Presentation Material

Consolidated Financial Results
for the Three Months Ended June 30, 2013
andSony Life’sLife sMarket Consistent Embedded Valueas off JuneJ3030, 2013
Sony Financial Holdings Inc.
August 12, 2013
Sony Financial Holdings Inc. All Rights Reserved

Content■ Consolidated Operating Results for the Three Months Ended June 30, 2013

P.3

g March 31,, 2014
■ Consolidated Financial Forecast for the Year Ending

P.28

 Revision of Dividend Forecast for the Year Ending March31, 2014

P.30

■ Sony Life’sLife s MCEV and Risk Amount Based on Economic Value as of June 30
30, 2013

P 32
P.32

■ Appendix

P.35

Disclaimers:
This presentation material contains statements concerning the current plans, expectations, strategies and beliefs of the SonyFi
Financiali l Group.
G
Any
A statementst tt containedt i d herein
h i thatth t pertaint i tot futuref t
operatingti performance
f
and
d th
thatt are nott hihistorict i factsf t
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 Sony financial Group, based on information that is currently available to it. As such, these forwardlooking statements are subject to various risks and uncertainties, and actual business results may vary substantially from theforecasts expressed or implied in forward-looking statements. Consequently, investors are cautioned not to place undue
reliance on forward-looking statements. The Sony Finacial 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 orform part of any offer for sale or subscription of or solicitation or invitation of any offer to buy or subscribe for any securities, norshall 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 Three Months Ended June 30, 2013

Sony Financial Holdings Inc. All Rights Reserved

3

Highlights of Consolidated Operating Performancefor the Three Months Ended June 30, 2013 (1)(Billions of yen)

Ordinary revenues+12.8%

Ordinary profit

312.8

FY13.1Q

247.6

280.9

+33.2

+13.4%

ChangeLifeiinsurancebusiness

Ordinary revenues
Ordinary profit

13.7

13.3

(0.4)

(2.9%)

Non-life
insurancebusiness

Ordinary revenues

21.7

23.0

+1.3

+6.2%

Ordinary profit

0.7

1.3

+0.6

+84.9%

Ordinary revenues

8.3

9.4

+1.0

+12.5%

Ordinary profit

0.8

2.2

+1.3

+154.1%

(0 5)
(0.5)

(0 6)
(0.6)

(0 0)
(0.0)

－

0.0

0.0

+0.0

+44.2%

277.2

312.8

+35.5

+12.8%

O
Ordinary
profit
f

15 4
15.4

17 0
17.0

+1.6
16

+10.4%
10 4%

Net income

9.6

9.6

+0.0

+0.4%

13.3.3113.6.30

Change from 13.3.31

Total assets

8,096.1

8,211.3+115.1+1.4%

Net assets

435.4

411.2

(24.2)(5.6%)

277.2
Bankingbusiness

Intersegment
adjustments*+10.4%

FY12.1Q

Ordinary revenues
Ordinary profit
Ordinary revenues

17.0
C
Consolidated
lid t d15.4

(Billions of yen)(Billions of yen)

Consolidated*Ordinary profit in “Intersegment adjustments” is mainly from SFH.
*Comprehensive income: FY12.1Q: ¥17.7 billion, FY13.1Q: ¥(13.3) billion
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 Three Months Ended June 30, 2013 (2) Life Insurance Business: Ordinary revenues increased year on year. This is because income frominsurance premiums rose associated with steady growth in policy amount in force, despite a decrease inlump-sum payment insurance premiums, affected by the revision of Sony Life’s insurance premium rates
on some of its products in April 2013. An increase in investment income due to higher gains on separate
account, net resulting from the market recovery also contributed to the rise in ordinary revenues.
Ordinary profit remained at the same levels as during FY12.1Q. This is because the positive effects
stemming from a decrease in provision of policy reserves for minimum guarantees for variable life
insurance and a recovery from negative spread into positive at Sony Life were offset by the negative
impact from an increase in provision of policy reserves resulting from the revision of discount rate used
for calculating policy reserves.
 Non-life Insurance Business：Ordinary revenues increased year on year owing to an increase in net
premiums written primarily for its mainstay automobile insurance. Ordinary profit increased year on year
due mainly to a decline in the loss ratio led by a lower car accident ratio and the revision of premium
rates for automobile insurance, in addition to the increase in ordinary revenues.
 Banking Business：Ordinary revenues increased year on year due to a rise in interest income on loans
led by the growing balance of mortgage loans and higher gains on foreign exchange transactions
stemming
g from customers’ active foreign
g currency
y trading.
g Ordinaryyp
profit increased yyear on yyear due toan increase in profit stemming from improved investment performance, including valuation gains onderivatives, net held for hedging interest rate risk on mortgage loans and other assets.
 Consolidated ordinary revenues increased 12.8% year on year, to ¥312.8 billion, ownig to increases inordinaryy revenues from all businesses. Consolidated ordinaryy profitpincreased 10.4% yyear on yyear, to¥17.0 billion. By business segment, ordinary profit from the non-life insurance and banking businesses
increased, whereas ordinary profit from the life insurance business remained at the same levels.
Consolidated net income was up 0.4% year on year, to ¥9.6 billion. This is mainly because the banking
business recorded profit for FY12.1Q, due to the tax effect of recording deferred tax assets on thetransfer of all shares of Sony Bank Securities,
Securities a wholly owned subsidiary of Sony Bank
Bank.
Line item amounts are truncated below ¥100 million; percentage change figures are rounded.

