Presentation Material

Consolidated Financial Results for theYear Ended March 31, 2014
andSony Life’sLife s PreliminaryMarket Consistent Embedded Valueas of March 31,, 2014

Sony Financial Holdings Inc.
M 20
May20, 2014
Sony Financial Holdings Inc. All Rights Reserved

Content
 Consolidated Operating Results for the Year Ended March 31, 2014

P. 3

 Consolidated
C
Financial Forecast ffor the Year Ending March 31
31, 201
2015

P. 29

 Dividend Forecast

P. 31

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

Value as of March 31, 2014
 Appendix

P. 33
P 36
P.

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
possibility ” that describe future operating activities
activities, business performance
performance, events or conditions.
conditions Forward-looking statements
statements, whether spoken or
written, are based on judgments made by the management of the Sony Financial 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 theforecasts expressed or implied in forward-looking statements. Consequently, investors are cautioned not to place undue reliance on forwardlooking statements. The Sony Financial 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 orsolicitation 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.

Sony Financial Holdings Inc. All Rights Reserved2Consolidated Operating Results for
the Year Ended March 31, 2014

Sony Financial Holdings Inc. All Rights Reserved

3

Highlights of Consolidated Operating Performancefor the Year Ended March 31, 2014 (1)Consolidated ordinary revenuesLife
insurancebusiness

1 259 01,259.0

+4 8%
+4.8%

Non-life
insurancebusiness

1,319.7

Bankingbusiness

Intersegment
adjustments*

76.1
79.2

(3.9%)FY2013

1,142.3

1,196.6

+54.2

+4.8%

Ordinary profit

72.7

67.2

(5.5)

(7.6%)

Ordinary revenues

84.7

89.8

+5.1

+6.1%

Ordinary profit

23
2.3

30
3.0

+0 6
+0.6

+26 7%+26.7%

Ordinary revenues

34.3

35.7

+1.4

+4.3%

Ordinary profit

3.9

5.6

+1.6

+42.6%

(2 3)
(2.3)

(2 5)
(2.5)

(0 1)
(0.1)

－

0.1

0.2

+0.0

+57.8%

1,259.0

1,319.7

+60.7

+4.8%

Ordinary profit

79.2

76.1

(3.1)

(3.9%)Net income

45.0

40.5

(4.5)

(10.1%)

13 3 3113.3.31

14 3 3114.3.31

Total assets

8,096.1

8,841.3+745.2+9.2%

Net assets

435.4

467.0

+31.6

+7.3%

Ordinary revenues

O diOrdinary
revenues
Ordinary profit
Ordinary revenues

Consolidated

FY2012FY2012(Billions of yen)

Consolidated ordinary profit(Billi(Billions
off yen))

FY2013(Billions of yen)

Consolidated

ChangeChange from
13.3.31*Ordinary profit in “Intersegment adjustments” is mainly from SFH.
*Comprehensive income: FY2012: ¥96.2 billion, FY2013: ¥44.7billion
Line item amounts are truncated below ¥100 million; percentage change figures are rounded.

Sony Financial Holdings Inc. All Rights Reserved

4Highlights of Consolidated Operating Performancefor the Year Ended March 31, 2014 (2) Life Insurance Business: Ordinary revenues increased year on year, due mainly to a rise in income frominsurance premiums associated with steady growth in policy amount in force, and higher interest income
and dividends on general account assets. Ordinary profit decreased year on year due to an increase inprovisioni i off policy
li reserves resulting
lti ffrom theth revisioni i off didiscountt ratet usedd ffor calculatingl l ti policylireserves and the provision of policy reserves for minimum guarantees for variable life insurance, despite
the positive effect of an increase in the positive spread.
 Non-life Insurance Business: Ordinary
y revenues expandedpyyear on yyear, owing
g to an increase in net

premiums written primarily for mainstay automobile insurance. Ordinary profit grew year on year due to a
decline in the loss ratio mainly led by the revision of premium rates for automobile insurance and a lower
car accident ratio owing to the introduction of a new bonus-malus system (non-fleet driver rating system),as well as the rise in ordinary
y revenues.
 Banking Business: Ordinary revenues increased year on year, due to higher gains on foreign exchangetransactions stemming from active foreign currency trading by customers and a rise in interest income onloans led by the growing balance of mortgage loans. Ordinary profit expanded year on year, due mainly
to lower interest expenses and an improvement in net gains on bond-dealing
bond dealing transactions,transactions in addition to
the increase in ordinary revenues.
 Consolidated ordinary revenues rose 4.8% compared with the previous fiscal year, to ¥1,319.7 billion,

owing to increases in ordinary revenues from all businesses: life insurance, non-life insurance andb kibanking.
C
Consolidated
lid t d ordinarydiprofitfit ddecreased
d3
3.9%9% year on year, tto ¥76¥76.1
1 billibillion. B
By bbusinessisegment, ordinary profit from the life insurance business fell, whereas ordinary profit from the non-life
insurance and banking businesses rose year on year. Consolidated net income declined 10.1% year on
year, to ¥40.5 billion.

Line item amounts are truncated below ¥100 million; percentage change figures are roundedSony Financial Holdings Inc. All Rights Reserved

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

Ordinary profit（億円）

1,142.2
+4.8%

69.2
74.6

FY2012FY2013 (Billions of yen)

◆ Ordinary revenues increased while ordinary profit
decreased year on year.
◆ Income from insurance premiums increased due to asteady growth in policy amount in force.
◆ Investment income increased due mainly to higher
interest income and dividends on general account assets.
◆ Ordinary profit decreased year on year due to anincrease in provision of policy reserves resulting from therevision of discount rate used for calculating policy
reserves and the provision of policy reserves forminimum guarantees for variable life insurance, despite
the positive impact from an increase in the positive
spreadspread.

