Financial Section

Financial Review
Indicators Showing the Main Results over the Last Five Fiscal Years
Summary of Operations
Accounting Concepts
1. Financial statements
2. Details of assets and liabilities
3. Income and loss details
4. Information about fair values, etc.

28

Japan Earthquake Reinsurance Co., Ltd. Annual Report 2018

FINANCIAL REVIEWBusiness development, results, etc.
The Japanese economy continued its moderate expansion in fiscal 2017 with benefits brought to the export sector
by the sustained growth of overseas economies, in addition to support from the extremely relaxed financial policiesof the Bank of Japan.
Premiums written increased from the previous fiscal year under the effects of a premium rate revision that was
implemented in January 2017. However, net premiums written excluding reinsurance premiums ceded decreased
because reinsurance premiums ceded to the government grew as a result of the revision of the reinsurance scheme
for earthquake insurance in April 2017. Net claims paid and loss adjustment expenses decreased from the previous
fiscal year, reflecting a gradual reduction in insurance payouts for the Kumamoto Earthquakes.
Looking at asset management, investment income fell from the previous fiscal year as the situation of extremely low
interest rates continued and the redemption of high-yield bonds advanced under tough conditions for managing new
assets.
JER worked on 29 management items in fiscal 2017, which it positioned as the final year under the fourth mediumterm business plan “Strengthening Arrangements for Earthquake Reinsurance Payouts.” Overall, JER achieved thetargets set for those items in the fiscal year under review.
As key measures, JER studied ways of improving credit risk management systems and revised new system foundations, in addition to working to achieve appropriate and realistic additional contribution ratios in the earthquake
insurance system.
Summary of earthquake insurance results① Net premiums written and net claims paid
Premiums written rose from the previous fiscal year, butreinsurance premiums ceded to the government grew
as a result of the revision of the reinsurance scheme
for earthquake insurance in April 2017. As a result, net
premiums written decreased to 97.3 billion yen (down
14.7% year on year).
In the meantime, net claims paid fell to 8.9 billion yen(down 96.0% year on year), reflecting factors including
the Kumamoto earthquakes.
② Risk reserves and underwriting reserves
JER added a total of 34.6 billion yen, including net premiums written and held of 34.3 billion yen, calculated bydeducting assumed reinsurance commissions from net
premiums written, and investment income of 0.3 billion
yen, to its risk reserves (down 33.4% year on year ).
Furthermore, JER returned the provision for outstanding
claims of 1.8 billion yen to the risk reserves, and withdrew the net claims paid of 8.9 billion yen stated above,
damage research expenses of 2.1 billion yen, and advertising and publicity expenses of 0.3 billion yen from therisk reserves posted for the past year. As a result, risk
reserves at the end of the fiscal year under review cameto 303.9 billion yen (up 9.0% year on year).
Underwriting reserves at the end of the fiscal year underreview amounted to 495.6 billion yen (up 8.5% year onyear) as a result of the addition of unearned premium
reserves to the risk reserves stated above.
③ Risk reserves of direct insurance companies
JER added a total of 3.1 billion yen (down 30.8% year
on year), including net premiums written and investment
income, to the risk reserves of direct insurance companies recorded as entrusted reserves. The risk reservesof direct insurance companies at the end of the fiscal
year under review came to 47.7 billion yen (up 1.8% year
on year) after withdrawing advertising and publicity expenses of 2.3 billion yen.

Outline of investments
Conditions for extremely low interest rates remained stable in Japan under the policy of quantitative and qualitative monetary easing with yield curve control advancedby the Bank of Japan. Investment conditions for JER remained severe with continued negative interest rates on
short- and medium-term bonds, which are JER’s maininvestment targets.
Looking at exchange rates, an interest rate hike in the
United States was a factor in the appreciation of the U.S.
dollar. However, the yen gradually strengthened against
the U.S. dollar as U.S. political pressure for correcting
the trade imbalance and long-term interest rates in the
United States calmed down. The yen weakened against
the euro in response to the monetary tightening policy
announced by the European Central Bank with the sustained recovery of the European economy in the background.
In these circumstances, we invested in assets with toppriority placed on safety and liquidity, followed by profitability. As a result, pretax profits from investments
amounted to 0.3 billion yen in the business account and71.2 million yen in the entrusted reserves account. Investment assets came to 533.5 billion yen at the end of
the fiscal year under review.
Profit and loss for the fiscal year under review
As a result of adding and subtracting other items to andfrom interest and dividend income and subtracting income taxes and residential taxes, net loss for the fiscal
year under review came to 0.6 million yen.

Japan Earthquake Reinsurance Co., Ltd. Annual Report 2018

29

INDICATORS SHOWING THE MAIN RESULTS
OVER THE LAST FIVE FISCAL YEARS(Yen in millions)Fiscal Year

Division

2013

2014

2015

2016

2017

Net premiums written
Percentage change over the previous term

92,248(0.8%)

108,99418.2%

121,986
11.9%

114,114(6.5%)

97,302(14.7%)Net claims paid
Percentage change over the previous term

15,010(52.5%)

9,563(36.3%)

5,589(41.6%)

220,905
3,852.3%

8,924(96.0%)

Ordinary income
Percentage change over the previous term

104,703(5.1%)

119,82214.4%

129,1077.7%

289,485
124.2%

101,288(65.0%)

Ordinary expenses
Percentage change over the previous term

104,509(5.1%)

119,81814.6%

129,1077.8%

289,487
124.2%

101,290(65.0%)

Ordinary profit (loss)
Percentage change over the previous term

194
0.3%

3
(98.2%)

0(98.4%)(1)(3,537.5%)(1)–

Net income (loss)
Percentage change over the previous term

(82)
(2,045.2%)

3
–

(0)
(115.6%)1–(0)(159.8%)1,000
2 mil. shares

1,000
2 mil. shares

1,000
2 mil. shares

1,000
2 mil. shares

1,000
2 mil. shares

Common stock
Sum of shares issued
Net assets

1,544

1,543

1,542

1,542

1,540

Total assets

577,305

640,137

709,408

511,297549,220

Underwriting reserves
Percentage change over the previous term

499,2748.2%

556,727
11.5%

627,34512.7%

456,745(27.2%)

495,634
8.5%

Of the balance, risk reserves
Percentage change over the previous term

378,0417.1%

417,05610.3%

464.584
11.4%

278,846(40.0%)

303,954
9.0%

Loans
Percentage change over the previous term

–
–

–
–

–
–

–
–

–
–

Securities
Percentage change over the previous term

525,161
10.1%

391,034(25.5%)

401,751
2.7%

234,580(41.6%)

200,239(14.6%)

Non-consolidated solvency-margin ratio

344.9%

354.5%

392.1%

299.1%

379.6%

Dividend propensity

–

–

–

–

–

No. of employees

26

29

28

26

28

Note:
JER’s solvency-margin ratio will not be used as a criterion for the administrative authorities’ order for improvement. For details, please refer to page 34.

