of convertible
bonds held by Sony Life was ¥91.9.
3) Stock-related derivative transactions in the chart above indicate
transactions that Sony Life made on and after October 1, 2008, for the
purpose of hedging against the price decline risks of Japanese stocks
and convertible bonds held by Sony Life.

12

We have disclosed the status of net unrealized gains/losses on availablefor-sale securities with fair market value every quarter since March 31,
2008.
As of September 30, 2008, net unrealized gains on available-for-salesecurities were ¥33.0 billion.
We hedge risk assets, mostly Japanese stocks, through derivativetransactions, by carefully monitoring market conditions.
As a reference for investors, the table on the right shows the status ofavailable-for-sale securities held and stock-related derivative transactions
as of October 24, 2008, which we announced on October 29, 2008. We
perceive Sony Life’s financial base as being sufficiently sound.

12

Sony Life Operating Performance (8)Adjusted net worth
for calculating Embedded Value(Billions of yen)
300

261.7

270.7

（Adjusted net worth for EV is calculated as follows）
Adjusted net worth＝(a) Total net assets in the balance sheets

194.8

200

（excluding net unrealized gains on bonds except for convertible

-24.4

170.4

and certain other bonds）＋(b) Reserve for price fluctuations＋(c) Contingency reserve＋(d) Reserve for possible loan losses＋(e) Net unrealized gains on land－(f) Unfunded employees’ retirement benefits liability－(g) Deferred tax assets for (b), (c), (d), (e), and (f).

100

007.3.3107.9.30

08.3.3108.9.30

Embedded value (EV) is calculated as the sum of theabove-mentioned “adjusted net worth” and “value of inforce business,” the present value of future profits on inforce business. EV is regarded as one of indices used forassessing the corporate value of a life insurancecompany.

Line item amounts are truncated below ¥100 million.

13

We disclose Sony Life’s embedded value, or EV, once a year at fiscal
year-end.
As of September 30, 2008, adjusted net worth, one component of EV, was¥170.4 billion, down ¥24.4 billion from March 31, 2008.
This decrease was mainly due to a decline in unrealized gains/losses
mainly on Japanese stocks and convertible bonds, influenced by thedeterioration of the market environment, despite a ¥10.0 billion increase incapital during the period.
In addition, we plan to change our disclosure of EV from the current
traditional embedded value (TEV) to the market consistent embedded
value (MCEV). We will announce MCEV results as of March 31, 2008, on
November 28, 200813

Sony Life Operating Performance (8)Number of Sales Employees

Number of Independent Agents(incl. Lifeplanner sales employees)（persons）（agents）

Number of sales employees
Of which, Lifeplanner sales employees

5000

+52

4,239
4000

3,776

4,200
3,741

4,248

4,300
2,186

3,830

3,779
+51

2,140

2,151 -71

07.9.30

08.3.31

2,080

2000

3000

2000

1000

1000

0

0
07.3.3107.9.30

08.3.3108.9.30

07.3.3108.9.30

14

As of September 30, 2008, the number of Lifeplanner sales employees
was 3,830, up 51 from March 31, 2008.
The total number sales employees, which includes Lifeplanner sales
employees, was 4,300, up 52 from March 31, 2008.
The number of independent agents was 2,080 as of September 30, 2008,
down 71 from March 31, 2008.

14

Highlights of Operating Performance:
Sony Assurance
Ordinary revenues

Ordinary profit

FY07.1H

FY08.1H

27.7

30.7

+2.9

+10.5％

27.4

30.3

+2.8

+10.5％（Billion Yen）
Change+10.5%

30.7

Ordinary revenues

27.7

Underwriting income
Investment income

0.2

0.3

+0.0

+12.3％

25.7

29.5

+3.7

+14.6％

Underwriting expenses

19.2

22.0

+2.8

+14.8％

Investment expenses

0.0

0.0

+0.0

+330.7％

Operating, general andadministrative expenses

6.5

7.4

+0.9

+14.0％

Ordinary profit

2.0

1.1

-0.8

-41.5％Net income

1.9

0.6

-1.2

Ordinary expenses

2.0-41.5%
1.1

FY07.1H（Billionyen）

FY08.1H

Sony AssuranceOrdinary revenues up but ordinary profit down
year on year
Net premiums written was ¥30.3 billion owing tohigher number of automobile insurance policies,
its mainstay products.
Ordinary profit was ¥1.1 billion, owing to higher
operating expenses and impact from natural
disasters
Combined ratio was up 2.2pt to 78.6%(Billion Yen)