Change1,197.1

+54.8

+4.8%

Income from insurance premiums

925.8

960.9

+35.1

+3.8%

Investment income

199.8

212.3

+12.4

+6.3%

Interest income and dividends

108.5

122.1

+13.6

+12.5%

Income from monetary trusts, net

5.2

5.3

+0.0

+1.0%

Gains on sale of securities

2.4

0.7

(1.6)

(68.0%)

Gains on separate accounts,
accounts net

83 6
83.6

82 6
82.6

(0 9)
(0.9)

(1 1%)(1.1%)

1,067.6

1,127.9

+60.2

+5.6%

Insurance claims and other payments

293.9

327.2

+33.3

+11.3%

Provision for policy reserves and others

630.5

650.7

+20.2

+3.2%

Investment expenses

11.6

8.5

(3.1)

(27.2%)

Losses on sale of securities

1.5

0.5

(1.0)

(66.7%)

Losses on separate accounts, net

0.3

－

(0.3)

(100.0%)

109.0

113.8

+4.8

+4.4%

Ordinary profit

74.6

69.2

(5.4)

(7.3%)Net income

42.4

37.0

(5.3)

(12.7%)

Ordinary expenses(7.3%)FY2013

1,142.2

Ordinary revenues

1,197.1

FY2012

Operating expenses(Billions of yen)

13.3.3114.3.31

Change from 13.3.31

Securities

5 211 55,211.5

5,954.7

+743
743.1
1

+14
14.3%
3%

Policy reserves

5,472.9

6,123.6+650.7+11.9%

Total net assets

342.3

369.2

+26.8

+7.9%

80.2

83.4

+3.1

+3.9%

5 952 7
5,952.7

6 624 96,624.9+672.1672 1+11.3%
11 3%

550.6

640.5

+89.9

+16.3%Net unrealized gains on other securities
T t l assets
Totalt
Separate account assets

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

Sony Financial Holdings Inc. All Rights Reserved

6Overview of Operating Performance:
Sony Life (Non-consolidated)
FY2012FY2013

ChangeNew policy amount

4,454.6

3,889.3(12.7%)

Lapse and surrender amount

1,911.9

1,739.4(9.0%)

Lapse and surrender rate

5.31%

4.61%

(0.70pt)

Policy amount in force

37,779.0

39,095.0+3.5%Annualized premiums from new policies

73.2

63.9

(12.7%)Of which,hi h third-sectorthi dt products
d t

18 3
18.3

13 4
13.4

(26 7%)(26.7%)

669.9

696.9

+4.0%

158.6

167.0

+5.3%

(Billions of yen)

FY2012FY2013

ChangeGains from investment, net (General account)

104.5

121.1

+15.9%

Core profit

80.0

72.3

(9.6%)

Positive spread

21
2.1

84
8.4

+300 0%+300.0%13.3.3114.3.31

Changefrom
13.3.312,281.8%

2,358.7%+76.9pt(Billions of yen)

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

Non-consolidated solvency margin ratio

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 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.

<Reasons for changes>◆ Decreased due to lower sales of family
income insurance and interest ratesensitive whole life insurance despite
higher sales of U
U.S.
S dollar denominatedinsurance and lump-sum payment
endowment insurance.

◆ Decreased mainly in term-life insurance.
◆ Decreased due to lower sales of interest
rate-sensitive whole life insurance andeducational endowment insurance despite
higher sales U.S. dollar denominatedinsurance and of lump-sum
lump sum payment
endowment insurance. Of which, in thirdsector products, sale of lump-sum
payment whole life nursing-care insurance
decreased.
◆ Decreased due to an increase in provisionof policy reserves resulting from therevision of discount rate used for
calculating policy reserves and theprovision of policy reserves for minimum
guarantees for variable life insurance,
despite the positive impact from anincrease in the positive spread.

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

Sony Financial Holdings Inc. All Rights Reserved

7

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

591

Annualized premiums from new policies

Number of new policies(Thousands of policies)

620(Billions of yen)

533

(Trillions of yen)

600

4.20

500

4.45

3 88
3.88

4.0

80

70.8

(14.0%)

5.0

Of which, third-sector

73.2
63.9

70

(12 7%)(12.7%)

60
400
50(12.7%)

3.0

300

200

2.0

40
30

(26.7%)

20
100

10
1.0

10

0

0

FY2011FY2012FY201317.1

18.3

FY2011FY201213.4

0FY2013

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

Sony Financial Holdings Inc. All Rights Reserved

8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)

Policy amount in force

Annualized premiums from insurance in force

Number of policies in force

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

50

40

5 67
5.67
36.0

6.04

+4.8%

700
6
5

+3.5
35%

4

30

0
2012.3.31

2013.3.31

2014.3.31

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

669.9
+4.0%

500
400

3

300

2

200

1

100

0

0

20

10

635 4
635.4

600

39.0

37.7

696.9

(Billions of yen)

6.33

148.9

2012.3.31

158 6
158.6

+5 3%
+5.3%

2013.3.31

167 0
167.0

2014.3.31

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

Sony Financial Holdings Inc. All Rights Reserved

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

(%)

8

6

5.93

5.31

(0.70pt)

4.61

4

2

0
FY2011FY2012FY2013*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.

Sony Financial Holdings Inc. All Rights Reserved

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

1 000
1,000

960.9

925.8

Interest Income and Dividends(Billions of yen)

120

816.1

+3.8%

800

100

122.1
108.5

97.9

+12.5%

80

600

60
400
40
200

20
0

0
FY2011FY2012FY2013

FY2011FY2012FY2013

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

Sony Financial Holdings Inc. All Rights Reserved

11

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

Ordinary Profit((Billions of yen)y ) *Included ¥3.9 billion of a reversal of reserve for outstanding(Billions of yen)claims related to the Great East Japan Earthquake.

