2018
Financial Data Book
April 1, 2017–March 31, 2018

Contents
SFH Financial Data (Consolidated)

Sony Assurance Financial Data

1 Principal Indicators of Operating Performance
2 Consolidated Balance Sheets
4 Consolidated Statements of Income andConsolidated Statements of Comprehensive Income
7 Consolidated Statements of Changes in Net Assets
9 Consolidated Statements of Cash Flows
Sony Life Financial Data (Non-consolidated)
10 Balance Sheets
12 Statements of Income
15 Statements of Changes in Net Assets
17 Statements of Cash Flows
20 1. Loans by Borrower Category
20 2. Risk-monitored Loans
20 3. Accounting Indicators
25 4. Reconciliation to Core Profit andNon-consolidated Ordinary Profit
27 5. Fair Value Information on Securities(General Account)
32 6. Fair Value Information on Securities(Company Total)

62 Balance Sheets
64 Statements of Income
65 Statements of Changes in Net Assets
67 Statements of Cash Flows
69 1. Loans by Borrower Category
69 2. Risk-monitored Loans
69 3. Assets and Liabilities
72 4. Profit and Loss
74 5. Fair Value Information, etc.
Sony Assurance Performance Indicators
75
76
78
80

1. Principal Indicators of Operating Performance
2. Underwriting Performance
3. Asset Management
4. Non-consolidated Solvency Margin Ratio

Sony Bank Financial Data (Consolidated)

Sony Life Performance Indicators (Non-consolidated)
39
40
47
48

1. Key Performance Indicators for Past Five Years
2. Key Performance Indicators
3. Indicators for Insurance Policies
4. Indicators Related to Asset Management(General Account)
56 5. Status of Insurance Claims Paying Ability
57 6. Balance of Separate Account Assets
57 7. Investment Progress of Separate Account Assets
in Individual Variable Life Insurance and Individual
Variable Annuities
59 8. Status of Individual Variable Life Insurance andIndividual Variable Annuities
60 9. Number of Agencies
61 10. Number of Employees and Recruits
61 11. Average Salary

82 Consolidated Balance Sheets
84 Consolidated Statements of Income
84 Consolidated Statements of Comprehensive Income
85 Consolidated Statements of Changes in Net Assets
87 Consolidated Statements of Cash Flows
Sony Bank Financial Data (Non-consolidated)
88 Balance Sheets
90 Statements of Income
91 Statements of Changes in Net Assets
93 1. Loans by Borrower Category
93 2. Risk-monitored Loans
93 3. Profit and Loss
96 4. Fair Value Information
Sony Bank Performance Indicators (Non-consolidated)
101
101
102
104

1. Key Performance Indicators
2. Status of Operations (Deposits)
3. Status of Operations (Loans)
4. Status of Operations (Securities)

MCEV Results for Sony Life
106
112
116
119
121

1. MCEV Results
2. Assumptions
3. Calculation Method of MCEV
4. Overview of MCEV
5. Glossary of MCEV-related Terminology

The Financial Data Book andAnnual Report are available only
on SFH’s website.

2018
Annual Report

April 1, 2017 – March 31, 2018

Annual Reporthttps://www.sonyfh.co.jp/en/financial_info/annualreport• Unless otherwise indicated, figures less than the indicated unit in thismaterial have been truncated, while ratios and percentage changes
have been rounded off.
• Fiscal 2016 and fiscal 2017 represent the fiscal years ended March 31,2017 and 2018, respectively.

SFH

Financial Data (Consolidated)
Principal Indicators of Operating PerformanceSony Financial Holdings Inc.
For the years ended March 31,
Millions of yen

Ordinary revenues
Ordinary profit
Profit attributable to owners of the parent
Comprehensive income
Total net assets
Total assets
Net assets per share (yen)Net income per share (yen)Diluted net income per share (yen)Cash flows from operating activities
Cash flows from investing activities
Cash flows from financing activities
Cash and cash equivalents at the end of the period
Number of employees

2014

2015

2016

2017

2018

¥1,320,456
76,13640,504
44,794
467,050
8,841,382
1,070.75
93.11¥1,352,325
90,062
54,41990,707550,672
9,545,868
1,262.94
125.10¥1,362,044
71,10343,355
71,105604,377
10,352,114
1,386.32
99.67¥ 1,381,667
66,326
41,621
21,433
601,139
11,471,845
1,378.63
95.69
95.68
692,445(624,749)(34,057)
268,381
9,739¥ 1,503,630
66,84351,89552,207625,406
12,401,446
1,433.73
119.30119.29819,721(680,845)(14,496)
393,133
10,719̶̶̶

601,738(549,346)(13,522)240,2798,150

425,656(445,431)(13,087)
207,4228,448

602,475(558,825)(17,437)
233,620
9,029

Note: Diluted net income per share for the years ended March 31, 2014 through 2016 is not shown because there are no latent shares.
%

For the years ended March 31,

2014

2015

Sony Life’s adjusted ROESony Life’s core ROEVSony Assurance’s adjusted ROESony Bank’s ROE

14.9%

9.6%

̶

̶

9.8
4.8

Consolidated adjusted ROE

14.2%

2016

2017

̶%

̶%

2018
̶%

14.2
6.0

5.0
13.3
5.0

3.6
14.4
4.1

5.9
16.1
5.5

9.5%

5.2%

3.9%

6.1%

Each ROE is calculated as follows:
Sony Life’s core ROEV
New business value + Expected existing business contribution
MCEV* as of the beginning of the fiscal year less dividends paid plus MCEV* as of the end of the fiscal year, divided by two
Sony Assurance’s adjusted ROE
Net income (loss) + Provision amount for catastrophe reserveand its provision amount for reserve for price fluctuations, in each case after taxes
The average amount of net assets plus the sum of catastrophe reserveand its reserve for price fluctuations during the fiscal year, in each case after taxes
Sony Bank’s ROE
Profit (loss) attributable to owners of the parent
The average amount of net assets during the fiscal year
Consolidated adjusted ROE for fiscal 2017
Consolidated adjusted ROE = Consolidated adjusted profit divided by consolidated adjusted capitalSony Life: New business value plus expected existing business contribution+ Sony Assurance: Net income (loss) plus provision amount for catastrophe reserve and its provision
amount for reserve for price fluctuations, in each case after taxes+ Sony Bank: Profit (loss) attributable to owners of the parent
Sony Life: MCEV* as of the beginning of the fiscal year less dividends paid plus MCEV* as of the end of the fiscal year, divided by two+ Sony Assurance: The average amount of net assets plus the sum of catastrophe reserveand its reserve for price fluctuations during the fiscal year, in each case after taxes+ Sony Bank: The average amount of net assets during the fiscal year
Note: Sony Life has changed its formula for calculating the numerator (adjusted profit) from fiscal 2016, whereby core ROEV rather than adjusted ROE is used as
an indicator for calculating consolidated adjusted ROE. Meanwhile, as of fiscal 2016 Sony Life’s MCEV is calculated by using the ultimate forward rate.
Consolidated adjusted ROE for fiscal 2015 was recalculated based on these changes. However, Sony Life’s core ROEV was partially calculated by thesimplified method.
Sony Life’s adjusted ROE (used for calculating consolidated adjusted ROE up to fiscal 2014)
The amount of increase in market consistent embedded value (MCEV)* during the fiscal year + Dividends paid
MCEV* as of the beginning of the fiscal year less dividends paid plus MCEV* as of the end of the fiscal year, divided by two* Sony Life discloses Market Consistent Embedded Value (“MCEV”). Sony Life’s MCEV is calculated in compliance with the European Insurance
CFO Forum Market Consistent Embedded Value Principles©** (“MCEV Principles”), the international standard in disclosing MCEV published by
the CFO Forum comprising CFOs from major insurance companies in Europe.
**Copyright © Stichting CFO Forum Foundation 2008

Sony Financial Holdings Inc. Financial Data Book 20181

SFH Consolidated Financial Statements

Consolidated Balance Sheets
Sony Financial Holdings Inc.
As of March 31, 2017 and 2018
Millions of yen

2017

2018

AssetsCash and due from banks

206,481¥327,633

Call loans and bills bought

61,90065,500

Monetary claims purchased

573

5,378

296,877

291,582

Securities

8,857,436

9,581,206

Loans

1,720,004

1,785,877

123,614106,051

Land

83,007

63,106

Buildings

34,96432,468

Leased assets

715

6,074

Construction in progress

132

5

Other tangible fixed assets

4,794

4,397

30,77635,684

Software30,14635,059Goodwill

49

583

Leased assets

̶

0

579

40

Due from agencies0̶Due from reinsurers

1,438

934

Foreign exchanges

7,268

9,346

148,650

168,736

Net defined benefit asset

2,752

3,426

Deferred tax assets

15,313

21,242

Reserve for possible loan losses(1,243)(1,152)¥11,471,845¥12,401,446

Money held in trust

Tangible fixed assets

Intangible fixed assets

Other intangible fixed assets

Other assets

Total Assets

2¥

Sony Financial Holdings Inc. Financial Data Book 2018

SFH Consolidated Financial Statements

Millions of yen

2017

2018

¥ 8,113,153¥ 8,763,349

Liabilities
Policy reserves and others
Reserve for outstanding claims
Policy reserves
Reserve for policyholders’ dividends

71,30674,7128,036,118

8,683,153

5,729

5,484

Due to agencies

2,616

1,873

Due to reinsurers

3,737

5,563

2,071,091

2,159,246

Deposits
Call money and bills sold

70,00096,000Borrowed money

90,000173,944

Foreign exchanges

108

228

Bonds payable

10,00020,000

Other liabilities

427,866

470,501

Reserve for employees’ bonuses

3,694

3,906

Net defined benefit liability

31,39933,179366

̶Reserve under the special laws

46,182

48,135Reserve for price fluctuations

46,182

48,135Reserve for directors’ retirement benefits

Deferred tax liabilities
Deferred tax liabilities on land revaluation
Total Liabilities

̶

0

488

109

10,870,705

11,776,039

Net Assets
Shareholders’ equity
Common stock

19,90019,927

Capital surplus

195,277

191,157

Retained earnings

255,062

283,911

(81)

(55)

470,157

494,941

134,849

133,991(1,154)(902)

Land revaluation, net of taxes(1,465)(2,439)Remeasurements of defined benefit plans, net of taxes(2,756)(1,929)129,472

128,719

49

97

Treasury stock
Total shareholders’ equity
Accumulated other comprehensive income
Net unrealized gains (losses) on available-for-sale securities, net of taxes
Net deferred gains (losses) on hedging instruments, net of taxes

Total accumulated other comprehensive income
Subscription rights to shares
Non-controlling interests
Total Net Assets
Total Liabilities and Net Assets

1,460

1,648

601,139

625,406¥11,471,845¥12,401,446

Sony Financial Holdings Inc. Financial Data Book 20183

SFH Consolidated Financial Statements

Consolidated Statements of Income and Consolidated Statements ofComprehensive Income
Sony Financial Holdings Inc.
For the years ended March 31, 2017 and 2018

(1) Consolidated Statements of Income
Ordinary Revenues
Ordinary Revenues from the Life Insurance Business
Income from insurance premiums
Insurance premiums
Ceded reinsurance commissions
Investment income
Interest income and dividends
Income from money held in trust, net
Gains on trading securities, net
Gains on sale of securities
Gains on redemption of securities
Foreign exchange gains, net
Other investment income
Gains on separate accounts, net
Other ordinary income

Millions of yen

2017

2018

¥1,381,667¥1,503,630

1,240,764

1,347,762

955,252

1,057,411

952,547

1,054,867

2,704

2,544

244,839

242,703147,785

157,276

4,493

4,490

152

2

1,308

0

̶

1

14,670̶

5

1

76,42380,931

40,67247,646102,337

110,091

Underwriting income

100,329

108,316

Net premiums written

100,274

108,253

Ordinary Revenues from the Non-life Insurance Business

Interest and dividends on deposits of premiums
Investment income
Interest income and dividends
Gains on sale of securities
Gains on redemption of securities
Transfer to interest and dividends on deposits of premiums
Other ordinary income

55

62

1,957

1,731

1,327

1,324

685

470

0

̶

(55)

(62)

49

43

38,31839,712

26,534

28,344

Interest income on loans

16,065

17,064

Interest income and dividends on securities

10,394

11,204

Ordinary Revenues from the Banking Business
Interest income

Interest income on call loans and bills bought̶

2Interest income on deposits with banks

63

63Interest income on interest rate swaps

8̶

Other interest income

1

9Fees and commissions

6,673

6,751

Other operating income

4,871

3,823

4,431

3,456

439

366

Gains on foreign exchange transactions, net
OthersOther ordinary income
Other
Other ordinary income

238

794

247

6,064

247

6,064

(Continued on next page)

4

Sony Financial Holdings Inc. Financial Data Book 2018

SFH Consolidated Financial Statements

Millions of yen

2017

2018

¥1,315,341¥1,436,787

1,186,465

1,296,417

372,407436,538

Insurance claims

84,17892,342

Annuity payments

12,01912,566

Insurance benefits

98,252

119,294

Surrender payments

168,409199,263

3,122

3,314

Ordinary Expenses
Ordinary Expenses from the Life Insurance BusinessInsurance claims and other payments

Other payments
Reinsurance premiums
Provision for policy reserves and others
Provision for reserve for outstanding claims
Provision for policy reserves
Interest portion of reserve for policyholders’ dividends

6,423

9,756

596,742

638,343

3,330

2,211

593,411

636,1310035,93732,889Interest expenses

44

151

Losses on sale of securities

̶0

Investment expenses

Losses on redemption of securities

53

2

30,05011,403Foreign exchange losses, net

̶15,280

Provision for reserve for possible loan losses̶

23

Depreciation of real estate for rent and others

1,779

1,680

Other investment expenses

4,008

4,346

Operating expenses

136,645

139,420

Other ordinary expenses

44,73349,226

96,639102,798

70,09473,94350,181

52,482

Loss adjustment expenses

7,458

8,067

Net commission and brokerage fees

1,187

1,295

Losses on derivatives, net

Ordinary Expenses from the Non-life Insurance Business
Underwriting expenses
Net losses paid

Provision for reserve for outstanding losses and claims
Provision for underwriting reserves
Investment expenses
Losses on sale of securities
Other investment expenses
Operating, general and administrative expenses
Other ordinary expenses

798

1,194

10,46910,903

3

2

0

̶

3

2

26,52028,84819

4(Continued on next page)

Sony Financial Holdings Inc. Financial Data Book 2018

5

SFH Consolidated Financial Statements

Consolidated Statements of Income (Continued)
Ordinary Expenses from the Banking BusinessMillions of yen

2017

2018

¥31,274¥30,428

8,554

7,656

5,104

5,320
(73)

Interest expenses
Interest expenses on deposits
Interest expenses on call money and bills sold(17)

Interest on borrowed money

190Interest expenses on bonds

74

40

3,372

2,360

Interest expenses on interest rate swaps
Other interest expenses

08Fees and commissions

3,648

4,676

Other operating expenses

86

105

18,843

17,733General and administrative expenses
Other ordinary expenses

142

257

962

7,141

962

7,141

66,326

66,843

̶

13,258

̶

13,258

2,032

2,180

Losses on disposal of fixed assets

134

187

Impairment losses

118

2

Provision for reserve under the special laws

1,772

1,953

Provision for reserve for price fluctuations

1,772

1,953

Other
Other ordinary expenses
Ordinary Profit
Extraordinary Gains
Gains on disposal of fixed assets
Extraordinary Losses

7

36

Provision for Reserve for Policyholders’ Dividends

Others

4,153

3,271

Income Before Income Taxes

60,14074,650

Income Taxes̶Current

23,12929,008

Income Taxes̶Deferred(4,724)(6,344)

Total Income Taxes

18,40522,664

Profit41,734

51,985

113

90¥41,621¥51,895

Profit Attributable to Non-controlling Interests
Profit Attributable to Owners of the Parent(2) Consolidated Statements of Comprehensive Income
ProfitMillions of yen

2017

2018

¥ 41,734¥51,985

Other Comprehensive Income
Net unrealized gains (losses) on available-for-sale securities, net of taxes(22,515)(857)

Net deferred gains (losses) on hedging instruments, net of taxes

1,192

251

Remeasurements of defined benefit plans, net of taxes

1,021

827

Total other comprehensive income(20,301)221¥ 21,433¥52,207

Comprehensive income attributable to owners of the parent¥ 21,301¥52,116Comprehensive income attributable to non-controlling interests¥¥

Comprehensive Income
Details:

6

Sony Financial Holdings Inc. Financial Data Book 2018

131

91

SFH Consolidated Financial Statements

Consolidated Statements of Changes in Net Assets
Sony Financial Holdings Inc.
For the years ended March 31, 2017 and 2018

Millions of yen

2017
Shareholders’ equity

Balance at the beginning of the period

Capitalsurplus¥19,900¥195,277¥238,079

¥ (0)

̶

̶

105

̶

105

19,900195,277

238,185(0)453,362

Cumulative effects of changes in accounting policies
Restated balance at the beginning of the period

Retainedearnings

Total
shareholders’equityCommonstock

Treasurystock¥453,256

Changes during the period
Dividends from surplus̶̶

(23,924)

̶

(23,924)

Profit attributable to owners of the parent̶̶

41,621

̶

41,621

Purchase of treasury stock

̶

̶

̶

(81)

(81)

Adjustments due to change of scope of consolidation

̶

̶

(818)

̶

(818)

Net changes of items other than shareholders’ equity

̶

̶

̶

̶

̶

Total changes during the period̶̶

16,877(81)

16,795

Balance at the end of the period¥19,900¥195,277¥255,062¥(81)¥470,157
Millions of yen

2017
Accumulated other comprehensive income
Net unrealized
gains (losses)
on available-forsale securities,
net of taxes

Net deferredgains (losses)on hedging
instruments,
net of taxes

Balance at the beginning of
the period¥157,364¥(2,347)

Cumulative effects ofchanges in accounting
policies̶Remeasurements ofdefinedbenefit plans,
net of taxes

Total
accumulated
othercomprehensive
incomeSubscription
rights tosharesNon-controllinginterests¥(1,465)¥(3,760)¥149,791¥̶

¥1,329¥604,377

̶

̶

̶

̶

̶

̶

105

157,364(2,347)(1,465)(3,760)149,791

̶

1,329

604,482

Dividends from surplus

̶

̶

̶

̶

̶

̶

̶

(23,924)

Profit attributable toowners of the parent

̶

̶

̶

̶

̶

̶

̶

41,621

Purchase of treasury stock

̶

̶

̶

̶

̶

̶

̶

(81)

Adjustments due to changeof scope of consolidation

̶

̶

̶

̶

̶

̶

̶

(818)

Net changes of items otherthan shareholders’ equity

Restated balance at the
beginning of the periodLand
revaluation,
net of taxes

Total
net assets

Changes during the period(22,515)

1,192

̶

1,003

(20,319)49

131(20,138)

Total changes during
the period(22,515)

1,192

̶

1,003

(20,319)49

131(3,343)

Balance at the end of
the period¥134,849¥(1,154)¥(1,465)¥(2,756)¥129,472¥49¥1,460¥601,139(Continued on next page)

Sony Financial Holdings Inc. Financial Data Book 20187

SFH Consolidated Financial Statements

Consolidated Statements of Changes in Net Assets (Continued)
Millions of yen

2018
Shareholders’ equity
CapitalsurplusRetainedearnings¥19,900¥195,277¥255,062¥(81)¥470,157

Issuance of new shares

27

27

̶

̶

55

Dividends from surplus̶̶

(23,922)̶

(23,922)

Profit attributable to owners of the parent̶̶

51,895

̶

51,895

Disposal of treasury shares

̶

(5)

̶

26

21

Transfer of loss on disposal of treasury shares

̶

5

(5)

̶

̶

Reversal of land revaluation

̶

̶

973

̶

973

Adjustments due to change of scope of consolidation

̶

̶

(92)

̶

(92)

Change in ownership interest of parent due to transactions with
non-controlling interests̶(4,147)̶̶

(4,147)

Net changes of items other than shareholders’ equity

̶

̶

̶

̶

̶

Total changes during the period

27(4,119)28,84926

24,784

Balance at the end of the period¥19,927¥191,157¥283,911¥(55)¥494,941

Balance at the beginning of the period

Treasury
stock

Total
shareholders’equityCommonstock

Changes during the period

Millions of yen

2018
Accumulated other comprehensive income
Net unrealized
Net deferredgains (losses) gains (losses)
on available-for- on hedging
sale securities, instruments,
net of taxes
net of taxes

Balance at the beginning of
the periodLand
revaluation,
net of taxes

Remeasurements ofdefinedbenefit plans,
net of taxes

Total
accumulated
othercomprehensive
incomeSubscription
rights tosharesNon-controllinginterests

Total
net assets¥601,139¥134,849¥(1,154)¥(1,465)¥(2,756)¥129,472¥49¥1,460Issuance of new shares

̶

̶

̶

̶

̶

̶

̶

55

Dividends from surplus

̶

̶

̶

̶

̶

̶

̶

(23,922)

Profit attributable toowners of the parent

̶

̶

̶

̶

̶

̶

̶

51,895

Disposal of treasury shares

̶

̶

̶

̶

̶

̶

̶

21

Transfer of loss on disposalof treasury shares

̶

̶

̶

̶

̶

̶

̶

̶

Reversal of land revaluation

̶

̶

̶

̶

̶

̶

̶

973

Adjustments due to changeof scope of consolidation

̶

̶

̶

̶

̶

̶

̶

(92)

Change in ownershipinterest of parent due totransactions with
non-controlling interests

̶

̶

̶

̶

̶

̶

̶

(4,147)

Net changes of items otherthan shareholders’ equity

(857)

251

(973)

827

(752)

48

187

(516)

Total changes during
the period

(857)

251

(973)

827

(752)

48

187

24,267

Balance at the end of
the period¥133,991¥ (902)¥(2,439)¥(1,929)¥128,719¥97¥1,648¥625,406

Changes during the period

8Sony Financial Holdings Inc. Financial Data Book 2018

SFH Consolidated Financial Statements

Consolidated Statements of Cash Flows
Sony Financial Holdings Inc.
For the years ended March 31, 2017 and 2018
Millions of yen

2017
Cash flows from operating activities
Income before income taxes
Depreciation of real estate for rent and others
Depreciation and amortization
Impairment losses
Amortization of goodwill
Increase (decrease) in reserve for outstanding claims
Increase (decrease) in policy reserve
Interest portion of reserve for policyholders’ dividends
Provision for (reversal of) reserve for policyholders’ dividends
Increase (decrease) in reserve for possible loan losses
Increase (decrease) in net defined benefit liability
Increase (decrease) in reserve for directors’ retirement benefits
Increase (decrease) in reserve for price fluctuations
Interest income and dividends(Gains) losses on securities
Interest expenses
Losses (gains) on derivatives
Exchange (gains) losses(Gains) losses on disposal of tangible fixed assets
Equity in (gains) losses of affiliates
Net (increase) decrease in loans
Net increase (decrease) in deposits
Net increase (decrease) in borrowed money (excluding subordinated borrowings)
Net increase (decrease) in call money and bills soldNet (increase) decrease in call loans and bills bought
Net (increase) decrease in foreign exchange (assets)
Net increase (decrease) in foreign exchange (liabilities)
Others, net
SubtotalInterest and dividends received
Interest paid
Policyholders’ dividends paid
Income taxes paid
Net cash provided by (used in) operating activities
Cash flows from investing activities
Net (increase) decrease in deposits
Investments in money held in trust
Proceeds from money held in trust
Purchases of securities
Proceeds from sale and redemption of securities
Investments in loans
Collections of loans
Net gains (losses) from the settlement of derivative financial instruments
Net increase (decrease) in collateral for securities lending transactions
Others, net
Total of net cash provided by (used in) investment transactions
Total of net cash provided by (used in) operating activities and investment transactions
Purchases of tangible fixed assets
Proceeds from sales of tangible fixed assets
Purchases of intangible fixed assets
Purchase of securities of a non-consolidated subsidiary
Purchase of securities of affiliates
Others, net
Net cash provided by (used in) investing activities
Cash flows from financing activities
Proceeds from debt borrowing
Repayments of debt
Cash dividends paid
Proceeds from issuance of bonds
Payments for redemption of bonds
Purchase of treasury stock
Payments from changes in ownership interests in subsidiaries that do not result in change in scope of
consolidation
Others, net
Net cash provided by (used in) financing activities
Effect of exchange rate changes on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Increase (decrease) in cash and cash equivalents resulting from change of scope of consolidation
Cash and cash equivalents at the beginning of the period
Cash and cash equivalents at the end of the period

¥

2018

60,1401,779
10,944118
22
4,128
603,880
0
4,153
(65)
3,020
14
1,772
(175,647)(77,393)
8,636
30,050(10,843)
107
3,551(195,446)
156,005
50,00070,000311(6,129)21(1,710)541,424
188,230(8,730)(3,430)(25,047)
692,445

¥

5
(101)
6,532
(1,104,737)
427,925(60,315)
28,761(22,997)(6,719)32,553(699,092)
120,629(2,049)36,700(12,481)(339)(3,450)(132)(680,845)

̶

(76)
5,160
(1,171,569)
375,241(57,798)
27,949(35,401)
247,803̶(608,689)
83,755(3,977)
̶(9,024)
̶

(3,045)(12)(624,749)

5,266(5,133)(23,921)
19,938(10,000)̶̶

(23,925)̶(10,000)
(81)

̶

̶

¥

(51)
(34,057)(1)
33,636
1,124
233,620
268,381

74,6501,680
11,8282
323,405
647,035
0
3,271
(140)
2,363
(176)
1,953
(186,943)(80,057)
8,327
11,40323,489(13,283)
2,338(56,745)
87,98780,00026,000(4,805)(2,077)119
15,506657,168
197,007(8,484)(3,517)(22,451)
819,721

¥

(171)
(474)
(14,496)(2)
124,377373
268,381393,133

Note: The above Consolidated Statements of Cash Flows have been prepared based on Article 210-10 of Ordinance for Enforcement of the Insurance BusinessAct of Japan.

Sony Financial Holdings Inc. Financial Data Book 20189

Sony Life

Financial Data (Non-consolidated)
Balance Sheets
Sony Life Insurance Co., Ltd.
As of March 31, 2017 and 2018
Millions of yen, %2017
Amount2018
Composition

AmountComposition

AssetsCash and depositsCash¥47,0162

Deposits

47,013

Call loans

61,900

Money held in trust
Securities
Japanese government bonds
Japanese local government bonds
Japanese corporate bonds

0.5%

¥

53,683
̶53,6830.7

65,500273,877

3.1

270,5822.8

91.2

8,765,967

91.6

6,664,639

6,966,434

1,767

1,543

310,466

461,015

86,95488,376

Foreign securities

782,064

959,188

Other securities

247,299

Policy loans

180,374

289,4082.0

180,339

Commercial loans

34

Tangible fixed assets

118,441

189,48625

1.3

93,16983,00762,259Buildings

34,44230,087

Leased assets

105Construction in progress75

̶

Other tangible fixed assets

906

816

Software
Other intangible fixed assets

19,356

2.0

189,460

Land

Intangible fixed assets

0.7

8,093,192

Japanese stocks

Loans

0.6%

0.2

19,347

23,2101.0

0.2

23,20198

Due from agencies

0

0.0

̶

̶

Due from reinsurers

1,393

0.0

929

0.0

74,2450.8

92,184

1.0

Other assets
Other receivables

35,31637,411

Prepaid expenses

1,651

1,983

Accrued income

18,621

19,627

Money on deposits

5,269

5,428

Initial margins of futures markets

7,302

18,324

Variation margins of futures markets

435

892

5,212

7,969

370

470

Derivatives
Advance payments
Others6575Prepaid pension costs

2,376

0.0

2,483

0.0

Deferred tax assets

5,350

0.1

10,787

0.1

Reserve for possible loan losses

(271)

(0.0)

(295)

(0.0)

Reserve for investment losses(3,640)

(0.0)

̶

̶

¥8,873,613

100.0%¥9,567,689

Total Assets

10 Sony Financial Holdings Inc. Financial Data Book 2018

100.0%

Sony Life Financial Data (Non-consolidated)

Millions of yen, %

2017

2018

AmountComposition

AmountComposition¥7,968,639

89.8%¥8,606,736

90.0%

Liabilities
Policy reserves and others
Reserve for outstanding claims
Policy reserves
Reserve for policyholders’ dividends
Due to agencies

32,96535,176

7,929,944

8,566,075

5,729

5,484

2,616

0.0

Due to reinsurers

3,663

Other liabilities

353,812

Payables under repurchase agreements
Collateral for securities lending transactions
Accrued income tax

1,873

0.0

0.0

5,497

0.1

4.0

386,099

4.0

̶

31,696

310,608

303,889

8,095

13,478Other payables

2,137

3,249

Accrued expenses

17,923

20,325

Unearned revenue

1,067

764

Deposits received

2,094

1,237

Deposits received for guarantee

5,420

4,202

Variation margins of futures markets

446

2,194

Derivative liabilities

614

1,410

Lease obligations

10

6

Asset retirement obligations

2,156

1,856

Suspense receipt

3,235

1,787

Reserve for employees’ retirement benefits

24,6780.3

26,656

0.3

Reserve for directors’ retirement benefits

119

0.0

̶

̶

Reserve under the special laws

46,0050.5

47,9290.5

Reserve for price fluctuations

46,005

Deferred tax liabilities
Deferred tax liabilities on land revaluation
Total Liabilities

47,929

̶

̶

̶

̶

488

0.0

109

0.0

8,400,024

94.7

9,074,902

94.8

70,0000.8

70,000

0.7

5,865

0.1

5,865

0.1

Net Assets
Common stock
Capital surplus
Capital reserve

5,865

Retained earnings

271,416

Legal retained earnings
Other retained earnings
Unappropriated retained earnings

241,098

259,486

241,098

259,486

347,281

Total valuation and translation adjustments
Total Liabilities and Net Assets

294,424
34,938Net unrealized gains (losses) on available-for-sale securities,
net of taxes

Total Net Assets

3.1

30,318

Total shareholders’ equity

Land revaluation, net of taxes

5,865
3.1

3.9

370,289

3.9

127,772

1.4

124,936

1.3(1,465)(0.0)(2,439)(0.0)

126,307

1.4

122,4971.3

473,589

5.3

492,787

5.2¥8,873,613

100.0%¥9,567,689

100.0%

Sony Financial Holdings Inc. Financial Data Book 2018 11

Sony Life Financial Data (Non-consolidated)

Statements of Income
Sony Life Insurance Co., Ltd.
For the years ended March 31, 2017 and 2018
Millions of yen

Ordinary Revenues
Income from insurance premiums
Insurance premiums
Ceded reinsurance commissions
Investment income
Interest income and dividends
Interest income from deposits
Interest income and dividends on securities

2017

2018

¥1,243,739¥1,351,076

956,733

1,059,269

954,028

1,056,725

2,704

2,544

245,339

243,293

148,284

157,72700130,772

140,435

Interest income from loans

6,377

6,610

Rent revenue from real estate

10,86910,285

Other interest income and dividends

265

395

Income from money held in trust, net

4,493

4,490

152

2

1,308

0

Gains on trading securities, net
Gains on sale of securities
Gains on redemption of securities̶1

Gains on derivatives, net

̶̶

14,670̶Foreign exchange gains, net
Reversal of reserve for possible loan losses

1̶

Other investment income

4

138

76,42380,932

41,666

48,513

Gains on separate accounts, net
Other ordinary income
Income for annuity riders

3,001

5,065

Proceeds from deferred insurance

33,87939,537

Other ordinary income

4,785

3,910

(Continued on next page)

12 Sony Financial Holdings Inc. Financial Data Book 2018

Sony Life Financial Data (Non-consolidated)

Millions of yen

2017

2018

¥1,183,558¥1,294,738

372,407436,538

Insurance claims

84,17892,342

Annuity payments

12,01912,566

Insurance benefits

98,252

119,294

Surrender payments

168,409199,263

Refund to policyholders

3,122

3,314

Reinsurance premiums

6,423

9,756

596,742

638,343

Ordinary Expenses
Insurance claims and other payments

Provision for policy reserves and others
Provision for reserve for outstanding claims
Provision for policy reserves
Interest portion of reserve for policyholders’ dividends
Investment expenses

3,330

2,211

593,411

636,1310036,19633,121

Interest expenses

44

151

Losses on sale of securities

̶0

Losses on redemption of securities

53

2

Losses on derivatives, net

30,05011,403Foreign exchange losses, net

̶15,280

Provision for reserve for possible loan losses̶

23

Depreciation of real estate for rent and others

1,879

1,770

Other investment expenses

4,167

4,487

Losses on separate accounts, net

̶̶Operating expenses

137,094

139,937

Other ordinary expenses

41,11846,796

Deferred insurance payments

19,88925,487Taxes

12,171

12,647

Depreciation and amortization

5,299

5,376

Provision for reserve for employees’ retirement benefits

3,745

2,981

Provision for reserve for directors’ retirement benefits̶̶

Others12

304

60,18056,338

Ordinary Profit(Continued on next page)

Sony Financial Holdings Inc. Financial Data Book 2018 13

Sony Life Financial Data (Non-consolidated)

Statements of Income (Continued)
Millions of yen

2017

Extraordinary Gains̶¥16,898

Gains on disposal of fixed assets

̶

13,258

Reversal of reserve for investment losses

̶

3,640

5,445

6,190

Losses on disposal of fixed assets

52

89

Impairment losses

70Provision for reserve under the special laws

1,744

1,924

Provision for reserve for price fluctuations

1,744

1,924

̶

4,176

Extraordinary Losses

Valuation losses on stocks of affiliated companies

¥

2018

Provision for reserve for investment losses

3,640

̶

Provision for Reserve for Policyholders’ Dividends

4,153

3,271

Income Before Income Taxes

50,581

63,774

Income Taxes̶Current

18,97323,224

Income Taxes̶Deferred(3,577)(4,583)

Total Income Taxes

15,395

18,640Net Income¥35,185¥45,134

14 Sony Financial Holdings Inc. Financial Data Book 2018

Sony Life Financial Data (Non-consolidated)

Statements of Changes in Net Assets
Sony Life Insurance Co., Ltd.
For the years ended March 31, 2017 and 2018
Millions of yen

2017
Shareholders’ equity
Capital surplus

Retained earnings
Otherretainedearnings

Balance at the beginning of the period
Cumulative effects of changes inaccounting policies
Restated balance at the beginning of
the period

Commonstock

Capitalreserve

Total
capitalsurplusLegalretainedearnings

Unappropriatedretainedearnings

Total
retainedearnings

Total
shareholders’equity¥70,000¥5,865¥5,865¥26,118¥231,056¥257,175¥333,040

̶

̶

̶

̶

56

56

56

70,000

5,865

5,865

26,118231,112257,231333,096

Changes during the period
Dividends from surplus

̶

̶

̶

4,200

(25,200)(21,000)(21,000)

Net income

̶

̶

̶

̶

35,18535,18535,185

Net changes of items other thanshareholders’ equity

̶

̶

̶

̶

̶

̶

̶

Total changes during the period

̶

̶

̶

4,200

9,985

14,185

14,185

Balance at the end of the period¥70,000¥5,865¥5,865¥30,318¥241,098¥271,416¥347,281
Millions of yen

2017
Valuation and translation adjustments
Net unrealized
gains (losses)
on available-forsale securities,
net of taxes

Balance at the beginning of the periodLand
revaluation,
net of taxes

Totalvaluation andtranslation
adjustments

Total
net assets¥482,195¥150,621¥(1,465)¥149,155

̶

̶

̶

56

150,621(1,465)

149,155

482,252

Dividends from surplus

̶

̶

̶

(21,000)

Net income

̶

̶

̶

35,185(22,848)

̶

(22,848)(22,848)

Cumulative effects of changes in accounting policies
Restated balance at the beginning of the period
Changes during the period