07.9.30-64.3％
Change from08.3.3108.3.3108.9.30

42.7

47.2

+4.5

+10.7
％
+3.6％

Underwriting reserves

39.6

Total net assets

15.2

15.3

15.9

+0.5

-0.0

-0.0

-0.1

-0.1

-

73.4

78.6

84.3

+5.6

+7.2％

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

Total assets

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

15

Sony Assurance posted a 10.5% increase in ordinary revenues comparedwith the same period of the previous fiscal year, to ¥30.7 billion, primarily
due to strong sales in its mainstay automobile insurance, which raised net
premiums written.
Ordinary profit decreased 41.5% year on year, to ¥1.1 billion, owing
primarily to increased operating expenses, mostly system-related
expenses, as well as to an increased amount of claims paid, led by thoseresulting from natural disasters.
Net income declined 64.3% compared with the same period of theprevious fiscal year, to ¥0.6 billion.

15

Overview of Performance: Sony Assurance(Billion yen)
FY07 1H

FY08 1H

ChangeDirect premiums written

27.3

30.1

+10.5％Net premiums written

27.4

30.3

+10.5％Net losses paid

12.4

14.1

+13.2％Net loss ratio

51.1%

52.4%

+1.3 pt

Net expense ratio

25.3%

26.2%

+0.9 pt

Combined ratio

76.4%

78.6%

+2.2 pt

Change from 07.9.30

Number of policies in force
Solvency margin ratio

07.9.30

08.3.3108.9.30

Number

%0.97 million

1.02 million

1.08 million+0.11 million+11.3％

1,067.7%

1,073.9%

1,096.5%+28.8 pt

Net expense ratio is equal to the ratio of total underwriting costs to net premiums written
Net loss ratio is equal to the ratio of net losses paid an loss adjustment expenses to net premiums written.
The number of policies in force is the total of automobile insurance and medical and cancer insurance, which accounts for more than 98% of net premiums written.
These numbers are truncated below 10,000 policies.
Line item amounts are truncated below ¥100 million. Percentage figures are rounded.

16

16

Sony Assurance’s Performance of Underwritingby type of policy
Net premiums written
FY07.1H

FY08.1H

ChangeFY07.1H

Fire

7

8

＋4.4%

Fire

Marine22

19-11.1%

MarinePersonal accident

3,183

3,430

＋7.8%

Voluntary
automobile

23,966

26,628＋11.1%

Compulsory
automobile liability
Total（Million Yen）

Direct premiums written
FY08.1H

Change＋24.7%

132

165

-

-

-

Personal accident

3,116

3,284

＋5.4%

Voluntary
automobile

24,07026,731＋11.1%---

27,31930,181＋10.5%

284

265

-6.6%

Compulsory
automobile liability

27,46430,351＋10.5%Total

Net losses paid
FY07.1H

FY08.1H

ChangeFire00-50.3%

Marine108-18.0 %

Personal accident

568

619

＋9.0 %

11,681

13,256＋13.5 %

217

239

＋10.2 %

12,47814,124＋13.2 %

Voluntary
automobile
Compulsory
automobile liability
Total

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

17

Direct premiums written, net premiums written, and net losses paid by typeof category are as described in this page.

17

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

60

Ordinary Profit(Millions of policies)
Other
Personal accident insurance
Voluntary automobile insurance
1.5
Number of policies in force

55.0

50

50.4

(Billions of yen)

1H

Full year

4

1.08

45.2

2.8

3

1.02
40

0.82

1

0.93

2.0
+10.5％

30

2.0

2

30.3

27.4
0.5

20

10

1.1

0.9

1

0

-0.1
FY07.1H

0
FY05

FY06

FY07

FY08.1H

0

FY08.1H

The number of policies in force is the total of automobile insurance and medical
and cancer insurance, which accounts for more than 98% of net premiums written.
Most personal accident insurance is medical and cancer insurance.
Line item amounts are truncated below ¥100 million for net premiums written andtruncated below 10,000 for the number of policies in force.

-1

-0.7
FY05

FY06

FY07

FY08.1H

Amounts are truncated below ¥1 million.

