Presentation Material

Consolidated Financial Results
for the Six Months Ended September 30, 2018
andSony Lifeʼs MCEV as of September 30, 2018

Sony Financial Holdings Inc.
November 12, 2018
Sony Financial Holdings Inc.

All Rights Reserved

Content
 Consolidated Operating Results for the Six Months Ended September 30, 2018
(FY18.1H)

P.3

 Forecast of Consolidated Financial Results for the Fiscal Year Ending
March 31, 2019 (FY18)

P.25

 Sony Lifeʼs MCEV and ESR as of September 30, 2018

P.27

 Appendix

P.30

Disclaimers:
This presentation material contains statements concerning the current plans, expectations, strategies and beliefs of the SonyFinancial Group. Any statements contained herein that are not historical facts are forward-looking statements or pro forma
information. Forward-looking statements may include̶but are not limited to̶words such as “believe,” “anticipate,” “plan,”“strategy,” “expect,” “assume,” “forecast,” “predict,” “propose,” “intend” and “possibility” that describe future operating activities,business performance, events or conditions. Forward-looking statements, whether spoken or written, may also be included in othermaterials released to the public. These forward-looking statements and pro forma information are based on assumptions, decisions
and judgments made by the management of Sony Financial Group companies, and are based on information that is currently
available to them. As such, they are subject to various risks and uncertainties, and actual business results may vary substantiallyfrom the forecasts expressed or implied in forward-looking statements. Consequently, investors are cautioned not to place undue
reliance on forward-looking statements. Sony Financial Group companies are under no obligation to revise forward-looking
statements or pro forma information in light of new information, future events or other findings. The information contained in thispresentation does not constitute or form part of any offer for sale or subscription of or solicitation or invitation of any offer to buy or
subscribe to any securities, nor shall it or any part of it form the basis of or be relied on in connection with any contract orcommitment whatsoever in Japan or abroad.
*Unless otherwise indicated, in these materials figures less than the indicated unit have been truncated, while ratios and percentage changes have been rounded.
Also, a “–” is used where percentage changes exceed 1,000% and in cases where one or both comparisons are negative.
* “Lifeplanner” is a registered trademark of Sony Life.

Sony Financial Holdings Inc.

All Rights Reserved2Consolidated Operating Results
for the Six Months Ended September 30, 2018
(FY18.1H)

Sony Financial Holdings Inc.

All Rights Reserved

3

Highlights of Consolidated Operating Performance (1)＜Consolidated＞
Ordinary revenues

Life insurance
business

Ordinary profit

860.8+21.5%

Non-life
insurancebusiness
Bankingbusiness

708.3
47.2

Intersegment
adjustments*+44.6%
Consolidated

32.6(JPY bn)

FY17.1H

FY18.1H(JPY bn)

FY17.1H

FY18.1H

Ordinary revenues

632.4

779.3

+146.9+23.2%+50.1%

ChangeOrdinary profit

24.9

37.4

+12.4

Ordinary revenues

54.7

57.7

+2.9

+5.4%

Ordinary profit

4.5

5.4

+0.8

+18.8%

Ordinary revenues

19.8

22.0

+2.2

+11.2%

Ordinary profit

3.7

4.6

+0.9

+25.8%+35.2%

1.2

1.7

+0.4

Ordinary profit

(0.5)

(0.3)

+0.2

-

Ordinary revenues

708.3

860.8

+152.5+21.5%

Ordinary profit

32.6

47.2

+14.5

+44.6%

Profit attributableto owners of theparent

21.5

31.7

+10.1

+47.1%

Ordinary revenues*“Intersegment adjustments” is from SFH, the nursing care business, and the venture capital business.
Proud Life Inc. and Sony Financial Ventures Inc. are included in the scope of consolidation from
FY17.2Q and FY18.2Q, respectively.
(Note) Comprehensive income : FY17.1H: ¥24.7 billion, FY18.1H: ¥19.2 billion(JPY bn)
Consolidated

Net assets
Total assets

Sony Financial Holdings Inc.

Mar. 18

Sep. 18

Change from Mar. 18

625.4

618.6

(6.8)

(1.1%)

12,401.4

13,062.0+660.5+5.3%

All Rights Reserved

Ordinary revenues increased 21.5% year on year, to ¥860.8 billion,
owing to increases in ordinary revenues from all the businesses:
life insurance, non-life insurance, and banking businesses.
Ordinary profit increased 44.6% year on year, to ¥47.2 billion,
owing to increases in ordinary profit from all the businesses
mentioned above.
Profit attributable to owners of the parent was up 47.1% year on year,to ¥31.7 billion, due to the increase in ordinary profit.

4

Highlights of Consolidated Operating Performance (2) Life Insurance Business︓Ordinary revenues grew year on year due to an increase ininsurance premiums in line with a steady rise in the policy amount in force and favorable
investment performance in the separate account. Ordinary profit increased year on year due
mainly to a recording of gains on sale of securities in the general account, an increase inprofit on higher policies in force and a decline in provision of policy reserves for productswith higher surrenders, which more than offset the effect of an impairment loss relating toavailable-for-sale securities in the general account.

 Non-life Insurance Business: Ordinary revenues expanded year on year, owing to anincrease in net premiums written for mainstay automobile insurance. Ordinary profit
increased year on year due mainly to a decline in the net expense ratio, despite the negative
impact of a higher loss ratio, driven by natural disasters.

 Banking Business︓Both ordinary revenues and ordinary profit rose year on year due toincreases in interest income on investment securities and on loans in line with a growing
balance of mortgage loans.

 Ordinary revenues increased 21.5% year on year, to ¥860.8 billion, owing to increases inordinary revenues from all the businesses: life insurance, non-life insurance, and banking
businesses. Ordinary profit increased 44.6% year on year, to ¥47.2 billion, owing toincreases in ordinary profit from all the businesses mentioned above. Profit attributable toowners of the parent was up 47.1% year on year, to ¥31.7 billion due to the increase inordinary profit.
Sony Financial Holdings Inc.

All Rights Reserved

5Highlights of Operating Performance:
Sony Life (Non-consolidated)
Ordinary revenues
Ordinary profit+23.2%

779.2

632.3
37.7
+44.8%(JPY bn)

FY17.1H

FY18.1H

632.3

779.2

+146.9+23.2%

Income from insurance premiums

480.4

542.0

+61.5

+12.8%

Investment income

145.1

231.4

+86.2

+59.4%

Interest income and dividends

78.2

81.7

+3.5

+4.5%

Gains on sale of securities

0.0

3.3

+3.3

-

Foreign exchange gains, net

2.0

21.3

+19.3

+929.5%

Ordinary revenues

Gains on separate accounts, net

62.6

122.6

+60.0

+95.9%

606.2

741.5

+135.2+22.3%

Insurance claims and other payments

187.3

200.4

+13.0

+7.0%

Provision for policy reserves and others

317.7

426.8

+109.1+34.4%

Investment expenses

18.1

26.6

+8.4

+46.6%

-

4.0

+4.0

-

14.7

19.7

+4.9

+33.7%

Ordinary expenses

26.0(JPY bn)

Devaluation losses on securities

FY17.1H

FY18.1H◆ Both ordinary revenues and ordinary profit increased
year on year.
◆ Income from insurance premiums increased due mainly
to a steady rise in the policy amount in force.
◆ Investment income increased due mainly to an increasein gains on separate account.
◆ Ordinary profit increased year on year due mainly to arecording of gains on sale of securities in the generalaccount, an increase in profit on higher policies in force
and a decline in provision of policy reserves for
products with higher surrenders, which more thanoffset the effect of an impairment loss relating toavailable-for-sale securities in the general account.

