Presentation Material

Consolidated Financial Results for the
Y
Year
E
Ended
d dM
March
h 31,
31 201
2015
andSony Life’sLife s PreliminaryMarket Consistent Embedded Valueas of March 31,, 2015

Sony Financial Holdings Inc.
M 15,
May
15 2015
Sony Financial Holdings Inc. All Rights Reserved

Content
 Consolidated Operating Results for the Year Ended March 31, 2015

P.3

 Consolidated
C
Financial Forecast ffor the Year Ending March 31
31, 2016

P.30
30

 Dividend Forecast

P.32

 Sony Life’s Preliminary MCEV and Risk Amount Based on

P.34

Economic Value as of March 31, 2015
 Appendix

P.37

Disclaimers:
This presentation material contains statements concerning the current plans, expectations, strategies and beliefs of the Sony Financial Group. Anystatements contained herein that pertain to future operating performance and that are not historic facts are forward-looking statements . Forwardlooking statements may include —but are not limited to—words such as “believe,” “anticipate,” “plan,” “strategy,” “expect,” “forecast,” “predict,” and“possibility” that describe future operating activities, business performance, events or conditions. Forward-looking statements, whether spoken or
j gmade byy the managementgof the Sonyy Financial Group,p, based on information that is currently
y available to it. As
written,, are based on judgments
such, these forward-looking statements are subject to various risks and uncertainties, and actual business results may vary substantially from theforecasts expressed or implied in forward-looking statements. Consequently, investors are cautioned not to place undue reliance on forward-looking
statements. The Sony Financial Group disclaims any obligation to revise forward-looking statements in light of new information, future events or otherfindings. The information contained in this presentation does not constitute or form part of any offer for sale or subscription of or solicitation or
invitation of any offer to buy or subscribe for any securities, nor shall it or any part of it from the basis of or be relied on in connection with any
contract or commitment whatsoever.
*Unless otherwise indicated, in these materials figures less than the indicated unit have been truncated, while ratios and percentage changes have been rounded.
Also, a “–” is used where percentage changes exceed 1,000% and in cases where one or both comparisons are negative.
* “Lifeplanner” is a registered trademark of Sony Life.

Sony Financial Holdings Inc. All Rights Reserved2Consolidated Operating Results for
the Year Ended March 31
31, 2015

Sony Financial Holdings Inc. All Rights Reserved3Management Message
 In FY2014, the Group operating performance reached record high inconsolidated ordinary profit, ordinary profit and net income, due to thesteady expansion of operations.
 Sony Life posted a record high new policy amount. MCEV steadily

increased thanks to an acquisitionqof new policiespand the benefit of
ALM despite the ultralow interest rate environment.
 We expect FY2015 business volume to expand in a stable andsustainable manner by each Group company. However, due to theabsence of some of the market factors that were present in FY2014, we
expect consolidated ordinary revenues, ordinary profit to fall year on
year, while we anticipate a rise in net income owing to the reduction in
the corporate tax rate.
 The
Th proposedd dividend
di id d forf FY2015 iis ¥55 per share,hup ¥15 per sharehyear on year (for the 4th consecutive year of dividend increases). We
will enhance shareholder returns by revising upward the medium- term
target for the dividend payout ratio into 40% to 50% of consolidated net
income.
Sony Financial Holdings Inc. All Rights Reserved

4Highlights of Consolidated Operating Performancefor Year Ended March 31, 2015 (1)Consolidated ordinary revenues
Consolidated ordinary profit

1,320.4 * +2.4%+18.3%

1,352.3

90.0

76.1

FY2014

1 196 6
1,196.6

1 223 91,223.9

+27 2
+27.2

+2 3%
+2.3%

ChangeLife
Insurancebusiness

Ordinary revenues
Ordinary profit

67.2

78.3

+11.0

+16.5%

Non-life
Insurancebusinessbus
essOrdinary revenues

89.8

93.0

+3.1

+3.5%

Ordinary
yp
profit

3.0

4.2

+1.2

+40.2%

Bankingbusiness

Ordinary revenues

36.4

38.4

+1.9

+5.3%

Ordinary profit

5.6

7.3

+1.6

+30.0%

Intersegment
adjustments*

Ordinary revenues

(2.5)

(3.1)

(0.5)

－

0.2

0.2

(0.0)

(18.4%)

1,320.4

1,352.3

+31.8

+2.4%

Ordinary profit

76.1

90.0

+13.9

+18.3%Net income

40.5

54.4

+13.9

+34.4%

Ordinary profit
Ordinary revenues

Consolidated

FY2013

FY2013(Billions of yen)

FY2014(Billions of yen)(*) Banking business revised its method of recording ordinary
revenues and ordinary expenses on hedge transactions from
FY2014. Ordinary revenues for FY2013 have been
retroactively adjusted to reflect the change. Consequently,
consolidated ordinary revenues for FY2013 have been revised
from ¥1,319.7 billion to ¥1,320.4 billion. As adjustments toordinary revenues were accompanied by adjustments in thesame amount to ordinary expenses
expenses, ordinary profit and net
income were unaffected.

*Ordinary profit in “Intersegment adjustments” is mainly from SFH.
*Comprehensive income: FY2013: ¥44.7billion, FY2014: ¥90.7 billion(Billions of yen)

14.3.3115.3.31

Change from 14.3.31

Net assets

467.0

550.6

+83.6

+17.9%

Total assets

8,841.3

9,545.8+704.4+8.0%

Consolidated

Sony Financial Holdings Inc. All Rights Reserved

5Highlights of Consolidated Operating Performancefor Year Ended March 31, 2015 (2) Life Insurance Business: Policy amount in force increased steadily, reflecting a record-high new policy

amount during FY2014. Ordinary revenues increased year on year, because of an increase in investment
income, which offset a decline in income from insurance premiums. The decline in income from insurance
premiums was principally because of the brisk sale of lump-sum payment endowment insurance prior to
the sales suspension during FY2013. Ordinary profit increased year on year, mainly for three reasons: anincrease in gains on sale of securities in the general account, the absence of the negative impact from therevision of the discount rate used for calculating policy reserves on the interest rate-sensitive whole life
insurance that was present in FY2013, and an increase in positive spread.
 Non-life Insurance Business: Ordinary revenues expanded year on year, owing to an increase in net

premiums written primarily for mainstay automobile insurance. Ordinary profit grew year on year due to a
declinedece in tthee lossoss ratio,
at o, mainly
a y leded by a lowero e cacar accaccidentde t ratio,
at o, as welle as tthe
e risese in oordinaryd a y revenues.
e e ues Banking Business: Ordinary revenues increased year on year, due mainly to higher revenues related toforeign currency transactions and mortgage loans. Ordinary profit expanded year on year, due to theabove mentioned increase in ordinary revenues and a rise in profit related to bondabove-mentioned
bond-dealing
dealing transactions.
transactions
 Consolidated ordinary revenues increased 2.4% year on year, to ¥1,352.3 billion, owing to increases inordinary revenues from all the businesses: life insurance, non-life insurance and banking. Consolidated
ordinarydiprofitfit grew 18.3%
18 3% year on year, tto ¥90¥90.0
0 billibillion owing
i tto iincreases iin ordinarydiprofitfit ffrom allll ththebusinesses. Consolidated net income was up 34.4% year on year, to ¥54.4 billion, reflecting the rise inordinary profit, and the change of the calculation policy of the reserve for price fluctuations for Sony Life.