Sony Financial Holdings Inc. All Rights Reserved

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

Ordinary profit

FY12.1Q

FY13.1Q

247.6

281.1

+33.5

+13.5%

Income from insurance premiums

217.9

221.3

+3.4

+1.6%

Investment income

27.8

55.8

+28.0

+100.7%

Interest income and dividends

25.7

28.9

+3.1

+12.4%

Income from monetary trusts, net

1.3

1.3

+0.0

+0.7%

Gains on sale of securities

0.7

0.0

(0.7)

(99.8%)

Gains on separate accounts,
accounts net

－

25 6
25.6

+25 6
+25.6

－

233.4

266.9

+33.5

+14.4%

Insurance claims and other payments

69.9

81.7

+11.8

+17.0%

Provision for policy reserves and others

107.2

150.3

+43.1

+40.2%

Investment expenses

26.1

1.9

(24.2)(92.5%)

23.6－(23.6)(100.0%)

26.1

28.0

+1.8

+7.1%

Ordinary profit

14.1

14.1

+0.0

+0.1%

Net income

8.2

8.0

(0.1)

(1.9%)

13.3.3113.6.30

Securities

5,211.5

5,381.0+169.4+3.3%

Policy reserves

5,472.9

5,623.3+150.3+2.7%

Total net assets

342.3

316.4

(25.8)(7.6%)

80.2

57.5(22.7)(28.3%)

5,952.7

6,062.8+110.1

+1.8%
%

550.6

574.6

+23.9

+4.4%

(Billions of yen)
Ordinary revenues+13.5%

281.1

24 6
247.6

14.1
14.1

+0.1%

Ordinary expenses

Losses on separate accounts, net(Billions of yen)Ordinaryy revenues increased yyear on yyear. Ordinaryyp
profitremained at the same levels.
Income from insurance premiums rose slightly associated with asteady growth in policy amount in force, despite a decrease inlump-sum payment insurance premiums, affected by the revision ofSony Life’ insurance premium rates on some of its products in April
2013.
Investment income increased due mainly to higher gains on
separate account, net resulting from the market recovery.
Ordinary profit remained at the same levels. This is because thepositive effects stemming from a decrease in provision of policy
reserves for minimum guarantees for variable life insurance and arecovery from negative spread into positive at Sony Life were offset
by the negative impact from an increase in provision of policy
reserves resulting from the revision of discount rate used for
calculating policy reserves.

Operating expenses(Billions of yen)

Net unrealized gains on other securities,
net of taxes
Total assets
Separate account assets

ChangeChange from 13.3.31

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

Sony Financial Holdings Inc. All Rights Reserved

6Overview of Performance:
Sony Life (Non-consolidated)(Billions of yen)

FY12.1Q

FY13.1Q<Reasons for changes>

Change1,066.5

1,033.3(3.1%)

Lapse and surrender amount

497 5
497.5

456 4
456.4

(8 3%)(8.3%)

Lapse and surrender rate

1.38%

1.21%

(0.17pt)

Policy amount in force

36,432.0

38,160.2+4.7%

Annualized premiums from new policies

17.4

16.8

(3.3%)Of which, third-sector products

4.4

3.9

(12.1%)

643.0

677.2

+5.3%

151.5

164.1

+8.3%

New policy amount

Annualized premiums from insurance in force
Of which, third-sector products(Billions of yen)

FY12.1Q

FY13.1Q

ChangeGains from investment, net (General account)

25.3

28.3

+11.8%

Core profit

14.7

15.3

+3.7%

Positive (Negative) spread

(0 5)
(0.5)

12
1.2

－

Non-consolidated solvency margin ratio

13.3.3113.6.30

2,281.8%

2,255.3%

 Decreased due to the revision of insurance
premium rates.

 Decreased due to the lowering lapse andsurrender rates mainly in term-life insurance.
 Decreased due to the revision of insurance
premium rates. In the third-sector insurancepproducts, sale of lump-sum payment whole life
nursing-care insurance decreased.

 Core profit increased. This is because the positiveeffects stemming from a decrease in provision ofpolicy reserves for minimum guarantees forvariable life insurance and a recovery fromnegative spread into positive at Sony Life wereoffset by the negative impact from an increase inprovision of policy reserves resulting from therevision of discount rate used for calculating policy
reserves.

Changefrom 13.3.31(26.5pt)

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
year.
3. The plus amount in negative spread indicates positive spread.

 Non-consolidated solvency margin ratio was down
due to a decrease in net unrealized gains on othersecurities net of taxes led by rising interest rates
securities,
rates,
but still stays at high levels.