ChangeLosses on derivatives, net

68.1

71.4

+3.3

+4.9%

Ordinary profit

Operating expenses

26.0

37.7

+11.6

+44.8%Net income

16.9

25.4

+8.4

+49.8%

Mar. 18

Sep. 18

Change from Mar. 18

Securities

8,765.9

9,257.8+491.8

Policy reserves

8,566.0

8,989.2+423.1

+4.9%

492.7

480.3

(12.4)(2.5%)(9.3%)(JPY bn)

Net assets
Net unrealized gains on other securities
Total assets
Separate account assets

Sony Financial Holdings Inc.

+5.6%

124.9

113.2

(11.6)

9,567.6

10,070.5+502.8+5.3%

1,128.8

1,289.8+161.0+14.3%All Rights ReservedSony Lifeʼs ordinary revenues increased 23.2% year on year,to ¥779.2 billion, due to an increase in insurance premiums in line witha steady rise in the policy amount in force and favorable investment
performance in the separate account.
Ordinary profit increased 44.8% year on year, to ¥37.7 billion,
due mainly to a recording of gains on sale of securities in the general account,an increase in profit on higher policies in force and a decline in provision ofpolicy reserves for products with higher surrenders, which more than offset
the effect of an impairment loss relating to available-for-sale securities
in the general account.
Net income increased 49.8% year on year, to ¥25.4 billion.
Sony Lifeʼs total assets exceeded ¥10 trillion as of September 30, 2018
for the first time.

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

FY17.1H

FY18.1H

Change＜Reasons for changes＞◆ Increased due to favorable salesof family income insurance.

2,230.7

3,159.7+41.6%

Lapse and surrender amount

873.4

1,587.3+81.7%

Lapse and surrender rate

1.93%

3.36%

+1.43pt

Annualized premiums from new policies

32.3

37.9

+17.3%Of which, third-sector products

5.9

7.3

+22.0%

New policy amount(JPY bn)

FY17.1H

FY18.1H

ChangeGains from investment, net (General account)

64.4

82.1

+27.5%

Core profit

43.8

57.8

+31.8%

Positive spread

9.3

8.7

(6.5%)(JPY bn)
Policy amount in force
Annualized premiums from insurance in force
Of which, third-sector products
Non-consolidated solvency margin ratio

ChangeFrom
Mar. 18

Mar. 18

Sep. 18

47,253.4

48,506.6

+2.7%

848.8

864.6

+1.9%

191.8

194.9

+1.6%

2,624.3%

2,618.9%(5.4pt)◆Increased due to cancellations ofexisting policies from certain
customers taking out new policies
such as family income insurance.
This shift resulted from premium
revisions, owing to the revision of
the standard mortality tables.
◆ Increased due to favorable salesof U.S. dollar-denominatedinsurance and individual annuities.
◆ Increased due mainly to a decline
in the provision of policy reserves
for minimum guarantees forvariable life insurance, an increasein profit on higher policies in force
and a decline in provision of policy
reserves for products with higher
surrenders.

Note: Figures for new policy amount, lapse and surrender amount, lapse and surrender rate, annualized premiums
from new policies, policy amount in force, and annualized premiums from insurance in force are calculated as
the total of individual life insurance and individual annuities. The lapse and surrender rate shows the ratio
derived by dividing the amount of lapses and surrenders, not adjusted for policy amount decreases, increases,
and reinstatements, by the policy amount in force at the beginning of the fiscal year.

Sony Financial Holdings Inc.

All Rights Reserved

7

Operating Performance :Sony Life (Non-consolidated) (1)
Number and Amount of New Policies

Annualized Premiums from New Policies(Individual Life Insurance + Individual Annuities)
New policy amount(Individual Life Insurance + Individual Annuities)
Annualized premiums from new policies

Number of new policies（Thousands（JPY tn）

293
280

4.0

of policies)（JPY bn）

300＋22.1%

40

240

2.0

＋17.3%

32.3
200

2.23

37.9

38.7

3.15
3.0

2.44

Of which, third-sector30＋41.6%

20
100

1.0

10

＋22.0%

8.1
0.0

0
FY16.1H

FY17.1H

FY18.1H

Sony Financial Holdings Inc.

5.9

7.3

FY17.1H

FY18.1H

0
FY16.1H

All Rights Reserved(Left-hand graph)
New policy amount for the total of individual life insurance andindividual annuities increased 41.6% year on year, to ¥3,159.7 billion,
due to favorable sales of family income insurance.
The number of new policies increased 22.1% year on year,
to 293 thousand policies.
(Right-hand graph)
Annualized premiums from new policies increased 17.3% year on year,to ¥37.9 billion, due to favorable sales of U.S. dollar-denominated insurance
and individual annuities.
Of which, the figure for third-sector products increased 22.0% year
on year, to ¥7.3 billion.

8

Operating Performance :Sony Life (Non-consolidated) (2)
Number and Amount of Policies in Force

Annualized Premiums from Insurance in Force(Individual Life Insurance + Individual Annuities)
Policy amount in force

60

45（Millionsof policies) （JPY bn）

7.56

7.42
46.2

＋4.9%

Annualized premiums from insurance in force

Number of policies in force＋3.7%（JPY tn）(Individual Life Insurance + Individual Annuities)

＋1.7%

7.69

8

47.2

864.6

848.8

800

6

＋1.9%

600

30

4

400

15

2

200

0

0
Mar. 18

＋3.7%

48.5
＋2.7%

Sep. 17833.5

Of which, third-sector

Sep. 18

Sony Financial Holdings Inc.

＋2.8%

189.6

191.8

Sep. 17Mar. 18

＋1.6%

194.9

0
Sep. 18

All Rights ReservedSony Lifeʼs policy amount in force which reflects new policy amount and lapse
and surrender amount, is shown here.
(Left-hand graph)
Policy amount in force for the total of individual life insurance andindividual annuities increased 2.7% from March 31, 2018, to ¥48.5 trillion.
The number of policies in force increased 1.7% from March 31, 2018,
to ¥7.69 million polices.
(Right-hand graph)
Annualized premiums from insurance in force increased 1.9% fromMarch 31, 2018, to ¥864.6 billion.
Of which, the figure for third-sector products was up 1.6% fromMarch 31, 2018, to ¥194.9 billion.

9

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

Lapse and surrender rate (1H)

（%）

8

6

4.97
4.27

4

＋1.43pt

2.14
2

3.36

1.93

0
FY16

FY17

FY18

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

Sony Financial Holdings Inc.

All Rights Reserved

Lapse and surrender rate was up 1.43 percentage points year on year,
to 3.36%.
The increase in the lapse and surrender rate was mainly due to certain
customers cancelling existing policies, taking out new policies such as
family income insurance since premiums were revised in line with revisionsof the standard mortality tables.

10

Operating Performance :Sony Life (Non-consolidated) (4)Income from Insurance Premiums(JPY bn)

542.0

Interest Income and Dividends(JPY bn)

80
500

477.4

480.4

72.2

81.7

78.2
＋4.5%

＋12.8%

60

400

300

40

200
20
100

0

0
FY16.1H

FY17.1H

FY18.1H

Sony Financial Holdings Inc.

FY16.1H

FY17.1H

FY18.1H

All Rights Reserved(Left-hand graph)
Income from insurance premiums increased 12.8% year on year,
amounting to ¥542.0 billion, due to a steady rise in the policy amountin force.
(Right-hand graph)
Interest income and dividends increased 4.5% year on year,to ¥81.7 billion, reflecting an expansion in investment assets along withbusiness expansion.