SUMMARY OF OPERATIONS
q Indicators relating to insurance underwriting
Item: earthquake
1. Net premiums written(Yen in millions)

Division

Fiscal Year

2015

2016

2017

Premiums written

245,353

247,441

261,556

Return premiums

6,708

4,342

4,316

Assumed net premiums
written (A)238,645

243,099257,239

Reinsurance premiums
ceded (B)

116,659

128,984

159,937

Net premiums written (A – B)

121,986

114,114

97,302

Notes:
1. R
 eturn premiums: Return premiums of receiving reinsurance.
2. 
Assumed net premiums: Produced by deducting return premiums
from premiums written.
3. Net premiums written: Produced by deducting the reinsurance premiums ceded from the assumed net premiums written.

30

2. Rate of premiums written by domestic and overseas contracts
Division

Fiscal Year

2015

2016

2017

100%

100%

100%

2015

2016

2017

8,214

388,527

14,786

Reinsurance claims
recovered (B)2,625

167,622

5,861

Net claims paid (A – B)

5,589

220,905

8,924

Domestic contract

3. Net claims paid
(Yen in millions)

Division

Fiscal Year

Assumed net claims paid (A)Notes:
1. 
Assumed net claims paid: Produced by deducting surrender value
from ceded insurance claims paid
2. Net claims paid: Produced by deducting reinsurance claims recoveredfrom assumed net claims paid

Japan Earthquake Reinsurance Co., Ltd. Annual Report 2018

4. Net loss ratio, net expense ratio and their combined ratio(Yen in millions)

Division

Fiscal YearNet loss ratio

2015

2016

2017
2015

2016

2017

10

11

9

1,054
48,426Rate of top fivereinsurers’ ceded
insurance premiums

91.5%

89.8%

90.4%

206.0%

11.4%

46,60647,40949,481 Insurance related operating,general and administrative
expenses725

734 Commissions and brokeragefees

45,88046,675Net expense ratio

38.2%

41.5%

50.9%

Combined ratio

43.5%

247.5%

62.3%

Notes:
1. Net loss ratio: (Net claims paid + loss adjustment expenses) / net
premiums written
2. Net expense ratio: (Commissions and brokerage fees + Insurance-related operating and general administrative expenses) / net premiums
written
3.	Combined ratio: Net loss ratio + net expense ratio

5. Rate of damage occurrence, the expenses ratio andrate of sum total before ceded insurance deduction
Not applicable
6. Changes in ordinary income or loss against a risein the loss rate
There are no changes in ordinary income or loss
in earthquake insurance because increases ininsurance payments are set off through the reversalof underwriting reserves in accordance of theprinciple of no loss and no profit.

Division

Fiscal Year

No. of reinsurersthat ceded insurance
contracts

5.3%

Underwriting expenses

8. No. of reinsurers that ceded insurance contracts andtop five reinsurers for ceded reinsurance premiums

Note:
The number of reinsurers that ceded insurance contracts is the number
who ceded treaty reinsurance contracts of 10 million or more yen.

9. Ratio of ceded insurance premiums by rating
Not applicable
10. Contractor dividend
Not applicable
11. Conditions at the end of the current fiscal year
(runoff result) of outstanding claims (estimatedamount) at the beginning of the term
Not applicable to earthquake insurance.
12. Amount of estimated final damages associatedwith the elapse of a period from the occurrenceof accidents
Not applicable to earthquake insurance.

7. Underwriting profit(Yen in millions)

Division

Fiscal Year

2015

2016

2017

Underwriting income

123,681284,934

99,430Underwriting expenses

122,956

284,200

98,375

Operating and generaladministrative expenses

1,054

725

734

Other income and expenses

–

–

–

Underwriting profit

–

–

–

Notes:
1. The above operating, general and administrative expenses are thoserelating to the underwriting of insurances mentioned in the operating, general and administrative expenses in a statement of profits andlosses.
2. Other income and expenses are those equivalent to corporate taxes
mentioned in a statement of earthquake insurance profits and losses.

Japan Earthquake Reinsurance Co., Ltd. Annual Report 201831

w Investments
3. 
Amount of interest and dividend received andinvestment assets yield (income yield)

1. Investments policy	JER is the only company in Japan that specializes
in reinsurance for earthquake insurance. JER attaches top priority to the guarantee of liquidity andsafety in earthquake reinsurance payouts because
the time and scale of an earthquake are unpredictable, and the liquidation of all investment assets ispossible. In asset management, JER is striving tomaintain and strengthen its capacity for earthquake
reinsurance payouts through the guarantee of funds
for payments and the expansion of risk reserves.

(Yen in millions)FiscalYear

Percentage
distribution(%)

Division
Deposits

189,215

Call loans
Monetaryreceivablesbought51.0 333,194

60.7

4,668

0.7

1,040

0.2

90

0.0

94,596

13.3

–

–

–

–

Money trusts

0.06

7

0.00

5

0.00

8

0.02

0

0.00

0

0.00

Monetaryreceivablesbought

144

0.08

3

0.02

–

–

–

–

–

–

–

–

Securities

401,75156.6

234,58045.9

200,239

36.5

Buildings

27

0.0

25

0.0

24

0.0

Total ofinvestments
assets690,258

97.3

496,18197.0

533,548

97.1

Total assets

709,408

100.0

511,297100.0

549,220

100.0

–

–

–

–

–

–

2,280

0.62

1,283

0.44

1,176

0.55

Buildings

–

–

–

–

–

–

2,468

0.38

1,294

0.24

1,181

0.23

Note:
Investment assets yield (income yield): indicator showing the result of investment assets from a point of income (interest and dividend income)The numerator is composed of interest and dividend income from investment assets while the denominator is an acquisition cost based assets.

