Presentation Material

Consolidated Financial Results
for the Six Months Ended September 30, 2012
andSony Life’s
Market Consistent Embedded Valueas of September 30, 2012

Sony Financial Holdings Inc.
November 14, 20121

Content
 Consolidated Operating Results for the Six Months Ended September 30, 2012

P.3

 Consolidated Financial Forecast for the Year Ending March 31, 2013

P.26

 Dividend Forecast for the Year Ending March 31, 2013P.28

 Sony Life’s MCEV and Risk Amount Based on Economic Value as of September 30, 2012

P. 30

 Appendix

P.32

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

2

Content

Consolidated Operating Results for
the Six Months Ended September 30, 20123

Highlights of Consolidated Operating Performancefor the Six Months Ended September 30, 2012 (1)(Billions of yen)
Ordinary revenues

Change

454.9

489.0

+34.0

+7.5%
+9.2%

Life
Insurance
Business

Ordinary revenues
Ordinary profit

28.1

30.7

+2.5

547.0

Non-life
Insurance
Business

Ordinary revenues

39.9

42.3

+2.4

+6.1%

(0.2)

(37.3%)+7.3%
Banking
Business

Intersegment
Adjustments*

33.1

FY11.1H

FY12.1H

Ordinary profit

509.9

30.8

FY11.1H

0.4
16.8

+0.8

+5.1%

1.9

1.8

(0.0)

(0.9%)

(0.9)

(1.2)

(0.2)

-

0.0

0.0

+0.0

+36.2%

509.9

547.0

+37.1

+7.3%

Ordinary profit

30.8

33.1

+2.3

+7.5%

Net income

16.3

19.7

+3.3

+20.6%

12.3.3112.9.30

Change from 12.3.31

Total assets

7,241.4

7,566.9+325.5+4.5%

Net assets

347.8

371.1

+23.3

+6.7%

Ordinary revenues
Ordinary profit
Ordinary revenues
Ordinary profit
Ordinary revenues

Consolidated

+7.5%

0.7
15.9

Ordinary profit

FY12.1H(Billions of yen)(Billions of yen)

Consolidated*Amounts in the ordinary profit in the “Intersegment adjustments” are mainly from SFH.
*Comprehensive income: FY11.1H: ¥35.1 billion, FY12.1H: ¥32.0 billion.
Line item amounts are truncated below ¥100 million; percentage change figures are rounded.

4

During the six months ended September 30, 2012, consolidated ordinary
revenues grew 7.3% year on year, to ¥547.0 billion, owing to increases inordinary revenues from the all businesses: life insurance, non-life insurance andbanking.
Consolidated ordinary profit increased 7.5% year on year, to ¥33.1 billion due toan increase in consolidated ordinary revenues.
Consolidated net income was up 20.6% year on year, to ¥19.7 billion due to anincrease in consolidated ordinary profit.

Highlights of Consolidated Operating Performancefor the Six Months Ended September 30, 2012 (2) Life insurance business: Ordinary revenues increased year on year, due mainly to higher income frominsurance premiums associated with a steady increase in the policy amount in force, and an increase ininvestment income on general account assets resulting from higher interest income and dividends.
Ordinary profit increased year on year, due mainly to improvements of investment income on generalaccount assets, although the income on reversal of reserve for outstanding claims related to the Great
East Japan Earthquake, which was recorded in the same period of the previous year, was a negative
factor during the period under review.
 Non-life insurance business: Ordinary revenues increased year on year, due to growth in the number of

insurance policies in force centered on its mainstay automobile insurance. On the other hand, ordinary
profit decreased year on year, owing to a rise in the loss ratio due mainly to higher insurance payments
per claim for automobile insurance.
 Banking business: Ordinary revenues increased year on year due to an increase in net fees andcommissions resulting from Sony Bank’s July 2011 acquisition of SmartLink Network, Inc., which has
become its consolidated subsidiary. The operating results of SmartLink Network, Inc., are included in
SFH’s scope of consolidation from the beginning of the fiscal year ending March 31, 2013, whereas they
were included in only part of the previous period. On the other hand, ordinary profit remained at the samelevels as during the same period of the previous fiscal year, due to a decrease in profit related to foreign
currency transactions which offset higher interest income on loans due to a growing balance of mortgage
loans.
 Consolidated ordinary revenues increased 7.3% year on year, to ¥547.0 billion, and consolidated

ordinary profit increased 7.5% year on year, to ¥33.1 billion. Net income increased 20.6%, to ¥19.7
billion.

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

5

Here is highlights of consolidated operating performance.

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

Ordinary profit
FY11.1H

FY12.1H

454.8

488.9

+34.0

Income from insurance premiums

395.7

428.8

+33.1

+8.4%

Investment income

52.0

56.0

+3.9

+7.6%

Interest income and dividends

47.4

52.1

+4.7

+9.9%

Income from monetary trusts, net

2.6

2.6

(0.0)

(0.9%)(38.8%)(Billions of yen)

454.8

+7.5%

Ordinary revenues

Gains on sale of securities

31.3

28.5
FY11.1H

FY12.1H(Billions of yen)

◆ Ordinary revenues and ordinary profit increased
year on year.
◆ Income from insurance premiums increased due to asteady increase in the policy amount in force.
◆ Investment income increased due to higher investment
income on general account assets, driven mainly by anincrease in interest income and dividends.
◆ Ordinary profit increased year on year, due mainly to
improvements of investment income on general accountassets, although the income on reversal of reserve foroutstanding claims related to the Great East Japan
Earthquake, which was recorded in the same period of
the previous year, was a negative factor during theperiod under review.