11

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

Core profit

Ordinary Profit

Adjusted core profit

60(JPY bn)

40

4…38.6

35.7

33.2

49.6

＋31.8%

37.7

40

57.8

＋44.8%

30

26.0+28.4%

20

30.6
20

10

0
FY16.1H

FY17.1H

0

FY18.1H

FY16.1H(Reference) Impact on core profit(JPY bn)
Positive spread
Provision of policy reserves forminimum guarantees for variable
life insurance (*)
Adjusted core profit (**)

FY17.1H

FY18.1H(Reference) Main differences from core profit
FY16.1H

FY17.1H

FY18.1H(JPY bn)

6.5

9.3

8.7

Capital gains (losses) excluding gains
or losses on hedges (*)(11.6)

(4.0)

(0.4)

Gains (losses) on hedges of variable
life insurance

35.7

38.6

49.6

Provision of contingency reserve (*)

FY16.1H

5.0

FY17.1H

FY18.1H

(5.6)

(3.3)

1.0

(8.5)

(12.3)

(3.4)

(3.6)

(4.4)

*“Provision of policy reserves for minimum guarantees for variable life insurance” and “Provision of contingency reserve” are described as negative amount.
Capital gains (losses) exclude gains or losses on hedges of variable life insurance.
**Adjusted core profit = (Core profit) – (Positive spread) – (Provision of policy reserves for minimum guarantees for variable life insurance)

Sony Financial Holdings Inc.

All Rights Reserved

12(Left-hand graph)Core profit rose 31.8% year on year, to ¥57.8 billion, due mainly to a decline
in the provision of policy reserves for minimum guarantees for variable life
insurance, an increase in profit on higher policies in force and a decline inprovision of policy reserves for products with higher surrenders.
Adjusted core profit, which subtracting positive spread and provision ofpolicy reserves for minimum guarantees for variable life insurance fromcore profit, increased 28.4% year on year, to ¥49.6 billion.
(Right-hand graph)
Ordinary profit increased 44.8% year on year, to ¥37.7 billion,
due mainly to an increase of core profit and a recording of gains on sale ofsecurities in the general account, which more than offset the effect ofan impairment loss relating to available-for-sale securities in the general account.

Operating Performance :Sony Life (Non-consolidated) (6)
Number of Lifeplanner Sales Employees＋173(Number)

5,000

5,142

4,933

4,942

4,974

4,968

Mar. 17

Jun. 17

Sep. 17

Dec. 17

5,147

5,135
＋12

4,500

4,000

3,500

0
3,000

Sony Financial Holdings Inc.

Mar. 18

Jun. 18

Sep. 18

All Rights Reserved

The number of Lifeplanner sales employees as of September 30, 2018,
was 5,147, up 12 from June 30, 2018 and up 173 from September 30, 2017.

13

Operating Performance :Sony Life (Non-consolidated) (7)Breakdown of General Account Assets
Mar. 18<Asset management review>Sep. 18

Amount%Amount%Japanese bonds(including JGBs)

7,281.1

86.3%

7,516.1

85.6%

Japanese stocks

38.4

0.5%

35.2

0.4%

Foreign bonds

366.5

4.3%

476.3

5.4%

(JPY bn)

Foreign stocks

30.3

0.4%

26.5

0.3%

Money held in trust

270.5

3.2%

267.0

3.0%

Policy loans

189.4

2.2%

193.6

2.2%

Real estate*

92.3

1.1%

91.5

1.0%

Cash and call loans

40.8

0.5%

58.3

0.7%

Others

129.1

1.5%

115.8

1.3%

8,438.8

100.0%

8,780.7

100.0%Total

We have continued to accumulate
ultralong-term bonds to match the liability
characteristics of insurance policies withlong-term maturities with the aim of
reducing interest rate risk.
<Bond duration>
Mar. 17 21.3 years
Mar. 18 21.4 years
Sep. 18 21.1 years■ Investment in the money held in trust is
mainly into Japanese bonds.
■ The holding ratio on the real status ofJapanese bonds including those invested
in money held in trust in the generalaccount : Sep. 18・・・88.6%（Mar. 18・・・89.5%）*Real estate is the total of land, buildings, and construction in progress.

Sony Financial Holdings Inc.

All Rights Reserved

14

Highlights of Operating Performance:
Sony Assurance
Ordinary revenues

Ordinary profit(JPY bn)

＋5.4%

54.7

＋18.8%

Ordinary revenues

57.7

Underwriting income

5.4

4.5

(JPY bn)

FY17.1H

FY18.1H◆Both ordinary revenues and ordinary profit
increased year on year.
◆Ordinary revenues expanded owing to anincrease in net premium written for mainstay
automobile insurance.
◆Ordinary profit increased year on year due
mainly to a decline in the net expense ratio,
despite the negative impact of a higher loss
ratio, driven by natural disasters.

FY17.1H

FY18.1H

Change

54.7

57.7

+2.9

+5.4%

53.8

56.5

+2.7

+5.1%

0.9

1.1

+0.2

+22.6%

Ordinary expenses

50.2

52.3

+2.1

+4.2%

Underwriting
expenses

36.7

38.9

+2.2

+6.0%

Operating generaland administrative
expenses

13.4

13.3

(0.1)

(0.8%)

Ordinary profit

4.5

5.4

＋0.8

＋18.8%Net income

3.3

3.8

＋0.5

+16.1%

Investment income(JPY bn)

Mar. 18

Sep. 18

Change from
Mar. 18

Underwriting reserves

117.0

122.5

+5.4

+4.7%

Net assets

33.1

33.9

+0.8

+2.4%

Total assets

204.3

209.9

+5.6

+2.8%

Sony Financial Holdings Inc.

All Rights ReservedSony Assuranceʼs ordinary revenues expanded 5.4% year on year,
to ¥57.7 billion, owing to an increase in net premium written for mainstay
automobile insurance.
Ordinary profit increased 18.8% year on year, to ¥5.4 billion,
due mainly to a decline in the net expense ratio, despite the negative impactof a higher loss ratio, driven by natural disasters.
Net income increased 16.1% year on year, to ¥3.8 billion.

15

Overview of Operating Performance:
Sony Assurance(JPY bn)

FY17.1H

FY18.1H<Reasons for changes>

ChangeDirect premiums written

53.1

55.9

+5.3%

Net premiums written

53.7

56.5

＋5.1%

Net losses paid

24.9

26.8

+7.6%

Underwriting profit

3.6

4.2

+17.5%Net loss ratio

53.2%

54.6%

+1.4ptNet expense ratio

26.6%

25.1%

(1.5pt)Combined ratio

79.8%

79.7%

(0.1pt)◆ Increased in its mainstay
automobile insurance.

◆ Declined due mainly to adecrease in system-related
expenses.

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

FY17.1H

FY18.1H

ChangeE. I. loss ratio

59.6%

61.2%

＋1.6ptE. I. loss ratio +Net expense ratio

86.2%

86.3％

＋0.1pt◆ Rose due to natural disasters.

Note: E.I. loss ratio = (Net losses paid + Provision for reserve for outstanding losses + Loss adjustment expenses) / Earned premiums[Earthquake insurance and compulsory automobile liability insurance are excluded from the above calculation.]Mar. 18
Non-consolidated
solvency margin ratio

782.1%

Sep. 18

Change from
Mar. 18821.0%

Sony Financial Holdings Inc.