Percentage
distribution(%)

26.7 260,534

Yield (%)

34

Securities

As of the end of
fiscal 2017

Percentage
distribution(%)

Yield (%)

Call loans

Total

As of the end of
fiscal 20162017

Deposits

Money trusts(Yen in millions)

As of the end of
fiscal 2015

2016

Yield (%)

Division

2. Total assets and investments assets
Year

2015

Numerator = Interest and dividend income (including the amount equivalent to interest and dividend income of profit (or loss) from monetarytrust operation)
Denominator = Acquisition cost or depreciation based average balance

4. Asset management yield (realized yield)(Yen in millions)2015

Fiscal Year

2016

2017

Division

Amount ofnumerator

Amount ofdenominator

Yield onworking
assets (%)

Amount ofnumerator

Amount ofdenominator

Yield onworking
assets (%)

Amount ofnumerator

Amount ofdenominator

Yield onworking
assets (%)

Deposits

34

60,1810.06

7

233,6710.00

5300,366

0.00

Call loans

838,187

0.02

0

1,471

0.00

0

388

0.00

144

184,504

0.08

320,157

0.02

–

–

–

–

–

–

–

–

–

–

–

–

2,475

368,634

0.67

1,419

294,061

0.48

1,216

215,2830.57

818

250,3820.33

662

251,1260.26

556

179,425

0.31

–

–

–

–

–

–

–

–

–

1,657

118,251

1.40

757

42,9341.76

659

35,857

1.84

Monetary receivables bought
Money trusts
Securities
Public and corporate bonds
StocksForeign securities

–

–

–

–

–

–

–

–

–

Loans

Other securities

–

–

–

–

–

–

–

–

–

Buildings

–

28

–

–

27

–

–

25

–

Derivatives

3,954

–

–

3,329

–

–

929

–

–

Others(4,494)––(3,791)––(1,404)

–

–

Total

2,124

651,5360.33

968

549,3900.18

747

516,0640.14

Notes:
1. Asset management yield (realized yield): indicator to show the result of managing of assets from the point of contribution to the current profit andloss. The numerator is realized profit and loss while the denominator is an acquisition cost based assets.
Numerator = profit from asset management + investment income on savings premiums – expenses of assets management
Denominator = acquisition cost or writing-off cost based average balance
2. Profit and loss from derivatives principally involve foreign exchange forward contracts with the remainder primarily involving currency exchange of foreign
currency-denominated bonds. JER deals in foreign exchange forward contracts and other transactions for the purpose of hedging risks associated with foreign
currency-denominated bonds.

32

Japan Earthquake Reinsurance Co., Ltd. Annual Report 2018

5. Market-price based overall yield (for reference)(Yen in millions)2015

Fiscal Year

2016

2017

Division

Amount ofnumerator

Amount ofdenominator

Yield onworking
assets (%)

Amount ofnumerator

Amount ofdenominator

Yield onworking
assets (%)

Amount ofnumerator

Amount ofdenominator

Yield onworking
assets (%)

Deposits

34

60,1810.06

7

233,6710.00

5300,366

0.00

Call loans

838,187

0.02

0

1,471

0.00

0

388

0.00

144

184,504

0.08

320,157

0.02

–

–

–

–

–

–

–

–

–

–

–

–

2,800

372,0300.75

212

297,783

0.07

(71)

217,797(0.03)

2,014

252,572

0.80

(227)

254,512(0.09)(63)

181,922(0.04)

–

–

–

–

–

–

–

–

–

Foreign securities

786

119,458

0.66

439

43,2701.01(7)35,874(0.02)

Other securities

Monetary receivables bought
Money trusts
Securities
Public and corporate bonds
Stocks

–

–

–

–

–

–

–

–

–

Loans

–

–

–

–

–

–

–

–

–

Buildings

–

28

–

–

27

–

–

25

–

Derivatives

3,954

–

–

3,329

–

–

929

–

–

Others(4,494)––(3,791)––(1,404)

–

–

Total

2,449

654,932

0.37

(239)

553,111(0.04)(540)

518,578(0.10)

Notes:
1. M arket-price based overall yield: indicator showing the efficiency of operation on a market price basis. The numerator reflects realized profit and loss
and fluctuations in market price appraisal while the denominator is market-price based assets.
Numerator = (income from operated assets management + investment income on savings premium – expenses for assets management) + (after-tax
unrealized gain for the year – after-tax unrealized gain for previous year)* + fluctuation in deferred hedge profit and loss
Denominator = acquisition cost or write-off based average balance + after-tax unrealized gain for previous year of other securities + profit and loss
for the previous year related to securities for transaction* Based on the amount before tax effect deduction
2. P rofit and loss from derivatives principally involve foreign exchange forward contracts with the remainder primarily involving currency exchange of foreign
currency-denominated bonds. JER deals in foreign exchange forward contracts and other transactions for the purpose of hedging risks associated with foreign
currency-denominated bonds.

6. B alance, percentage distribution and yield of Foreign Loans & Investments(Yen in millions)

Year

As of the end of fiscal 2015

As of the end of fiscal 2016

As of the end of fiscal 2017

Percentage
distribution(%)

Percentage
distribution(%)

Percentage
distribution(%)

Division
Foreign currency denominatedForeign public and corporate bonds

76,404

69.8

14,91056.4

24,361

33,11830.2

109,523

100.0

70.0

11,525

43.6

10,46030.026,435100.0

34,822100.0

Yen denominatedForeign public and corporate bonds
Total
Yield on foreign loans & investments
Investment assets yield (income yield)

1.39%

1.45%

Assets management (realized yield)

1.40%

1.76%

1.88%
1.84%

Market-price based overall yield (for reference)

0.66%

1.01%

(0.02%)Note:
Of the yield on foreign loans & investments, the investment assets yield was calculated in the same manner as 3., Amount of interest and dividend
received and yield on investment assets (income yield) in connection with the assets involving foreign investments.

Japan Earthquake Reinsurance Co., Ltd. Annual Report 201833

e Informationonthenon-consolidated
solvency-margin ratio (the ratio that shows
the ability to pay out claims)(Yen in millions)Year
Division
Total amount of non-consolidated solvency-margin282,607306,691

1,540

1,539

Price fluctuation reserves

2

1

Risk reserves––

278,846

303,954

Common stock, etc.

Catastrophe reserves
Reserves for ordinary bad debts

(A)

–

–

2,218

1,195

Unrealized gain and loss included land holdings––

Surplus such as premium reserves––

Funding instruments with a debt-like nature––

Surplus such as premium reserves and funding
instruments with a debt-like nature that are notincluded in the margin––

Items deductible––

Others––

188,948

161,550

General underwriting risk (RI)––

Underwriting risk in third-area insurance (R2)––

Anticipated rate of return risk (R3)

–

–

7,343

7,482

Unrealized gain/loss on available-for-salesecurities / Deferred gain/loss on hedges

Total amount of non-consolidated risk√(R1 + R2)2 + (R3 + R4)2 + R5 + R6

(B)

Investment risk (R4)(C)

As of theAs of theend ofend offiscal 2016 fiscal 2017Management risk (R5)

3,704

3,167

Catastrophe risk (R6)

177,900

150,900

Non-consolidated solvency-margin ratio[(A) / { (B) x 1 / 2 }] x 100

299.1%

379.6%

Note:
Amounts and other figures presented above are calculated on the basisof the provisions of Article 86 and Article 87 of the Enforcement Regulations for the Insurance Business Act and Notification No. 50 of the Ministry of Finance issued in 1996.