80

80.0
*

80

72.3

71.6

74.6

69.2

69.4

(9.6%)(7.3%)

60

60

40

40

20

20

0

0
FY2011FY2012FY2011FY2013(Reference) Impact on core profit(Billions of yen)

FY2011 FY2012 FY2013
(1.5)
2.1
8.4
(7.5)
－
－

Positive (Negative) spread
Effects by the revision of policy reserve discount rate
Reversal of policy reserves for minimum guarantees
for variable life insurance in the general account assets*The minus amount in positive spread indicates negative spread.

(2.8)

1.3

(4.2)

FY2012(Reference) Main differences from Core Profit
Capital gains (losses)
Provision of contingency reserve

FY2011
1.7(3.7)

FY2013(Billions of yen)

FY2012(0.9)(4.2)

FY20131.1(4.1)*“Provision of policy reserves for minimum guarantees for variable life insurance inthe general account assets” and “Provision of contingency reserve” are describedas negative amount.
Line item amounts are truncated below ¥100 million; percentage change figures are rounded.

Sony Financial Holdings Inc. All Rights Reserved

12

Operating Performance :Sony Life (Non-consolidated) (6)
Number of Lifeplanner Sales Employees+83(Number)

4,500
4,121
[76]

4,105
[86]

4,085
[96]

4,046
[102]

4,133
[[105]]

4,127[[109]]

4,000

4,125
[[110]]

4,216
[138]

4,092
[121]
+124

3,500

3,000
, 0
12.3.3112.6.30

12.9.30 12.12.31 13.3.31

13.6.30

13.9.30 13.12.31 14.3.31

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.
* “Lifeplanner” is a registered trademark of Sony Life.

Sony Financial Holdings Inc. All Rights Reserved

13

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

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

4,561.0

84.4%

5,190.0

86.7%

Japanese stocks

31.1

0.6%

33.2

0.6%

Foreign securities

62.0

1.1%

79.8

1.3%

Amount%On the asset side, we lengthened the duration of
securities held to match the liability characteristics of
insurance policies with long-term maturities with theaim of reducing interest rate risk.
Japanese government and corporate bonds:
Continue to accumulate ultralong-term bonds in FY13.

<Bond duration>
Foreign stocks

25.4

0.5%

26.9

0.4%

Monetary trusts

306.1

5.7%

305.3

5.1%

Policy loans

145.0

2.7%

154.1

2.6%

Real estate

70.3

1.3%

66.5

1.1%

Cash and call loans

103.3

1.9%

32.6

0.5%

Others

97.7

1.8%

95.6

1.6%

5 402 1
5,402.1

100 0%
100.0%

5 984 3
5,984.3

100 0%
100.0%

Total

Mar. 31, 2012: 19.2 years
Mar. 31, 2013: 19.9 years
Mar. 31, 2014: 19.7 years■Investment in the monetary trusts is mainly into
Japanese government and corporate bonds■The holding ratio on the real status
status, of Japanese
government and corporate bonds including thoseinvested in monetary trusts in the general accountassets: As of Mar. 31, 2014: 91.8%(As of Mar. 31, 2013: 90.1%)

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

Sony Financial Holdings Inc. All Rights Reserved

14

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

Positive Spread
(%)

3.00

Average assumed interest rate
Investment yield for core profit(Billions of yen)
10

8.4

9

2.35

8

2.31

2.35

2 27
2.27

2.18
8

2.31

7
6

2.00

+300.0%

5
4
3

2.1

2
1

(1.5)
1 00
1.00

0

FY2011-1-2

FY2011FY2012FY2012FY2013

FY2013*The minus amount in positive spread indicates negative spread.
Line item amounts are truncated below ¥100 million; percentage change figures are rounded.

Sony Financial Holdings Inc. All Rights Reserved

15

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

(%)

3,000

+76.9pt

2,500

2,358.7

2,281.8

2,000

1,980.4
1,500

0
1,000

12.3.3113.3.3114.3.31Sony Financial Holdings Inc. All Rights Reserved

16

Operating Performance :AEGON Sony Life Insurance*AEGON Sony Life Insurance sells individual variable annuities.

Number and Amount of Policies in Force

Number and Amount of New Policies
New policy amount(Billions of yen)

Number of new polices [ ]

180

167.5
[28.8]

160(Thousands
(Th
d off
policies)

Policyy amount in force(Billions of yen)32

Number of policies in force [ ]

250

236.4
[38.2]

28

140

200

20

30.0
25.0

150

100
16
80

51.1
[7.3]

60
40
20

20 0
20.0

8

50

4

0
FY2012

15.0
10.0

30.4
[3 6]
[3.6]

5.0

0

0
FY2011

76.1[10.2]

100

12

17.5
[2.4]

40.0
35.0

24

120

(Thousands
(Th
d off
policies)

0.0
12.3.31

FY201313.3.3114.3.31

Net income (losses) for AEGON Sony Life Insurance and SA Reinsurance(Billions of yen)

FY2012

ChangeFY2013

AEGON Sony Life Insurance

(2.5)

(3.4)

(0.9)

SA Reinsurance

(0.9)

0.4

+1.3

AEGON SSony Lif
Life IInsurance andd SA R
Reinsuranceiare equity
it method
th d companies,
i
50
50-50
50 joint
j i t venturetestablishedt bli h d byb SonyS
Life
Lif andd AEGON Group.
G
SA Reinsurance prepares its financial statements in accordance with U.S. GAAP.
Line item amounts are truncated below ¥ 100 million;
50% of the net income (losses) for AEGON Sony Life Insurance and SA Reinsurance are recognized as
numbers of policies are truncated below 100 policies;
percentage change figures are rounded.
investment profit (losses) on equity method in the SFH’s consolidated net income.