18

In terms of insurance underwriting performance, the number of policies inforce grew steadily. As of September 30, 2008, the number of policies inforce—the total of voluntary automobile insurance and medical and cancer
insurance policies—was 1.08 million, up 11.3 % from September 30, 2007.
Direct premiums written increased 10.5% year on year, to ¥30.1 billion,
associated with steady growth in the number of automobile insurance
policies. Net premiums written also increased, rising 10.5% year on year,to ¥30.3 billion.
Ordinary profit decreased 41.5% year on year, to ¥1.1 billion, as explained
before.

18

Sony Assurance Operating Performance (2)<Reference>

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

Net expense ratio

Earned/Incurred loss ratio

100+3.0pt89.9

89.0

Combined ratio(Net expense ratio + Net loss ratio)

86.3

89.3

Net expense ratio（％）

Net loss ratio

100

80

80
60

63.6

62.3

+2.1pt

61.0

79.9

80.3

53.6

53.5

+2.2pt

76.4

78.6

63.1
+1.3pt

60
40

52.4

51.1

40
20

26.3

26.7

25.3

+0.9pt

26.2

20

26.3

0
FY06

FY07

FY07.1H

FY08.1H*Note that earthquake insurance and compulsory automobile liability
insurance are excluded from the above calculation.

25.3

26.2

FY07

FY07.1H

FY08.1H

0
FY06

Earned/Incurred loss ratio is equal to the ratio of the sum of net losses paid, loss adjustment
expenses and accumulation in provision for reserve for outstanding losses to earned premium.

+0.9pt26.7

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

19

To help you understand the actual condition of Sony Assurance, which is in a growthphase, at left we show the combined ratio calculated using the earned/incurred loss
ratio rather than the net loss ratio.
The earned/incurred loss ratio rose 2.1 percentage points from the same period of theprevious fiscal year. This rise includes the impact of changes in the calculation ofunderwriting reserves for personal accident insurance during the six months ended
September 30, 2007. Excluding this effect, the earned/incurred loss ratio in the six
months ended September 30, 2007 was 62.2%. This assumption results in an
earned/incurred loss ratio up 0.9% as of September 30, 2008, a smaller increase than
the 1.3 percentage point increase in the net loss ratio.
Furthermore, excluding the impact of natural disasters the earned/incurred loss ratio
as of September 30, 2008, would have been at almost the same as the ratio as of
September 30, 2007. Accordingly the earned/incurred loss ratio has remained stablesince the year ended March 31, 2007.
The net expense ratio rose 0.9 percentage point year on year, to 26.2%, owing to anincrease primarily in system-related expenses, which more than offset operational
efficiency improvement.
The chart at the right shows the net loss ratio. This ratio increased 1.3 percentage
points year on year, to 52.4%, due to the impact of natural disasters. As a result, thecombined ratio (the sum of the net loss ratio and the net expense ratio) rose 2.2
percentage points year on year, to 78.6%.

19

Sony Assurance Operating Performance (3)Solvency Margin Ratio

（％）

1,500
+22.6pt

1,030.6
1,000

976.1

971.9

1,009.7

1,067.7 1,073.9 1,096.5

500

005.9.30 06.3.31 06.9.30 07.3.31 07.9.30 08.3.31 08.9.30

20

As of September 30, 2008, Sony Assurance’s solvency margin ratio was
1,096.5%, up 22.6 percentage points from March 31, 2008, maintaining thehigh level.

20

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

Ordinary profit（Billion yen）

Change17.7+53.3%

Ordinary revenues

11.5

17.7

+6.1

+53.3%

Gross operating profit

5.4

6.6

+1.1

+20.7%Net interest income

2.4

2.1

-0.3

-14.6%Net fees and commissions

0.3

0.1

-0.2

-67.1%Net other operating income

2.6

4.3

+1.7

+63.6%

General and administrative
expenses

3.8

4.9

+1.0

+27.0%

Ordinary profit

1.5

1.6

+0.0

+2.4%

Net income

2.0

0.9

-1.0

-53.6%

11.5

1.5

FY07.1H+2.4%

FY08.1Ｈ

FY07.1Ｈ

1.6（Billion
Yen）

FY08.1H

07.9.30

08.3.3108.9.30

Sony Bank

Securities

348.3

488.7

667.3

+178.5+36.5％

 Both ordinary revenues and ordinary
profit up year on year.
 Gross operating income expanded due
to increase in net other operating
income.
 Net income declined compared to thesame period of the previous fiscal year,
when deferred tax assets were recorded.
 Customer assets was ¥1,433.1 billion.
Loans reached ¥400.0 billion.

