Presentation Material

Consolidated Financial Results
for the Three Months Ended June 30, 2013
andSony Life’s
Market Consistent Embedded Valueas of June 30, 2013
Sony Financial Holdings Inc.
August 12, 2013
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1

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

P.3

■ Consolidated Financial Forecast for the Year Ending March 31, 2014P.28

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

P.30

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

P.32

■ Appendix

P.35

Disclaimers:
This presentation material contains statements concerning the current plans, expectations, strategies and beliefs of the SonyFinancial Group. Any statements contained herein that pertain to future operating performance and that are not historic facts
are forward-looking statements. Forward-looking statements may include—but are not limited to—words such as “believe,”“anticipate,” “plan,” “strategy,” “expect,” “forecast,” “predict,” and “possibility” that describe future operating activities, businessperformance, events or conditions. Forward-looking statements, whether spoken or written, are based on judgments made by
the management of the 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.

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Content2

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

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3

3

Highlights of Consolidated Operating Performancefor the Three Months Ended June 30, 2013 (1)FY12.1Q

FY13.1Q

247.6

Ordinary profit
Ordinary revenues(Billions of yen)

Ordinary revenues+12.8%

Ordinary profit

312.8+13.4%

13.7

13.3

(0.4)

(2.9%)

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)

(0.6)

(0.0)

－

0.0

0.0

+0.0

+44.2%

277.2

312.8

+35.5

+12.8%

Ordinary profit

15.4

17.0

+1.6

+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%)

Non-life
insurancebusiness
Bankingbusiness

Intersegment
adjustments*+10.4%

280.9

Ordinary revenues

277.2

Ordinary revenues
Ordinary profit
Ordinary revenues

17.0
Consolidated

15.4(Billions of yen)(Billions of yen)

Change+33.2

Lifeinsurancebusiness

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.

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4

During the three months ended June 30, 2013, consolidated ordinary
revenues grew 12.8% compared with the same period of the previous
fiscal year, to ¥312.8 billion, owing to increases in ordinary revenues fromthe all businesses: life insurance, non-life insurance and banking.
Consolidated ordinary profit increased 10.4% year on year, 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. Thisis mainly because the banking business recorded profit for the same
period of the previous fiscal year, due to the tax effect of recording
deferred tax assets on the transfer of all shares of Sony Bank
Securities, a wholly owned subsidiary of Sony Bank.
Total net assets amounted to ¥411.2 billion as of June 30, 2013, down
¥24.2 billion from March 31, 2013, owing to a decrease in net unrealized
gains on other securities, net of taxes led by a rising interest rates andthe dividend payout to shareholders.

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 from customers’ active foreign currency trading. Ordinary profit increased year on year 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 inordinary revenues from all businesses. Consolidated ordinary profit increased 10.4% year on year, 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, a wholly owned subsidiary of Sony Bank.
Line item amounts are truncated below ¥100 million; percentage change figures are rounded.

Sony Financial Holdings Inc. All Rights Reserved

5Here is highlights of consolidated operating performance.

5

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

Ordinary profit

FY12.1Q

FY13.1Q

247.6

281.1

+33.5

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%)

－

25.6

+25.6

－

233.4

266.9

+33.5

+14.4%+17.0%(Billions of yen)
Ordinary revenues+13.5%

281.1

247.6

Gains on separate accounts, net

14.1
14.1

+0.1%

Ordinary expenses

Change+13.5%

Insurance claims and other payments

69.9

81.7

+11.8

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%)

Losses on separate accounts, net(Billions of yen)
Operating expenses
Ordinary revenues increased year on year. Ordinary profit
remained 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 wereoffset by the negative impact from an increase in provision of policy
reserves resulting from the revision of discount rate used for
calculating policy reserves.