Net changes of items other than shareholders’ equity
Total changes during the period(22,848)

̶

(22,848)(8,662)

Balance at the end of the period¥127,772¥(1,465)¥126,307¥473,589(Continued on next page)

Sony Financial Holdings Inc. Financial Data Book 2018 15

Sony Life Financial Data (Non-consolidated)

Statements of Changes in Net Assets (Continued)
Millions of yen

2018
Shareholders’ equity
Capital surplus

Retained earnings
Otherretainedearnings

Balance at the beginning of the period

Commonstock

Capitalreserve

Total
capitalsurplusLegalretainedearnings

Unappropriatedretainedearnings

Total
retainedearnings

Total
shareholders’equity¥70,000¥5,865¥5,865¥30,318¥241,098¥271,416¥347,281

Changes during the period
Dividends from surplus

̶

̶

̶

4,620

(27,720)(23,100)(23,100)

Net income

̶

̶

̶

̶

45,13445,13445,134

Reversal of land revaluation

̶

̶

̶

̶

973

973

973

Net changes of items other thanshareholders’ equity

̶

̶

̶

̶

̶

̶

̶

Total changes during the period

̶

̶

̶

4,620

18,38723,00723,007

Balance at the end of the period¥70,000¥5,865¥5,865¥34,938¥259,486¥294,424¥370,289
Millions of yen

2018
Valuation and translation adjustments
Net unrealized
gains (losses)
on available-forsale securities,
net of taxes

Landrevaluation,
net of taxes

Totalvaluation andtranslation
adjustments

Total
net assets¥127,772¥(1,465)¥126,307¥473,589

Dividends from surplus

̶

̶

̶

(23,100)

Net income

̶

̶

̶

45,134

Reversal of land revaluation

̶

̶

̶

973

Balance at the beginning of the period
Changes during the period

Net changes of items other than shareholders’ equity(2,836)(973)(3,809)(3,809)Total changes during the period(2,836)(973)(3,809)19,198

Balance at the end of the period¥124,936¥(2,439)¥122,497¥492,787

16 Sony Financial Holdings Inc. Financial Data Book 2018

Sony Life Financial Data (Non-consolidated)

Statements of Cash Flows
Sony Life Insurance Co., Ltd.
For the years ended March 31, 2017 and 2018
Millions of yen

Cash flows from operating activities
Income before income taxes
Depreciation of real estate for rent and others
Depreciation and amortization
Impairment losses
Valuation loss on stocks of affiliated companies
Increase (decrease) in reserve for outstanding claims
Increase (decrease) in policy reserves
Interest portion of reserve for policyholders’ dividends
Provision for (reversal of) reserve for policyholders’ dividends
Increase (decrease) in reserve for possible loan losses
Increase (decrease) in reserve for investment losses
Increase (decrease) in reserve for employees’ retirement benefits
Increase (decrease) in reserve for directors’ retirement benefits
Increase (decrease) in reserve for price fluctuations
Interest income and dividends(Gains) losses on securities(Gains) losses on derivatives
Interest expenses
Foreign exchange (gains) losses(Gains) losses on disposal of tangible fixed assets(Increase) decrease in due from agencies(Increase) decrease in due from reinsurers(Increase) decrease in other assets (excluding those related to investing and financing activities)
Increase (decrease) in due to agencies
Increase (decrease) in due to reinsurers
Increase (decrease) in other liabilities (excluding those related to investing and financing activities)
Others, net
SubtotalInterest and dividends received
Interest paid
Policyholders’ dividends paid
Others, net
Income taxes paid
Net cash provided by (used in) operating activities
Cash flows from investing activities
Investments in money held in trust
Proceeds from money held in trust
Purchases of securities
Proceeds from sale and redemption of securities
Investments in loans
Collections of loans
Net gains (losses) from the settlement of derivative financial instruments
Net increase (decrease) in collateral for securities lending transactions
Total of net cash provided by (used in) investment transactions[Total of net cash provided by (used in) operating activities and investment transactions]Purchases of tangible fixed assets
Proceeds from sales of tangible fixed assets
Purchase of securities of subsidiaries
Purchase of securities of affiliates
Others, net
Net cash provided by (used in) investing activities
Cash flows from financing activities
Cash dividends paid
Others, net
Net cash provided by (used in) financing activities
Effect of exchange rate changes on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the period
Cash and cash equivalents at the end of the period

2017

2018

¥ 50,581
1,879
5,299
7

¥ 63,774
1,770
5,376
0
4,176
2,211
636,13103,271
23(3,640)
1,977
(119)
1,924
(157,727)(81,740)
11,403151
15,280(13,359)
0463
20,226
(743)
1,833
(876)
724
512,516
164,864(152)(3,517)(3,358)(17,840)
652,511

̶

3,330
593,411
0
4,153
(1)
3,640
2,734
(1)
1,744
(148,284)(81,886)
30,05044(14,670)42(0)(1,094)
18,783
161
3,042
805
3,730
477,503
158,014(44)(3,430)(3,912)(19,875)
608,256(76)
5,160(936,092)
173,781(57,798)
27,949(35,401)
247,803(574,672)[33,584](3,085)(3,045)(4,125)(584,928)

(101)
4,532
(842,838)
223,951(60,315)
28,760(22,997)
25,800(643,206)[9,305](760)
36,700(339)(3,450)(8,080)(619,136)(21,000)(4)(21,004)(1)
2,321
106,594¥ 108,916(23,100)(5)(23,105)(2)
10,267
108,916¥ 119,183

̶̶Sony Financial Holdings Inc. Financial Data Book 2018 17

Sony Life Financial Data (Non-consolidated)

Notes
Sony Life Insurance Co., Ltd.

(Retirement benefit obligations)
As of March 31, for the year ended March 31,

1. Overview of retirement benefit plans
A lump-sum retirement benefit plan is provided to sales staff as a defined benefit plan. A defined benefit corporate pension plan isprovided to internal office staff as a defined benefit plan. Also, a defined contribution pension plan is provided as a defined contributionplan.
2. Defined benefit plan
(1) Reconciliation of beginning and ending balances of retirement benefit obligations
Millions of yen

Balance at the beginning of the period
Service cost
Interest cost
Net actuarial gains (losses)
Retirement benefits paid
Balance at the end of the period

2017

2018

¥37,081
4,409
(42)
(82)
(1,672)¥39,692¥39,692
4,401
90
282
(2,502)¥41,964(2) Reconciliation of beginning and ending balances of plan assets
Millions of yen

Balance at the beginning of the period
Expected return on plan assets
Net actuarial gains (losses)
Employer contribution
Retirement benefits paid
Balance at the end of the period

2017

2018

¥12,678
190
174
1,009
(227)
¥13,825¥13,825
138
556
1,110
(258)
¥15,371(3) Reconciliation of retirement benefit obligations and plan assets, and reserve for employees’ retirement benefits and prepaid pension
costs recorded on the balance sheets
Millions of yen

2017

2018

Unfunded retirement benefit obligations
Unrecognized net actuarial gains (losses)
Net liabilities and assets recorded on the balance sheets¥ 10,734(13,825)(3,090)28,957(3,565)22,301¥ 11,620(15,371)(3,751)
30,344(2,419)24,172

Reserve for employees’ retirement benefits
Prepaid pension cost
Net liabilities and assets recorded on the balance sheets

24,678(2,376)¥ 22,301

26,656(2,483)¥ 24,172

Funded retirement benefit obligations
Plan assets(4) Gains (losses) related to retirement benefits
Millions of yen

Service cost
Interest cost
Expected return on plan assets
Recognized actuarial gains (losses)
OthersRetirement benefit expenses related to defined benefit plans

18 Sony Financial Holdings Inc. Financial Data Book 2018

2017

2018

¥4,409
(42)
(190)
1,014
59
¥5,250¥4,401
90
(138)
871
49
¥5,274

Sony Life Financial Data (Non-consolidated)(5) Main components of plan assets
The percentage share of components by main asset class out of total plan assets is as follows:
Bonds
StocksOthers
Total

2017

2018

67%
30%
3%
100%

68%
29%
3%
100%

(6) Method of setting the long-term expected rate of return on plan assets
The long-term expected rate of return on plan assets is determined by taking into account the current and expected allocation ofplan assets, and the current long-term return rate and the long-term return rate that are expected in the future based on the various
assets that comprise the plan assets.
(7) Bases for calculating actuarial gain or loss
The main bases for calculating actuarial gain or loss are as follows:
Discount rate
for sales staff
for internal office staff
Long-term expected rate of return on plan assets

2017

2018

0.2%
0.3%
1.5%

0.2%
0.3%
1.0%

3. Defined contribution plan
The amounts of contribution required for defined contribution plans by Sony Life were ¥98 million and ¥103 million for the year ended
March 31, 2017 and 2018, respectively.
(Tax effect accounting)
As of March 31, for the year ended March 31,

1. For the fiscal year ended March 31, 2017, the total amount of deferred tax assets was ¥59,221 million, while the total amount ofdeferred tax liabilities was ¥50,211 million. Of the deferred tax assets, the amount deducted as valuation allowance was ¥3,659 million.
The breakdown of major factors giving rise to the deferred tax assets is a policy reserves and others of ¥28,014 million, a reserve forprice fluctuations of ¥12,881 million, a reserve for employees’ retirement benefits of ¥6,244 million, and excess depreciation andamortization of ¥3,456 million.
The major factor giving rise to the deferred tax liabilities is net unrealized gains on available-for-sale securities of ¥49,641 million.
For the fiscal year ended March 31, 2018, the total amount of deferred tax assets was ¥63,744 million, while the total amount ofdeferred tax liabilities was ¥48,972 million. Of the deferred tax assets, the amount deducted as valuation allowance was ¥3,984 million.
The breakdown of major factors giving rise to the deferred tax assets is a policy reserves and others of ¥30,950 million, a reserve forprice fluctuations of ¥13,420 million, a reserve for employees’ retirement benefits of ¥6,768 million, and excess depreciation andamortization of ¥3,275 million.
The major factor giving rise to the deferred tax liabilities is net unrealized gains on available-for-sale securities of ¥48,409 million.
2. The statutory effective tax rate in the fiscal year ended March 31, 2017 was 28.24%. The major item giving rise to a difference between
the statutory effective tax rate and the effective income tax rate after application of tax effect accounting is a 2.93% increase in valuation
allowance.
The statutory effective tax rate in the fiscal year ended March 31, 2018 was 28.24%, registering a minimal difference between thestatutory effective tax rate and the effective income tax rate after application of tax effect accounting.

Sony Financial Holdings Inc. Financial Data Book 2018 19

Sony Life Financial Data (Non-consolidated)

1 Loans by Borrower Category
Millions of yen

As of March 31,

Bankrupt and quasi-bankrupt loans

2017

¥

2018
̶

¥

̶

Doubtful loans̶̶Sub-standard loans̶̶

Subtotal̶̶[% to total]

[ ̶]

[̶]

Normal loans

431,372

428,359

Total¥431,372¥428,359

Notes: 1. Bankrupt and quasi-bankrupt loans are loans to borrowers who are subject to bankruptcy, corporate reorganization, rehabilitation or other similar
proceedings and other borrowers in serious financial difficulties.
2. Doubtful loans are loans to borrowers (other than bankrupt and quasi-bankrupt borrowers) with deteriorated financial condition and results ofoperations from which it is unlikely that the principal and interest on the loans will be recovered.
3. Sub-standard loans are loans on which principal and/or interest are past due for three months or more (excluding loans described in notes 1. and 2.
above) and loans on which terms and conditions have been amended in favor of the borrowers (e.g., reduction of the original interest rate, deferral ofinterest payments, extension of principal repayments or debt waiver) in order to support the borrowers’ recovery from financial difficulties (excludingloans described in notes 1. and 2. above and loans on which principal and/or interest are past due for three months or more).
4. Normal loans are loans that do not fall under the classifications for 1. to 3. above and where the borrowers have no financial or business performance
problems.

2 Risk-monitored Loans
Not applicable

3 Accounting Indicators
3- 01 Reserve for outstanding claims
Millions of yen

As of March 31,

2017

2018

¥ 9,148¥ 8,542

Insurance claims
Death benefits
Accidental benefits

258

278

Disability payments

2,200

1,464

Maturity benefits

1,224

1,234

Others

2,281

2,834

Subtotal

15,113

14,354

Annuity payments

170

600

Insurance benefits

8,081

8,734

Surrender payments

8,950

10,709Deferred insurance payments
Total, including others

20 Sony Financial Holdings Inc. Financial Data Book 2018

455

641

¥32,965¥35,176

Sony Life Financial Data (Non-consolidated)

3- 02 Policy reserves
Millions of yen

As of March 31,

Policy reserves (excluding contingency reserve)
Individual life insurance
General accounts
Separate accounts
Individual annuities
General accounts
Separate accounts
Group life insurance
General accounts
Separate accounts
Group annuities
General accounts
Separate accounts
OthersGeneral accounts
Separate accounts
Subtotal
General accounts
Separate accounts
Contingency reserve
Total
General accounts
Separate accounts

2017

2018

¥7,550,631
6,704,429
846,201
285,231
160,079
125,15247
47¥8,128,998
7,183,813
945,184
337,064
175,320
161,743
60
60

̶

̶

11,57011,57010,037
10,037

̶
̶
̶
̶

̶
̶
̶
̶

7,847,480
6,876,127
971,353
82,463¥7,929,944¥6,958,590
971,353

8,476,160
7,369,232
1,106,927
89,915¥8,566,075¥7,459,147
1,106,927

3- 03 Breakdown of policy reserves
Millions of yen
As of March 31,

Premium reserve
Unearned premiums
Refund reserve
Contingency reserve
Total

2017

2018

¥7,605,909
241,571¥8,238,862
237,297̶̶

82,463¥7,929,944

89,915¥8,566,075

3- 04 Policy reserve calculation methods, ratios and balance involving individual life insurance

and individual annuities by contract year
Policy reserve calculation methods and ratios
As of March 31,

Calculation method
Policies subject to standard policy reserve method
Pure death-protection insurance
Mixed insurance
Pure endowment insurance
Annuities
Policies not subject to standard policy reserve method
Pure death-protection insurance
Mixed insurance
Pure endowment insurance
Annuities
Ratio of “amount of the company’s policy reserves(excluding contingency reserve)” to “policy reserves
required by regulatory standards”

2017

2018

Net level premium reserve method
Net level premium reserve method
Net level premium reserve method
Net level premium reserve method

Net level premium reserve method
Net level premium reserve method
Net level premium reserve method
Net level premium reserve method

Net level premium reserve method
Net level premium reserve method
Net level premium reserve method
Net level premium reserve method

Net level premium reserve method
Net level premium reserve method
Net level premium reserve method
Net level premium reserve method

100.1%

100.1%

Notes: 1. The calculation methods and ratios are set for individual life insurance and individual annuities. The concept of calculation method is not targeted atpolicy reserves for group life insurance and group annuities, so these insurance policies are not included.
2. The above ratios indicate the amounts of the company’s policy reserves (excluding contingency reserve) to the required premium reserves andunearned premiums calculated by (a) the method laid down in the Ministry of Finance Public Notice No. 48 (1996) for policies to which the standard
policy reserve method is applied, and (b) the net level premium reserve method for policies to which the standard policy reserve method is not applied.
The amounts of the company’s policy reserves include policy reserves additionally reserved to maintain the future soundness of certain policies.

Sony Financial Holdings Inc. Financial Data Book 2018 21

Sony Life Financial Data (Non-consolidated)

Balance of policy reserves by contract year
Millions of yen, %Fiscal year issued

Balance of policy reserves

Up to FY1980
FY1981 to FY1985
FY1986 to FY1990
FY1991 to FY1995
FY1996 to FY2000
FY2001 to FY2005
FY2006 to FY2010
FY2011FY2012FY2013
FY2014FY2015FY2016FY2017¥

Assumed interest rate̶%
6.00–6.25
6.00–6.25
2.75–6.25
1.90–4.00
1.50
1.50
1.50
1.50
1.00
1.00
1.00
1.00
0.25

̶

33,82153,804
581,036
1,151,085
1,437,987
1,827,197
417,543458,203
418,019
310,404
304,649
181,839
183,545

Notes: 1. The balance of policy reserves shows the total of those for individual life insurance and individual annuities, excluding those of separate accounts andcontingency reserves.
2. The assumed interest rate shows the assumed interest rate of the majority of policy reserves for each contract fiscal year.

3- 05 Balance, calculating method and coefficient of policy reserves of general accounts related

to policies with minimum guarantees whose insurance policies are invested in separate
accounts
Balance of policy reserves (general account)
Millions of yen

As of March 31,

Balance of policy reserves (general account)

2017

2018

¥88,485¥107,211

Notes: 1. Calculations employed in the above table apply to the insurance policies subject to the standard policy reserve method provided for under Article 68 of
the Ordinance for Enforcement of the Insurance Business Act of Japan.
2. Each of the balances of policy reserves of the general accounts shows the total of premium reserve related to minimum guarantees and unearned
premiums.

Calculating method and coefficient
1. Policy reserves related to minimum guarantees are calculated using the standard policy reserve method based on the Ministry of FinancePublic Notice No. 48 (1996), “Comprehensive Supervisory Guidelines for Insurance Companies (II-2-1-3-1).”
2. Coefficients used in the calculations are stipulated in Article 9, Paragraph 1-2 of the above public notice. The assumed surrender rates
consist of an annual rate of 5.0% during the payment of premiums, and an annual rate of 3.0% after the payment of premiums.

3- 06 Reserve for policyholders’ dividends
Millions of yen

2017

For the year ended March 31,

At the beginning of the period
Increase due to interest
Decrease due to dividend payment
Provision for the period
At the end of the period

Individual life
insurance¥ 1,824
0
92
126
1,859
[1,488]

Individual
annuities

¥ 237
0
14
48
270
[152]

Asset-formation
insurance,
asset-formation
annuities

Group life
insuranceGroupannuities¥2,861

¥ 82

¥̶

¥̶

̶

̶

3,241
3,904
3,525
[0]

82
73
74
[̶]

̶
̶
̶
̶
[̶]

̶
̶
̶
̶
[̶]

OthersTotal¥ 5,006
0
3,430
4,153
5,729
[1,640]Millions of yen

2018

For the year ended March 31,

At the beginning of the period
Increase due to interest
Decrease due to dividend payment
Provision for the period
At the end of the period

Asset-formation
insurance,
asset-formation
annuities

Individual life
insurance

Individual
annuities

Group life
insuranceGroupannuities¥ 1,859
0
103
121
1,877
[1,392]

¥ 270
0
21
55
305
[156]

¥3,525

¥ 74

¥̶

¥̶

̶

̶

3,319
3,090
3,296
[0]

74
3
4
[̶]

̶
̶
̶
̶
[̶]

̶
̶
̶
̶
[̶]

Note: Figures in [ ] are accumulated dividends.

22 Sony Financial Holdings Inc. Financial Data Book 2018

OthersTotal¥ 5,729
0
3,517
3,271
5,484
[1,549]

Sony Life Financial Data (Non-consolidated)

3- 07 Other reserves
Millions of yen

2017
Balance atthe end of
the period

Balance atthe beginningof the period

For the years ended March 31,

Reserve for possible loan losses
General reserve for possible loan losses
Specific reserve for possible loan losses
Reserve for possible loan losses for specificforeign countries
Reserve for investment losses
Reserve for employees’ retirement benefits
Reserve for directors’ retirement benefits
Reserve for price fluctuations

¥

2018

0
272

¥

Balance atthe beginningof the period

Increase(decrease)

0
270

¥

0
(1)

¥

0
270

Balance atthe end of
the period

Increase(decrease)

¥

¥

0
294

(0)
23

̶

̶

̶

̶

̶

̶

̶

3,640
24,67811946,005

3,640
2,734
(1)
1,744

3,640
24,67811946,005

̶(3,640)
1,977
(119)
1,924

21,944
121
44,26026,656
̶

47,9293- 08 Insurance premiums
Millions of yen

For the years ended March 31,

2017

2018

Individual life insurance
Single premium
Annual payment
Semi-annual payment
Monthly payment
Individual annuities
Single premium
Annual payment
Semi-annual payment
Monthly payment
Group life insuranceGroup annuities
Total, including others¥912,353
11,506263,632
10,927626,286
35,633
11,0935,823
321
18,394
5,895
145¥954,028¥ 996,545
75,893262,938
11,049646,664
53,79325,746
5,328
347
22,3706,255
130¥1,056,725

3- 09 Insurance claims
Millions of yen

2017

Asset-formation
insurance,
asset-formation
annuities

Total

Individual life
insurance

Individual
annuities

Group life
insuranceGroupannuities¥48,657
437
3,160
20,91911,004¥84,178¥50,158
496
2,701
24,424
12,920¥90,702

¥̶

¥̶

¥̶

¥̶

̶

̶

̶

̶

¥1,351
0
98

̶

̶

̶

̶

̶

̶

̶

̶

̶

191
¥1,640

̶

̶

̶

¥̶

¥̶

¥̶

For the years ended March 31,

Death benefits
Accidental benefits
Disability payments
Maturity benefits
Others
Total

2018

̶

¥̶

OthersTotal¥51,509496
2,799
24,424
13,112¥92,342

3- 10 Annuity payments
Millions of yen

2017

For the years ended March 31,

Annuity payments

Total¥12,0192018
Individual life
insurance

Individual
annuities

Group life
insuranceGroupannuities¥̶¥11,030¥1¥1,534

Asset-formation
insurance,
asset-formation
annuities¥̶

Others¥̶

Total¥12,566

Sony Financial Holdings Inc. Financial Data Book 2018 23

Sony Life Financial Data (Non-consolidated)

3- 11 Insurance benefits
Millions of yen

2017

For the years ended March 31,

2018
Individual life
insurance

Total

Death benefits¥ 2,574¥

Asset-formation
insurance,
asset-formation
annuities

Individual
annuities

Group life
insuranceGroupannuities

2,612

¥ 93

¥̶

¥ ̶

¥̶

¥̶

Others

Total

¥

2,706

Hospitalization benefits

9,291

9,573

̶

1

̶

̶

̶

9,574

Surgery benefits

9,622

10,317

̶

̶

̶

̶

̶

10,317

Disability benefits

114

150

̶

0

̶

̶

̶

150

Living benefits

66,04285,015

̶

̶

̶

̶

̶

85,015

Others

10,606

10,694

599

̶

236

̶

̶

11,530Total¥98,252¥118,364

¥692

¥ 1

¥236

¥̶

¥̶

¥119,294

3- 12 Surrender payments
Millions of yen

2017

Total

Individual life
insurance

Individual
annuities

Group life
insuranceGroupannuities¥168,409¥189,231¥10,031¥̶¥0

For the years ended March 31,

Surrender payments

2018
Asset-formation
insurance,
asset-formation
annuities

Others

¥̶

Total

¥̶

¥199,263

3- 13 Depreciation and amortization
Millions of yen, %2017
For the years ended March 31,

Acquisition
cost

Tangible fixed assets¥ 8,167

Buildings
Leased assets
Other tangible fixed assets
Intangible fixed assets

Accumulated
depreciation

Balanceat the endof the period¥ 427 ¥ 2,395 ¥ 5,771

Ratio ofdepreciation

Acquisition
cost

Balance
Depreciation Accumulated
at the end
expensesdepreciation of the period¥ 523 ¥ 2,788 ¥ 5,694

Ratio ofdepreciation

29.3%¥ 8,483

6,448

291

1,496

4,952

23.2

6,785

361

1,839

4,946

27.1

32.9%

22

4

12

10

56.0

23

4

17

5

74.6
55.6

1,695

130

885

809

52.3

1,674

156

931

742

43,6104,868

24,262

19,34755.6

46,161

4,849

22,95923,201

49.7

22

3

15

7

68.4

15

3

10

5

66.7

Others
Total

Depreciation
expenses

2018¥51,800¥5,299 ¥26,673 ¥25,126

51.5%¥54,660¥5,376 ¥25,758 ¥28,902

47.1%

3- 14 Operating expenses
Millions of yen

For the years ended March 31,

2017

2018

Sales and marketing expenses¥ 65,072¥ 64,566

Sales administrative expenses

19,08019,824General administrative expenses
Total

52,94255,547¥137,094¥139,937

Note: Contribution to the Life Insurance Policyholders Protection Corporation of Japan prescribed by Article 259 of the Insurance Business Act of Japan is
as follows:
Millions of yen
For the years ended March 31,

2017

2018

Life Insurance Policyholders Protection Corporation of Japan

¥736

¥751

24 Sony Financial Holdings Inc. Financial Data Book 2018

Sony Life Financial Data (Non-consolidated)

4 Reconciliation to Core Profit and Non-consolidated Ordinary Profit
Millions of yen

For the years ended March 31,

2017

2018

¥ 83,831¥ 81,384

16,114

9,894

Income from money held in trust, net

̶̶

Income from trading securities, net

134̶Core profit(A)

Capital gains

Gains on sale of securities
Gains on derivatives, net
Foreign exchange gains, net
Other capital gains
Capital losses

1,308

0

̶

̶

14,670

̶

̶

9,894

32,27627,357

Losses on money held in trust, net̶̶

Losses on trading securities, net̶

8Losses on sale of securities

̶0

Devaluation losses on securities̶̶

30,05011,403

̶

15,280Losses on derivatives, net
Foreign exchange losses, net
Other capital losses
Net capital gains (losses)
Core profit plus net capital gains (losses)

2,226

664

(B)

(16,162)(17,463)(A) + (B)67,66963,920

Other one-time gains

1̶

Gains from reinsurance̶̶

Reversal of contingency reserve̶̶

Reversal of specific reserve for possible loan losses

1̶

OthersOther one-time losses
Losses from reinsurance
Provision for contingency reserve

̶

̶

7,490

7,582

̶

̶

7,296

7,451

Provision for specific reserve for possible loan losses

̶23

Provision for reserve for possible loan losses for specific foreign countries̶̶

Write-off of loans̶̶

OthersNet other one-time gains (losses)
Ordinary profit(C)(A) + (B) + (C)

193

107

(7,488)(7,582)¥ 60,180¥ 56,338

Notes: 1. Core profit for the fiscal year ended March 31, 2018 (A) includes income gains of ¥4,490 million in income from money held in trust along with interest
income and dividends of ¥11 million in income from trading securities, net. Other capital gains consists of reversal of policy reserves and others of¥9,894 million for currency market fluctuations of products denominated in foreign currencies, while other capital losses consist of impairment losses of¥664 million from investment partnerships. “Others” of other one-time losses consists of provision of additional policy reserve of ¥107 million.
2. Core profit for the fiscal year ended March 31, 2017 (A) includes income gains of ¥4,493 million in income from money held in trust along with interest
income and dividends of ¥17 million in income from trading securities, net. Other capital losses consists of provision of policy reserves and others of¥1,560 million for currency market fluctuations of products denominated in foreign currencies and impairment losses of ¥665 million from investment
partnerships. “Others” of other one-time losses consists of provision of additional policy reserve of ¥193 million.

Sony Financial Holdings Inc. Financial Data Book 2018 25

Sony Life Financial Data (Non-consolidated)

Reference: Reconciliation to core profit
Millions of yen

For the years ended March 31,

Core Revenues

2017

2018

¥1,227,623¥1,351,085

956,733

1,059,269

954,028

1,056,725

Income from insurance premiums
Insurance premiums
Ceded reinsurance commissions

2,704

2,544

224,713238,800

148,284

157,727

Gains on redemption of securities

̶1

Reversal of general reserve for possible loan losses̶0

Other investment income

4

138

76,42380,932

41,666

48,513

Investment income
Interest income and dividends

Gains on separate accounts, net
Other ordinary income
Income for annuity riders

3,001

5,065

Proceeds from deferred insurance

33,87939,537

̶

̶

4,785

3,910

Reversal of reserves for outstanding claims
OthersOther core revenues
Core Expenses

4,510

4,502

1,143,791

1,269,701

Insurance claims and other payments

372,407436,538

Insurance claims

84,17892,342

Annuity payments

12,01912,566

Insurance benefits

98,252

119,294

Surrender payments

168,409199,263

Refund to policyholders

3,122

3,314

Reinsurance premiums

6,423

9,756

587,690

640,678

Investment expenses

5,480

5,749

Interest expenses

44

151

Losses on redemption of securities

53

2

Provision for general reserve for possible loan losses0̶

Depreciation of real estate for rent and others

1,879

1,770

Other investment expenses

3,502

3,823

Provision for policy reserves and others

Losses on separate accounts, net

̶̶Operating expenses

137,094

139,937

Other ordinary expenses

41,11846,796

Deferred insurance payments

19,88925,487Taxes

12,171

12,647

Depreciation and amortization

5,299

5,376

Provision for reserve for employees’ retirement benefits

3,745

2,981

Provision for reserve for directors’ retirement benefits̶̶

Others

12

304

̶

̶

Other core expenses
Core Profit¥

83,831¥

81,384

Reference: Positive spread and yields
Billions of yen, %For the years ended March 31,

2017

2018

¥15.4

¥17.7

Investment yield for core profit

2.24%

2.22%

Investment yield (general account)

1.81%

1.63%

Average assumed interest rate

2.00%

1.97%

Positive spread

26 Sony Financial Holdings Inc. Financial Data Book 2018

Sony Life Financial Data (Non-consolidated)

5 Fair Value Information on Securities (General Account)
5- 01 Fair value information on securities
Valuation gains (losses) on trading-purpose securities
Millions of yen

2017
As of March 31,

2018

Balance sheet amount

Net valuation gains (losses)
recorded in income

Balance sheet amount¥2,054¥(162)¥̶

Trading-purpose securities

Net valuation gains (losses)
recorded in income¥(31)

Fair value information on securities
a. Securities with fair value (except trading-purpose securities)
Millions of yen

2017
Carrying
amountFair value

Net unrealized
gains (losses)

Unrealized
gains¥6,068,671¥7,514,255¥1,445,584¥1,521,504¥75,919

277,372

303,356

25,98327,876

1,893

̶

̶

̶

̶

̶

896,527

1,069,920

173,392

174,667

1,274Japanese bonds

852,604

1,013,331

160,726

160,726

̶Japanese stocks

13,68527,082

13,396

13,45558

Foreign securities

As of March 31,

Held-to-maturity securities
Policy-reserve-matching bonds
Stocks of subsidiaries and affiliated companies
Available-for-sale securities

Unrealized
losses30,071

29,193

(878)

337

1,215

Bonds

18,545

17,996

(548)

337

886

Stocks, etc.

11,525

11,196

(329)

̶

329

Other securities

165

313

147

147

̶

Monetary claims purchased

̶

̶

̶

̶

̶

Certificates of deposit

̶

̶

̶

̶

̶

Others

̶

̶

̶

̶

̶

Total

¥7,242,571¥8,887,532¥1,644,961¥1,724,048¥79,087

Japanese bonds¥6,942,338¥8,595,523¥1,653,185¥1,707,293¥54,108

Japanese stocks

13,68527,082

13,396

13,45558

Foreign securities

286,381

264,612(21,768)

3,151

24,920

Bonds

274,855

253,416(21,439)

3,151

24,590Stocks, etc.

11,525

11,196

(329)

̶

329

Other securities

165

313

147

147

̶

Monetary claims purchased

̶

̶

̶

̶

̶

Certificates of deposit

̶

̶

̶

̶

̶

Others

̶

̶

̶

̶

̶

Notes: 1. The above table includes assets that are permitted to be treated as equivalent to securities defined in the Financial Instruments and Exchange Act
of Japan.
2. Carrying amount and net unrealized gains (losses) on money held in trust, including items other than trading-purpose securities, as of March 31, 2017
amounted to ¥232,402 million and ¥41,919 million, respectively.

(Continued on next page)

Sony Financial Holdings Inc. Financial Data Book 2018 27

Sony Life Financial Data (Non-consolidated)

Fair value information on securities (continued)
Millions of yen

2018
Carrying
amountFair value

Net unrealized
gains (losses)

Unrealized
gains

Unrealized
losses¥6,467,997¥8,050,644¥1,582,646¥1,640,383¥57,736

401,958

436,842

34,88435,939

1,055

̶

̶

̶

̶

̶

3,349

As of March 31,

Held-to-maturity securities
Policy-reserve-matching bonds
Stocks of subsidiaries and affiliated companies
Available-for-sale securities

921,995

1,091,187

169,192

172,541

Japanese bonds

847,062

1,002,106

155,044

155,044̶Japanese stocks

13,68530,66816,982

17,00825

Foreign securities

61,081

58,125(2,955)

368

3,323

Bonds

49,39846,689(2,709)

368

3,077

Stocks, etc.

11,682

11,436

(245)

̶

245

Other securities

165

286

120

120

̶

Monetary claims purchased

̶

̶

̶

̶

̶

Certificates of deposit

̶

̶

̶

̶

̶

Others

̶

̶

̶

̶

̶

Total

¥7,791,950¥9,578,673¥1,786,723¥1,848,865¥62,142

Japanese bonds¥7,397,136¥9,185,284¥1,788,148¥1,827,186¥39,037

Japanese stocks

13,68530,66816,982

17,00825

Foreign securities

380,962

362,434(18,528)

4,550

23,078

Bonds

369,280

350,998(18,282)

4,550

22,832

Stocks, etc.

11,682

11,436

(245)

̶

245

Other securities

165

286

120

120

̶

Monetary claims purchased

̶

̶

̶

̶

̶

Certificates of deposit

̶

̶

̶

̶

̶

Others

̶

̶

̶

̶

̶

Notes: 1. The above table includes assets that are permitted to be treated as equivalent to securities defined in the Financial Instruments and Exchange Act
of Japan.
2. Carrying amount and net unrealized gains (losses) on money held in trust, including items other than trading-purpose securities, as of March 31, 2018,
amounted to ¥232,484 million and ¥38,552 million, respectively.

b. Carrying amounts of securities for which fair value cannot be measured reliably
Millions of yen

As of March 31,

Held-to-maturity securities

2017

¥

̶

2018

¥

̶

Unlisted foreign bonds

̶̶

Others̶̶̶̶

Stocks of subsidiaries and affiliated companies

16,312

15,926

Available-for-sale securities

9,896

7,719

Unlisted domestic stocks (except OTC stocks)

159

159

Unlisted foreign stocks (except OTC stocks)

608

590

Policy-reserve-matching bonds

Unlisted foreign bonds
OthersTotal

28 Sony Financial Holdings Inc. Financial Data Book 2018

̶

̶

9,127

6,968

¥26,209¥23,645

Sony Life Financial Data (Non-consolidated)c. Fair value information consisting of those stated in the previous Table a. and Table b. after evaluating foreign exchange and othergains (losses)
Millions of yen

2017

As of March 31,

Held-to-maturity securities
Policy-reserve-matching bonds
Stocks of subsidiaries and affiliated companies
Available-for-sale securities
Japanese bonds
Japanese stocks
Foreign securities
Bonds
Stocks, etc.
Other securities
Monetary claims purchased
Certificates of deposit
Others
Total
Japanese bonds
Japanese stocks
Foreign securities
Bonds
Stocks, etc.
Other securities
Monetary claims purchased
Certificates of deposit
OthersCarrying
amountFair value

Net unrealized
gains (losses)

Unrealized
gains¥6,068,671
277,372
16,312906,423
852,604
13,84530,68018,545
12,134
9,293

Unrealized
losses¥7,514,255
303,356
16,312
1,083,838
1,013,331
27,24230,947
17,996
12,95012,317¥1,445,584
25,983¥1,521,504
27,876̶̶̶

177,414160,726
13,396
266
(548)
815
3,024

179,270
160,726
13,455
1,482
337
1,145
3,606

1,856

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

¥7,268,780¥6,942,338
22,208294,940
274,855
20,084
9,293¥8,917,763¥8,595,523
35,605274,316
253,416
20,90012,317¥1,648,982¥1,653,185
13,396(20,623)(21,439)815
3,024¥1,728,652¥1,707,293
13,455
4,296
3,151
1,145
3,606

¥79,669¥54,10858
24,92024,590
329
581

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

¥75,919
1,893

̶

58
1,215
886
329
581

Millions of yen

2018

As of March 31,

Held-to-maturity securities
Policy-reserve-matching bonds
Stocks of subsidiaries and affiliated companies
Available-for-sale securities
Japanese bonds
Japanese stocks
Foreign securities
Bonds
Stocks, etc.
Other securities
Monetary claims purchased
Certificates of deposit
Others
Total
Japanese bonds
Japanese stocks
Foreign securities
Bonds
Stocks, etc.
Other securities
Monetary claims purchased
Certificates of deposit
OthersCarrying
amountFair value

Net unrealized
gains (losses)

Unrealized
gains

Unrealized
losses¥6,467,997
401,958
15,926
929,714847,062
13,84561,67149,39812,273
7,134¥8,050,644
436,842
15,926
1,103,060
1,002,106
30,82859,702
46,68913,013
10,422¥1,582,646
34,884¥1,640,383
35,939¥57,736
1,055

̶

̶

̶

173,345
155,044
16,982(1,968)(2,709)740
3,287

176,918
155,044
17,008
1,354
368
986
3,510

3,572

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

¥7,815,596¥7,397,136
21,482389,842369,280
20,562
7,134¥9,606,473¥9,185,284
38,464372,301
350,998
21,302
10,422¥1,790,876¥1,788,148
16,982(17,541)(18,282)740
3,287¥1,853,241¥1,827,186
17,008
5,536
4,550
986
3,510

¥62,365¥39,037
25
23,07822,832
245
222

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

25
3,323
3,077
245
222

Sony Financial Holdings Inc. Financial Data Book 2018 29

Sony Life Financial Data (Non-consolidated)

5- 02 Fair value information on money held in trust (general account)
Millions of yen

2017
Balance sheet
amountAs of March 31,

Money held in trust

Fair value¥273,877

Net unrealized
gains (losses)

Unrealized gains

Unrealized losses

¥̶

¥̶

¥̶

¥273,877

Millions of yen

2018
Balance sheet
amountAs of March 31,

Money held in trust

Fair value¥270,582

Net unrealized
gains (losses)

Unrealized gains

Unrealized losses

¥̶

¥̶

¥̶

¥270,582

Note: The above tables include jointly invested money held in trust, which amounted to ¥40 million as of March 31, 2018 and ¥50 million as of March 31, 2017,
respectively.