Loans

319.1

347.0

400.0

+52.9

+15.3％

Deposits

888.4

1,144.3

1,338.2+193.8+16.9％

1,006.0

1,247.3

1,433.1+185.8+14.9％

38.2

35.7

36.6

+0.9

+2.6％

-5.1

-9.0

-15.6

-6.5

-

966.1

1,211.0

1,423.1+212.1+17.5％

10.94%

9.15%

8.88%

（Billion yen）

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

Total assets
Capital adequacy ratio(Domestic criteria)

Change from 08.3.31-0.27pt

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

21

On a non-consolidated basis, Sony Bank’s ordinary revenues increased
53.3% compared with the same period of the previous fiscal year, to ¥17.7
billion, as a higher balance of investment assets and other factors, in linewith business expansion, led to higher interest income and other operating
income.
Owing to an increase in gross operating profit, ordinary profit increased
2.4% compared with the same period of the previous fiscal year, to ¥1.6
billion.
Net income decreased to ¥0.9 billion, down 53.6% compared with thesame period of the previous fiscal year when the deferred tax assets weretopped up at September 30, 2007.

21

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

Change from 08.3.31
08.3.3107.9.30

08.9.30

ChangeChange(%)

Customer assets

1,006.0

1,247.3

1,433.1+185.8+14.9%

Deposits

888.4

1,144.3

1,338.2+193.8+16.9%

Yen

708.8

892.6

1,079.7+187.0+21.0%

Foreigncurrency

179.6

251.7

258.4

+6.7

+2.7%

117.6

102.9

94.9

-7.9

-7.8%

319.1

347.0

400,0

+52.9

+15.3%

311.4

338.8

391.5

+52.6

+15.5%

Investment trusts
Loans
Mortgage loans
Other
Number of accounts (thousand)

7.6

8.1

8,4

+0.3

+3.8%

532

610

670

+60

+9.8%

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

22

22

Sony Bank Operating Performance (1)Customer Assets (Deposits + Investment Trusts)
and Number of Accounts
Yen deposits
Foreign currency deposits
Investment trusts(Billion yen)

670

Number of accounts (thousand)

1,500

401

430

458

491

Loans

(Billions of yen)

610

532

Mortgage loans

Other

500

1,433.1Investment
1,247.3

trusts:94.9 bil

400.0

400

Other
¥8.4 bil

347.0
1,006.0
1,000

Foreigncurrency
deposits:¥258.4 bil 300

319.1
284.7

848.8
239.4

762.7
638.2 675.1
500

249.1

MortgageLoans¥391.5 bil

200
Yendeposits:¥1,079.7 bil

172.1

100

0

0

05.9.30 06.3.31 06.9.30 07.3.31 07.9.30 08.3.31 08.9.30

05.9.30 06.3.31 06.9.30 07.3.31 07.9.30 08.3.31 08.9.30
Amounts are truncated below ¥100 billion; numbers of accounts are truncatedbelow 1 thousand.

Amounts are truncated below ¥100 million.

23

As of September 30, 2008, customer assets (the sum of deposits andinvestment trusts) grew ¥185.8 billion, from March 31, 2008, to ¥1,433.1
billion, primarily due to an increase in yen time deposits.
Deposits for the total of yen deposits and foreign currency deposits
increased ¥193.8 billion from March 31, 2008, to ¥1,338.2 billion.
Investment trusts decreased ¥7.9 billion from March 31, 2008, to ¥94.9
billion.
Loans expanded steadily to ¥400.0 billion, up ¥52.9 billion from March 31,
2008, as shown in the right graph.
As of September 30, 2008, the number of accounts was up 60 thousand
from March 31, 2008, to 670 thousand.

23

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

Ordinary profit (1H)
General and administrative expenses (1H)

Ordinary profit (full year)
General and administrative expenses (full year)

Gross operating profit (1H)

Gross operating profit (full year)

Non-consolidated Capital Adequacy Ratio(Domestic Criteria)
（％）
20

10.9
10

9.4

9.0

7.0

7.6

15

8.1
11.49
10.55

6.6
10

10.52
9.24

5.4
5

4.5
3.3

4.5
3.8
1.3

9.15

8.88

4.9
3.8

2.2

1.1

10.94

5

2.7

1.5

1.6

0.5

0
05.9.30 06.3.31 06.9.30 07.3.31 07.9.30 08.3.31 08.9.30

0
FY05

FY06

FY07

FY08.1H

Notes: Capital adequacy ratios as of June 30, 2007, March 31, 2008, and June 30, 2008
were calculated based on the standard stipulated in the Financial Services Agency
Public Announcement No. 19 of 2006.