13.3.3113.6.30

Securities

5,211.5

5,381.0+169.4

Policy reserves

5,472.9

5,623.3+150.3+2.7%

Total net assets

342.3

316.4

(25.8)(7.6%)(Billions of yen)

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

Change from 13.3.31
+3.3%

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%

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

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6

Highlights of Sony Life’s operating performance (non-consolidated basis)are shown here.
Sony Life’s ordinary revenues increased 13.5% year on year, to ¥281.1
billion. Of this amount, income from insurance premiums grew 1.6% fromthe same period of the previous fiscal year, to ¥221.3 billion, associatedwith steady growth in policy amount in force, despite a decrease in lumpsum payment premiums affected by the revision of Sony Life’s insurance
premium rates on some of its products in April 2013.
Investment income was almost doubled compared with the same period of
the previous fiscal year, to ¥55.8 billion, due to higher gains on separate
accounts, net resulting from the market recovery.
Ordinary profit remained at the same levels as during the same period of
the previous fiscal year, to ¥14.1 billion. This is because the positiveeffects stemming from a decrease in provision of policy reserves forminimum guarantees for variable life insurance and a recovery fromnegative spread into positive at Sony Life were offset by the negative
impact from an increase in provision of policy reserves resulting from therevision of discount rate used for calculating policy reserves.

6

Overview of Performance:
Sony Life (Non-consolidated)(Billions of yen)
New policy amount

FY12.1Q

FY13.1Q<Reasons for changes>

Change1,066.5

1,033.3

Lapse and surrender amount

497.5

456.4

(8.3%)

Lapse and surrender rate

1.38%

1.21%

(0.17pt)

Policy amount in force

36,432.0

38,160.2

+4.7%

17.4

16.8

(3.3%)

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

(3.1%)

4.4

3.9(12.1%)

643.0

677.2

+5.3%

151.5

164.1

+8.3%

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)

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 insurance
products, 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.
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,
but still stays at high levels.

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

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7

Here is an overview Sony Life’s performance.

7

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

1.03

1.06

+31.9%(Trillions of yen)

137

137

0.96

0.97

180

1.23

+26.9%(3.1%)

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

Sony Financial Holdings Inc. All Rights Reserved

8(Left-hand graph)
New policy amount for the total of individual life insurance and individual
annuities for the three months ended June 30, 2013 (FY13.1Q)
decreased 3.1% year on year, to ¥1,033.3 billion, due to the revision of
insurance premium rates. The number of new policies decreased 6.1%
year on year, to 142 thousand policies.
(Right-hand graph)
Next, we will show you an impact of strong last-minute demand led by therevision of insurance premium rates during the last fourth quarter(FY12.4Q). Insurance premium rates in some products were revised
reflecting the revision of discount rate used for calculating policy reserves
in April 2013.
New policy amount for the last fourth quarter (FY12.4Q) increased 26.9%
year on year.
As a result, new policy amount for the three months ended June 30, 2013
(FY13.1Q) decreased year on year, affected by the backlash of the above
strong last-minute demand during the last fourth quarter.

8

Sony Life Operating Performance (2)Annualized Premiums from New Policies(Individual Life Insurance + Individual Annuities)
Annualized premiums from new policies

Of which, third-sector[ Reference]
4Q(3M) Annualized Premiums from New Policies
Annualized premiums from new policies
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(Left-hand graph)
Annualized premiums from new policies for the three months ended June30, 2013 (FY13.1Q) decreased 3.3% year on year, to ¥16.8 billion due tothe revision of insurance premium rates as did new policy amount. Of
which, the figure for third-sector insurance products was down 12.1%
year on year, to ¥3.9 billion due to a significant decrease in sale of lumpsum payment whole life nursing-care insurance.
(Right-hand graph)
Annualized premiums from new policies for the last fourth quarter(FY12.4Q) increased year on year for the same reason as new policy
amount had.

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
Annualized premiums from insurance in force

+6.2%
50

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

6.11

6.04

5.76

700

+1.3%

643.0

+5.3%

677.2

669.9

6

+1.1%

600

40

36.4 +4.7%

38.1

37.7

5
500

+1.0%
4

30

400

3

300

2

200

20

+8.3%
10
1

100

151.5

158.6

12.6.30

13.3.31

+3.5%

164.1

0

0

0

12.6.30

13.3.3113.6.30

13.6.30

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

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

Sony Financial Holdings Inc. All Rights Reserved

10Sony Life’s policy amount in force which reflects new policy amount andlapse and surrender amount, is shown here.
(Left-hand graph)
Policy amount in force for the total of individual life insurance andindividual annuities increased 4.7% year on year, to ¥38.1 trillion due toan increase in new policies and a decline in lapse and surrender rate.
The number of policies in force increased 6.2% year on year, to 6.11
million policies.
(Right-hand graph)
Annualized premiums from insurance in force increased 5.3% year on
year, to ¥677.2 billion.
Of this amount, the figure for third-sector products was up 8.3% year on
year, to ¥164.1 billion.