Non-consolidated solvency-margin ratio
The non-life insurance companies deposit reserves incase that they pay insurance money for any insurance
accident that occurred or refund depository insurance
at maturity. It is also necessary for them to maintaina satisfactory ability to make payments or solvency
even in case of unusual, unforeseeable risk, including
a huge disaster or sharp drop in price of such assets
as owned by them.
The rate of “Non-life insurance company’s ability tomake payments by owned assets and reserves (A in theabove table) over any risk unforeseeable (B in the abovetable)” is indicated as the non-consolidated solvencymargin ratio (C in the above table) which is calculated
according to the pertinent rules, including the Insurance Business Law.

34

[Unforeseeable risk] (Total of risks): Sum of 1–5
1. General underwriting risk: risk associated with aninsurance accident rate that is higher than normallypredictable (other than the risk associated with ahuge disaster).
2. Anticipated ratio of return risk: the risk that may
arise for saving-type insurance if the actual yieldfrom operations is lower than it was when calculating depository insurance premiums.
3. Investment risk: management risk that might arise
when the value of assets owned including securities
changes in an unforeseeable manner.
4. Management risk: risk that might arise on business
management in an unforeseeable manner, otherthan 1–3 and 5.
5. Catastrophe risk: risk that might arise with a hugedisaster (such as the Great Kanto Earthquake)
which is normally unforeseeable.
Capability of payment by non-life insurance company
owned capital and reserves (total amount of non-consolidated solvency-margin) is the total of capital owned
by a non-life insurance company, various reserves (pricefluctuation reserve, catastrophe reserve, etc.), part of latent profit from land, and so on.
The solvency-margin ratio is one of the indicators used
when the administrative authorities check insurancecompanies to determine the soundness of management
for supervisory purposes. When the rate is 200% or
more, the insurance company is deemed satisfactory interms of its ability to make insurance and other payouts.
◎ JER has entered into a reinsurance contract with thegovernment of Japan for earthquake insurance in accordance with Law concerning Earthquake Insurance.
The law stipulates in addition that the government takes
responsibility for support and for lending funds for thepayment of insurance money. Because this is a form ofspecial business, JER’s solvency-margin ratio is not usable as a figure to enable the administrative authorities
to trigger an order for improvement, irrespective of theabove solvency-margin ratio, as provided for in Paragraph 4, Article 3, Order to specify the division statedin Paragraph 2, Article 132, Insurance Business Law.
Note: The article is as follows.
[In the event that an insurance company has entered into a reinsurance
contract with the government as stated in Paragraph 1, Article 3, Law
concerning Earthquake Insurance (law No. 73, 1966), any order to be issued according to the listed division in Section 1 of the Article applicableto the insurance company shall be issued in accordance with the list of
inapplicable division.]

Japan Earthquake Reinsurance Co., Ltd. Annual Report 2018

ACCOUNTING CONCEPTS(NET ASSETS)

q Financial statements(Yen in millions)2016(As of March
31, 2017)

2017(As of March
31, 2018)

Item

AmountAmountCommon stock

1,000

1,000

546

545



Fiscal Year

1. Balance sheets(ASSETS)

(Yen in millions)2016(As of March
31, 2017)

2017(As of March
31, 2018)

Item

AmountAmount Other legal reserve of retained earnings

Cash and deposits
Deposits

260,534
260,534

333,194
333,194  Special reserves

1717  Special price fluctuation reserves3939  Retained earnings carried forward

488

487



Fiscal Year

Call loans

1,040

90

234,580
91,41924,257
92,467
26,435200,239
62,581
20,05182,78434,822

Tangible fixed assets
Buildings Other tangible fixed assets

43
25
17

125
24
101

Intangible fixed assets
Software
Software in progress Other intangible fixed assets

227
173
52
1

261
259
–
1

Other assets Reinsurance accounts receivable
Accounts receivable
Uncollected income
Deposits
Suspense payments
Derivatives

14,87014,464
–
261
46
17
80

15,30914,234
0
309
46
2
715

Total assets

511,297549,220

Securities
Government bonds
Municipal bonds
Corporate bonds
Foreign securities(LIABILITIES)
(Yen in millions)Fiscal Year

Item

2016
(As of March
31, 2017)

2017(As of March
31, 2018)

AmountAmountUnderwriting funds
Outstanding claims
Underwriting reserves

460,327
3,581
456,745

497,407
1,773
495,634

Entrusted reserves

36,10337,499Other liabilities
Reinsurance accounts payable
Income taxes payable
Deposits payable
Accrued amounts payable
Derivatives

10,630
9,709
144
3
328
444

11,36011,180109
561
3

Reserve for retirement benefits

151

154

Reserve for directors’ retirement benefits

5

9Reserve for bonus payments

22

21

Reserves under the special law
Reserve for price fluctuation

2
2

1
1

2,511

1,225

Net unrealized gains on available-for-salesecurities of earthquake insurance
Deferred tax liabilities
Total liabilities

00509,755

547,680

Retained earnings Legal reserve of retained earnings

Treasury Stock
Total shareholders’ equity
 et unrealized gains on available-for-saleNsecurities Total valuation and translation adjustments
Total net assets
Total liabilities and net assets

1

1

545

544

(5)

(5)

1,540

1,539

2

0

2

0

1,542

1,540

511,297549,220

Notes for fiscal 2017
1. Matters relating to accounting policies are as follows.
(1)	Appraisal standards and method of securities
and method of indication are as follows.
(i)	Of available-for-sale securities, those to which
the market price is applicable is appraised according to the market price at term end.
(ii)	With respect to the unrealized gain of assets
corresponding to the underwriting reserves andentrusted reserves of earthquake insurance, theamount before tax effect deduction is shownas Net unrealized gains on other securities ofearthquake insurance in Liabilities on the form
attached to the Enforcement Rules of Insurance
Business Act. For other unrealized gains, theamount after tax effect deduction is processed
entirely according to the direct capital injection
method and indicated in Shareholders’ Equity.
The calculation of the sales price is based on
the moving average method.
(2) The appraisal of derivatives is done on the basisof market price.
(3) Although depreciation of tangible fixed assets
is calculated using the declining balance method, buildings (excluding equipment attached tobuildings) that were acquired on or after April 1,
1998 and equipment attached to buildings andstructures that were acquired on or after April
1, 2016 were depreciated using the straight-line
method.

