February 12, 2021

Financial Results for the Nine Months Ended December 31, 2020
Fukoku Mutual Life Insurance Company (President: Yoshiteru Yoneyama) announces
financial results for the nine months ended December 31, 2020.

[Contents]
1. Business Highlights ……………………………………………..………….……

P. 1

2. Investment Results of General Account Assets ………………………………….

P. 3

3. Non-consolidated Balance Sheets ………………………….………………..…..

P. 6

4. Non-consolidated Statements of Operations …………………………………….

P. 7…………………….…

P. 9

6. Solvency Margin Ratio ………………………….…………………………..…..

P. 10…………………………….……………..…………

P. 11

8. Status of the Company, Subsidiaries and Affiliates ………………………..……

P. 12

5. Breakdown of Ordinary Profits (Fundamental Profit)

7. Status of Separate AccountFukoku Mutual Life Insurance Company

1. Business Highlights(1) Policies in Force, New Policies and Surrendered and Lapsed Policies(i) Policies in Force
As of March 31, 2020
Number of policies(Thousands)

As of December 31, 2020

Amount(100 millions of yen)

Number of policies
Changes(Thousands)(%, Pre-FYE)

Amount(100 millions
Changesof yen)(%, Pre-FYE)

Individual insurance

3,184

224,295

3,178

99.8

224,330

100.0

Individual annuities

627

24,560610

97.3

23,874

97.2

3,811

248,855

3,788

99.4

248,204

99.7

Group insurance—

176,052——

175,136

99.5

Group annuities—

22,334——

22,584

101.1

Subtotal

Notes: 1. Policy amounts for individual annuities are equal to (a) the funds to be held at the time annuity payments are to commence for anannuity for which annuity payments have not yet commenced and (b) the amount of policy reserve for an annuity for which
payments have commenced and (c) special riders for term insurance attached to individual annuities.
Notes: 2. Policy amount in force for group annuities is equal to the amount of outstanding policy reserve.

(ii) New Policies
Nine months ended
December 31, 2019

New business

Net increase by
conversion

Amount(100 millions of yen)Amount(100 millions of yen)

Total
Number of policies(Thousands)

Amount(100 millions of yen)

Individual insurance

271

11,787

10,327

1,460

Individual annuities

7

214

223

(9)

Subtotal

278

12,001

10,5501,450Group insurance

—

104

104

—

Group annuities

—

0

0

—

Total
Nine months ended
December 31, 2020

Number of policies(Thousands)
Changes(%, YoY)

New businessAmountAmount

Net increase by
conversion
Amount(100 millionsof yen)Changes(%, YoY)(100 millionsof yen)Changes(%, YoY)(100 millionsof yen)Changes(%, YoY)

Individual insurance

213

78.6

11,054

93.8

8,227

79.7

2,826

193.6

Individual annuities

5

72.7

150

70.3

157

70.3

(6)

－

Subtotal

218

78.4

11,204

93.4

8,384

79.5

2,820

194.4

Group insurance

—

—

26

25.0

26

25.0

—

—

Group annuities

—

—

0

714.8

0

714.8

—

—

Notes: 1. Number of new policies is the sum of new business and policies after conversion.
Notes: 2. Amount of new policies for individual annuities, both new business and net increase by conversion, is equal to the funds to beheld at the time annuity payments are to commence and special riders for term insurance attached to individual annuities.
Notes: 3. Amount for group annuities is equal to the initial premium payment.

(iii) Surrendered and Lapsed Policies (Individual Insurance and Individual Annuities)
Nine months ended
December 31, 2019

Nine months ended
December 31, 2020
Changes(%, YoY)

Amount of surrender and lapse(100 millions of yen)

9,157

7,279

79.5

Surrender and lapse ratio (%)

3.64

2.93

(0.71)

Notes: 1. The amount of lapse is not offset by the amount of reinstatement which was once lapsed.
Notes: 2. The column of "Changes" of surrender and lapse ratio is increase-decrease points over year.