10

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, not adjusted for policy amount decreases, increases, andreinstatements, by the policy amount in force at the beginning of the fiscal year.

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11

The lapse and surrender rate for the three months ended June 30, 2013
decreased 0.17 percentage point year on year, to 1.21%, due to thelowering lapse and surrender rates primarily for term-life insurance.

11

Sony Life Operating Performance (5)Income from Insurance Premiums(Billions of yen)(Billions of yen)

221.3

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(Left-hand graph)
Income from insurance premiums increased 1.6% year on year, to ¥221.3
billion, along with a steady growth in policy amount in force, despite adecrease in lump-sum payment insurance premiums affected by therevision of insurance premium rates.
(Right-hand graph)
Interest income and dividends was up 12.4% year on year, to ¥28.9
billion, due to an expansion of investment assets along with businessexpansion.

12Sony Life Operating Performance (6)Core Profit

Ordinary Profit(Billions of yen)(Billions of yen)

¥3.3 billion of reversal of
19.2 * *Included
reserve for outstanding claims related

17.9

to the Great East Japan Earthquake.

15.3

14.7

14.1

14.1
+0.1%

+3.7%

(Reference) Impact on core profit(Billions of yen)
FY11.1Q

FY12.1Q(Reference) Main differences from Core Profit

FY13.1Q(Billions of yen)
FY11.1Q

FY12.1Q

(0.3)

0.4

FY13.1Q
0.0

(0.8)

(0.9)

(1.0)

Positive (Negative) spread

(1.3)

(0.5)

1.2

Capital gains (losses)

Effects by the revision of policy reserve discount rate

0.0

0.0

(5.5)

Provision of contingency reserve

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.

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

Sony Financial Holdings Inc. All Rights Reserved

13(Left-hand graph)Core profit increased 3.7% year on year, to ¥15.3 billion. This is because
the positive 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 which offset thenegative impact from an increase in provision of policy reserves resulting
from the revision of discount rate used for calculating policy reserves.
(Right-hand graph)
Ordinary profit remained at the same levels as during the same period of
the previous fiscal year.

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.
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(Left-hand graph)
The number of Lifeplanner sales employees as of June 30, 2013, was
4,127, up 22 from June 30, 2012 and down 6 from March 31, 2013.
From this period, we began adding the number of contracted Lifeplanner
sales employees to the overall numbers, in addition to those who wererehired on a fixed-term contract basis after retirement.

14

Sony Life Operating Performance (8)Breakdown of General Account Assets
13.3.31<Asset management review>

13.6.30(Billions of yen)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%

Foreign stocks

25.4

0.5%

26.0

0.5%

Monetary trusts

306.1

5.7%

295.5

5.4%

Policy loans

145.0

2.7%

146.6

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%

Japanese governmentand corporate bonds<Bond duration>

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 Reserved

15

Here is a breakdown of Sony Life’s general account assets as of June 30,
2013, compared with March 31, 2013.
As Sony Life continued its investment in ultralong-term bonds, the holding
ratio on the real status, of Japanese government and corporate bonds
including those invested in monetary trusts rose to 90.9% as of June 30,
2013.
Going forward, Sony Life will invest most of new money acquired fromincome from insurance premiums in ultralong-term bonds in order toproperly control interest rate risk on insurance liabilities.

15

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

As of June 30, 2013 , Sony Life’s non-consolidated solvency margin ratio
was 2,255.3%, down 26.5 percentage points from March 31, 2013 due toa decrease in net unrealized gains on other securities, net of taxes led byrising interest rates. However it still stays at a high level.