Japan Earthquake Reinsurance Co., Ltd. Annual Report 2018

35

(4)

Software for in-house use that is recorded as
an intangible fixed asset is amortized using thestraight-line method over the estimated usable
life (five years).
(5) The conversion of foreign currency assets and liabilities into Japanese currency is processed according to the accounting standards for foreign
currency transactions.
(6)	Reserve for bad debts is written as follows against
losses from bad debts in accordance with theself-appraisal standard of assets and depreciation and reserve standards.
	
In connection with claims against debtors who
have gone bankrupt legally and formally, including bankruptcy, special liquidation or disposition
by suspension of business at a clearing house, ordebtors who are effectively bankrupt, the rest of
any of the claims deducting an estimated amountof disposable mortgage and a deductible amountby guarantee was appropriated for such reserves.
	
In connection with the other claims, the rate ofbad debts calculated according to past bad debts
and other factors is multiplied by the amount ofclaims to appropriate for reserves.
	In addition, all claims are written after the financedepartment appraises the assets, and the result
is audited by the planning and controller department independent of the finance department toappropriate the appraisal for reserves.
	
There are no assets in the current term that are
to be appropriated for reserves and no reserve isrequired.
(7) For employees’ retirement and severance benefits, reserve for retirement benefits is appropriated according to estimated retirement allowanceliabilities at the end of the term.
	Retirement allowance liabilities are calculated using a simple method on the basis of the allowance to be supplied at the end of the term for any
employee who retires for his/her own reasons.
(8) For reserve for directors’ retirement benefits, thebenefits to be paid at the end of the term arerecorded according to the relevant in-house rules.
(9) Reserve for bonus payments is calculated according to the standards for the estimated bonuses
payable as of the end of the fiscal year underreview.
(10) To prepare for a loss from price changes ofshares and others, reserve for price fluctuation isappropriated according to Article 115, Insurance
Business Law.

36

2. Financial instruments and fair values of financial
instruments(1) Situation of financial instruments
We mainly hold highly rated short- and mediumterm Japanese and foreign bonds and short-term
financial instruments in preparation for reinsurance payouts. We manage assets by attaching
top priority to liquidity and safety and giving
additional consideration to profitability. It is ourpolicy to engage in derivatives trading or forward
exchange contracts to reduce the market risks offoreign-currency receivables associated with exchange fluctuations, within the limits of actual
demand. In addition, we maintain an understanding of market risks, credit risks and liquidity risks
and manage current quotations and credit information on a regular basis in this regard.
(2) Fair values of financial instruments
The table below shows the balance sheet amounts
and fair values of financial instruments and thedifferences between them as of March 31, 2018.
(Yen in millions)

Balancesheet
amountFair value

Difference(i) Cash and deposits

333,194

333,194

–

90

90

–

(iii) Securities
Available-for-sale securities

200,239200,239–

Total assets(ii) Call loans

533,524

533,524–(iv) Derivatives* to which
hedge accounting is notapplied

711

711

–

Derivatives total

711

711

–

* Derivatives recorded in other assets and other liabilities.
Net claims and debts derived from derivatives represent the net amounts, and items
whose net balance becomes debts are stated in brackets.

Note: Methods for calculating the fair values of financial instruments(i) Cash and deposits
Cash and deposits are settled in the short term and their fair values
are based on their carrying values as their fair values and carrying
values are similar.
(ii) Call loans
Call loans are settled in the short term and their fair values are
based on their carrying values as their fair values and carrying values are similar.
(iii) Securities
The fair values of securities are based on their market prices atterm end, which are reference prices in the trading statistics of theJapan Securities Dealers Association or market prices obtained
from outside vendors or brokers.
(iv) Derivatives
The fair values of derivatives are determined by prices offered bycorrespondent financial institutions.

Japan Earthquake Reinsurance Co., Ltd. Annual Report 2018

3. Taxes are included when preparing accounts for
consumption tax and other items.
4. Risk reserves contained in Underwriting reserves
have been deposited based on instructions for the
calculation of underwriting reserves by accumulating the amounts that result from subtracting anamount equivalent to corporate taxes from the net
premiums written and profit from operating the assets.
5. The accumulated depreciation of tangible fixed assets is 113 million yen.
6. See below for a breakdown of outstanding claims.
(Yen in millions)

Outstanding claims (before the deduction ofoutstanding reinsurance claims)

2,881

Outstanding reinsurance claims related to theabove claims

1,108

Net outstanding claims

1,773

7. Total deferred tax assets amount to 441 million yen,while total deferred tax liabilities come to 0 million
yen. Deferred tax assets are all deducted from thetotal amount for a valuation reserve.
A breakdown of deferred tax assets reveals tax loss
carried forward of 358 million yen, a reserve for retirement benefits of 43 million yen, unpaid businesstaxes of 21 million yen and unpaid special local corporate tax of 8 million yen. Deferred tax liabilities
resulted mainly from unrealized gains on securitiesof 0 million yen.
8. No event that could have a material impact on assets
or profits or losses in or after the next fiscal year
has arisen since the last day of the fiscal year underreview.
9. Net assets per share are 774.54 yen. The basis forthis calculation is that net assets are 1,540 million
yen, net assets accrued from ordinary shares are
1,540 million yen and the number of ordinary sharesat the end of the term is 1.988 million.
10. Each amount is rounded down to the nearest
whole unit.

Japan Earthquake Reinsurance Co., Ltd. Annual Report 201837

2. Statements of income(Yen in millions)

Fiscal Year

2016

2017

(from April 1, 2016
to March 31, 2017)(from April 1, 2017
to March 31, 2018)

Item

AmountOrdinary income

Notes for fiscal 2017
1. See below for a breakdown of net premiums written.
(Yen in millions)

Premiums written:

257,239

AmountReinsurance premiums ceded:

159,937

289,485

101,288

Net premiums written:

97,302

Underwriting income

284,934

99,430   Net premiums written

114,114

97,302220

319  Investment income on savings
premiums  Reversal of outstanding claims

–

1,808

170,599–

Investment income

4,550

1,858

   Interest and dividend income

1,294

1,181

  Reversal of policy reserve   Gains on sales of securities   Gains on derivatives   Other investment income  Transfer of investment income on
savings premiums
Other ordinary income
Ordinary expenses
Underwriting expenses   Net claims paid

147

63

3,329

929

0

3

(220)

(319)

8,924

Provision of outstanding reinsurance claims
related to the above claims(1,182)

Net provision of outstanding claims(1,808)

2,429

–

–

38,888

3,803

1,429

   Loss on sales of securities

1022  Foreign exchange losses

3,773

1,386

   Other investment expenses

19

20

1,345

1,413

138

71

138

71

(1)

(1)

3

1

Reversal of reserve for price fluctuation(2,990)98,375  
Provision of outstanding claims

Extraordinary income(Yen in millions)

Provision of outstanding claims(before the deduction of outstanding
reinsurance claims)

220,905

2,135

Ordinary profit (loss)

3. See below for a breakdown of the provision of outstanding claims (figures in parentheses are the reversal of outstanding claims).