1

Fukoku Mutual Life Insurance Company

(2) Annualized Premiums(i) Policies in Force(100 millions of yen, %)As of March 31, 2020

As of December 31, 2020
Changes (%, Pre-FYE)

Individual insurance

2,692

2,676

99.4

Individual annuities

1,158

1,126

97.2

Total

3,851

3,802

98.7

1,135

1,142

100.6

Medical coverage and living benefits(ii) New Policies(100 millions of yen, %)Nine months ended December 31, 2019

Nine months ended December 31, 2020
Changes (%, YoY)

Individual insurance

106

84

79.7

Individual annuities

6

4

70.9

112

89

79.2

58

44

76.7

Total
Medical coverage and living benefits

Notes: 1. Annualized premiums are calculated by using coefficients based on the premium payment method. (For single premium
contracts, the amount is calculated by dividing the premium by the coverage period.)
Notes: 2. Figures for medical coverage and living benefits represent portion of annualized premium corresponding to the medical
benefits (hospitalization benefits and surgery benefits, etc.), living benefits (nursing care benefits, etc.) and premium waiver
benefits, in which disability cause is excluded but causes such as specific illness are included.
Notes: 3. New policies include net increase by conversion.

2

Fukoku Mutual Life Insurance Company

2. Investment Results of General Account Assets(1) Asset Composition(Millions of yen, %)Cash, deposits, and call loans

As of March 31, 2020

As of December 31, 2020

AmountAmount% of total

515,545

Monetary claims bought

7.7 %% of total

395,355

5.7 %

269

0.0

247

0.0

24,1560.4

25,2450.4

5,265,401

78.5

5,643,284

81.4

Domestic bonds

2,677,697

39.9

2,745,351

39.6

Domestic stocks

612,0199.1

733,102

10.6

Foreign securities

1,857,920

27.7

2,013,982

29.0

Foreign bonds

1,580,829

23.6

1,629,382

23.5

277,091

4.1

384,600

5.5

117,7641.8

150,847

2.2

565,473

8.4

560,797

8.1

Policy loans

55,3390.8

51,4680.7

Ordinary loans

510,133

7.6

509,329

7.3

Real estate

215,305

3.2

228,539

3.3

Deferred tax assets

29,397

0.4——

Others

92,688

1.4

82,864

1.2

Allowance for possible loan losses(2,023)(0.0)(2,364)(0.0)

6,706,213

100.0

6,933,969

100.0

2,159,294

32.2

2,289,208

33.0

Money held in trust
Securities

Foreign stocks and other securities
Other securities
Loans

Total
Foreign currency denominated assets

Note: The amount of real estate is equal to the amounts of land, buildings, and construction in progress.

3

Fukoku Mutual Life Insurance Company

(2) Fair Value Information on Securities (with fair value, other than trading securities)(Millions of yen)
As of March 31, 2020

As of December 31, 2020

Gains/Losses

Gains/Losses

Book value Fair value

Book value Fair value
Gains

Losses

Gains

Losses

Held-to-maturity debt securities

757,178879,712122,534

122,534—

755,496869,251

113,754

113,754—

Domestic bonds

737,664

858,750

121,085

121,085—736,674

849,349

112,675

112,675—

Foreign bonds

19,51420,962

1,448

1,448

—

18,822

19,901

1,079

1,079

—

Monetary claims bought

—

—

—

—

—

—

—

—

—

—

Negotiable certificate of deposits

—

—

—

—

—

—

—

—

—

—

Others

—

—

—

—

—

—

—

—

—

—

Policy-reserve-matching bonds

892,940

1,035,765

142,825

144,107

1,281

879,640

1,005,623

125,983

129,833

3,850

Domestic bonds

892,940

1,035,765

142,825

144,107

1,281

879,640

1,005,623

125,983

129,833

3,850

Foreign bonds

—

—

—

—

—

—

—

—

—

—

Investments in subsidiaries and affiliates

—

—

—

—

—

—

—

—

—

—

3,056,561

3,450,284

393,722477,836

84,113

3,316,280

3,883,029

566,749

596,644

29,894

Domestic bonds

955,552

1,038,974

83,421

83,947525

1,058,828

1,129,036

70,20773,821

3,613

Domestic stocks

333,313543,104

209,791

232,868

23,077345,448

664,196318,747

329,405

10,657

Foreign securities

1,675,248

1,770,514

95,265

148,498

53,233

1,804,954

1,959,310

154,356

168,277

13,921

Foreign bonds

1,389,520

1,503,075

113,555

138,270

24,715

1,471,184

1,583,068

111,884

122,304

10,420Foreign stocks and other securities

285,728

267,438(18,289)