Sony Financial Holdings Inc. All Rights Reserved

17Highlights of Operating Performance:
Sony Assurance
Ordinary revenues

Ordinary profit

FY2012FY2013

84.7

89.8

+5.1

+6.1%

Underwriting income

83.6

88.6

+5.0

+6.0%

Investment income

1.0

1.1

+0.1

+17.4%

82.3

86.8

+4.5

+5.5%

Underwriting expenses

61.8

65.4

+3.6

+5.9%

Investment expenses

0.0

0.0

(0.0)

(2.4%)

Operating, general andOperatingadministrative expenses

20.4

21.3

+0.8

+4.4%

Ordinary profit

2.3

3.0

+0.6

+26.7%Net income

1.4

1.6

+0.2

+14.4%(Billions of yen)

89.8
84.7

Ordinary revenues+6.1%

Ordinaryy expenses
p

3.0

2.3
FY2012+26.7%
26 %FY2013(Billions of yen)

◆ Ordinary revenues and ordinary profit increased
year on year.
◆ Ordinary revenues increased year on year, due toan increase in net premiums written primarily for its
mainstay automobile insurance.
◆ Ordinary profit grew year on year due to a decline in
the loss ratio mainly led by the revision of premium
rates for automobile insurance and a lower car
accident ratio owing to the introduction of a new
bonus-malus system (non-fleet driver rating system),as well as the rise in ordinary revenues
revenues.

(Billions of yen)

13.3.3114.3.31

ChangeChange from
13.3.31

Underwriting reserves

70.6

78.0

+7.4

+10.5%

Total net assets

19.9

21.4

+1.4

+7.4%

Total assets

127.4

142.7

+15.2

+12.0%

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

Sony Financial Holdings Inc. All Rights Reserved

18

Overview of Operating Performance:
Sony Assurance((Billions of yen)y )FY2012<Reasons for changes>

ChangeFY2013

Direct premiums written

82.5

87.3

+5.9%

Net premiums written

83.5

88.6

+6.0%

Net losses paid

47 1
47.1

46 1
46.1

(2 1%)(2.1%)

Underwriting profit

1.3

1.8

+34.0%Net loss ratio

63.2%

59.3%

(3.9pt)Net expense ratio

26 0%
26.0%

25 6%
25.6%

(0 4pt)(0.4pt)Combined ratio

89.2%

84.9%

(4.3pt)◆ Increased primarily in its mainstay
automobile insurance.
◆ Decreased mainly led by the revision ofpremium rates for automobile insurance
and a lower car accident ratio owing to
the introduction of a new bonus-malus
system.

◆ Declined due to a proper control of
insurance acquisition cost, in addition to arise in automobile insurance premiums.

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

Number of policies in force
Non-consolidated
solvency margin ratio

13.3.3114.3.31

Change from 13.3.31

1 55 million
1.55

1 61 million
1.61+0 06 million+0.06

504.2%

527.6％

+4 0%
+4.0%

+23.4pt

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

Sony Financial Holdings Inc. All Rights Reserved

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

19

Sony Assurance’s Underwriting Performanceby Type of Policy
Direct Premiums Written(Millions of yen)

Net Premiums Written

FY2012FY2013

FY2012FY2013

Change

Fire

86

104

+19.9%

Marine

142

153

+8.0%

Change(Millions of yen)

Fire

236

275

+16.4%

Marine－－－Personal accident

7,898

8,360

+5.8%

Personal accident

8,138

8,613

+5.8%

Voluntary automobile

74,40678,735+5.8%

Voluntary automobile

74,14078,473

+5.8%

－

－

－

Compulsory
automobile liability

1,075

1,255

+16.8%

82 54182,54187 37087,370

+5 9%
+5.9%

83 582
83,58288 60088,600

+6 0%
+6.0%

Compulsory
automobile liability
Total*SURE, medical and cancer insurance is included in personal accident.

Net losses paid
FY2012FY2013

ChangeFire13+207.2%Marine185129(30.4%)

Personal accident

1 957
1,957

2 066
2,066

+5 5%
+5.5%

Voluntary automobile

44,00442,860(2.6%)

Compulsory
automobile liability

1,004

1,123

+11.8%

47,153

46,183(2.1%)(Millions of yen)

Total

Total

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

Sony Financial Holdings Inc. All Rights Reserved

20

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

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

120

1.49

(Billions of yen)
5(Millions of policies)
4.5

Personal accident insurance

1.55

+4.0%

1.61
1.6

Ordinary profit

Adjusted ordinary profit

4.2

4
3.5

100

79.1

88.6

83.5

80

1.4
1.2

+6.0 %

60

2

0.8

1.5

0.4

2.8
2.3

2.5

1

0.6

40

3

3.0

+26.7%

1

0.3

0.5

0.1

0

20

02
0.2

0

0
FY2011FY2012FY2011FY2013(Reference) Provision for catastrophe reserve
FY2011FY2013The 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 90% of personal accident insurance is medical and cancer insurance.

FY2012*Adjusted ordinary profit = Ordinary profit + Provision for catastrophe reserve

Provision for catastrophe reserve(Billions of yen)

FY2012

(2.4)

(2.2)

FY2013
1.2*Reversal for catastrophe reserve is described as negative amount.
Line item amounts are truncated below ¥100 million; numbers of policies aretruncated below 10,000 policies; percentage change figures are rounded.