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

Sony Financial Holdings Inc. All Rights Reserved7Sony Life Operating Performance (1)Number and Amount of New Policies(Individual Life Insurance + Individual Annuities)
New policy amount

Number of new policies(Thousands of policies)(Trillions of yen)

150

1.05

152

[ Reference]
4Q(3M) Number and Amount of New Policies
New policy amount

Number of new policies(Thousands of policies)(6.1%)

142

1.06

1.03

+31 9%+31.9%(Trillions of yen)

137

137

0.96

0.97

(3.1%)

180

1.23+26.9%

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 Reserved8Sony Life Operating Performance (2)Annualized Premiums from New Policies(Individual Life Insurance + Individual Annuities)[ Reference]
4Q(3M) Annualized Premiums from New Policies

A
Annualized
li d premiumsiffrom new policies
li iAnnualized premiums fromf
new policies

Of which,hi h thi
third-sectordt

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

17.1

17.4

16.8
(3.3%)(12.1%)

4.2

4.4

3.9

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

Sony Financial Holdings Inc. All Rights Reserved

9Sony Life Operating Performance (3)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

Number of policies in force(Millions of policies)(Trillions of yen)
+6.2%
50

5 76
5.76

700

+1.3%
1.3%
6

643 0
643.0

+5 3%
+5.3%

36.4 +4.7%

677.2

669.9
+1.1%

600

40

Of which, third-sector(Billions of yen)

6.11

6.04

Annualized premiums from insurance in force

38.1

37.7

5
500

+1.0%
4

30

400

3

300

2

200

20

+8.3%
10
1

0

0

12.6.30

13.3.3113.6.30

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

100

151.5

158.6

12.6.30

13.3.31

+3 5%
+3.5%

164.1

0

13.6.30

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

Sony Financial Holdings Inc. All Rights Reserved10Sony Life Operating Performance (4)Lapse and Surrender Rate*(Individual Life Insurance + Individual Annuities)
Lapse and surrender rate
(Annual)

Lapse and surrender rate
(1Q)

(%)

5.93
((FY11))

5.31(FY12)

1.53

1.38(0.17pt)

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

Sony Financial Holdings Inc. All Rights Reserved11Sony Life Operating Performance (5)Income from Insurance Premiums(Billions of yen)(Billions of yen)

221 3
221.3

217 9
217.9
194.6

Interest Income and Dividends

28.9
25.7

+1.6%

23.2

+12.4%

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

Sony Financial Holdings Inc. All Rights Reserved

12Sony Life Operating Performance (6)Core Profit(Billions of yen)

19.2 *

Ordinary Profit(Billions of yen)

*Included ¥3.3 billion of reversal ofreserve for outstanding claims related
to the Great East Japan Earthquake.

17.9
15.3

14 7
14.7

14 1
14.1

14.1
+0.1%

+3.7%

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

(Reference) Main differences from Core Profit(Billions of yen)
FY11.1Q

FY12.1Q

FY11.1Q

FY12.1Q

Positive (Negative) spread

(1.3)

(0.5)

1.2

Capital gains (losses)

(0.3)

0.4

0.0

Effects by the revision of policy reserve discount rate

0.0

0.0

(5.5)

Provision of contingency reserve

(0.8)

(0.9)

(1.0)

Provision of policy reserves for minimum guarantees forvariable life insurance in the general account assets

(0.8)

(4.0)

(0.9)

*The plus amount in negative spread indicates positive spread.
“Provision of policy reserves for minimum guarantees for variable life insurance in thegeneral account assets” and “Provision of contingency reserve” are described as negative
amount.

FY13.1Q*Line item amounts are truncated below ¥100 million; percentage figures are rounded.

Sony Financial Holdings Inc. All Rights Reserved

FY13.1Q

13

Sony Life Operating Performance (7)Number of Lifeplanner Sales Employees(Number)
+22

(6)

4,127
[109]

0

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 towork as Lifeplanner sales employees that meet certain sales conditions and other requirement
requirement.
From FY13.1Q, the number of contracted Lifeplanner sales employees is added to each figure in [ ].
* “Lifeplanner” is a registered trademark of Sony Life Insurance Co., Ltd.

Sony Financial Holdings Inc. All Rights Reserved

14Sony Life Operating Performance (8)Breakdown of General Account Assets(Billions of yen)

13.3.31<Asset management review>

13.6.30

Amount%Amount

%4,561.0

84.4%

4,691.9

85.5%

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 stocks

31.1

0.6%

34.5

0.6%

Japanese government and corporate bonds:
Continue to accumulate ultralong-term bonds in FY13

Foreign securities

62.0

1.1%

64.5

1.2%

Japanese governmentand corporate bonds<Bond duration>
Foreign stocks

25.4

0.5%

26.0

0.5%

Monetary trusts

306.1

5.7%

295.5

5.4%

Policy loans

145 0
145.0

2 7%
2.7%

146 6
146.6

2 7%
2.7%

Real estate

70.3

1.3%

67.8

1.2%

Cash and call loans

103.3

1.9%

37.8

0.7%

Others

97.7

1.8%

123.3

2.2%

5,402.1

100.0%

5,488.2

100.0%

Total

Mar. 31, 201219.2 years

Mar. 31, 201319.9 years

Jun. 30, 201319.5 years■Investment in the monetary trusts is mainly into Japanese
government and corporate bonds.
■The holding ratio on the real status, of Japanese government andcorporate bonds including those invested in monetary trusts in thegeneral account assets:
As of Jun. 30, 2013: 90.9%, (As of Mar. 31, 2013: 90.1%)