Sony Financial Holdings Inc. All Rights Reserved

6

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

Ordinary profit

FY2013

FY2014

1,197.1

1,223.8

+26.7

+2.2%

Income from insurance premiums

960.9

914.0

(46.9)(4.9%)

Investment income

212 3
212.3

280 1
280.1

+67 8
+67.8

+31 9%+31.9%

Interest income and dividends

122.1

133.5

+11.4

+9.4%

Income from monetary trusts, net

5.3

5.2

(0.0)

(0.5%)

Gains on sale of securities

0.7

8.8

+8.1

－

Foreign exchange gains, net

1.1

5.0

+3.8

+328.1%

Gains on separate accounts, net

82.6

126.7

+44.1

+53.4%

1,127.9

1,144.1

+16.2

+1.4%

Insurance claims and other payments

327 2
327.2

382.9

+55.6
55.6

+17.0%
17.0%

Provision for policy reserves and others

650.7

604.3

(46.4)(7.1%)

Investment expenses

8.5

9.7

+1.2

+14.4%

Operating expenses

113.8

115.6

+1.7

+1.5%

Ordinary profit

69.2

79.6

+10.4

+15.1%Net income

37.0

42.5

+5.4

+14.7%

14.3.3115.3.31

Securities

5 954 7
5,954.7

6 543 7
6,543.7+588 9+588.9

+9 9%
+9.9%

Policy reserves

6,123.6

6,727.2+603.6

+9.9%

369.2

432.5

+63.2

+17.1%

83.4

118.1

+34.6

+41.6%

6,624.9

7,301.3+676.4+10.2%

640.5

793.3

+152.7+23.9%(Billions of yen)（億円）

1,223.8

1,197.1

Ordinary revenues

+2.2%

79.6
69.2

+15.1%

Ordinary expenses

FY2013

FY2014(Billions of yen)

◆ Ordinary revenues and ordinary profit increased year on year.
◆ Income from insurance premiums declined principally becauseof the brisk sale of lump-sum payment endowment insurance
prior to the sales suspension in FY2013
FY2013.
◆ Investment income increased due mainly to higher gains on
separate accounts, higher gains on sale of securities and higher
interest income and dividends on general account assets.
◆ Despite an increase in provision of policy reserves for minimum
guarantees for variable life insurance, ordinary profit increased
yyear on yyear,, mainly
y for three reasons: an increase in g
gains onsale of securities in general account, the absence of the negative
impact from the revision of the discount rated used for calculating
policy reserves on the interest rate-sensitive whole life insurance
that was present in FY2013, and an increase in positive spread.
◆ Net income was up year on year. Sony Life has changed its
calculation policy of the reserve for price fluctuations toaccumulate the reserve up to required levels from FY2014 while
it had accumulated the reserve in excess of the required levels
until FY2013.

(Billions of yen)

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

Sony Financial Holdings Inc. All Rights Reserved

ChangeChange from 14.3.31

7

Overview of Operating Performance:
Sony Life (Non-consolidated)<Reasons for changes>
FY2013

FY2014

ChangeNew policy amount

3,889.3

4,771.6+22.7%

Lapse and surrender amount

1,739.4

2,088.4+20.1%
20.1%

Lapse and surrender rate

4.61%

5.35%

+0.74pt

Policy amount in force

39,095.0

40,988.7+4.8%Annualized premiums from new policies

63.9

76.6

+19.7%Of which, third-sector products

13.4

15.2

+13.3%

696.9

735.7

+5.6%

167.0

172.8

+3.4%

(Billions of yen)

FY2013

FY2014

ChangeGains from investment, net (General account)

121.1

143.6

+18.6%

Core profit

72.3

76.5

+5.7%

Positive spread

8.4

13.0

+54.8%(Billions of yen)

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

Non-consolidated solvency margin ratio

14.3.3115.3.31

Changefrom 14.3.31

2,358.7%

2,555.0%+196.3pt

Notes:
1. Figures for new policy amount, lapse and surrender amount, lapse and surrender rate, policy amount in force,
annualized premiums from new policies and annualized premiums from insurance in force are calculated as
the total of individual life insurance and individual annuities.
2. The lapse and surrender rate shows the ratio derived by dividing the amount of lapses and surrenders, notadjusted for policy amount decreases, increases, and reinstatements, by the policy amount in force at the
beginning of the fiscal year.

◆ Increased due to higher sales of family
income insurance and variable life
insurance.
◆ Increased because during FY14.3Q
some policyholders switched over to
new types of family income insurance
and living benefit insurance, whichwere launched in Oct
Oct. 20142014.
◆ Increased due to higher sales ofvariable life insurance, educational
endowment insurance and living
benefit insurance.

◆ Increased year on year due mainly tothe absence of the negative impact
from the revision of the discount rateused for calculating policy reserves oninterest rate-sensitive whole lifeiinsuranceththatt was presentt ini FY2013
and an increase in positive spread,
although provision of policy reserves
for minimum guarantees for variable
life insurance increased driven by its
brisk sales
sales.

Sony Financial Holdings Inc. All Rights Reserved

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

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

New policy amount

Annualized premiums from new policies

Number of new policies

Of which,which third-sector(Thousands ofpolicies)620+13.7%

606(Billions of yen)

600

533

80

(Trillions of yen)

5

4.77
4.45

73.2

500

+22.7%+19.7%

63.9
60

3.88

4

76 6
76.6

400

3

300

2

200

40

20
1
0

0
FY2012FY2013

FY2014+13.3%

18 3
18.3

100

13.4

15.2

FY2013

FY20140
FY2012

Sony Financial Holdings Inc. All Rights Reserved

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

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

Policyy amount in force

Of which, third-sector(Millions of policies)(Trillions of yen)

50

6.04
40

Annualized premiums from insurance in force

Number of p
policies in force

37.7

6 33
6.33
39.0

+5.4%

+4.8 %

6.67
40.9(Billions of yen)

7

735 7
735.7
669.9

6
5

30

800

696.9

+5.6%

600

4
400

3

20

2
10
1
0

0
13.3.3114.3.3115.3.31

+3.4%

200

158 6
158.6

167 0
167.0

172 8
172.8

13.3.3114.3.3115.3.310Sony Financial Holdings Inc. All Rights Reserved

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

(%)

8

6

5.31

4.61

+0.74pt

5.35

4

2

0
FY2012FY2013

FY2014**The lapse and surrender rate shows the ratio derived by dividing the amount off
lapses and surrenders, not adjusted for policy amount decreases, increases, andreinstatements, by the policy amount in force at the beginning of the fiscal year.