10,22728,517

333,770

376,241

42,47145,972

3,501

Other securities

92,446

97,6905,244

12,521

7,277

107,048

130,486

23,43825,140

1,702

Money held in trust

—

—

—

—

—

—

—

—

—

—

Monetary claims bought

—

—

—

—

—

—

—

—

—

—

Negotiable certificate of deposits

—

—

—

—

—

—

—

—

—

—

Others

—

—

—

—

—

—

—

—

—

—

Total

4,706,680

5,365,762

659,082

744,478

85,395

4,951,417

5,757,905

806,487

840,233

33,745

Domestic bonds

2,586,157

2,933,490

347,333

349,140

1,807

2,675,143

2,984,009

308,865

316,329

7,464

Available-for-sale securities

Domestic stocks

333,313543,104

209,791

232,868

23,077345,448

664,196318,747

329,405

10,657

Foreign securities

1,694,762

1,791,476

96,713

149,946

53,233

1,823,776

1,979,212

155,435

169,357

13,921

Foreign bonds

1,409,034

1,524,038

115,003

139,719

24,715

1,490,006

1,602,970

112,964

123,384

10,420Foreign stocks and other securities

285,728

267,438(18,289)

10,22728,517

333,770

376,241

42,47145,972

3,501

Other securities

92,446

97,6905,244

12,521

7,277

107,048

130,486

23,43825,140

1,702

Money held in trust

—

—

—

—

—

—

—

—

—

—

Monetary claims bought

—

—

—

—

—

—

—

—

—

—

Negotiable certificate of deposits

—

—

—

—

—

—

—

—

—

—

Others

—

—

—

—

—

—

—

—

—

—

Note: The table above includes assets which are considered appropriate to deem as securities under the Financial Instruments andExchange Law.

• Book value of securities without fair value are as follows:(Millions of yen)

As of March 31, 2020

As of December 31, 2020

Held-to-maturity debt securities——

Unlisted foreign bonds——

Others——

Policy-reserve-matching bonds——

Investments in subsidiaries and affiliates

64,78764,787Available-for-sale securities

32,41032,377

Unlisted domestic stocks (except over-the-counter stocks)

5,684

5,676

Unlisted foreign stocks (except over-the-counter stocks)——

Unlisted foreign bonds——

Others26,72526,700Total

97,197

97,164

Note: In this table, domestic and overseas investment partnerships are included in “Others” within “Available-forsale securities.” However, unrealized gains on available-for-sale securities corresponding to these holdings
by domestic and overseas investment partnerships (¥1,443 million as of March 31, 2020 and ¥462 million asof December 31, 2020) are included in their balance sheet carrying amounts.

4

Fukoku Mutual Life Insurance Company

(3) Fair Value Information on Money Held in Trust(Millions of yen)

As of March 31, 2020

Money held in trust

Carrying valueon the balance
sheet

Fair value

24,15624,156

As of December 31, 2020

Gains/Losses
Gains

LossesCarrying valueon the balance
sheet

—

—

25,245—

Gains/Losses
Fair value

25,245

Gains

Losses———• Money held in trust for trading purpose(Millions of yen)

As of March 31, 2020
Net valuation gains/losses
included in the statementsof operations

Carrying valueon the balance sheet

Money held in trust
for trading purpose

As of December 31, 2020

23,156

Net valuation gains/losses
included in the statementsof operations

Carrying valueon the balance sheet

024,245107• Money held in trust classified as held-to-maturity, policy-reserve-matching and available-for-sale(Millions of yen)

As of March 31, 2020

As of December 31, 2020

Gains/Losses
Book value

Gains/Losses

Fair value

Book value
Gains

LossesFair value
Gains

LossesMoney held in trust
for held-to-maturity

—

—

—

—

—

—

—

—

—

—

Money held in trust
for policy-reservematching

—

—

—

—

—

—

—

—

—

—

Money held in trust
for available-for-sale

—

—

—

—

—

—

—

—

—

—

Reference: Fair Value of Real Estate (Land and Leaseholds)(Millions of yen)

As of March 31, 2020
Carrying valueon the balance sheet

125,121

Fair value

278,475

As of December 31, 2020
Carrying valueon the balance sheet

Gains (Losses)

153,354

137,344

Fair value

291,964

Gains (Losses)

154,619

Note: Fair value is based on the appraisal value by the real-estate appraiser, the appraisal value for property tax and the road rate.