＋38.9pt

All Rights Reserved16Sony Assuranceʼs Underwriting Performanceby Type of Policy
Direct Premiums Written

Net Premiums Written

FY17.1H

FY18.1H

Change

102

110

+7.0%

－

－

－

Personal accident

4,348

4,361

+0.3%

Voluntary
automobile

48,66451,478

+5.8%

－

－

－

53,11655,950+5.3%(JPY ｍn)

Fire
MarineCompulsory
automobile liability
Total

Net losses paid
(JPY ｍn)

Fire

FY17.1H

FY18.1H

Change2

3+63.8%

3

2(36.4%)

1,361

1,402

+3.0%

Voluntary
automobile

22,91524,749

+8.0%

655

671

+2.6%

24,937

26,830+7.6%

Compulsory
automobile liability
Total

FY17.1H

FY18.1H

Change

8

8

+8.5%

(0)

－

－

Personal accident

4,452

4,441

(0.3%)

Voluntary
automobile

48,54551,336

+5.7%

780

733

(6.0%)

53,78656,520+5.1%

FireMarineCompulsory
automobile liability
Total*Medical insurance is included in personal accident.

Personal accident

Marine(JPY ｍn)

Sony Financial Holdings Inc.

All Rights Reserved

17

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

Personal accident insurance

OthersOrdinary Profit andAdjusted Ordinary Profit(JPY bn)

Adjusted ordinary profit

Ordinary profit(JPY bn)

56.5

60

48.9

53.7

7.2

＋15.1 %

6.2

6

5.4

4.9

＋5.1 %＋18.8 %

4

40

4.5
3.3

2
20
0
FY16.1H

FY17.1H

FY18.1H*Adjusted ordinary profit = Ordinary profit + Provision for catastrophe reserve

0
FY16.1H

FY17.1H

FY18.1H(Reference) Provision for catastrophe reserve(JPY bn)

Provision for catastrophe reserve
Note: Most of personal accident insurance is medical insurance.

FY16.1H

FY17.1H

1.5

1.7

FY18.1H

1.7*Provision for catastrophe reserve is described as positive amount.

Sony Financial Holdings Inc.

All Rights Reserved

18(Left-hand graph)
Net premiums written increased 5.1% year on year, to ¥56.5 billion
due to stable sales of automobile insurance.
(Right-hand graph)
Ordinary profit increased year on year as described before.
Adjusted ordinary profit is an profit indicator on a managerial accounting basis.
The figure is calculated by adjusting the amount of provision (reversal) for
catastrophe reserve to ordinary profit.
Adjusted ordinary profit was ¥7.2 billion.

Operating Performance:
Sony Assurance (2)Earned/Incurred Loss Ratio +Net Expense Ratio
Earned/Incurred loss ratio(Reference) Combined Ratio＜参考＞(Net Loss Ratio+ Net Expense Ratio)
Net loss ratio

Net expense ratio

（%）

（%）
100

Net expense ratio

90.6

100

89.2

89.9

86.3

86.2
＋0.1pt

80

85.8

84.4

83.3

80

79.7

79.8

(0.1pt)

60

62.3

60.7

63.3

59.6

＋1.6pt

61.2

60

57.5

55.9

56.7

53.2
＋1.4pt

40

54.6

40

(1.5pt)

20
28.3

28.5

26.6

26.6

(1.5pt)

20
25.1

28.3

28.5

26.6

26.6

25.1

FY16

FY17

FY16.1H

FY17.1H

FY18.1H

0

0
FY16
FY17
FY16.1H
FY17.1H
FY18.1H
Notes:
Earned/Incurred loss ratio = (Net losses paid + Provision for reserve foroutstanding losses + Loss adjustment expenses) / Earned premiums[Earthquake insurance and compulsory automobile liability insurance are excluded
from the above calculation.]Sony Financial Holdings Inc.

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

All Rights Reserved

19(Left-hand graph)
The Earned/Incurred (E.I.) loss ratio was up 1.6 percentage points year on year,
to 61.2%, driven by natural disasters.
The net expense ratio was down 1.5 percentage points year on year,
to 25.1%, due mainly to a decrease in system-related expenses.
Consequently, the sum of the E.I. loss ratio and the net expense ratio wasup 0.1 percentage points year on year, to 86.3%.
(Right-hand graph)
The net loss ratio was up 1.4 percentage points year on year, to 54.6%.
This is different from the E.I. loss ratio, which reflects an increase ora decrease in provision for reserve for outstanding losses.
The combined ratio (the sum of the net loss ratio and the net expense ratio)
was down 0.1 percentage points year on year, to 79.7%.

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

19.8<Consolidated>
FY17.1H

FY18.1H

Ordinary revenues

19.8

22.0

+2.2

Ordinary profit

3.7

4.6

+0.9

+25.7%

Profit attributable to ownersof the parent

2.4

3.0

+0.6

+27.7%(JPY bn)+11.2 %

+25.7 %

220
22.0

4.6

(JPY bn)

FY17.1H

FY18.1H＜Consolidated＞◆Both ordinary revenues and ordinary profit rose year
on year due to increases in interest income on
investment securities and on loans in line with agrowing balance of mortgage loans.
＜Non-consolidated＞◆Both gross operating profit and net operating profit
increased.
・Net interest income increased due to increases ininterest income on investment securities and loans.

+11.2%<Non-consolidated>
FY17.1H

FY18.1H

Ordinary revenues

18.0

19.9

＋1.8

+10.3%

Gross operating profit

10.5

11.8

+1.2

+11.6%+13.0%(JPY bn)

3.7

ChangeChangeNet interest income

10.1

11.4

+1.3

Net fees and commissions

(1.5)

(1.6)

(0.0)

－

Net other operating income

2.0

2.0

(0.0)

(1.4%)

7.6

7.6

(0.0)

(0.2%)＋40.2％

General and administrative
expenses
Net operating profit

2.9

4.1

＋1.1

Ordinary profit

3.4

4.2

+0.8

+23.9%Net income

2.3

2.9

+0.6

+26.6%

Mar. 18

Sep. 18

85.7

85.7

(JPY bn)
Net assets
Net unrealized gains onother securities, net of taxes
Total assets

Sony Financial Holdings Inc.

Change from
Mar. 18

+0.0

+0.1%

6.0

5.1

(0.8)

(14.4%)

2,635.0

2,778.6＋143.5＋5.4%

All Rights Reserved

20

On a consolidated basis, Sony Bankʼs ordinary revenues increased 11.2%
year on year, to ¥22.0 billion, due to increases in interest income on
investment securities and on loans in line with a growing balance of mortgage loans.
Ordinary profit increased 25.7% year on year,to ¥4.6 billion, for the same reasons as ordinary revenues.
On a non-consolidated basis, ordinary revenues and ordinary profit increased year
on year for the same reasons as in the consolidated results.

