Content

During the year ended March 31, 2014, consolidated ordinary revenues rose 4.8%year on year, tot ¥1,319.7¥1 319 7 billibillion, owing
i tto iincreases iin ordinary
direvenues ffrom allll th
thebusinesses; life insurance, non-life insurance and banking.
Consolidated ordinary profit decreased 3.9% year on year, to ¥76.1 billion. By
business segment, 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.

Here is highlights of consolidated operating performance.

Highlights of Sony Life’s operating performance (non-consolidated basis) are shown
here.
Sony Life’s ordinary revenues increased 4.8% year on year, to ¥1,197.1 billion.
Of this amount, income from insurance premiums grew 3.8% year on year, to ¥960.9billion, due to a steady growth in policy amount in force.
Investment income increased 6.3% year on year, to ¥212.3 billion, due mainly to higher
interest income and dividends on general account assets.
OrdinaryO
diprofit
fit ddecreased
d7
7.3%
3% year on year, tto ¥69¥69.2
2 billibillion. Thi
This iis b
because off anincrease in provision of policy reserves resulting from a revision of discount rate used for
calculating policy reserves and the provision of policy reserves for minimum guarantees
for variable life insurance, despite the positive impact from an increase in the positivespread.

Here is an overview Sony Life’s operating performance (non-consolidated basis)

(Left-hand graph)
New policy amount for the total of individual life insurance and individual annuities for theyear ended March 31, 2014, decreased 12.7% year on year, to ¥3.88 trillion, due mainly
to the revision of insurance premium rates.
By product type, sales of family income insurance and interest rate-sensitive whole life
insurance decreased while sales of U.S. dollar denominated insurance which was newly
launched this fiscal year and lump-sum payment endowment insurance increased.
The number of new policies decreased 14
14.0%
0% year on yearyear, to 533 thousand policies
policies.
(Right-hand graph)
Annualized premiums from new policies for the year ended March 31, 2014,decreased 12.7% year on year, to ¥63.9 billion, due to the revision of insurance
premium rates.
By product type, sales of interest rate-sensitive whole life insurance and educational
endowment
dt insuranceiddecreasedd whilehil sales
l off llump-sum paymentt endowmentdt
insurance. Of which, the figure for third-sector insurance products was down 26.7% year
on year, to ¥13.4 billion due to a decrease in sale of lump-sum payment whole lifenursing-care insurance.

Sony Life’s policy amount in force which reflects new policy amount and lapse andsurrenderd amount,t isi shownhhhere.
(Left-hand graph)
Policy amount in force for the total of individual life insurance and individual
annuities increased 3.5% year on year, to ¥39.0 trillion, due to an increase in newpolicies and a decline in lapse and surrender rate.
Annual ggrowth rate for the yyear ended March 31, 2014, was lower than that in theprevious fiscal year. However, the average growth rate for the past two years was 4.1%,
which is in line with Sony Life’s mid-term target rate of 4.0%. Sony Life has been stably
growing its business volume.
(Right-hand graph)
Annualized premiums from insurance in force increased 4.0% year on year, to ¥696.9
billion.

The lapse and surrender rate for the year ended March 31, 2014, decreased 0.70
percentage
tpointi t year on year, tot 4.61%,
4 61% ddue tto th
the ffurther
th llowering
i off llapse anddsurrender rates primarily for term-life insurance.

(Left-hand graph)
IIncomefromfinsurance
ipremiums
iiincreased
d3
3.8%8% year on year, tto ¥960
¥960.99 billibillion, ddue tto asteady growth in policy amount in force.
(Right-hand graph)
Interest income and dividends was up 12.5% year on year, to ¥122.1 billion, due to anexpansion in investment assets along with business expansion.

(Left-hand graph)CCore
profitfit was ddown 99.6%
6% year on year, tto ¥72¥72.3
3 billibillion, due
d tto an increasei
iin provisioni iof policy reserves resulting from a revision in the discount rate used for calculating policy
reserves and the provision of policy reserves for minimum guarantees for variable life
insurance, despite the positive effect of an increase in the positive spread.
(Right-hand graph)
Ordinary profit decreased 7.3% year on year, to ¥69.2 billion.
M i diffMain
differences b
betweentcore profit
fit andd ordinary
diprofit
fit iinclude
l d a provisioni i off
contingency reserve and capital gains and losses.

The number of Lifeplanner sales employees as of March 31, 2014, was 4,216, up 124ffromDecemberDb 31
31, 2013
2013, andd up 83 ffrom M
Marchh 3131, 20132013.

Here is a breakdown of Sony Life’s general account assets as of March 31, 2014,
comparedd withith M
Marchh 3131, 20132013.
As Sony Life continued its investment in ultralong-term bonds, the holding ratio on thereal status, of Japanese government and corporate bonds including those invested inmonetary trusts rose to 91.8% as of March 31, 2014.
Going forward, Sony Life will invest most of new money acquired from income frompremiums in ultralong-termgbonds in order to pproperly
p y control interest rate risk
insurance pon insurance liabilities.