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

Sony Financial Holdings Inc. All Rights Reserved15Sony Life Operating Performance (9)Non-consolidated solvency Margin Ratio(%)(26.5pt)

2,255.3

2,281.8
1,980.40Sony Financial Holdings Inc. All Rights Reserved

16

Highlights of Operating Performance:
Sony Assurance
Ordinary revenues

21 7
21.7

+6.2%

Ordinary profit

23.0(Billions of yen)

FY12.1Q

23.0

+1.3

+6.2%

Underwriting income

21.4

22.8

+1.3

+6.1%

Investment income

02
0.2

02
0.2

+0 0
+0.0

+22 4%+22.4%

21.0

21.7

+0.7

+3.4%

Underwriting expenses

16.1

16.7

+0.5

+3.7%

Investment expenses

0.0

0.0

+0.0

-

Operating, general andadministrative expenses

4.8

5.0

+0.1

+2.5%

Ordinary profit

0.7

1.3

+0.6

+85.0%Net income

0.4

0.8

+0.4

+93.6%

1.3
Ordinary expenses

0.7(Billions of yen)Ordinary revenues and ordinary profit increased
year on year.
Ordinary revenues increased year on year, due to aniincrease
iin nett premiumsiwrittenitt ffor itits mainstay
i t
automobile insurance.
Ordinary profit increased year on year due to a decline
in the loss ratio led by a lower car accident ratio and therevision of premium rates for automobile insurance, in
addition to the increase in ordinary revenues.

Change21.7

Ordinary revenues

85.0%

FY13.1Q(Billions of yen)

13.3.3113.6.30

Change from13 3 3113.3.31

Underwriting reserves

70.6

73.6

+3.0

+4.4%

Total net assets

19.9

21.1

+1.2

+6.2%

Total assets

127.4

130.8

+3.4

+2.7%

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

Sony Financial Holdings Inc. All Rights Reserved

17Overview of Performance:
Sony Assurance(Billions of yen)

FY12.1Q

ChangeFY13.1Q<Reasons for changes>

Direct premiums written

21.2

22.4

+5.7%

Net premiums written

21.4

22.7

+5.9%

N t llosses paid
Net
id

11 4
11.4

11 7
11.7

+2 5%
+2.5%

Underwriting profit

0.4

1.0

+119.7%Net loss ratio

59.9%

58.2%

(1.7pt)Net expense ratio

24.5%

23.8%

(0.7pt)Combined ratio

84.4%

82.0%

(2.4pt) Increased mainly in its mainstay automobile
insurance.

 Declined due to a lower car accident ratio andthe revision of premium rates for automobile
insurance.

 Declined due to a proper control of
insurance acquisition cost and a rise inautomobile insurance premiums.

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

Number of policies in force
Non-consolidated
Solvency margin ratio

13.3.3113.6.30

Change from 13.3.31

1.55 million

1.56 million+0.01 million

504.2%

535.5%+0.8%+31.3pt

Note: The number of policies in force is the total of automobile insurance and medical and cancer insurance,
which accounts for 99% of net premiums written.
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 Reserved18Sony Assurance’s Underwriting Performanceby Type of Policy
Direct Premiums Written

Net Premiums Written

FY12.1Q

FY12.1Q

ChangeFY13.1Q(Milli(Millions
off yen))
Fire

63

55

(13.2%)

Marine－－－P
Personall accident*
id t*

1 931
1,931

2 044
2,044

+5 9%
+5.9%

Voluntary automobile

19,21920,321

+5.7%

－

－

－

21,21422,420+5.7%

Compulsory
automobile liability
Total

ChangeFY13.1Q(Millions of yen)
Fire

69

74

+8.5%

Marine

42

44

+3.1%

Personal accident*
accident

2 001
2,001

2 124
2,124

+6 1%
+6.1%

Voluntary automobile

19,15020,257

+5.8%

217

241

+10.8%

21,481

22,741+5.9%

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

Net losses paid
FY12.1Q

ChangeFY13.1Q(Millions of yen)
Fire

0

0

(63.1%)

Marine12232(73.6%)

Personal accident*

467

463

(0.9%)

10,631

10,994

+3.4%

239

255

+6.6%

11,461

11,745+2.5%

Voluntary automobile
Compulsory
automobile liability
Total

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

Sony Financial Holdings Inc. All Rights Reserved19Sony Assurance Operating Performance (1)Net Premiums Written andNumber of Policies in Force
Voluntaryy automobile insurance

Ordinary Profit

Personal accident insurance(Millions of policies)

Number of policies in force

Others(Billions of yen)(Billions of yen)

1.51

+3.3%

1.56

1 41
1.41

13
1.3
+5.9%

0.2

20.2
1.8

0.3

21.4
20
2.0

22.7 0.3+85.0%

2.1

0.7
18.1

19.1

0.7

20.2

The numberTh
b off policies
li i iin fforce iis theh totall off automobile
bil iinsurance andd medical
di land cancer insurance policies, which account for 99% of net premiums written.
More than 90% of personal accident insurance is medical and cancer insurance.