5

Fukoku Mutual Life Insurance Company

3. Non-consolidated Balance Sheets(Millions of yen)

Assets:Cash and deposits
Call loans
Monetary claims bought
Money held in trust
Securities:[Government bonds][Local government bonds][Corporate bonds][Stocks][Foreign securities]
Loans:
Policy loans
Ordinary loans
Tangible fixed assets
Intangible fixed assets
Agency receivables
Reinsurance receivables
Other assets
Prepaid pension costs
Deferred tax assets
Allowance for possible loan losses
Total assets

Liabilities:
Policy reserves:
Reserve for outstanding claims
Policy reserve
Reserve for dividends to policyholders
Reinsurance payables
Subordinated bonds
Other liabilities:
Corporate income tax payable
Lease obligations
Asset retirement obligations
Rest of the other liabilities
Reserve for employees' retirement benefits
Reserve for price fluctuation
Deferred tax liabilities
Deferred tax liabilities for land revaluation
Total liabilities
Net assets:
Foundation funds
Accumulated foundation funds redeemed
Reserve for revaluation
Surplus:
Legal reserve for future losses
Other surplus:
Reserve for redemption of foundation funds
Reserve for dividend allowances
Accumulated fund for price fluctuation
Reserve for advanced depreciation of real estate for tax purpose
Other reserves
Unappropriated surplus
Total foundation funds, surplus and others
Net unrealized gains (losses) on available-for-sale securities, net of tax
Revaluation reserve for land, net of tax
Total valuation and translation adjustments
Total net assets
Total liabilities and net assets

6

As of March 31, 2020

As of December 31, 2020

288,668
230,000
269
24,156
5,344,665[1,932,731][102,704][664,875][631,989][1,894,581]
565,473
55,339510,133
219,475
23,791
4
111
66,881—
29,397(2,023)6,790,871

199,062200,000
247
25,2455,736,417[1,994,801][98,703][676,032][757,949][2,058,059]
560,797
51,468509,329
233,013
23,3208
555,072356—(2,364)
7,031,182

As of March 31, 2020

As of December 31, 2020

5,775,716
19,814
5,694,979
60,922
86
191,935
122,632
6,002
966
2,754
112,908
23,519122,745—
14,2136,250,849

5,827,565
17,407
5,736,640
73,51763
241,935
112,052
295
812
2,792
108,151
23,668125,449
17,407
14,2096,362,351

12,000116,000
112
123,054
3,176
119,878—
20,00041,000209
767
57,901
251,166
284,752
4,102
288,855
540,0216,790,871

12,000116,000
112
127,546
3,271
124,275
2,400
20,00041,000207
767
59,900255,658
408,927
4,245
413,172
668,8317,031,182

Fukoku Mutual Life Insurance Company

4. Non-consolidated Statements of Operations(Millions of yen)

Nine months ended
December 31, 2019

Nine months ended
December 31, 2020

Ordinary revenues:
Premium and other income[Premium income]Investment income[Interest, dividends and other income][Gains on money held in trust, net]
[Gains on trading securities, net]
[Gains on sales of securities][Gains on separate accounts, net]
Other ordinary revenues[Reversal of reserve for outstanding claims]

411,216[411,188]
138,754[109,475]
[110]
[90]
[24,221][4,544]
11,914[3,073]362,095[362,067]
147,160[107,503][1,100][4,332][19,804][14,312]9,185[2,406]

Total ordinary revenues

561,885

518,441

Ordinary expenses:
Claims and other payments[Claims][Annuities][Benefits][Surrenders][Other payments]
Provision of policy reserve and others:
Provision of policy reserves
Provision of interest portion of reserve for dividends to policyholders
Investment expenses[Interest expenses][Losses on sales of securities][Losses on valuation of securities][Losses on derivative instruments, net]
[Foreign exchange losses, net]
Operating expenses
Other ordinary expenses

328,949[73,949][119,545][79,699][37,815][17,761]
63,76063,750928,087[2,895][894][1,130][583][13,047]
68,41016,156308,388[59,034][113,583][75,640][41,445][18,504]
41,67041,660
10
39,371[2,992][8,847][4,756][6,187][6,492]
67,666
16,152

Total ordinary expenses

505,364

473,249

Ordinary profits

56,52145,192Extraordinary gains:
Gains on disposal of fixed assets

00

Total extraordinary gains

00Extraordinary losses:
Losses on disposal of fixed assets
Impairment losses
Provision of reserve for price fluctuation
Others

87
15
2,649
—

590
62
2,704
965

Total extraordinary losses

2,752

4,322

Surplus before income taxes

53,76940,870

Income taxes:
Current
Deferred

9,455(1,505)

5,654(1,069)Total income taxes

7,949

4,584

Net surplus for the period

45,81936,285

7

Fukoku Mutual Life Insurance Company

Notes to the Non-consolidated Financial Statements
I.