Money held in trust for investment
Not applicable

Money held in trust for held-to-maturity, policy-reserve-matching and other
Millions of yen

2017
As of March 31,

Carrying amountMoney held in trust for held-to-maturity

¥

¥

̶

Money held in trust for policy-reservematching
Other money held in trust

Fair value̶

Net unrealized
gains (losses)

Unrealized gains

¥

¥

̶

Unrealized losses

̶

¥̶

̶

̶

̶

̶

̶

231,907273,826

41,91941,919̶Millions of yen

2018
As of March 31,

Carrying amountMoney held in trust for held-to-maturity

¥

¥

̶

Money held in trust for policy-reservematching
Other money held in trust

Fair value̶

Net unrealized
gains (losses)

Unrealized gains

¥

¥

̶

Unrealized losses

̶

¥̶

̶

̶

̶

̶

̶

231,989

270,541

38,55238,552

̶

5- 03 Fair value information on derivative transactions (general account) (total of derivatives

to which hedge accounting is applied and derivatives to which hedge accounting is
not applied)
1. Breakdown of valuation gains (losses) (Derivatives to which hedge accounting is applied and derivatives to which hedge accounting is
not applied)

Millions of yen

2017

2018

As of March 31,

Interest
raterelated

Hedge accounting is applied¥ ̶ ¥Hedge accounting is not applied

337

3,797

462

̶

̶

Total

¥337 ¥3,797

¥462

¥̶

¥̶ ¥4,597

Currencyrelated

Stockrelated

Bondrelated

̶

¥ ̶

¥̶

¥̶ ¥

Others

Total

̶

4,597

Interest
rateCurrencyrelated
relatedStockrelated

Bondrelated

̶

¥ ̶

¥̶

¥̶ ¥

5,772

786

̶

̶

¥̶ ¥5,772

¥786

¥̶

¥̶ ¥6,559¥̶ ¥̶

Note: Valuation gains (losses) on derivatives to which hedge accounting is not applied are recorded in the statements of income.

30 Sony Financial Holdings Inc. Financial Data Book 2018

Others

Total

̶

6,559

Sony Life Financial Data (Non-consolidated)

2. Interest rate derivatives

Millions of yen

2017

As of March 31,

2018

Notional
amounttotal

Over 1 year

Fair value¥1,000¥1,000¥337

Valuation
gains(losses)

Notional
amounttotal

Over 1 year

Fair value

Valuation
gains(losses)

¥337

¥̶

¥̶

¥̶

¥̶

Over-the-counter transactions
Interest rate swaps
Fixed-rate receivable/
Floating-rate payable
Total

¥337

¥̶

Note: Fair value is also shown in the column under “Valuation gains (losses).”

Reference: Balance of interest rate swaps by remaining period

Millions of yen, %2017

As of March 31,

Due after
Due after
Due after
3 years through 5 years through 7 years through10 years
7 years
5 years

Due in1 year or lessDue after
1 year through3 years

¥̶

¥̶

¥̶

¥̶

¥̶

̶

̶

̶

̶

̶

Fixed-rate receivable/Floating-ratepayable for notional principal ofinterest rate swap
Average fixed-rate receivable
Average floating-rate payable
Total

̶

̶

̶

̶

̶

¥̶

¥̶

¥̶

¥̶

¥̶

Due after
10 years

Total¥1,0001.89%(0.00%)¥1,000¥1,0001.89%(0.00%)¥1,000Millions of yen, %2018

As of March 31,

Due in1 year or less

Fixed-rate receivable/Floating-ratepayable for notional principal ofinterest rate swap
Average fixed-rate receivable
Average floating-rate payable
Total

Due after
Due after
Due after
Due after
1 year through 3 years through 5 years through 7 years through10 years
7 years
5 years
3 years

Due after
10 years

Total

¥̶

¥̶

¥̶

¥̶

¥̶

¥̶

¥̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

¥̶

¥̶

¥̶

¥̶

¥̶

¥̶

¥̶

3. Currency derivatives

Millions of yen

2017

As of March 31,

Notional
amounttotal

Over 1 year

2018

Fair value

Valuation
gains(losses)

Notional
amounttotal

Over 1 year

Fair value

Valuation
gains(losses)Over-the-counter transactions
Forward foreign exchanges
Sold¥240,804¥̶

¥3,799¥3,799¥153,617¥̶

¥5,775¥5,775

U.S. dollars

212,273

̶

3,284

3,284

124,094

̶

4,572

4,572

Euro

28,531

̶

514

514

29,522

̶

1,203

1,203

̶

̶

̶

̶

̶

̶

̶

̶

169

̶

(1)

(1)

172

̶

(3)

(3)

169

̶

(1)

(1)

172

̶

(3)

(3)

Australian dollars
BoughtU.S. dollars
Total¥3,797¥5,772

Notes: 1. The fair value of forward foreign exchanges is calculated using the discounted present value based on the fiscal year-end interest rate.
2. Fair value is also shown in the column under “Valuation gains (losses).”Sony Financial Holdings Inc. Financial Data Book 2018 31

Sony Life Financial Data (Non-consolidated)

4. Stock derivatives

Millions of yen

2017

As of March 31,

Notional
amounttotal

Over 1 year

¥96,016¥̶2018

Fair value

Valuation
gains(losses)

Notional
amounttotal

Over 1 year

Fair value

¥462

¥462

¥106,875¥̶

¥786

Valuation
gains(losses)

ListedStock index futures
Sold
Total

¥462

¥786
¥786

Note: Fair value is also shown in the column under “Valuation gains (losses).”

5. Bond derivatives
Not applicable
6. Others
Not applicable

6 Fair Value Information on Securities (Company Total)
6- 01 Fair value information on securities
Valuation gains (losses) on trading-purpose securities

Millions of yen

2017
As of March 31,

2018

Balance sheet amount

Net valuation gains (losses)
recorded in income

Balance sheet amount

Net valuation gains (losses)
recorded in income¥921,319¥45,396¥1,048,062¥36,944

Trading-purpose securities

Fair value information on securities
a. Securities with fair value (except trading-purpose securities)

Millions of yen

2017
Carrying
amountFair value

Net unrealized
gains (losses)

Unrealized
gains¥6,068,671
277,372¥7,514,255
303,356¥1,445,584
25,983¥1,521,504
27,876

As of March 31,

Held-to-maturity securities
Policy-reserve-matching bonds
Stocks of subsidiaries and affiliated companies
Available-for-sale securities
Japanese bonds
Japanese stocks
Foreign securities
Bonds
Stocks, etc.
Other securities
Monetary claims purchased
Certificates of deposit
Others
Total
Japanese bonds
Japanese stocks
Foreign securities
Bonds
Stocks, etc.
Other securities
Monetary claims purchased
Certificates of deposit
Others

Unrealized
losses¥75,919
1,893

̶

̶

̶

̶

̶

896,527852,604
13,68530,071
18,545
11,525165

1,069,920
1,013,331
27,082
29,193
17,996
11,196313

173,392
160,726
13,396
(878)
(548)
(329)
147

174,667
160,726
13,455
337
337

1,274

̶
̶
̶

̶
̶
̶

̶
̶
̶

̶
̶
̶

¥7,242,571¥6,942,338
13,685286,381274,855
11,525165¥8,887,532¥8,595,523
27,082
264,612
253,416
11,196313¥1,644,961¥1,653,185
13,396(21,768)(21,439)(329)
147¥1,724,048¥1,707,293
13,455
3,151
3,151

̶
̶
̶

̶
̶
̶

̶
̶
̶

̶
̶
̶

̶

147

̶

147

̶

58
1,215
886
329
̶
̶
̶
̶

¥79,087¥54,10858
24,92024,590329
̶̶̶̶(Continued on next page)

32 Sony Financial Holdings Inc. Financial Data Book 2018

Sony Life Financial Data (Non-consolidated)

Fair value information on securities (continued)
Millions of yen

2018
As of March 31,

Held-to-maturity securities
Policy-reserve-matching bonds
Stocks of subsidiaries and affiliated companies
Available-for-sale securities
Japanese bonds
Japanese stocks
Foreign securities
Bonds
Stocks, etc.
Other securities
Monetary claims purchased
Certificates of deposit
Others
Total
Japanese bonds
Japanese stocks
Foreign securities
Bonds
Stocks, etc.
Other securities
Monetary claims purchased
Certificates of deposit
OthersCarrying
amountFair value

Net unrealized
gains (losses)

Unrealized
gains

Unrealized
losses¥6,467,997
401,958¥8,050,644
436,842¥1,582,646
34,884¥1,640,383
35,939¥57,736
1,055

̶

̶

̶

̶

̶

921,995
847,062
13,68561,08149,398
11,682165

1,091,187
1,002,106
30,66858,12546,68911,436286

169,192
155,044
16,982(2,955)(2,709)(245)
120

172,541
155,044
17,008
368
368

3,349

̶
̶
̶

̶
̶
̶

̶
̶
̶

̶
̶
̶

¥7,791,950¥7,397,136
13,685
380,962369,280
11,682
165¥9,578,673¥9,185,284
30,668362,434
350,998
11,436286¥1,786,723¥1,788,148
16,982(18,528)(18,282)(245)
120¥1,848,865¥1,827,186
17,008
4,550
4,550

̶
̶
̶

̶
̶
̶

̶
̶
̶

̶
̶
̶

̶

25
3,323
3,077
245

̶

120

̶
̶
̶
̶

¥62,142¥39,037
25
23,07822,832
245

̶

120

̶
̶
̶
̶

Notes: 1. The above table includes assets that are permitted to be treated as equivalent to securities defined in the Financial Instruments and Exchange Act ofJapan.
2. The carrying amount and net unrealized gains (losses) on money held in trust, including items other than trading securities, amounted to ¥232,484
million and ¥38,552 million, respectively, as of March 31, 2018 and ¥232,402 million and ¥41,919 million, respectively, as of March 31, 2017.

○ Held-to-maturity securities
Millions of yen

2017
As of March 31,

Held-to-maturity securities whose fair value
exceeds balance sheet amountJapanese bonds
Foreign securities
Other securities
Held-to-maturity securities whose fair value
does not exceed balance sheet amountJapanese bonds
Foreign securities
Other securities

2018

Balance sheet
amountFair value

Difference

Balance sheet
amountFair value

Difference¥5,366,516
5,340,238
26,278¥6,888,020
6,858,928
29,092¥1,521,504
1,518,690
2,813¥5,712,419
5,649,059
63,360¥7,352,803
7,285,480
67,322¥1,640,383
1,636,421
3,962

̶

̶

̶

̶

̶

̶

702,154472,123230,031626,234
419,907206,327(75,919)(52,215)(23,704)

755,577
513,318
242,259

697,840
475,204
222,636(57,736)(38,113)(19,623)

̶

̶

̶

̶

̶

̶

Sony Financial Holdings Inc. Financial Data Book 2018 33

Sony Life Financial Data (Non-consolidated)○ Policy-reserve-matching bonds
Millions of yen

2017
As of March 31,

Policy-reserve-matching bonds whose fairvalue exceeds balance sheet amountJapanese bonds
Foreign securities
Other securities
Policy-reserve-matching bonds whose fairvalue does not exceed balance sheet amountJapanese bonds
Foreign securities
Other securities

2018

Balance sheet
amountBalance sheet
amountFair value

Fair value¥230,196
230,196¥258,073
258,073¥27,876
27,876
̶¥346,779
340,492
6,286¥382,719
376,212
6,506¥35,939
35,720
219

̶

̶

̶

̶

̶

̶

̶

̶

47,17647,17645,28345,283(1,893)(1,893)̶̶̶

55,17947,203
7,975

54,123
46,2797,843(1,055)
(924)
(131)

̶

̶

̶

̶

̶

̶

Difference

Difference○ Available-for-sale securities
Millions of yen

2017
As of March 31,

Available-for-sale securities whosebalance sheet amount exceeds
carrying amountJapanese bonds
Japanese stocks
Foreign securities
Other securities
Monetary claims purchased
Certificates of deposit
OthersAvailable-for-sale securities whosebalance sheet amount does not exceed
carrying amountJapanese bonds
Japanese stocks
Foreign securities
Other securities
Monetary claims purchased
Certificates of deposit
Others2018

Carrying
amountBalance sheet
amountDifference

Carrying
amountBalance sheet
amountDifference¥868,161
852,604
12,7932,597
165¥1,042,829
1,013,331
26,2492,935
313¥174,667
160,726
13,455337
147¥868,385
847,062
13,3847,772
165¥1,040,926
1,002,106
30,3928,140
286¥172,541
155,044
17,008
368
120

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

28,36527,091(1,274)53,61050,260(3,349)

̶

̶

̶

̶

̶

̶

891
27,473833
26,257(58)(1,215)301
53,308275
49,984(25)(3,323)

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

b. Carrying amounts of securities for which fair value cannot be measured reliably
Millions of yen

As of March 31,

Held-to-maturity securities
Unlisted foreign bonds
Others
Policy-reserve-matching bonds
Stocks of subsidiaries and affiliated companies
Available-for-sale securities
Unlisted domestic stocks (except OTC stocks)
Unlisted foreign stocks (except OTC stocks)
Unlisted foreign bonds
OthersTotal

34 Sony Financial Holdings Inc. Financial Data Book 2018

2017

¥

̶

2018

¥

̶

̶

̶

̶

̶

̶

̶

16,312
9,896
159
608

15,926
7,719
159
590

̶

̶

9,127
¥26,209

6,968¥23,645

Sony Life Financial Data (Non-consolidated)c. Fair value information consisting of those stated in the previous Table a. and Table b. after evaluating foreign exchange and othergains (losses)
Millions of yen

2017

As of March 31,

Held-to-maturity securities
Policy-reserve-matching bonds
Stocks of subsidiaries and affiliated companies
Available-for-sale securities
Japanese bonds
Japanese stocks
Foreign securities
Bonds
Stocks, etc.
Other securities
Monetary claims purchased
Certificates of deposit
Others
Total
Japanese bonds
Japanese stocks
Foreign securities
Bonds
Stocks, etc.
Other securities
Monetary claims purchased
Certificates of deposit
OthersCarrying
amountFair value

Net unrealized
gains (losses)

Unrealized
gains¥6,068,671
277,372
16,312906,423
852,604
13,84530,68018,545
12,134
9,293¥7,514,255
303,356
16,312
1,083,838
1,013,331
27,24230,947
17,996
12,95012,317¥1,445,584
25,983¥1,521,504
27,876̶̶̶

177,414160,726
13,396
266
(548)
815
3,024

179,270
160,726
13,455
1,482
337
1,145
3,606

1,856
58
1,215
886
329
581

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

¥7,268,780¥6,942,338
22,208294,940
274,855
20,084
9,293¥8,917,763¥8,595,523
35,605274,316
253,416
20,90012,317¥1,648,982¥1,653,185
13,396(20,623)(21,439)815
3,024¥1,728,652¥1,707,293
13,455
4,296
3,151
1,145
3,606

¥79,669¥54,10858
24,92024,590
329
581

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

Unrealized
losses¥75,919
1,893

̶Millions of yen

2018

As of March 31,

Held-to-maturity securities
Policy-reserve-matching bonds
Stocks of subsidiaries and affiliated companies
Available-for-sale securities
Japanese bonds
Japanese stocks
Foreign securities
Bonds
Stocks, etc.
Other securities
Monetary claims purchased
Certificates of deposit
Others
Total
Japanese bonds
Japanese stocks
Foreign securities
Bonds
Stocks, etc.
Other securities
Monetary claims purchased
Certificates of deposit
OthersCarrying
amountFair value

Net unrealized
gains (losses)

Unrealized
gains

Unrealized
losses¥6,467,997
401,958
15,926
929,714847,062
13,84561,67149,39812,273
7,134¥8,050,644
436,842
15,926
1,103,060
1,002,106
30,82859,702
46,68913,013
10,422¥1,582,646
34,884¥1,640,383
35,939¥57,736
1,055

̶

̶

̶

173,345
155,044
16,982(1,968)(2,709)740
3,287

176,918
155,044
17,008
1,354
368
986
3,510

3,572
25
3,323
3,077
245
222

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

¥7,815,596¥7,397,136
21,482389,842369,280
20,562
7,134¥9,606,473¥9,185,284
38,464372,301
350,998
21,302
10,422¥1,790,876¥1,788,148
16,982(17,541)(18,282)740
3,287¥1,853,241¥1,827,186
17,008
5,536
4,550
986
3,510

¥62,365¥39,037
25
23,07822,832
245
222

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

Sony Financial Holdings Inc. Financial Data Book 2018 35

Sony Life Financial Data (Non-consolidated)

6- 02 Fair value information on money held in trust (company total)

Millions of yen

2017
As of March 31,

Balancesheet amountMoney held in trust¥273,877 ¥273,877

Fair value

2018

Net
unrealized
gains (losses)

Unrealized
gains

¥̶

¥̶

Fair valueNet
unrealized
gains (losses)

Unrealized
gains

Unrealized
losses¥̶ ¥270,582 ¥270,582

¥̶

¥̶

¥̶

Unrealized
lossesBalancesheet amountNote: The above tables include jointly invested money held in trust, which amounted to ¥40 million as of March 31, 2018 and ¥50 million as of March 31, 2017.

Money held in trust for investment
Not applicable

Money held in trust for held-to-maturity, policy-reserve-matching and other

Millions of yen

2017
As of March 31,

Carrying
amountFair value

Money held in trust
for held-to-maturity ¥̶ ¥̶Money held in trust
for policy-reservematching̶̶Other money heldin trust

231,907273,826

2018

Net
unrealized
gains (losses)

Unrealized
gains

¥

¥

Unrealized
lossesCarrying
amountFair value

̶

¥̶ ¥

̶ ¥

̶

̶

̶

̶

̶

̶

41,91941,919̶

231,989

270,541

̶Net
unrealized
gains (losses)¥

Unrealized
gains

̶

¥̶

̶

̶

̶

38,55238,552̶̶¥

Unrealized
losses

6- 03 Fair value information on derivative transactions (company total)
Qualitative Information
1. Transaction details
The main derivative transactions used by Sony Life are as follows:• Interest rate-related:
Interest rate swap transactions• Currency-related:
Forward foreign exchange transactions• Stock-related:
Stock index futures trading
2. Purpose of use and policy on derivative transactions
Sony Life’s policy is to conduct derivative transactions to reduce risks related to its holdings of assets and liabilities, and does notengage in speculative derivative transactions.
• Interest rate-related:
The purpose is to hedge interest rate-related risk on its holdings of assets and liabilities.
• Currency-related:
The purpose is to hedge foreign currency-related risk related to its holdings of assets and the minimum
guaranteed for individual variable life insurance.
• Stock-related:
The purpose is to hedge stock-related risk related to its holdings of assets and the minimum guaranteed forindividual variable life insurance.
3. Risk details
The risk of fluctuations in market value (interest rate-related risk, currency-related risk and stock-related risk) is inherent to derivativetransactions employed by Sony Life. However, as these transactions are conducted primarily to reduce risk related to its holdings ofassets and liabilities, the total risk related to derivative transactions and their underlying assets and liabilities is limited. Credit risk isinherent to derivative instruments, but when conducting transactions, Sony Life selects parties that it believes pose little risk of default.
4. Risk management systems
Sony Life’s balance of derivative transactions is within the limits that Sony Life has set in-house. On transactions conducted by thedivision in charge of investment, the administrative division receives reports directly from the transaction counterparty. This systemenables the administrative division and the investment division to independently determine derivative positions and transaction profits
and losses. In addition, the management of risks related to derivative transactions is conducted strictly by the department in charge ofsupervision. Also, the risk management division regularly reports the overall risk status to Sony Life’s Board of Directors and Executive
Committee.
5. Supplemental information regarding quantitative information
Sony Life does not employ hedge accounting for derivative transactions.

Quantitative Information
1. Breakdown of valuation gains (losses) (Derivatives to which hedge accounting is applied and derivatives to which hedge accounting is
not applied)

Millions of yen

2017

2018

As of March 31,

Interest
raterelated

Hedge accounting is applied¥ ̶ ¥Hedge accounting is not applied

337

3,797

462

̶

̶

Total

¥337 ¥3,797

¥462

¥̶

¥̶ ¥4,597

Currencyrelated

Stockrelated

Bondrelated

̶

¥ ̶

¥̶

¥̶ ¥

Others

Total

̶

4,597

Interest
rateCurrencyrelated
relatedStockrelated

Bondrelated

¥̶ ¥

̶

¥ ̶

¥̶

¥̶ ¥

5,772

786

̶

̶

¥̶ ¥5,772

¥786

¥̶

¥̶ ¥6,559

̶Note: Valuation gains (losses) on derivatives to which hedge accounting is not applied are recorded in the statements of income.

36 Sony Financial Holdings Inc. Financial Data Book 2018

Others

Total

̶

6,559

Sony Life Financial Data (Non-consolidated)

2. Derivatives to which hedge accounting is not applied
Interest rate derivatives

Millions of yen

2017

As of March 31,

2018

Notional
amounttotal

Over 1 year

Fair value¥1,000¥1,000¥337

Valuation
gains(losses)

Notional
amounttotal

Over 1 year

Fair value

Valuation
gains(losses)

¥337

¥̶

¥̶

¥̶

¥̶

Over-the-counter transactions
Interest rate swaps
Fixed-rate receivable /Floating-rate payable
Total

¥337

¥̶

Note: Fair value is also shown in the column under “Valuation gains (losses).”

Reference: Balance of interest rate swaps by remaining period

Millions of yen, %2017

As of March 31,

Due after
Due after
Due after
3 years through 5 years through 7 years through10 years
7 years
5 years

Due in1 year or lessDue after
1 year through3 years

¥̶

¥̶

¥̶

¥̶

¥̶

̶

̶

̶

̶

̶

Fixed-rate receivable /Floating-rate payable for notional
principal of interest rate swap
Average fixed-rate receivable
Average floating-rate payable
Total

̶

̶

̶

̶

̶

¥̶

¥̶

¥̶

¥̶

¥̶

Due after
10 years

Total¥1,0001.89%(0.00%)¥1,000¥1,0001.89%(0.00%)¥1,000Millions of yen, %2018

As of March 31,

Due in1 year or less

Fixed-rate receivable /Floating-rate payable for notional
principal of interest rate swap
Average fixed-rate receivable
Average floating-rate payable
Total

Due after
Due after
Due after
Due after
1 year through 3 years through 5 years through 7 years through10 years
7 years
5 years
3 years

Due after
10 years

Total

¥̶

¥̶

¥̶

¥̶

¥̶

¥̶

¥̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

¥̶

¥̶

¥̶

¥̶

¥̶

¥̶

¥̶

Currency derivatives

Millions of yen

2017

Fair value

Notional
amounttotal

Over 1 year

Fair value

Valuation
gains(losses)¥̶¥3,799¥3,799¥153,617¥̶

¥5,775¥5,775212,273

̶

3,284

3,284

124,094

̶

4,572

4,572

28,531

̶

514

514

29,522

̶

1,203

1,203

̶

̶

̶

̶

̶

̶

̶

̶

169

̶

(1)

(1)

172

̶

(3)

(3)

169

̶

(1)

(1)

172

̶

(3)

Over 1 year

¥240,804

U.S. dollars
Euro

As of March 31,

2018
Valuation
gains(losses)

Notional
amounttotal

Over-the-counter transactions
Forward foreign exchanges
Sold

Australian dollars
BoughtU.S. dollars
Total¥3,797(3)¥5,772

Notes: 1. The fair value of forward foreign exchanges is calculated using the discounted present value based on the fiscal year-end interest rate.
2. Fair value is also shown in the column under “Valuation gains (losses).”Sony Financial Holdings Inc. Financial Data Book 2018 37

Sony Life Financial Data (Non-consolidated)

Stock derivatives

Millions of yen

2017

As of March 31,

Notional
amounttotal

Over 1 year

¥96,016¥̶2018

Fair value

Valuation
gains(losses)

Notional
amounttotal

Over 1 year

Fair value

Valuation
gains(losses)

¥462

¥462

¥106,875

¥̶

¥786

¥786

ListedStock index futures
Sold
Total
Note: Fair value is also shown in the column under “Valuation gains (losses).”

Bond derivatives
Not applicable
OthersNot applicable
3. Derivatives to which hedge accounting is applied
Interest rate derivatives
Not applicable
Currency derivatives
Not applicable
Equity derivatives
Not applicable
Bond derivatives
Not applicable
OthersNot applicable

38 Sony Financial Holdings Inc. Financial Data Book 2018

¥462

¥786

Sony Life

Performance Indicators (Non-consolidated)
1 Key Performance Indicators for Past Five Years
Millions of yen

For the years ended March 31,

Policy amount in force
Individual life insurance

2014

2015

2016

2017

2018

¥40,500,241¥42,430,898¥44,749,196¥47,185,239¥49,173,547

38,628,089

40,391,018

42,293,769

44,313,382

45,892,442

Individual annuities

466,915597,682

856,0621,020,810

1,360,998

Group life insurance

1,405,237

1,442,198

1,599,364

1,851,046

1,920,106

Policy amount in force for group annuities

55,196

17,21013,093

11,57010,037

Annualized premiums from insurance in force

696,986

735,728

781,315820,856

848,823

167,075

172,800

179,707

187,449

191,895

3,894,484

4,776,917

5,152,456

5,004,921

5,346,249

3,814,291

4,625,700

4,871,062

4,765,257

4,912,156

Individual annuities

75,088145,926

280,332

192,247

375,820

Group life insurance

5,104

5,291

1,061

47,41558,272

Annualized premiums from new policies

63,992

76,61285,01878,12773,073

Medical protection, living benefit
protection and other products

13,486

15,285

15,717

15,71812,984

Medical protection, living benefit
protection and other products
New policy amountIndividual life insurance

Ordinary revenues

1,197,109

1,223,827

1,230,141

1,243,739

1,351,076

Income from insurance premiums

960,986

914,034

1,028,048

956,733

1,059,269

Investment income

212,323

280,148

170,517245,339

243,293

1,127,904

1,144,162

1,169,348

1,183,558

1,294,738
436,538

Ordinary expenses
Insurance claims and other payments

327,257

382,902363,370

372,407

Investment expenses

8,506

9,727

23,39936,19633,121

Operating expenses

113,868

115,603

133,334

137,094

139,937

Ordinary profit

69,20579,66560,79260,18056,338Net income

37,06342,52437,09635,18545,134

Core profit

72,36576,50543,01983,831

81,384

Common stock

70,00070,00070,00070,00070,000Shares issued and outstanding(thousands of shares)

70,00070,00070,00070,00070,0006,624,903

7,301,350

8,035,408

8,873,613

9,567,689

640,562

793,344

850,323

989,605

1,128,817

6,123,633

6,727,241

7,336,533

7,929,944

8,566,075

154,219

162,399

171,649

180,374

189,486

Securities

5,954,716

6,543,703

7,273,361

8,093,192

8,765,967

Solvency margin ratio

2,358.7%

2,555.0%

2,722.8%

2,568.8%

2,624.3%

Number of employees

6,553

6,781

7,289

7,865

8,246

Total assets
Separate account assets
Policy reserves
Loans

Notes: 1. Policy amount in force is the total of individual life insurance, individual annuities and group life insurance. Policy amount for individual annuities is equal
to the sum of (a) the funds to be held at the time annuity payments are to commence for policies for which annuity payments have not yet commencedand (b) the amount of policy reserves for policies for which annuity payments have commenced.
2. The policy amount in force for group annuities is equal to the amount of policy reserves.
3. New policy amount is the total of individual life insurance, individual annuities and group life insurance. New policy amount for individual annuities isequal to the funds to be held at the time annuity payments commence.
4. Annualized premiums, which are the total of individual life insurance and individual annuities, are converted to a per-year premium amount by
multiplying individual premiums by a coefficient corresponding to the premium payment method. (For single premium policies, premiums are divided by
the number of coverage years.)
5. Annualized premiums for “medical protection, living benefit protection and other products” include those for medical protection benefits (hospitalization
benefits, surgical benefits, etc.) and living benefit protection (benefits for specific diseases, nursing care benefits, etc.).

Sony Financial Holdings Inc. Financial Data Book 2018 39

Sony Life Performance Indicators (Non-consolidated)

2 Key Performance Indicators
2- 01 Policy amount in force and new policy amount
Policy amount in force
Millions of yen, %2017
As of March 31,

Individual life
insurance
Individual annuities
Group life insuranceGroup annuities

NumberComparison to
March 31, 2016

7,112,052
196,606̶̶

103.4%
118.2
̶
̶

2018
Comparison to
March 31, 2016

Amount¥44,313,382
1,020,810
1,851,046
11,570104.8%
119.2
115.7
88.4

Comparison to
March 31, 2017

Number7,316,968
252,658

102.9%
128.5

̶
̶

̶
̶

Comparison to
March 31, 2017

Amount¥45,892,442
1,360,998
1,920,106
10,037103.6%
133.3
103.7
86.8

Notes: 1. The policy amount in force for individual annuities is equal to the sum of (a) the funds to be held at the time annuity payments are to commence forpolicies for which annuity payments have not yet commenced and (b) the amount of policy reserves for policies for which annuity payments havecommenced.
2. The policy amount in force for group annuities is equal to the amount of policy reserves.

New policy amountMillions of yen, %2017

For the year ended March 31,

Individual life insurance
Individual annuities
Group life insuranceGroup annuities

Comparison toprevious year

Number479,131
34,492

82.7%
68.0

̶
̶

̶
̶

Comparison toprevious year

Amount¥4,765,257
192,247
47,415

97.8%
68.6
4,468.6

̶

Amount,of which,increase fromconversion

Amount,of which,
new policies¥4,765,257
192,247
47,415

̶

¥̶
̶
̶
̶

̶

Millions of yen, %2018

For the year ended March 31,

Individual life insurance
Individual annuities
Group life insuranceGroup annuities

Comparison toprevious year

Number

478,994
61,374̶̶

100.0%
177.9
̶̶

AmountAmount,of which,increase fromconversion

Comparison toprevious year

Amount,of which,
new policies

103.1%
195.5
122.9¥4,912,156
375,820
58,272¥4,912,156
375,820
58,272
̶

̶

¥̶
̶
̶
̶

̶

Notes: 1. The new policy amount including increase from conversion for individual annuities is equal to the funds held at the time annuity payments commence.
2. The new policy amount for group annuities is equal to the sum of the initial premium payments.

2- 02 Annualized premiums
Policy amount in force

Millions of yen, %

2017

2018

Comparison to
March 31, 2016

Comparison to
March 31, 2017

As of March 31,

AmountIndividual life insurance
Individual annuities
Total
Of which, medical protection, living benefit protection
and other products¥787,005
33,851¥820,856

104.7%
114.8
105.1%¥807,437
41,386¥848,823

102.6%
122.3
103.4%

187,449

104.3

191,895

102.4

AmountNew policies

Millions of yen, %2017
For the years ended March 31,

Individual life insurance
Individual annuities
Total
Of which, medical protection, living benefit protection
and other products

Amount2018
Comparison toprevious year

AmountComparison toprevious year

¥72,786
5,340¥78,127

95.4%
61.5
91.9%

¥63,875
9,197¥73,073

87.8%
172.2
93.5%

15,718100.0

12,984

82.6

Notes: 1. Annualized premiums refer to an amount that is calculated by multiplying individual premium amounts by a coefficient that differs depending on thepremium payment methods, thereby converting the figure to a per-year premium. (For single premium policies, premiums are divided by the number ofcoverage years.)
2. Annualized premiums for “medical protection, living benefit protection and other products” include those for medical protection benefits (hospitalization
benefits, surgical procedure benefits, etc.) and living benefit protection (benefits for specific diseases, nursing care benefits, etc.).