Sony Financial Holdings Inc. All Rights Reserved

11

Operating Performance :Sony Life (Non-consolidated) (4)Income from Insurance Premiums(Billions of yen)(Billions of yen)

1,000
,

Interest Income and Dividends

925 8
925.8

960.9

914 0
914.0
(4.9%)

140
120

800

122.1

+9.4%

133.5

108.5

100
600

80
60

400

40
200
20
0
FY2012FY2013

FY20140
FY2012

Sony Financial Holdings Inc. All Rights Reserved

FY2013

FY201412

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

Ordinary Profit(Billions of yen)

80

(Billions of yen)

80.0
+5.7%

72.3

79.6

76.5

80

60

60

40

40

20

20

74.6

+15.1%

69.2

00
FY2012FY2013(R f(Reference)) ImpactIt on core profit
fit
FY2012
Positive spread
Provision of policy reserves for minimum guarantees
for variable life insurance (*1)
Effects by the revision of policy reserve discount rate
(Interest rate-sensitive whole life insurance) (*2)

FY2012FY2014FY2013(Billions of yen)
FY2014

2.1

8.4

13.0

1.3

(4.2)

(10.6)

－

(5 7)
(5.7)

－

FY2013

FY2014(Reference) Main differences from Core Profit(Billi(Billions
off yen))
FY2013
FY2014FY2012
Capital gains (losses) excluding gains or losses onhedges (*1)
Gains (losses) on hedges of variable insurance
Provision of contingency reserve (*1)
( 1)

(0.9)

1.1

10.7

－

－

(2.3)

(4 2)
(4.2)

(4 1)
(4.1)

(5 0)
(5.0)

*1: “Provision of policy reserves for minimum guarantees for variable life insurance” and “Provision of contingency reserve” are described as negative amount. Capital gains (losses) exclude gains or losses on hedges ofvariable life insurance.
*2: The effected amount of a surge of sales of interest rate-sensitive whole life insurance due to a delay in rising insurance premiums (May 2013) against the revision of policy reserve discount rate (April 2013).

Sony Financial Holdings Inc. All Rights Reserved

13

Operating Performance :Sony Life (Non-consolidated) (6)
Number of Lifeplanner Sales Employees+113(Number)

4,329
[161]

4,500

4,133
4
133
[105]

4,127
4
127
[109]

4,125
4
125
[110]

13.6.30

13.9.30

4,092
[121]

4,216
[138]

4,228
[146]

4,248
[150]

4,216
[155]
+113

4,000

3 500
3,500

3,000
0

13.3.31

13.12.31

14.3.3114.6.30

14.9.30

14.12.31

15.3.31

Note: Figures in [ ] show the numbers of Lifeplanner sales employees (rehired on a fixed-term contract basis after retirement) included in the overall
numbers, those who have reached retirement age but who continue to work as Lifeplanner sales employees that meet certain sales conditions
and other requirement.

Sony Financial Holdings Inc. All Rights Reserved

14

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

15.3.31(Billions of yen)Amount%Amount%Japanese governmentand corporate bonds

5,190.0

86.7%

5,606.8,

86.2%

Japanese stocks

33.2

0.6%

42.4

0.7%

Foreign bonds

79.8

1.3%

105.5

1.6%

<Bond duration>
Mar. 31, 2013: 19.9 years

Foreign stocks

26.9

0.4%

26.0

0.4%

Monetary trusts

305.3

5.1%

313.2

4.8%

Policy loans

154.1

2.6%

162.3

2.5%

Real estate

66.5

1.1%

117.7

1.8%

Cash and call loans

32.6

0.5%

56.8

0.9%

Others

95.6

1.6%

76.7

1.2%

5 984 3
5,984.3

100 0%
100.0%

6 508 06,508.0

100 0%
100.0%Total

We have continued to accumulate ultralongterm bonds to match the liability
characteristics of insurance policies withlong term matlong-term
maturities
rities with
ith the aim of red
reducing
cing
interest rate risk.

Mar. 31, 2014: 19.7 years
Mar. 31, 2015: 20.3 years■ Investment in the monetary trusts is mainly into
Japanese government and corporate bonds.
■ The holding ratio on the real status of Japanese
government and corporate bonds including
those invested in monetary trusts in the generalaccount assets: As of Mar. 31, 2015: 91.0%(As of Mar. 31, 2014: 91.8%)

Sony Financial Holdings Inc. All Rights Reserved

15

Operating Performance :Sony Life (Non-consolidated) (8)Average Assumed Interest Rate andInvestment Yield for Core Profit

Positive Spread(%)(Billions of yen)

13.0

14

3.00

Average assumed interest rate

Investment yield for core profit

12+54.8%

10

2 31
2.31

8.4

2.27

8
2.00

2.35

2.35

2.18

2.12

6
4
2
0

2.1
1.00
FY2012FY2013

FY2014FY2012

Sony Financial Holdings Inc. All Rights Reserved

FY2013

FY201416

Operating Performance :Sony Life (Non-consolidated) (9)Non-consolidated Solvency Margin Ratio

(%)

3,000

+196.3pt

2,500

2,281.8

2,555.0

2,358.7

2,000

1,500

1,000013.3.3114.3.3115.3.31Sony Financial Holdings Inc. All Rights Reserved

17

Operating Performance :AEGON Sony Life Insurance*AEGON SonyS
Life
Lif InsuranceIsells
ll individual
i di id l variable
i bl annuities.
iti

Number and Amount of Policies in Force

Number and Amount of New Policies
New policy amount

Number of new polices [ ]Policy amount in force(Thousands ofpolicies)(Billions of yen)

200
163.2
[26.8][268]

390.4 (Thousands of[63.5] policies)
70(Billions of yen)

400

35
167.5
[[28.8]]

Number of policies in force [ ]

60

30
300

150

50

236.4
[38.2]

25

40

20
200

100

30

15
50

51.1
[7.3]

10

100

20

76.1
[10.2]

5100

0FY2012FY2013
FY2014
Net income ((losses)) for AEGON Sonyy Life Insurance and SA Reinsurance(Billions of yen)

FY20130013.3.3114.3.3115.3.31

ChangeFY2014

AEGON Sony Life Insurance

(3.4)

(5.4)

(2.0)

SA Reinsurance

0.4

2.4

+2.0

AEGON Sony Life Insurance and SA Reinsurance are equity method companies, 50-50 joint venture established by Sony Life and AEGON Group.
SA Reinsurance prepares its financial statements in accordance with U.S. GAAP. 50% of the net income (losses) for AEGON Sony Life Insurance andSA Reinsurance are recognized as investment profit (losses) on equity method in the SFH’s consolidated net income.