16

Highlights of Operating Performance:
Sony Assurance
Ordinary revenues

21.7

+6.2%

Ordinary profit

23.0(Billions of yen)

FY12.1Q

23.0

+1.3

21.4

22.8

+1.3

+6.1%

Investment income

0.2

0.2

+0.0

+22.4%

21.0

21.7

+0.7

+3.4%

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%

0.7

Ordinary revenues and ordinary profit increased
year on year.
Ordinary revenues increased year on year, due to anincrease in net premiums written for its mainstay
automobile insurance.
Ordinary profit increased year on year due to a decline
in the loss ratio led by a lower car accident ratio andthe revision of premium rates for automobile insurance,in addition to the increase in ordinary revenues.

+6.2%

Underwriting expenses

Ordinary expenses(Billions of yen)

Change

21.7

1.3
85.0%

FY13.1Q

Underwriting income

Ordinary revenues(Billions of yen)

13.3.3113.6.30

Change from
13.3.31

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

17Sony Assurance’s ordinary revenues increased 6.2% year on year, to¥23.0 billion due to an increase in net premiums written for its mainstay
automobile insurance.
Ordinary profit increased 85.0% year on year, to ¥1.3 billion due to a
decline in the loss ratio led by a lower car accident ratio and the revisionof premium rates for automobile insurance, in addition to the increase inordinary revenues.
Net income increased 93.6% year on year, to ¥0.8 billion.

17

Overview of Performance:
Sony Assurance(Billions of yen)

FY12.1Q

FY13.1Q<Reasons for changes>

ChangeDirect premiums written

21.2

22.4

+5.7%

Net premiums written

21.4

22.7

+5.9%

Net losses paid

11.4

11.7

+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.
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 Reserved

18

Here is an overview of Sony Assurance’s performance.

18

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

Net Premiums Written

FY12.1Q

FY13.1Q

FY12.1Q

Change

63

Fire

－

Marine55－(13.2%)
－

Fire

69

74

42

44

+3.1%

2,001

2,124

+6.1%

19,15020,257

+5.8%

217

241

+10.8%

21,481

22,741

+5.9%

1,931

2,044

+5.9%

Personal accident*

Voluntary automobile

19,21920,321+5.7%

Voluntary automobile

Total

ChangeMarinePersonal accident*

Compulsory
automobile liability

FY13.1Q(Millions of yen)

(Millions of yen)

－

－

－

21,21422,420+5.7%

Compulsory
automobile liability
Total

+8.5%

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

Net losses paid
FY12.1Q

FY13.1Q

Change(Millions of yen)Fire

0MarinePersonal accident*
Voluntary automobile
Compulsory
automobile liability
Total

0

(63.1%)

12232(73.6%)

467

463(0.9%)

10,631

10,994

+3.4%

239

255

+6.6%

11,461

11,745+2.5%

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

Sony Financial Holdings Inc. All Rights Reserved

19This slide shows direct premiums written, net premiums written and net
losses paid by type.

19

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

1.3
+5.9%

0.2

20.2
1.8

0.3

21.4
2.0

22.7 0.3+85.0%

2.1

0.7
18.1

19.1

0.7

20.2

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

20(Left-hand graph)
The number of policies in force for the total of automobile insurance andmedical and cancer insurance increased 3.3% year on year, to 1.56
million policies. This is because Sony Assurance began offering a new
discounted premiums for new customers who contracted automobile
insurance via Internet, despite a negative impact of the revisions ofautomobile insurance premium rates in November 2012 and April 2013.
Net premiums written posted a 5.9% year-on-year increase, to ¥22.7
billion.
(Right-hand graph)
Ordinary profit significantly increased year on year, due to a decline inloss ratio as described in the previous pages.