40 Sony Financial Holdings Inc. Financial Data Book 2018

Sony Life Performance Indicators (Non-consolidated)

2- 03 Policy amount in force and new policy amount by product
Policy amount in force by productMillions of yen

2017
As of March 31,

Number2018
AmountNumberAmountIndividual life insurance products
Pure death-protection insurance
5,437,934 ¥40,855,198 5,625,189 ¥42,367,088
Variable life insurance (whole life type)845,906
4,382,838
843,324
4,366,744
U.S. dollar-denominated whole life insurance
130,292
1,130,333
206,545
1,611,986
̶̶
U.S. dollar-denominated single premium whole life insurance (non-notification type)14,31864,955
̶̶
U.S. dollar-denominated living benefit whole life insurance (living standard type)
29,567
156,645
Modified payment whole life insurance
13,886
122,105
13,566
117,483
Limited payment whole life insurance
341,278
2,682,182
337,508
2,637,306
Family insurance
1,178
10,710
1,157
10,498Interest rate-sensitive whole life insurance
525,4892,876,061
511,9122,776,525
Whole life insurance (no selection type)
3,773
6,606
3,707
6,358
Single premium whole life insurance (non-notification type)12,96772,743
12,64871,545
Living benefit insurance (whole life type)525,352
1,779,397
514,507
1,725,310
Living benefit whole life insurance (living standard type)132,695
538,877
140,376
561,546
Variable life insurance (term type)
1,160
37,585
6,176
299,791
Family income insurance
301,711
7,704,077
331,719
8,518,053
Living standard insurance
2,361
29,361
2,115
24,842
Level premium plan term life insurance
79,193
1,579,254
75,9601,498,413
Decreasing term life insurance
68,881
1,273,146
68,465
1,254,506
Living benefit insurance (term type)84,107751,117
86,414751,283
Living benefit term life insurance (living standard type)
48,943419,104
75,201
628,764̶̶Living benefit decreasing term life insurance (living standard type)23,627
280,512
Level premium plan term life insurance (non-smoker preferred risk)
17,291
712,186
16,646
682,498
Decreasing term life insurance (non-smoker preferred risk)
21,001
381,322
19,436
328,979
Family income insurance (non-smoker preferred risk)
43,007
1,057,556
40,149933,000
Increasing term life insurance
25
3,802
17
2,735
Long-term level premium plan term life insurance (with disability benefit)
62,8073,079,671
64,9683,199,331
Level premium plan term life insurance with reduced surrender value (disability / nursing care type)721
28,698987
37,903
Increasing term life insurance (reduced surrender value)
4,509
182,966
5,714
231,994
Level premium plan term life insurance with no surrender value
50,609954,664
52,3681,002,448
Level premium plan term life insurance with no surrender value (disability / nursing care type)
700
12,546
1,130
19,720
Income protection insurance to cover three major diseases
24,02818,93325,367
19,738Semi-participating whole life nursing care insurance
132,974
495,199
129,863480,217Whole life nursing care insurance (reduced surrender value)
20,5683,995
21,3893,952
Cancer insurance
208,71027,718209,291
27,344Whole life cancer insurance (08)80,685
7,003
83,305
7,135
̶̶Cancer hospitalization insurance
29,40927,384Comprehensive medical insurance
1,611,376
623,656 1,618,418
609,931
Long-term comprehensive medical insurance
10,294
4,401
9,905
4,279
Semi-participating living standard insurance (joint type)
48
927
40
816
Term riders and others[525,045] 7,864,446[508,347] 7,411,989
Mixed insurance
442,497
1,570,161
465,044
1,661,040
Variable life insurance (limited term type)
97,804327,486
122,514438,533
U.S. dollar-denominated endowment insurance
6,019
25,115
13,10745,588
U.S. dollar-denominated specialty endowment insurance
5,451
32,651
7,329
43,747
Endowment insurance
260,200
981,704
251,130
935,744
Semi-participating endowment insurance
62,555
163,776
59,826
156,895
Specialty endowment insurance
10,46839,428
11,13840,531
Pure endowment insurance
1,231,621
1,888,021 1,226,735
1,864,313
Educational endowment insurance
134,305
145,313
170,181
184,308
Semi-participating educational endowment insurance
1,097,316
1,742,708 1,056,554
1,680,004̶̶̶̶Living benefit rider
Total individual life insurance products
7,112,052 44,313,382 7,316,968 45,892,442
Individual annuity products
Semi-participating individual annuities
80,359350,831
79,373
341,258
Individual variable annuities
105,603597,726
161,507941,325
Others10,64472,252
11,77878,414
Total individual annuity products
196,606
1,020,810
252,658
1,360,998
Group life insurance productsGroup term life insurance
118,661
168,646
117,089
159,095
Group welfare term life insurance
119,043
72,089123,250
68,450Non-participating group welfare term life insurance
13,26740,32230,64988,614
Group credit life insurance
1,407,149
1,569,983 1,337,163
1,603,943
Annuity payment rider
15
4
12
3
Total group life insurance products
1,658,135
1,851,046 1,608,163
1,920,106Group annuity products
New-type corporate annuities
20,85595
20,54489
Defined contribution corporate annuities
56,164
11,47555,425
9,948
Total group annuity products
77,019
11,57075,96910,037̶̶̶̶
Medical protection insurance (group type)̶̶̶̶Reinsurance recipients
Notes: 1. “Term riders and others” includes, in addition to “term riders,” “living benefit whole life policy riders” and “semi-participating lump-sum nursing careriders every five years.”
2. The total number of policies in force for “term riders and others” and “living benefit rider” is excluded from total individual life insurance products.
3. “Semi-participating individual annuities” and “Individual variable annuities” under individual annuity products refer to the policies for which annuity
payments have not yet commenced.
The amounts of policies for which annuity payments have not yet commenced are the funds to be held at the time annuity payments are to commence.
4. “Others” under individual annuity products includes “semi-participating nursing care riders,” “semi-participating fixed individual annuity riders,” and thepolicies for which annuity payments have commenced.
The amounts of policies for which annuity payments have commenced are those of policy reserves.
5. The numbers of policies for group life insurance products, group annuity products, medical protection insurance (group type) and reinsurance recipientsreflect the total numbers of insured parties.

6. The amount of “Annuity payment rider” under group life insurance products is equal to the sum of (a) the funds to be held at the time annuity payments
are to commence for policies for which annuity payments have not yet commenced and (b) the amount of policy reserves for policies for which
payments have commenced.
7. The amount of policies in force for group annuity products is equal to the amount of policy reserves.
8. The amount of medical protection insurance (group type) is equal to the daily benefits for hospitalization.

Sony Financial Holdings Inc. Financial Data Book 2018 41

Sony Life Performance Indicators (Non-consolidated)

New policy amount by productMillions of yen

2017
For the years ended March 31,

Number2018
AmountNumberAmountIndividual life insurance products
390,191 ¥4,659,997
Pure death-protection insurance
400,145 ¥4,545,352
Variable life insurance (whole life type)
40,986
189,654
15,67068,146
U.S. dollar-denominated whole life insurance
72,587578,975
79,919616,764
̶̶
U.S. dollar-denominated single premium whole life insurance (non-notification type)14,35567,544̶̶
U.S. dollar-denominated living benefit whole life insurance (living standard type)
29,783
163,319̶̶̶̶
Modified payment whole life insurance
Limited payment whole life insurance
7,832
43,152
2,955
13,944̶̶̶̶
Family insurance
Interest rate-sensitive whole life insurance
1,459
9,797
(6)
(26)
Whole life insurance (no selection type)
289
440
400
532
̶
̶
Single premium whole life insurance (non-notification type)
1,201
7,012
Living benefit insurance (whole life type)
8,648
31,734
3,035
10,586
Living benefit whole life insurance (living standard type)41,141
171,650
13,641
54,155̶̶
Variable life insurance (term type)
5,101
265,537
Family income insurance
44,0391,362,255
55,7591,802,802̶̶̶̶Living standard insurance
Level premium plan term life insurance
4,883
104,897
3,364
68,408Decreasing term life insurance
4,181
112,575
5,237
143,067
Living benefit insurance (term type)11,27178,4758,10855,315
Living benefit term life insurance (living standard type)
37,722
307,038
29,286236,295
̶̶
Living benefit decreasing term life insurance (living standard type)23,949284,929
Level premium plan term life insurance (non-smoker preferred risk)
1,129
57,078690
36,751̶̶̶̶Decreasing term life insurance (non-smoker preferred risk)̶̶̶̶Family income insurance (non-smoker preferred risk)̶̶̶̶
Increasing term life insuranceLong-term level premium plan term life insurance (with disability benefit)
15,323
826,699
5,643
274,162
Level premium plan term life insurance with reduced surrender value (disability / nursing care type)728
28,820300
10,871
Increasing term life insurance (reduced surrender value)
2,274
102,346
1,631
65,539Level premium plan term life insurance with no surrender value
5,634
125,467
5,906
136,173
Level premium plan term life insurance with no surrender value (disability / nursing care type)717
13,022521
8,549
Income protection insurance to cover three major diseases
3,515
2,966
2,927
2,262
Semi-participating whole life nursing care insurance
2,647
10,0201,139
3,961
Whole life nursing care insurance (reduced surrender value)
3,209
332
1,826
124
Cancer insurance
6,957
698
7,993
775
Whole life cancer insurance (08)
9,221
766
5,746
475
̶
̶
Cancer hospitalization insurance
2,180
1,154
Comprehensive medical insurance
70,372
12,45764,15911,044̶̶̶̶Long-term comprehensive medical insurance̶̶̶̶Semi-participating living standard insurance (joint type)
Term riders and others[19,298]
367,014[12,018]
257,984
Mixed insurance
39,631
171,232
51,932211,940
Variable life insurance (limited term type)
16,872
71,611
29,744
127,437
U.S. dollar-denominated endowment insurance
2,653
10,6797,299
24,638
U.S. dollar-denominated specialty endowment insurance
1,784
14,187
2,124
15,393
Endowment insurance
14,466
61,836
10,441
36,654Semi-participating endowment insurance
1,435
5,450
905
3,569
Specialty endowment insurance
2,421
7,467
1,419
4,246
Pure endowment insurance
39,35548,67336,871
40,218
Educational endowment insurance
39,354
48,67036,871
40,218̶̶Semi-participating educational endowment insurance
1
3
̶
̶
̶
̶
Living benefit rider
Total individual life insurance products
479,131
4,765,257
478,994
4,912,156
Individual annuity products
1,260
4,158
Semi-participating individual annuities
6,723
29,639Individual variable annuities
27,769162,60760,114
371,662̶̶̶̶OthersTotal individual annuity products
34,492
192,247
61,374
375,820
Group life insurance products̶̶̶̶Group term life insuranceGroup welfare term life insurance
2,001
7,075
610
2,725
Non-participating group welfare term life insurance
13,26440,34018,84555,547̶̶̶̶
Group credit life insurance̶̶̶̶Annuity payment rider
Total group life insurance products
15,26547,415
19,45558,272
Group annuity products̶̶̶̶New-type corporate annuities̶̶̶̶
Defined contribution corporate annuities̶̶̶̶
Total group annuity products̶̶̶̶Medical protection insurance (group type)̶̶̶̶Reinsurance recipients
Notes: 1. “Term riders and others” includes, in addition to “term riders,” “living benefit whole life policy riders” and “semi-participating lump-sum nursing careriders every five years.”
2. The total number of policies in force for “Term riders and others” and “Living benefit rider” is excluded from total individual life insurance products.
3. Figures for individual annuity products show the funds to be held at the time annuity payments are to commence.
4. The number of new policies for group life insurance products, group annuity products, medical protection insurance (group type) and reinsurance
recipients reflect the total number of insured parties.
5. The new policy amount for group annuity products is equal to the sum of the initial premium payments.
6. The amount of medical protection insurance (group type) is equal to the daily benefits for hospitalization.

42 Sony Financial Holdings Inc. Financial Data Book 2018

Sony Life Performance Indicators (Non-consolidated)

2- 04 Policy amount in force by insurance function
Millions of yen

As of March 31,

Death protection
Ordinary deathIndividual life insurance
Individual annuities
Group life insuranceGroup annuities
Total, including others
Accidental deathIndividual life insurance
Individual annuities
Group life insuranceGroup annuities
Total, including others
Death protection with other conditions
Individual life insurance
Individual annuities
Group life insuranceGroup annuities
Total, including others
Living protection
Maturity and living benefits
Individual life insurance
Individual annuities
Group life insuranceGroup annuities
Total, including others
Annuities
Individual life insurance
Individual annuities
Group life insuranceGroup annuities
Total, including others
OthersIndividual life insurance
Individual annuities
Group life insuranceGroup annuities
Total, including others
Hospitalization protection
Accidental hospitalization
Individual life insurance
Individual annuities
Group life insuranceGroup annuities
Total, including others
Disease hospitalization
Individual life insurance
Individual annuities
Group life insuranceGroup annuities
Total, including others
Hospitalization with other conditions
Individual life insurance
Individual annuities
Group life insuranceGroup annuities
Total, including others

2017

2018

¥42,425,360[233,025]
1,851,042¥44,028,129[296,045]
1,920,103

̶̶44,276,402

45,948,233[6,156,920][5,940,789]

̶

̶

[310]

[327]

̶

̶

[6,157,230][5,941,116][1,179,842][1,114,008]

̶
̶
̶

̶
̶
̶

[1,179,842][1,114,008]

1,888,021
949,391

1,864,313
1,283,430

̶
̶

̶
̶

2,837,413

3,147,743

̶̶[118,959][1][157,039]
[1]

̶

̶

[118,960][157,041]

̶̶

71,418
4
11,57082,99477,5673
10,03787,608[18,188][18,209]

̶

̶

[17]

[29]

̶

̶

[18,205][18,239][18,188][18,209]

̶
̶
̶

̶
̶
̶

[18,188][18,209][7,067][6,934]

̶
̶
̶

̶
̶
̶

[7,067][6,934]

Notes: 1. Figures in [ ] show additional coverage and rider coverage attached to primary policies.
However, ordinary death protection including “term riders and others” is recorded under primary coverage.
2. Figures for “Maturity and living benefits” of living protection show the funds to be held at the time annuity payments are to commence for individual
annuities and group life insurance (annuity payment rider) for which annuity payments have not yet commenced.
3. Figures for annuities within living protection show annual annuity amounts.
4. Figures for “Others” within living protection show policy reserves for individual annuities (after commencement of annuity payments), group life
insurance (after commencement of annuity payments of annuities payment rider) and group annuities.
5. Figures for hospitalization protection show the daily benefits for hospitalization.
6. Figures for “Total, including others” in “Disease hospitalization” within hospitalization protection show the total of primary coverage and rider coverage.
*Figures for primary coverage, if any, are shown without [ ]. If there is no primary coverage, figures for additional coverage are shown in [ ].

Sony Financial Holdings Inc. Financial Data Book 2018 43

Sony Life Performance Indicators (Non-consolidated)

2- 05 Number of policies in force by insurance function
As of March 31,

2017

2018

Disability protection
Individual life insurance

676,158

754,106

Individual annuities̶̶Group life insurance

11,993

14,685̶̶

688,151

768,791

1,690,123

1,694,041

Individual annuities̶̶Group life insurance̶̶Group annuities̶̶

1,690,123

1,694,041

Group annuities
Total, including others
Surgery protection
Individual life insurance

Total, including others

2- 06 Policy amount in force by type of individual life insurance and individual annuities
Millions of yen

As of March 31,

2017

2018

Pure death-protection insurance
Whole life insurance
Whole life insurance with term rider¥ 9,219,018¥ 9,740,161

̶̶

Term life insurance

18,140,113

19,370,145

Total, including others

40,855,198

42,367,088

Mixed insurance
1,170,595

1,138,227

Endowment insurance with term rider̶̶Term life insurance with living benefits̶̶Total, including others

1,570,161

1,661,040

Pure endowment insurance

1,888,021

1,864,313

1,020,810

1,360,998

Rider to cover accidental death

3,087,697

2,968,417

Injury rider

3,069,222

2,972,372

426

409

Comprehensive protection riders covering hospitalization for family

16

15

Comprehensive protection riders covering lifestyle-related disease

46

44

Medical treatment rider for adults

1,183

1,152

Medical treatment rider for womenEndowment insurance

Annuity products
Individual annuities
Riders for disaster and disease

Comprehensive protection riders covering hospitalization

1,220

1,200

Lifestyle diseases medical treatment rider

14

13

New medical treatment rider for women

4

3

259

268

6,835

6,922

Cancer rider
Rider to cover initial period of hospitalization

Notes: 1. The amount of individual annuities is equal to the sum of (a) the funds to be held at the time annuity payments are to commence for policies for whichannuity payments have not yet commenced and (b) the amount of policy reserves for policies for which payments have commenced.
2. Figures for hospitalization protection show the daily benefits for hospitalization.

44 Sony Financial Holdings Inc. Financial Data Book 2018

Sony Life Performance Indicators (Non-consolidated)

2- 07 Change in policy amount in force
Individual life insurance
Millions of yen, %

2017

2018

For the years ended March 31,

NumberAmountNumberAmountBalance at the beginning of the period

6,880,470¥42,293,769

7,112,052¥44,313,382

New policy amount

479,131

4,765,257

478,994

4,912,156

Increase from renewal

12,61946,02913,69549,030

Increase from reinstatement

18,191

120,415

15,747

108,579

Increase in policy amount

[234]

2,178

[265]

1,752

Increase from conversion

̶

̶

̶

̶

Increase for other reasons

5,553

149,243

6,569

148,633

Decrease from death

11,957

69,785

12,762

71,987

Decrease for maturity

46,733

138,327

58,289162,364

Decrease in policy amount[40,318]

188,878[41,272]

199,976

Decrease from conversion

̶

̶

̶

̶

Surrender amount

182,344

1,578,540

198,985

2,000,829

Lapse amount

33,406

234,703

29,937215,051

Decrease for other reasons

9,472

853,275

10,116990,882

7,112,052

44,313,382

7,316,968

45,892,442[Increase ratio][3.4%][4.8%][2.9%][3.6%]Net increase

231,5822,019,612

204,916

1,579,060[Increase ratio][(29.3%)][6.1%][(11.5%)][(21.8%)]

Balance at the end of the period

Note: Each amount above is the total of pure death-protection insurance, mixed insurance and pure endowment insurance.

Individual annuities
Millions of yen, %

2017

2018

For the years ended March 31,

NumberBalance at the beginning of the period

166,331¥ 856,062

196,606¥1,020,810

New policy amount

34,492

192,247

61,374

375,820

672

3,867

811

4,661

Increase from reinstatement

AmountNumberAmountIncrease from conversion

̶

̶

─

─

Increase for other reasons

1,656

5,009

2,039

6,877

78

362

102

470

Decrease from death
Decrease for maturity

784

459

868

464

Decrease in annuity amount

[506]

4,757

[666]

5,424

Decrease from conversion

̶

̶

─

─

Surrender amount

3,651

19,9794,885

28,212

Lapse amount

1,073

6,162

1,200

6,730

957

4,654

1,117

5,870

Balance at the end of the period

196,606

1,020,810

252,658

1,360,998[Increase ratio][18.2%][19.2%][28.5%][33.3%]Net increase

30,275

164,748

56,052

340,187[Increase ratio][(35.5%)][(36.2%)][85.1%][106.5%]Decrease for other reasons

Note: The above amounts are equal to the sum of (a) the funds to be held at the time annuity payments are to commence for policies for which annuity payments
have not yet commenced and (b) the amount of policy reserves for policies for which payments have commenced.

Sony Financial Holdings Inc. Financial Data Book 2018 45

Sony Life Performance Indicators (Non-consolidated)

Group life insurance

Millions of yen, %

2017

2018

For the years ended March 31,

NumberAmountNumberAmountBalance at the beginning of the period
New policy amount
Increase from renewal
Increase from reinstatement
Increase in policy amount (increase by additional purchase of riders)
Increase in policy amount
Increase for other reasons
Decrease from death
Decrease for maturity
Withdrawals
Decrease in policy amount
Surrender amount
Lapse amount
Decrease for other reasons
Balance at the end of the period[Increase ratio]
Net increase[Increase ratio]

1,743,119
15,265
237,340
12
111,440
[569]
66
8,403
239,727
198,416[732,441]
2,395
12
154
1,658,135[(4.9%)](84,984)[̶]¥1,599,364
47,415234,567120
387,248
342
101
1,426
240,695
93,55180,451
1,748
120
120
1,851,046[15.7%]
251,682[60.1%]

1,658,135
19,455
250,140
10
92,573
[632]
221
8,112
254,524
148,974[820,567]
563
89
109
1,608,163[(3.0%)](49,972)[̶]¥1,851,046
58,272257,00815
221,145
481
136
1,628
277,376
64,036
88,5301,311
309
34,805
1,920,106[3.7%]
69,059[(72.6%)]

Notes: 1. Each amount above is the total of pure death-protection insurance, mixed insurance and pure endowment insurance.
2. The number of policies reflects the total number of insured parties.

Group annuities

Millions of yen, %2017
For the years ended March 31,

Balance at the beginning of the period
New policy amount
Annuity payment
Lump-sum payment
Surrender amount
Balance at the end of the period[Increase ratio]
Net increase[Increase ratio]

Number2018
AmountNumberAmount80,155¥13,093

77,019̶̶̶

¥11,570̶

211,085
1,510

1,664
128

193,475
1,466

1,534
236

̶

̶

̶

̶

77,019[(3.9%)](3,136)[̶]

11,570[(11.6%)](1,522)[̶]75,969[(1.4%)](1,050)[̶]

10,037[(13.2%)](1,532)[̶]Notes: 1. The amounts at the beginning and end of the period are equal to policy reserves at those times.
2. New policy amounts are equal to the sum of initial premium payments.
3. The number of policies reflects the total number of insured parties.

2- 08 Dividends to policyholders
1. Standard dividend yields for semi-participating individual life insurance and individual annuities with policyholder dividends every
five years
For the years ended March 31,

Level-premium
Assumed interest rates of 1.00% or less
Assumed interest rates of more than 1.00%, and 2.00% or less
Assumed interest rates of more than 2.00%
Single premium and others
Assumed interest rates of 0.85% or less
Assumed interest rates of more than 0.85%, and 2.00% or less
Assumed interest rates of more than 2.00%

46 Sony Financial Holdings Inc. Financial Data Book 2018

2017

2018

0.70%
1.55%
1.40%

0.70%
1.55%
1.40%

0.35%
1.20%
1.05%

0.35%
1.20%
1.05%

Sony Life Performance Indicators (Non-consolidated)

2. The following is an example of policyholder dividends for semi-participating whole life nursing care insurance (before nursing careannuity payments commence) using figures for the fiscal year ended March 31, 2018.
<Example> Semi-participating whole life nursing care insurance (before nursing care annuity payments commence)Entered at age 30, male, single premium, 10x death benefit, basic care annuity amount of ¥0.5 million(Sales discontinued in July 2016)
Contract dateNov. 2, 2015
Nov. 2, 2014
Nov. 2, 2013
Nov. 2, 2012
Nov. 2, 2011
Nov. 2, 2010
Nov. 2, 2009
Nov. 2, 2008

Assumed interest rateYears elapsed

1.00%
1.00
1.00
1.50
1.50
1.50
1.50
1.50

3 years
4
5
6
7
8
9
10

Ongoing policy
̶
¥
̶

Yen
Policies to which nursing care applies,
ending at death of policyholder¥22,818
30,62938,5630000038,563̶̶̶̶

0Notes: 1. The “Policies to which nursing care applies, ending at death of policyholder” column shows the amount receivable for nursing care or upon death.
The number of years elapsed is the number through November 2, 2018.
2. The amount of policyholders’ dividends above is the sum of the prorated dividend amount (policy reserve × dividend participation ratio) and interest
through November 2, 2018 (excluding dividends already paid).
Dividend participation ratio = Standard dividend yield – Assumed interest rate

3. Standard dividend yield on group annuities
The standard dividend yield on group annuities is 0.75%, using figures for the fiscal year ended March 31, 2018.
Note: Dividend participation is calculated as follows:
Dividend amount = Policy reserves × Dividend participation ratio
Dividend participation ratio = Standard dividend yield – Assumed interest rate

4. For group term life insurance and other products, a reserve for policyholders’ dividends is accumulated in accordance with eachproduct’s characteristics.

3 Indicators for Insurance Policies
3- 01 Increase ratio of policy amount in force%

For the years ended March 31,

2017

2018

Individual life insurance
Individual annuities
Group life insuranceGroup annuities

4.8%
19.2
15.7
(11.6)

3.6%
33.3
3.7
(13.2)

3- 02 Average policy amount for new policies and policies in force (individual life insurance)
Thousands of yen

For the years ended March 31,

2017

2018

Average policy amount for new policies
Average policy amount for policies in force¥9,945
6,230¥10,255
6,272

Note: The above figures do not include the increase from the conversion for average policy amount for new policies.

3- 03 Ratio of new policy amount (to policy amount in force at the beginning of the fiscal year)
For the years ended March 31,

2017

2018

Individual life insurance
Individual annuities
Group life insurance

11.3%
24.4
3.0

11.1%
39.6
3.1

%

Note: The above figures do not include the increase from the conversion.

3- 04 Lapse and surrender rate (to policy amount in force at the beginning of the fiscal year)
The lapse and surrender rate is expressed as a ratio calculated by dividing the amounts of lapses and surrenders modified for decreases,
increases or reinstatements by the total policy amount in force at the beginning of the fiscal year.
For the years ended March 31,

2017

2018

Individual life insurance
Individual annuities
SubtotalGroup life insurance

4.44%
3.42
4.43
5.12

5.20%
3.76
5.17
4.84

%

Sony Financial Holdings Inc. Financial Data Book 2018 47

Sony Life Performance Indicators (Non-consolidated)

The following lapse and surrender rate is expressed as a ratio calculated by dividing the amounts of lapses and surrenders not modified for
decreases, increases or reinstatements by the total policy amount in force at the beginning of the fiscal year.

%

For the years ended March 31,

2017

2018

Individual life insurance + Individual annuities

4.27%

4.97%

3- 05 Average premium for new policies of individual life insurance (monthly payment contracts)
Yen

For the years ended March 31,

2017

2018

Average premiums for new policies¥13,582¥13,036

Note: The above figures do not include increase from conversion.

3- 06 Mortality rate (individual life insurance: primary coverage)‰

For the years ended March 31,

2017

2018

Based on number of policies
Based on policy amount

1.71‰
1.61

1.77‰
1.59

3- 07 Incidence rates of riders (individual life insurance)‰

2017
For the years ended March 31,

Number ofpolicies

Accidental death protection
Disability protection
Accidental hospitalization protection
Disease hospitalization protection
Lifestyle-related disease hospitalization protection
Disease and accidental surgery protection
Lifestyle-related disease surgery protection

0.070‰
0.100
3.636
38.017
16.26146.97412.184

2018
Policy amount0.075‰
0.053
90.257611.877418.817

Number ofpolicies

0.072‰
0.103
3.910
38.76417.33449.57213.358

Policy amount

0.106‰
0.089
97.414627.210445.3143- 08 Operating expense ratio (to insurance premiums)%

For the years ended March 31,

2017

2018

Operating expense ratio

14.4%

13.2%

4 Indicators Related to Asset Management (General Account)
4- 01 Overview of asset management (general account)
Overview of asset management for the fiscal year ended March 31, 2018(1) Investment Environment
During the fiscal year ended March 31, 2018, the Japanese economy registered gradual growth. Exports increased, thanks to generally
healthy overseas economies, leading to an economic expansion surpassing the Izanagi economic boom. Capital investment also
increased, driven by improvements in corporate earnings and business confidence. Personal consumption remained solid, supported by an
improving employment environment and a growing sentiment for wage hikes. In the meantime, the consumer price index remained at a low
level of near 0%, with a 0.5% increase in core CPI year on year. Real GDP growth, year on year, for the April–June quarter, July–September
quarter, October–December quarter and January–March quarter was 2.1%, 2.0%, 1.0% and negative 0.6%*, respectively.
In the Japanese bond market, long-term interest rates moved within a narrow range. Yields on 10-year JGBs hovered around the targeted 0% level, in an inactive market with tight supply and demand, attributable to the buying operations of the Bank of Japan as part of its
yield-curve control policy. Under these circumstances, the long-term interest rate as of March 31, 2018 was 0.043% (down 0.024 percentage points year on year).
Stock markets rose during the fiscal year. In September 2017, Prime Minister Abe announced a dissolution of the House ofRepresentatives and a snap election, and the Liberal Democratic Party was victorious. The administration’s stability gave confidence to themarkets, which resulted in a rise of stock prices. This was followed by a further rally fueled by a series of announcements of healthy earnings both in Japan and the U.S., sending the Nikkei Stock Average above the ¥24,000 level in January 2018 for the first time in 26 years.
The stock market, however, started to decline in late January following the State of the Union Address by U.S. President Trump, then fluctuated around the ¥21,000 level toward the end of the fiscal year. As of March 31, 2018, the Nikkei Stock Average was ¥21,454.30, up¥2,545.04 from its level on March 31, 2017.
The foreign exchange market moved within a certain range. In the first half of the fiscal year, the market continued to fluctuate within arange from ¥108 to ¥114, under a general trend of risk aversion among investors in view of the geopolitical risks and political uncertainty inboth Japan and abroad. In January, the U.S. dollar depreciated to a level as low as around ¥104 at one point, following a remark by the
U.S. Treasury secretary that was viewed by the market as indicating a tolerance for a weaker dollar, along with a series of departures ofhigh-ranking officials from the administration. The U.S. dollar later bounced back. As of March 31, 2018, the yen was traded at ¥106.24 to
the U.S. dollar, still registering a slight yen appreciation compared with ¥112.19 as of the end of the previous fiscal year.
*Second preliminary estimates

48 Sony Financial Holdings Inc. Financial Data Book 2018

Sony Life Performance Indicators (Non-consolidated)(2) Investment Policy
Sony Life’s investment policy is to understand the characteristics of insurance liabilities, and prioritize investment in the assets that meetsuch characteristics based on ALM (asset liability management, the comprehensive management of assets and liabilities). Specifically,
Sony Life is investing primarily in ultralong-term Japanese bonds with longer remaining maturity, to meet the long-term liabilities of life insurance policies, in an effort to maintain adequate control over the risks associated with interest rate fluctuations involved in such insurance
liabilities. Meanwhile, it is Sony Life’s policy to limit its investment in risky assets including stocks.
(3) Results of Investment
As of March 31, 2018, general account assets totaled ¥8,438.8 billion, up 7.0%, or ¥554.8 billion, from a year earlier. Within generalaccount assets, Japanese bonds totaled ¥7,281.1 billion (accounting for 86.3% of total general account assets), foreign bonds ¥366.5
billion (4.3%), Japanese stocks ¥38.4 billion (0.5%), money held in trust ¥270.5 billion (3.2%), policy loans ¥189.4 billion (2.2%), real estate¥92.3 billion (1.1%) and cash and deposits and call loans ¥40.8 billion (0.5%).

Portfolio of general account assets
Components of general account assets

Millions of yen, %2017
As of March 31,

Cash and deposits, call loans
Securities repurchased under resale agreements
Pledged money for bond borrowing transaction
Monetary claims purchased
Securities under proprietary accounts
Money held in trust
Securities
Japanese bonds
Japanese stocks
Foreign securities
Bonds
Stocks, etc.
Other securities
Loans
Policy loans
Commercial loans
Real estate
Deferred tax assets
Other assets
Reserve for possible loan losses
Total
Of which, foreign-currency-denominated assets

Amount¥2018
Composition

40,896

0.5%

̶
̶
̶
̶

273,877
7,173,927
6,828,743
37,659305,846
274,306
31,5391,678
180,374
180,33934
117,525
5,350
92,328(271)¥7,884,008
309,046

Amount

¥

̶
̶
̶
̶

3.5
91.0
86.6
0.5
3.9
3.5
0.4
0.0
2.3
2.3
0.0
1.5
0.1
1.2
(0.0)
100.0%
3.9

Composition

40,862

0.5%

̶
̶
̶
̶

270,582
7,717,905
7,281,144
38,464
396,910366,571
30,3391,385
189,486
189,460
25
92,346
10,787
117,195(295)¥8,438,872
409,863

̶
̶
̶
̶

3.2
91.5
86.3
0.5
4.7
4.3
0.4
0.0
2.2
2.2
0.0
1.1
0.1
1.4
(0.0)
100.0%
4.9

Note: The amount for real estate is equivalent to the total amount of land, buildings and construction in progress.

Changes in general account assets by categories

Millions of yen

For the years ended March 31,

2017Cash and deposits, call loans
Securities repurchased under resale agreements
Pledged money for bond borrowing transaction
Monetary claims purchased
Securities under proprietary accounts
Money held in trust
Securities
Japanese bonds
Japanese stocks
Foreign securities
Bonds
Stocks, etc.
Other securities
Loans
Policy loans
Commercial loans
Real estate
Deferred tax assets
Other assets
Reserve for possible loan losses
Total
Of which, foreign-currency-denominated assets¥ (11,655)

2018

¥

(33)

̶
̶
̶
̶

─
─
─
─

(7,095)694,591
477,566
4,294
212,705
204,172
8,533
24
8,725
8,690
34
1,708
5,350
7,297
1
¥698,923
217,228(3,295)543,978
452,401
805
91,06492,264(1,199)
(292)
9,112
9,121
(9)
(25,178)
5,437
24,867(23)¥554,864
100,817

Note: The amount for real estate is equivalent to the total amount of land, buildings and construction in progress.

Sony Financial Holdings Inc. Financial Data Book 2018 49

Sony Life Performance Indicators (Non-consolidated)

4- 02 Investment yield by type of asset (general account)%

For the years ended March 31,

2017

2018

Cash and deposits, call loans
Securities repurchased under resale agreements
Pledged money for bond borrowing transaction
Monetary claims purchased
Securities under proprietary accounts
Money held in trust
Securities
Japanese bonds
Japanese stocks
Foreign securities
Loans
Commercial loans
Real estate
Total

0.00%

0.00%

̶

̶

̶

̶

̶

̶

̶

̶

1.94
2.19
1.88
2.80
13.41
3.64
0.02
5.52
1.81%

1.93
1.68
1.81
3.22
(1.21)
3.60
0.23
5.86
1.63%

Notes: 1. The denominator for the investment yield calculation is a daily averaged carrying amount, while the numerator is investment income minus investment
expenses under ordinary profit (loss).
2. Valuation gains for Article 112 of the Insurance Business Act of Japan are not accounted for.

4- 03 Average balance by type of asset (general account)

Millions of yen

For the years ended March 31,

Cash and deposits, call loans
Securities repurchased under resale agreements
Pledged money for bond borrowing transaction
Monetary claims purchased
Securities under proprietary accounts
Money held in trust
Securities
Japanese bonds
Japanese stocks
Foreign securities
Loans
Commercial loans
Real estate
Total
Of which, overseas investment

2017

¥

2018

56,120Interest income and dividends
Gains on securities under proprietary accounts
Income from money held in trust, net
Income from trading securities, net
Gains on sale of securities
Gains on redemption of securities
Gains on derivatives, net
Foreign exchange gains, net
Reversal of reserve for possible loan losses
Other investment income
Total

50 Sony Financial Holdings Inc. Financial Data Book 201853,249

̶

̶

̶

̶

̶

̶

̶

̶

232,199
6,657,127
6,457,611
21,903
176,307
175,07116
111,951¥7,321,974
178,482

232,243
7,272,160
6,923,514
19,444
328,134
183,551
31
103,115¥7,939,778
332,178

4- 04 Investment income (general account)
For the years ended March 31,¥

Millions of yen

2017

2018

¥148,284¥157,727

̶

─

4,493
152
1,308
̶

4,490
2
0
1

̶

─

14,6701
4¥168,915

──138¥162,361

Sony Life Performance Indicators (Non-consolidated)

4- 05 Investment expenses (general account)
Millions of yen

For the years ended March 31,

2017Interest expense
Losses on securities under proprietary accounts
Losses on money held in trust, net
Losses on trading securities, net
Losses on sale of securities
Devaluation losses on securities
Losses on redemption of securities
Losses on derivatives, net
Foreign exchange losses
Provision for reserve for possible loan losses
Write-off of loans
Depreciation of real estate for rent and others
Other investment expenses
Total

¥

2018

44

¥

151

̶

̶

̶

̶

̶

̶

̶

0

̶

̶

53
30,0502
11,403
15,280
23

̶
̶
̶

̶

1,879
4,167
¥36,196

1,770
4,487
¥33,121

4- 06 Interest income and dividends (general account)
Millions of yen

For the years ended March 31,

Interest income from deposits
Interest income and dividends on securities
Interest income from Japanese bonds
Dividends from Japanese stocks
Interest income and dividends on foreign securities
Interest income from loans
Income from real estate for rent
Total, including others

2017

2018

¥
0
130,772
121,103
527
8,886
6,377
10,869¥148,284¥0140,435
125,271566
13,9756,610
10,285¥157,727

4- 07 Gains on sale of securities (general account)
Millions of yen

For the years ended March 31,

2017

Gains on sale of Japanese bonds (including JGBs)
Gains on sale of Japanese stocks, etc.
Gains on sale of foreign securities
Total

¥

2018

20

¥0

̶

─

1,287
¥1,308─¥0

4- 08 Losses on sale of securities (general account)
Millions of yen

For the years ended March 31,

2017

Losses on sale of Japanese bonds (including JGBs)
Losses on sale of Japanese stocks, etc.
Losses on sale of foreign securities
Total

2018

¥̶

¥̶

̶

̶

̶

0
¥0

¥̶

4- 09 Devaluation losses on securities (general account)Not applicableSony Financial Holdings Inc. Financial Data Book 2018 51

Sony Life Performance Indicators (Non-consolidated)

4- 10 Securities (general account)

Millions of yen, %2017
As of March 31,

Japanese government bonds
Japanese local government bonds
Japanese corporate bonds
Of which, public corporation bonds
Japanese stocks
Foreign securities
Bonds
Stocks, etc.
Other securities
Total

2018

AmountComposition

AmountComposition¥6,521,494
454
306,794
248,753
37,659305,846
274,306
31,5391,678¥7,173,927

90.9%
0.0
4.3
3.5
0.5
4.3
3.8
0.4
0.0
100.0%¥6,825,024
451
455,668
387,638
38,464
396,910366,571
30,3391,385¥7,717,905

88.4%
0.0
5.9
5.0
0.5
5.1
4.7
0.4
0.0
100.0%

4- 11 Balance of securities by remaining period (general account)

Millions of yen

2017
As of March 31,

Securities
Japanese government bonds
Japanese local government
bonds
Japanese corporate bonds
Japanese stocks
Foreign securities
Bonds
Stocks, etc.
Other securities
Monetary claims purchased
Certificates of deposit
Others
Total

Within 1 year

More than
1 year to
3 years

More than
3 years to
5 years¥59,094
57,009More than
7 years to
10 years

Over 10 years(including nofixed maturity)

Total¥417,229
417,229¥6,666,680
6,030,193¥7,173,927
6,521,494
454
306,794
37,659305,846
274,306
31,5391,678¥16,624
11,638¥5,493

̶

̶

̶

̶

̶

561

̶

̶

1,627

̶

̶

¥8,805
5,422

More than
5 years to
7 years

̶

̶

̶

̶

̶

4,424

2,592
790

457

̶

̶

4,918
574

̶

̶

454
304,605
37,659293,452
274,306
19,146
313

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

¥16,624¥5,493¥8,805¥59,094¥417,229¥6,666,680¥7,173,927

̶

̶

̶

̶

̶

4,424

4,918

2,592

457

̶

Millions of yen

2018
As of March 31,

Securities
Japanese government bonds
Japanese local government
bonds
Japanese corporate bonds
Japanese stocks
Foreign securities
Bonds
Stocks, etc.
Other securities
Monetary claims purchased
Certificates of deposit
Others
Total

Within 1 year

More than
1 year to
3 years

More than
3 years to
5 years

More than
5 years to
7 years

More than
7 years to
10 years

Over 10 years(including nofixed maturity)

Total¥218,745
213,510¥420,836
417,615¥7,050,288
6,177,266¥7,717,905
6,825,024
451
455,668
38,464
396,910366,571
30,3391,385¥5,876¥3,309̶̶

¥18,847
16,631

̶

̶

̶

̶

̶

̶

̶

̶

4,925

3,220

̶

̶

̶

̶

̶

5,476
400

3,309

310

̶

̶

1,516
699

̶

̶

451
447,522
38,464386,297366,571
19,726
286

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

¥5,876¥3,309¥18,847¥218,745¥420,836¥7,050,288¥7,717,905

̶

̶

̶

̶

̶

5,476

3,309

1,516

310

̶

Note: Items treated as securities based on “financial product accounting standards” (Corporate Accounting Standards, No. 10) are included.