+7.5%

1.9

1.1

(0.7)

426.2

457.5

+31.2

+7.3%

Insurance claims and other payments

137.2

135.3

(1.9)

(1.4%)

Provision for policy reserves and others

200.8

242.0

+41.1

+20.5%

Investment expenses

29.3

18.7

(10.6)(36.2%)

Ordinary expenses+9.8%

Change488.9

Losses on sale of securities

1.5

0.2

(1.3)

(86.8%)

Losses on separate accounts, net

21.8

13.5

(8.3)

(38.0%)
+4.0%

51.5

53.6

+2.0

Ordinary profit

Operating expenses

28.5

31.3

+2.7

+9.8%

Net income

15.6

18.4

+2.7

+17.5%

12.3.3112.9.30

Securities

4,545.0

4,799.1+254.0+5.6%

Policy reserves

4,843.0

5,085.0+242.0+5.0%

Total net assets

264.8

285.8

+21.0

+7.9%

34.0

45.7

+11.7

+34.5%

5,222.8

5,484.3+261.4

+5.0%

444.2

443.8

(0.4)

(0.1%)(Billions of yen)

Net unrealized gains on other securities
Total assets
Separate account assets

Change from 12.3.31

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

6

Highlights of Sony Life’s operating performance (non-consolidated basis) are
shown here.
Sony Life’s ordinary revenues increased 7.5% year on year, to ¥488.9 billion.
Of this amount, income from insurance premiums grew 8.4% from the same
period of the previous fiscal year, to ¥428.8 billion.
Investment income increased 7.6% year on year, to ¥56.0 billion, due to higher
investment income on general account assets, driven mainly by an increase ininterest income and dividends.
Ordinary profit increased 9.8% year on year to ¥31.3 billion, due mainly to
improvements of investment income on general account assets, although theincome on reversal of reserve for outstanding claims related to the Great East
Japan Earthquake, which was recorded in the same period of the previous year,
was a negative factor during the period under review.
Consequently, net income increased 17.5% year on year, to ¥18.4 billion.

Overview of Performance:
Sony Life (Non-consolidated)
FY11.1H

FY12.1H

New policy amount2,051.7

2,013.9(1.8%)(Billions of yen)

ChangeLapse and surrender amount

1,022.4

956.1(6.5%)

Lapse and surrender rate

2.95%

2.65%

(0.3pt)Policy amount in force

35,371.1

36,706.8

+3.8%

33.2

32.1

(3.4%)

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

8.1

8.1

(0.1%)

618.0

648.5

+4.9%

144.7

153.1

+5.7%

FY11.1H

FY12.1H

Gains from investment, net (General account)

44.5

50.7

+14.1%

Core profit

31.6

33.3

+5.1%

Negative spread

1.9

0.4

(78.9%)

12.3.3112.9.30

Changefrom 12.3.31

1,980.4%

2,149.6%+169.2pt(Billions of yen)

Solvency margin ratio

ChangeNotes:*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 thetotal 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.
*3 The solvency margin ratios are calculated according to the new standards which became
effective as of the end of fiscal 2011 (March 31, 2012).

<Reasons for changes>◆ Slightly decreased due to lower sales offamily income insurance which offset
higher sales of living benefit insurance,etc.
◆ Decreased due to the lowering lapse
and surrender rates mainly in term-life
insurance.
◆ Decreased due mainly to lower sales ofcancer hospitalized insurance, etc.
which offset higher sales of living
benefit insurance, etc.
◆ Increased due to an increase in interest
income and dividends.
◆ A change in core profit includes a
decline in negative spread (positive
factor) and the income on reversal ofreserve for outstanding claims related
to the Great East Japan Earthquake,
which was recorded in the same periodof the previous year (negative factor).

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

7

Here is an overview of Sony Life’s performance.

Sony Life Operating Performance (1)Annualized Premiums from New policies

Number and Amount of New Policies(Individual Life Insurance + Individual Annuities）(Individual Life Insurance + Individual Annuities)
New policy amount

Number of new policies(3.2%)

295

283

Annualized premiums from new policies

Of which, third-sector(Thousands of policies)

274(Trillions of yen)(Billions of yen)

300

40

30,0003.0

34.9

25,000
2.5

2.06

2.05

(1.8%)

2.01

33.2

30

32.1
(3.4%)

200

20,0002.0

20

15,0001.5

100

10,000
1.0

10
5,000
0.5

0

0
FY10.1H

FY11.1H

FY12.1H

Line item amounts are truncated below ¥10 billion; numbers of policies aretruncated below 1,000 policies; percentage change figures are rounded.

7.9

8.1

FY10.1H

FY11.1H(0.1%)

8.1

0
FY12.1H

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

8(Left-hand graph)
New policy amount for the total of individual life insurance and individual
annuities decreased 1.8% year on year, to ¥2,013.9 billion, due mainly to lower
sales of family income insurance which offset higher sales of living benefit
insurance, etc.
The number of new policies decreased 3.2% year on year, to 274 thousand
policies.
(Right-hand graph)
Annualized premiums from new policies decreased 3.4% year on year, to ¥32.1
billion, due mainly to lower sales of cancer hospitalized insurance, etc. which
offset higher sales of living benefit insurance, etc. Of which, the figure for thirdsector insurance products remained at the same level as during the same periodof the previous fiscal year, amounting to ¥8.1 billion.

Sony Life Operating Performance (2)Annualized Premiums from Insurance in Force

Number and Amount of Policies in Force(Individual Life Insurance + Individual Annuities)(Individual Life Insurance + Individual Annuities)
Policy amount in force(Trillions of yen)

50

+5.9%

5.49

Annualized premiums from insurance in force

Number of policies in force

5.67

+2.6%

Of which, third-sector(Billions of yen)

5.82

(Millions of policies) 700

6

+4.9%

618.0

648.5

635.4

600
40

35.3

36.7

+3.8%

36.0

500
4

+1.7%

30

+2.1%

5

400
3

300
20
2
10

1

0

0
11.9.30

12.3.3112.9.30

Line item amounts are truncated below ¥100 billion; numbers of policies aretruncated below 10,000 policies; percentage change figures are rounded.