Presentation of the Non-consolidated Financial Statements

1. Basis of presentation
The accompanying non-consolidated financial statements have been prepared from the accounts maintained by Fukoku
Mutual Life Insurance Company (the “Company”) in accordance with the provisions set forth in the Insurance BusinessAct of Japan and its related rules and regulations and in conformity with accounting principles generally accepted in Japan,
which are different in certain respects from accounting principles generally accepted in countries and jurisdictions otherthan Japan.
In addition, the notes to the non-consolidated financial statements include information which is not required underaccounting principles generally accepted in Japan but is presented herein as additional information.
Amounts of less than one million yen have been rounded down. As a result, the totals do not add up.

II. Notes to the Non-consolidated Balance Sheets
1. Article 59-6 of the Enforcement Regulations of the Insurance Business Act requires that insurance companies andsubsidiaries make an effort to disclose especially important reference information related to conditions of business andproperty to policyholders and any other customers as stipulated under Article 111, Paragraph 6 of the Insurance
Business Act.
To fulfil our efforts to comply with these requirements, we have prepared financial statements for the nine months ended
December 31,2020 in accordance with the first- and third-quarter announcement format model created by The Life
Insurance Association of Japan (the “Quarterly Reporting Model”) and generally accepted standards for preparation ofquarterly financial statements in Japan. As the Quarterly Reporting Model is prepared for the purpose of fulfilling theobligation above to make an effort to disclose information, disclosures in the Quarterly Reporting Model differ from thoseprescribed by the regulations concerning terminology, formats, and preparation methods of quarterly financial statements
and other reports.
2. The amount of securities lent under lending agreements was ¥467,066 million as of December 31, 2020.
3. Changes in reserve for dividends to policyholders for the nine months ended December 31, 2020 were as follows:(Millions of yen)

Balance at the beginning of the current period…...............................................

¥ 60,922

Transfer from surplus in the previous fiscal year...............................................

31,547

Dividend payments to policyholders during the current period…..…………...

(18,963)

Increase in interest....................................................……………………..........

10

Balance at the end of the current period.............................................................

¥ 73,517

III. Note to the Non-consolidated Statements of Operations
1. “Others” within “Extraordinary losses” consists of expenses associated with salary guaranties provided to sales
representatives as a countermeasure aimed at preventing the spread of COVID-19.

8

Fukoku Mutual Life Insurance Company

5. Breakdown of Ordinary Profits (Fundamental Profit)(Millions of yen)

Nine months ended
December 31, 2019

Nine months ended
December 31, 2020

57,08953,552

24,231

23,735

Gains on money held in trust, net

9

1,029

Gains on trading securities, net

—

2,901

24,221

19,804

Gains on derivative instruments, net——

Foreign exchange gains, net——

Other capital gains——

17,92826,284Losses on money held in trust, net——

Losses on trading securities, net

2,272

—

894

8,847

1,130

4,756

583

6,187

13,047

6,492

—

—

Fundamental profit

A

Capital gains

Gains on sales of securities

Capital losses

Losses on sales of securities
Losses on valuation of securities
Losses on derivative instruments, net
Foreign exchange losses, net
Other capital losses
Net capital gains (losses)

B

6,302

(2,548)Fundamental profit plus net capital gains (losses)

A+B

63,39251,003

4

7

Reinsurance income——

Reversal of contingency reserve——

Reversal of specific allowance for possible loan losses

4

7

Others

—

—

6,875

5,819

Reinsurance premiums——

Provision for contingency reserve

661

376

Provision of specific allowance for possible loan losses——

Provision of allowance for specified overseas loans——

Write-offs of loans

262

—

5,951

5,442

Non-recurring gains

Non-recurring losses

Others
Non-recurring gains (losses)

C(6,870)(5,811)

Ordinary profits

A+B+C

56,52145,192

Notes: 1. The following amounts in respect of gains on money held in trust have been excluded from capital gains / losses and included infundamental profit due to their income nature (being interest and dividend income): ¥101 million in respect of the nine months
ended December 31, 2019 and ¥70 million in respect of the nine months ended December 31, 2020.
Notes: 2. The following amounts in respect of gains on trading securities have been excluded from capital gains / losses and included infundamental profit due to their income nature (being interest and dividend income): ¥2,362 million in respect of the nine months
ended December 31, 2019 and ¥1,431 million in respect of the nine months ended December 31, 2020.
Notes: 3. Other non-recurring losses represent the losses relating to provision of the additional policy reserves in accordance with Article
69, Paragraph 5 of the Enforcement Regulations of the Insurance Business Act.