Amounts are truncated below ¥100 million.

24

In terms of profitability, Gross operating profit increased 20.7% from the same period of theprevious fiscal year, to ¥6.6 billion, led by an increase in net other operating income.
With respect to the breakdown of gross operating profit, net interest income dropped 14.6% year
on year, to ¥2.1 billion due to increased interest on deposits, and net fees and commissions
declined 67.1% year on year, to ¥0.1 billion, owing primarily to a decrease in securities-related
commissions. Net other operating income rose 63.6% from the same period of the previous fiscal
year, to ¥4.3 billion, as a result of increased income from foreign exchange transactions derived
from the investment of foreign currency deposits.
General and administrative expenses increased 27.0% year on year to ¥4.9 billion, due mainly to
an increase in system-related expenses.
Next, we explain the capital adequacy status shown in the right hand.
Net unrealized losses on other securities, net of taxes, amounted to ¥15.6 billion, deteriorated by¥6.5 billion from March 31, 2008 due primarily to the decline in the fair market value of corporate
bonds and Japanese government bonds.
During the six months ended September 30, 2008, Sony Bank’s capital was raised ¥6.0 billion. As
a result, common stock and capital surplus as of September 30, 2008, were ¥28.0 billion and¥18.0 billion, respectively. In addition, Sony Bank assumed ¥2.0 billion in subordinated debts fromoutside of the SFH Group. The increased capital and the subordinated borrowings were intended
to ensure Sony Bank’s financial soundness, considering the increased investment assets alongwith its business expansion.
As of September 30, 2008, Sony Bank’s non-consolidated capital adequacy ratio (domestic
criteria) was 8.88%, maintaining a sound level.
In view of the recent market environment, on November 12, 2008, Sony Bank’s capital was raised
a further ¥6.0 billion through the allocation of shares to SFH, with the aim of enhancing SonyBank’s financial soundness and achieving further growth.

24Consolidated Operating Performance
Forecast for FY2008(Billions of yen; line item amounts are truncated below ¥100 million; changes are rounded)
FY2008% changefrom FY07

FY2004

FY2005

FY2006

FY2007

Consolidated ordinary revenues
Of which, life insurance business
Of which, non-life insurance business
Of which, banking business

653.2

758.7

759.2

822.1

884.0

+ 7.5%

604.2

696.6

689.8

741.3

793.0

+ 7.0%

38.1

45.7

51.0

55.6

59.8 →60.7+ 9.2%

11.3

17.2

19.4

25.9

33.0→33.5+ 1.5%

Consolidated ordinary profit
Of which, life insurance business
Of which, non-life insurance business
Of which, banking business

12.2

25.3

18.3

44.5

37.0

-16.9%

17.1

24.3

14.8

39.0

34.0

-13.0%

(2.8)

(0.7)

2.0

2.8

1.3 →2.1-25.0%

(1.6)

2.2

1.3

2.4

2.0→1.4-30.0%

6.3

11.5

10.0

24.2

21.0

-13.4%

Consolidated net income(Full-year
forecast)

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

758.7

759.2

Additional Information
We expect ordinary revenues to continue increasing,owing to the robust expansion of each business.
However, ordinary profit is expected to decrease, forthe reasons described below.
■ Life insurance business
The yield on general account investments is
expected to fall, compared with FY2008.
■ Non-life insurance business
The operating expense ratio is expected to riseslightly, owing to higher system-related expenses.
■ Banking business
Expenses are expected to increase: system-related
and other expenses are expected to increase, Sony
Bank Securities is expected to operate in the red
initially, and goodwill will be amortized, among otherfactors.

Consolidated Ordinary Profit

884.0(Billions of yen)

822.1

Banking business
Non-life insurance businessLife insurance business

44.5

37.0

653.2
25.3
(Forecast)

12.2

18.3
(Forecast)