200
+5.7%

100

144.7

148.9

11.9.30

12.3.31

+2.8%

153.1

0
12.9.30

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

9Sony Life’s policy amount in force which reflects new policy amount and lapse
and surrender amount, is shown here.
(Left-hand graph)
Policy amount in force for the total of individual life insurance and individual
annuities increased steadily, up 3.8% year on year, to ¥36.7 trillion due to an
addition of new policies and a decline in lapse and surrender rate.
The number of policies in force increased 5.9% year on year, to 5.82 million
policies.
(Right-hand graph)
Annualized premiums from insurance in force increased 4.9% year on year, to¥648.5 billion. Of this amount, the figure for third-sector products was up 5.7%
year on year, to ¥153.1 billion.

Sony Life Operating Performance (3)Lapse and Surrender Rate*

Solvency Margin Ratio(Individual Life Insurance + Individual Annuities)＜Annual and 1H＞
Lapse and surrender rate
(Annual)

Lapse and surrender rate
(1H)

(%)

(%)

3,000

10
2,500

2,149.6

8

1,980.4

6.41

2,000

5.93
6

1,720.0+169.2pt(Annual)
1,500

4

2

1,000

(0.30pt)

(1H)

3.11

2.95

2.65

500

0

0

FY10

FY11

FY12

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

0

11.3.3112.3.3112.9.30

Note: The solvency margin ratios are calculated according to the new standards
which became effective as of the end of fiscal year 2011 (March 31, 2012).

10(Left-hand graph)
The lapse and surrender rate for the six months ended September 30, 2012
decreased 0.30 percentage point year on year, to 2.65%, due to the lowering
lapse and surrender rates primarily for term-life insurance.
(Right-hand graph)
As of September 30, 2012 , Sony Life’s solvency margin ratio was 2,149.6 %, up
169.2 percentage points from March 31, 2012.

Sony Life Operating Performance (4)Income from Insurance Premiums

Ordinary Profit(Billions of yen)

428.8
(Billions of yen)

400

395.7
371.0

100
+8.4%

80

300
60

50.0
200
40

31.3

28.5
100

+9.8%

20

0

0
FY10.1H

FY11.1H

FY12.1H

FY10.1H

FY11.1H

FY12.1H

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

11

Sony Life Operating Performance (5)Negative SpreadCore Profit(Billions of yen)(Billions of yen)

FY10.1H

FY11.1H

FY12.1H

40

0

33.3

1

0.4

31.6

(78.9%)

2

1.9

30

26.8

+5.1%

3
4
5

4.1

20

6
7

10

8
9
0

10

FY10.1H

FY11.1H

FY12.1H

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

12(Left-hand graph)
Negative spread declined 78.9% year on year, to ¥0.4 billion driven by anincrease in interest income and dividends.
(Right-hand graph)Core profit increased 5.1% year on year, to ¥33.3 billion. A change in core profit
includes a decline in negative spread (positive factor) and the income on reversalof reserve for outstanding claims related to the Great East Japan Earthquake,
which was recorded in the same period of the previous year (negative factor).

Sony Life Operating Performance (6)Number of Lifeplanner Sales Employees(Number)
+48

4,500
4,066
[49]

4,026
[51]

4,023
[62]

3,996
[66]

4,116
[71]

4,071
[82]

4,098
[79]

4,000

(27)

3,500

0
3,000

11.3.3111.6.30

11.9.30

11.12.31

Note: Figures in [ ] show the numbers of Lifeplanner sales employees (rehired ona fixed-term contract basis after retirement) included in the overall numbers.

12.3.3112.6.30

12.9.30* “Lifeplanner” is a registered trademark of Sony Life Insurance Co., Ltd.

13

(Left-hand graph)
The number of Lifeplanner sales employees as of September 30, 2012, was
4,071, down 27 from June 30, 2012 and up 48 from September 30, 2011.
From the first quarter of this fiscal year, SFH began disclosing the number ofLifeplanner 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 requirements.

Sony Life Operating Performance (7)Breakdown of General Account Assets
12.3.31(Billions of yen)

12.9.30

Amount%3,975.7

83.2%

4,244.6

84.2%

Japanese stocks

45.0

0.9%

32.9

0.7%

Foreign securities

59.6

1.2%

60.6

1.2%

Foreign stocks

30.5

0.6%

29.9

0.6%

Monetary trusts

288.2

6.0%

295.5

5.9%

Policy loans

138.7

2.9%

140.8

2.8%

■ Investment in the monetary trusts is mainly into
Japanese government and corporate bonds.

Real estate

72.9

1.5%

72.1

1.4%

Cash and call loans

64.8

1.4%

58.5

1.2%

Others

102.6

2.1%

105.2

2.1%

■ The holding ratio on the real status, ofJapanesegovernment and corporate bonds including
those invested in monetary trusts in the generalaccount assets: As of Sep. 30, 2012: 90.1%

4,778.5

100.0%

5,040.4

100.0％

Japanese governmentand corporate bonds

Total

Amount<Asset management review>%

Japanese government and corporate bonds:
Continue to accumulate ultralong-termbonds in FY12

[Lengthened asset duration]
11. 3.31

18.5 year

12. 3.31

19.2 year

12. 9.30

19.3 year(As of March 31, 2012: 89.2%)

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

14

Here is a breakdown of Sony Life’s general account assets as of September 30,
2012, compared with March 31, 2012.
As Sony Life continued its investment in ultralong-term bonds, mainly Japanese
government and corporate bonds, their ratio rose to 90.1% as of September 30,
2012.
Going forward, Sony Life will mitigate interest rate risk by investing most newmoney acquired in ultralong-term bonds.