4- 12 Fiscal year-end yields on bonds (general account)%

As of March 31,

2017

2018

Japanese bonds
Foreign bonds

1.87%
2.37

1.82%
2.43

Note: Figures in this table are calculated excluding discount bonds.

52 Sony Financial Holdings Inc. Financial Data Book 2018

Sony Life Performance Indicators (Non-consolidated)

4- 13 Japanese stock holdings by industry (general account)

Millions of yen, %2017
As of March 31,

AmountFisheries, agriculture and forestry
MiningConstruction
Manufacturing industries
Food products
Textiles and clothing
Pulp and paper
Chemicals
Medical products
Oil and coal products
Rubber products
Glass and stone products
Steel
Non-steel metals
Metal products
Machinery
Electric appliances
Transportation vehicles
Precision machinery
OthersElectric and gas utilities
Transportation / information telecommunications
Ground transportation
Water transportation
Air transportation
Warehouses / transportation
Information / telecommunications
Commerce
Wholesalers
Retailers
Financial services / insuranceBanking
Securities and commodity futures trading
Insurance
Other financial services
Real estate
Service companies
Total

¥

2018
Composition

Amount

̶%

̶

̶

̶

̶

1,729

4.6

2,003

5.2

1,047

2.8

833

2.2

̶

̶

̶

̶

̶

̶

̶

̶

1,557
1,484

4.1
3.9

1,563
1,431

4.1
3.7

̶

̶

̶

̶

̶

̶

̶

̶

128

0.3

171

0.4

̶

̶

̶

̶

̶

̶

̶

̶

365
1,610
5,137
2,466
403
612
460

1.0
4.3
13.6
6.5
1.1
1.6
1.2

358
1,662
5,627
2,566
399
585
512

0.9
4.3
14.6
6.7
1.0
1.5
1.3

1,706

4.5

1,821

4.7

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

3,542

9.4

3,533

9.2

212
3,183

0.6
8.5

̶

̶

3,433

8.9

̶

̶

̶

̶

̶

̶

̶

̶

8,522
960

22.6
2.6

7,796
1,093

20.3
2.8

̶

2,528
¥37,659̶

6.7
100.0%¥

Composition

̶

̶

̶

3,068
¥38,464̶%̶

8.0
100.0%

Note: Categories of stock holdings by industry are based on the classification by the Securities Identification Code Committee of Japan.

4- 14 Loans (general account)
As of March 31,

Policy loans
Policyholder loans
Automatic premium loans
Commercial loans[Of which, loans to borrowers located outside Japan]
Corporate loans[Of which, corporate loans̶domestic]
Loans to national, international and government-affiliated organizations
Loans to public entities
Mortgage loans
Consumer loans
Other loans
Total

Millions of yen

2017

2018

¥180,339
163,580
16,75834[ ̶]¥189,460
172,356
17,104
25
[̶]

̶

̶

[ ̶]

[̶]

̶

̶

̶

̶

̶

̶

̶

̶

34
¥180,374

25¥189,486

Sony Financial Holdings Inc. Financial Data Book 2018 53

Sony Life Performance Indicators (Non-consolidated)

4- 15 Tangible fixed assets (general account)
Details of tangible fixed assets

Millions of yen, %2017
Balance atthe beginning of
the period

Increase in
the period

Decrease in
the period

Land
Buildings¥ 83,007
32,777

¥ ̶
3,810

¥ ̶
41
[7]

Leased assets
Construction in progress
Other tangible assets
Total

12
31
427
¥116,2562163
677¥4,653

Of which, investment
and rental properties

112,769357

For the year ended March 31,

Amount ofdepreciation in
the period

Balance atthe end of
the period

¥ ̶
2,103

¥ 83,007
34,442

1,617¥29,036

26,641

̶

4

119
18
¥180
[7]

̶

180
¥2,2881075
906¥118,441

0

1,861

111,265

Amount ofaccumulated
depreciation¥% ofaccumulated
depreciation

̶%
44.3

̶

27,406
12

56.0

̶

̶

64.1
45.1%

47.4
Millions of yen, %2018
For the year ended March 31,

Balance atthe beginning of
the period

Land
Buildings¥ 83,007
34,442

Leased assets
Construction in progress
Other tangible assets
Total

10
75
906
¥118,441

Of which, investment
and rental properties

111,265

Increase in
the period

Decrease in
the period

¥ ̶
731

¥20,747
2,976[0]Amount ofdepreciation in
the period

Balance atthe end of
the period¥¥62,259
30,087

̶

2,109

Amount ofaccumulated
depreciation¥% ofaccumulated
depreciation

̶%
45.9

̶

25,522

0

̶

4

5

17

̶

̶

̶

̶

90
¥822

75
1
¥23,801
[0]

74.6

179
¥2,293816¥93,169

1,640¥27,180

66.8
46.8%

343

23,7681,770

86,06924,39149.2

̶Note: Figures in [ ] in the “Decrease in the period” describe the amount of impairment losses.
Millions of yen

Balance of real estate and number of buildings for rent
As of March 31,

Real estate balance
For corporate use
For rent
Number of buildings for rent

2017

2018

¥117,525
6,357
111,1683¥92,346
6,351
85,9952

4- 16 Overseas investment (general account)
Millions of yen, %Details by assets
2017
As of March 31,

Assets denominated in foreign currency (yen amount not fixed)
Foreign bonds
Foreign stocks
Cash, deposits and others
Subtotal
Assets denominated in foreign currency (yen amount fixed)
Foreign bonds
Cash, deposits and others
Subtotal
Assets denominated in yen
Loans to borrowers located outside Japan
Foreign bonds and others
Subtotal
Total
Overseas investment

Amount2018
Composition¥274,306
12,95021,789309,046
̶
̶
̶

86.4%
4.1
6.9
97.3
̶
̶
̶

AmountComposition¥366,571
13,35229,939409,863
̶
̶
̶

87.7%
3.2
7.2
98.0
̶
̶
̶

̶

̶

̶

̶

8,590
8,590

2.7
2.7

8,322
8,322

2.0
2.0

¥317,636

100.0%¥418,185

100.0%

Note: “Assets denominated in foreign currency (yen amount fixed)” are recorded under assets on the balance sheets at the fixed yen value that was determinedat settlement with foreign exchange forward contracts.

54 Sony Financial Holdings Inc. Financial Data Book 2018

Sony Life Performance Indicators (Non-consolidated)

Overseas investment by region
Millions of yen, %2017
Of which,foreign bonds

Foreign securities

Of which,foreign stocks, etc.

Loans to borrowers
located outside Japan

As of March 31,

AmountComposition

AmountComposition

AmountComposition

AmountComposition

North America¥278,242

91.0%¥274,306

100.0%¥ 3,936

12.5%

¥̶

̶%

̶

3,707

11.8

̶

̶

Europe

3,707

1.2

̶

Oceania

11,1963.7

̶̶

11,196

35.5

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

12,6994.2

̶̶

12,69940.3

̶̶Middle East

̶

̶

̶

̶

̶

̶

̶

̶

Africa

̶

̶

̶

̶

̶

̶

̶

̶

International organizations

̶

̶

̶

̶

̶

̶

̶

̶

100.0%

¥̶

̶%

Asia
Latin America

Total¥305,846

100.0%¥274,306

100.0%¥31,539

Millions of yen, %2018

Foreign securities

Of which,foreign bonds

Of which,foreign stocks, etc.

Loans to borrowers
located outside Japan

As of March 31,

AmountComposition

AmountComposition

AmountComposition

AmountComposition

North America¥370,252

93.3%¥366,571

100.0%¥ 3,681

12.1%

¥̶

̶%

Europe

3,421

0.9

̶

̶

3,421

11.3

̶

̶

Oceania

11,4362.9

̶̶

11,436

37.7

̶

̶

339

0.1

̶

̶

339

1.1

̶

̶

11,4612.9

̶̶

11,46137.8

̶̶

Middle East

̶

̶

̶

̶

̶

̶

̶

̶

Africa

̶

̶

̶

̶

̶

̶

̶

̶

International organizations

̶

̶

̶

̶

̶

̶

̶

̶

100.0%

¥̶

̶%

Asia
Latin America

Total¥396,910

100.0%¥366,571

100.0%¥30,339

Foreign-currency-denominated assets by currency
Millions of yen, %

2017

2018

As of March 31,

AmountComposition

AmountComposition

U.S. dollar¥291,759

94.4%¥388,586

94.8%

Euro

5,853

1.9

9,376

Australian dollar

11,1993.6

11,4382.8

British pound

229

0.1

120

0.0

̶

̶

̶

̶

New Taiwanese dollar
Singapore dollar
Total

4¥309,046

0.0
100.0%

341

2.3

0.1

¥409,863

100.0%For the years ended March 31,

2017

2018

Yield on overseas investments

13.25%(1.19%)

4- 17 Yield on overseas investments (general account)%Note: Overseas investments is the total of assets denominated in foreign currencies and yen.

Sony Financial Holdings Inc. Financial Data Book 2018 55

Sony Life Performance Indicators (Non-consolidated)

5 Status of Insurance Claims Paying Ability
5- 01 Solvency margin ratio
As of March 31,(A) Total solvency margin
Common stock, etc.
Reserve for price fluctuations
Contingency reserve
General reserve for possible loan losses
Net unrealized gains on available-for-sale securities (before tax deductions) and net deferred gains orlosses on hedging instruments (before tax deductions) × 90% (100% if losses)
Net unrealized gains on real estate × 85% (100% if losses)
Amount excluded from deferred tax assets
Unallotted portion of reserve for policyholders’ dividends
Deferred tax assets
Excess amount of policy reserves based on Zillmer method
Subordinated debt
The portion of the excess amount of policy reserves based on Zillmer method
and subordinated debt that is not included in the margin
Deductible items(B) Total risk
(R1 + R8)2 + (R2 + R3 + R7)2 + R4
Insurance risk
R1
Third-sector insurance risk
R8
Assumed interest rate risk
R2
Minimum guarantee risk
R7
Asset management risk
R3
Business management risk
R4
Solvency margin ratio[(A)/{(1/2) × (B)}] × 100

Millions of yen

2017

2018

¥1,176,229
324,181
46,00582,4630¥1,233,854
344,039
47,92989,915
0

159,672
30,847156,01129,830̶̶

442
82,980495,984377
88,661
525,389̶̶

(42,891)(3,457)(43,128)(5,171)

91,57624,1698,541
31,35618,14033,554
2,315

94,03024,337
8,587
32,452
20,137
32,9532,369

2,568.8%

2,624.3%

Notes: 1. The above figures were calculated based on provisions in Articles 86 and 87 of the Ordinance for Enforcement of the Insurance Business Act of Japanand the Ministry of Finance Public Notice No. 50 (1996).
2. Minimum guarantee risk is calculated based on the standardized approach.

Reference: Real net assets
As of March 31,(1) Total amount to be recorded as assets (= + + + – – )Total assets on the balance sheets
Difference between fair value and balance sheet amount of securities
Unrealized gain or loss on tangible fixed assets
Unrealized gain or loss other than tangible fixed assets
Deferred tax assets for net unrealized gains (losses) on available-for-sale securities
Deferred tax assets for net deferred gains (losses) on hedging instruments(2) An amount calculated based on total amount to be recorded as liabilities (= – – – – – )Total liabilities on the balance sheets
Reserve for price fluctuations
Contingency reserve
Part of reserves for future insurance claim payment
Excess of amount equivalent to surrender values ( (a))
Unallocated amount in reserve for policyholders’ dividends ( (b))
Deferred tax liabilities for net unrealized gains (losses) on available-for-sale securities
Deferred tax liabilities for net deferred gains (losses) on hedging instruments
Real net assets (A) (1)–(2) (including unrealized gains (losses) on held-to-maturity securities andpolicy-reserve-matching bonds)(3) Unrealized gains (losses) on held-to-maturity securities and policy-reserve-matching bonds
Real net assets (B) (1)–(2)–(3) (excluding unrealized gains (losses) on held-to-maturity securities andpolicy-reserve-matching bonds)

Billions of yen

2017

2018

¥10,382.4
8,873.6
1,471.5
37.2¥11,222.6
9,567.6
1,617.5
37.4

̶

̶

̶

̶

̶

̶

7,725.4
8,400.0
46.0
82.4
496.4
495.9
0.4
49.6

8,362.8
9,074.9
47.9
89.9
525.7
525.3
0.3
48.4

̶

̶

2,656.9
1,471.5

2,859.7
1,617.5

1,185.3

1,242.2

Note: According to the “Comprehensive Guideline for Insurance Companies” defined by the regulatory authority, when the amount (actual difference between
assets and liabilities (B)) obtained by deducting unrealized gains (losses) on held-to-maturity securities and on policy-reserve-matching bonds which are notaccounted for in the balance sheets as mark-to-market from the actual difference between assets and liabilities (A) is positive, and liquid assets are held,
the regulatory authority will not, in principle, take early corrective actions even if the actual difference between assets and liabilities (A) becomes negative.

56 Sony Financial Holdings Inc. Financial Data Book 2018

Sony Life Performance Indicators (Non-consolidated)

6 Balance of Separate Account Assets
Millions of yen

As of March 31,

2017

2018

Individual variable life insurance and individual variable annuities¥989,605¥1,128,817

̶̶¥989,605¥1,128,817

Group annuities
Total separate accountNote: Assets relating to individual variable life insurance and individual variable annuities are jointly invested at Sony Life.

7 Investment Progress of Separate Account Assets in Individual Variable Life
Insurance and Individual Variable Annuities
7- 01 Results of investment%
2018

As of March 31,

Equity-based
investment

Japanese
growthequity-based
investment

Global core
equity-based
investment

Globalequity-based
investment

15.01

25.02

8.52

6.68

Results of investment

Bond-based
investment

Globalbond-based
investment

Hybridinvestment

Short-termmonetary
market-based
investment

0.60

2.76

7.18

(0.03)

7- 02 Investment progress (for the fiscal year ended March 31, 2018)
Equity-based investment
Benchmark: The Nikkei Stock Average
Investment progress in the period
The Japanese stock market rose, reaching its highest level since the collapse of the bubble economy. The market remained bearish at the
beginning of this period due to a stronger yen, pushing the Nikkei Stock Average down to as low as ¥18,335 in April. However, the U.S.
interest rates were hiked in September, causing the yen to fall against the dollar, triggering another rally in the Japanese stock market inanticipation of an improvement in corporate earnings. The Nikkei Stock Average later registered gains for a record-breaking 16 consecutive
trading sessions, to reach ¥24,124 in January 2018, its highest level since June 1996. However, the run was followed by a sizable drop
shortly afterward, along with a sharp decline in the U.S. stock market at the heightened prospect of another interest rate hike. Thus, theNikkei Stock Average remained largely at the ¥21,000 level after February. Investment results of the fund were positive 15.01% year on
year, while the benchmark return stood at positive 13.46%.
Investment policy for the futureSony Life’s investment activities will remain primarily focused on the Exchange Traded Fund (ETF Nikkei 225), to ensure linkage to the stock
market. Furthermore, Sony Life will aim to achieve medium- to long-term investment results in excess of the Nikkei Stock Average throughinvestments in domestic stocks.
Japanese growth equity-based investment
Benchmark: TOPIX (inclusive of dividends)
Investment progress in the periodSony Life invested in the additional-type equity investment trust “Fidelity Japan Growth Stock Fund VA3 (exclusively for qualified institutional
investors)” (provided by FIL Investments (Japan) Limited). Investment results of the fund were positive 25.02% year on year, while thebenchmark return stood at positive 15.87%.
Investment policy for the futureSony Life will continue investing in the additional-type equity investment trust “Fidelity Japan Growth Stock Fund VA3 (exclusively for
qualified institutional investors).” This investment trust invests mainly in stocks listed on the Japanese stock exchanges (or stocks equivalent
thereto), with the basic strategies involving active investment aiming to achieve long-term growth of the investment trust asset.
Global core equity-based investment
Benchmark: MSCI World Index (inclusive of dividends, in yen terms)
Investment progress in the periodSony Life invested in the additional-type equity investment trust “World Equity Fund VL (exclusively for qualified institutional investors)”(provided by State Street Global Advisors (Japan) Co., Ltd.). Investment results of the fund were positive 8.52% year on year, while thebenchmark return was positive 8.10%.
Investment policy for the futureSony Life will continue investing in the additional-type equity investment trust “World Equity Fund VL (exclusively for qualified institutional
investors).” This investment trust invests mainly in stocks both in Japan and abroad aiming to achieve investment results in excess of thebenchmark MSCI World Index (inclusive of dividends, in yen terms).

Sony Financial Holdings Inc. Financial Data Book 2018 57

Sony Life Performance Indicators (Non-consolidated)

Global equity-based investment
Benchmark: MSCI World Index (inclusive of dividends, in yen terms)
Investment advisor: Morgan Stanley Investment Management (Japan) Co., Ltd.
Investment progress in the period
Stock markets rose in major countries around the world. In the U.S., share prices continued an upward trend on solid economic expansion
along with expected growth in corporate earnings, resulting from the enactment of the Tax Cuts and Jobs Act. The moves drove the major
U.S. stock indices to set new records on a daily basis. However, U.S. share prices tumbled after January, resulting from heightened expectations of an interest rate hike associated with a growing awareness of inflation risk, as well as an increasing concern over trade friction,
developing into a spell of some volatility toward the end of the fiscal year. Investment results of the fund were positive 6.68% year on year,
while the benchmark return was positive 8.10%.
Investment policy for the futureSony Life will continue investing in globally diversified stocks, based on its further analysis of fundamentals, focusing on stocks withsignificant intangible assets (brand value), thereby aiming to achieve investment results in excess of the MSCI World Index (inclusive ofdividends, in yen terms) over the medium to long term.
Bond-based investment
Investment progress in the period
In the Japanese bond market, long-term interest rates remained low while the Bank of Japan (BOJ) continued its negative interest rate
policy. Rates started to rise and kept climbing until the beginning of July, due to strengthening expectations of monetary tightening by theEuropean and U.S. central banks. However, rates started to drop again due to heightened geopolitical risks, falling into a negative range at
one point in September. Afterward, interest rates rose, influenced by rate hikes overseas along with fueled expectations of a normalizationof monetary policy by a reduction of the BOJ’s JGB purchases in January. In February, however, interest rates declined again following a
media report on the prospect that BOJ Governor Kuroda would be reappointed. The news raised expectations that the BOJ would
continue its current monetary easing policy. Investment results of the fund were positive 0.60% year on year.
Investment policy for the futureSony Life will continue to build a portfolio consisting mainly of Japanese yen-denominated bonds, with the aim of ensuring stable mediumto long-term yields. It will work to achieve stable investment results based on gains on sales, as well as ensuring stable interest income fromthe bond portfolio.
Global bond-based investment
Benchmark: The FTSE World Government Bond Index (unhedged, in yen terms)
Investment progress in the period
Bond markets in major countries around the world generally saw rising long-term interest rates, driven by the global economic recovery
along with moves toward normalization at the Federal Reserve Board (FRB) and the European Central Bank (ECB). In the U.S., interest
rates rose generally due to continuous rate increases by the FRB, as well as to the prospect of economic expansion coupled with concerns
over a deterioration of the U.S. fiscal situation caused by the tax reform. In European markets, interest rates were restrained. The ECB
Governing Council decided in October to taper the quantitative easing policy, yet favored the continuation of easing. Later, however, interest
rates rose thanks to a general recovery of the European economies, giving rise to the market expectations of earlier tapering. The
investment results of the fund were positive 2.76% year on year, while the benchmark return stood at positive 2.91%.
Investment policy for the futureSony Life will continue investing in countries, that it believes, based on its interest rate analysis, offer higher real interest rates, as well as
wider differentials between long-term interest rates and short-term interest rates, in addition to a favorable economic environment, aiming
to achieve medium- to long-term investment results in excess of the FTSE World Government Bond Index (unhedged, in yen terms).
Hybrid investment
Investment progress in the period
Hybrid investment funds with a diversified portfolio mainly comprising Japanese bonds, Japanese stocks and the Exchange Traded Fund
(ETF Nikkei 225) registered investment results of positive 7.18% year on year, thanks to the buoyant domestic stock market, along withlower interest rates (and an associated rise in bond prices) in the Japanese bond market.
Investment policy for the futureSony Life will continue to actively allocate assets into the classes deemed, based on its analysis of economic/financial circumstances, tooffer higher expected returns compared to investment risks over the medium to long term, while earning constant interest income from theJapanese yen-denominated bond portfolio.
Short-term monetary market-based investment
Benchmark: Short-term interest rate (unsecured overnight call rate, etc.)
Investment progress in the period
Investment was focused on bonds with shorter remaining maturities as well as short-term financial instruments, and achieved investment
results of negative 0.03% year on year, approximately tracking short-term interest.
Investment policy for the futureSony Life will invest primarily in short-term bonds and short-term financial instruments, to secure yields on investments approximately
tracking short-term interest.

58 Sony Financial Holdings Inc. Financial Data Book 2018

Sony Life Performance Indicators (Non-consolidated)

8 Status of Individual Variable Life Insurance and Individual Variable Annuities
8- 01 Policy amount in force
Individual variable life insurance
Millions of yen

2017

2018

As of March 31,

NumberAmountNumberAmountVariable life insurance (whole life type)845,906¥8,680,668

843,324¥8,384,508

Variable life insurance (limited term type)

97,804421,300

122,514628,240

Variable life insurance (term type)

1,160

38,716

6,176

301,218

944,870¥9,140,684

972,014¥9,313,967

Total
Note: Amounts include the rider portion of variable life insurance.

Individual variable annuities
Millions of yen

2017

2018

As of March 31,

NumberAmountNumberAmountIndividual variable annuities

106,276¥600,331

162,474¥945,144

Note: The amount of individual variable annuities is equal to the sum of (a) the funds to be held at the time annuity payments are to commence for policies forwhich annuity payments have not yet commenced and (b) the amount of policy reserves for policies for which payments have commenced.

8- 02 Portfolio of separate account assets in individual variable life insurance and individual

variable annuities
Millions of yen, %2017
As of March 31,

Amount2018
Composition

Amount¥ 68,020

6.9%

Securities

919,26592.9

1,048,062

92.8

Japanese bonds

148,130

15.0

147,849

13.1

Japanese stocks

49,294

5.0

49,911

4.4

Foreign securities

476,21848.1

562,277

49.8

Bonds

68,315

6.9

77,350

6.9

Stocks, etc.

407,90241.2

484,927

43.0

Other securities

245,62124.8

288,022

25.5

Loans

̶

̶

̶

̶

Others

2,320

0.2

2,434

0.2

Reserve for possible loan losses
Total

̶

¥989,605̶

100.0%¥

78,321

Composition

Cash and deposits, call loans̶¥1,128,817

6.9%

̶

100.0%

Note: Assets relating to individual variable life insurance and individual variable annuities are jointly invested at Sony Life.

Sony Financial Holdings Inc. Financial Data Book 2018 59

Sony Life Performance Indicators (Non-consolidated)

8- 03 Net investment gains (losses) of separate account assets in individual variable life

insurance and individual variable annuities
Millions of yen

For the years ended March 31,

Interest income and dividends
Gains on sale of securities
Gains on redemption of securities
Valuation gains on securities
Foreign exchange gains, net
Gains on derivatives, net
Other investment income
Losses on sale of securities
Losses on redemption of securities
Devaluation losses on securities
Foreign exchange losses, net
Losses on derivatives, net
Other investment expenses
Net investment gains (losses)

2017

2018

¥ 14,498
22,211
21
215,402¥ 16,526
30,392
32
258,562

̶

̶

̶

̶

0
1,001
37
169,842
4,021

0
1,937
83
221,586
719

̶

̶

806
¥ 76,423

253¥ 80,932

Note: Assets relating to individual variable life insurance and individual variable annuities are jointly invested at Sony Life.

8- 04 Fair values of securities relating to separate account assets in individual variable life

insurance and individual variable annuities
Valuation gains (losses) on trading-purpose securities
Millions of yen

2017

2018

As of March 31,

Balance sheet
amountNet valuation
gains (losses)
recordedin income

Trading-purpose securities¥919,265¥45,559

Balance sheet
amountNet valuation
gains (losses)
recordedin income¥1,048,062¥36,976

Note: Assets relating to individual variable life insurance and individual variable annuities are jointly invested at Sony Life.

Fair value information on money held in trust
Not applicable

Fair value information on derivative transactions
Not applicable

9 Number of Agencies
As of March 31,

2017

2018

Number of agencies

1,818

1,811

60 Sony Financial Holdings Inc. Financial Data Book 2018

Sony Life Performance Indicators (Non-consolidated)

10 Number of Employees and Recruits
10- 01 Number of employees
As of March 31,

2017

2018

Office employees[Male][Female]Sales employees[Male][Female]

2,280[1,064][1,216]
5,585[5,447]
[138]

2,420
[1,120][1,300]5,826*[5,673][153]*Number of Lifeplanner sales employees (including those rehired on a fixed-term contract basis after retirement and contracted Lifeplanner sales employees) is
5,142 as of March 31, 2018.

10- 02 Number of recruits
For the years ended March 31,

2017

2018

Office employees

339

366

[Male][81][93][Female]

[258]

[273]

685

617

[Male]

[643]

[585]

[Female]

[42]

[32]

Sales employees

10- 03 Average age and years of service
2017
As of March 31,

Office employees

Average age

2018
Average yearsof service

Average age

Average yearsof service

40.5

9.0

40.7

9.1

[Male][42.2][11.9][42.3][12.1][Female][39.0][6.5][39.3]

[6.6]

44.9

10.0

44.7

10.0

[Male][45.0][10.2][44.9][10.2][Female][39.1][2.3][39.1][2.7]

Sales employees

11 Average Salary
11- 01 Average salary (office employees)
Thousands of yen

For the years ended March 31,

2017

2018

Office employees

¥392

¥383

Note: The average monthly salary is the tax-inclusive standard salary in March for each fiscal year, excluding bonuses and overtime pay.

11- 02 Average compensation (sales employees)
Thousands of yen

For the years ended March 31,

2017

2018

Sales employees

¥653

¥685

Note: The average monthly compensation is the tax-inclusive compensation in March for each fiscal year, excluding bonuses and commuting allowances.

Sony Financial Holdings Inc. Financial Data Book 2018 61

Sony Assurance

Financial Data
Balance Sheets
Sony Assurance Inc.
As of March 31, 2017 and 2018
Millions of yen, %2017
Amount2018
Composition

Amount4.80%¥ 23,778

Composition

Change11.64%¥14,827

71.12

7,795

1.18

(991)

3.03

(332)

8.39

(4,976)

4.64

1,502

100.00%¥17,824

AssetsCash and deposits
Cash

¥

8,951
0

Deposits

8,951

Securities

137,553

0
23,77873.74

145,349

Japanese government bonds

84,45582,422

Japanese local government bonds

29,30834,954

Japanese corporate bonds

21,54424,750Japanese stocks

2,046

3,023

Foreign securities

197

197

Tangible fixed assets

3,399

Buildings

1.82

188

2,407
177

Construction in progress

22

̶

Other tangible fixed assets

3,188

2,229

Intangible fixed assets
Software
Software in progress
Other intangible fixed assets
Other assets

6,529

3.50

6,196

5,833

5,008

144

1,178

550
22,1259
11.86

17,149Accrued premiums

1,270

1,238

Due from reinsurers

36

4

Due from foreign reinsurers

8

0

15,097

10,432

149

149

Accounts receivable
Accrued income
Money on deposits

506

493

Suspense payments

5,056

4,831

Deferred tax assets
Total Assets

62 Sony Financial Holdings Inc. Financial Data Book 2018

7,978¥186,537

4.28
100.00%9,480¥204,362

Sony Assurance Financial Data

Millions of yen, %

2017

2018

AmountComposition

AmountComposition

Change¥144,514

77.47%¥156,612

76.63%¥12,098

5.65

1,676

Liabilities
Underwriting reserves
Reserve for outstanding losses and claims

38,340Underwriting reserves

106,173

Other liabilities

9,877

39,535
117,077
5.29

11,553Due to reinsurers

68

55

Due to foreign reinsurers

5

10

1,746

2,363

Income taxes payable
Deposits received

65

66

Accounts payable

3,021

3,761

Suspense receipt

4,969

5,295

Reserve for employees’ retirement benefits

1,440

0.77

1,667

0.82

227

Reserve for directors’ retirement benefits

36

0.02

̶

̶

(36)

Reserve for employees’ bonuses

1,082

0.58

1,132

0.55

50

Reserve under the special laws

177

0.10

206

0.10

29

157,12884.23

171,173

83.76

14,04420,00010.72

20,000

9.79

̶

3,389

1.82

3,389

1.66

̶

3.85

3,063

Reserve for price fluctuations
Total Liabilities

177

206

Net Assets
Common stock
Capital surplus
Capital reserve

3,389

Retained earnings

4,808

Legal retained earnings
Other retained earnings
Unappropriated retained earnings

3,389
2.58

7,872

258

610

4,549

7,261

4,549

7,261

Total shareholders’ equity

28,19715.12

31,261

15.30

3,063

Net unrealized gains (losses) on available-for-salesecurities, net of taxes

1,211

0.65

1,927

0.94

715

Total valuation and translation adjustments

1,211

0.65

1,927

0.94

715

Total Net Assets

29,40915.77

33,189

16.24

3,779

¥186,537

100.00%¥204,362

100.00%¥17,824

Total Liabilities and Net Assets

Sony Financial Holdings Inc. Financial Data Book 2018 63

Sony Assurance Financial Data

Statements of Income
Sony Assurance Inc.
For the years ended March 31, 2017 and 2018
Millions of yen

Ordinary Revenues

2017

2018

Change¥102,333¥110,092¥ 7,758

Underwriting income

100,330

108,316

7,986

Net premiums written

100,274

108,254

7,979

55

62

7
(226)

Interest and dividends on deposits of premiums
Investment income
Interest income and dividends
Gains on sale of securities
Gains on redemption of securities
Transfer to interest and dividends on deposits of premiums
Other ordinary income
Ordinary Expenses
Underwriting expenses

1,957

1,731

1,327

1,324

(3)

685

470

(215)

0

̶

(0)

(55)

(62)

(7)

45

43

(2)

97,336

103,517

6,181

70,55374,4193,866

Net losses paid

50,181

52,482

2,301

Loss adjustment expenses

7,458

8,067

608

Net commissions and brokerage fees

1,646

1,771

125

Provision for reserve for outstanding losses and claims
Provision for underwriting reserves
Investment expenses
Losses on sale of securities
Operating, general and administrative expenses
Other ordinary expenses
Ordinary Profit
Extraordinary Gains
Extraordinary Losses

798

1,194

396

10,46910,903

434

0

̶

(0)

0

̶

(0)

26,76329,096

2,332

19

2

(17)

4,996

6,574

1,577

̶

̶

̶

47

35

(12)

Losses on sale or disposal of fixed assets

19

5

(13)

Provision for reserve under the special laws

27

29

1

Provision for reserve for price fluctuations

27

29

1

Income Before Income Taxes

4,949

6,539

1,589

Income Taxes̶Current

2,669

3,497

828

Income Taxes̶Deferred(1,235)(1,780)(545)

Total Income Taxes

1,434

1,717

282

4,821

¥ 1,306

Net Income

64 Sony Financial Holdings Inc. Financial Data Book 2018

¥

3,515

¥

Sony Assurance Financial Data

Statements of Changes in Net Assets
Sony Assurance Inc.
For the years ended March 31, 2017 and 2018
Millions of yen

2017
Shareholders’ equity
Capital surplus

Retained earnings (deficits)
Otherretainedearnings(deficits)
Total
retainedearnings(deficits)

Totalshareholders’equityCommonstock

Capitalreserve¥20,000¥3,389¥3,389¥ ̶¥ 2,586¥ 2,586¥25,976

Dividends from surplus

̶

̶

̶

258

(1,552)(1,294)(1,294)

Net income

̶

̶

̶

̶

3,515

3,515

3,515

Net changes of items other thanshareholders’ equity

̶

̶

̶

̶

̶

̶

̶

Balance at the beginning of the periodLegalretainedearnings

Unappropriatedretainedearnings(deficits)

Total
capitalsurplus

Changes during the period

Total changes during the period

̶

̶

̶

258

1,962

2,221

2,221

Balance at the end of the period¥20,000¥3,389¥3,389¥258¥ 4,549¥ 4,808¥28,197
Millions of yen

2017
Valuation and translation
adjustments
Net unrealized
gains (losses)
on available-forsale securities,
net of taxes

Totalvaluation andtranslation
adjustments

Total
net assets¥ 2,328¥ 2,328¥ 28,305

Dividends from surplus̶̶

(1,294)

Net income

̶

̶

3,515

(1,116)(1,116)(1,116)

Balance at the beginning of the period
Changes during the period

Net changes of items other than shareholders’ equity
Total changes during the period(1,116)(1,116)

1,104

Balance at the end of the period¥ 1,211¥ 1,211¥ 29,409(Continued on next page)