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 Reserved20Sony Assurance Operating Performance (2)Earned/Incurred Loss Ratio +Net Expense Ratio
Earned/Incurred loss ratio
(%)

98.1

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

Net expensepratio

Net expense ratio

(%)

98.9
89.9

93.4

89.0

89.0

89.2
81.4

(4.4pt)

84 4
84.4

82.0
(2.4pt)(1.7pt)(3.7pt)(0.7pt)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(0.7pt)Notes:Net loss ratio = (Net losses paid + Loss adjustment expenses ) / Net premiums written
Net expense ratio = Expenses related to underwriting / Net premiums writtenfrom the above calculation.]Sony Financial Holdings Inc. All Rights Reserved21Sony Assurance Operating Performance (3)Non-consolidated solvency Margin Ratio(%)

557.8%

535.5%

504.2%+31.3pt

Sony Financial Holdings Inc. All Rights Reserved

22Highlights of Operating Performance:
Sony Bank (Consolidated/Non-consolidated)
Consolidated ordinary revenues
Consolidated ordinary profit<Consolidated>(Billions of yen)

FY12.1Q

FY13.1Q

Consolidated ordinary revenues

8.3

9.4

+1.0

+12.5%

Consolidated ordinary profit

1.0

2.2

+1.2

+122.6%

Consolidated net income

1.4

1.4

(0.0)

(1.4%)

FY12.1Q

FY13.1Q

Ordinary revenues

75
7.5

87
8.7

+1 2
+1.2

+17 1%+17.1%

Gross operating profit

4.4

5.9

+1.4

+33.4%Net interest income

4.0

5.0

+0.9

+23.5%Net fees and commissions

0.0

(0.0)

(0.0)

―

Net other operating income

0.3

0.9

+0.5

+181.3%General and administrative
expenses

3.5

3.6

+0.1

+3.4%

Net operating profit

0.9

2.2

+1.3

+148.9%O di
Ordinary
profit
fit

08
0.8

22
2.2

+1.4
14

+162.2%
162 2%Net income (loss)

(1.2)

1.4

+2.6

―

13 3 3113.3.31

13 6 30
13.6.30

67.8

68.6

+0.8

+1.2%

6.5

5.3

(1.1)

(17.5%)

2 005 02,005.0

2 000 02,000.0

(5 0)
(5.0)

(0 3%)(0.3%)

9.4

8.3+12.5%
12.5%

22
2.2

Change<Non-consolidated>(Billions of yen)+122.6%

1.0(Billions of yen)<Consolidated>
Consolidated ordinary revenues and ordinary profit increased year
on year due to a rise in interest income on loans led by the growing
balance of mortgage loans and higher gains on foreign exchangetransactions stemming from customers’ active foreign currency
trading. On the other hand, consolidated net income remained at
the same levels as FY12.1Q in which a profit was recorded dueto the tax effect of recording deferred tax assets on the transfer ofall shares of Sony Bank Securities.
<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 onloans led by a growing balance of mortgage loans, and a decreasei iinterest expenses.
in-Net other operating income increased due to an increase in profit
stemming from improved investment performance , including
valuation gains on derivatives, net held for hedging interest raterisk on mortgage loans and other assets, in addition to higher gains
on foreign exchange transactions stemming from customers’ active
foreign currency trading
trading.
Net income turned into a profit of ¥1.4 billion due to recording
valuation losses on the shares of Sony Bank Securities in FY12.1Q.

(Billi(Billions
off yen))Total net assets
Net unrealized gains onother securities, net of taxes
T t l assets
Totalt

ChangeCh
Changeffrom 1313.3.313 31Line item amounts are truncated below ¥100 million except for net fees and commissions;percentage change figures are rounded.

Sony Financial Holdings Inc. All Rights Reserved

23

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

12.6.30

13.3.3113.6.30

Change from
13.3.31

1,868.0

1,974.3

1,965.6(8.7)(0.4%)

Deposits

1,767.2

1,857.4

1,849.0(8.3)(0.4%)

Yen

1,401.8

1,467.2

1,466.9(0.2)(0.0%)

365.4

390.2

382.1

(8.0)

(2.1%)

100.8

116.9

116.5

(0.3)

(0.3%)

866.4

970.2

989.1

+18.9

+2.0%

Mortgage loans

774.4

860.3

878.1

+17.8

+2.1%

Others

92.0

109.8

111.0

+1.1

+1.0%

Capital adequacy ratio(domestic criteria) (*2)

11.29%

11.98%

11.89%(0.09pt)

Ti 1 ratio
Tier
ti

9 36%
9.36%

8 85%
8.85%

*1
1
9.04%
9
04%

+0 19pt+0.19pt

Customer assets

Foreign currency
Investment trusts
Loans outstanding(*1)<Reasons for changes>
Yen deposit balance remained at thesame levels because interest rates wereat unattractively low levels, despite apositive effect on customer assets of
converting from foreign currencies to yen
backed by yen depreciation.
Foreign currency deposit balance
decreased due to a negative impact fromconverting more foreign currencies into
yen, despite a positive impact from
customers’ active foreign currency trading
led by yen depreciation.