Sony Financial Holdings Inc. All Rights Reserved

21

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

(%)

100

98.1

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

Net expense ratio

Net expense
p
ratio

(%)

98.9

93.8

100

89 0
89.0

89 2
89.2

84 9
84.9

( 5.1pt)

80

80

60

72.4

72.9

68.2

(4.7pt)60(4.3pt)

63.2
63.3

59.3

(3.9pt)

40

40

20

25.7

26.0

(0.4pt)

20
25.6

25.7

26.0

FY2011FY2012(0.4pt)25.6

00FY2011FY2012FY2013

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 the above calculation.]

FY2013

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

22

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

(%)

800

557.8%

504 2%
504.2%

527.6%+23.4pt

400

012.3.3113.3.3114.3.31Sony Financial Holdings Inc. All Rights Reserved

23

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

34.3<Consolidated>(Billions of yen)

FY2012FY2013

Consolidated ordinary revenues

34.3

35.7

+1.4

+4.3%

Consolidated ordinary profit

44
4.4

5.6

+1
1.1
1

+26
26.5%
5%

Consolidated net income

3.2

3.4

+0.1

+5.2%

FY2012FY2013

Ordinary revenues

31.3

33.3

+1.9

+6.2%

Gross operating profit

18.5

20.7

+2.1

+11.7%Net interest income

18.1

19.9

+1.8

+10.1%Net fees and commissions

01
0.1

(0 0)
(0.0)

(0 1)
(0.1)

―

Net other operating income

0.2

0.7

+0.4

+171.1%

General and administrative
expenses

13.9

14.6

+0.7

+5.2%

Net operating profit

4.5

6.0

+1.4

+32.5%

Ordinary profit

4.2

5.8

+1.5

+36.5%Net income

0.8

3.5

+2.7

+307.8%13.3.3114.3.31

67.8

72.7

+4.9

+7.3%

6.5

7.2

+0.7

+11.0%

2,005.0

2,056.7

+51.6

+2.6%

35.7

+4 3%
+4.3%

5.6

Change<Non-consolidated>+26.5%(Billions of yen)

4.4

FY2012FY2013(Billions of yen)<Consolidated>◆Ordinary revenues increased year on year, due to higher
gains on foreign exchange transactions stemming from
active foreign currency trading by customers and a rise ininterest income on loans led by the growing balance ofmortgage loans. Ordinary profit expanded year on year, due
mainly to lower interest expenses and an improvement in net
gains on bond-dealing transactions, in addition to theincrease in ordinary revenues.
<Non-consolidated>
Non consolidated◆Both gross operating profit and net operating profit increased
year on year.
-Net interest income increased owing to a rise in interest
income on loans led by the growing balance of mortgage
loans, and a decrease in interest expenses.
-Net other operating income increased due mainly to higher
gains on foreign exchange transactions stemming from
active foreign currency trading by customers, in addition toan improvement in net gains on bond-dealing transactions.

(Billions of yen)
Total net assets
Net unrealized gains onother securities,, net of taxes

Total assets

ChangeChange ffrom
Ch
13.3.31

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

Sony Financial Holdings Inc. All Rights Reserved

24Overview of Operating Performance:
Sony Bank (Non-consolidated) (1)<Reasons for changes>
Change from
13.3.3113.3.3114.3.31

Customer assets

1,974.3

2,007.5

+33.1

+1.7%

Deposits

1,857.4

1,890.0

+32.5

+1.8%

Yen

1 467 2
1,467.2

1,526.4

+59
59.2
2

+4
4.0%
0%

390.2

363.5

(26.7)(6.8%)

116.9

117.4

+0.5

+0.5%

L
Loans
outstandingt t di

970 2
970.2

1 057 4
1,057.4

+87 1
+87.1

+9 0%
+9.0%

Mortgage loans

860.3

949.3

+88.9

+10.3%

Others109.8

108.1*1(1.7)(1.6%)

92

97

+4

+5.3%

0.41%

0.35%

(0.06pt)

11 98%
11.98%

11 72%
11.72%(0 26pt)(0.26pt)(Billions of yen)

Foreign currency
Investment trusts

Number of accounts(10 thousands)

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

Capital adequacy ratio *3(domestic criteria)◆ Yen deposits increased from March 31,
2013 due to an effect of converting fromforeign currencies to yen.

◆ Foreign currency deposit balance
decreased due to an increase in selling tolock in profits led by yen depreciation.

◆ Loan balance increased due to anincrease in the balance of mortgage loans.

*1 Loans in others include corporate loans of ¥102.2 billion*2 Balance of problem assets based on the Financial Reconstruction Law / Total credit exposure*3 PleasePlrefer
f tto ththe graphh off ththe non-consolidated
lid t d capital
it l adequacy
d
ratio
ti (d
(domesticti criteria)
it i ) on P28
P28.
Line item amounts are truncated below ¥100 million;
numbers of accounts are truncated below 10 thousands accounts;
percentage change figures are rounded.

Sony Financial Holdings Inc. All Rights Reserved25Overview of Operating Performance:
Sony Bank (Non-consolidated) (2)<Reference> On Managerial Accounting Basis<Reference> Interest Spread(Managerial Accounting Basis)

FY2012FY2013

18 5
18.5

20 6
20.6

+2 1
+2.1

+11 7%+11.7%

17.6

18.2

+0.5

+3.2%

Net fees and commissions*2 ②

1.0

1.0

+0.0

+7.4%

g income**3
Net other operating((0.1))

1.3

+1.5

―

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

18.6

19.2

+0.6

+3.4%

Operating expenses and otherexpenses
③

13.9

14.6

+0.6

+4.9%

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

4.6

4.6

(0.0)

(0.9%)(Billions of yen)

Gross operating profit
Net interest income*1①

Change■Managerial accounting basis
The following adjustments are made to the figures on a financial accounting basis toaccount for profits and losses more appropriately.
*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 inforeign currency transactions recorded in net other operating income.
*3 Net other operating income:*3:
income After the above
abo e adjustments
adj stments (*1 and *2)*2), consists ofprofits and losses for bond and derivative dealing transactions.
■Core profit
Profits and losses exclude net other operating income, which includes those on
bond and derivative dealing transactions, and stands for Sony Bank’s basic profits.