Sony Financial Holdings Inc. Financial Data Book 2018 65

Sony Assurance Financial Data

Statements of Changes in Net Assets (Continued)
Millions of yen

2018
Shareholders’ equity
Capital surplus

Retained earnings (deficits)
Otherretainedearnings(deficits)
Total
retainedearnings(deficits)

Totalshareholders’equityCommonstock

Capitalreserve¥20,000¥3,389¥3,389¥258¥ 4,549¥ 4,808¥28,197

Dividends from surplus

̶

̶

̶

351

(2,109)(1,758)(1,758)Net income

̶

̶

̶

̶

4,821

4,821

4,821

Net changes of items other thanshareholders’ equity

Balance at the beginning of the periodLegalretainedearnings

Unappropriatedretainedearnings(deficits)

Total
capitalsurplus

Changes during the period

̶

̶

̶

̶

̶

̶

−

Total changes during the period

̶

̶

̶

351

2,712

3,063

3,063

Balance at the end of the period¥20,000¥3,389¥3,389¥610¥ 7,261¥ 7,872¥31,261
Millions of yen

2018
Valuation and translation
adjustments
Net unrealized
gains (losses)
Total
on available-for- valuation andsale securities,
translation
net of taxes
adjustments

Balance at the beginning of the period

Total
net assets¥1,211¥1,211¥29,409

Dividends from surplus̶̶

(1,758)Net income

̶

̶

4,821

715

715

715

Total changes during the period

715

715

3,779

Balance at the end of the period¥1,927¥1,927¥33,189

Changes during the period

Net changes of items other than shareholders’ equity

66 Sony Financial Holdings Inc. Financial Data Book 2018

Sony Assurance Financial Data

Statements of Cash Flows
Sony Assurance Inc.
For the years ended March 31, 2017 and 2018
Millions of yen

2017

2018

ChangeIncome before income taxes¥ 4,949¥ 6,539¥ 1,589

Depreciation and amortization

3,493

3,927

434

798

1,194

396
434

Cash flows from operating activities

Increase (decrease) in reserve for outstanding losses and claims
Increase (decrease) in underwriting reserves

10,46910,903

Increase (decrease) in reserve for employees’ retirement benefits

158

227

69

Increase (decrease) in reserve for directors’ retirement benefits

(7)

(36)

(29)

125

50

(75)
1

Increase (decrease) in reserve for employees’ bonuses
Increase (decrease) in reserve for price fluctuations

27

29

Interest income and dividends(1,327)(1,324)

3(Gains) losses on securities

(685)

(470)

215

(Gains) losses on tangible fixed assets

0

5

5

(Gains) losses on intangible fixed assets

19

̶

(19)

(1,764)

4,987

6,752

(Increase) decrease in other assets(excluding those related to investing and financing activities)
Increase (decrease) in other liabilities(excluding those related to investing and financing activities)

1,369

956

(412)

Subtotal

17,62626,9909,364Interest and dividends received

1,642

1,654

12

Income taxes (paid) refund(2,376)(2,909)(533)

Net cash provided by (used in) operating activities

16,89225,735

8,843

Purchases of securities(24,161)(33,558)(9,396)

Proceeds from sale and redemption of securities

11,63026,875

15,244

Total of net cash provided by (used in) investment transactions(12,530)(6,682)

5,848[Total of net cash provided by (used in) operating activities and investment transactions][4,361][19,052][14,691]

(460)

(148)

312

Others, net(3,092)(2,318)773

Net cash provided by (used in) investing activities(16,084)(9,150)

6,933

Cash dividends paid

(1,294)(1,758)(464)

Net cash provided by (used in) financing activities(1,294)(1,758)

(464)

̶

̶

̶

Net increase (decrease) in cash and cash equivalents(486)

14,827

15,313

Cash and cash equivalents at the beginning of the period

9,437

8,951

(486)

¥ 8,951¥ 23,778¥ 14,827

Cash flows from investing activities

Purchases of tangible fixed assets

Cash flows from financing activities

Effect of exchange rate changes on cash and cash equivalents

Cash and cash equivalents at the end of the periodSony Financial Holdings Inc. Financial Data Book 2018 67

Sony Assurance Financial Data

Notes
Sony Assurance Inc.
As of March 31, for the year ended March 31,

1. For the fiscal year ended March 31, 2017, the total amount of deferred tax assets was ¥8,449 million, while the total amount of deferred
tax liabilities was ¥471 million. The breakdown of major factors giving rise to the deferred tax assets is underwriting reserves of ¥4,782
million and reserve for outstanding losses and claims of ¥1,898 million.
For the fiscal year ended March 31, 2018, the total amount of deferred tax assets was ¥10,230 million, while the total amount ofdeferred tax liabilities was ¥749 million. The breakdown of major factors giving rise to the deferred tax assets is underwriting reserves of¥5,767 million and reserve for outstanding losses and claims of ¥1,954 million.
2. Information regarding retirement benefits is as follows:(1) Retirement benefit obligations and their breakdown
Millions of yen

Retirement benefit obligations
Unrecognized net actuarial gains (losses)
Reserve for employees’ retirement benefits

2017

2018

¥(1,551)
111¥(1,440)¥(1,784)
116¥(1,667)

2017

2018

0.4%
10 years

0.3%
10 years(2) The main basis for calculating retirement benefit obligations, etc.
Method for attributing projected retirement benefits: Benefit formula basis
Discount rate
Number of years for amortizing net actuarial gains or losses

3. The breakdown of retirement benefit expenses recorded as loss adjustment expenses and operating, general and administrative
expenses is as follows:
Millions of yen

Service cost
Interest cost
Recognized actual gains (losses)
Recognized past service cost
Retirement benefit expenses
Contribution to defined contribution pension plan
Total

68 Sony Financial Holdings Inc. Financial Data Book 2018

2017

2018

¥199
1
19
—
220
176
¥397

¥201
6
16
67
291
185
¥477

Sony Assurance Financial Data

1 Loans by Borrower Category

Millions of yen

As of March 31,

2017

2018

Bankrupt and quasi-bankrupt loans¥̶¥̶

Doubtful loans̶̶Sub-standard loans̶̶Normal loans

̶

̶

Total

¥̶

¥̶

Notes: 1. Bankrupt and quasi-bankrupt loans Bankrupt and quasi-bankrupt loans are loans to borrowers who are subject to bankruptcy, corporate
reorganization or rehabilitation or other similar proceedings and other borrowers in serious financial difficulties.
2. Doubtful loans Doubtful loans are loans to borrowers (other than bankrupt and quasi-bankrupt borrowers) with deteriorated financial condition andresults of operations from which it is unlikely that the principal and interest on the loans will be recovered.
3. Sub-standard loans Sub-standard loans are loans on which principal and/or interest are past due for three months or more and restructured loans,
excluding loans described in notes 1. and 2. above. Restructured loans are loans on which terms and conditions have been amended in favor of theborrowers (e.g., reduction of the original interest rate, deferral of interest payments, extension of principal repayments or debt waiver) in order tosupport the borrowers’ recovery from financial difficulties.
4. Normal loans Normal loans are loans that do not fall under the classifications for 1. to 3. above and where the borrowers have no financial or
business performance problems.

2 Risk-monitored Loans

Millions of yen

As of March 31,

2017

2018

Bankrupt loans¥̶¥̶

Non-accrual delinquent loans̶̶

Past due loans (3 months or more)̶̶

Restructured loans

̶

̶

Total

¥̶

¥̶

Notes: 1. Bankrupt loans Bankrupt loans are non-accrual loans which meet the event defined under Article 96-1-3, i through v (allowed limits for uncollectible
accounts) or 96-1-4 of the Order for Enforcement of the Corporation Tax Act (Enforcement Order 97 (1965)). Non-accrual loans are loans (excluding
the portion of the loans that were written off), on which accrued interest receivable is not recognized because payments of principal or interest are
overdue for considerable periods and therefore are regarded as improbable.
2. Non-accrual delinquent loans Non-accrual delinquent loans are non-accrual loans other than bankrupt loans and loans on which interest payments
are deferred in order to support the borrowers’ recovery from financial difficulties.
3. Past due loans (3 months or more) Past due loans are loans on which the payments of principals or interests are past the due date for three months
or more, and which are not classified to bankrupt loans or non-accrual delinquent loans.
4. Restructured loans Restructured loans are loans on which terms and conditions have been amended in favor of the borrowers (e.g., reduction of theoriginal interest rate, deferral of interest payments, extension of principal repayments or debt waiver) in order to support the borrowers’ recovery fromfinancial difficulties, excluding loans described in notes 1. to 3. above.

3 Assets and Liabilities
3- 01 Securities
Millions of yen, %2017
As of March 31,

2018

AmountComposition

AmountComposition¥ 84,455

61.4%¥ 82,422

56.7%

Japanese local government bonds

29,30821.3

34,95424.0

Japanese corporate bonds

21,54415.7

24,75017.0

Japanese stocks

2,046

1.5

3,023

2.1

Foreign securities

197

0.1

197

0.1

Japanese government bonds

Total¥137,553

100.0%¥145,349

100.0%

Sony Financial Holdings Inc. Financial Data Book 2018 69

Sony Assurance Financial Data

3- 02 Yield on securities (yield on investments)%

For the years ended March 31,

2017

2018

Japanese bonds

1.01%

0.93%

Japanese stocks

1.08

0.96

Foreign securities

2.82

2.68

Other securities

0.01

̶

Total

1.01%

0.94%

Yield on investments

1.53

1.27

Reference: Yield on investments (fair value basis)

0.34

1.95

3- 03 Balance of securities by remaining period

Millions of yen

2017

Within 1 year

More than
1 year to
3 years

More than
3 years to
5 years¥ 5,720¥18,157¥ 5,224

Japanese local government bonds

8,760

11,575

5,587Japanese corporate bonds

3,716

10,653

5,267

As of March 31,

Japanese government bonds

Over 10 years(including nofixed maturity)

Total

72

¥55,182¥ 84,455

1,523

854

1,007

29,308

301

100

1,505

21,544More than
5 years to
7 years¥

98

More than
7 years to
10 years¥

Japanese stocks

̶

̶

̶

̶

̶

2,046

2,046

Foreign securities

̶

101

̶

96

̶

̶

197

Other securities

̶

̶

̶

̶

̶

̶

̶

¥18,196¥40,487¥16,079¥2,018¥1,028¥59,741¥137,553

Total

Millions of yen

2018

As of March 31,

Within 1 year

More than
1 year to
3 years

More than
3 years to
5 years

Japanese government bonds

More than
5 years to
7 years

More than
7 years to
10 years

Over 10 years(including nofixed maturity)

Total¥ 82,422¥ 9,512¥13,352

¥

98

¥ ̶

¥ 698

¥58,760

Japanese local government bonds

7,372

15,252

10,711

200

710

707

34,954

Japanese corporate bonds

5,332

11,734

5,876

201

100

1,505

24,750Japanese stocks

̶

̶

̶

̶

̶

3,023

3,023

Foreign securities

̶

100

96

̶

̶

̶

197

Other securities

̶

̶

̶

̶

̶

̶

̶

¥22,218¥40,440¥16,782¥401¥1,510¥63,996¥145,349

Total

3- 04 Policy reserves and others
Reserve for outstanding losses and claims

Millions of yen

As of March 31,

2017

Fire

¥

Marine

2018

1
10

¥

5
(1)

Personal accident

680

694

Voluntary automobile

37,17638,363

471

471

̶

̶

¥38,340¥39,535

Compulsory automobile liability
OthersTotal

70 Sony Financial Holdings Inc. Financial Data Book 2018

Sony Assurance Financial Data

Underwriting reserves

Millions of yen

As of March 31,

2017

Fire

¥

Marine

2018

439

¥

435

2

0

Personal accident

47,861

52,329Voluntary automobile

55,84862,074Compulsory automobile liability

2,023

2,237

̶

̶

¥106,173¥117,077

Others
Total

Breakdown of the balance of underwriting reserves
Millions of yen

2017

As of March 31,

Unearnedpremium
reserve

Catastrophe
reserve

Fire

¥

¥

390

Contingency
reserve

0

¥̶

¥̶

2

̶

̶

̶

2

Personal accident

44,713

3,045

100

1

̶

47,861

Voluntary automobile

41,393

14,447

̶

6

̶

55,848Compulsory automobile liability

2,023

̶

̶

̶

̶

2,023

̶

̶

̶

̶

̶

̶

¥88,521¥17,542

¥101

¥8

¥̶

¥106,173

Others
Total

¥

Total

0

Marine47

Reserve forpolicyholders’dividends

Refundreserve¥

439

Millions of yen

2018

As of March 31,

Unearnedpremium
reserve

Fire

¥

384

MarineCatastrophe
reserve¥

Contingency
reserve

50¥

Reserve forpolicyholders’dividends

Refundreserve

0

¥̶

¥̶

Total

¥

435

̶

0

̶

̶

̶

0

Personal accident

48,889

3,330

109

̶

̶

52,329Voluntary automobile

44,47817,589̶6

̶

62,074Compulsory automobile liability

2,237

̶

̶

̶

̶

2,237

Others
Total

̶

̶

̶

̶

̶

̶

¥95,990¥20,970

¥109

¥6

¥̶

¥117,077

Note: The underwriting reserves for earthquake insurance and compulsory automobile liability insurance are included in the unearned premium reserve.

3- 05 Calculation method for underwriting reserves
For the years ended March 31,

2017

2018

Calculation method
Policies subject to the standard underwriting reserves
Policies not subject to the standard underwriting reserves
Rate of reserve fundingStandard underwriting reserves

Standard underwriting reserves̶̶

100.0%

100.0%

Notes: 1. The calculation method and the rate of reserve funding are not applied for policies as pertaining to the classes of insurance listed in Article 3
Paragraph 5 Item 1 of the Insurance Business Act of Japan and whose principal insurance is pertaining to such classes of insurance.
2. The calculation method is described for insurance due reserves and refund reserve for deposits of premiums because the concept of a calculation
method does not exist for other items.
3. Rate of reserve funding = (Unearned premium reserves actually accumulated + Refund reserves) / (Sum of (1) – (3) below)(1) Insurance due reserves and refund reserves calculated by the method stipulated in the Ministry of Finance Public Notice No. 48 of 1996 for policies
subject to the standard underwriting reserves (limited to policies as defined in Article 68 Paragraph 2 of the Order for Enforcement of the Insurance
Business Act of Japan).
(2) Insurance due reserves for policies of which terms started after July 1, 2001, which are calculated by the net level premium reserve method forpolicies not subject to the standard underwriting reserves, refund reserves for policies of which terms started after July 1, 2001 and for policies otherthan policies as defined in Article 68 Paragraph 2 of the Order for Enforcement of the Insurance Business Act of Japan, and unearned premium
reserves and refund reserves for policies of which terms started before July 1, 2001.
(3) Unearned premiums for policies of which terms started after July 1, 2001.

Sony Financial Holdings Inc. Financial Data Book 2018 71

Sony Assurance Financial Data

3- 06 Other reserves

Millions of yen
2016

2017
For the year ended March 31,

As ofMarch 31,

Decrease
Increase

Specific

Other

As of
March 31,

Reserve for possible loan losses
General reserve for possible loan losses¥ ̶Specific reserve for possible loan losses
Reserve for possible loan losses for specific foreign countries
Total

¥

̶

¥ ̶

¥̶

¥

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

Reserve for directors’ retirement benefits

44

6

14

̶

36

Reserve for employees’ bonuses

956

1,082

956

̶

1,082

Reserve for price fluctuations

149

27

̶

̶

177

̶

Millions of yen

2017

2018
For the year ended March 31,
Decrease

As ofMarch 31,

Increase

Specific

¥

¥

¥

Other

As of
March 31,

Reserve for possible loan losses
General reserve for possible loan losses̶¥̶Specific reserve for possible loan losses

̶

̶

̶

̶

̶

Reserve for possible loan losses for specific foreign countries

̶

̶

̶

̶

̶
̶

̶

Total

¥

̶

̶

̶

̶

̶

36

̶

36

̶

̶

1,082

1,132

1,082

̶

1,132

177

29

̶

̶

206

Reserve for directors’ retirement benefits
Reserve for employees’ bonuses̶

Reserve for price fluctuations

4 Profit and Loss
4- 01 Gains (losses) on sale of securities and devaluation losses on securities
Millions of yen

2017
For the years ended March 31,

Gains onsales

Japanese government bonds, etc.

Devaluation
lossesGains onsales

Losses on
sales

Devaluation
losses

6

¥0

¥̶

¥ 14

¥̶

¥̶

Japanese stocks

679

̶

̶

455

̶

̶

Foreign securities

̶

̶

̶

−

̶

̶

¥0

¥̶

¥470

¥̶

¥̶

Total

4- 02 Gains (losses) on trading securities
Not applicable

72 Sony Financial Holdings Inc. Financial Data Book 2018

¥

2018

Losses on
sales

¥685

Sony Assurance Financial Data

4- 03 Gains (losses) on sale or disposal of fixed assets
Millions of yen

2017
For the years ended March 31,

2018

Gains

LossesLand and buildings¥̶

Other tangible fixed assets
Intangible fixed assets
Total

Gains

Losses

¥ 0

¥̶

¥ 5

̶

0

̶

0

̶

19

̶

̶

¥̶

¥19

¥̶

¥ 5

4- 04 Operating expenses (including loss adjustment expenses)
Millions of yen

For the years ended March 31,

2017

2018

Personnel expenses¥ 9,875¥10,176

Non-personnel expenses

23,50426,072

841

914

0

0

Taxes
Contribution to fire prevention and traffic accident prevention
Contribution to Non-life Insurance Policyholders Protection Corporation of Japan

̶

̶

1,646

1,771

¥35,867¥38,934

Net commissions and brokerage fees
Total

Note: The total of operating expenses above is the total amount of “loss adjustment expenses,” “operating, general and administrative expenses” and “netcommissions and brokerage fees” in the statements of income.

4- 05 Depreciation and amortization; depreciation of real estate for rent and others
Millions of yen

2017
For the year ended March 31,

Buildings

Acquisition cost¥597

For corporate use

Depreciation
expenses

¥

27

597

For rent

Accumulated
depreciation¥

27

Balance at theend of the period

408

¥ 188

408

188

̶

̶

̶

̶

Other tangible fixed assets

5,810

1,058

2,622

3,188

Software

20,2601,856

14,426

5,833

Other intangible fixed assets

1,113

550

562

550

¥27,781¥3,493¥18,020¥9,761

Total

Millions of yen

2018
For the year ended March 31,

Buildings

Acquisition cost

431

¥ 177

431

177

̶

̶

̶

̶

Other tangible fixed assets

5,936

1,088

3,706

2,229

Software20,937

1,502

15,9295,008

Other intangible fixed assets

1,879

1,307

1,869

9

¥29,362¥3,927¥21,936¥7,425

Total

¥

29

¥

Balance at theend of the period29

For rent

609

Accumulated
depreciation609

For corporate use¥

Depreciation
expenses

Sony Financial Holdings Inc. Financial Data Book 2018 73

Sony Assurance Financial Data

5 Fair Value Information, etc.
5- 01 Securities
Trading-purpose securities
Not applicable

Held-to-maturity securities
Millions of yen

2017

2018

Balance sheet
amountFair value

Difference

Balance sheet
amountFair value

Difference

Japanese bonds¥71,765¥87,810¥16,045¥74,383¥91,556¥17,172

Foreign securities

197

215

18

197

211

13

71,962

88,026

16,06374,581

91,767

17,185

Japanese bonds

3,873

3,424

(449)

4,496

4,173

(323)

Foreign securities

̶

̶

̶

̶

̶

̶

3,873

3,424

(449)

4,496

4,173

(323)

¥75,836¥91,451¥15,614¥79,078¥95,940¥16,862

As of March 31,

Fair value is higher than balance sheet amount

Subtotal
Fair value is lower than balance sheet amount

Subtotal
Total

Stock of subsidiaries and affiliated companies
Not applicable

Available-for-sale securities
Millions of yen

2017
As of March 31,

2018

Balance sheet
amountAcquisition
cost

Difference

Balance sheet
amountAcquisition
cost

Difference

Balance sheet amount is higher thanacquisition cost
Japanese bonds¥45,082¥44,900¥ 181¥40,245¥40,151

Japanese stocks

2,046

529

1,517

3,023

412

¥

2,610

93

Subtotal

47,12945,4301,698

43,26840,564

2,704

14,587

14,603(15)

23,002

23,029(27)

Balance sheet amount is lower thanacquisition cost
Japanese bonds
Japanese stocks
Subtotal
Total

̶

̶

̶

̶

̶

̶

14,587

14,603(15)

23,002

23,029(27)¥61,716¥60,033¥1,683¥66,270¥63,593¥2,677Available-for-sale securities sold during the year
Millions of yen

2017

2018

For the years ended March 31,

Amountof salesTotal gains
on salesJapanese bonds¥1,885¥

Japanese stocks
Total

6

Total losses
on salesAmountof salesTotal gains
on salesTotal losses
on sales¥0¥4,622

¥ 14

¥̶

937

679

̶

573

455

̶

¥2,823¥685¥0¥5,195¥470¥̶

74 Sony Financial Holdings Inc. Financial Data Book 2018

Sony Assurance

Performance Indicators
1 Principal Indicators of Operating Performance
Millions of yen

For the years ended March 31,

2014

2015

2016

2017

2018

Net premiums written¥ 88,600¥ 91,712¥ 95,549¥100,274¥108,254

Year-on-year change

6.0%

3.5%

4.2%

4.9%

8.0%

Underwriting profit
Year-on-year change
Ordinary revenues
Year-on-year change
Ordinary profit
Year-on-year change
Net income
Year-on-year change

1,874

3,044

3,470

3,070

4,863

34.0%

62.4%

14.0%

(11.5%)

58.4%

89,86493,022

96,905102,333

110,092

6.1%

3.5%

4.2%

5.6%

7.6%

3,003

4,209

4,680

4,996

6,574

26.7%

40.1%

11.2%

6.8%

31.6%

1,664

2,233

2,586

3,515

4,821

14.4%

34.2%

15.8%

35.9%

37.2%

Net loss ratio

59.3%

57.6%

57.8%

57.5%

55.9%

Net expense ratio

25.6%

26.7%

27.1%

28.3%

28.5%

Interest income and dividends

1,209

1,268

1,313

1,327

1,324

Year-on-year change
Yield on investments (income basis)
Yield on investments (realized basis)
Securities
Loans

17.7%

4.9%

3.6%

1.0%

(0.2%)

1.17%

1.10%

1.03%

0.95%

0.85%

1.19%

1.11%

1.03%

1.44%

1.15%

¥101,245¥111,809¥127,256¥137,553¥145,349

̶

̶

̶

̶

̶

117,077

Underwriting reserves

78,04386,50895,704

106,173

Common stock

20,00020,00020,00020,00020,000400,000

400,000

400,000

400,000

400,000

Number of shares issued and outstanding (shares)
Total net assets

21,41824,741

28,30529,40933,189Total assets

142,714

157,919

172,323

186,537

204,362

Assets accounted for as deposit premium accounts
Capital adequacy ratio
Dividend payout ratio
Non-consolidated solvency margin ratio
Number of employees

̶

̶

̶

̶

̶

15.0%

15.7%

16.4%

15.8%

16.2%

̶

̶

50.0%

50.0%

50.0%

527.6%

629.6%

693.5%

730.8%

782.1%

1,090

1,119

1,178

1,203

1,235

Sony Financial Holdings Inc. Financial Data Book 2018 75

Sony Assurance Performance Indicators

2 Underwriting Performance2- 01 Direct premiums written
Millions of yen, %2017
For the years ended March 31,

AmountFire¥

Marine2018

Composition

YoY change

245

0.2%

(29.6%)

̶̶̶

AmountComposition

YoY change

206

0.2%

(15.9%)

̶

̶

̶

¥

Personal accident

8,767

8.9

1.0

8,679

8.1

(1.0)

Voluntary automobile

90,001

90.9

5.5

98,12391.7

9.0

Compulsory automobile liability

̶

̶

̶

̶

̶

̶

Others

̶

̶

̶

̶

̶

̶

Total

¥99,014

Direct premiums written per employee¥

100.0%

82

5.0%¥107,008

2.8%¥

100.0%

86

8.1%
5.3%

Notes: 1. Direct premiums written = Gross premiums written – (Surrender benefits of direct policies + Other returned direct premiums)
2. Direct premiums written per employee = Direct premiums written / Number of employees
3. Sony Assurance has no deposits of premiums.

2- 02 Net premiums written
Millions of yen, %2017
For the years ended March 31,

Fire

Amount¥Composition

2018
YoY change

AmountYoY change(34.4%)

24

0.0%(43.9%)

16

0.0%

(2)

(0.0)

(105.5)00.0̶Personal accident

9,044

9.0

1.0

8,887

8.2

(1.7)

Voluntary automobile

89,74689.5

5.4

97,88090.4

9.1

Compulsory automobile liability

1,460

1.5

5.5

1,469

1.4

0.6

̶

̶

̶

̶

̶

̶

100.0%

4.9%

100.0%

8.0%

MarineOthersTotal¥100,274¥

Composition¥108,254

Note: Net premiums written = Direct premiums written + Assumed net premiums written – Ceded net premiums written

2- 03 Net losses paid, net loss ratio
Millions of yen, %2017
For the years ended March 31,

AmountFire¥

Marine2018

Composition

Net loss ratio

6

0.0%

117.5%

(6)

(0.0)

̶

Amount¥Composition

Net loss ratio

6

0.0%

247.1%

2

0.0

308.8

Personal accident

2,615

5.2

32.0

2,692

5.1

33.7

Voluntary automobile

46,263

92.2

59.5

48,464

92.3

57.4

Compulsory automobile liability

1,301

2.6

89.1

1,316

2.5

89.6

̶

̶

̶

̶

̶

̶

100.0%

57.5%

100.0%

55.9%

OthersTotal¥50,181

Notes: 1. Net losses paid = Direct net losses paid + Assumed net losses paid – Reinsurance losses recovered
2. Net loss ratio = (Net losses paid + Loss adjustment expenses) / Net premiums written

76 Sony Financial Holdings Inc. Financial Data Book 2018

¥52,482

Sony Assurance Performance Indicators

2- 04 Expenses and net expense ratio related to underwriting

Millions of yen

For the years ended March 31,

2017

2018

Expenses related to underwriting¥28,352¥30,803

Operating, general and administrative expenses related to underwriting

26,70629,032

Net commissions and brokerage fees

1,646

1,771

28.3%

28.5%

Net expense ratio
Note: Net expense ratio = Expenses related to underwriting / Net premiums written

2- 05 Underwriting profit

Millions of yen

For the years ended March 31,

2017

2018

Underwriting income¥100,330¥108,316

Underwriting expenses

70,55374,419Operating, general and administrative expenses

26,70629,032Other income (expenses)(0)

Underwriting profit

¥

3,070

(1)
¥

4,863

Notes: 1. Operating, general and administrative expenses is the amount related to underwriting in “Operating, general and administrative expenses” in thestatements of income.
2. Other income (expenses) is the amount equivalent to the corporate income taxes for compulsory automobile liability insurance, etc.

Underwriting profit by type of policy

Millions of yen

For the years ended March 31,

2017

2018

Fire

¥ (326)¥ (314)

Marine31

9Personal accident(1,013)(1,595)

Voluntary automobile

4,378

6,764

Compulsory automobile liability̶̶

Others̶̶¥ 3,070¥ 4,863Total

2- 06 Net loss ratio, net expense ratio and combined ratio
%

2017

2018

For the years ended March 31,

Net lossratio

Net expense
ratio

Combinedratio

Net lossratio

Net expense
ratio

Combined
ratio

Fire

117.5%

1,232.7%

1,350.2%

247.1%

1,785.3%

2,032.3%

̶

̶

̶

308.8

267.4

576.2

Personal accident

32.0

28.6

60.7

33.7

33.8

67.5

Voluntary automobile

59.5

28.4

87.9

57.4

28.1

85.5

Compulsory automobile liability

89.6

Marine

89.1

̶

89.1

89.6

̶

Others

̶

̶

̶

̶

̶

̶

Total

57.5%

28.3%

85.8%

55.9%

28.5%

84.4%

Note: Combined ratio = Net loss ratio + Net expense ratio

Sony Financial Holdings Inc. Financial Data Book 2018 77

Sony Assurance Performance Indicators

3 Asset Management
3- 01 Asset management policy
The goal is to assure stable medium- to long-term returns taking into consideration the market environment and asset management risk, aswell as current level and future fluctuations of interest rates.
Investments are primarily made with Japanese yen-denominated bonds. Investments are also made based upon the consideration ofdiversification of timing of investments as well as the timing of re-investments. Thus, the investment portfolio is built in such a way thatstable returns are assured.

3- 02 Overview of asset management
Millions of yen, %
2018

2017
As of March 31,

Cash and deposits

Amount¥8,951

Composition

4.8%

Amount¥ 23,778

Composition

11.6%

Call loans

̶

̶

̶

̶

Bond trading with repurchase agreement

̶

̶

̶

̶

Bonds paid for securities borrowing transactions

̶

̶

̶

̶

Monetary claims purchased

̶

̶

̶

̶

Securities under proprietary accounts

̶

̶

̶

̶

Money held in trust

̶

̶

̶

̶

137,55373.7

145,349

71.1

̶

̶

̶

̶

Securities
Loans
Land and buildings

188

0.1

177

0.1

Total

146,69378.6

169,305

82.8

Total assets¥186,537

100.0%¥204,362

100.0%

78 Sony Financial Holdings Inc. Financial Data Book 2018

Sony Assurance Performance Indicators

3- 03 Interest income and dividends, yield on investments (income basis)

Millions of yen, %

2017

2018

For the years ended March 31,

AmountYield

AmountYield

Cash and deposits
Call loans
Bond trading with repurchase agreement
Bonds paid for securities borrowing transactions
Monetary claims purchased
Securities under proprietary accounts
Money held in trust
Securities
Loans
Land and buildings
Subtotal
Others
Total
Yield on investments (realized basis)(Reference) Yield on investments (fair value basis)

¥

0

0.00%

¥

0

0.00%

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

1,327

1.01

1,323

0.94

̶

̶

̶

̶

̶

̶

̶

̶

1,327
0
¥1,327

0.95

1,324
0
¥1,324

0.85

1.44%
0.32

1.15%
1.77

Notes: 1. Total revenues are equal to “interest income and dividends” in the statements of income of Sony Assurance.
2. In principle, the average balance of investments is calculated based on average balances of either acquisition cost or amortized cost at the end of eachmonth, then divided by 12.
3. Calculation methods for yield on investments are as follows:(1) Yield on investments (income basis)
The results of investment in assets are indicated as income revenues (interest income and dividends). Interest income and dividends on investment
assets is the numerator, and acquisition cost is the denominator.
• Numerator: Interest income and dividends• Denominator: Average balance of either acquisition cost or amortized cost(2) Yield on investments (realized basis)
The results of investment in assets are indicated as the contribution to net income (loss) for the period (statements of income).
Realized profit and loss is the numerator, and acquisition cost is the denominator.
• Numerator: Investment income + Interest and dividends on deposits of premiums – Investment expenses• Denominator: Average balance of either acquisition cost or amortized cost(3) (Reference) Yield on investments (fair value basis)
An indicator of investment efficiency based on fair value. Realized profit and loss plus net unrealized gains is the numerator, and fair value ofinvestment assets is the denominator.
• Numerator = (Investment income + Interest and dividends on deposits of premiums – Investment expenses) + (Net unrealized gains at end of
period* – Net unrealized gains at end of previous period*)• Denominator = Average balance of either acquisition cost or amortized cost + Net unrealized gains on available-for-sale securities at end of
previous period**Amounts before tax deductions

3- 04 Overseas investment

Millions of yen, %2017
As of March 31,

Foreign currency denominatedForeign bonds
Foreign stocks
OthersSubtotal
Yen denominated
Loans to borrowers outside Japan
Foreign bonds
OthersSubtotal
Total
Yield on overseas investments
Yield on investments (income basis)
Yield on investments (realized basis)(Reference) Yield on investments (fair value basis)

2018

AmountComposition

AmountComposition

¥ ̶

̶%

¥ ̶

̶%

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

197

100.0

197

100.0

̶

̶

̶

̶

197
¥197

100.0
100.0%

197
¥197

100.0
100.0%

2.82%
2.82%
2.82%

2.68%
2.68%
2.68%

Note: “Yield on overseas investments” is calculated with respect to assets relating to overseas investments, using the formula equivalent to the “Calculation
methods for yield on investments” in Note 3 of “3-03 Interest income and dividends, yield on investments (income basis).”Sony Financial Holdings Inc. Financial Data Book 2018 79

Sony Assurance Performance Indicators

4 Non-consolidated Solvency Margin Ratio
Millions of yen

As of March 31,

2017

2018

(A) Total non-consolidated solvency margin¥46,724¥54,244

26,43928,849Reserve for price fluctuations

177

206

Contingency reserve

101

109

Catastrophe reserve

17,542

20,970

̶

̶

1,514

2,409

Net unrealized gains on real estate̶̶

Excess refund reserve̶̶

Subordinated debt̶̶

The portion of the excess refund reserve and subordinated debt that is not included in the margin̶̶

Deductible items

̶

̶

948

1,698

12,786

13,871

Capital or treasury, etc.

General reserve for possible loan losses
Net unrealized gains on available-for-sale securities and net deferred gains (losses) on hedging
instruments (before tax deductions)

Others(B) Total non-consolidated risk

2

2

(R1 + R2) + (R3 + R4) + R5 + R6

Ordinary insurance risk

R1

11,37012,395

Third-sector insurance risk

R2

̶

̶

Assumed interest rate risk

R3

105

114

Asset management risk

R4

1,431

1,712

Business management risk

R5

278

305

Major catastrophe risk

R6

1,033

1,036

730.8%

782.1%(C) Non-consolidated solvency margin ratio [(A)/{(B) × (1/2)}] × 100

Note: The above figures are calculated based on the provisions in Articles 86 and 87 of the Ordinance for Enforcement of the Insurance Business Act of Japanand the Ministry of Finance Public Notice No. 50 (1996).

• Breakdown of non-consolidated solvency margin:
1. Capital or treasury, etc.
Net assets of the balance sheets, excluding the amount of expected outflow from the company, such as dividends to shareholders anddirectors’ bonuses, deferred assets and the amount of valuation and translation adjustments.
2. Reserve for price fluctuations
The reserve for price fluctuations shown on the balance sheets.
3. Contingency reserve
The contingency reserve included in underwriting reserves shown on the balance sheets.
4. Catastrophe reserve
The total amount of both the catastrophe reserve and the contingency reserve concerning residential earthquake insurance that areincluded in underwriting reserves shown on the balance sheets.
5. General reserve for possible loan losses
The general reserve for possible loan losses included in the reserve for possible loan losses shown on the balance sheets. This does
not apply to Sony Assurance.
6. Net unrealized gains on available-for-sale securities and net deferred gains (losses) on hedging instruments (before tax deductions)
Net unrealized gains on available-for-sale securities (securities other than trading-purpose securities, held-to-maturity securities, stockof subsidiaries and affiliated companies) and associated net deferred gains (losses) on hedging instruments.
7. Net unrealized gains on real estate
Net unrealized gains on real estate, representing the difference between the fair value of land, leaseholds and other properties and theirrespective balance sheet amount (amounts shown on the balance sheets). This does not apply to Sony Assurance.
8. Excess refund reserve
Excess refund reserve refers to the surplus refund reserve included in underwriting reserves shown on the balance sheets. This does
not apply to Sony Assurance.
9. Subordinated debt
Subordinated debt refers to those funds raised by taking out subordinated loans, issuing subordinated bonds or through other meansthat meet a certain set of conditions. This does not apply to Sony Assurance.