Loan balance increased due an increase in
the balance of mortgage loans.

*1 Loans in others include corporate loans of ¥104.7billion.
*2 Please refer to the graph of the non-consolidated capital adequacy ratio (domestic criteria) on P27.

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

Sony Financial Holdings Inc. All Rights Reserved

24Overview of Performance:
Sony Bank (Non-consolidated) (2)<Reference> On Managerial Accounting Basis<Reference> Interest Spread
FY12.1Q

FY13.1Q

4.4

5.9

+1.4

+33.4%

4.2

4.5

+0.3

9.2%

Net fees andcommissions *2 ②

0.1

0.4

+0.2

+119.3%

Net other operating
income *3

0.0

0.8

+0.8

－

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

4.3

5.0

+0.6

+14.1%

Operating expenses andother expenses ③

3.5

3.5

+0.0

+1.6%

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

0.8

1.4

+0.5

+63.8%(Billions of yen)
Gross operating profit
Net interest income*1①Change(Managerial Accounting Basis)
Yield on investment

Yield on financing

Interest spread(%)+0.04pt

0.94●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 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
and losses for bond and derivative dealing transactions.
●Core profit
Profits and losses exclude net other operating income, which includes those on bond andderivative dealing transactionstransactions, and stands for Sony Bank’s
Bank s basic profits.
profits

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

25

Operating Performance:
Sony Bank (Non-consolidated) (1)
Deposits
Yen depositspLoansMortgageg g loans

Foreign currency deposits

Others(Billions of yen)

970.2

(Billions of yen)

1,762.2

1,849.0

1,857.4
(8.3)

989.1
+18.9

835 5
835.5

111.0

*Corporate loansof ¥104.7 billion.

382.1

878.1

1 466 91,466.9

Line item amounts are truncated below ¥100 million.

Sony Financial Holdings Inc. All Rights Reserved

26

Operating Performance:
Sony Bank (Non-consolidated) (2)Balance of Securities by Credit Ratings
AAA
BBB

AA
Others

Non-Consolidated Capital Adequacy Ratio(Domestic Criteria)
Capital adequacy ratio

A

Tier1 ratio(%)(Billions of yen)

11.58
912.9

11 98
11.98

(0 09 pt)
(0.09
t)

11.89

908.8
802.7
(106.1)

9.63

8.85

9 04
9.04
+0.19 pt*C
*Calculated
based on the standard FSA
S NotificationfNo. 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.

Amounts are truncated below ¥100 million.

Sony Financial Holdings Inc. All Rights Reserved27

Consolidated Financial Forecast
for the Year Ending
g March 31,, 2014

Sony Financial Holdings Inc. All Rights Reserved28

Consolidated Financial Forecast
for the Year Ending March 31, 2014
■SFH’sS
fforecast off consolidated ffinancial results ffor FY2013
2013 is unchanged ffrom the fforecast
announced on May 9, 2013.
(Billions of yen)

FY12

FY13

(Actual)(Forecast)

ChangeConsolidated ordinary revenues

1,259.0

1,222.0(2.9%)

Life insurance business

1,142.3

1,099.9

Non-life insurance business

84.7

88.5

(3.7%)+4.5%

Banking business

34.3

34.0

(0.9%)

Consolidated ordinary profit

79.2

69.0

(12.9%)

Life insurance business

72.7

61.4

(15.5%)

Non-life insurance business

2.3

3.0

+30.4%

Banking business

39
3.9

43
4.3

+10 3%+10.3%

Consolidated net income

45.0

37.0

(17.9%)■Life insurance business
Ordinary revenues are expected to decrease year on year, because we do not expect such an increase in investment income on separate
account due to the market recovery as recorded in the previous fiscal year, although we expect higher income from insurance premiums.
Ordinary profit is expected to decrease, since we do not expect such a reversal of policy reserves related to minimum
guarantees for variable life insurance policies as recorded in the previous fiscal year. We also expect provision for policy reserves toincrease reflecting a revision of discount rate used for calculating policy reserves.
■Non-life insurance business
Ordinary revenues are expected to increase year on year, owing to an increase in net premiums written, primarily for automobile insurance.
Ordinary profit is expected to increase because we expect higher revenues and lower loss ratio.
■Banking Business
Ordinary revenues are expected to decrease year on year, owing mainly to a decrease in revenues in SmartLink Networks, despite aniincrease
iin iinteresttt iincome on lloans lleddb
by a growing
i bbalanceloff mortgagetlloans.
Ordinary profit is expected to rise, mainly because we anticipate a steady increase in gross operating profit, driven by business expansion.
Line item amounts are truncated below ¥100 million; percentage change figures are rounded.