Highlights of Operating Performance:
Sony Assurance
Ordinary profit

Ordinary revenues(Billions of yen)

+6.1%

39.9

42.3

FY11.1H

0.4(37.3%)

FY12.1H(Billions of yen)

◆ Ordinary revenues increased but ordinary profit
decreased year on year.
◆ Ordinary revenues increased year on year,
owing to an increase in net premiums written, as
the number of insurance policies in force grewsteadily, primarily for automobile insurance.
◆ Ordinary profit decreased year on year, owing toa rise in the loss ratio due mainly to higher
insurance payments per claim for automobile
insurance.

FY12.1H

Change

39.9

42.3

+2.4

Underwriting income

39.4

41.8

+2.4

+6.1%

Investment income

0.4

0.4

+0.0

+11.2%

Ordinary revenues

+6.1%

39.1

41.9

+2.7

+6.9%

Underwriting expenses

29.7

31.7

+2.0

+6.9%

Investment expenses

0.0

0.0

+0.0

+175.8%Operating, general andadministrative expenses

9.4

10.0

+0.6

+7.3%

Ordinary profit

0.7

0.4

(0.2)

(37.3%)Net income

0.4

0.2

(0.2)

(47.1%)

12.3.3112.9.30

Underwriting reserves

67.3

70.0

+2.7

+4.0%

Total net assets

18.0

18.3

+0.3

+2.0%

122.2

+3.6

+3.1%

Ordinary expenses

0.7

FY11.1H(Billions of yen)

Total assets

118.6

Change from 12.3.31

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

15

Sony Assurance’s ordinary revenues increased 6.1% year on year, to ¥42.3
billion, due to increased net premiums written, as the number of insurance
policies in force grew in its mainstay automobile insurance.
Ordinary profit decreased 37.3% year on year, to ¥0.4 billion, owing to a rise in
the loss ratio due mainly to higher insurance payments per claim for automobile
insurance.
Net income decreased 47.1% year on year, to ¥0.2 billion.

Overview of Performance:
Sony Assurance<Reasons for changes>(Billions of yen)

FY11.1H

FY12.1H

ChangeDirect premiums written

39.0

41.3

+5.8%

Net premiums written

39.4

41.8

+6.1%

Net losses paid

21.1

23.1

+9.2%

Underwriting profit

0.3

0.0

(94.5%)Net loss ratio

60.1%

62.0%

+1.9ptNet expense ratio

25.5%

25.7%

+0.2ptCombined ratio

85.7%

87.7%

+2.0pt◆ Increased owing to an increase in thenumber of policies in force for automobile
insurance.
◆ Increased owing mainly to an increase in
the number of insurance payments due tothe higher number of policies in force for
automobile insurance.
◆ Increased owing mainly to increases ininsurance acquisition cost for new
policies and in the system-related
expenses.

Net loss ratio = (Net losses paid + Loss adjustment expenses) / Net premiums written
Net expense ratio = Expense related to underwriting / Net premiums written.

Number of policies in force
Solvency margin ratio

12.3.3112.9.30

Change from 12.3.31

1.49 million

1.53 million+0.03 million

557.8%

534.4%

Notes:*1 The number of policies in force is the total of automobile insurance andmedical and cancer insurance, which accounts for 99% of net premiums written.
*2 The solvency margin ratios are calculated according to the new standards whichbecame effective as of the end of fiscal year 2011 (March 31, 2012).

+2.6%(23.4pt)◆ Increased due to an increase in thenumber of policies in force for automobile
insurance.

Line item amounts are truncated below ¥ 100 million; numbers of policies aretruncated below 10,000 policies; percentage change figures are rounded.

16

Here is an overview of Sony Assurance’s performance.

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

Net Premiums Written

FY11.1H

FY12.1H

ChangeFY11.1H

FY12.1H

Fire

64

73

+13.6%

Marine1874+294.7%(Millions of yen)

Change(Millioms of yen)

Fire

66

111

+68.7%

Marine－－－Personal accident*

3,645

3,895

+6.9%

Personal accident*

3,745

4,009

+7.0%

Voluntary automobile

35,33837,293+5.5%

Voluntary automobile

35,20637,155+5.5%Compulsory
automobile liability

408

532

+30.6%

39,443

41,845+6.1%

Compulsory
automobile liability
Total

－

－

－

39,04941,300

+5.8%

Total

*SURE, medical and cancer insurance is included in personal accident.

Net Losses Paid
FY11.1H

FY12.1H

Change(98.8%)(Millions of yen)

Fire

40

0

Marine11142－

Personal accident*

867

941

+8.6%

Voluntary automobile

19,866

21,562+8.5%

Compulsory
automobile liability

410

489

+19.4%

21,19623,137

+9.2%

Total

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

17

This slide shows direct premiums written, net premiums written and net losses
paid by type of policy.

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

Ordinary Profit

Personal accident insurance
Voluntary automobile insurance
OthersNumber of policies in force(Billions of yen)

(Millions of policies)

+6.1%

40

0.3

1.6

1.44

1.33

50

(Billions of yen)

2

1.53
1.4

0.4

36.7

39.4
3.7

+6.1%

41.8
4.0

1.5

0.6
1.2
1

3.6
37.1

30

35.2

1
0.8

32.6

0.6

0.6

20

0.4

0.7
0.4

0.5

10

(37.3%)

0.2
00
FY10.1H

FY11.1H

FY12.1H

The number of policies in force is the total of automobile insurance and medical
and cancer insurance policies, which account for 99% of net premiums written.
More than 99% of personal accident insurance is medical and cancer insurance.

0
FY10.1H

FY11.1H

FY12.1H

Line item amounts are truncated below ¥100 million; numbers of policies aretruncated below 10,000 policies; percentage change figures are rounded.

18(Left-hand graph)
Number of policies in force for the total of automobile insurance and medical andcancer insurance increased steadily, rising 6.1% year on year, to 1.53 million
policies.
Net premiums written posted a 6.1% year-on-year increase, to ¥41.8 billion.
(Right-hand graph)
Ordinary profit decreased year on year, as described in the previous pages.