284,200

48,426  Interest paid

8,924

0

14,190

Other ordinary expenses

5,861

Net claims paid:

101,290

46,675 Operating, general and administrative
expenses

14,786

Reinsurance claims recovered:0   Loss adjustment expenses

Investment expenses(Yen in millions)

Claims paid:

289,487  Commissions and brokerage fees   Provision of underwriting reserves

2. S ee below for a breakdown of net claims paid.

3

1

Net income (loss) before income taxes

1(0)Income taxes

00

Total income taxes00

Net income (loss)

1(0)

4. The interest and dividend income are given below
by category:(Yen in millions)

Deposits:

5

Call loans:0Securities:

1,176

Total:

1,181

5. Paper profit/loss involved in the gains on derivatives
is a profit of 711 million yen.
6. Netloss per share is 0.34 yen.
The basis for this calculation is such that net loss
is 0 million yen, net loss accrued from common
stocks is 0 million yen and the term average number of common stocks amount to 1.988 million.
7. The legal effective tax rate at the end of the termis 28.24%, and the corporate tax burden after applying the tax effect is (73.59%). The difference is
explained by the following breakdown: valuation
reserve (23,162.17%), the amount of the write-off
carried from publicity expenses related to risk reserves 23,213.07%.
8. Each amount is rounded down to the nearest whole
unit.

38

Japan Earthquake Reinsurance Co., Ltd. Annual Report 2018

3. Statements of cash flow
(Yen in millions)

Fiscal Year

Item

2016

2017

(from April 1, 2016
to March 31, 2017)(from April 1, 2017
to March 31, 2018)

AmountAmountNotes for fiscal 2017
1. 
Relationship of cash and cash equivalents at theend of the year with the amounts mentioned in therelevant balance sheet item.
(Yen in millions)

Cash flow from operating activities
Net income before income taxes
Depreciation

1(0)(As of March
31, 2017)(As of March
31, 2018)

260,534

333,194

88

115

Increase (decrease) in outstanding
claims2,429(1,808)

Increase (decrease) in underwriting
reserves(170,599)

38,888Deposits of a depository period
over three months(14,000)(14,000)

Increase (decrease) in entrusted
reserves(30,999)

1,396

Securities other than cash equivalent(234,580)(200,239)

Increase (decrease) in reserve forretirement benefits

52Cash and cash equivalents

247,574

319,284

Increase (decrease) in reserve fordirectors’ retirement benefits(3)

4Increase (decrease) in reserve forbonus payments

0(0)Increase (decrease) in reserve forprice fluctuation
Interest and dividend income

(3)

(1)

(1,294)(1,181)

Losses (gains) on investment insecurities

(136)

(40)

Foreign exchange losses (gains)

3,865

1,904

Decrease (increase) in other assets(other than investment and financial
activities related)(2,079)244

Increase (decrease) in other liabilities(other than investment and financial
activities related)

1,862

1,205

Others5,603(1,110)   Subtotal(191,258)

39,620

3,009

1,654

Interest and dividends received
Income taxes paid

(0)

(0)

(188,249)

41,274

Net decrease (increase) in cash anddeposits(3,000)–

Proceeds from sales and redemptionof monetary receivables bought

71,597–Purchase of securities(21,306)(112,994)

Proceeds from sales and redemptionof securities

182,791

143,662    Total investment assets activities

230,082

30,667    Total operating activities and   investment assets activities

41,833

71,941(0)(117)

Net cash provided by operating activities

Cash and deposits
Call loans

1,040

90

Securities

234,580

200,239

2. Cash flow in investing activities includes cash flowfrom the investment assets operations in the insurance business.

Cash flow from investing activities

Acquisition of tangible fixed assets
Others

(140)

(114)

229,941

30,435

Cash flow in financing activities–– ffect of exchange rate changes on cashEand cash equivalents––

 et increase (decrease) in cash andNcash equivalents

41,692

71,709Cash and cash equivalents at the
beginning of the year

205,882

247,574

Cash and cash equivalents at the endof the year

247,574

319,284

Net cash provided by investing activities

Japan Earthquake Reinsurance Co., Ltd. Annual Report 201839

4. Statement of Changes in Shareholders’ Equity
Fiscal 2016 (from April 1, 2016 to March 31, 2017)(Yen in millions)

Valuation andtranslation adjustments

Shareholder’s equity
Retained earnings
Commonstock

Legalreserve ofretainedearnings

1,000

1Balance at the
beginning of theperiodOther legal reserve of retained earnings
Total
retainedearnings

Specialreserves

Specialprice
fluctuation
reserves

Retainedearnings
carriedforward

17

39

487

544

1

1

Treasury
stock

Total
shareholders’equity

(5)

Net
Total
unrealized
valuation
gains onandavailabletranslation
for-saleadjustments
securities

1,539

3

3

Total net
assets1,542

Changes during
the period
Net income(loss)

1

1

Net changes
other thanshareholders’equityTotal changes
Balance at theend of the period

1,000

1

17

39

1

1

488

546

(5)

(1)

(1)

(1)

1

(1)

(1)

0

1,540

2

2

1,542

Fiscal 2017 (from April 1, 2017 to March 31, 2018)(Yen in millions)

Valuation andtranslation adjustments

Shareholder’s equity
Retained earnings
Commonstock

Legalreserve ofretainedearnings

1,000

1Balance at the
beginning of theperiodOther legal reserve of retained earnings
Total
retainedearnings

Specialreserves

Specialprice
fluctuation
reserves

Retainedearnings
carriedforward

17

39

488

546

(0)

(0)

Treasury
stock

Total
shareholders’equity

(5)

Net
Total
unrealized
valuation
gains onandavailabletranslation
for-saleadjustments
securities

1,540

2

2

Total net
assets1,542

Changes during
the period
Net income(loss)(0)(0)

Net changes
other thanshareholders’equityTotal changes
Balance at theend of the period

1,000

1

17

39

(0)

(0)

487

545

Notes for fiscal 2017
1. Matters related to the types and total number ofstocks outstanding and the types and number oftreasury stock(Stock)Issuedstock
Treasury
stock

(1)

(1)

(0)

(1)

(1)

(2)

1,539

0

0

1,540

5. Dividend per share and total assets per employee(Yen in millions)
Division

Fiscal Year

Dividend per share
Net income (loss) per share

2015

2016

2017

–

–

–

(0.23 yen)

0.57 yen(0.34 yen)

Balance asof the endof fiscal
2016

Increase in
fiscal 2017

Decrease in
fiscal 2017

Balance asof the endof fiscal
2017

Dividend propensity

–

–

–

Net assets per share

775.61 yen

775.67 yen

774.54 yen

24,462

19,665

19,615

Ordinary stock

2,000,000––

2,000,000

Total

Notes:
1. Net income (loss) per share comes from net income (loss) / term average
number of shares
2. The number of treasury stock is deducted from producing information per share
3. The total assets per employee come from the total assets at the end of
the term / number of employees at the end of the term.