9

Fukoku Mutual Life Insurance Company

6. Solvency Margin Ratio(Millions of yen)

As ofMarch 31, 2020

As ofDecember 31, 2020

1,537,878

1,771,038

Foundation funds and surplus

217,313229,419

Reserve for price fluctuation

122,745

125,449

Contingency reserve

215,014215,390

1,538

1,893

(Net unrealized gains (losses) on securities (before tax)
and deferred hedge gains (losses) (before tax)) × 90%

355,650

510,490

Net unrealized gains on real estate × 85%

145,920

147,113

Excess amount of policy reserve based on full-time Zillmer method

294,153

301,540

Qualifying subordinated debt

191,935

241,935——

Deductible items(46,783)(46,783)

Others40,391

44,590238,265

276,666

Total solvency margin(A)

General allowance for possible loan losses

The amount of "excess amount of policy reserve based on full-time Zillmer method"and "qualifying subordinated debt" excluded from the calculation of solvency margin

Total amount of risk √(𝑅1 + 𝑅8 )2 + (𝑅2 + 𝑅3 + 𝑅7 )2 + 𝑅4

(B)

Insurance risk

R1

22,732

22,434

3rd sector insurance risk

R8

9,911

9,898

Assumed investment yield risk

R230,56830,029Minimum guarantee risk

R7

—

—

Investment risk

R3

200,132

238,677

Business risk

R4

5,266

6,020

1,290.8 %1,280.2 %Solvency margin ratio
(A)
× 100
(1/2) × (B)Notes: 1. Above figures are calculated based on the provisions of Articles 86 and 87 of the Enforcement Regulation of the Insurance
Business Act and Ministry of Finance Notification No. 50, 1996.
Notes: 2. "Deductible items" represent the capital increase to the subsidiary, Fukokushinrai Life Insurance Co., Ltd.
Notes: 3. "Minimum guarantee risk" is calculated by standard method.

10

Fukoku Mutual Life Insurance Company

7. Status of Separate Account(1) Separate Account Assets by Products(Millions of yen)

As of March 31, 2020

As of December 31, 2020

AmountAmountIndividual variable insurance——

Individual variable annuities

22

26Group annuities

84,635

97,186

Total

84,65897,212(2) Policies in Force(i) Individual Variable Insurance

The Company has not sold the individual variable insurance.
(ii) Individual Variable Annuities(Millions of yen except number of policies)

As of March 31, 2020
Number ofpolicies

As of December 31, 2020
Number ofpolicies

AmountAmountIndividual variable annuities

8

20

8

20

Total

8

20

8

20

11

Fukoku Mutual Life Insurance Company

8. Status of the Company, Subsidiaries and Affiliates(1) Selected Financial Data
(100 millions of yen)

Nine months ended
December 31, 2019

Nine months ended
December 31, 2020

Ordinary revenues

6,593

6,783

Ordinary profits

572

462

Net surplus attributable to the parent company

458

365

Comprehensive income

969

1,614

As of March 31, 2020

As of December 31, 2020

85,744

86,9951,331.7 %1,321.1 %Total assets
Solvency margin ratio(2) Scope of Consolidation and Application of Equity Method
Number of consolidated subsidiaries: 6
Number of unconsolidated subsidiaries accounted for under the equity method: 0
Number of affiliates accounted for under the equity method: 0

12

Fukoku Mutual Life Insurance Company

(3) Consolidated Balance Sheets(Millions of yen)

As of March 31, 2020

As of December 31, 2020

Assets:Cash and deposits

415,816354,636

Call loans

230,000

200,000

Monetary claims bought
Money held in trust
Securities

269

247

24,15625,245

6,977,554

7,231,222

Loans

569,127564,188

Tangible fixed assets

219,883

233,376

Intangible fixed assets

33,35930,401

Agency receivables
Reinsurance receivables
Other assets
Net defined benefit assets

0

0

124

5

74,05961,640

255

675

Deferred tax assets

31,885242

Allowance for possible loan losses(2,024)(2,364)

8,574,467

8,699,518

As of March 31, 2020

As of December 31, 2020

7,515,143

7,454,668

23,62020,9347,430,271

7,359,919

60,92273,517

Total assets

Liabilities:
Policy reserves:
Reserve for outstanding claims
Policy reserve
Reserve for dividends to policyholders
Reserve for dividends to policyholders (subsidiary)

328

297

Agency payables

114

144

Reinsurance payables

103

79

Subordinated bonds

191,935

241,935

Other liabilities

132,340

120,678

Net defined benefit liabilities

34,61433,488Reserve for price fluctuation

133,162

136,100

Deferred tax liabilities

015,607

14,213

14,2098,021,628

8,016,912

Foundation funds

12,00012,000

Accumulated foundation funds redeemed

116,000

116,000

112

112

Consolidated surplus

127,315132,057

Total foundation funds, surplus and others

255,427

260,169

Net unrealized gains (losses) on available-for-sale securities, net of tax

292,980

416,994

4,102

4,245

Deferred tax liabilities for land revaluation
Total liabilities
Net assets:

