Content

During the three months ended June 30, 2014 (April 1, 2014 to June 30, 2014),
consolidated ordinary revenues decreased 3.1% compared with the same periodof the previous fiscal year, to ¥303.2 billion.
By business segment, ordinary revenues from the life insurance and the banking
businesses decreased, whereas ordinary revenues from the non-life insurance
business increased.
Consolidated ordinary profit increased 29.1% year on year, to ¥21.9 billion.
By bB
business
isegment, ordinarydiprofit
fi ffrom theh liflife iinsurance andd theh non-lifelifinsurance businesses increased, whereas ordinary profit from the banking
business decreased.
Consolidated net income was up 50.9% year on year, to ¥14.5 billion, due mainly
to the rise in ordinary profit, and the change of the calculation policy of the reservefor price fluctuations in the life insurance business. The change was to accumulate
the reserve up
p to required
qlevels from FY14 while it had accumulated the reservein excess of the required levels until FY13.

Sony Life’s ordinary revenues decreased 3.8% year on year, to ¥270.5 billion.
This is mainly due to lower gains on separate accounts, net compared with thesame period of the previous fiscal year, which benefited from a market recovery.
Ordinary profit increased 24.6% year on year, to ¥17.6 billion, due mainly to theabsence of the negative impact from the revision of the discount rate used forcalculating policy reserves on interest rate-sensitive whole life insurance that waspresent in the same pp
period of the pprecedingg fiscal yyear.
Net income increased 46.2% year on year, to ¥11.7 billion year on year reflecting
the rise in ordinary profit, and the change of the calculation policy of the reserve forprice fluctuations. The change was to accumulate the reserve up to required levels
from FY14 while it had accumulated the reserve in excess of the required levels
until FY13.

(Left-hand graph)
New policy amount for the total of individual life insurance and individual annuities
for the three month ended June 30, 2014, increased 9.9% year on year, to¥1,135.8 billion, due to a brisk sale of U.S. dollar denominated insurance which
was launched in May, 2013, as well as strong sales of variable life insurance andterm-life insurance in line with the efforts to strengthen sales of death protectiontype products. Furthermore, there was a sign of recovery in sales of family income
insurance.
su a ce
The number of new policies increased 8.2% year on year to 154 thousand policies.
(Right-hand graph)
Annualized premiums from new policies for the three month ended June 30, 2014,
iincreased
d 12
12.0%
0% year on year, tto ¥18¥18.9
9 billibillion, ddue tto hihigher
h salesl off term-life
tlif
insurance, endowment insurance, U.S. dollar denominated insurance, variable life
insurance and educational endowment insurance.
Of which, the figure for third-sector insurance products was down 5.1% year onyear, to ¥3.7billion.

(Left-hand graph)
Policy amount in force for the total of individual life insurance and individual
annuities increased 3.7% year on year, to ¥39.5 trillion, due to an increase in
new policies and a low lapse and surrender rate.
The number of policies in force increased 5.0% year on year, to ¥6.42 million
policies.
(Right-hand graph)
Annualized premiums from insurance in force increased 4.3% year on year, to¥706.5 billion. Of this amount, the figure for third-sector products was up 2.9%
year on year, to ¥168.9 billion.

The lapse and surrender rate for the three month ended June 30, 2014, decreased
0.06 percentage point year on year, to 1.15%, due to the lowering lapse andsurrender rate in each product.

(Left-hand graph)
Income from insurance premiums remained at the same level as in the same
period of the preceding year, to ¥220.7 billion, owing to the absence of positive
impact from the temporarily strong sale of interest rate-sensitive whole life
insurance led by the revision of insurance premium rates that was present in thesame period of the preceding fiscal year, despite steady growth in policy amount inforce.
(Right-hand graph)
Interest income and dividends was up 12.6% year on year, to ¥32.5 billion, due toan expansion in investment assets along with business expansion.

(Left-hand graph)Core profit was up 22.1% year on year, to ¥18.7 billion, due mainly to the absenceof the negative impact from the revision of the discount rate used for calculating
policy reserves on interest rate-sensitive whole life insurance that was present in
the same period of the preceding fiscal year.
(Right-hand graph)
Ordinary profit increased 24.6% year on year, to ¥17.6 billion.