Sony Financial Holdings Inc. All Rights Reserved18

Highlights of Operating Performance:
Sony Assurance
Ordinary revenues

Ordinary profit

FY2013

FY2014

89.8

93.0

+3.1

+3.5%

Underwriting income

88.6

91.7

+3.1

+3.5%

Investment income

1.1

1.2

+0.0

+3.0%

86.8

88.8

+1.9

+2.2%

Underwriting expenses

65.4

65.6

+0.1

+0.3%

Investment expenses

0.0

0.0

(0.0)

(85.7%)

Operating general andadministrative expenses

21.3

23.1

+1.7

+8.2%

Ordinary profit

3.0

4.2

+1.2

+40.1%Net income

1.6

2.2

+0.5

+34.2%

14.3.3115.3.31(Billions of yen)

89 8
89.8

+3 5%
+3.5%

Ordinary revenues

93.0

Ordinaryy expenses
p4.2+40.1%

30

FY2013

FY2014(Billions of yen)

◆ Ordinary revenues and ordinary profit increased
year on year.
◆ Ordinary
y revenues increased yearyon year,y , dueto an increase in net premiums written primarily
for its mainstay automobile insurance.
◆ Ordinary profit grew year on year and reachedrecord high due to a decline in the loss ratio
mainly led by a lower car accident ratio, as wellas the rise in ordinary revenues.

(Billions of yen)

ChangeChange from
14.3.31

Underwriting reserves

78.0

86.5

+8.4

+10.8%Net assets

21.4

24.7

+3.3

+15.5%

Total assets

142.7

157.9

+15.2

+10.7%

Sony Financial Holdings Inc. All Rights Reserved

19Overview of Operating Performance:
Sony Assurance(Billions of yen)

FY2013

FY2014<Reasons for changes>

ChangeDirect premiums written

87.3

90.4

+3.6%

Net premiums written

88.6

91.7

+3.5%

Net losses paid

46 1
46.1

45 9
45.9

(0 4%)(0.4%)

Underwriting profit

1.8

3.0

+62.4%Net loss ratio

59.3%

57.6%

(1.7pt)Net expense ratio

25 6%
25.6%

26 7%
26.7%

+1 1pt+1.1ptCombined ratio

84.9%

84.3%

(0.6pt)◆ Increased mainly in its mainstay
automobile insurance.

◆ Declined
D li d ddue mainly
i l to a llower car
accident ratio.

◆ Increased due mainly to higher
system-related expenses, a rise ininsurance acquisition cost and a
consumption tax rate rise.

Notes:Net loss ratio = (Net losses paid + Loss adjustment expenses ) / Net premiums written.
Net expensepratio = Expensesprelated to underwritingg / Net p
premiums written

Number of policies in force
Non-consolidated
solvency margin ratio

14.3.3115.3.31

1 61 million
1.61

1 70 million
1.70

527.6%

629.6%

Change from 14.3.31+0 08 million
+0.08

+5 4%
+5.4%

102.0pt

Note: The number of policies in force is the total of automobile insurance and medical and cancer insurance,
which accounts for 99% of net p
premiums written.

Sony Financial Holdings Inc. All Rights Reserved◆ Rose significantly from ayear earlier, showing thatSony Assurance has
maintained a financial
soundness.

20

Sony Assurance’s Underwriting Performanceby Type of Policy
Direct Premiums Written

Net Premiums Written

FY2013

FY2014

Change

Fire

275

332

+21.0%

Marine－－－Personal accident

8,360

8,576

+2.6%

Voluntary automobile

78,735

81,585

+3.6%

－

－

－

87 37087,37090 49590,495

+3 6%
+3.6%

((Millions of yyen))Compulsory
automobile liability
T t l
Total

FY2013

FY2014

ChangeFire33(6.3%)

Marine12990(30.1%)

Personal accident

2,066

2,265

+9.7%

Voluntary automobile

42,86042,414(1.0%)

Compulsory
automobile liability
y

1,123

1,212

+7.9%

46,18345,985(0.4%)Total

FY2014

Change

Fire

104

45

(56.4%)

Marine153110(27.9%)

Personal accident

8,613

8,845

+2.7%

Voluntary automobile

78,473

81,375+3.7%

Compulsory
automobile liability

1,255

1,335

+6.4%

88 60088,60091 712
91,712

+3 5%
+3.5%

T t l
Total

*Medical and cancer insurance is included in personal accident.

Net losses paid
(Millions of yen)

FY2013(Millions of yen)Sony Financial Holdings Inc. All Rights Reserved

21

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

Net Premiums Written andNumber of Policies in Force
Voluntary automobile insurance
Personal accident insurance
OthersNumber of policies in force(Billions of yen)

120

1 55
1.55

1.61

+5.4%

100

83.5

88.6

+3.5 %

1.70(Millions ofpolicies)

7
6

1.5

91.7

5

4.2

1.4
8.8

80

7.1

(Billions of yen)

4.2

4

1

3

60

3.0

+40.1%

2.3

2

81.3

40

0.5

1

0.1
20

0
FY2012FY2013

FY2014*Adjusted ordinary profit = Ordinary profit + Provision for catastrophe reserve

00
FY2012FY2013

FY2014Th numberTheb off policies
li i iin fforce iis th
the ttotalt l off automobilet
bil iinsurance andd medical
di land cancer insurance policies, which account for 99% of net premiums written.
More than 90% of personal accident insurance is medical and cancer insurance.

(Reference) Provision for catastrophe reserve
FY2012
Provision for catastrophe reserve(Billions of yen)

FY2013

(2 2)
(2.2)

FY2014
12
1.2

28
2.8

*Provision for catastrophe reserve is described as positive amount.

Sony Financial Holdings Inc. All Rights Reserved

22

Operating Performance:
Sony Assurance (2)Earned/Incurred Loss Ratio +Net Expense Ratio
Earned/Incurred loss ratio

(%)

100

98.9

(Reference) Combined Ratio(Net Loss Ratio+ Net Expense Ratio)
Net loss ratio

Net expense ratio

Net expense
p
ratio

(%)

93.8

91.0

100

89 2
89.2

(2.8pt)

80

80

60

72.9

68.2

64.3

60

(0.6pt)

63.2

59.3

(3.9pt)57.6(1.7pt)

40

40

20

84.3

84.9

26.0

25.6

20

+1.1pt
26.7

26.0

25.6

FY2012FY2013+1.1pt26.7

00FY2012FY2013

FY2014

Notes:
Earned/Inc rred loss ratio = (Net losses paid + Provision
Earned/Incurred
Pro ision for reserve
reser e for outstandingo tstanding
losses + Loss adjustment expenses) / Earned premiums[Earthquake insurance and compulsory automobile liability insurance are excluded
from the above calculation.]