Sony Financial Holdings Inc. All Rights Reserved

29

Revision of Dividend Forecast
for the Year Ending March 31, 2014

Sony Financial Holdings Inc. All Rights Reserved30Revision of Dividend Forecast
for the Year Ending March 31, 2014
We revise the year-end per-share dividend forecast for FY2013 from ¥25 to ¥30, following the dividend increase
for the prior fiscal year, after updating the recent business environment, business performance, and other factors.



Our mid-term target for the dividend payout ratio is 30% to 40% of consolidated net income. Going forward, we
will steadily raise dividend amount, taking into account management environment.
<Dividend Payout>

Dividend payout ratio (%)

35.3(Billions of yen) 26.4

26.5
20.9

21 2
21.2

25

24.1
Increased
Dividend(Forecast)

13.6

20
Increased
Di id dDividend

Annual dividend amount

15

Increased
Dividend

10

13.05

10.875
8.7

8.7

6.525

6.525

6.525

FY07

FY08

FY09

FY10

FY11

FY12

FY13(F)( )Dividend per share ¥15

¥15

¥15

¥20

¥20

¥25

¥30
(Forecast)50Note: We pay dividends once a year as a year-end dividend.

Sony Financial Holdings Inc. All Rights Reserved31Sony Life
Life’ss MCEV and
Risk Amount Based on Economic Valueas of June 30,
30 2013

Sony Financial Holdings Inc. All Rights Reserved32Sony Life’s MCEV as of June 30, 2013
(Billions of yen)

13.3.3113.6.30

Change from
13.3.311,064.7

1,149.9+85.2

Adjusted net worth

770.8

572.5

(198.3)

Value of existing business

293.9

577.4

+283.5

MCEV

Notes:
1. Calculated MCEV for policies in force as of June 30, 2013 by using updated lapse and surrender rate and economic assumptions.
2. Adoptedp
simplifiedpmethod for a p
part of MCEV calculations as of June 30,, 2013.

MCEV increased because an increase in value of existing business offset a significant decrease inadjusted net worth due mainly to a decrease in unrealized gains on held-to-maturity securities inline with higher interest rates in the ultra-long term.
New business value (new business margin) for 12 months ended March 31, 2013 was ¥41.6 billion(3.5%) while that for 3 months ended June 30, 2013 was ¥17.1 billion (6.5%). New business marginrose due mainly to higher interest rates in the ultra
ultra-long
long term and the revision of Sony Life’sLife sinsurance premium rates on some of its products in April 2013.
(*) New business margin equals new business value divided by present value of premium income.

* Please keep
p in mind that the validity
y of these calculations has not been verified byy outside specialists.
pSony Financial Holdings Inc. All Rights Reserved33Sony Life’s Risk Amount Based on Economic Valueas of June 30, 2013
(Billions of yen)

13.3.3113.6.30

Insurance risk

605.6

597.2

Market-related risk

289.9

234.5

Of which, interest rate risk*

234.2

175.4

p
risk
Operational

26.0

25.0

Counter party risk

2.3

1.7

Variance effect(262.5)(241.3)Th riskThe
i k amount b
based
d on economic
i value
l

661 3
661.3

617 0
617.0

(Billions of yen)

MCEV

13.3.31
1 064 7
1,064.7

13.6.30
1 149 91,149.9(*) Interest amount excluding the variance effect within market-related risk.

 Maintained capital adequacy by controlling market-related risk.
Notes
1. The risk amount based on economic value refers to the total amount of Sony Life’s risks, comprehensively examined and including insurance risk andmarket-related risk.
2. The solvency risk capital on an economic value basis is calibrated at VaR (99.5) over one year and based on the internal model, which is a similar but
modified model based on the EU Solvency II (QIS5) standard method.

* Please keep in mind that the validity of these calculations has not been verified by outside specialists.

Sony Financial Holdings Inc. All Rights Reserved34

Appendix

Sony Financial Holdings Inc. All Rights Reserved35

Recent Topics 1
AEGON Sony Life Insurance’s 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 (3 types, 4 products*)
Sales Channels: Lifeplanner sales employees and partner Banks (12*)(12 ) *AsAs of Aug.
Aug 12,12 2013<Financial Highlights for FY13.1Q> Number of new policies: 6,812 (+5,737 from FY12.1Q)
New policy amount: ¥39.6 billion (+¥32.1 billion from FY12.1Q)<As of June 30, 2013> Number of policies in force: 16,762 (+12,036 from June 30, 2012)
Policy amount in force: ¥113.3billion (+76.5 billion from June 30, 2012)
Line item amounts are truncated below ¥100 million.

Sony Bank’s Mortgage Loans through Sony Life
■ Sony Life accounts for 25% of the balance of mortgage
loans as of June 30, 2013
Sony Life accounts for 22% of the amount of new mortgage loans for FY13.1Q*Sonyy Life started handlingg bankingg agencygy business in January
y 2008.

Sony Assurance’s Auto Insurance Sold by Sony Life
■ Sony Life accounts for approx. 5% of new automobile policies for FY13.1Q* Sony Life started handling automobile insurance in May 2001.
“Lifeplanner” is a registered trademark of Sony Life Insurance Co., Ltd.