(Left-hand graph)
P iti spread
Positived ffor th
the year endedd dMMarchh 31
31, 2014
2014, increased
id ¥6.3¥6 3 billi
billion year on year,to ¥8.4 billion, due to a lower average assumed interest rate and higher investment yieldfor core profit.
(Right-hand graph)
Investment yield for core profit for the year ended March 31, 2014, was 2.35% which
exceeds the average assumed interest rate, 2.18%.

As of March 31, 2014, Sony Life’s non-consolidated solvency margin ratio was
2 358 7% up 76
2,358.7%,
76.9
9 percentage
tpointsi t ffrom M
Marchh 3131, 20132013, remaining
i i att a hihighh llevel.
lAEGON Sony Life Insurance, which sells individual variable annuities, has steadily
expandedd d itits bbusiness
ivolume.
lSonyy Assurance’s ordinaryy revenues increased 6.1% year
yon year,y , to ¥89.8 billion,, due
to an increase in net premiums written primarily for automobile insurance.
Ordinary profit increased 26.7% year on year, to ¥3.0 billion, 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.

Here is an overview of Sony Assurance’s operating performance.

This slide shows direct premiums written, net premiums written and net losses paid byt
type
off policy.
li(Left-hand graph)
Th numberTheb off policies
li i iin fforce ffor ththe total
t t l off automobilet
bil iinsurance andd medical
di l andd
cancer insurance steadily increased 4.0% year on year, to 1.61 million policies. This isbecause Sony Assurance has began offering a new discounted premiums (increased
discount rate from ¥5,000 to ¥8,000) for new customers who contracted automobile
insurance via Internet from April 2013.
Net premiums written posted a 6.0% year-on-year increase, to ¥88.6 billion, owing to anincrease in the number of automobile insurance and the effect of the premium revision.
(Right-hand graph)
Ordinary profit significantly increased year on year, due mainly to a decline in the loss
ratio as described in the previous pages. We also show you adjusted ordinary profit inaddition to ordinary profit on the graph. Adjusted ordinary profit is an profit indicator on a
managerial accounting basis. The figure is calculated by adjusting the amount ofprovision(reversal) for catastrophe reserve to ordinary profit. Adjusted ordinary profit also
increased significantly year on year, to ¥4.2 billion.

(Left-hand graph)
F year endedFord dMMarchh 3131, 2014
2014, ththe EE.I.
I lloss ratio
ti ddeclined
li d 44.7
7 percentage
tpointsi t yearon year, to 68.2%, 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).
The net expense ratio declined 0.4 percentage point year on year, to 25.6%, due to aproper control of insurance acquisition cost and a rise in automobile insurance premiums.
qy, the sum of the E.I. loss ratio and the net expense
pratio declined 5.1
Consequently,percentage points year on year, to 93.8%.
(Right-hand graph)
The net loss ratio declined 3.9 percentage points year on year, to 59.3%. This is different
from the E.I. loss ratio, which reflects an increase or a decrease in provision for reservefor outstanding losses. The combined ratio (the sum of the net loss ratio and the net
expense ratio) declined 4.3 percentage points year on year, to 84.9%.

As of March 31, 2014, Sony Assurance’s non-consolidated solvency margin ratio was
527 6% up 23527.6%,
23.4
4 percentage
tpointsi t ffrom MMarchh 3131, 20132013.

Sony Bank’s consolidated ordinary revenues and ordinary profit increased year on year.
CConsolidated
lid t d ordinary
direvenues iincreased
d4
4.3%
3% year on year, tto ¥35¥35.7
7 billibillion anddconsolidated ordinary profit increased 26.5% year on year, to ¥5.6 billion.
On a non-consolidated basis, Sony Bank’s net interest income increased owing to anincrease in interest income on loans led by the growing balance of mortgage loans and adecrease in interest expenses.
goperating
pgp
profit increased 11.7% yyear on yyear,, to ¥20.7 billion and netMoreover,, grossoperating profit increased 32.5% year on year, to ¥6.0 billion. This is because of a higher
gains on foreign exchange transactions stemming from active foreign currency trading bycustomers, in addition to an improvement in net gains on bond-dealing transactions.
Sony Bank achieved a record-high in ordinary profit, gross operating profit and net
operating profit on both consolidated and non-consolidated basis for the year ended
March 31, 2014.

Here is an overview of Sony Bank’s operating performance.

We break down gross operating profit on a managerial accounting basis to facilitate anunderstandingd t di off operationaltil sources off revenue andd profits.
fit(Left-hand table)
Net interest income on a managerial accounting basis increased 3.2% year on year, to¥18.2 billion, owing to an increase in interest income on loans led by the growing
balance of mortgage loans and a decrease in interest expenses.
Net fees and commissions increased 7.4% year on year, to ¥1.0 billion, owing to higher
gains on foreign
gg exchange
g transactions stemmingg from active foreign
g currency
y trading
gby customers.
Net other operating income increased to ¥1.3 billion, due to an improvement in net gains
on bond-dealing transactions. Consequently, gross operating profit on a core profit basis
increased 3.4% year on year, to ¥19.2 billion, and net operating profit on a core profit
basis amounted to ¥4.6 billion.
(Right-hand graph)
The yield on investment for FY2013 was 1.20%.
The yield on financing for FY2013 was 0.28%.
Consequently, interest spread for FY2013 was 0.93%.