Reserve for revaluation

Revaluation reserve for land, net of tax

(480)

(589)

Accumulated remeasurements of defined benefit plans(7,714)(6,764)

Total accumulated other comprehensive income

288,888413,886

8,523

8,549

552,839

682,605

8,574,467

8,699,518

Foreign currency translation adjustment

Non-controlling interests
Total net assets
Total liabilities and net assets

13

Fukoku Mutual Life Insurance Company

(4) Consolidated Statements of Operations and Comprehensive Income[Consolidated Statements of Operations](Millions of yen)

Ordinary revenues:
Premium and other income
Investment income[Interest, dividends and other income][Gains on money held in trust, net]
[Gains on trading securities, net]
[Gains on sales of securities][Gains on separate accounts, net]
Other ordinary revenues[Reversal of reserve for outstanding claims][Reversal of policy reserve]
Total ordinary revenues
Ordinary expenses:
Claims and other payments[Claims][Annuities][Benefits][Surrenders][Other payments]
Provision of policy reserve and others:
Provision of policy reserves
Provision of interest portion of reserve for dividends to policyholders
Provision of interest portion of reserve for dividends to policyholders (subsidiary)
Investment expenses[Interest expenses][Losses on sales of securities][Losses on valuation of securities][Losses on derivative instruments, net]
[Foreign exchange losses, net]
Operating expenses
Other ordinary expenses
Total ordinary expenses
Ordinary profits
Extraordinary gains:
Gains on disposal of fixed assets
Total extraordinary gains
Extraordinary losses:
Losses on disposal of fixed assets
Impairment losses
Provision of reserve for price fluctuation
OthersTotal extraordinary losses
Provision of reserve for dividends to policyholders (subsidiary)
Surplus before income taxes
Income taxes:
Current
Deferred
Total income taxes
Net surplus for the period
Net surplus (loss) attributable to non-controlling interests
Net surplus attributable to the parent company

14

Nine months ended
December 31, 2019

Nine months ended
December 31, 2020

488,358
156,892[126,549]
[110]
[90]
[25,284][4,544]
14,104[4,448][—]659,354433,301
164,099[122,728][1,100][4,332][21,518][14,312]80,985[2,686][70,351]
678,386

429,831[79,317][181,849][89,163][61,340][17,894]
49,93849,9289
027,128[2,913][894][1,130][583][13,051]
74,906
20,344602,149
57,205499,325[64,807][272,787][83,164][59,605][18,692]10—
10
0
38,414[3,007][8,847][4,756][6,187][6,494]73,894
20,450632,095
46,291

0
0

0
0

88
15
2,908
—
3,012
167
54,024

590
62
2,938
965
4,557
131
41,603

9,765(1,531)
8,234
45,790(54)
45,844

5,941
(920)
5,020
36,58247
36,534

Fukoku Mutual Life Insurance Company

(4) Consolidated Statements of Operations and Comprehensive Income (Continued)[Consolidated Statements of Comprehensive Income](Millions of yen)

Nine months ended
December 31, 2019

Nine months ended
December 31, 2020

Net surplus

45,79036,582Other comprehensive income:

51,118124,836

Net unrealized gains (losses) on available-for-sale securities, net of tax

50,501

123,995

Foreign currency translation adjustments

(100)

(109)

Remeasurements of defined benefit plan, net of tax

717

950

Comprehensive income:

96,909161,419

Comprehensive income attributable to the parent company

97,010161,389(100)

29

Comprehensive income attributable to non-controlling interests

15

Fukoku Mutual Life Insurance Company

Notes to the Consolidated Financial Statements
I. Presentation of the Consolidated Financial Statements
1. Basis of Presentation
The accompanying consolidated financial statements have been prepared from the accounts maintained by Fukoku MutualLife Insurance Company (the “Company”) and its consolidated subsidiaries in accordance with the provisions set forth in
the Insurance Business Act of Japan and its related rules and regulations and in conformity with accounting principles
generally accepted in Japan, which are different in certain respects from accounting principles generally accepted incountries and jurisdictions other than Japan.
In addition, the notes to the consolidated financial statements include information which is not required under accounting
principles generally accepted in Japan but is presented herein as additional information.
Amounts of less than one million yen have been rounded down. As a result, the totals do not add up.