2,000,000––

2,000,000

Ordinary stock

11,400––11,400Total

11,400––11,400Total assets per employee

2. Each amount is rounded down to the nearest whole
unit.

40

(5)

(1)

Japan Earthquake Reinsurance Co., Ltd. Annual Report 2018

5. Balance Current Maturity of securities by category
As of the end of fiscal 2016

w Details of assets and liabilities(Yen in millions)

1.	Deposits
Division

Up to
1 year

1 overup to
3 years

3 overup to
5 years

5 over
up to
7
years

Government
bonds

12,57526,39537,4585,835

Municipal
bonds

18,9514,406

898

Corporatebonds

85,766

6,701(Yen in millions)Year
Division

As of the endof fiscal 2015

As of the endof fiscal 2016

As of the endof fiscal 2017

Deposits

189,215

260,534

333,194

Ordinary deposits

155,655

236,504

309,164

Time deposits

33,56024,03024,0302.	Average balance and trading amount of commodity
securities
Not applicable
3.	Balance of securities by category and percentage
distribution(Yen in millions)

Year

As of the end of
fiscal 2015

As of the end of
fiscal 2016

Percentage
distribution(%)

Division

As of the end of
fiscal 2017

Percentage
distribution(%)

92,467

–

–

–

–

–

–

–

8,797

15,838

1,800

–

–

–

26,435Other
securities

–

–

–

–

–

–

–

126,090

53,341

40,157

5,835– 9,155

234,580

Total(Yen in millions)

Municipal
bonds

8,834

6,960

2,327 1,928

17.4

Corporatebonds

12,45557,82910,642 1,856

–

–

–

–

9,858

17,615

7,348

–

–

–

–

–

35,297 119,512

32,3883,785

20,051

10.0

Corporatebonds

154,871

38.5

92,46739.4

82,784

41.3

–

–

–

–

–

109,523

27.3

26,435

11.3

34,822–200,239

–

–

10.3

100.0

–

–

24,257

234,580–

12,069

10.8

100.0

–

37,106

43,526

401,751

24,257

4,148

Municipal
bonds

Total

–

Government
bonds

31.3

–

–

5 over
up to
7
years

62,581––3 overup to
5 years

39.0–

91,4191 overup to
3 years

91,419–– 9,155

Up to
1 year

23.4

Othersecurities

Total

As of the end of fiscal 201793,829Foreignsecurities

Over
10
years

Foreignsecurities

StocksPercentage
distribution(%)

Government
bonds

Stocks7 over
up to
10
years

–
100.0

Division

StocksForeignsecurities
Other
securities

4. Yield on securities heldTotal

7 over
up to
10
years

Over
10
years

Total

– 9,256

62,581––

20,051––82,784

–

–

–

–

–

34,822–––– 9,256

200,239(%)


Division

Fiscal Year

2015

2016

2017

0.25

0.26

0.28

–

–

–

1.39

1.45

1.88

Investment assets yield (income yield)
Public & corporate bonds
StocksForeign securities
Other securities
Total

–

–

–

0.62

0.44

0.55

0.33

0.26

0.31

–

–

–

1.40

1.76

1.84

Assets management yield (realized yield)
Public & corporate bonds
StocksForeign securities
Other securities
Total

–

–

–

0.67

0.48

0.57

(0.09)(0.04)

Market-price based overall yield (for reference)
Public & corporate bonds
StocksForeign securities
Other securities
Total

0.80
–

–

–

0.66

1.01

(0.02)

–

–

–

0.75

0.07

(0.03)

6.	Amount of stocks held by type of business
There are no stocks.
7.	Loans
There are no notes with the following items; amountof stocks held by type of business, balance current
maturity of loan by remaining life, balance ofloans by type of collateral secured, balance andpercentage distribution of loan by designated use,balance of loan by industry and its ratio to the total,and balance of amortization of loans.
8.	Risk management credits
Not applicable

Note:
Public & corporate bonds include government bonds, municipal bonds, andcorporate bonds.

Japan Earthquake Reinsurance Co., Ltd. Annual Report 2018

41

9.	
Present conditions of loans involving trust withcontact for replacement of losses
Not applicable
10. Credits classified in accordance with debtor
classification
Not applicable
11. Self-appraisal of assets
We categorize assets in accordance with the level ofrisk associated with collection and the level of riskof a loss in the value by carrying out self-appraisal
and individually examining holding assets. There
were no category assets (II through IV categories)
as of March 31, 2018.

(Yen in millions)
As of the endof fiscal 2015Land

As of the endof fiscal 2016

As of the endof fiscal 2017

–

–

–

for underwriting

–

–

–

for investment

–

–

–

Buildings

27

25

24

for underwriting

27

25

24

for investment

–

–

–

–

–

–

Construction in progressfor underwriting

–

–

–

for investment

–

–

–

Total of property

27

25

24

for underwriting

27

25

24

for investment

–

–

–

–

–

–

Other tangible fixed assets

39

17

101

Total

66

43

125

Leased assets(Yen in millions)
Division–––

Reserve for individual bad debts

–

–

–

–

Reserve for specificforeign securities

–

–

–

–

Reserve for retirement benefits

145

23

17

151

Reserve for directors’ retirement
benefits

8

4

7

5

Reserve for bonus
payments

21

22

21

22

Total

Division

2
182

Balance asof the end of
fiscal 2016

Balance
Decrease
as of the end of
in fiscal 2017
fiscal 2017

Increase in
fiscal 2017

Reserve for ordinary
bad debts

–

–

–

–

Reserve for individual bad debts

–

–

–

–

Reserve for specificforeign securities

–

–

–

–

Reserve for retirement benefits

151

14

12

154

Reserve for directors’ retirement
benefits

5

4

–

9

Reserve for bonus
payments

22

21

22

21

Reserve for pricefluctuation

2

–

1

1

182

40

36

186

As of the endof fiscal 2016

As of the endof fiscal 2017

Outstanding claims

1,152

3,581

1,773

Underwriting reserves

627,345456,745495,634

Risk reserves

464,584

278,846

303,954

Unearned premium
reserves

162,760

177,899

191,679

628,497

460,327

497,407

16. Level of underwriting reserves
There is no target contact.

42

3
50

(Yen in millions)(Yen in millions)

Total

–
49

As of the end of fiscal 201715.	Underwriting funds
As of the endof fiscal 20156
182

18. Detailed listing of shareholders’ equity
Please refer to the statement of changes in shareholders’ equity on page 40.