The number of Lifeplanner sales employees as of June 30, 2014, was 4,228, up 12
from March 31, 2014 and up 101 from June 30, 2013.

As Sony Life continued its investment in ultralong-term bonds, the holding ratio on
the real status, of Japanese government and corporate bonds including thoseinvested in monetary trusts was 91.7% as of June 30, 2014.

On July 28, 2014, Sony Life entered into an agreement to acquire the site

occupied by the headquarters building of our parent company, Sony
Corporation, and the process is scheduled to conclude in September 2014.
Sony Life’s asset management policy remains unchanged. The company
will continue to invest mainly in ultralong-term bonds with the aim of controllinginterest rate risk. However,, the company
p y has determined that this investment
constitutes a fully appropriate investment from the standpoint of economicrationality.

As of June 30, 2014, Sony Life’s non-consolidated solvency margin ratio was2,463.3%, up 104.6 percentage points from March 31, 2014, remaining at a highlevel.

Operating results of AEGON Sony Life Insurance, which sells individual variableannuities, are shown here.
Sales of individual variable annuities decreased compared with the same period of
the previous fiscal year. Behind this drop was the fact that brisk sales of individual
variable annuities were seen due to a favorable stock market in the preceding year.
However, the business scale itself has been expanding along with steady growth inpolicy amount in force.

Sony Assurance’s ordinary revenues increased 4.4% year on year, to ¥24.1 billion,
due to an increase in net premiums written primarily for its mainstay automobile
insurance.
Ordinary profit increased 101.9% year on year, to ¥2.7 billion, due to a decline in
the loss ratio mainly led by a lower car accident ratio, as well as the rise in ordinary
revenues.
Net income increased 113.2% year on year, to ¥1.8 billion.

(Left-hand graph)
The number of policies in force for the total of automobile insurance and medical
and cancer insurance steadily increased 4.6% year on year, to 1.63 million
policies.
Net premiums written increased 3.0% year on year, to ¥23.4 billion, due to a stablesale of automobile insurance.
(Right-hand graph)
Ordinary profit significantly increased year on year, due mainly to a decline in theloss ratio as described in the previous pages. We also show you adjusted ordinary
profit in addition to ordinary profit on the graph. Adjusted ordinary profit is an profit
indicator on a managerial accounting basis. The figure is calculated by adjusting
the amount of provision(reversal) for catastrophe reserve to ordinary profit.
Adjusted ordinary profit also significantly increased year on year, to ¥3.4 billion.

(Left-hand graph)
For the three month ended June 30, 2014, the E.I. loss ratio declined 7.2
percentage points year on year, to 58.0%, mainly led by the revision of premium
rates for automobile insurance and a lower car accident ratio owing to theintroduction of a new bonus-malus system (non-fleet driver rating system).
The net expense ratio rose 0.6 percentage point year on year, to 24.4%, due
mainly to higher system-related expenses.
Consequently,
Cl theh sum off theh E
E.I.
I lloss ratio
i andd the
h net expense ratio
i ddeclined
li d 66.6
6
percentage points year on year, to 82.4%.
(Right-hand graph)
The net loss ratio declined 3.5 percentage points year on year, to 54.7%. This isdifferent from the E.I. loss ratio, which reflects an increase or a decrease inprovision for reserve for outstanding
pg losses. The combined ratio ((the sum of thenet loss ratio and the net expense ratio) declined 2.9 percentage points year onyear, to 79.1%.

As of June 30, 2014, Sony Assurance’s non-consolidated solvency margin ratio
was 569 6%, up 42.0 percentage points from March 31, 2014.