Sony Financial Holdings Inc. All Rights Reserved36

Recent Topics 2<Highlight for FY2013.1Q>
2013-7-29

Sony Bank started accepting an account application form for Nippon Individual Savings Account (tax-free),called NISA.

2013-6-25

Sony Bank opened its official account on social media sites.

2013-5-02

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

2013-5-01

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

2013-4-02

Sony Life revised insurance premium rates on some of its products in line with the reduction in discount rateused for calculating policy reserves.

2013-4-01

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 non-fleet driver rating system and therevision on automobile insurance premium rates.)Sony Financial Holdings Inc. All Rights Reserved37Sony Life: Fair Value Information on Securities(General Account Assets)
Fair Value Information on Securities
Fair value information on securities with market value (except trading-purpose
trading purpose securities)

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

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

Sony Financial Holdings Inc. All Rights Reserved38Sony Life’s Interest Income and Dividends (Details)(Millions of yen)

FY12.1Q

ChangeFY13.1Q
00(65.3%)

20,82823,649+13.5%

6848(30.1%)

Foreign securities

697

1,253

+79.6%

Other securities

78

11(85.5%)

Loans

1 342
1,342

1 394
1,394

+3 9%
+3.9%

Real estate

2,710

2,560

(5.5%)

810+18.2%

25,73528,926+12.4%Cash and deposits
Japanese governmentand corporate bonds
Japanese stocks

Others
Total

Line item amounts are truncated below ¥1 million

Sony Financial Holdings Inc. All Rights Reserved39Sony Life’s Quarterly Trend on New Policies Amount
Quarterly trend on New Policies Amount(Billions of yen)

New policy amountLine item amounts are truncated below ¥100 million;

Sony Financial Holdings Inc. All Rights Reserved40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)Line item amounts are truncated below ¥100 million;

Sony Financial Holdings Inc. All Rights Reserved

41

Method of Measuring Risk Amount
Based on Economic Value (1) Market-related Risk
Sony Life(Reference) EU Solvency II (QIS5)Interest rate risk
Foreign currencies’ interest rate up 1.33x–10.39x(differs each currency and each year)
Yen’s interest rate down 0.07x–0.67x
but no lower than 1%

Interest rate up 1.25x–1.70xInterest rate down 0.25x–0.73x
but no lower than 1%

Equity risk

Listed equities and REIT 45% decline
Unlisted equities 55%
Other securities 70%
Subsidiaries affiliated companies and strategic
Subsidiaries,
investment 100%

Global 30%
Others 40% (Note 2)

Real estate risk

Actual real estate 25%

Same as on the left

Credit risk

Credit risk = (market value) x (risk coefficient for each credit
rating) x adjusted duration
Note that adjusted durations have caps and floors, depending
on credit ratings.
(Example)
Rating A: Risk coefficient (1.4%), cap (23), floor (1)Same as on the left

Currency risk

30% downside fluctuation

25% downside fluctuation

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

Notes
1. Principal items as of June 30, 2013.
Market-related risk qquantification follows the QIS5 approachpp
in p
principle.
p However,, Sonyy Life modified it to make it more suitable to Japanesepmarket byy adapting
p g the ppast and latest
data of the market which is different from the method prescribed in QIS5.
2. Standard risk coefficients are global: 39%/other: 49%. Symmetric adjustment (an adjustment of ±10% of the average value of the stock price index during a defined period in the past)is applied; as of the QIS5 trial introduction (December 31, 2009), these were 30%/40%.

Sony Financial Holdings Inc. All Rights Reserved

42Method of Measuring Risk Amount
Based on Economic Value (2) Insurance Risk
Sony Life(Reference) EU Solvency II (QIS5)

Mortality risk

Mortality rate increases by 15% for each year
elapsedSame as on the leftLongevity risk

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

Lapse risk

The largest amount of these*;・Lapse rate increases by 50% for each year
elapsed・Lapse rate decreases by 50% for each year
elapsed・30% of policies on which surrender value is inexcess of best estimate liability are immediately
surrendered

The largest amount of these;
・Increase by 50% in the assumed rates oflapsation for Life module, 20% for Healthmodule・Decrease by 50% in the assumed rates oflapsation for Life module, 20% for Healthmodule・30% of policies (70% for group annuities,etc ) on which surrender value is in excess of
etc.)
best estimate liability are immediately
surrendered

Expense risk

Operating expenses increase by 10% for eachyear elapsed
Rate of inflation rises by 1%

Disability risk

Rate of occurrence increases by 35% in theRate of occurrence increases by 35% in the first
first fiscal year, rising by 25% for each year
fiscal year, rising by 25% for each year thereafter
thereafter Recovery rate decreases by 20%
thereafter.
20%.

Same as on the left

* At Sony Life, lapse risk is calculated by computing and adding together the largest amount of three options for each insurance policy.

Sony Financial Holdings Inc. All Rights Reserved

43

Contact: CorporatepCommunications & Investor Relations DepartmentpSony Financial Holdings Inc.
TEL： +81-3-5785-1074

Sony Financial Holdings Inc. All Rights Reserved

44