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

100

95.2

98.1

Combined Ratio(Net Loss Ratio + Net Expense Ratio)<Reference>

Net expense ratio

Net loss ratio+2.9pt94.2

99.0

Net expense ratio

(%)
100

96.1

85.6
80

89.0

+2.0pt

83.0

87.7

85.7

80

70.6
72.4

60

+2.7pt+1.9pt

73.3

69.5

69.7

60
60.0

40

60.1

63.3

62.0

58.2

40

20
25.5

25.7

20

+0.2pt

24.7

25.5

25.7

FY10.1H

FY11.1H

FY12.1H025.5+0.2pt

25.7
24.7

25.5

25.7

FY10.1H

FY11.1H

FY12.1H

0

FY10

FY11

Notes:
Earned/Incurred loss ratio = (Net losses paid + Provision for reserve for outstanding losses +Loss adjustment expenses ) / Earned premiums.
[Earthquake insurance and compulsory automobile liability insurance are excluded from theabove calculation. ]

FY10

FY11

Notes:Net loss ratio = (Net losses paid + Loss adjustment expenses) / Net premiums written
Net expense ratio = Expenses related to underwriting / Net premiums written.

19(Left-hand graph)
To help you understand the actual condition of Sony Assurance, which is in a
growth phase, we show the earned/incurred loss ratio, which is the accrual-basis
loss ratio.
For the six months ended September 30, 2012, the E.I. loss ratio increased 2.7
percentage points year on year, to 73.3%, due mainly to higher insurance
payments per claim for automobile insurance.
The net expense ratio increased 0.2 percentage point, to 25.7%, owing mainly toincreases in insurance acquisition cost for new policies and in the system-related
expenses.
Consequently, the sum of the E.I. loss ratio and the net expense ratio increased
2.9 percentage points year on year, to 99.0%.
(Right-hand graph)
The net loss ratio rose 1.9 percentage points compared with the same period of
the previous fiscal year, to 62.0%, due to the same reason as the E.I. loss ratio
did.
The combined ratio (the sum of the net loss ratio and the net expense ratio) rose
2.0 percentage points year on year, to 87.7%.

Sony Assurance Operating Performance (3)Solvency Margin Ratio
(%)
1,200

800

631.0%

557.8%(23.4pt)

534.4%

400

011.3.3112.3.3112.9.30

Note: The solvency margin ratios are calculated according to the new standards which became effective as of the end of
fiscal year 2011 (March 31, 2012).

20

As of September 30, 2012, Sony Assurance’s solvency margin ratio was 534.4%,
down 23.4 percentage points from March 31, 2012. Sony Assurance has
maintained financial soundness.

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

15.9<Consolidated>

16.8

FY11.1H

FY12.1H

Consolidated ordinary revenues

15.9

16.8

+0.8

+5.1%

Consolidated ordinary profit

2.1

2.1

(0.0)

(0.8%)

Consolidated net income

0.9

1.8

+0.9

+105.9%(Billions of yen)

+5.1%

Change<Non-consolidated>
FY11.1H

FY12.1H

Ordinary revenues

15.1

15.2

+0.0

+0.2%

Gross operating profit

9.3

8.9

(0.3)

(4.2%)(Billions of yen)

2.1 (0.8%)

FY11.1H

2.1

FY12.1H(Billions of yen)<Consolidated>◆ Consolidated ordinary revenues increased year on year due toan increase in net fees and commissions resulting from SonyBank’s acquisition of SmartLink Network, Inc. which has
become its consolidated subsidiary. Consolidated ordinary
profit remained at the same levels. Consolidated net income
increased due to recording deferred tax assets on the sale ofSony Bank Securities Inc. on August 1, 2012.
<Non-consolidated>◆Gross operating profit decreased year on year due to adecrease in profit related to foreign currency transactions which
offset higher interest income on loans due to a growing balanceof mortgage loans.
◆ Net operating profit decreased owing to higher general andadministrative expenses led primarily by personal
reinforcement for business expansion.
◆ Net income (loss) decreased owing to recording extraordinary
losses (¥2.8 billion) on the sale of Sony Bank Securities Inc.

ChangeNet interest income

7.8

8.3

+0.5

+6.6%

Net fees and commissions

0.08

0.01

(0.07)(87.2%)

1.4

0.5

(0.8)

(59.5%)

General and administrative
expenses

Net other operating income

6.8

6.9

+0.1

+2.1%

Net operating profit

2.3

2.0

(0.2)

(12.4%)

Ordinary profit

2.2

1.9

(0.2)

(11.6%)Net income (loss)

1.2

(0.5)

(1.8)

―

12.3.3112.9.30

62.7

62.4

(Billions of yen)

Total net assets
Net unrealized gains on othersecurities (net of taxes)

Total assets

Change from
12.3.31(0.3)(0.6%)

1.7

2.5

+0.8

+45.3%

1,890.5

1,951.5

+61.0

+3.2%

Line item amounts are truncated below ¥100 million except for net fees and commissions;percentage change figures are rounded.

21

Sony Bank’s consolidated ordinary revenues increased year on year due to anincrease in net fees and commissions resulting from Sony Bank’s July 2011acquisition of SmartLink Network, Inc., which has become its consolidated
subsidiary.
Consolidated ordinary profit remained at the same levels as during the same
period of the previous fiscal year.
Consolidated net income increased due to recording deferred tax assets on thesale of Sony Bank Securities Inc. on August 1, 2012.
On a non-consolidated basis, Sony Bank’s gross operating profit decreased 4.2%
from a year earlier, to ¥8.9 billion, because higher interest income on loans due
to a growing balance of mortgage loans were offset by a decrease in profit
related to foreign currency transactions.
Net operating profit decreased 12.4% year on year, to ¥2.0 billion, as general andadministrative expenses increased due mainly to the personnel reinforcement forbusiness expansion.
Sony Bank’s non-consolidated net income (loss) decreased owing to recording
extraordinary losses of ¥2.8 billion on the sale of the aforementioned subsidiary,Sony Bank Securities Inc., resulting in a loss of ¥0.5 billion.