(Left-hand graph)
A off MarchAsM h 31
31, 2014
2014, ddepositsit (th(the sum off JJapanese yen andd fforeign
i currency ddeposits)it )amounted to ¥1,890.0 billion, up ¥32.5 billion from March 31, 2013. Of which, yen
deposits balance amounted to ¥1,526.4 billion, up ¥59.2 billion from March 31, 2013,
owing to an effect of converting from foreign currencies to yen backed by yen
depreciation. Foreign currency deposits balance amounted to ¥363.5 billion, down ¥26.7
billion from March 31, 2013, due to an increase in selling to lock in profits led by yen
depreciation.
(Right-hand graph)
Loans balance expanded to ¥1,057.4 billion, up ¥87.1 billion from March 31, 2013, due
to the growing balance of mortgage loans.

(Left-hand graph)
A off MarchAs
M h 31
31, 2014
2014, ththe bbalanceloff securities
iti amountedt d tto ¥773.8¥773 8 billibillion, ddown ¥135
¥135.00billion from March 31, 2013. Sony Bank continuously invests in highly rated bonds while
keeping close eyes on interest rate environment.
(Right-hand graph)
As of March 31, 2014, Sony Bank’s non-consolidated capital adequacy ratio (domesticcriteria) was 11.72%. Sony Bank has maintained financial soundness.
Sonyy bank calculates this ratio based on Basel III from March 31,, 2014.

With regard to SFH’s financial forecast for the year ending March 31, 2015, stable andsustainablet i bl bbusinessi
growthth iis expectedt d iin allll ththe bbusinesses:
iliflife iinsurance, non-lifelifinsurance and banking.
We expect ordinary revenues for the fiscal year ending March 31, 2015, to decrease
because we do not anticipate the same level of increase in lump-sum payment insurance
premiums and investment income on separate account due to market recovery as
recorded in the previous fiscal year. However, we do look forward to steady growth inpolicypy amount in force in the life insurance business.
We anticipate the same level of ordinary profit in this fiscal year as in the year ended
March 31, 2014. 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 inoperating expenses due to the consumption tax rate rise. We do not expect any negative
impact from a rise in provision of policy reserves resulting from the revision of the
discount rate used for calculating policy reserves.
We expect net income to grow significantly year on year. Sony Life has changed its
calculation policy of the reserve for price fluctuations to accumulate reserves up torequired levels from this fiscal year while it had accumulated reserves in excess of therequired levels until the previous fiscal year.
The policy change is a result of its ALM initiatives where Sony Life has successfully
reduced its risk assets.

Taking into account such factors as operating performance during the fiscal year ended
M h 31March31, 2014
2014, we planl tto pay a year-end
d didividend
id d off ¥30 per share,hup ¥5 ffrom th
theprevious fiscal year.
Given the substantial increase in net income forecast for FY2014, we expect to increase
the dividend by ¥10 per share, to ¥40. This would correspond to the third consecutive
year of dividend increases, since FY2012.
policyy is to ppay
y stable dividends,, steadilyy increasing
g their level in line with
SFH’s dividend p
earnings growth over the medium to long term, thereby enhancing ongoing shareholder
returns.

Sony Life’s preliminary MCEV as of March 31, 2014, increased ¥156.6 billion from March
31 201331,
2013, tto ¥ 1,221.3
1 221 3 billi
billion, ddue mainly
i l tto an acquisition
i iti off new policies,
li iassumptiontichanges in mortality rates and lapse and surrender rates and higher interest rates.
New business value (new business margin) for 12 months ended March 31, 2014 was¥55.2 billion (5.2%) while that for 12 months ended March 31, 2013 was ¥41.6 billion(3.5%).
g as of March 31,, 2014,, was up
p from March 31,, 2013,, due
New business margin
mainly to the revision of Sony Life’s insurance premium rates in April 2013 and higher
interest rates.

The risk amount based on economic value as of March 31, 2014 amounted to ¥664.3billibillion.
WithiWithin SSony LifLife’s’ risks,i k iinsurance riski k andd market-related
k t l t d riski k amountedt d tto¥654.5 billion and ¥240.0 billion respectively.
Sony Life revised its method of measuring interest rate risk in Japanese yen on March31, 2014. Please see page 43 for detail.
The risk amount based on economic value as of March 31, 2014, was slightly up fromMarch 31,, 2013.
However, Sony Life has maintained high financial soundness by keeping MCEV, whichis capital based on economic value, at a higher level than the risk amount.

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