Overview of Operating Performance:
Sony Bank (Non-consolidated) (1)Change from
Mar. 18

Sep. 17Mar. 18

Sep. 18

Customer assets

2,284.8

2,343.0

2,436.1

+93.0

+4.0%

Deposits

2,165.2

2,219.3

2,308.9

+89.6

+4.0%

Yen

1,800.5

1,814.7

1,909.8

+95.1

+5.2%

364.6

404.6

399.1

(5.4)

(1.4%)

Investment trusts

119.6

123.7

127.1

＋3.4

+2.8%

Loans outstanding

1,559.3

1,596.3

1,638.3

＋41.9

+2.6%

Mortgage loans

1,477.9

1,525.5

1,574.8

+49.2

+3.2%

Card loans

18.9

18.8

18.5

(0.3)

(1.7%)

Others

62.4

51.8

45.0

(6.8)

(13.3%)

＋0.07
mm

+5.2%

(JPY bn)

Foreign currencies*1

1.29mm

1.35mm

1.42mmNon-performing assets ratio*2（Based on Financial
Reconstruction Law）

0.15%

0.12％

0.12％

(0.01pt)

Non-consolidated capital
Adequacy ratio *3（domestic criteria）

9.43%

10.45%

10.43%(0.02pt)

Number of accounts<Reasons for changes>◆ Increased due mainly to an increasein newly accumulated funds via theincreased number of accounts, aswell as a conversion from foreign
currencies backed by yen
depreciation.
◆ Decreased due to a conversion and atransfer from foreign ordinary
deposits into yen deposits led by yen
depreciation, despite an increase inforeign currency time deposits.
◆ Rose due to a steady increase inmortgage loans.

*1 Loans in others include corporate loans of ¥44.9 billion*2 Non-performing loans (loans based on the Financial Reconstruction Act) /Total loan exposure*3 Please refer to the graph of the non-consolidated capital adequacy ratio (domestic criteria) on page 24.

Sony Financial Holdings Inc.

All Rights Reserved

21

Overview of Operating Performance:
Sony Bank (Non-consolidated) (2)<Reference> On Managerial Accounting Basis<Reference> Interest Spread(Managerial Accounting Basis)(JPY bn)

FY17.1H
10.5

11.8

+1.2

+11.6%

①

11.3

12.5

+1.2

+11.3%Net fees and commissions*2 ②

(1.3)

(1.3)

(0.0)

―

Gross operating profit
Net interest income*1*3

FY18.1H

Change

0.5

0.6

+0.0

+5.5%

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

10.0

11.2

+1.1

+12.0%

Operating expenses and other
Expenses
③

7.6

7.7

+0.0

+0.6%

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

2.3

3.4

+1.1

+49.4%Net other operating income■Managerial accounting basis
The following adjustments are made to the figures on a financial account for profits andlosses 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), mainly consistsof 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 Bankʼs basic profits.

Yield on investment（%）

Yield on financing

Interest spread

1.17

1.13
1

0.91

+0.02pt

0.93

0.5

0.22

0.25

0
FY17.1H

FY18.1H

Note: Interest spread=(Yield on investment)-(Yield on financing)Sony Financial Holdings Inc.

All Rights Reserved

We break down gross operating profit on a managerial accounting basis tofacilitate an understanding of operational sources of revenues and profits.
(Left-hand table)
Net interest income increased 11.3% year on year, to ¥12.5 billion,
due to increases in interest income on investment securities and on loans
in line with a growing balance of mortgage loans.
Net fees and commissions was a loss of ¥1.3 billion, due mainly tohigher fees associated with mortgage loans.
Consequently, gross operating profit on a core profit basis increased 12.0%
year on year, to ¥11.2 billion. Net operating profit on a core profit basis
increased 49.4% year on year, to ¥3.4 billion.
(Right-hand graph)
The yield on investment for FY18.1H was 1.17%.
The yield on financing for FY18.1H was 0.25%.
Consequently, interest spread for FY18.1H was 0.93%.

22

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

Foreign currency deposits(JPY bn)

2,112.9
2,000

Loans

348.0

Mortgage loans

2,308.9

2,219.3
＋89.6
404.6

399.1

1,500

Others(JPY bn)

1,539.6
1,500

87.1

1,638.3

1,596.3
70.7

63.5

+41.9

*

1,000

1,000
1,764.9

1,814.7

1,452.4

1,909.8

1,525.5

1,574.8

Mar. 18

Sep. 18500
500

0Mar. 17Mar. 18

Sep. 180Mar. 17*Corporate loans of ¥44.9 billion. Card loans of ¥18.5 billion.

Sony Financial Holdings Inc.

All Rights Reserved

23(Left-hand graph)
As of September 30, 2018, deposits (the sum of Japanese yen and foreign
currency deposits) amounted to ¥2,308.9 billion, up ¥89.6 billion
from March 31, 2018.
Of this amount, the yen deposit balance amounted to ¥1,909.8 billion,up ¥95.1 billion from March 31, 2018, as yen ordinary deposits increased
due mainly to an increase in newly accumulated funds via the increased
number of accounts, as well as a conversion from foreign currencies
backed by yen depreciation.
The yen-denominated balance of foreign currency deposits amounted
to ¥399.1 billion, down ¥5.4 billion from March 31, 2018, reflecting
a conversion and a transfer from foreign ordinary deposits into yen deposits
led by yen depreciation, despite an increase in foreign currency time deposits.
(Right-hand graph)
The loan balance as of September 30, 2018 expanded ¥41.9 billion
from March 31, 2018, to ¥1,638.3 billion, due to a steady increase inmortgage loans.

Operating Performance:
Sony Bank (Non-consolidated) (2)Non-Consolidated Capital Adequacy Ratio

Balance of Securities by Credit Rating
AAA
BBB(Domestic Criteria)

AA
A
Others(JPY bn)

631.2
600

674.2

+58.2

（%）

732.5
14.4

15

18.1

26.1
315.3

10

306.8

9.75

10.45

10.43
10.43
(0.02pt)

303.0
400
94.9
109.8
200

5

135.3

160.2

232.4

300.2

0

0
Mar. 17Mar. 18

Sep. 18

Mar. 17Mar. 18

Sep. 18

Note: 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.

Sony Financial Holdings Inc.

All Rights Reserved

24(Left-hand graph)
As of September 30, 2018, the balance of securities amounted to¥732.5 billion, up ¥58.2 billion from March 31, 2018.
Sony Bank continuously invests in highly rated bonds.
(Right-hand graph)
As of September 30, 2018, Sony Bankʼs non-consolidated capital adequacy ratio(domestic criteria) was 10.43%, down 0.02 percentage points fromMarch 31, 2018. Sony Bank maintains financial soundness.

Forecast of Consolidated Financial Results
for the Fiscal Year Ending March 31, 2019
(FY18)

Sony Financial Holdings Inc.

All Rights Reserved25Forecast of Consolidated Financial Results for FY18
Forecast of consolidated financial results for FY18 is unchanged from the forecast announced on April 27, 2018
（JPY bn）

FY17（Actual）

FY18（Forecast）

ChangeFY18.1H（Actual）

Progress
rate

1,503.6

1,578.0

+4.9%

860.8

54.6%

1,351.2

1,416.1

+4.8%

779.3

55.0%

Non-life insurance business

110.0

112.3

+2.0%

57.7

51.4%

Banking business

39.9

42.8

+7.2%

22.0

51.5%

66.8

83.0

+24.2%

47.2

56.9%

Life insurance business

54.1

70.9

+30.9%

37.4

52.8%

Non-life insurance business

6.5

6.5

(1.1%)

5.4

83.8%

Banking business

7.1

7.0

(2.0%)

4.6

66.7%

51.8

55.0

+6.0%

31.7

57.8%

Ordinary revenues

Life insurance business

Ordinary profit

Profit attributable to owners of the parent<Segment information for ordinary revenues and ordinary profit>■Life insurance, Non-life insurance, and Banking businesses

Although both ordinary revenues and ordinary profit exceeded our initial expectations in FY18.1H, we maintain our full-year forecasts
for FY18, taking into consideration the business environment from FY18.3Q onward.

Sony Financial Holdings Inc.