Overview of Performance:
Sony Bank (Non-consolidated) (1)11.9.30

12.3.3112.9.30

Change from
12.3.31(Billions of yen)

Customer assets

1,743.7

1,864.3

1,921.5

+57.1

+3.1%

Deposits

1,645.2

1,762.2

1,819.3

+57.1

+3.2%

Yen

1,284.3

1,390.5

1,456.0

+65.5

+4.7%

360.8

371.7

363.3

(8.3)

(2.3%)

Investment trusts

98.5

102.0

102.1

+0.0

+0.1%

Loans outstanding

776.1

835.5

898.6

+63.0

+7.5%

Mortgage loans

697.8

749.6

802.9

+53.3

+7.1%

Others

78.2

85.9

95.6*1+9.7+11.3%

88

89

91

+1

+1.3%

Capital adequacy ratio(domestic criteria) *2

10.52%

11.58%

11.18%(0.40pt)

Tier 1 ratio

10.07%

9.63%

9.30%

(0.33pt)

Foreign currency

Number of accounts(10 thousands)<Reasons for changes>◆ Yen deposit increased due to the positiveeffect of special campaigns associatedwith the 2012 summer bonus season.

◆ Foreign currency deposit slightly
decreased reflecting the yen’s
appreciation that had the negative impact
on the foreign exchange conversion(negative impact of ¥20.9 billions).

◆ Loan balance increased due to a growing
balance of mortgage loans, in addition toa higher corporate loan balance centeredon syndicated loans.

*1 Loans in others include corporate loans of ¥88.7 billion.
*2 Please refer to the graph of the non-consolidated capital adequacy ratio (domestic criteria) on P25.

Line item amounts are truncated below ¥100 million; numbers of accounts are truncatedbelow 10,000 accounts; percentage change figures are rounded.

22

Here is an overview of Sony Bank’s performance.

Overview of Performance:
Sony Bank (Non-consolidated) (2)<Reference> On Managerial Accounting Basis
FY11.1H

FY12.1H

9.3

8.9

Net interest income*1 ①

8.3

8.5

+0.2

+2.5%

Net fees and commissions*2 ②

0.6

0.2

(0.3)

(55.0%)(Billions of yen)

Gross operating profit<Reference> Interest Spread(Managerial Accounting Basis)

Change(0.3)

Yield on investment
Interest spread(4.2%)Net other operating income*3

0.3

0.1

(0.2)

(69.2%)

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

8.9

8.8

(0.1)

(1.4%)

Operating expenses and otherexpenses
③

6.9

6.8

(0.1)

(1.4%)Net operating profit (core profit)＝(A)－③

1.9

1.9

(0.0)

(1.2%)

Yield on financing

(%)

2.00

1.50

1.36
1.28

1.00

0.94

*1: Net interest income: Includes profits and losses associated with fund investment recordedin 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.

0.50

0.42

0.38

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

0.00
FY11.1H

FY12.1H(0.04pt)

0.90●Managerial accounting basis
The following adjustments are made to the figures on a financial accounting basis to accountfor profits and losses more appropriately.

Note: Interest spread=(Yield on investment)-(Yield on financing)Line item amounts are truncated below ¥100 million; percentage change figures are rounded.
The calculation method on a managerial accounting basis was partly changed from this fiscal year. Accordingly, the figures for FY11.1H were retroactively calculated.

23

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 amounted to ¥8.5 billion,¥0.2 billion up year on year, due to business expansion, mainly in its mortgage
loans, which offset a decrease in profit related to foreign currency transactions.
Net fees and commissions amounted to ¥0.3 billion, ¥0.2 billion down year on
year, owing mainly to a decrease in gains on customer dealings in foreign
currency transactions, influenced by the movements of foreign exchange market.
Consequently, both gross operating profit and net operating profit on a core profit
basis remained at the same levels as during the same period of the previous
fiscal year, amounted to ¥8.8 billion and ¥1.9 billion respectively.
(Right-hand graph)
The yield on investment for FY12.1H was 1.28%.
The yield on financing was 0.38%.
Consequently, the interest spread was 0.90%.

Operating Performance:
Sony Bank (Non-consolidated) (1)
Deposits
Yen deposits

Loans

Foreign currency deposits

Mortgage loans

Others898.6(Billions of yen)(Billions of yen)

835.5
95.6*
800

2,000

1,649.1

1,762.2

+57.1

722.4

1,819.3

363.3

+63.0

*Corporateloans of¥88.7billion.

600

1,500

400

1,000

802.9
1,456.0
200

500

0

0

11.3.3112.3.3112.9.30

11.3.3112.3.3112.9.30

Line item amounts are truncated below ¥100 million.

24(Left-hand graph)
As of September 30, 2012, deposits (the sum of Japanese yen and foreign
currency deposits) amounted to ¥1,819.3 billion, up ¥57.1 billion from March 31,
2012.
Of which foreign currency deposit decreased to ¥363.3 billion, down ¥8.3 billion
from March 31, 2012, reflecting the yen’s appreciation that had the negative
impact on the foreign exchange conversion.
(Right-hand graph)
Loans expanded to ¥898.6 billion, up ¥63.0 billion, from March 31, 2012, due to a
growing balance of mortgage loans, in addition to a higher corporate loanbalance centered on syndicated loans.