20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 expense ratio

Net expense ratio

(%)

98.9
89.9

93.4

89.0

89.0

89.2
81.4

(4.4pt)84.4

82.0(2.4pt)(1.7pt)(3.7pt)(0.7pt)(0.7pt)Notes:
Earned/Incurred loss ratio = (Net losses paid + Provision for reserve for outstanding losses

Notes:Net loss ratio = (Net losses paid + Loss adjustment expenses ) / Net premiums written+ Loss adjustment expenses) / Earned premiums[Earthquake insurance and compulsory automobile liability insurance are excluded

Net expense ratio = Expenses related to underwriting / Net premiums writtenfrom the above calculation.]Sony Financial Holdings Inc. All Rights Reserved

21(Left-hand graph)
To help you understand the actual condition of Sony Assurance, which isin a growth phase, we show the earned/incurred loss ratio, which is theaccrual-basis loss ratio.
For the three months ended June 30, 2013, the E.I. loss ratio declined 3.7
percentage points year on year, to 65.2%, due mainly to a lower car
accident ratio and the revision of premium rates for automobile insurance.
The net expense ratio declined 0.7 percentage point year on year, to23.8%, due to a proper control of insurance acquisition cost and a rise inautomobile insurance premiums.
Consequently, the sum of the E.I. loss ratio and the net expense ratio
declined 4.4 percentage points year on year, to 89.0%.
(Right-hand graph)
The net loss ratio declined 1.7 percentage points year on year, to 58.2%.
This is different from the E.I. loss ratio, which reflects an increase or adecrease in provision for reserve for outstanding losses.
The combined ratio (the sum of the net loss ratio and the net expense
ratio) declined 2.4 percentage points year on year, to 82.0%.

21

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

As of June 30, 2013, Sony Assurance’s solvency margin ratio was
535.5%, up 31.3 percentage points from March 31, 2013.

22

Highlights of Operating Performance:
Sony Bank (Consolidated/Non-consolidated)
Consolidated ordinary revenues
Consolidated ordinary profit<Consolidated>
FY12.1Q

FY13.1Q

Consolidated ordinary revenues(Billions of yen)

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%)

9.4
8.3+12.5%

2.2

Change<Non-consolidated>
FY12.1Q

FY13.1Q

Ordinary revenues(Billions of yen)

7.5

8.7

+1.2

+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%Ordinary profit

0.8

2.2

+1.4

+162.2%

Net income (loss)

(1.2)

1.4

+2.6

―

13.3.3113.6.30

67.8

68.6

+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 due tothe tax effect of recording deferred tax assets on the transfer of allshares 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 decrease
in interest expenses.
-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.
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.

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

ChangeChange from 13.3.31
+0.8

+1.2%

6.5

5.3

(1.1)

(17.5%)

2,005.0

2,000.0(5.0)(0.3%)

Line 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

23Sony Bank’s consolidated ordinary revenues and ordinary profit increased year
on year due to a rise in interest income on loans led by the growing balance ofmortgage loans and higher gains on foreign currency transactions stemmingfrom customers’ active foreign currency trading. Consolidated ordinary revenues
increased 12.5% year on year, to ¥9.4 billion and consolidated ordinary profit
were doubled, amounting to ¥2.2 billion.
On the other hand, consolidated net income remained at the same levels as
FY12.1Q in which a profit was recorded due to the tax effect of recording
deferred tax assets on the transfer of all shares of Sony Bank Securities,
amounting to ¥1.4 billion.
On a non-consolidated basis, Sony Bank’s net interest income increased owing
to an increase in interest income on loans led by a growing balance of mortgage
loans and a decrease in interest expenses. Moreover, gross operating profit
increased 33.4% year on year, to ¥5.9 billion. This is because of an increase inprofit stemming from improved investment performance, including valuation
gains on derivatives, net held for hedging interest rate risk on mortgage loans
and other assets, in addition to higher gains on foreign exchange transactions
stemming from customers’ active foreign currency trading.
Net operating profit was doubled to ¥2.2 billion.
Net income turned into a profit of ¥1.4 billion compared with a loss for the lastperiod due to recording valuation losses on the shares of Sony Bank Securities
in FY12.1Q.

23

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

Tier 1 ratio

9.36%

8.85%

*1
9.04%

+0.19pt(Billions of yen)
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

Here is an overview of Sony Bank’s performance.