14. Special accountNot applicable

Year
Division

Balance
Decrease
as of the end of
in fiscal 2016
fiscal 2016

Increase in
fiscal 2016

–

Total

13. Unearned claims paid
Not applicable

Balance asof the end of
fiscal 2015

Reserve for ordinary
bad debts

Reserve for pricefluctuation

12. Tangible fixed assets by category
Year
Division

17. Detailed listing of liability reserves
As of the end of fiscal 2016

Japan Earthquake Reinsurance Co., Ltd. Annual Report 2018

7. D
 epreciation expenses by category
As of the end of fiscal 2016e Income and loss details(Yen in millions)

1. Gains on sales of securities by category(Yen in millions)

Division

Fiscal Year

2015

2016

Type of asset

2017

Government bonds

181

2

63

Foreign securities

12

144

–

Total

194

147

63

2. Losses on sales of securities by category(Yen in millions)

Division

Fiscal Year

2015

2016

2017

Government bonds

–

–

8

Foreign securities

–

10

13

Total

–

10

22

Rate of
Deprecia- Aggregated Balance as
Acquisition
aggregatedtion indeprecia- the end of
cost
depreciafiscal 2016
tions
fiscal 2016
tions %

Tangible fixed assets
Buildings

85

1

59

25

69.8

for
underwriting

85

1

59

25

69.8

for
investment

–

–

–

–

–

Other tangible
fixed assets

142

22

125

17

87.7

Total

228

23

185

43

81.0

Intangible fixed assets
Software

382

64

208

173

54.6

Software in
progress

52

–

–

52

–

3. Losses on valuation of securities
Not applicable

Other
intangible
fixed assets

1

–

–

1

–

Total

436

64

208

227

47.8

4. Gains on disposal of fixed assets
Not applicable

Grand total

665

88

393

271

59.2

As of the end of fiscal 2017
(Yen in millions)

5. Losses on disposal of fixed assets(Yen in millions)

Division

Fiscal Year

2015

2016

Type of asset

2017

Acquisition
cost

Land

–

–

–

Tangible fixed assets

Buildings–––

Buildings

Other tangible fixed assets

0

–

–

Total

0

–

–

6. Business expenses (inclusive of loss adjustment)(Yen in millions)

Division

Fiscal Year

Personnel expenses
Non personnel expenses
Taxes

2015

2016

2017

Rate of
Deprecia- Aggregated Balance as
aggregatedtion indeprecia- the end ofdepreciafiscal 2017tions
fiscal 2017
tions %

85

1

61

24

71.4

for
underwriting

85

1

61

24

71.4

for
investment

–

–

–

–

–

Other tangible
fixed assets

153

33

52

101

34.1

Total

239

34

113

125

47.4

Intangible fixed assets

404

3,311

651

Software

504

81

244

259

48.5

1,527

11,914

2,633

Other
intangible
fixed assets

1

–

–

1

–

331

310

264

Commissions and brokeragefees

45,88046,67548,426

Total

48,14462,211

51,976

Total

505

81

244

261

48.3

Grand total

745

115

358

387

48.0

Note:
Business expenses are the total of loss adjustment expense, operating,general and administrative expenses, commissions and brokerage fees
as shown in the income statement.

Japan Earthquake Reinsurance Co., Ltd. Annual Report 201843

(iv) Available-for-sale securities sold at the termr Information about fair values, etc.

(Yen in millions)Fiscal 2016

1. Matters related to financial instruments
For matters related to the status of financial instruments and matters related to the fair values of financial instruments, please refer to Note 2 on thebalance sheet (page 36).
2. Securities(i) Securities held for trading purposes
Not applicable(Yen in millions)Type

Acquisition
cost

Book value

Difference

Public &corporatebonds

186,891

189,396

2,505

–

–

–

20,503

21,275

772

–

–

–

Subtotal

207,394

210,672

3,278

Public &corporatebonds

18,757

18,747(9)

StocksForeignsecurities
OthersSecurities whosecarrying amount
does not exceed
their cost

–

–

–

5,252

5,159

(92)

–

–

–

OthersSubtotal
Total

24,00923,907(101)

231,404

234,580

3,176

As of the end of fiscal 2017Type
Public &corporate
bonds
Securities whosecarrying amountexceeds their cost

Securities whosecarrying amount
does not exceed
their cost

Difference

82,83784,766

1,928

–

–

–

500

502

2

Others–––Subtotal

83,337

85,268

1,931

Public &corporatebonds

80,70380,650

(53)

–

–

–

36,21434,320(1,894)–––

116,918

114,971(1,947)200,256

200,239(16)

StocksSubtotal

44

Book value

StocksOthers
Total

Acquisition
cost

Foreignsecurities

Foreignsecurities

Sales
price

Total ofgains onsale

Total oflosseson salePublic &corporate
bonds

3,504

2

–

26,029

63

8

–

–
13

Stocks––––Foreignsecurities

42,893

144

10

2,322

–

Others

–

–

–

–

–

–

46,397147

1028,35263

22

4. Derivative transactions(i) Derivative transactions to which hedge accounting is
not applied
Currency related
As of the end of fiscal 2016
(Yen in millions)Contract amount1 year or
longerones

Type

Appraisal
profit andloss

Marketprice

Over-the-counter transactions Forward foreign exchange contracts  Short positions   US dollar

14,388

–

(363)

(363)

(363)

(363)

As of the end of fiscal 2017
(Yen in millions)Contract amount1 year or
longerones

TypeMarketprice

Appraisal
profit and
loss

711

711

711

711

Over-the-counter transactions(Yen in millions)

Division

Total oflosseson saleTotal

StocksForeignsecurities

Total ofgains onsale

3. Money trust
Not applicable(iii) Available-for-sale securities
As of the end of fiscal 2016

Securities whosecarrying amountexceeds their cost

Sales
price

Type

Total

(ii) Securities to be held to maturity
Not applicable

Division

Fiscal 2017 Forward foreign exchange contracts  Short positions   US dollar
Total

25,414–

Notes:
1. Currency related derivative transactions other than the above areomitted as there is no applicable item.
2. Calculating a market price: Foreign exchange rates using forward exchange rate provided by banks.

(ii) Derivative transactions to which hedge accounting
is applied
Not applicable

Japan Earthquake Reinsurance Co., Ltd. Annual Report 2018