All Rights Reserved

26

Forecast of consolidated financial results for FY18 is unchanged from the forecast
announced on April 27, 2018.

Sony Lifeʼs MCEV and ESR
as of September 30, 2018

Some parts of the calculations of MCEV adopted simplified method except for those as of March 31, 2018.
Please keep in mind that the validity of these calculations has not been verified by outside specialists.
*In this part, figures, ratios and percentages changes have been rounded.

Sony Financial Holdings Inc.

All Rights Reserved27Sony Lifeʼs MCEV
ChangefromMar. 18

ChangefromJun. 18

Mar. 18

Jun. 18

Sep. 18

1,633.2

1,593.5

1,715.3+82.1+121.8Adjusted net worth

1,786.1

1,804.3

1,560.0(226.1)(244.3)

Value of existing business(152.9)(210.8)155.3+308.2+366.1(JPY bn)

FY17.4Q(3M)

FY18.1Q(3M)

FY18.2Q(3M)

FY18.1H(6M)

New business value

21.2

21.9

22.6

44.6

New business margin

6.1%

7.1%

6.9％

7.0％

(JPY bn)

MCEV

 Reasons for changes in MCEV
・MCEV as of September 30, 2018 increased ¥121.8 billion from June 30, 2018, due mainly to an increase in interest rates
in Japanese yen.
 New business value / New business margin
・New business value for FY18.2Q (3M) was ¥22.6 billion, due to a favorable acquisition of new policies.
・New business margin for FY18.2Q (3M) was down 0.2pt from FY18.1Q (3M), due mainly to a change in product mix.
Notes:
1. Calculated MCEV as of June 30, 2018 onward by using mainly updated economic assumptions and lapse and surrender rate from March 31, 2018.
2. New business value and new business margin are calculated accumulating new business value for each month based on economic assumptions at the end of each month.
The figures for FY18 onward reflect the revision in the insurance risk measurement method and others which revised in March 31, 2018. For details of the revision in
the insurance risk measurement method and others, please refer to the Presentation Materials “Consolidated Financial Results for the Fiscal Year Ended March 31, 2018
and Sony Lifeʼs Preliminary MCEV as of March 31, 2018.”*Please refer to the appendix page 41-44 for trend on bond yields and yield curves.

Sony Financial Holdings Inc.

All Rights ReservedSony Lifeʼs MCEV as of September 30, 2018 was ¥1,715.3 billion,
increased ¥121.8 billion from June 30, 2018, due mainly to an increase
in interest rates in Japanese yen.
New business value for FY18.2Q (3M) was ¥22.6 billion, due to a favorable
acquisition of new policies.
New business margin for FY18.2Q (3M) was down 0.2 percentage points
from FY18.1Q (3M), to 6.9%, due mainly to a change in product mix.

28

Sony Lifeʼs ESR(JPY bn)

Mar. 18

Jun. 18

Sep. 18

Insurance risk

497.5

506.8

488.7

Market-related risk

380.6

379.6

407.6

Of which, interest rate risk

275.3

270.4

300.7

Operational risk

31.0

32.1

33.0

Counter party risk

2.6

2.6

2.7

(182.0)(183.1)(187.8)

729.7

738.0

744.1

Variance effect
The risk amount based on
economic value(JPY bn)

MCEV + Frictional costs
ESR

Mar. 18

Jun. 18

Sep. 18

1,655.8

1,619.2

1,731.6

227%

219%

233%

 The risk amount based on economic value as of September 30, 2018 amounted to ¥744.1 billion, up ¥6.1 billion
from June 30, 2018, due mainly to an increase in interest rate risk.
 ESR as of September 30, 2018 was 233%, up 13pt from June 30, 2018.
Notes:
1. The risk amount based on economic value refers to the total amount of Sony Lifeʼs risks comprehensively examined by a market consistent approach, including
insurance risk and market-related risk and others.
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.
3. Risk amount excluding the variance effect within market-related risk.
4. ESR=(MCEV + Frictional costs) / Risk amount based on economic value.

Sony Financial Holdings Inc.

All Rights Reserved

29

The risk amount based on economic value as of September 30, 2018 amounted
to ¥744.1 billion, up ¥6.1 billion from June 30, 2018, due mainly to an increase
in interest rate risk.
ESR as of September 30, 2018 was 233%, up 13 percentage points from
June 30, 2018.
Consolidated adjusted ROE for FY18.1H was 3.3%.
For details, please refer to page 45 to 47.

Appendix

Sony Financial Holdings Inc.

All Rights Reserved30Recent Topics
 Sony Bankʼs Mortgage Loans through Sony Life
Sony Life accounts for 12% of the amount of new mortgage loans for FY18.1H (6M)
Sony Life accounts for 20% of the balance of mortgage loans as of September 30, 2018
*Sony Life started handling banking agency business in January 2008.

 Sony Assuranceʼs Automobile Insurance sold by Sony Life
Sony Life accounts for 5% of new automobile policies for FY18.1H (6M)
*Sony Life started handling automobile insurance in May 2001.

 Highlights on and after FY18.2Q
2018-09-22

Sony Life opened the financial advisory retail shop in Singapore

2018-10-01

Sony Bank began offering new mortgage loan, "Fixed-rate Select Mortgage Loan" and new group credit life
insurance with disease protection rider

2018-10-11

Sony Financial Ventures announced the launch of its first venture capital fund with Global Brain Corporation,
one of the largest venture capital firms in Japan

2018-10-15

Sony Assurance began selling internet-only fire insurance

2018-10-15

Sony Lifecare announced to open its 4th “SONARE” brand nursing care home in Suginami-city, Tokyo
in autumn 2019Sony Financial Holdings Inc.

All Rights Reserved31Sony Lifeʼs Product Portfolio
Annualized Premiums from New Policies by Product
FY17（12M）¥73.0 billion

Yen whole
life 6%

Endowment/
Annuities
29%

U.S. dollardenominatedwhole life 13%
円建終⾝
円建終⾝
14%U.S. dollar19%
denominatedsingle-premium
whole life
insurance 6%

Protection-type（term-life）
47％

FY18.1Q（3M）¥18.7 billion

Yen wholelife
3%
Endowment/
Annuities
30%

U.S. dollardenominatedwhole life
14%
円建終⾝
U.S. Dollar14%
denominatedsingle-premium
whole life
insurance 8%

FY18.2Q（3M）¥19.2 billion
U.S. dollardenominatedwhole life 14%

Yen wholelife
3%
Endowment/
Annuities
31%

U.S. Dollardenominatedsinglepremium
whole life
insurance
7%

Protection-type（term-life）
46％

Protection-type（term-life）
45％

Sony Financial Holdings Inc.

All Rights Reserved32Sony Lifeʼs Asset Management
Purchase Securities in the General AccountForeign

FY17.1H（6M） bonds

12.0%Japanesestocks 0.4%

FY18.1H（6M）
Japanesestocks 0.4%

Japanese
corporate
bonds
31.1%

FY17（12M）

Foreign
bonds
18.5%

社債
11.9%

Japanese
corporate
bonds
国債
25.9%

JGBs
56.5%

Foreignbonds
24.0%Japanesestocks 0.5%

Japanese
corporate
社債
bonds
25.9%
17.6%

JGBs
58.0%

JGBs
55.1%

85.3%

Notes:
1. Japanese corporate bonds include FILP agency bonds and Government-guaranteed bonds.
2. The graphs above are asset allocation for the relevant period. Total invested amount for the relevant period as 100%.
(excluding, investment in subsidiaries and affiliates, and strategic investments)

Sony Financial Holdings Inc.