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%Net interest income *1 ①

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(Billions of yen)
Gross operating profit

Change(Managerial Accounting Basis)

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%

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 transactions, and stands for Sony Bank’s basic 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

We break down gross operating profit on a managerial accounting basis tofacilitate an understanding of operational sources of revenue and profits.
(Left-hand table)
Net interest income on a managerial accounting basis amounted to ¥4.5 billion,
up 9.2% from the same period of the previous fiscal year, owing to an increase
in interest income on loans led by a growing balance of mortgage loans and adecrease in interest expenses.
Net fees and commissions were doubled to ¥4.0 billion, owing mainly to anincrease in gains on foreign exchange transactions stemming from customers’
active foreign currency trading.
Net other operating income increased to ¥0.8 billion, due primarily to anincrease in profit stemming from improved investment performance, including
valuation gains on derivatives, net held for the hedging interest rate risk on
mortgage loans and other assts.
Consequently, gross operating profit on a core profit basis increased ¥0.6 billion
year on year, to ¥5.0 billion, and net operating profit on a core profit basis
increased ¥0.5 billion year on year, to ¥1.4 billion.
(Right-hand graph)
The yield on investment for FY13.1Q was 1.22%.
The yield on financing for FY13.1Q was 0.28%.
Consequently, interest spread for FY13.1Q was 0.94%.

25

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

Loans
Mortgage loans

Foreign currency deposits

Others

989.1(Billions of yen)

970.2
(Billions of yen)

+18.9

1,762.2

1,849.0

1,857.4
(8.3)

111.0

835.5

*Corporate loansof ¥104.7 billion.

382.1

878.1

1,466.9

Line item amounts are truncated below ¥100 million.

Sony Financial Holdings Inc. All Rights Reserved

26(Left-hand graph)
As of June 30, 2013, deposits (the sum of Japanese yen and foreign
currency deposits) amounted to ¥1,849.0 billion, up ¥8.3 billion fromMarch 31, 2013.
Of which, yen deposit balance remained at the same levels, amounting to¥1,466.9 billion, because interest rates were at unattractively low levels,
despite a positive effect on customer assets of converting from foreign
currencies to yen backed by yen depreciation.
Foreign currency deposit balance decreased ¥8.0billion, to ¥382.1 billion,
due to a negative impact from converting more foreign currencies into yen,despite a positive impact from customers’ active foreign currency trading
led by yen depreciation.
(Right-hand graph)
Loans expanded to ¥989.1 billion, up ¥18.9 billion from March 31, 2013
due to the growing balance of mortgage loans.

26

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

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

AA
A
OthersTier1 ratio(%)(Billions of yen)

11.58
912.9

11.98

(0.09 pt)

11.89

908.8
802.7
(106.1)

9.63

9.04
8.85

+0.19 pt

*Calculated based on the standard FSA Notification No. 19 2006), which establishes
standards based on Article 14-2 of the banking Act of Japan for determining the capital
adequacy of a bank in light of the assets held by the bank.

Amounts are truncated below ¥100 million.

Sony Financial Holdings Inc. All Rights Reserved

27(Left-hand graph)
As of June 30, 2013, the balance of securities decreased ¥106.1 billion,to ¥802.7 billion from March 31, 2013.
Sony Bank continuously invests in highly rated bonds.
(Right-hand graph)
As of June 30, 2013, Sony Bank’s non-consolidated capital adequacy
ratio (domestic criteria) was 11.89%, down 0.09 percentage point fromMarch 31, 2013.
Sony Bank has maintained financial soundness.

27

Consolidated Financial Forecast
for the Year Ending March 31, 2014

Sony Financial Holdings Inc. All Rights Reserved28

28

Consolidated Financial Forecast
for the Year Ending March 31, 2014
■SFH’s forecast of consolidated financial results for FY2013 is unchanged from the forecast
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
84.7
34.3

1,099.9
88.5
34.0(3.7%)+4.5%(0.9%)

Consolidated ordinary profit

79.2

69.0

(12.9%)

Life insurance businessBanking business

72.7
2.3
3.9

61.4
3.0
4.3

(15.5%)+30.4%+10.3%

Consolidated net income

45.0

37.0

(17.9%)

Non-life insurance businessBanking business

Non-life insurance business■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 anincrease in interest income on loans led by a growing balance of mortgage loans.
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

SFH’s forecast of consolidated financial results for the fiscal year ending
March 31, 2014 (April 1, 2013 to March 31, 2014), is unchanged from theforecast announced on May 9, 2013.