FY2014

Notes:Net loss ratio = (Net losses paid + Loss adjustment expenses ) / Net premiums written
Net expense ratio = Expenses related to underwriting / Net premiums writtenSony Financial Holdings Inc. All Rights Reserved

23

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

(%)

800

629.6%
600

504.2%

527.6%+102 0pt+102.0pt

400

200

0
13.3.3114.3.3115.3.31Sony Financial Holdings Inc. All Rights Reserved

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

36.4

+5.3%

<C
<Consolidated>
lid t d>38.4
7.3

+30.0%(Billions of yen)

FY2013

FY2014

Consolidated ordinary revenues

36.4

38.4

+1.9

+5.3%

Consolidated ordinary profit

5.6

7.3

+1.6

+30.0%

Consolidated net income

3.4

4.5

+1.1

+32.9%FY2013

FY2014

Ordinary revenues

33 9
33.9

35 7
35.7

+1 7
+1.7

+5 1%
+5.1%

Gross operating profit

20.7

22.5

+1.8

+8.8%

Net interest income

17.3

16.6

(0.6)

(3.7%)Net fees and commissions

(0.0)

0.0

0.0

―

Net other operating income

3.4

5.8

+2.4

+70.4%

General and administrative
expenses

14.6

15.3

+0.6

+4.5%

Net operating profit

60
6.0

72
7.2

+1 1
+1.1

+18 4%+18.4%

Ordinary profit

5.8

7.2

+1.4

+24.9%Net income

3.5

4.6

+1.0

+29.3%

14 3 3114.3.31

15 3 3115.3.31

Change<Non-consolidated>(Billions of yen)

5.6

FY2013

FY2014(Billi(Billions
off yen))◆Ordinary revenues and ordinary profit increased year on year
on a consolidated and a non-consolidated basis. Sony Bank
reached record high in ordinary revenues, ordinary profit andnet income.
Co so dated<Consolidated>◆Ordinary revenues increased year on year, due mainly tohigher revenues related to foreign currency transactions andmortgage loans. Ordinary profit expanded year on year, due
to the above-mentioned increase in ordinary revenues and arise in profit related to bond-dealing transactions.
<Non-consolidated＞◆Gross operating profit and net operating profit increased year
on year.
・Net interest income decreased year on year, due mainly to
lower interest income on securities under the lowering interest
rates.
・Net other operating income increased due to higher gains on
f i exchange
foreignhtransactions,tti
iin addition
dditi tot an improvementitin net gains on bond-dealing transactions including sale ofbonds.

(Billions of yen)

Change from 14
14.3.31
3 31

72.7

77.0

+4.2

+5.9%

7.2

6.6

(0.6)

(8.8%)

2,056.7

2,062.5

+5.8

+0.3%

Net assets
Net unrealized gains onother securities, net of taxes
Total assets

Change(*) Sony Bank revised its method of recording ordinary revenues and ordinary expenses on hedge transactions for
FY2014. Ordinary revenues for FY2013 have been retroactively adjusted to reflect the change.

Sony Financial Holdings Inc. All Rights Reserved25Overview of Operating Performance:
Sony Bank (Non-consolidated) (1)14.3.3115.3.31

Change from
14.3.31

Customer assets

2 007 5
2,007.5

2 007 92,007.9

+0 3
+0.3

+0 0%
+0.0%

Deposits

1,890.0

1,878.2(11.7)(0.6%)

Yen

1,526.4

1,551.0

+24.5

+1.6%

363 5
363.5

327 2
327.2

(36 3)(36.3)(10 0%)(10.0%)

117.4

129.6

+12.1

+10.4%

Loans outstanding

1,057.4

1,187.1+129.7+12.3%

Mortgage loans

949.3

1,074.3+125.0+13.2%

Others

108.1

112.8

+4.6

+4.3%

9.7

10.5

+0.7

+8.0%

0.35%

0.28%

(0.07pt)

11.72%

10.66%(1.06pt)(Billions of yen)F i currency
ForeignInvestment trusts

Number of accounts((10 thousands))

Non-performing assets ratio*2(Based on Financial Reconstruction Law)

Capital adequacy ratio*3(domestic criteria)*1<Reasons for changes>◆ Yen deposit balance increased fromMarch 31,
31 20142013 due to a conversion
from foreign currencies to yen.
◆ Foreign currency deposit balance
decreased due to a conversion and atransfer into yen deposit led by yen
depreciation.
◆ Loan balance increased due to anincrease in the balance of mortgage
loans.
◆ Number of accounts increased
reflecting
g a new operation byy SonyyLife’s Lifeplanner sales employees tohandle opening account at Sony Bank
from May 2014.
◆ SonySBank
B k maintainsi t i an extremelytl llow
non-performing assets ratio.

*1 Loans in others include corporate loans of ¥107.5billion*2 Non-performing loans (loans based on the Financial Reconstruction Act) /Total loan exposure*3 Please refer to the graph of the non-consolidated capital adequacy ratio (domestic criteria) on P29.

Sony Financial Holdings Inc. All Rights Reserved26

Overview of Operating Performance:
Sony Bank (Non-consolidated) (2)<Reference> On Managerial Accounting Basis
FY2013

FY2014

20 6
20.6

22 4
22.4

+1 8
+1.8

+8 8%
+8.8%

18.2

18.2

+0.0

+0.3%

1.0

0.9

(0.0)

(9.2%)

1.3

3.2

+1.8

+133.5%Gross operating profit (core profit)(A) ＝①＋②

19.2

19.2

(0.0)

(0.2%)

Operating expenses and otherexpenses ③

14.6

15.2

+0.5

+4.0%

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

4.6

4.0

(0.6)

(13.5%)(Billions of yen)
Gross operating profit
Net interest income*1 ①
Net fees and commissions*2

Net other operatingg income②*3<Reference> Interest Spread(Managerial Accounting Basis)

ChangeYield on investment

Yield on financing
gInterest spread
(%)

1.5

1.0

1.20

1.20

0.93

0.92
0.92
(0.01pt)■Managerial accounting basis

0.5

The following adjustments are made to the figures on a financial account for profits andlosses more appropriately.

0.28

0 28
0.28

FY2013

FY2014*1: Net interest income: Includes profits and losses associated with fund investment recorded in
net other operating income, including gains or losses from currency swap transactions.
*2: Net fees and commissions: Includes profits and losses for customer dealings in foreign
currency transactions recorded in net other operating income.
*3: Net other operating income: After the above adjustments (*1 and *2), consists of profits andlosses for bond and derivative dealing transactions.
■Core profit

0.0

Note: Interest spread=(Yield on investment)-(Yield on financing)

Profits and losses exclude net other operating income, which includes those on bond andderivative dealing transactions, and stands for Sony Bank’s basic profits.