Sony Bank’s consolidated ordinary revenues decreased 3.0% year on year,to ¥9.3 billion and consolidated ordinary profit decreased 22.9% year on year, to¥1.7 billion, due to lower gains on foreign exchange transactions stemming frompassive foreign currency trading by customers compared with the same period of
the previous fiscal year when foreign currency exchange rates fluctuated wildly.
On a non-consolidated basis, Sony Bank’s ordinary revenues and ordinary profit
decreased year on year, due to lower gains on foreign exchange transactions as
the same reason as in the consolidated resultsresults.
Gross operating profit decreased 10.5% year on year, to ¥5.2 billion, due mainly toa decrease in net interest income. Behind this drop was lower interest income on
securities under the lowering interest rates.
Net operating profit decreased 31
31.0%0% year on yearyear, to ¥1.5
¥1 5 billion
billion.

We break down gross operating profit on a managerial accounting basis tofacilitate an understanding of operational sources of revenue and profits.
(Left-hand table)
Net interest income on a managerial accounting basis remained at the same level
as the same period of the previous year, amounting to ¥4.4 billion, which
maintained a certain level of interest spread.
Net fees and commissions decreased, to ¥0.5 billion year on year, due to lower
gains
i on fforeigni exchange
htransactions
istemmingi ffrom passive
i fforeign
i currency
trading by customers.
Consequently, gross operating profit on a core profit basis decreased ¥0.6 billion
year on year, to ¥4.4 billion, and net operating profit on a core profit basis also
decreased ¥0.6 billion year on year, to ¥0.7 billion.
(Right-hand graph)
The yield on investment for FY14.1Q was 1.18%.
The yield on financing for FY14.1Q was 0.27%.
Consequently, interest spread for FY14.1Q was 0.91%.

(Left-hand graph)
As of June 30, 2014, deposits (the sum of Japanese yen and foreign currencydeposits) amounted to ¥1,829.7 billion, down ¥60.3 billion from March 31, 2014. Of
which, yen deposit balance decreased from March 31, 2014, to ¥1,462.8 billion
under persistently low interest rates.
Foreign currency deposit balance amounted to ¥366.9 billion, up ¥3.3 billion fromMarch 31, 2014, as the volume of customers’ purchase of foreign currencies waslarger than that of their sales under a narrow range of exchange rates.
rates(Right-hand graph)Loan balance as of June 30, 2014 expanded to ¥1,071.6 billion, up ¥14.2 billion
from March 31, 2014, due to the growing balance of mortgage loans.

(Left-hand graph)
As of June 30, 2014, the balance of securities amounted to ¥780.5 billion, up ¥6.7billion from March 31, 2014.
Sony Bank continuously invests in highly rated bonds.
(Right-hand graph)
As of June 30, 2014, Sony Bank’s non-consolidated capital adequacy ratio((domestic criteria)) was 11.68%,, down 0.04 pointpfrom March 31,, 2014.
Sony Bank has maintained financial soundness.

SFH’s consolidated financial forecast for the year ending March 31, 2015
(April 1, 2014 to March 31, 2015), is unchanged from the forecast announced onMay 14, 2014.

Sony Life’s MCEV as of June 30, 2014 increased ¥38.7 billion from March 31,
2014, to ¥1,260.0 billion, due mainly to an acquisition of new policies and yield
curve changes in Japanese yen. (lowering interest rates under 40 years)
New business value for the three months ended June 30, 2014 was ¥16.9 billion,(¥67.6 billion / annualized), reflecting brisk sales of new policies, while that for 12months ended March 31, 2014 was ¥55.2 billion.
New business margin as of June 30, 2014 was 5.5%, while that as of March 31,
2014 was 5.5%.
The reason behind this rise is mainly the absence of a substantial increase in saleof lump-sum payment endowment insurance and the strong sale led by therevision of insurance premium rates on interest rate-sensitive whole life insurance.

The risk amount based on economic value as of June 30, 2014 amounted to¥687.3 billion. Within Sony Life’s risks, insurance risk and market-related risk
amounted to ¥663.9 billion and ¥265.0 billion respectively.
The risk amount based on economic value as of June 30, 2014, was up fromMarch 31, 2014, due mainly to an increase in interest rate risk reflecting yield
curve changes in Japanese yen.
However, Sony Life has maintained high financial soundness by keeping MCEV,
which is capital based on economic value, at a higher level than the risk amount.

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