29

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

Sony Financial Holdings Inc. All Rights Reserved30

30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
24.1
20.9

21.2

25

Increased
Dividend(Forecast)

13.6

20
Increased
Dividend

Annual dividend amount

15

Increased
Dividend

10

13.05

10.875
8.7

8.7

FY09

FY10

FY11

FY12

FY13(F)

¥15

¥20

¥20

¥25

¥30
(Forecast)

6.525

6.525

6.525

FY07

FY08

Dividend per share ¥15

¥15

5
0

Note: We pay dividends once a year as a year-end dividend.

Sony Financial Holdings Inc. All Rights Reserved

31

We will strive to expand returns to shareholders based on our dividend
policy that aims for steady increases in dividends in line with earnings
growth over the medium to long term, while considering the businessenvironment and financial soundness of our Group companies.
We revise the year-end per-share dividend forecast for the year ending
March 31, 2014, to ¥30, up ¥5 from the previous forecast of ¥25
announced on May 20, 2013, following the dividend increase for the priorfiscal year.

31Sony Life’s MCEV and
Risk Amount Based on Economic Valueas of June 30, 2013

Sony Financial Holdings Inc. All Rights Reserved3232Sony Life’s MCEV as of June 30, 2013

(Billions of yen)

MCEV

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

Notes:
1. Calculated MCEV for policies in force as of June 30, 2013 by using updated lapse and surrender rate and economic assumptions.
2. Adopted simplified method for a 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-long term and the revision of Sony Life’s
insurance 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 in mind that the validity of these calculations has not been verified by outside specialists.

Sony Financial Holdings Inc. All Rights Reserved

33Sony Life’s MCEV as of June 30, 2013 amounted to ¥1,149.9 billion, up ¥85.2
billion from March 31, 2013.
MCEV increased because an increase in value of existing business offset a
significant decrease in adjusted net worth due mainly to a decrease inunrealized gains on held-to-maturity securities in line 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 margin rose due mainly to higher interest
rates in the ultra-long term and the revision of Sony Life’s insurance premium
rates on some of its products in April 2013.

33

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

Operational risk

26.0

25.0

Counter party risk

2.3

1.7

Variance effect(262.5)(241.3)

The risk amount based on economic value

661.3

617.0

(Billions of yen)

MCEV

13.3.311,064.7

13.6.30
1,149.9(*) 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 Reserved

34

The risk amount based on economic value as of June 30, 2013 amounted to¥617.0 billion. Sony Life has maintained high financial soundness by keeping it
within a proper level of MCEV, which is capital based on
economic value.
Within Sony Life’s risks, insurance risk and market-related risk were ¥597.2
billion and ¥234.5 billion, down compared with ¥605.6 billion and ¥289.9 billion
as of March 31, 2013 led by a rise in interest rates in the ultra-long term.
Going forward, Sony Life will control a market-related risk such as a interest raterisk from an ALM perspective, while insurance risk is expected to increase
through the acquisition of new policies. Sony Life will strive to raise corporate
value on an economic value basis.

34

Appendix

Sony Financial Holdings Inc. All Rights Reserved

35

Appendix35

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*) *As of Aug. 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*Sony Life started handling banking agency business in January 2008.

Sony Assurance’s Auto Insurance Sold by Sony Life
■ Sony Life accounts for approx. 5% of new automobile policies for FY13.1Q* 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 Reserved

36

Appendix36

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 Reserved

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Appendix37

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 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.

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Appendix38

Sony Life’s Interest Income and Dividends (Details)(Millions of yen)

FY12.1Q

FY13.1Q

Change00(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

1,394

+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

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Appendix39

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;

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Appendix40

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;

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Appendix41

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
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 quantification follows the QIS5 approach in principle. However, Sony Life modified it to make it more suitable to Japanese market by adapting the past 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%.

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Appendix42

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 ofbest 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%.

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.

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Appendix43

Contact: Corporate Communications & Investor Relations Department
Sony Financial Holdings Inc.
TEL： +81-3-5785-1074

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Contact

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