All Rights Reserved33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)
Mar. 17（JPY bn）

Carrying
amountMar. 18

Fair value

Net unrealized
gains (losses)

7,514.2

1,445.5

Carrying
amountCarrying
amountFair value

Fair value

Net unrealized
gains (losses)

8,050.6

1,582.6

6,663.4

7,961.2

1,297.8

Held-to-maturity securities

6,068.6

Policy reserve matching bonds

277.3

303.3

25.9

401.9

436.8

34.8

522.9

540.8

17.9

Available-for-sale securities

896.5

1,069.9

173.3

921.9

1,091.1

169.1

955.1

1,107.7

152.5

Japanese bonds(including JGBs)

852.6

1,013.3

160.7

847.0

1,002.1

155.0

862.7

1,002.3

139.5

Japanese stocks

13.6

27.0

13.3

13.6

30.6

16.9

11.2

25.9

14.7

Foreign securities

30.0

29.1

(0.8)

61.0

58.1

(2.9)

80.9

79.0

(1.8)

Other securities

0.1

0.3

0.1

0.1

0.2

0.1

0.1

0.2

0.1

7,242.5

8,887.5

1,644.9

7,791.9

9,578.6

1,786.7

8,141.5

9,609.8

1,468.3

Total

6,467.9

Sep. 18
Net unrealized
gains (losses)

Note: The above table includes money held in trust other than trading-purpose securities.

Valuation gains (losses) on trading-purpose securities
Mar. 17
Balance sheet
amountNet valuation gains (losses)
recorded in income

2.0（JPY bn）

Mar. 18(0.1)

Balance sheet
amountSep. 18

Net valuation gains (losses)
recorded in income－

Sony Financial Holdings Inc.

(0.0)

All Rights Reserved

Balance sheet
amount1.4

Net valuation gains (losses)
recorded in income

(0.0)

34

Sony Lifeʼs Interest Income and Dividends (Details)（JPY mn）

FY17.1H

FY18.1H

Cash and deposits

Change00+145.4%

Japanese bonds(including JGBs)

61,87564,207+3.8%

Japanese stocks

282

295

+4.5%

Foreign securities

7,027

8,988

+27.9%

Other securities

124

293

+135.4%

Loans

3,285

3,396

+3.4%

Real estate

5,455

4,347

(20.3%)

191

269+41.3%

78,24181,798+4.5%

Others
Total

Sony Financial Holdings Inc.

All Rights Reserved35Sony Lifeʼs Capital Gains/Losses
FY17.1H

FY18.1H

16,25740,355Losses on trading securities, net－

19

Income from trading securities, net

19－

Losses on sale of securities…(3)034Gains on sale of securities…(3)

0

3,316

（JPY mn）
Capital losses

Devaluation losses on securities…(4)

－

4,026

14,73919,704Losses on hedges of variable life insurance…(1)8,555

12,304Losses on hedges of available-for-sale securities…(2)

2,767

2,628

Losses on U.S. dollar-denominated insurance…(5)

2,489

4,461

Losses on derivatives, net

Foreign exchange losses, net
Other capital losses
Losses on U.S. dollar-denominated insurance（the provision of policy reserves for foreignexchange fluctuations）…(5)

－

－

1,518

16,570853

16,570（JPY mn）
Capital gains

Gains on derivatives, net
Foreign exchange gains, net
Gains on U.S. dollar-denominatedinsurance(foreign exchange gains in separate
accounting）…(5)Other capital gains

Net capital gains (losses)

FY17.1H

FY18.1H

2,098

24,715

－

－

2,078

21,398

1,583

21,280－－(14,159) (15,639)

Note: The figures of income (losses) from trading securities, net, gains (losses) on derivatives andforeign exchange gains (losses), net were recorded after offsetting gains and losses of each item.
FY17.1H

FY18.1H(1) Gains (Losses）on hedges of variable life insurance(8,555)(12,304)(2) Gains (losses）on hedges of available-for-salesecurities(2,767)(2,628)（JPY mn）(3) Gains (losses) on sale of securities

0

3,282

(4) Devaluation losses on securities－(4,026)(1,759)249(5) Gains (losses) on U.S. dollar-denominated insuranceSony Financial Holdings Inc.

All Rights Reserved36Sony Lifeʼs Quarterly Trend on New Policy Amount
Quarterly Trend on New Policy Amount(Individual Life Insurance + Individual Annuities)（JPY bn）

2,000

1,842.4
1,674.7

1,750
1,500
1,250

1,485.0

1,457.7
1,260.0

1,189.0

1,050.7

1,115.8

1,114.8

FY17.1Q

FY17.2Q

1,214.7

1,000
750
500
250
0
FY16.1Q

FY16.2Q

FY16.3Q

FY16.4Q

Sony Financial Holdings Inc.

FY17.3Q

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FY17.4Q

FY18.1Q

FY18.2Q

37

Sony Lifeʼs Quarterly Trend on
Annualized Premiums from New Policies
Quarterly Trend on Annualized Premiums from New Policies(Individual Life Insurance + Individual Annuities)

Annualized premiums from new policies

Of which, third-sector(JPY bn)

25

23.9
20.5

20

19.5

18.2
15.3

15

21.1
18.7

16.1

16.2

3.1

2.8

3.3

3.6

3.3

FY17.1Q

FY17.2Q

FY17.3Q

FY17.4Q

FY18.1Q

19.2

10

5
4.1

3.9

FY16.1Q

FY16.2Q

0

4.4

3.1
FY16.3Q

FY16.4Q

Sony Financial Holdings Inc.

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3.9
FY18.2Q

38

Sony Lifeʼs Quarterly Trend on New Business Value
Quarterly Trend on New Business Value(JPY bn)

25
19.9

20

21.2

21.9

22.6

17.2
14.1

15
10.2

10

12.2

5.0

5
0
(0.2)
(5)
FY16.1Q

FY16.2Q

FY16.3Q

FY16.4Q

FY17.1Q

FY17.2Q

FY17.3Q

FY17.4Q

FY18.1Q

FY18.2Q

Note: New business value is calculated accumulating new business value for each month based on economic assumptions at the end of each month.
The figures for FY18 onward reflect the revision in the insurance risk measurement method and others which revised on March 31, 2018.

Sony Financial Holdings Inc.

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39

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

Number and Amount of Policies in Force

Number and Amount of New Policies
New policy amount(JPY bn)40

Number of new polices [ ]

41.3
[7.9]

Policy amount in force(Thousandsof policies)(JPY bn)

15

600

Number of policies in force [ ]

519.7

520.6

[89.9][92.5]

525.8[93.8](Thousandsof policies)

120

25.6
30

[5.5]

10

400

80

5

200

40

0

0

14.5
[2.9]

20

10

0
FY16.1H

FY17.1H

FY18.1H

Net income (losses) for AEGON Sony Life Insurance and SA Reinsurance(JPY bn)

FY17.1H

FY18.1H

0
Sep. 17Mar. 18

Sep. 18

ChangeAEGON Sony Life Insurance

(2.4)

(1.7)

＋0.6

SA Reinsurance

(0.0)

1.1

＋1.2

AEGON Sony Life Insurance and SA Reinsurance are equity method companies, 50-50 joint venture established by Sony Life and AEGON Group.
SA Reinsurance prepares its financial statements in accordance with U.S. GAAP. 50% of the net income (losses) for AEGON Sony Life Insurance andSA Reinsurance are recognized as investment profit (losses) on equity method in the SFHʼs consolidated net income.