II. Notes to the Consolidated Balance Sheets
1. Article 59-6 of the Enforcement Regulations of the Insurance Business Act requires that insurance companies andsubsidiaries make an effort to disclose especially important reference information related to conditions of businessand property to policyholders and any other customers as stipulated under Article 111, Paragraph 6 of the Insurance
Business Act.
To fulfil our efforts to comply with these requirements, we have prepared consolidated financial statements for the ninemonths ended December 31,2020 in accordance with the first- and third-quarter announcement format model created by
The Life Insurance Association of Japan (the “Quarterly Reporting Model”) and generally accepted standards for
preparation of quarterly consolidated financial statements in Japan. As the Quarterly Reporting Model is prepared for the
purpose of fulfilling the obligation above to make an effort to disclose information, disclosures in the Quarterly Reporting
Model differ from those prescribed by the regulations concerning terminology, formats, and preparation methods ofquarterly consolidated financial statements and other reports.

2. The amount of securities lent under lending agreements was ¥467,066 million as of December 31, 2020.

3. Changes in reserve for dividends to policyholders for the nine months ended December 31, 2020 were as follows:(Millions of yen)

Balance at the beginning of the current period…...............................................

¥60,922

Transfer from surplus in the previous fiscal year...............................................

31,547

Dividend payments to policyholders during the current period…..…………...

(18,963)

Increase in interest....................................................……………………..........

10

Balance at the end of the current period.............................................................

¥73,517

4. Changes in reserve for dividends to policyholders (Fukokushinrai Life Insurance Co., Ltd.) for the nine months
ended December 31, 2020 were as follows:(Millions of yen)

Balance at the beginning of the current period…...............................................

¥328

Dividend payments to policyholders during the current period…..…………...

(162)

Increase in interest....................................................……………………..........

0

Provision of reserve for dividends to policyholders……………………….….

131

Balance at the end of the current period.............................................................

¥297

16

Fukoku Mutual Life Insurance Company

III.

Notes to the Consolidated Statements of Operations

1. For the nine months ended December 31, 2020, the total amount of depreciation, including depreciation of real estate forrent, was ¥13,254 million.

2. “Others” within “Extraordinary losses” consists of expenses associated with salary guaranties provided to sales
representatives as a countermeasure aimed at preventing the spread of COVID-19.

17

Fukoku Mutual Life Insurance Company

(5) Status of Insurance Claims Paying Ability of the Company and Insurance Subsidiaries(Millions of yen)

As ofMarch 31, 2020

As ofDecember 31, 2020

1,616,409

1,851,341

Foundation funds and surplus

230,289242,681Reserve for price fluctuation

133,162

136,100

Contingency reserve

217,331

217,754

—

—

1,538

1,893

(Net unrealized gains (losses) on securities (before tax) and deferredhedge gains (losses) (before tax)) × 90%

366,504

521,155

Net unrealized gains on real estate × 85%

145,920

147,113

Sum of unrecognized actuarial differences and unrecognized prior service cost

(10,714)(9,394)

Excess amount of policy reserve based on full-time Zillmer method

296,497

303,901

Qualifying subordinated debt

191,935

241,935

The amount of "excess amount of policy reserve based on full-time Zillmer
method" and "qualifying subordinated debt" excluded from the calculation ofsolvency margin——

Deductible items——

43,944

48,201

242,753

280,260

Total solvency margin(A)

Catastrophe loss reserve
General allowance for possible loan losses

OthersTotal amount of risk √(√𝑅12 + 𝑅52 + 𝑅8 + 𝑅9)2 + (𝑅2 + 𝑅3 + 𝑅7)2 + 𝑅4 + 𝑅6

(B)

Insurance risk

R1

23,16922,849General insurance risk

R5

—

—

Catastrophe risk

R6

—

—

3rd sector insurance risk

R8

10,033

10,035

Small amount and short-term insurance risk

R9

—

—

Assumed investment yield risk

R230,93430,375

Minimum guarantee risk

R7

—

—

Investment risk

R3

204,120

241,803

Business risk

R4

5,365

6,101

1,331.7 %1,321.1 %Solvency margin ratio
(A)
× 100
(1/2) × (B)Notes: 1. Above figures are calculated based on the provisions of Articles 86-2 and 88 of the Enforcement Regulation of the Insurance
Business Act and the Financial Services Agency Notification No. 23, 2011.
Notes: 2. "Minimum guarantee risk" is calculated by standard method.

18

Fukoku Mutual Life Insurance Company