Yield on investment
Interest spread

Yield on financing

(%)

1.5

1 27
1.27
0.92

1

0.5

0.35

1.20
+0.01pt

0.93
0.93

0 28
0.28

0
FY2012FY2013

Note: Interest spread=(Yield on investment)-(Yield on financing)Line item amounts are truncated below ¥100 million; percentage change figures are rounded.

Sony Financial Holdings Inc. All Rights Reserved

26

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

1,762.2

1,057.4
1,890.0

1,857.4

970.2

1,000

363.5

of ¥102.2 billion.

+87.1

835.5

+32.5

108.1 *Corporate loans

800

1,500

949.3
600
1,000

1,526.4
400

500

200

0

0

12.3.3113.3.3114.3.3112.3.3113.3.3114.3.31

Line item amounts are truncated below ¥100 million.

Sony Financial Holdings Inc. All Rights Reserved

27

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)

(%)

15

(Billions of yen)

1,200

1,000

11.98
912.9

11.58

908.8
773.8

800

(0 26pt)(0.26pt)

11.72

10

(135.0)

600
5
400

200
0
12.3.310
12 3 3112.3.31

13 3 3113.3.31

14 3 3114.3.3113.3.3114.3.31*Calculated based on the standard FSA Notification No. 19 (2006), which establishes
standards based on Article 14
14-2
2 of the Banking Act of Japan for determining thecapital 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.
Line item amounts are truncated below ¥100 million.

Sony Financial Holdings Inc. All Rights Reserved28

Consolidated Financial Forecast
for the Year Ending March 31, 2015

Sony Financial Holdings Inc. All Rights Reserved29Consolidated Financial Forecast
for the Year Ending March 31, 2015
Consolidated ordinary revenues are expected to decrease, ordinary profit is expected to remain at the same levels,and net income is expected to grow significantly.
(Billions of yen)

FY2013(Actual)

FY2014(Forecast)

Change1,319.7

1,191.0(9.8%)

1,196.6
89.8
35.7

1,061.9
92.4
36.6(11.3%)
+2.8%
+2.2%

Consolidated ordinary profit

76.1

77.0

+1.1%

Life insurance businessBanking business

67.2
3.0
5.6

67.4
3.9
5.3

+0.2%
+29.8%(6.0%)

Consolidated net income

40.5

49.0

+21.0%

Consolidated ordinary revenues
Life insurance business
Non-life insurance businessBanking business

Non-life insurance business<Segment information for ordinary revenues and ordinary profit>■ Life Insurance Business
Ordinary revenues are expected to decrease because we do not expect such an increase in lump-sum payment insurance premiums and investment income on separate
accountt due
d tot marketk t recovery as recorded
d d iin th
the previousififiscall year. H
However, we expectt steadyt d growthth iin policy
li amountt iin force.
f
O diOrdinary
profitfit isi expectedt d tto bebnearly at the same level as in the previous fiscal year. This is because we expect a higher provision for policy reserves related to minimum guarantees for variable life
insurance policies, as well as an increase in operating expenses due to the consumption tax rate rise. We do not expect any negative impact from a rise in provision ofpolicy reserves resulting from the revision of the discount rate used for calculating policy reserves in the previous fiscal year.
■ Non-life Insurance Business
Ordinary revenues are expected to increase in line with growth in net premiums written, primarily for mainstay automobile insurance. Operating profit is expected to risestemming from the rise in ordinary revenues and a decline in the loss ratio although we expect higher operating expenses
expenses.
■ Banking Business
Ordinary revenues are expected to rise year on year, because we regard to stable and sustainable business growth even in an environment characterized by persistently
low interest rates. Ordinary profit is expected to decrease because we do not believe that foreign exchange transactions will be as vigorous as in the previous fiscal year,
and we expect higher operating expenses as we pursue initiatives designed to strengthen our settlement function with an eye to future growth, while we expect higher
ordinary revenues to lead to an increase in gross operating profit.
<Consolidated
Consolidated net income
income>Net income is expected to grow significantly year on year. This is because Sony Life has changed its calculation policy of the reserve for price fluctuations to accumulate
reserves up to required levels from this fiscal year while it had accumulated reserves in excess of the required levels until the previous fiscal year.
Line item amounts are truncated below ¥100 million; percentage change figures are rounded.

Sony Financial Holdings Inc. All Rights Reserved30

Dividend Forecast

Sony Financial Holdings Inc. All Rights Reserved

31

Dividend Forecast forfor the Year Ending March 31, 2015
 The proposed dividend for FY2013 is ¥30 per share, up ¥5 year on year.
 Given the substantial increase in net income forecast for FY2014,
FY2014 we expect toincrease the dividend by ¥10 per share, to ¥40. This would correspond to thethird consecutive year of dividend increases, since FY2012.
 SFH’s
SFH s dividend policy is to pay stable dividends
dividends, steadily increasing their levelin line with earnings growth over the medium to long term, thereby enhancing
ongoing shareholder returns.