Sony Financial Holdings Inc. All Rights Reserved

27

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

Deposits
Yen depositspForeigng currency
y depositspMortgageg g loans

Others(Billions of yen)
1,200(Billions of yen)

2,000

1,187.1
1,057.4

1,857.4

1,878.2

1,890.0

1,000

363.5

*corporate loansof ¥107.5 billion+129.7
129 7
108.1

109.8

(11.7)
390.2

970.2

112.8

327.2

800

1,500
1,074.3

600
1,000

860.3

1,551.0
1,467.2

1,526.4

949.3

400

500

200

0

0
13.3.3114.3.3115.3.3113.3.31Sony Financial Holdings Inc. All Rights Reserved

14.3.3115.3.3128

Operating Performance:
Sony Bank (Non-consolidated) (2)Non-Consolidated Capital Adequacy Ratio

Balance of Securities by Credit Rating
AAA
BBB

AA
A
Others(Domestic Criteria)(%)(Billions of yen)

15

1,200

11 98
11.98
1,000

11.72

10.66

908.8
10

773 8
773.8

800

(1.06pt)

730 0
730.0
(43.7)

600
5
400

200
0
13.3.31013.3.3114.3.3115.3.3114.3.3115.3.31*Calculated based on the standard FSA Notification No. 19 (2006), which establishes
standards
t d d bbased
d on A
Articleti l 1414-2
2 off ththe B
Bankingki A
Actt off JJapan ffor ddeterminingt
i i ththecapital adequacy of a bank in light of the assets held by the bank.
Sony bank calculates this ratio based on Basel III from March 31, 2014

Sony Financial Holdings Inc. All Rights Reserved29Consolidated Financial Forecast
for the Year Ending
g March 31,, 2016

Sony Financial Holdings Inc. All Rights Reserved30Consolidated Financial Forecast
for the Year Ending March 31, 2016
Consolidated ordinary revenues and ordinary profit are expected to decrease, while net income to increase(Billions of yen)

FY2014(Actual)

FY2015(Forecast)

Change1,352.3

1,300.0(3.9%)

1,223.9

1,168.0(4.6%)

Non-life insurance business

93.0

97.1

+4.4%

Banking business

38.4

36.8

(4.2%)

Consolidated ordinary
y profit

90.0

85.0

(5.6%)

Life insurance business

78.3

74.1

(5.4%)

Non-life insurance business

4.2

4.4

+4.5%

Banking business

7.3

6.4

(12.7%)

54 4
54.4

57.0
57
0*

+4 7%
+4.7%

Consolidated ordinary revenues
Life insurance business

Consolidated net income

For FY2015, stable and sustainable business growth is expected in all the businesses.
Consolidated ordinary revenues are expected to decrease because we do not anticipate an improvement in investment income backed by favorable market
conditions, as was present in FY2014, mainly in the life insurance business. Consolidated ordinary profit is expected to decrease because we anticipate anincrease in spending for medium-term business growth activities, an increase in provision of policy reserves for minimum guarantees for variable life
insurance in the life insurance business, and lower gains on sale of securities in the life insurance and banking businesses. On the other hand, consolidated
net income is expected to increase due to the reduction in the corporate tax rate.
<Segment information for ordinary revenues and ordinary profit>■Life insurance business
Ordinary revenues are expected to decrease because we do not anticipate an increase in investment income backed by favorable market conditions,as was present in FY2014. Ordinary profit is expected to decrease because we anticipate an increase in spending for medium-term business growth
activities and an increase in provision of policy reserves for minimum guarantees for variable life insurance.
■Non-life insurance business
Ordinary revenues and ordinary profit are expected to increase in line with growth in net premiums written primarily for mainstay automobile insurance.
■Banking businessAlthough we anticipate business expansion under such a low interest rate environment
environment, ordinary revenues and ordinary profit are expected to decrease
because we do not anticipate an increase in gains on bond-dealing transactions including sale of bonds as was present in FY2014.
*The amount of consolidated net income for FY2015 (Forecast) is equivalent to the amount of “Net income attributable to parent company”
of Accounting Standard for Business Combinations (ASBJ Statement No. 21, on Sep. 13, 2013) and the related revision.

Sony Financial Holdings Inc. All Rights Reserved

31

Dividend Forecast

Sony Financial Holdings Inc. All Rights Reserved

32

Dividend Forecast for the Year Ending March 31, 2016
and Mid-term Dividend Policy
The proposed dividend for FY2015 is ¥55 per share, up ¥15 year on year.
-4th consecutive year of dividend increases since FY2012<Mid-term Dividend Policy> Our basic dividend policy is to steady increases in dividends in line with earnings growth over the
mediumdiandd llong tterms.
 We will enhance shareholder returns by revising upward our medium-term target for thedividend payout ratio into 40% to 50% of consolidated net income.
* We will determine specific dividend amounts for each fiscal year by taking into account a comprehensive range offactors, including capital adequacy, investment opportunities, business forecasts and legal and regulatory
developments.

■ Consolidated Net Income and Dividend Result/Forecast
FY2011FY2012FY2013

FY2014(Expected)

FY2015(Forecast)¥32.8 billion¥45.0billion¥40.5billion¥54.4billion¥57.0billion*

Net income per share¥75.43¥103.60¥93.11¥125.10¥131

Dividend per share

¥20

¥25

¥30

¥40

¥55

26.5%

24.1%

32.2%

32.0%

42.0%

Consolidated net income

Dividend payout ratio (consolidated)*The amount of consolidated net income for FY2015 (Forecast) is equivalent to the amount of “Net income attributable to parent company”
of Accounting Standard for Business Combinations (ASBJ Statement No. 21, on Sep. 13, 2013) and the related revision.

Sony Financial Holdings Inc. All Rights Reserved33Sony Life
Life’ss Preliminary MCEV and
Risk Amount Based on Economic Valueas of March 31, 2015

Please keep in mind that the validity of these calculations of MCEV as of March 31, 2015, has not been verified by outside specialists.
The calculation of MCEV as of March 31, 2015, in accordance with the MCEV principles and verified by outside specialists, is scheduled
to be announced on May 21, 2015.
A part of the calculations of MCEV as of December 31, 2014 adopted simplified method and has not been verified by outside specialists.

Sony Financial Holdings Inc. All Rights Reserved34Sony Life’s MCEV as of March 31, 2015
(Billions of yen)

14.3.31

14.12.31

15.3.31

Change from
14.3.31

Change from
14.12.31

1,221.3

1,234.9

1,322.9+101.6+88.0

Adjusted net worth

722.1

1,171.2

1,119.2+397.1(52.0)

Value of existing business

499.1

63.8

203.7

(295.5)+139.9MCEV

14 3 3114.3.31

14 12 31
14.12.31

15 3 3115.3.31

New business value

55.2 (12M)28.2 (6M)

48.6 (12M)

New business margin

5.2%

2.9%

3.8%

(Billions of yen)

Notes:
1. New business margin equals new business value divided by present value of premium income.
2. Calculated MCEV as of December 31, 2014 by using updated economic assumptions and lapse and surrender rate and other assumptions as of March 31, 2014.