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

Balance of Securities by Credit RatingsAAA
BBB

Capital adequacy ratio

AA
A
OthersTier1 ratio

(%)

15

(Billions of yen)

1,200

11.58
1,000

940.1

912.9

(0.40pt)

10.84

918.0

11.18

+5.0

10

10.41

800

9.30
9.63
(0.33pt)

600

5
400

200

0
11.3.3112.3.3112.9.30011.3.3112.3.3112.9.30* Calculated based on the standard FSA Notification No. 19 (2006), which establishes
standards based on Article 14-2 of the banking Act of Japan for determining the capital
adequacy of a bank in light of the assets held by the bank.
Line item amounts are truncated below ¥100 million.

25(Left-hand graph)
As of September 30, 2012, the balance of securities increased ¥5.0 billion, to¥918.0 billion from March 31, 2012.
Sony Bank continuously invests in highly rated bonds.
(Right-hand graph)
As of September 30, 2012, Sony Bank’s non-consolidated capital adequacy ratio(domestic criteria) was 11.18%, down 0.40 percentage point from March 31,
2012.
Sony Bank will continue to maintain a sound financial position.

Consolidated Financial Forecast
for the Year Ending March 31, 201326

Consolidated Financial Forecast
for the Year Ending March 31, 2013
■SFH’s forecast of consolidated financial results for FY2012 is unchanged from the forecast announced on May 10, 2012.
(Billions of yen)

Consolidated ordinary revenues

FY11

FY12

ActualForecast

Change1,078.0

1,115.0

Life insurance business

967.5

994.5

+2.8%

Non-life insurance business

80.0
32.5

85.0
34.5

+8.4% → +6.1%+6.0%

Banking business86.8 →+3.4%

Consolidated ordinary profit

74.6

67.0

(10.2%)

Life insurance business

68.1

61.5

(9.8%)

Non-life insurance business

2.8
3.4

2.6
3.6

(9.1%)
+3.9%

32.8

37.0

+12.8%

Banking business

Consolidated net income■Life insurance business
The forecast of ordinary revenues and ordinary profit remains unchanged because the actual results for the first half of the fiscal year were close to
the amounts we had expected.
■Non-life insurance business
SFH revised downward its forecast of ordinary revenues. This is because the net premiums written during the first half of the fiscal year were less than
we had expected at the beginning of the fiscal year, and we assume this condition will continue in the second half of the fiscal year, due to intensifiedcompetition in Japan’s automobile insurance industry. On the other hand, the forecast of ordinary profit remains unchanged because we expect the
cut back on expenses and a reversal of catastrophe reserve will offset an impact from the aforementioned decrease in ordinary revenues and theloss ratio which is expected to stay at a high level.
■Banking business
The forecast of ordinary revenues is unchanged. This is because actual performance for the first half of the fiscal year was in line with forecasts madeat the beginning of the fiscal year, and the balance of loans, especially mortgages, is expected to increase steadily in the second half of the fiscal year.
The forecast of ordinary profit is unchanged, as we anticipate a steady increase in interest income on loans due to a rise in the balance of mortgage
loans, which should offset an assumed decrease in profit related to foreign currency transactions.
Line item amounts are truncated below ¥100 million; percentage figures are rounded.

27

SFH’s forecast of consolidated financial results for the fiscal year ending March
31, 2013 (April 1, 2012, through March 31, 2013), is unchanged from the forecast
announced on May 10, 2012, considering the progress achieved as planned
during the first half of the FY2012.

Dividend Forecast for theYear Ending March 31, 201328

Dividend Forecast for the YearEnding March 31, 2013
We have decided on a year-end per-share dividend of ¥25 for the year ending
March 31, 2013, up ¥5 from the previous year’s ¥20.
■ Reasons for Dividend Increase
Our dividend policy is to basically maintain stable dividends. The policy also aims for steady increases in
dividends in line with earnings growth over the medium to long terms.
We have decided to increase the year-end dividend for the year ending March 31, 2013, after looking
during the first half under review and taking into account such overall factors as the management
environment in which the Group operates.
(%)(Billions of yen)

Increased
dividend29

We have not disclosed our dividend forecast for the year ending March 31, 2013,
because of uncertainty in the operating environment. However, we decided toincrease the year-end dividend after looking at performance during the first half
under review and taking into account such overall factors as the management
environment in which the Group operates.
We have decided on a year-end per-share dividend of ¥25, up ¥5 from theprevious year’s ¥20.
Our dividend policy is to steadily increase dividends in line with earnings growthover the medium to long term, targeting a medium-term dividend payout ratio of
30% to 40% of Group net income.
As shown in the above chart, we have gradually increased the annual dividend
amount. We will strive to return profits to shareholders in a more proactive
manner, while enhancing Group operating performance.

Sony Life’s MCEV
andRisk Amount Based on Economic Valueas of September 30, 201230

Sony Life’s MCEV and Risk Amount Based on
Economic Value as of September 30, 2012
(Billions of yen)

12.3.31(JGB yield)

12.9.30(JGB yield)

Change from
12.3.31

1,041.5

1,068.3+26.8

Adjusted net worth

409.2

467.2

+58.0

Value of existing business

632.4

601.2

(31.2)MCEV(1) Calculated MCEV for policies in force as of September 30, 2012 by using updated lapse and surrender rate and economic assumptions.
(2) Adopted simplified method for a part of MCEV calculations as of September 30, 2012.

(Reasons for change)
 MCEV increased due to the addition of new policies while an increase in prices of ultralong-term JGBs held from an ALM
perspective offset the negative effect of a decrease in the value of existing business led by a decline in ultralong-term
interest rates.
 New business value (new business margin) for the first half of this fiscal year was ¥30.5 billion (6.1%) while that for theprevious fiscal year amounted to ¥65.2 billion (6.4%).
Note: New business margin = (Value of new business) / (present value of premium income)* Please keep in mind that the validity of these calculations has not been verified by outside specialists.
(Billions of yen)

The risk amount based on economic
value

12.3.31551.5

12.9.30
593.2

Change from 12.3.31+41.7

Note: Measurement of risk based on economic value takes one-year VaR to be 99.5% and is measured using an internal model that refers to the
EU Solvency II (QIS5) standard model.