Sony Financial Holdings Inc.

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40Trend on JGB Yields (Par rate)
1.20%

10 year
20 year

1.00%

30 year
40 year

0.80%

0.60%

0.40%

0.20%

0.00%
Mar. 18

Apr. 18

May. 18

Jun. 18

Jul. 18

Aug. 18

Sep. 18

Jul. 18

Aug. 18

As of the end of each monthMar. 18

Apr. 18

May. 18

Jun. 18

Sep. 18

10 year

0.04%

0.06%

0.04%

0.04%

0.05%

0.11%

0.13%

20 year

0.53%

0.53%

0.51%

0.51%

0.53%

0.62%

0.66%

30 year

0.74%

0.75%

0.72%

0.72%

0.74%

0.83%

0.89%

40 year

0.89%

0.88%

0.86%

0.85%

0.86%

0.97%

1.03%

Sony Financial Holdings Inc.

All Rights Reserved

41Trend on Risk-free Rate (Japanese yen/Par rate)
2.00%
Convergence
period:20 yearMar. 18
1.50%

Jun. 18
Sep. 18

1.00%

0.50%

0.00%
Last liquid point:
40 year(0.50%)-0.50%
1×

10

20

30

40

50

60

70

80

year

year

year

year

year

year

year

year

year

*For above risk-free rate, we employ the Smith-Wilson method for extrapolation so that the 60-year forward rate will coverage on the UFR (3.5%).

Sony Financial Holdings Inc.

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42Trend on U.S. Dollar Bonds Yields (Par rate)
3.30%
10 year3.20%

20 year
30 year

3.10%
3.00%
2.90%
2.80%
2.70%
2.60%
2.50%
Mar. 18

Apr. 18

May. 18

Jun. 18

Jul. 18

Aug. 18

Sep. 18

Jul. 18

Aug. 18

As of the end of each monthMar. 18

Apr. 18

May. 18

Jun. 18

Sep. 18

10 year

2.74%

2.95%

2.86%

2.86%

2.96%

2.86%

3.06%

20 year

2.85%

3.02%

2.93%

2.91%

3.02%

2.93%

3.14%

30 year

2.97%

3.12%

3.03%

2.99%

3.08%

3.02%

3.21%

Sony Financial Holdings Inc.

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43Trend on Risk-free Rate (U.S. Dollar /Par rate)
3.50%
Convergence
period: 30 year

3.00%

2.50%
Mar. 18
Jun. 18
Sep. 18

2.00%

Last liquid point:
30 year

1.50%
1×

10

20

30

40

50

60

70

80

year

year

year

year

year

year

year

year

year

*For above risk-free rate, we employ the Smith-Wilson method for extrapolation so that the 60-year forward rate will coverage on the UFR (3.5%).

Sony Financial Holdings Inc.

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44

Detail of Consolidated Adjusted ROE

FY17
(12M)

FY17.1H(6M)

FY18.1H(6M)

Consolidated Adjusted ROE

6.1％

2.8%

3.3%

(Sony Life) Core ROEV*

5.9％

2.6％

3.1％

(Sony Assurance) Adjusted ROE

16.1％

10.5％

10.5％

(Sony Bank) ROE

5.5％

2.9%

3.6%

*The figures for FY17 and FY17.1H excluded the impact of the revision in the insurance risk measurement method and others
for Sony Life.

Sony Financial Holdings Inc.

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Detail of Consolidated Adjusted Profit andConsolidated Adjusted Capital
Adjusted capital (Denominator）

Adjusted profit（Numerator)
Sony Financial Group（consolidated）(JPY bn）

Adjusted profit (consolidated)
Sony Life (non-consolidated) (JPY bn）

FY2017

FY17.1H

FY18.1H

98.8

44.9

60.0

FY17.1H

FY18.1H

29.3

44.5

FY17

New business value *1

70.4

Expected existing business
contribution *1

16.3

8.5

7.1

Adjusted profit

86.7

37.9

51.7

FY17.1H

FY18.1H

Net income

Sony Assurance

4.8

3.3

3.8

Provision amount for catastrophe
reserve (after tax)

2.4

1.2

1.2

Provision amount for reserve forprice fluctuations (after tax)

0.0

0.0

0.0

Adjusted profit

7.3

4.5

5.1

Sony Bank (consolidated)(JPY bn）(JPY bn）

Profit attributable to owners of theparent

FY17

FY17

4.7

FY17.1H

FY18.1H

2.4

3.0

Sony Financial Group（consolidated）(JPY bn）

Adjusted capital (consolidated)
Sony Life (non-consolidated)(JPY bn）①MCEV as of the beginning of the
fiscal year

FY17

FY17.1H

FY18.1H

1,607.6

1,597.4

1,797.7

FY17

FY17.1H

FY18.1H

1,441.0

1,441.0

1,633.1

23.1

23.1

26.2

③MCEV as of the end of the period *2*3

1,536.5

1,523.0

1,715.2

Adjusted capital

1,477.2

1,470.5

1,661.0

FY17②Dividends paid（①－②＋③）/２

FY17.1H

FY18.1H①The average amount of net assets
during the periodSony Assurance

33.1

31.0

33.9

②The average amount of catastrophe
reserve (after tax) during the period

15.0

13.8

16.3

③The average amount of reserve forprice fluctuations (after tax) during theperiod

0.1

0.1

0.1

Adjusted capital （①＋②＋③）

45.2

43.5

49.4

FY17.1H

FY18.1H

83.3

87.2

Sony Bank (consolidated)(JPY bn）(JPY bn）

Adjusted capital（The average amountof net assets during the period）

FY17

85.1

*1. Please keep in mind that the validity of these calculations has not been verified by outside specialists for the figures for FY17.1H and FY18.1H.
*2. Please keep in mind that the validity of these calculations has not been verified by outside specialists.
*3. The figures for FY17 and FY17.1H excluded the impact of the revision in the insurance risk measurement method and others.
Note: The figures on this page unit have been truncated. Therefore, some figures may differ from other pages.

Sony Financial Holdings Inc.

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46

Definition of Consolidated Adjusted ROE
Calculation of Consolidated Adjusted ROE
Since each company of Sony Financial Group differs by industry such as insurance and banking,each group company calculate its “Adjusted ROE” based on adjusted profit and adjusted capital
to realize its corporate value and capital efficiency.
Sony Financial Group *Sony Life
Core ROEVSony Assurance
Adjusted ROE

Numerator(Adjusted
profit)New business value +Expected existing business
contribution

Net income (loss) + Provision
amount for catastrophe
reserve and its provision
amount for reserve for pricefluctuations, in each case②
after taxes＋

Denominator(Adjusted
capital)MCEV as of the beginning of
the fiscal year less dividends
paid plus MCEV as of the endof the fiscal year, divided bytwo.

The average amount of net
assets plus the sum ofcatastrophe reserve and its
reserve for price fluctuations
during the fiscal year, ineach case after taxes
⑤

＋

＋

①

④

＋

Sony Bank
ROE
Profit (loss) attributable toowners of the parent③③

The average amount of net
assets during the fiscal year⑥⑥

* Consolidated Adjusted ROE = Consolidated Adjusted Profit divided by Consolidated Adjusted Capital
Consolidated Adjusted Profit ＝ ①＋②＋③
Consolidated Adjusted Capital ＝ ④＋⑤＋⑥

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47

Contact︓
Investor Relations Department
Sony Financial Holdings Inc.
TEL︓+81-3-5290-6500

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48