■ Consolidated Net Income and Dividend Result/Forecast
FY2010
Dividend per share

FY2011FY2012FY2013

FY2014(Expected)(Forecast)

¥20

¥20

¥25

¥30

¥40

Annual dividend amount¥8.7 billion¥8.7 billion¥10.875 billion¥13.049 billion¥17.399 billion

Consolidated net income¥41.7 billion¥32.8 billion¥45.0 billion¥40.5 billion¥49.0 billion

20.9%

26.5%

24.1%

32.2%

35.5%

Dividend payout ratio(consolidated)

Note: Annual dividend amounts are truncated below ¥1 million,
million consolidated net income
amounts are truncated below ¥100 million, and dividend payout ratios are rounded.

Sony Financial Holdings Inc. All Rights Reserved32Sony Life’s Preliminary MCEV
andd
Risk Amount Based on Economic Valueas of March 31
31, 2014

Please keep in mind that the validity of these calculations of MCEV as of March 31, 2014, has not been verified by outside specialists.
The calculation of MCEV as of March 31, 2014, in accordance with the MCEV principles and verified by outside specialists, is scheduled to
be announced on May 26, 2014.
A part of the calculations of MCEV as of December 31, 2013, adopted simplified method and has not been verified by outside specialists.

Sony Financial Holdings Inc. All Rights Reserved33Sony Life’s Preliminary MCEV as of March 31, 2014
(Billions of yen)

13.3.31

13.12.31

14.3.31

Changefrom 13.3.31

Change from
13.12.31

1,064.7

1,186.9

1,221.3+156.6+34.4

Adjusted net worth

770.8

698.5

722.1

(48.7)+23.7

Value of existing business

293.9

488.4

499.1

+205.3

+10.7

MCEV

(Billions of yen)

13.3.31

13.12.31

14.3.31

New business value

41.6(12M)

45.2(9M)

55.2(12M)

New business margin

3.5%

5.5%

5.2%

Notes:
1. New business margin equals new business value divided by present value of premium income.
2. Calculated MCEV as of December 31, 2013 by using updated lapse and surrender rate and economic assumptions as of March 31, 2013.

 Reasons for changes in MCEV・Preliminary MCEV as of March 31,
31 2014,2014 increased ¥156.6¥156 6 billion from March 31
31, 2013
2013, due mainly to an acquisition of newpolicies, assumption changes in mortality rates and lapse and surrender rates and higher interest rates.
・Preliminary MCEV as of March 31, 2014, increased ¥34.4 billion from December 31, 2013, due to changes in assumptions, mainlymortality rates and lapse and surrender rates.
 Reasons for changes in new business margin
・New business margin as of March 31, 2014, was up 1.7% from March 31, 2013, due mainly to the revision of Sony Life’s
Insurance premium rates in April 2013 and higher interest rates.
・New business margin as of March 31, 2014, was down 0.3% from December 31, 2013, due mainly to an increase in operating
expenses driven by higher inflation rate in future.

*Please see page 44 for trend on JGB yields.

Sony Financial Holdings Inc. All Rights Reserved34Sony Life’s Risk Amount Based on Economic Valueas of March 31, 2014
(after tax)
(Billions of yen)

13.3.31

13.12.31

14.3.31 *2

Insurance risk

605.6

621.1

654.5

Market-related risk

289.9

260.8

240.0

Of which, interest rate risk*1

234.2

198.3

180.9

Operational risk

26 0
26.0

27 9
27.9

26.3

Counter party risk

2.3

2.0

1.3

Variance effect(262.5)(256.9)(257.8)The risk amount based on economic value

661.3

654.8

664.3

*1 Interest amount excluding the variance effect within market-related risk
*2 Sony Life revised its method of measuring interest rate risk in Japanese yen on March 31, 2014. Please see page 43.

(Billions of yen)

MCEV

13.3.31

13.12.31

1,064.7

1,186.9

14.3.311,221.3

 Maintained capital adequacy by controlling market-related risk.
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 and market-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, 2013 by using updated lapse and surrender rate and economic assumptions as of March 31, 2013.

Sony Financial Holdings Inc. All Rights Reserved

35

Appendix

Sony Financial Holdings Inc. All Rights Reserved36

Recent Topics 1
AEGON Sony Life Insurance
Launch of sales: December 1, 2009
Common stock: ¥24 billion (including capital surplus of ¥12 billion)
Equity ownership: Sony Life insurance Co.,
Co Ltd.
Ltd 50%,50% AEGON international B.V.
B V 50%Marketing products: Individual Variable Annuities
Sales Channels: Lifeplanner sales employees and partner Banks (20*) *As of May 20, 2014
SA Reinsurance Ltd
Established： October 29, 2009
Common stock: ¥8 billion
Equity ownership: Sony Life insurance Co., Ltd. 50%, AEGON international B.V. 50%
Business： Reinsurance business* AEGON Sony Life Insurance and SA Reinsurance are equity method companies, 50-50 joint ventures established by Sony Life and AEGON Group.

Sony Bank’s Mortgage Loans through Sony Life
■ Sony Life accounts for 24% of the balance of mortgage loans as of Mar. 31, 2014
Sony Life accounts for 17% of the amount of new mortgage loans for FY13
*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 FY13
*Sonyy Life started handlingg automobile insurance in May
y 2001.

* “Lifeplanner” is a registered trademark of Sony Life.

Sony Financial Holdings Inc. All Rights Reserved37

Recent Topics 2<Highlights for FY2013>2013-04-01
2013-04-02

Sony Assurance revised its automobile insurance policy details. (including an increased discount of ¥8,000
for new customers who conclude contracts on line, introduction of new bonus-malus system and the revision on
automobile insurance premium rates.)Sony Life revised insurance premium rates on some of its products in line with the reduction in discount rateused for calculating policy reserves.

2013-05-01

Sony Bank set service charge free on inward foreign currency remittances.