31

Sony Life’s MCEV as of September 30, 2012 amounted to ¥1,068.3 billion, up¥26.8 billion from March 31, 2012.
MCEV has steadily increased for the first half of this fiscal year, althoughultralong-term interest rates declined. This is a result of the addition of newpolicies and Sony Life’s financial portfolio which tolerate the interest rate
movements through enhancing asset liability management.
New business value (new business margin) for the first half of this fiscal year was¥30.5 billion (6.1%) while that for the previous fiscal year amounted to ¥65.2
billion (6.4%).
Lastly, the risk amount based on economic value as of September 30, 2012 was¥593.2 billion.

Appendix

32

Appendix

Recent Topics 1
AEGON SONY LIFE INSURANCE Sales Update
Launch of sales：December 1, 2009
Common stock：¥20 billion (including capital surplus of ¥10 billion)
Equity ownership：Sony Life insurance Co., Ltd. 50%, AEGON・international B.V. 50%
Marketing products: Individual Variable Annuities (2 types, 4 products*)
Sales Channels: Lifeplanner sales employees and partner Banks (7*) As of November14, 2012
Financial Highlights for FY12.1H:Number of new policies: 2,578, New policy amount: ¥18.3 billion
Number of policies in force: 6,209, Policy amount in force: ¥47.5 billion (As of September 30, 2012)

Sony Bank’s Mortgage Loans through Sony Life
■Sony Life accounts for 23% of the balance of mortgage loans
as of September 30, 2012
Sony Life accounts for 25% of the amount of
new mortgage loans for FY12.1H*Sony Life started handling banking agency business in January 2008.

Sony Assurance’s Auto Insurance Sold by Sony Life
Sony Life accounts for approx. 5% of new automobile policies
for FY12.1H* Sony Life started handling automobile insurance in May 2001.
““Lifeplanner” is a registered trademark of Sony Life Insurance Co., Ltd.

33

(Recent Topics 1)

Recent Topics 2<Highlights for FY12.2Q>
2012-7-23

Sony Assurance launched renewed official website and smartphone site

2012-7-27

Sony Assurance began providing smartphone designed to assist drivers to be conscious of the importance ofsafe driving, to solve problems when troubled and to get estimates and apply for automobile insurance via smartphone.
Sony Assurance is the first Japanese automobile insurance provider to offer these smartphone applications and services.

2012-8-01

AEGON Sony Life Insurance began offering a new individual variable annuity product, “With Family” through Sony Life‘sLifeplanner sales employees

2012-8-01

Sony Bank transferred all Sony Bank securities’ shares to Monex Group with the aim of enhancing financial products
intermediary services through strengthening business alliance with Monex Group

2012-9-24

Sony Assurance launched renewed customer communication website

2012-10-01

Sony Assurance made a commitment of an initial response by an appointed staff member within an hour after receiving
an accident report for automobile insurance policyholders

2012-10-19

Sony Life launched the second phase of its “Co-Creation Project”

2012-10-22

Sony Bank began offering Chinese Yuan, South African Rand and Swedish Krona for foreign currency deposits

2012-11-01

Sony Assurance revised automobile insurance including a discount on paperless insurance policies and establishing a
new rider, commencing on or after November 1, 201234

(Recent Topics 2)

Sony Life: Fair Value Information on Securities(General Account Assets)
Fair Value Information on Securities
zFair value information on securities with market value (except trading-purpose securities)(Billions of yen)zValuation gains (losses) on trading-purpose securities(Billions of yen)

Notes: 1) Line item amounts are truncated below ¥100 million. 2) Amounts above include those categorized as “monetary trusts.”

35(Sony Life: Fair Value Information on Securities)

Sony Life’s Breakdown of Net Assets
Net Assets on BS, Real Net Assets and Solvency Margin(Billions of yen)
②Real
Net Assets①Net Assets (B/S)
12.3.3112.9.30③Solvency
MarginNotes

12.3.3112.9.30

12.3.3112.9.30

223.1

240.9

Total shareholders’ equity

232.2

241.5

232.2

241.5

Net unrealized gains on other securities, net of taxes

34.0

45.7

34.0

45.7

－

－

－

－

－

－

54.6

69.8

(1.3)

(1.3)

(1.3)

(1.3)

－

－

Net unrealized gains (losses) on available-for-sale securities
Land revaluation, net of taxes③After estimated distributed
income deducted③Before tax x 90%

Reserve for price fluctuations

－

－

25.3

28.6

25.3

28.6

Contingency reserve

－

－

55.3

57.3

55.3

57.3

General reserve for possible loan losses

－

－

－

－

0.0

0.0

Net unrealized gains on real estate

－

－

0.6

0.6

(0.1)

(0.1)

③Before tax (Before revaluation) x
85% (if losses x 100%)

Excess amount of policy reserves based on Zillmer method

－

－

350.4

361.3

304.4

328.0

③After deducting exclusion amount

Unallotted portion of reserve for policyholders' dividends

－

－

0.7

1.1

0.7

1.1

Deferred tax assets

－

－

－

－

58.7

66.7

Unrealized gains (losses) on held-to-maturity bonds

－

－

155.8

205.4

－

－

②Before tax (after revaluation)

Deferred tax liabilities for available-for-sale securities
Total

－

－

18.3

23.6

－

－

264.8

285.8

871.4

963.9

722.1

792.4

（Note: Real net assets excluding net unrealized gains (losses) on held-to-maturity securities and on policy reserve matching bonds,
are ¥715.5 billion as of March 31, 2012, and ¥758.5billion as of September 30, 2012.

(Sony Life’s Breakdown of Net Assets)②Before tax

Amounts are truncated below ¥100 million.

36

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37(Contact)