 Reasons for changes in MCEV
31, 2015 increased ¥101.6¥101 6 billion from March 31
31, 2014
2014, due mainly to the contribution of new businessbusiness,
・ MCEV as of March 31
the decrease in inflation rates, the effect of the reduction in the corporate tax rate. While the value of existing businessdecreased significantly due to a decline in interest rates, most of the decrease was offset with the benefit of ALM (by theincrease in the adjusted net worth).
・ MCEV as of March 31, 2015 increased ¥88.0 billion from December 31, 2014, due mainly to the contribution of new business,a rise in interest rates in Japanese yen, and the effect of the reduction in the corporate tax rate.
 Reasons for changes in new business margin
・ New business margin as of March 31, 2015 was down 1.4% from March 31, 2014, due mainly to a decline in interest rates.
・ New business margin as of March 31
31, 2015 was up 0.9%
0 9% from December 31
31, 2014
2014, due mainly to a rise in interest rates inJapanese yen, improvement in insurance-related assumptions, and the effect of the reduction in the corporate tax rate.
*Please see page 44 for changes on new business value*Please see page 47 for trend on JGB yields

Sony Financial Holdings Inc. All Rights Reserved35Sony Life’s Risk Amount Based on Economic Valueas of March 31, 2015
(after tax)
(Billions of yen)

14.12.31

14.3.3115.3.31

Insurance risk

654.5

709.6

724.2

Market-related risk

240.0

290.5

287.0

Of which, interest rate risk*

180.9

219.7

218.5

Operational risk

26 3
26.3

23 8
23.8

25 9
25.9

Counter party risk

1.3

3.0

1.8

Variance effect(257.8)(291.4)(293.4)

The risk amount based on economic value

664.3

735.5

745.5

(*) Interest rate risk excluding the variance effect within market-related risk.
(Billions of yen)

MCEV

14.3.31

14.12.31

1,221.3

1,234.9

15.3.31
1,322.9

 Maintained capital adequacy by controlling market-related risk.
Notes:
1. The risk amount based on economic value refers to the total amount of Sony Life’s risks, comprehensively examined and including insurance risk andmarket-related risk.
2. The solvency risk capital on an economic value basis is calibrated at VaR (99.5) over one year and based on the internal model, which is a similar but
modified model based on the EU Solvency II (QIS5) standard method.
3. Calculated MCEV as of December 31, 2014 by using updated economic assumptions and lapse and surrender rate and other assumptions as of March 31, 2014.

Sony Financial Holdings Inc. All Rights Reserved

36Appendix

Sony Financial Holdings Inc. All Rights Reserved37

Recent Topics 1
AEGON Sony Life Insurance
Launch of sales: December 1, 2009
Common stock: ¥26 billion (including capital surplus of ¥13 billion)*q y ownership:p Sonyy Life insurance Co Ltd 50%,, AEGON international B.V. 50%
EquityMarketing products: Individual Variable Annuities
Sales Channels: Lifeplanner sales employees and partner Banks (20*)
SA Reinsurance Ltd
Established： October 29
29, 2009
Common stock: ¥11 billion*
Equity ownership: Sony Life insurance Co., Ltd. 50%, AEGON international B.V. 50%
Business： Reinsurance businessNote) AEGON Sony Life Insurance and SA Reinsurance are equity method companies, 50
50-50
50 joint ventures established by Sony Life and AEGON Group.
*As of May 15, 2015

Sony Bank’s Mortgage Loans through Sony Life
■Sonyy Life accounts for 22% of the balance of mortgage
g g loans as of March 31,, 2015
Sony Life accounts for 14% of the amount of new mortgage loans for FY2014*Sony Life started handling banking agency business in January 2008.

Sony Assurance’s Auto Insurance Sold by Sony Life
■Sony Life accounts for 4% of new automobile policies for FY2014*Sony Life started handling automobile insurance in May 2001.

Sony Financial Holdings Inc. All Rights Reserved38

Recent Topics 2<Highlights for FY2014>2014-04-01"Sony Lifecare Inc." was established as a holding company to oversee the Group’s operations in the nursing care business.

2014-04-21

Sony Assurance began offering “Policyholders‘ Apps” for smart-phone users.

2014-05-02

Sony Life commenced sale of a new product: “Specialty Endowment Insurance.”

2014 06 18
2014-06-18

Sony Bank began offering “Omakase
Omakase Money Receiving Service”
Service2014-07-09

Sony Life closed its representative office in Beijing.

2014-07-28

Sony Life entered into an agreement to acquire Sony Corporation’s headquarters site.

2014-08-01

Sony Bank entered tie-up with “Sony Real Estate” in mortgage loans.

2014-08-06

Sony Bank started ATM affiliation with Aeon Bank, Ltd.

2014-08-15

Sony Bank began offering interest rates on its mortgage loans based on customers’ own funds.

2014-10-01

2014-12-16

Sony Lifecare Group announced the opening of the first newly built nursing care home in Tokyo in spring, 2016.
Sonyy Life commenced sales of Livingg Benefit Whole Life Insurance ((Living
g Standard Type)yp ) and Living
g Standard Specialp
Provision 14.
Sony Bank began offering “Exchange Rate-Linked Deposits”

2015-01-07

Sony Assurance announced to open a customer service office in Kumamoto prefecture in July 2015

2015-02-23

Sonyy Bank began
g offering
g “SpecialpInterest Rates for Foreigng Currencyy Time Depositpwhen Depositingpg from Yen Funds”.

2015-02-23

Sony Assurance commenced sale of a PHYD(Pay How You Drive) type of automobile insurance “Gentle Driving Cash-Back Plan”

2015-04-01

Sony Life changed its President, Representative Directors.

2015-04-01

Sony Life opened its new sales office in Fukui prefecture.

2015-04-01

SmartLink Network, Sony Bank’s subsidiary, changed its corporate name to Sony Payment Services Inc.

2015-04-30

Sony Lifecare entered into an agreement to enter capital participation with Yuuai Holdings Co., Ltd.