25

SFH’s consolidated financial results forecast for the year ending March 31, 2009 (April 1, 2008
through March 31, 2009) are unchanged from those announced on May 14, 2008.
With respect to the breakdown of each business, SFH changed its forecasts of ordinary revenues
and ordinary profit both upward for the non-life insurance business for the year ending in March 31,
2009, from those originally announced in May, as stated here, owing to such factors as1) Underwriting income during the six months ended September 30, 2008 was higher thanoriginally
expected,
2) The loss ratio for the period was within the range originally forecast, and
3) System-related expenses for the year ending March 31, 2009 are not expected to be as high as
originally forecast.
In addition, SFH changed its forecasts of ordinary revenues upward but ordinary profit downward
for the banking business for the year ending March 31, 2009, from those announced in August, as
stated here, as ordinary revenues for the six months ended September 30, 2008 were higher thanthe original forecast due to steady business expansion, and considering the financial market
environment as of September 30, 2008.
Our consolidated forecast for the year ending March 31, 2009, does not incorporate the potential
impact of market fluctuations on and after October 1, 2008, as it is difficult to forecast the financial
market conditions as of March 31, 2009.
Last, as one of recent topics, SFH announced on October 1, 2008, that it has obtained an AAissuer rating from Rating and Investment Information, Inc. (“R&I”).

25

Appendix

26

Appendix

26

Recent Topics
Aug. 1

Sony Bank started tie up in conducting banking agency business with Seven
Bank to offer Sony Bank's mortgage loans

Oct. 1

Sony Financial Holdings (SFH) obtained AA- issuer rating from R&I, Japanese
rating agency

Oct. 1

Sony Life opened representative office in Beijing, PRC

Oct. 13

Sony Bank introduced a fund sweep service tying with Sony Bank Securities

Oct. 14

Sony Bank obtained AA- long-term senior debt rating from JCR , Japanese rating
agencyOct. 20

Sony Bank started ATM affiliation with LAWSON ATM Networks to expand realmoney services to be provided throughout Japan

Oct. 29

Sony Bank started handling credit cards with dual-currency settlement function

Nov. 12 SFH injected capital (¥6.0 billion) to Sony Bank

27

Recent Topics

27

Comparison with Sony Corporation’s
Consolidated Financial Services Segment(Principal Differences between Japan GAAP and U.S. GAAP)* “SFH” refers to “Sony Financial Holdings Inc.”
Financial Services Segment of Sony
Corporation, Consolidated(U.S. GAAP)*SFH Consolidated(Japanese GAAP)

Treatment of new policy acquisition
costs(Concerns the life insurance business andthe medical care insurance portion of the
non-life insurance business)

The portion of costs related to acquiring new
policies or changes in these costs that is deemed
recoverable is deferred.

Costs are treated as expenses during the period
in which they are incurred.

Method of calculating policy reserves（insurance policy liabilities)(Concerns the life insurance business andthe medical care insurance portion of the
non-life insurance business)

Under U.S. GAAP, calculated according to the net
level premium method using insurance actuarial
figures.

Calculated according to methods approved byregulatory bodies. Computed with an emphasis on
the early accumulation of policy reserves from thestandpoint of protecting policyholders.

Treatment of the market value of
convertible bonds held
(Concerns the life insurance business)

Changes in the fair value (changes in the market
value) of so-called “hybrid financial products,”
which include derivatives, are posted to theincome statement as profits or losses.

Changes in fair value are posted to the balance
sheets as increases or decreases in net assets.

Notes:
1. The above-mentioned differences between U.S. GAAP and Japan GAAP are deemed material to SFH’s consolidated ordinary profit for FY08. 1H.
2. The scope of Sony Corporation’s consolidated Financial Services segment and SFH’s consolidation differ, as follows:• Sony Corporation’s consolidated Financial Services segment: SFH, Sony Life Insurance Co., Ltd., Sony Assurance Inc., Sony Bank Inc., Sony FinanceInternational Inc., others. AEGON Sony Life Planning Co., Ltd. is also in the scope as an affiliated company accounted for under the equity method.
• SFH consolidated: Sony Life Insurance Co., Ltd., Sony Assurance Inc., Sony Bank Inc., Sony Bank Securities Inc., Sony Life Insurance (Philippines)
Corporation. AEGON Sony Life Planning Co., Ltd. is also in the scope as an affiliated company accounted for under the equity method.
3.Under U.S. GAAP, the book value at the date of conversion to shares is used as the market value of shares converted from convertible bonds (CBs),
whereas under Japanese accounting principles the book value is carried as the CB acquisition price even after conversion. Consequently, total gains orlosses on the sales of shares converted from CBs (differences between selling prices and book values), and total impairment losses (differences between
market value and book value)—of stocks included in the scope of impairment loss accounting—differ depending on the use of U.S. or Japanese GAAP.

28

Comparison with Sony Corporation’s Consolidated Financial Services
Segment

28

Contact:

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

29

Contacts

29