80 Sony Financial Holdings Inc. Financial Data Book 2018

Sony Assurance Performance Indicators

10. The portion of the excess refund reserve and subordinated debt that is not included in the margin
If the total amount of 8. and 9. above exceeds the base amount calculated according to the method prescribed by laws and regulations,such excess amount shall be deducted from the non-consolidated solvency margin. This does not apply to Sony Assurance.
11. Deductible items
If an insurance company owns the stock of other insurance companies or financial institutions, or possesses other such means ofraising funds, and that ownership qualifies as “intentional possession” as governed by the overall supervisory guidelines for insurancecompanies, then those funds must be deducted from the non-consolidated solvency margin. This does not apply to Sony Assurance.
12. Others
Others refers to deferred tax assets related to other retained earnings (deficits) included in the net assets section of the balance sheets.

Non-consolidated Solvency Margin Ratio
Non-life insurance companies maintain reserves to ensure their ability to pay claims when accidents occur and return contracted amounts
at maturity on savings-type insurance. Non-life insurance companies must also maintain sufficient ability to cover against risk events which
exceed its normal estimates, i.e., occurrence of a major catastrophe or a dramatic drop in the value of the assets they hold.
Total risk (item (B) in the table) indicates risk events which exceed the normal estimates. The non-consolidated solvency margin ratio (item(C) in the table) is an indicator of an insurer’s ability to pay, calculated as prescribed by the Insurance Business Act of Japan, based on its
percentage holdings of capital and other reserves (in other words, the total non-consolidated solvency margin, as indicated by (A)).

Non-consolidated Solvency Margin Ratio (%) =Ability to pay, indicated by such factors as capital and reserves
× 100
Risk events which exceed the normal estimates × 1/2• “Risk events which exceed the normal estimates” refers to the total of the amounts represented by the following risks:
Insurance underwriting risk (ordinary insurance risk, third-sector insurance risk)
Risk which exceeds the normal estimates for the rate of accident occurrence (excluding major catastrophe risk)
Assumed interest rate risk
Risk that actual investment yield will fall below the investment yield assumed when calculating premiums
Asset management risk
Risk arising from such factors as unexpectedly large fluctuations in prices on held securities and other assets
Business management risk
Unexpected risk to business management other than through above andMajor catastrophe risk
Risk arising from major catastrophes (such as the Great Kanto Earthquake and the Ise Bay Typhoon)• A non-life insurer’s ability to pay (total non-consolidated solvency margin), as indicated by such factors as its capital and reserves, is thetotal of the insurer’s net assets (excluding the amount of expected outflow from the company), reserves (such as the reserve for pricefluctuations and catastrophe reserve) and a portion of its net unrealized gains on real estate.
• The non-consolidated solvency margin ratio is one of the objective indicators used by the insurance regulatory authorities to supervise
insurers. When this ratio is 200% or higher, an insurer is judged to have sufficient ability to satisfy claims and other payments.

Sony Financial Holdings Inc. Financial Data Book 2018 81

Sony Bank

Financial Data (Consolidated)
Consolidated Balance Sheets
Sony Bank Inc. and consolidated subsidiaries
As of March 31, 2017 and 2018
Millions of yen

2017

2018

Cash and due from banks¥ 180,581¥ 287,752

Monetary claims purchased

573

5,378

Money held in trust

23,00021,000

Securities

629,254672,244

1,539,630

1,596,376

Foreign exchanges

7,268

9,346

Other assets

53,22352,372

710

1,709

106

658

0

0

602

1,051

4,803

5,652

4,789

5,637

13

14

Deferred tax assets

762

138

Reserve for possible loan losses

(971)

(806)

¥2,438,836¥2,651,162

AssetsLoans

Tangible fixed assets
Buildings
Leased assets
Other tangible fixed assets
Intangible fixed assets
Software
Other intangible fixed assets

Total Assets

82 Sony Financial Holdings Inc. Financial Data Book 2018

Sony Bank Financial Data (Consolidated)

Millions of yen

2017

2018

¥2,109,583¥2,219,324

Liabilities
Deposits
Call money and bills sold

70,00096,000Borrowed money

103,000

180,000

Foreign exchanges
Other liabilities
Reserve for employees’ bonuses
Net defined benefit liability

108

228

71,52066,071

782

769

1,117

1,243

Reserve for directors’ retirement benefits

56

̶Provision for reimbursement of deposits

62

81

2,356,231

2,563,718

Common stock

31,00031,000Capital surplus

21,00021,000Retained earnings

25,81528,948

Total shareholders’ equity

77,81580,948

Total Liabilities
Net Assets

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

4,776

6,037

Net deferred gains (losses) on hedging instruments, net of taxes(1,338)(1,086)

Remeasurements of defined benefit plans, net of taxes

(109)

(103)

Total accumulated other comprehensive income

3,328

4,847

Non-controlling interests

1,460

1,648

Total Net Assets

82,60487,444¥2,438,836¥2,651,162

Total Liabilities and Net Assets

Sony Financial Holdings Inc. Financial Data Book 2018 83

Sony Bank Financial Data (Consolidated)

Consolidated Statements of Income
Sony Bank Inc. and consolidated subsidiaries
For the years ended March 31, 2017 and 2018
Millions of yen

Ordinary Revenues
Interest income
Interest income on loans
Interest income and dividends on securities
Interest income on call loans and bills boughtInterest income on deposits with banks
Other interest income
Fees and commissions
Other operating income
Other ordinary income
Reversal of reserve for possible loan losses
Income from money held in trust, net
OthersOrdinary Expenses
Interest expenses
Interest expenses on deposits
Interest expenses on call money and bills soldInterest expenses on borrowed money
Interest expenses on short-term corporate bonds
Other interest expenses
Fees and commissions
Other operating expenses
General and administrative expenses
Other ordinary expenses
Other ordinary expenses
Ordinary Profit
Extraordinary Losses
Losses on disposal of fixed assets
Impairment losses
Other extraordinary losses
Income Before Income Taxes
Income Taxes̶Current
Income Taxes̶Deferred
Total Income Taxes
ProfitProfit Attributable to Non-controlling Interests
Profit Attributable to Owners of the Parent

2017

2018

¥38,510
26,533
16,065
10,394¥39,933
28,344
17,064
11,204
2
63
9
6,961
3,823
804
96
1
706
32,752
7,731
5,322
(73)
113

̶

63
9
6,870
4,871
234
22
8
203
33,460
8,672
5,105
(17)
211
0
3,372
5,480
86
19,079
142
142
5,049
214
57
150
7
4,834
1,429
(14)
1,414
3,420
113
¥ 3,306

̶

2,368
6,685
109
18,084
141
141
7,180
92
92
̶
̶

7,088
2,225
(46)
2,179
4,909
186
¥ 4,722

Consolidated Statements of Comprehensive Income
Sony Bank Inc. and consolidated subsidiaries
For the years ended March 31, 2017 and 2018

ProfitOther Comprehensive Income
Net unrealized gains (losses) on available-for-sale securities, net of taxes
Net deferred gains (losses) on hedging instruments, net of taxes
Remeasurements of defined benefit plans, net of taxes
Comprehensive Income
Comprehensive income attributable to owners of the parent
Comprehensive income attributable to non-controlling interests

84 Sony Financial Holdings Inc. Financial Data Book 2018

Millions of yen

2017

2018

¥3,420
2,703
1,444
1,192
65
6,123
5,992
131

¥4,909
1,519
1,260
251
7
6,429
6,242
187

Sony Bank Financial Data (Consolidated)

Consolidated Statements of Changes in Net Assets
Sony Bank Inc. and consolidated subsidiaries
For the years ended March 31, 2017 and 2018
Millions of yen

2017
Shareholders’ equity
Retainedearnings

Total
shareholders’equity¥21,000¥24,419¥76,419

̶

48

48

31,00021,00024,46876,468Dividends from surplus̶̶

(1,959)(1,959)Profit attributable to owners of the parent

̶

̶

3,306

3,306

Net changes of items other than shareholders’ equity

̶

̶

̶

̶

Total changes during the period

̶

̶

1,347

1,347

Balance at the end of the period¥31,000¥21,000¥25,815¥77,815

Balance at the beginning of the period
Cumulative effects of changes in accounting policies
Restated balance at the beginning of the period

Commonstock

Capitalsurplus¥31,000
̶Changes during the period

Millions of yen

2017
Accumulated other comprehensive income
Net unrealized
gains (losses)
on available-forsale securities,
net of taxes

Net deferredgains (losses)on hedging
instruments,
net of taxes

Remeasurements ofdefinedbenefit plans,
net of taxes

Total
accumulated
othercomprehensive
incomeNon-controllinginterests¥3,331¥(2,531)¥(157)¥ 643¥1,329

̶

̶

̶

̶

̶

48

3,331

(2,531)

(157)

643

1,329

78,440

Dividends from surplus

̶

̶

̶

̶

̶

(1,959)Profit attributable to owners of the parent

̶

̶

̶

̶

̶

3,306

1,444

1,192

47

2,685

131

2,816

Balance at the beginning of the period
Cumulative effects of changes in accounting policies
Restated balance at the beginning of the period

Total
net assets¥78,391

Changes during the period

Net changes of items other than shareholders’ equity
Total changes during the period

1,444

1,192

47

2,685

131

4,164

Balance at the end of the period¥4,776¥(1,338)¥(109)¥3,328¥1,460¥82,604(Continued on next page)

Sony Financial Holdings Inc. Financial Data Book 2018 85

Sony Bank Financial Data (Consolidated)

Consolidated Statements of Changes in Net Assets (Continued)
Millions of yen

2018
Shareholders’ equity
Commonstock

CapitalsurplusRetainedearnings

Total
shareholders’equity¥31,000¥21,000¥25,815¥77,815

Dividends from surplus̶̶

(1,590)(1,590)

Profit attributable to owners of the parent

̶

̶

4,722

4,722

Net changes of items other than shareholders’ equity

̶

̶

̶

̶

Total changes during the period

̶

̶

3,132

3,132

Balance at the end of the period¥31,000¥21,000¥28,948¥80,948

Balance at the beginning of the period
Changes during the period

Millions of yen

2018
Accumulated other comprehensive income
Net unrealized
Net deferredgains (losses) gains (losses)
on available-for- on hedging
sale securities, instruments,
net of taxes
net of taxes

Balance at the beginning of the period

Remeasurements ofdefinedbenefit plans,
net of taxes

Total
accumulated
othercomprehensive Non-controllinginterests
incomeTotal
net assets¥4,776¥(1,338)¥(109)¥3,328¥1,460¥82,604

Dividends from surplus

̶

̶

̶

̶

̶

(1,590)

Profit attributable to owners of the parent

̶

̶

̶

̶

̶

4,722
1,706

Changes during the period

1,260

251

6

1,519

187

Total changes during the period

Net changes of items other than shareholders’ equity

1,260

251

6

1,519

187

4,839

Balance at the end of the period¥6,037¥(1,086)¥(103)¥4,847¥1,648¥87,44486 Sony Financial Holdings Inc. Financial Data Book 2018

Sony Bank Financial Data (Consolidated)

Consolidated Statements of Cash Flows
Sony Bank Inc. and consolidated subsidiaries
For the years ended March 31, 2017 and 2018
Millions of yen

2017

Cash flows from operating activities
Income before income taxes
Depreciation and amortization
Impairment losses
Amortization of goodwill
Increase (decrease) in reserve for possible loan losses
Increase (decrease) in reserve for employees’ bonuses
Increase (decrease) in net defined benefit liability
Increase (decrease) in reserve for directors’ retirement benefits
Increase (decrease) in provision for reimbursement of deposits
Interest income̶accrual basis
Interest expenses̶accrual basis(Gains) losses on securities(Gains) losses on money held in trust
Exchange (gains) losses(Gains) losses on disposal of fixed assets
Net (increase) decrease in loans
Net increase (decrease) in deposits
Net increase (decrease) in borrowed money (excluding subordinated borrowings)
Net (increase) decrease in call loans and bills soldNet increase (decrease) in call money and bills bought
Net (increase) decrease in foreign exchange (assets)
Net increase (decrease) in foreign exchange (liabilities)
Interest income̶cash basis
Interest expenses̶cash basis
Others, net
Subtotal
Income taxes paid
Net cash provided by (used in) operating activities
Cash flows from investing activities
Purchases of securities
Proceeds from sale of securities
Proceeds from redemption of securities
Proceeds from money held in trust
Purchases of tangible fixed assets
Purchases of intangible fixed assets
Net cash provided by (used in) investing activities
Cash flows from financing activities
Net decrease in subordinated borrowings
Cash dividends paid
Payments for leased obligations
Net cash provided by (used in) financing activities
Effect of exchange rate changes on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the period
Cash and cash equivalents at the end of the period

¥

2018

4,834
1,989
150
19
(64)
67
107
14
3
(26,533)
8,672
5,146
(8)
3,827
67
(195,446)
185,285
50,000311
70,000(6,129)21
29,088(8,782)(23,016)
99,628(1,836)
97,791(210,315)
51,393
138,435

¥

7,088
1,812
̶
̶

(164)
(13)
137
(19)
19
(28,344)
7,731
2,126
(1)
8,208
74
(56,745)
109,572
80,000(4,805)26,000(2,077)
119
30,944(7,907)(8,661)
165,095(1,189)163,906(154)(1,793)(22,434)(228,090)
51,241
125,856
2,000(1,066)(2,086)(52,144)(7,000)(1,959)(30)(8,989)(3,000)(1,590)(0)(4,590)̶̶66,367
114,213¥ 180,581

107,171
180,581¥ 287,752

̶Sony Financial Holdings Inc. Financial Data Book 2018 87

Sony Bank

Financial Data (Non-consolidated)
Balance Sheets
Sony Bank Inc.
As of March 31, 2017 and 2018
Millions of yen

2017

2018

¥ 177,468¥ 287,332

177,468

287,332

573

5,378

Money held in trust

23,00021,000

Securities

631,296674,285

Japanese government bonds

103,083

96,872

Japanese local government bonds

34,86636,001

Japanese corporate bonds

63,611

65,366

Japanese stocks

2,050

2,050

Other securities

427,684

473,993

1,539,630

1,596,376

1,521,546

1,577,480

18,08418,895

7,268

9,346

7,268

9,346

41,77037,103

Domestic exchange settlement account debit

258

438

Prepaid expenses

149

149

Accrued income

3,859

3,687

Derivatives

5,153

7,320

Cash collateral paid for financial instruments

21,65018,559Accounts receivable

7,879

4,599

Others

2,821

2,349

398

1,204

Buildings

65

620

Other tangible fixed assets

332

584

3,170

3,808

3,165

3,803

4

5

Deferred tax assets632

̶Reserve for possible loan losses

(971)

(806)

¥2,424,236¥2,635,028

AssetsCash and due from banks
Due from banks
Monetary claims purchased

Loans
Loans on deeds
Overdrafts
Foreign exchanges
Due from foreign banks
Other assets

Tangible fixed assets

Intangible fixed assets
Software
Other intangible fixed assets

Total Assets

88 Sony Financial Holdings Inc. Financial Data Book 2018

Sony Bank Financial Data (Non-consolidated)

Millions of yen

2017

2018

¥2,112,985¥2,219,325

Liabilities
Deposits
Ordinary deposits

630,964

672,877

Time deposits

1,129,004

1,134,731

Other deposits

353,017

411,716

Call money

70,00096,000Borrowed money

103,000

180,000

Borrowed money

103,000

180,000

Foreign exchanges

108

228

Foreign bills sold

31

147

Foreign bills payable

77

81

Other liabilities

55,19952,033

Income taxes payable

582

1,588

Accrued expenses

4,646

5,255

Initial margins of futures markets

20,661

20,205Derivatives

20,582

16,349Cash collateral received for financial instruments

757

590

Asset retirement obligations

144

226

7,825

7,817

Reserve for employees’ bonuses

Others705

687

Reserve for employees’ retirement benefits

815

933

Reserve for directors’ retirement benefits

27

̶Provision for reimbursement of deposits

62

81

Deferred tax liabilities̶

92,342,904

2,549,299

Common stock

31,00031,000Capital surplus

21,00021,000Capital reserves

21,00021,000Retained earnings

25,893

28,778

Total Liabilities
Net Assets

Legal retained earnings

391

709

Other retained earnings

25,501

28,06825,501

28,068

Total shareholders’ equity

Unappropriated retained earnings

77,89380,778Net unrealized gains (losses) on available-for-sale securities, net of taxes

4,776

6,037

Net deferred gains (losses) on hedging instruments, net of taxes(1,338)(1,086)

Total valuation and translation adjustments

3,438

4,950

Total Net Assets
Total Liabilities and Net Assets

81,33285,729¥2,424,236¥2,635,028

Sony Financial Holdings Inc. Financial Data Book 2018 89

Sony Bank Financial Data (Non-consolidated)

Statements of Income
Sony Bank Inc.
For the years ended March 31, 2017 and 2018
Millions of yen

Ordinary Revenues
Interest income
Interest income on loans
Interest income and dividends on securities
Interest income on call loans
Interest income on deposits with banks
Interest income on interest rate swaps
Other interest income
Fees and commissions
Fees and commissions on domestic and foreign exchanges
Other fees and commissions
Other operating income
Gains on foreign exchange transactions
Gains on sale of bonds
Gains on redemption of bonds
Gains on derivatives
OthersOther ordinary income
Reversal of reserve for possible loan losses
Income from money held in trust, net
OthersOrdinary Expenses
Interest expenses
Interest expenses on deposits
Interest expenses on call money
Interest expenses on borrowed money
Interest expenses on short-term corporate bonds
Interest expenses on interest rate swaps
Other interest expenses
Fees and commissions
Fees and commissions on domestic and foreign exchanges
Other fees and commissions
Other operating expenses
Losses on sale of bonds
Expenses from derivatives other than for trading or hedging
OthersGeneral and administrative expenses
Other ordinary expenses
Write-off of loans
OthersOrdinary Profit
Extraordinary Losses
Losses on sale or disposal of fixed assets
Impairment losses
Income Before Income Taxes
Income Taxes̶Current
Income Taxes̶Deferred
Total Income Taxes
Net Income

90 Sony Financial Holdings Inc. Financial Data Book 2018

2017

2018

¥35,105
26,534
16,066
10,394¥36,270
28,344
17,064
11,204
2
63

̶

63
8
0
3,465
207
3,257
4,871
4,431
438
0
̶

0
234
22
8
203
30,470
8,671
5,105
(17)
211
0
3,372
0
5,046
188
4,857
86
41
44
0
16,524
141
0
141
4,634
150

̶

9
3,298
267
3,030
3,823
3,456
334
0
32
̶

804
96
1
706
29,712
7,730
5,322
(73)
113
̶

2,360
8
6,238
265
5,972
109
68
̶

̶

40
15,515
118
0
118
6,557
74
74

150
4,484
1,307
1
1,308
¥ 3,176

6,482
2,033
(25)
2,007
¥ 4,474̶Sony Bank Financial Data (Non-consolidated)

Statements of Changes in Net Assets
Sony Bank Inc.
For the years ended March 31, 2017 and 2018
Millions of yen

2017
Shareholders’ equity
Capital surplus

Retained earnings
Otherretainedearnings

Balance at the beginning of the period
Cumulative effects of changes inaccounting policies
Restated balance atthe beginning of the period

Unappropriatedretainedearnings

Total
retainedearnings

Total
shareholders’equity¥ ̶¥24,627¥24,627¥76,627

̶

̶

48

48

48

21,000̶

24,676

24,676

76,676

Commonstock

Capitalreserves

Total
capitalsurplusLegalretainedearnings¥31,000¥21,000¥21,000

̶̶

31,00021,000Changes during the period
Dividends from surplus

̶

̶

̶

391

(2,351)(1,959)(1,959)Net income

̶

̶

̶

̶

3,176

3,176

3,176

Net changes of items otherthan shareholders’ equity

̶

̶

̶

̶

̶

̶

̶

Total changes during the period

̶

̶

̶

391

825

1,217

1,217

Balance at the end of the period¥31,000¥21,000¥21,000¥391¥25,501¥25,893¥77,893
Millions of yen

2017
Valuation and translation adjustments
Net unrealized
gains (losses)
on available-forsale securities,
net of taxes

Net deferredgains (losses)on hedging
instruments,
net of taxes

Totalvaluation andtranslation
adjustments¥3,331¥(2,531)¥ 800¥77,428

̶

̶

̶

48

3,331

(2,531)

800

77,477

Dividends from surplus

̶

̶

̶

(1,959)Net income

̶

̶

̶

3,176
2,637

Balance at the beginning of the period
Cumulative effects of changes in accounting policies
Restated balance at the beginning of the period

Total
net assets

Changes during the period

1,444

1,192

2,637

Total changes during the period

Net changes of items other than shareholders’ equity

1,444

1,192

2,637

3,854

Balance at the end of the period¥4,776¥(1,338)¥3,438¥81,332(Continued on next page)

Sony Financial Holdings Inc. Financial Data Book 2018 91

Sony Bank Financial Data (Non-consolidated)

Statements of Changes in Net Assets (Continued)
Millions of yen

2018
Shareholders’ equity
Capital surplus

Retained earnings
Otherretainedearnings

Commonstock

Capitalreserves

Total
capitalsurplus¥31,000¥21,000¥21,000

Dividends from surplus̶̶Net income̶

Net changes of items otherthan shareholders’ equity

̶

Balance at the beginning of the periodLegalretainedearnings

Unappropriatedretainedearnings

Total
retainedearnings

Total
shareholders’equity¥391¥25,501¥25,893¥77,893̶

318(1,908)(1,590)(1,590)

̶

̶

̶

4,474

4,474

4,474

̶

̶

̶

̶

̶

̶

Changes during the period

Total changes during the period

̶

̶

̶

318

2,566

2,884

2,884

Balance at the end of the period¥31,000¥21,000¥21,000¥709¥28,068¥28,778¥80,778
Millions of yen

2018
Valuation and translation adjustments
Net unrealized
Net deferredgains (losses) gains (losses)
on available-for- on hedging
sale securities, instruments,
net of taxes
net of taxes

Balance at the beginning of the period

Totalvaluation andtranslation
adjustments

Total
net assets¥4,776¥(1,338)¥3,438¥81,332

Dividends from surplus

̶

̶

̶

(1,590)Net income

̶

̶

̶

4,474

1,260

251

1,512

1,512

Changes during the period

Net changes of items other than shareholders’ equity
Total changes during the period

1,260

251

1,512

4,397

Balance at the end of the period¥6,037¥(1,086)¥4,950¥85,729

Notes
Sony Bank Inc.
As of March 31, for the year ended March 31,

The breakdown of major factors giving rise to deferred tax assets and deferred tax liabilities is as follows:
Millions of yen

Deferred tax assets
Devaluation losses on securities
Reserve for possible loan losses
Provision for retirement benefits
Provision for bonuses
Net deferred losses on hedging instruments
OthersSubtotal of deferred tax assets
Valuation allowance
Total deferred tax assets
Deferred tax liabilities
Net unrealized gains on available-for-sale securities
OthersTotal deferred tax liabilities
Net deferred tax assets

92 Sony Financial Holdings Inc. Financial Data Book 2018

2017

2018

¥ 664
251
249
217
590
493
2,467
(664)
1,803

¥ 664
198
285
210
479
589
2,427
(664)
1,763

1,150
20
1,171
¥ 632

1,707
65
1,772
¥
9

Sony Bank Financial Data (Non-consolidated)

1 Loans by Borrower Category
Millions of yen

As of March 31,

2017

2018

Category
Bankrupt and quasi-bankrupt loans

¥

743

¥

472

Doubtful loans

1,021

Sub-standard loans

1,227

842

1,544,587

1,604,392¥1,547,579¥1,606,393

Normal loans
Total

685

Note: The above table is based on “Act on Emergency Measures for the Revitalization of Financial Functions.”

2 Risk-monitored Loans
Millions of yen

As of March 31,

2017

2018

Bankrupt loans

¥ 176

¥

Non-accrual delinquent loans

1,580

1,061

Past due loans (3 months or more)

91

̶

̶

Restructured loans

1,227

842

Total

¥2,984¥1,995

3 Profit and Loss
3- 01 Gross operating profit
Millions of yen

2017

2018

For the years ended March 31,

Domestic
division

Net interest income¥13,813¥4,104

Interest income

17,951

8,588

Interest expenses

International
division

Domestic
division

Total¥17,917[5]
26,534[5]

International
division¥15,506¥5,141

18,830

9,540

3,323

4,399

Total

¥20,648[27]
28,344
[27]

4,138

4,483

(1,665)84(1,580)(3,048)108

Fees and commissions received

3,328

136

3,465

3,093

204

3,298

Fees and commissions paid

4,994

51

5,046

6,142

95

6,238

Net trading income

̶

̶

̶

̶

̶

̶

Trading income

̶

̶

̶

̶

̶

̶

Trading expenses

̶

̶

̶

̶

̶

̶

4

4,780

4,785

54

3,658

3,713

Other operating income

49

4,821

4,871

112

3,710

3,823

Other operating expenses

44

41

86

57

51

109

Net fees and commissions

Net other operating income

8,616

7,695
(2,940)Gross operating profit

12,152

8,968

21,121

12,512

8,909

21,421Gross operating profit ratio

0.69%

2.09%

0.96%

0.60%

1.84%

0.84%

Notes: 1. The Domestic division deals with transactions denominated in Japanese yen, whereas the International division deals with transactions denominated inforeign currencies (foreign currency deposits, foreign securities, etc.). Non-resident transactions denominated in Japanese yen are included in theInternational division.
2. Interest expenses exclude estimated interest expenses on money held in trust (¥54 million̶FY2016, ¥34 million̶FY2017).
3. [ ] indicates interest on borrowed funds between the Domestic division and the International division.
Gross operating profit for the period
× 100
4. Gross operating profit ratio =Average balance of investment accounts

Sony Financial Holdings Inc. Financial Data Book 2018 93

Sony Bank Financial Data (Non-consolidated)

3- 02 Average balances, interests, yields and interest spreads of major investment andfinancing accounts
Domestic division

Millions of yen, %2017
For the years ended March 31,

Investment accounts
Loans
Securities
Call loans
Due from banks
Monetary claims purchased
Financing accounts
Deposits
Call money
Borrowed money

Averagebalance

2018

Interest[4,067]¥1,757,036
1,439,927
187,305

Yield[5]¥17,951
15,983
1,888

1.02%
1.11
1.00

Averagebalance

Interest[27,628]¥2,082,692
1,553,044
198,824

Yield

[27]
¥18,830
16,987
1,742

0.90%
1.09
0.87

̶

̶

̶

̶

̶

̶

116,068734[̶]1,737,072
1,665,317
22,31571,646

63
0
[̶]
4,138
2,322
(17)
211

0.05
0.08

272,7247,363[̶]2,061,645
1,796,170
138,594
147,931

63
9
[̶]
3,323
1,989
(74)
113

0.02
0.13

0.23
0.13
(0.07)
0.29

0.16
0.11
(0.05)
0.07

Notes: 1. [ ] indicates the average balance and interest of borrowed funds between the Domestic division and the International division, and the total ispresented in net.
2. In the investment accounts, the average balance of non-interest-bearing “due from banks” (¥1,500 million—FY2016, ¥1,497 million—FY2017) is
excluded. In the financing accounts, the average balance of funds for investing money held in trust (¥23,000 million—FY2016, ¥21,679 million—
FY2017) and the interest expenses on money held in trust (¥54 million—FY2016, ¥34 million—FY2017) are excluded, respectively.

International division

Millions of yen, %2017
For the years ended March 31,

Investment accounts
Loans
Securities
Call loans
Due from banks
Monetary claims purchased
Financing accounts
Deposits
Call money
Borrowed money

Averagebalance

2018

Interest

Yield

[̶]
¥429,121
8,391
414,862[̶]¥8,588
82
8,506

0.97
2.05

̶
̶
̶

̶
̶
̶

̶
̶
̶

[4,067]
347,060
342,872

[5]
4,483
2,782

2.00%

1.29
0.81

Averagebalance

Interest

Yield

[̶]
¥482,786
7,935
465,149140[̶]¥9,540
77
9,461
2

0.97
2.03
1.79

̶
̶

̶
̶

̶
̶

[27,628]
398,441
370,572
51

[27]
4,399
3,332
0

1.97%

1.10
0.89

̶
̶
̶
1.59
̶
̶
̶
̶
̶
̶
Note: [ ] indicates the average balance and interest of borrowed funds between the Domestic division and the International division, and the total is presented
in net.

Total

Millions of yen, %2017
For the years ended March 31,

Investment accounts
Loans
Securities
Call loans
Due from banks
Monetary claims purchased
Financing accounts
Deposits
Call money
Borrowed money

Averagebalance¥2,182,089
1,448,319
602,1672018

Interest

Yield¥26,534
16,066
10,394

1.21%
1.10
1.72

̶

̶

̶

116,068734
2,080,065
2,008,190
22,31571,646

63
0
8,616
5,105
(17)
211

0.05
0.08
0.41
0.25
(0.07)
0.29

Averagebalance¥2,537,850
1,560,979
663,973140
272,724
7,363
2,432,459
2,166,743
138,645
147,931

Interest

Yield¥28,344
17,064
11,204
2
63
9
7,695
5,322
(73)
113

1.11%
1.09
1.68
1.79
0.02
0.13
0.31
0.24
(0.05)
0.07

Note: In the investment accounts, the average balance of non-interest-bearing “due from banks” (¥1,500 million—FY2016, ¥1,497 million—FY2017) is excluded.
In the financing accounts, the average balance of funds for investing money held in trust (¥23,000 million—FY2016, ¥21,679 million—FY2017) and theinterest expenses on money held in trust (¥54 million—FY2016, ¥34 million—FY2017) are excluded, respectively.

94 Sony Financial Holdings Inc. Financial Data Book 2018

Sony Bank Financial Data (Non-consolidated)

Interest spread%2017
For the years ended March 31,

Yield on investment
Yield on financing
Interest spread

Domestic
division

2018

International
division

1.02%
0.23
0.78

2.00%
1.29
0.70

Domestic
division

Total

1.21%
0.41
0.80

International
division

0.90%
0.16
0.74

1.97%
1.10
0.87

Total

1.11%
0.31
0.80

3- 03 Interest income and interest expenses
Domestic division

Millions of yen

2017

For the years ended March 31,

Interest income
Loans
Securities
Call loans
Due from banks
Monetary claims purchased
Interest expenses
Deposits
Call money
Borrowed money

Increase(decrease)
due to balance¥1,923
2,234
(224)
(7)
44
0
465
187
16
108

2018

Increase(decrease)
due to yield¥(857)
(901)
6
̶

(41)
(0)
(563)
(13)
(39)
(162)

Net increase(decrease)¥1,065
1,332
(218)
(7)
2
0
(97)
173
(23)
(53)

Increase(decrease)
due to balance¥3,327
1,255
116

Increase(decrease)
due to yield¥(2,447)
(252)
(261)

¥ 879
1,003
(145)

̶

̶

̶

86
5
773
182
(91)
224

(87)
3
(1,587)
(515)
34
(322)

(0)
9
(814)
(333)
(56)
(97)

International division

Millions of yen

2017

For the years ended March 31,

Interest income
Loans
Securities
Call loans
Due from banks
Monetary claims purchased
Interest expenses
Deposits
Call money
Borrowed money

Increase(decrease)
due to balance

2018

Increase(decrease)
due to yield

Net increase(decrease)

Increase(decrease)
due to balance¥(571)
(6)
(595)

¥506
0
536

¥ (64)(5)(58)¥1,074
(4)
1,031

̶
̶
̶

̶
̶
̶

̶
̶
̶

̶
̶
̶

(230)
149

(61)
(46)

(292)
102

663
224

̶
̶

̶
̶

̶
̶

̶
̶

Increase(decrease)
due to yield

¥952
(5)
955
2

̶
̶

̶
̶

(748)
325
0

(84)
550
0

̶

̶

Millions of yen

2017Interest income
Loans
Securities
Call loans
Due from banks
Monetary claims purchased
Interest expenses
Deposits
Call money
Borrowed money

Net increase(decrease)¥(121)
(0)
(75)
2

Total

For the years ended March 31,

Net increase(decrease)

Increase(decrease)
due to balance¥2,364
2,224
(868)
(7)
44
0
901
394
16
108

2018

Increase(decrease)
due to yield¥(1,312)
(897)
591
̶

(41)
(0)
(1,241)
(119)
(39)
(162)

Net increase(decrease)¥1,051
1,326
(276)
(7)
2
0
(339)
275
(23)
(53)

Increase(decrease)
due to balance¥4,326
1,249
1,066
̶

86
5
1,459
403
(91)
224

Increase(decrease)
due to yield¥(2,515)
(251)
(257)
2
(87)
3
(2,380)
(186)
35
(322)

Net increase(decrease)¥1,810
998
809
2
(0)
9
(920)
217
(55)
(97)

Note: Where the reason for an increase or decrease is overlapping between “due to balance” and “due to yield,” the amount of the increase or decrease isincluded in “due to yield.”Sony Financial Holdings Inc. Financial Data Book 2018 95

Sony Bank Financial Data (Non-consolidated)

3- 04 General and administrative expenses
Millions of yen

For the years ended March 31,

2017

2018

¥ 3,775¥ 3,829

Employee retirement benefits

141

144

Fringe benefit expenses

542

535

Depreciation and amortization

1,280

1,254

Leases on land, buildings and machinery

1,299

1,371

Maintenance fees

1,924

1,780

Repairs and utilities

3

4

Supplies expenses

234

301

Heat, light and water

28

30

Travel expenses

9

11

754

738

1,598

903

Salaries

Communication expenses
Advertising expenses
Membership fees, donations and social expenses

18

20

Outsourcing

1,877

1,563

Taxes and public dues

1,066

1,098

Deposit insurance

629

598

Others

1,341

1,327

Total

¥16,524¥15,515

4 Fair Value Information
4- 01 Fair value information on securities*In addition to “Securities” on the non-consolidated balance sheets, the figures in the following tables include beneficiary certificates ofinvestment trust in “Monetary claims purchased.”

Trading-purpose securities
Not applicable

Held-to-maturity securities

Millions of yen

2017

2018

Balance sheet
amountFair value

Difference

Japanese government bonds¥5,990¥6,073

Japanese corporate bonds

228

232

¥6,218¥6,306

As of March 31,

Balance sheet
amountFair value

Difference

¥83

¥ ̶

¥ ̶

¥̶

4

200

201

1

¥87

¥200

¥201

¥1

Held-to-maturity securities of which fair value
exceeds balance sheet amount

Total

Notes: 1. Fair value is based upon the value measured at the fiscal year end.
2. There were no fair values that did not exceed their non-consolidated balance sheet amount.

96 Sony Financial Holdings Inc. Financial Data Book 2018

Sony Bank Financial Data (Non-consolidated)

Available-for-sale securities

Millions of yen

2017
As of March 31,

2018

Balance sheet
amountAcquisition
cost

Unrealized
gains (losses)

Balance sheet
amountAcquisition
cost

Unrealized
gains (losses)

Available-for-sale securities of which balance sheet
amount exceeds acquisition costBonds

¥162,942¥154,516¥ 8,425¥159,116¥151,369¥ 7,747

Japanese government bonds

69,59663,897

5,699

62,24856,567

5,681

Japanese local government bonds

34,866

33,697

1,168

34,50033,624876

Japanese corporate bonds
OthersForeign bonds
OthersSubtotal

58,47956,921

1,557

62,367

61,1781,188

283,047

277,903

5,143

287,657

282,442

5,215

278,572

275,617

2,955

279,376

276,933

2,442

4,474

2,286

2,188

8,281

5,508

2,772

445,989

432,419

13,569446,774

433,812

12,962Available-for-sale securities of which balance sheet
amount does not exceed acquisition cost
Bonds
Japanese government bonds

32,39933,090(690)

38,924

39,202(278)

27,49628,175(679)

34,62334,901

(277)

̶

̶

̶

1,501

1,501

(0)

Japanese local government bonds
Japanese corporate bonds
OthersForeign bonds
OthersSubtotal
Total

4,903

4,914

(11)

2,798

2,800

(1)

145,210

145,977(767)

191,714

192,956(1,242)

144,636

145,404(767)

189,559

190,801(1,241)

573

573

(0)

2,154

2,155

(0)

177,610179,067(1,457)

230,638

232,159(1,520)¥623,599¥611,487¥12,112¥677,412¥665,971¥11,441

Note: Fair value is based upon the value measured at the fiscal year end.