2015-05-02

Sony Life commenced sale of a new product: “Lump-sum Payment Whole Life Insurance (No-notification Type) “

2014 10 02
2014-10-02

Sony Financial Holdings Inc. All Rights Reserved39Sony Life: Fair Value Information on Securities(General Account Assets)
Fair Value Information on Securities
Fair value information on securities with market value (except trading-purpose securities)(Billions of yen)

Notes:
1. The above table includes monetary trusts other than trading-purpose securities.
2.Derivative financial products such as principal protected 30 year notes with Nikkei 225 index-linked coupons are included in the “Held-to-maturity-securities” above.
Principal protected 30 year notes with Nikkei 225 index-linked coupons
As of Mar. 31, 2013; Carrying amount: ¥43.3 billion, Fair market value: ¥52.2 billion, Net unrealized gain (losses): ¥8.8 billion
As of Mar. 31, 2014; Carrying amount: ¥43.8 billion, Fair market value: ¥56.0 billion, Net unrealized gain (losses): ¥12.2 billion
As of Mar. 31,, 2015;; Carrying
y g amount: ¥44.2 billion,, Fair market value: ¥57.5 billion,, Net unrealized gaing(losses):() ¥13.2 billion

Valuation gains (losses) on trading-purpose securities(Billions of yen)

Note: The above chart includes trading-purpose securities included in “monetary trusts,” etc

Sony Financial Holdings Inc. All Rights Reserved40Sony Life’s Interest Income and Dividends (Details)(Millions of yen)

FY2013

ChangeFY2014

Cash and deposits
Japanese governmentand corporate bonds
Japanese stocks

00( 36.0%)98,588107,383

+8.9%

397

464

+16.9%

Foreign securities

6,740

8,998

+33.5%

Other securities

460

430

(6.6%)

Loans

5 691
5,691

5 921
5,921

+4 0%
+4.0%

Real estate

10,250

10,327

+0.8%

31

66

+112.7%122,160

133,592+9.4%

Others
Total

Sony Financial Holdings Inc. All Rights Reserved41Sony Life’s Quarterly Trend on New Policy Amount
Quarterly Trend on New Policy Amount(Billions of yen)

1 600
1,600

1,491.6

1,400
1,200
,

1,201.9

1,238.7

1,066.5

1,033.3

991.5

947.4

1,000

1,152.5

1,135.8,

1,128.3
886.2

841.4
800
600
400
200
0
FY12 1Q
FY12.1Q

FY12 2Q
FY12.2Q

FY12 3Q
FY12.3Q

FY12 4Q
FY12.4Q

FY13 1Q
FY13.1Q

FY13 2Q
FY13.2Q

FY13 3Q
FY13.3Q

FY13 4Q
FY13.4Q

Sony Financial Holdings Inc. All Rights Reserved

FY14 1Q
FY14.1Q

FY14 2Q
FY14.2Q

FY14 3Q
FY14.3Q

FY14 4Q
FY14.4Q

42

Sony Life’s Quarterly Trend on
Annualized Premiums from New Policies
Quarterly Trend on Annualized Premiums from New Policies
A
Annualized
li d premiumsiffrom new policies
li i

Of which, third-sector(Billions of yen)

25

22.0

21.8

19.0

20

17.4

18.5
17.2

16 8
16.8
15.2

14.6

15

18.9

18.5

13.2

10

5

4.4

5.0

5.2
3.9

3.6

3.0

3.6

2.9

3.7

5.1
3.5

2.8

0
FY12.1Q

FY12.2Q

FY12.3Q

FY12.4Q

FY13.1Q

FY13.2Q

FY13.3Q

FY13.4Q

Sony Financial Holdings Inc. All Rights Reserved

FY14.1Q

FY14.2Q

FY14.3Q

FY14.4Q

43

Sony Life’s Changes on New Business Value(Billions of yen)

FY14.4Q (3M)

11.7
+8.7*
Dec. 31, 2014
(9M)

Mar. 31, 2015
(12M)

48.6
[3.8%]**

Dec. 31, 2014
(9M)

36.9

28.2
[2.9%]**

Assumptionsp
as of Dec. 31, 2014

Assumptions as of Mar. 31, 2015

Notes:*Effected amount by valuating new business value as of Dec. 31, 2014 (9M) mainly with interest rates as of Mar. 31, 2015.
New business value increased due mainly to a rise in interest rates in Japanese yen, improvement in insurance-related assumptions, and the
reduction in the corporate tax rate
rate.
**Figures in [ ] show new business margin.

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44

Method of Measuring Risk Amount
Based on Economic Value (1) Market-related Risk*1

Interest rate risk
Fluctuations in net asset
value based on economic
value in response to theshocks in the right columns.
The same applies below.

Sony Life(Reference) EU Solvency II (QIS5)

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

Percentage increases or decreases differ for eachcurrency and term but no lower than 1%(Example)
For Yen 30-year, 30% decrease(Example)
For Yen 30-year, 33% decrease (parallel shift),
28% decrease (twist), 8% decrease (butterfly)

Equity risk

Listed equities 45%, Other securities 70%

Global 30%, Others 40%*2

Real estate risk

Actual real estate 25%

Real estate 25%

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

Credit risk

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

Same as on the left

(Example)
Rating A: Risk coefficient (1.4%), cap (23), floor (1)Currency risk

30% downside fluctuation

25% downside fluctuationNotes
p items as of Mar. 31, 2015.
1. Principal
2. Standard risk coefficients are global: 39%/other: 49%. Symmetric adjustment (an adjustment of±10% of the average value of the stock price index during a defined period in
the past) is applied; as of the QIS5 trial introduction (Dec.31, 2009), these were 30%/40%.

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45

Method of Measuring Risk Amount
Based on Economic Value (2) Insurance Risk*1

Sony Life(Reference) EU Solvency II (QIS5)

Mortalityy risk

Mortalityy rate increases by
y 15% for each yyear elapsedpSame as on the leftLongevity risk

Mortality rate decreases by 20% for each year
elapsedSame as on the left

Lapse risk

The largest amount of these; *2

The largest amount of these;•Lapse rate increases by 50% for each year elapsed• Increases by 50% in the assumed rates of• Lapse rate decreases by 50% for each year elapsed

lapsation for Life module, 20% for Health module• 30% of policies on which surrender value is in•Decreases by 50% in the assumed rates ofexcess of best estimate liability are immediately
surrendered• 30% of policies (70% for group annuities, etc.) on

lapsation for Life module, 20% for Health module
which surrender value is in excess of best
estimate liability are immediately surrendered

Expense risk

Disability risk

Operating expenses increase by 10% for each year
elapsedRate of inflation rises by 1%

Same as on the left

Rate of occurrence increases by 35% in the first fiscal Rate of occurrence increases by 35% in the firstyear, risingi ibby 25% forf eachh year thereafterthftfi
fiscall year, rising
i i bby 25% ffor eachh year th
thereafter.
ft
Recovery rate decreases by 20%.

Notes
1. Principal items as of Mar. 31, 2015.
2. At Sony Life, lapse risk is calculated by computing and adding together the largest amount of three options for each insurance policy

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46

JGB Yields

A off theAsth endd off eachh monthth

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47

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

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48