2013-05-02

Sony Life commenced sale of a new product: “ U.S. Dollar Denominated Insurance.”

2013-08-01

Sony Assurance enhanced special benefit service for its policyholders with renewal contract.

2013-10-28

Sony Bank launched new service: automatic saving plans for foreign currency deposits.

2013-10-31

Sony Bank closed its representative office in Sydney.

2013-11-11

The Sony Financial Group entered the nursing care business, acquiring Senior Enterprise Corporation as awholly owned subsidiary of SFH.

2013-12-02

Sony Bank introduced paperless procedures to open bank accounts.

2013-12-19
2014-01-02
2014-01-10

Sony Bank announced plans to issue the new Sony Card with an enhanced credit and settlement function
through a tie-up with Sumitomo Mitsui Card Company, with this credit card being offered to customers fromFebruary 7, 2014.
Sony Life started selling new educational endowment insurance (non-participating type).
Sony Bank enhanced its settlement function by starting withdrawal services for credit card payments for
Sumitomo Mitsui Card holders
holders.

2014-02-12

Sony Life dissolved tie-up with Watami Co., Ltd. in the nursing care business.

2014-04-01"Sony Lifecare Inc." is established as a holding company to oversee the Group’s operations in the nursing carebusiness.

2014-05-02

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

Sony Financial Holdings Inc. All Rights Reserved38Sony Life: Fair Value Information on Securities(General Account Assets)
Fair Value Information on Securities
Fair Value Information on Securities(Billions of yen)

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

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

Sony Financial Holdings Inc. All Rights Reserved39Sony Life’s Interest Income and Dividends (Details)(Millions of yen)

FY2012

ChangeFY2013

Cash and deposits
Japanese governmentand corporate bonds
Japanese stocks

00(39.8%)

87,634

98,588

12.5%

536

397

(25.9%)

Foreign securities

3,746

6,740

79.9%

Other securities

251

460

83.6%

Loans

5 450
5,450

5 691
5,691

4 4%
4.4%

Real estate

10,854

10,250(5.6%)

6731(53.7%)

108,539

122,160

12.5%

Others
Total

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

Sony Financial Holdings Inc. All Rights Reserved40Sony Life’s Quarterly Trend on New Policies Amount

Quarterly Trend on New Policy Amount

New policy amount(Billions of yen)

1,200.0
1,054.4
1,000.0

1,201.9

1,175.4

1 238 71,238.7

1,066.5
997.3

976.1

1,128.3
1,033.3

947.4
841.4

886 2
886.2

800.0
600 0
600.0
400.0
200.0
0.0
FY11.1Q
Q FY11.2Q
Q FY11.3Q
Q FY11.4Q
Q FY12.1Q
Q FY12.2Q
Q FY12.3Q
Q FY12.4Q
Q FY13.1Q
Q FY13.2Q
Q FY13.3Q
Q FY13.4Q
Q
Line item amounts are truncated below ¥100 million.

Sony Financial Holdings Inc. All Rights Reserved41Sony Life’s Quarterly Trend on
Annualized Premiums from New Policies
Quarterly Trend on Annualized Premiums from New Policies
Annualized premiums from new policies

Of which, third-sector((Billions of yen)
y )

24.0

22.0

22.0

19.8

20.0
18.0

17.1

16.0

19.0
17.6

18.5

17.4

16.8

16.0

15.2

14.6
13.2

14.0
12.0
10.0
8.0
6.0
4.0
2.0

4.2

3.8

4.9

4.0

4.4

5.0

5.2

3.6

3.9

3.0

3.6

2.9

00
0.0
FY11.1Q FY11.2Q FY11.3Q FY11.4Q FY12.1Q FY12.2Q FY12.3Q FY12.4Q FY13.1Q FY13.2Q FY13.3Q FY13.4Q
Line item amounts are truncated below ¥100 million.

Sony Financial Holdings Inc. All Rights Reserved42Sony Life: Revision of Method of Measuring
Interest Rate Risk in Japanese Yen
 For interest rate risk in Japanese yen, Sony Life revised the risk measure at the end of March 2014, having
observed significant changes in ultra-long term interest rates during the year 2013. More specifically, Sony Life
revised the previous methodology which measured the shock by dropping interest rates by at least 1% for all(parallel shift)) and introduced pprincipal
p componentpanalysis,y , where yyield curve changes
g arematurities (pdisaggregated into three components, parallel shift, twist and butterfly, and the yield curve is shocked by eachcomponent, to capture the risk of yield curve changes more precisely. The risk amount would be larger than theprevious risk measure when ultra-long term interest rates are high and there is room for yield curve flattening(such as on December 31, 2012), while the risk amount would be smaller than the previous risk measure whenultra-long term interest rates are sufficiently low and there is little room for further decline in yield curve (such as
on March 31, 2014). Interest rate risk at the end of March 31, 2014, prior to revising the risk measure was¥233.6 billion (post-revision: ¥180.9 billion) and the solvency risk capital on an economic value basis was¥697.5 billion (post-revision: ¥664.3 billion).

 Sony Life confirms its risk measure at least oncea year. Not only the above risk measure revision
for interest rate risk,
risk Sony Life modified risk
factors specified in QIS5 standard methodology
appropriately to make them more suitable in lightof the market risk attribute to which Sony Life is
exposed, where risk factors specified in QIS5 or
its previous risk measure are considered unable
to capture enough risk amount at a 99.5%
confidence level.

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43

JGB Yields

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Contact:
CorporateCo
po ate Co
Communications
u cat o s & Investor
esto Relations
e at o s Department
epa t e t
Sony Financial Holdings Inc.
TEL： +81-3-5785-1074

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45