Securities without fair value
Millions of yen

As of March 31,

2017

2018

Balance sheet
amountBalance sheet
amount¥2,050¥2,050Stocks of subsidiaries and affiliated companies
Stocks of subsidiaries

4- 02 Fair value information on money held in trust
Money held in trust for investment
Not applicable

Money held in trust for held-to-maturity
Not applicableSony Financial Holdings Inc. Financial Data Book 2018 97

Sony Bank Financial Data (Non-consolidated)

Other money held in trust
Millions of yen

2017
Balance sheet
amountAs of March 31,

Other money held in trust

Acquisition cost

¥23,000

Difference¥23,000

Of which, balance sheet
amount exceeds
acquisition cost

Of which, balance sheet
amount does notexceed acquisition cost

¥̶

¥̶

¥̶

Millions of yen

2018
Balance sheet
amountAs of March 31,

Other money held in trust

Acquisition cost

¥21,000

Of which, balance sheet Of which, balance sheet
amount does notamount exceeds
exceed acquisition costacquisition cost

Difference¥21,000

¥̶

¥̶

¥̶

Note: “Difference” consists of “Of which, balance sheet amount exceeds acquisition cost” and “Of which, balance sheet amount does not exceed
acquisition cost.”

4- 03 Fair value information on derivatives
Interest rate derivatives
Millions of yen

Derivatives for which hedge accounting is not applied
As of March 31,
Category

Over-the-countertransactions

2017
Type

Notional amount

Notional amountover 1 year

Fair value

Valuation gains(losses)Interest rate swaps
Fixed-rate receivable / Floating-rate payable¥3,528¥3,528¥(50)

Floating-rate receivable / Fixed-rate payable

3,528

3,528

50

50

¥̶

¥̶

Total

¥(50)

Notes: 1. The above transactions are evaluated at fair value, and valuation gains (losses) are recorded in the statements of income.
2. Fair value is calculated using the price indicated by the financial institution.
Millions of yen

Derivatives for which hedge accounting is applied
As of March 31,

2017
Notional amount

Notional amountover 1 year

Deferred hedge
accounting

Interest rate swaps
Floating-rate receivable / Fixed-rate payable Loans, deposits¥103,000¥103,000Fair value hedge
accounting

Interest rate swaps
Available-for-saleFloating-rate receivable / Fixed-rate payable securities (bonds)

304,661

266,269

MethodType

Hedged item

Total

Fair value¥353(17,639)¥(17,285)

Notes: 1. The above table includes derivatives for which deferred hedge accounting is applied in accordance with “Accounting and Auditing Treatments on
Application of Accounting Standard for Financial Instruments in the Banking Industry” (Industry Audit Committee of Japanese Institute of Certified
Public Accountants No. 24, February 13, 2002) and derivatives for which fair value hedge accounting is applied.
2. Fair value is calculated using the discounted present value.
Millions of yen

Derivatives for which hedge accounting is not applied
As of March 31,
Category

Over-the-countertransactions

2018
Notional amount

Notional amountover 1 year

Interest rate swaps
Fixed-rate receivable / Floating-rate payable¥13,461¥13,461

Floating-rate receivable / Fixed-rate payable

13,461

13,461

Type

Fair value

Total
Notes: 1. The above transactions are evaluated at fair value, and valuation gains (losses) are recorded in the statements of income.
2. Fair value is calculated using the price indicated by the financial institution.

98 Sony Financial Holdings Inc. Financial Data Book 2018¥(66)

Valuation gains(losses)

¥(66)

66

66

¥ ̶

¥ ̶

Sony Bank Financial Data (Non-consolidated)

Millions of yen

Derivatives for which hedge accounting is applied
As of March 31,

2018

MethodType

Hedged item

Notional amount

Notional amountover 1 year

Deferred hedge
accounting

Interest rate swaps
Floating-rate receivable / Fixed-rate payable Deposits¥103,000¥103,000Fair value hedge
accounting

Interest rate swaps
Available-for-saleFloating-rate receivable / Fixed-rate payable securities (bonds)

268,367

241,415

Total

Fair value¥

130(12,300)¥(12,169)

Notes: 1. The above table includes derivatives for which deferred hedge accounting is applied in accordance with “Accounting and Auditing Treatments on
Application of Accounting Standard for Financial Instruments in the Banking Industry” (Industry Audit Committee of Japanese Institute of Certified
Public Accountants No. 24, February 13, 2002) and derivatives for which fair value hedge accounting is applied.
2. Fair value is calculated using the discounted present value.

Currency derivatives
Derivatives for which hedge accounting is not applied

Millions of yen

As of March 31,

2017
Notional amount

Notional amountover 1 year

Sold

¥ 47,967¥̶Bought104,561

̶

258

258

Sold

46,494

̶

1,309

1,309

Bought18,449

̶

1,018

1,018

Sold

214

̶

(1)

0

Bought

212

̶

1

0

Category

Over-the-countertransactions

Type

Fair value

Valuation gains(losses)¥¥

Forward foreign exchanges
69

69

Foreign exchange margin transactions

Currency options

Currency forwards
Sold
Bought̶̶̶̶

15,265

̶

(126)

(126)

¥2,529¥2,530Total
Notes: 1. The above transactions are evaluated at fair value, and valuation gains (losses) are recorded in the statements of income.
2. Fair value is calculated using the discounted present value or the option pricing model.

Derivatives for which hedge accounting is applied

Millions of yen

As of March 31,
MethodFair value hedge
accounting

2017
Type

Currency swaps

Hedged item

Available-for-sale securities (bonds)

Total

Notional amount

Notional amountover 1 year

¥14,645¥4,700Fair value¥(673)¥(673)

Notes: 1. Fair value hedge accounting is applied.
2. Fair value is calculated using the discounted present value.

Sony Financial Holdings Inc. Financial Data Book 2018 99

Sony Bank Financial Data (Non-consolidated)

Derivatives for which hedge accounting is not applied

Millions of yen

As of March 31,

2018
Notional amount

Notional amountover 1 year

Sold

¥ 66,635

¥̶

¥ 152

¥ 152

Bought153,069

̶

499

499

Sold

62,635

̶

2,480

2,480

Bought21,987

̶

1,020

1,020

Sold

156

̶

(1)

0

Bought

206

̶

1

0

Category

Over-the-countertransactions

Type

Valuation gains(losses)

Fair value

Forward foreign exchanges

Foreign exchange margin transactions

Currency options

Currency forwards
Sold
Bought̶̶̶̶

14,216

̶

(325)

(325)

¥3,828¥3,828

Total
Notes: 1. The above transactions are evaluated at fair value, and valuation gains (losses) are recorded in the statements of income.
2. Fair value is calculated using the discounted present value or the option pricing model.

Derivatives for which hedge accounting is applied

Millions of yen

As of March 31,
MethodFair value hedge
accounting

2018
Type

Currency swaps

Hedged item

Available-for-sale securities (bonds)

Total
Notes: 1. Fair value hedge accounting is applied.
2. Fair value is calculated using the discounted present value.

100 Sony Financial Holdings Inc. Financial Data Book 2018

Notional amount

Notional amountover 1 year

¥19,200¥14,000

Fair value¥(687)¥(687)

Sony Bank

Performance Indicators (Non-consolidated)
1 Key Performance Indicators
Millions of yen

For the years ended March 31,

2014

Ordinary revenues
Ordinary profit
Net income
Common stock
Number of shares issued and outstanding (shares)
Total net assets
Total assets
Deposits
Loans
Securities
Non-consolidated capital adequacy ratio
Dividend payout ratio
Number of employees

2015

¥

33,994
5,845
3,585
31,000620,000
72,774
2,056,704
1,890,022
1,057,419
773,81111.72%

2016¥

35,7147,298
4,634
31,000620,000
77,0642,062,525
1,878,256
1,187,187
730,01310.65%

̶

̶

430

455

¥

34,892
5,857
3,912
31,000620,000
77,4282,126,564
1,923,506
1,344,184
620,993
9.89%
50.07%
456

2017

2018

¥

35,105
4,634
3,176
31,000620,000
81,332
2,424,236
2,112,985
1,539,630
631,2969.75%
50.06％
480¥

36,2706,557
4,474
31,000620,000
85,7292,635,028
2,219,325
1,596,376
674,285
10.45％
50.01％
487

Notes: 1. Number of employees refers to full-time employees.
2. In the fiscal year ended March 31, 2017, the method for measuring credit risk in the calculation of the non-consolidated capital adequacy ratio waschanged from the previous “standard approach” to the “foundation internal ratings-based approach.”

2 Status of Operations (Deposits)
2- 01 Average and year-end balance of deposits by category
Average balance
Millions of yen

2017

2018

For the years ended March 31,

Domestic
divisionInternational
division

Total

Domestic
divisionInternational
division

Total

Floating deposits
Time and saving deposits
Other deposits
Total¥ 563,912
1,101,104300¥1,665,317¥177,323
165,52127¥342,872¥ 741,235
1,266,626
328¥2,008,190¥ 664,602
1,130,959
608¥1,796,170¥177,041
193,48249¥370,572¥ 841,643
1,324,441
658¥2,166,743

Year-end balance
Millions of yen

2017
As of March 31,

Floating deposits
Time and saving deposits
Other deposits
Total

2018

Domestic
divisionInternational
division

Total

Domestic
divisionInternational
division

Total¥ 630,964
1,129,004
348¥1,760,317¥178,597
174,02346¥352,668¥ 809,562
1,303,027
395¥2,112,985¥ 672,877
1,134,731
720¥1,808,329¥190,691
220,24756¥410,995¥ 863,569
1,354,978
777¥2,219,325

Note: Deposits (floating deposits and time and saving deposits) of the Domestic division include deposits from the parent company and its subsidiaries in theamount of ¥41,894 million and ¥60,078 million as of March 31, 2017 and 2018, respectively.

2- 02 Balance of time deposits by remaining period
Millions of yen

2017

2018

As of March 31,

Fixed rate
time deposits

Floating rate
time deposits

Less than 3 months
3 months or more, less than 6 months
6 months or more, less than 1 year
1 year or more, less than 2 years
2 years or more, less than 3 years
3 years or moreTotal

¥ 284,575
411,120
403,920
60,494
15,381
52,275¥1,227,766

¥̶
̶
̶
̶
̶
̶

¥̶

Total

Fixed rate
time deposits

Floating rate
time deposits¥ 284,575
411,120
403,920
60,494
15,381
52,275¥1,227,766¥ 329,325
434,419
401,735
39,56319,36549,454¥1,273,863

¥̶
̶
̶
̶
̶
̶

¥̶

Total

¥ 329,325
434,419
401,735
39,56319,36549,454¥1,273,863

Note: The above table does not include thrift saving deposits.

Sony Financial Holdings Inc. Financial Data Book 2018 101

Sony Bank Performance Indicators (Non-consolidated)

3 Status of Operations (Loans)
3- 01 Average and year-end balance of loans by category
Average balance
Millions of yen

2017
Domestic
division

For the years ended March 31,

Loans on bills¥

Loans on deeds

1,423,903

̶International
division¥̶

Domestic
division

Total

¥

̶

¥

1,432,294

1,534,294

16,023

1

16,025̶̶̶

¥1,439,927¥8,391¥1,448,319

Bills discounted

International
division

¥

̶

8,390

Overdrafts
Total

2018

̶

Total

¥

̶

7,933

1,542,227

18,7502

18,752̶̶̶

¥1,533,044¥7,935¥1,560,979

Year-end balance
Millions of yen

2017
Domestic
division

As of March 31,

2018

International
division

Total

Loans on deeds

1,514,358

7,187

1,521,546

1,569,455

8,024

1,577,480

18,081

2

18,08418,893

1

18,895

Overdrafts
Bills discounted
Total

̶

¥

¥

Total

¥

̶

¥

International
division

Loans on bills

̶¥

Domestic
division

̶

̶

¥

̶

̶

̶

̶

̶

̶

̶

¥1,532,440¥7,190¥1,539,630¥1,588,349¥8,026¥1,596,376

3- 02 Balance of loans by remaining period
Millions of yen

2017
As of March 31,

Fixedinterest rates

Floating
interest rates

Less than 1 year¥

¥ 14,787

913

2018
Total

¥

15,700Fixedinterest rates¥

Floating
interest rates

1,316¥ 11,861

Total¥

13,178Over 1 year, not exceeding 3 years

2,675

20,897

23,572

2,068

17,214

Over 3 years, not exceeding 5 years

5,658

22,14327,802

5,548

21,25126,800Over 5 years, not exceeding 7 years

10,631

13,76824,39910,4397,958

18,397

Over 7 years, not exceeding 10 years

28,493

16,32444,81828,072

16,20944,282

Over 10 years

630,990754,262

1,385,252

629,749

825,790

1,455,540̶

18,08418,084

̶

18,89518,895¥679,363¥860,267¥1,539,630¥677,195¥919,180¥1,596,376

No fixed redemption
Total

19,282

3- 03 Balance of loans by collateralMillions of yen

As of March 31,

Pledged securities

2017

¥

2018
̶

¥

̶

Pledged receivables

̶

Pledged merchandise̶̶

1,081,498

1,111,211

̶̶

Pledged real estate
Others̶

Subtotal

1,081,498

1,111,211

Guaranteed

160,081

213,515

Credit298,050

271,649

Total¥1,539,630¥1,596,376

Balance of acceptances and guarantees at the end of the period
Not applicable

102 Sony Financial Holdings Inc. Financial Data Book 2018

Sony Bank Performance Indicators (Non-consolidated)

Customers’ liabilities for acceptances and guarantees classified by type of collateral
Not applicable

3- 04 Balance of loans by industry
Millions of yen, %2017
As of March 31,

Individual

2018

BalanceComposition

BalanceComposition¥1,470,596

95.52%¥1,544,485

96.74%

Corporation

69,034

4.48

51,890

3.25

Manufacturing industries

25,8281.68

20,0101.25

Construction

1,519

0.10

502

0.03

Information and telecommunications

2,589

0.17

568

0.03

Transportation / Mail services

6,156

0.40

4,189

0.26

Wholesalers / Retailers

4,752

0.31

2,489

0.15

Financial services / Insurance

5,010

0.33

3,000

0.18

Real estate / Goods leasing services

21,3171.38

19,487

1.22

Various service

337

0.02

125

0.00

Local government

1,521

0.10

1,517

Total

¥1,539,630

100.00%¥1,596,376

0.09
100.00%3- 05 Loan-deposit ratio: year end and annual average%

2017
As of March 31, for the years ended March 31,

Domestic
divisionInternational
division

At the year end

87.05%

2.03%

Annual average

86.46

2.44

2018
Total

Domestic
divisionInternational
division

72.86%

87.83%

1.95%

71.93%

72.12

86.46

2.14

72.04

Total

Loan balance at year end (annual average) ×
Note: Loan-deposit ratio =100
Deposit balance at year end (annual average)

3- 06 Reserve for possible loan losses: balance at year end and increase (decrease) during

the year
Millions of yen

2017

2018

As of March 31, for the years ended March 31,

Balance at the endof the period

Increase(Decrease)

Balance at the endof the period

Increase(Decrease)

General reserve for possible loan losses

¥438

¥(73)

¥416

¥ (22)

Specific reserve for possible loan losses

532

9

390

(141)

̶

̶

̶

̶

¥971

¥(64)

¥806

¥(164)

Reserve for possible loan losses for specific foreign countries
Total

3- 07 Write-off loans
Millions of yen

For the years ended March 31,

Total

2017

2018

¥0

¥0

Sony Financial Holdings Inc. Financial Data Book 2018 103

Sony Bank Performance Indicators (Non-consolidated)

4 Status of Operations (Securities)
4- 01 Average balance of securities under proprietary accounts by category
Not applicable

4- 02 Balance of securities by category and remaining period
Millions of yen

2017

As of March 31,

Within 1 year

More than
1 year to
3 years

Japanese government bonds

More than
3 years to
5 years

More than
5 years to
7 years

More than
7 years to
10 years

¥

¥

¥

2,113

Over 10 years

Unspecified
term

Total

̶

¥66,696¥̶¥103,083

̶

34,866
63,611¥ 19,154¥ 15,117

Japanese local government
bonds

̶

516

34,034315̶̶Japanese corporate bonds

̶

5,055

13,04237,066

6,139

2,079

228

̶

Japanese stocks

̶

̶

̶

̶

̶

̶

2,050

2,050

Other securities

87,714

152,294

109,574

43,461

10,574

19,5894,474

427,684

87,714

152,294

109,574

43,461

10,574

19,589̶

423,209

Of which: Foreign bonds
Others
Total

̶

̶

̶

̶

̶

̶

4,474

4,474

¥111,924¥180,971¥182,789¥49,916¥12,653¥86,515¥6,525¥631,296
Millions of yen

2018

As of March 31,

Within 1 year

More than
1 year to
3 years

Japanese government bonds¥ 12,867¥ 15,078

Japanese local government
bonds

1,501

14,60319,896̶̶̶̶

36,001

Japanese corporate bonds

3,724

26,61834,823

̶

̶

200

̶

65,366More than
3 years to
5 years

More than
5 years to
7 years

More than
7 years to
10 years

Over 10 years

Unspecified
term

Total

¥

¥

̶

¥20,363¥ 46,478¥̶¥ 96,872

2,085Japanese stocks

̶

̶

̶

̶

̶

̶

2,050

2,050

Other securities

88,227145,038

107,084

16,794

17,81993,9705,058

473,993

88,227145,038

107,084

16,794

17,81993,970̶

468,935

̶

̶

̶

̶

̶

̶

5,058

5,058

¥106,320¥201,338¥163,889¥16,794¥38,182¥140,649¥7,109¥674,285

Of which: Foreign bonds
OthersTotal

4- 03 Average and year-end balance of securities by category
Average balance
Millions of yen

2017

2018

For the years ended March 31,

Domestic
divisionInternational
division

Total

Domestic
divisionInternational
division

Japanese government bonds¥ 85,241¥̶¥ 85,241¥ 94,186

¥

Total

̶

¥ 94,186

Japanese local government bonds

35,520̶

35,52035,082

̶

35,082

Japanese corporate bonds

62,143

̶62,14365,128

̶

65,128Japanese stocks

2,050

̶

2,050

2,050

̶

2,050

Other securities

2,348

414,862

417,2112,375

465,149

467,525

̶

414,862

414,862̶

465,149

465,149

2,348

̶

2,348

2,375

̶

2,375

¥187,305¥414,862¥602,167¥198,824¥465,149¥663,973

Of which: Foreign bonds
OthersTotal

104 Sony Financial Holdings Inc. Financial Data Book 2018

Sony Bank Performance Indicators (Non-consolidated)

Year-end balance
Millions of yen

2017

2018

As of March 31,

Domestic
divisionInternational
division

Total

Domestic
divisionInternational
division̶Japanese government bonds¥103,083

¥

¥

Total

¥103,083¥ 96,872

Japanese local government bonds

34,866

̶

34,86636,001

̶

36,001

Japanese corporate bonds

63,611

̶

63,611

65,366

̶

65,366

Japanese stocks

2,050

̶

2,050

2,050

̶

2,050

Other securities

4,474

423,209427,684

5,058

468,935

473,993̶

423,209423,209̶

468,935

468,935

Of which: Foreign bonds
OthersTotal

̶¥ 96,872

4,474

̶

4,474

5,058

̶

5,058

¥208,086¥423,209¥631,296¥205,350¥468,935¥674,285

4- 04 Securities-deposit ratio: year end and annual average
%

2017

2018

As of March 31, for the years ended March 31,

Domestic
divisionInternational
division

Domestic
divisionInternational
division

Total

At the year end

11.82%

120.00%29.87%

11.35%

114.09%30.38%

Annual average

11.24

120.99

29.98

11.06

125.52

30.64

Total

Securities balance at year end (annual average)
Note: Securities-deposit ratio =× 100
Deposit balance at year end (annual average)

Sony Financial Holdings Inc. Financial Data Book 2018 105

Sony Life MCEVMCEV Results for Sony Life
1 MCEV Results
1- 01 MCEV resultsSony Life’s MCEV as of March 31, 2018 increased ¥192.1 billion, due to the revision of the methodologies for the quantification of
insurance risk, the addition of new business and other factors. Please refer to Sections 1- 06 (8) and 3- 07 (2) for the revision of themethodologies for the quantification of insurance risk.
Billions of yen

As of March 31,

MCEV

2017

2018

Change¥1,441.1¥1,633.2¥192.1

Adjusted net worth

1,657.7

1,786.1

128.4

Value of existing business(216.7)(152.9)63.7

1- 02 Adjusted net worth
Adjusted net worth is calculated as the market value of assets allocated for the covered business in excess of statutory policy reserves andother liabilities as of the valuation date. Based on generally accepted accounting principles and practices in Japan (“Japanese GAAP”), it iscalculated as the total amount of the net assets section on the balance sheets, adding reserve for price fluctuations, contingency reserve,
reserve for possible loan losses, reinsurance debit for coinsurance-type reinsurance (future profits to be recognized), unrealized gains orlosses on held-to-maturity securities, unrealized gains or losses on policy-reserve-matching bonds and unrealized gains or losses on landand buildings, less unfunded pension liabilities and intangible fixed assets, and adjusting for the amount of tax effect equivalent to thesenine items, on which valuation gains or losses on subsidiaries and affiliated companies are added. The adjusted net worth at the end of thecurrent fiscal year increased ¥128.4 billion, primarily because of the increase in unrealized gain on held-to-maturity securities caused by adecrease in interest rates. The breakdown is shown in the table below.
Billions of yen

As of March 31,

2017

2018

ChangeAdjusted net worth¥1,657.7¥1,786.1¥128.4

Total net assets

473.6

492.8

19.2

Reserve for price fluctuations

46.0

47.9

1.9

Contingency reserve

82.5

89.9

7.5

Reserve for possible loan losses

0.0

0.0

(0.0)

Reinsurance debit for coinsurance-type reinsurance

1.2

2.1

0.9
137.1

Unrealized gains or losses on held-to-maturity securities

1,445.6

1,582.6

Unrealized gains or losses on policy-reserve-matching bonds

26.0

34.9

8.9

Unrealized gains or losses on land and buildings

71.0

69.7

(1.3)

Unfunded pension liabilities

(3.6)

(2.4)

1.1

Intangible fixed assets(19.4)(23.2)(3.9)

Tax effect equivalent of above nine items(461.8)(504.4)(42.6)

(3.4)

(3.7)

(0.4)

Valuation gain or loss on subsidiaries and affiliated companies

Billions of yen

As of March 31,

2017

2018

ChangeAdjusted net worth¥1,657.7¥1,786.1¥ 128.4

Free surplus

496.1

926.1

430.0

1,161.7

860.0(301.6)

Required capitalSony Life sets its required capital as the larger of the amount of Japanese regulatory minimum capital requirement at the solvency margin
ratio of 200% or the amount of capital to cover risks based on an internal model based on economic value. The required capital at the endof the current fiscal year decreased due to the revision of the methodologies for the quantification of insurance risks. Please refer to Section
3- 07 for the method used to calculate required capital.

106 Sony Financial Holdings Inc. Financial Data Book 2018

Sony Life MCEV

1- 03 Value of existing business
The value of existing business is the present value of certainty-equivalent profit less the time value of options and guarantees, and frictionalcosts and the cost of non-hedgeable risks. The value of existing business as of March 31, 2018 increased ¥63.7 billion, primarily due to arevision of the methodologies used for the quantification of insurance risks and the addition of new business, which increased value, offset
by the effect of a decrease in interest rates, which lowered the value of existing business. The breakdown of the value of existing businessis shown in the table below.
Billions of yen

As of March 31,

2017

2018

ChangeValue of existing business¥(216.7)¥(152.9)¥ 63.7

Present value of certainty-equivalent profit

350.0

316.7

(33.3)

Time value of options and guarantees(145.2)(136.0)9.1

Frictional costs(35.6)(22.7)

12.9

Cost of non-hedgeable risks(385.9)(310.9)75.0

1- 04 New business value
New business value represents the value at point of sale of new business acquired during the fiscal year ended March 31, 2018 and does
not include the value of new business expected to be acquired in the future.
The new business value in this fiscal year increased ¥41.3 billion, primarily because of the increase in the overall level of interest rates
throughout the year compared with the previous fiscal year. The breakdown of new business value is as follows:
Billions of yen

For the years ended March 31,

2017

2018

ChangeValue of new business¥ 29.1¥ 70.4¥41.3

Present value of certainty-equivalent profit

68.3

106.3

37.9

Time value of options and guarantees

(9.1)

(6.9)

2.3

Frictional costs

(0.1)

(0.2)

(0.1)

Cost of non-hedgeable risks(29.8)(26.8)

3.1

Other profits or losses

(0.2)

(2.0)

(1.9)

1- 05 New business margin
The new business margin described below is the ratio of the value of new business to the present value of premium income. The present
value of premium income is calculated applying the same assumptions as those for the calculation of new business value, and is based onpremiums before the deduction of reinsurance premiums. The business margin in the fiscal year ended March 31, 2018 increased due to achange in the product mix and the increase in the overall level of interest rates throughout the year compared with the previous fiscal year.
Billions of yen

For the years ended March 31,

2017

Value of new business¥

Present value of premium income
New business margin

29.1

2018

¥

70.4

Change¥ 41.3

1,297.4

1,213.8(83.5)

2.2%

5.8%

3.6 points

Relationships between annualized premiums from new policies and the present value of premium income from new business wereas follows:
Billions of yen

For the years ended March 31,

2017

2018

ChangeNew business single premium¥ 22.6¥101.5¥ 79.0

Annualized premiums from level premium new business1

104.7

93.3

(11.4)

Average annualization multiplier

12.17

11.92

(0.25)

2

1

Annualized premiums from level premium new business are calculated by multiplying the number of payments in a year by the amount of premiums received at
one time. It should be noted that the definition of annualized premiums here is different from that used in disclosures such as financial results and annual reports
issued by Sony Life.
2
The average annualization multiplier is calculated as (Present value of premium income – New business single premium) / Annualized premiums from level
premium new business.

Sony Financial Holdings Inc. Financial Data Book 2018 107

Sony Life MCEV

1- 06 Reconciliation analysis from MCEV at the end of the prior year
The table below shows the reconciliation analysis of MCEV as of March 31, 2018, from MCEV as of March 31, 2017.
Billions of yen
Free surplus

Required capital

Value of existing
business¥496.1¥1,161.7¥(216.7)¥1,441.1

Opening adjustments(23.1)

̶̶

(23.1)

Adjusted opening MCEV

¥1,418.0

Opening MCEV (MCEV as of March 31, 2017)

MCEV¥473.0¥1,161.7¥(216.7)

New business value

(3.2)

1.1

72.5

70.4

Expected existing business contribution (risk-free rate)

(1.4)

(2.8)

20.5

16.4

Expected existing business contribution (in excess of risk-free rate)

0.6

1.2

5.1

6.8

Transfers from value of existing business and required capital
to free surplus(8.8)(61.6)

70.3

̶(66.1)

̶66.1

̶Experience variances

119.5(114.3)

4.0

9.2

Assumption changes

9.1

(9.1)

36.2

36.2

Other operating variance373.3(373.3)

80.4

80.4

Operating MCEV earnings

489.2(558.8)

289.0

219.4

Economic variances(36.1)

257.1(225.3)

(4.2)

̶

̶

̶

̶

Total MCEV earnings

453.1(301.6)

63.7

215.2

Closing adjustments

̶

̶

̶

̶

¥926.1¥ 860.0¥(152.9)¥1,633.2

Of which, on new business

Other non-operating variance

Closing MCEV (MCEV as of March 31, 2018)(1) Opening adjustments
These adjustments reflect dividend payments to shareholders.
(2) New business value

This figure reflects increases resulting from the acquisition of new business during the fiscal year ended March 31, 2018. Please refer to
Section 3- 10 for information concerning the calculation method.
(3) Expected existing business contribution (risk-free rate)
This figure includes the release of the portion for the fiscal year ended March 31, 2018 of the time value of options and guarantees and thecost of non-hedgeable risks, in addition to the unwinding of the opening MCEV at a risk-free rate.
(4) Expected existing business contribution (in excess of risk-free rate)
This figure reflects the profit expected in excess of the risk-free rate generated by holding assets such as ordinary corporate bonds, loans,stocks and real estate. The expected yield used for the fiscal year ended March 31, 2018 was negative 0.147%, which was developed byreflecting Sony Life’s view of the market environment and annual investment plans for the year against the asset balance at the end of theprevious fiscal year.
(5) Transfer from value of existing business and required capital to free surplus
This figure tracks changes in free surplus that emerge over the course of a fiscal year due to transferring profit earned during the fiscal year
from existing business value to free surplus and to changes in required capital. The transfer of profit includes both the transfer of profit that
was anticipated during the current fiscal year under the MCEV calculation performed at the prior year end and the transfer of profit that wascalculated as a component of new business value for the current fiscal year.
The value of MCEV itself does not change as a result of this transfer as the transfer merely constitutes an internal shift among MCEV
components.
(6) Experience variances
These variances show the impact on MCEV of the actual versus assumed differences in non-economic expected profit for the fiscal year
ended March 31, 2018 under the MCEV calculation as of March 31, 2017, and of the differences between actual policies in force as ofMarch 31, 2018, and those that were projected to be in force on March 31, 2017 using persistency assumptions. The decrease in required
capital by ¥114.3 billion was caused by the risk aggregation effect when the required capital for the new business, which was measured ona stand-alone basis, was aggregated with the required capital for existing business.
(7) Assumption changes
This figure primarily indicates the impact of changes in assumptions based on experience data for mortality and morbidity rates, lapse andsurrender rates, and operating expense rates. The value of existing business increased primarily because of an improvement in mortality
and morbidity.

108 Sony Financial Holdings Inc. Financial Data Book 2018

Sony Life MCEV

(8) Other operating varianceThis represents the impact of improvements and corrections of the model used in calculating MCEV.
Sony Life revised the methodologies for the quantification of insurance risks to better reflect its risk profile. Along with this revision,
Sony Life also revised the cost of capital rate from 2.5% to 3.0%. Please refer to 3- 07 (2) for the revision of insurance risk and 3- 15 forthe revision of the cost of capital rate.
In addition, Sony Life revised the shock factors on interest rates for ultra-long term durations where there is no market data, specifically,
after the 40th year for the Japanese yen rates and after the 30th year for the U.S. dollar rates that are used for the calculation of nonhedgeable interest rate risks. This revision was made in consideration of the discussion on Insurance Capital Standard (ICS) being developed by the International Association of Insurance Supervisors (IAIS) for the international capital standard. This revision is reflected in thisline, which decreased the required capital by ¥58.4 billion.
Sony Life revised pricing for some of its products in February 2018 and April 2018. Renewal premium in the projection reflects those pricing revisions.
(9) Operating MCEV earnings
This figure shows the aggregate amount of items (2) through (8).
(10) Economic variances
These variances show the impact of actual to assumed differences in economic assumptions, such as market interest rates and implied
volatilities that were reflected in the market environment when calculating MCEV as of March 31, 2017 (for new business values, as of thedate when they were calculated) on future values, and the impact of the actual to assumed difference in expected investment income that
was assumed to be realized during the year ended March 31, 2018 under MCEV as of March 31, 2017.
The major reasons for the decrease in the value of existing business include an update of economic scenarios due to changes in themarket environment such as a decrease in interest rates, an increase in stock prices and changes in implied volatilities, accounting for adecrease in the present value of certainty-equivalent profit of ¥225.6 billion, a decrease in the time value of options and guarantees of¥19.8 billion, an increase in frictional costs of ¥4.5 billion and an increase in the cost of non-hedgeable risks of ¥13.2 billion. Another factor
is an increase in expenses tied to the rise in inflation rates, accounting for a decrease in the value of existing business of ¥1.9 billion. The
major reason for the increase in the adjusted net worth was the increase in prices of government bonds caused by a decrease in interest
rates. The required capital increased primarily because the amount of liabilities and risks on an economic basis increased due to adecrease in interest rates, causing increases in frictional costs and the cost of non-hedgeable risks.
Please note that the significant changes in adjusted net worth and value of existing business offset each other with the effect of ALM.
The total amount of changes in MCEV is disaggregated into a decrease of ¥2.3 billion as a result of changes in the market environment
such as the decrease in interest rates, and a decrease of ¥1.9 billion as a result of the increase in inflation rates.
(11) Other non-operating variance
No items were included in other non-operating variance.
(12) Closing adjustments
No items were included in closing adjustments.

Sony Financial Holdings Inc. Financial Data Book 2018 109

Sony Life MCEV

1- 07 Sensitivity analysis
The impact of changing the underlying assumptions on MCEV and new business value is as follows:

Sensitivities of MCEVBillions of yen
Assumption

Change in assumption

MCEV

Base

No change¥1,633.2

Interest rates

50bp decrease
50bp increase

Change in amount¥Rate of change̶̶

1,552.6(80.6)(5%)

1,679.2

46.0

3%

Swap rates

1,656.3

23.1

1%

Stock / Real estate market value

10% decrease

1,610.7(22.5)(1%)

Stock / Real estate implied volatility

25% increase

1,604.2(28.9)(2%)

Interest swaption implied volatility

25% increase

1,614.5(18.7)(1%)

Maintenance expenses

10% decrease

1,659.7

26.5

2%
(1%)

Lapse and surrender rates

× 0.9

1,617.9(15.3)

Mortality rates

Death protection products × 0.95

1,699.3

66.1

4%

Third-sector and annuity products × 0.95

1,620.8(12.3)(1%)

× 0.95

1,698.6

65.5

4%Required capital

Regulatory minimum

1,652.1

18.9

1%

Foreign exchange rates

10% appreciation of JPY

1,613.5(19.7)(1%)

Morbidity rates

The breakdown of the changes in MCEV into the adjusted net worth and the value of existing business are shown in the table below.
Of items not specified in this table, only the value of existing business has been changed while adjusted net worth remains the same.
Billions of yen
Assumption

Change in assumption

MCEV

Adjusted net worth

Value ofexisting business

Interest rates

50bp decrease¥(80.6)¥ 830.8¥(911.4)

50bp increase

46.0(718.2)764.2

Stock / Real estate market value

10% decrease(22.5)(8.4)(14.0)

Foreign exchange rates

10% appreciation of JPY(19.7)

0.1(19.8)

Sensitivity of new business value
Billions of yen
New business
value

Assumption

Change in assumption

Base

No change

¥70.4

¥ ̶

̶

Interest rates

50bp decrease

65.6

(4.8)

(7%)

50bp increase

73.6

3.2

5%

Swap rates

63.4

(7.1)

(10%)

Stock / Real estate market value

10% decrease

70.4

(0.0)

(0%)

Stock / Real estate implied volatility

25% increase

69.9

(0.5)

(1%)

Interest swaption implied volatility

25% increase

69.1

(1.3)

(2%)

Maintenance expenses

10% decrease

72.2

1.7

2%

Lapse and surrender rates

× 0.9

77.5

7.0

10%

Mortality rates

Death protection products × 0.95

75.4

5.0

7%

Third-sector and annuity products × 0.95

70.1

(0.3)

(0%)

× 0.95

72.1

1.7

2%

Required capital

Regulatory minimum

70.4

0.0

0%

Foreign exchange rates

10% appreciation of JPY

67.0

(3.4)

(5%)

Morbidity rates

110 Sony Financial Holdings Inc. Financial Data Book 2018

Change in amountRate of changeSony Life MCEV

(1) Interest rates
This sensitivity represents the impact of an immediate parallel shift of the Japanese and foreign government bond yield curves as of the endof March 2018, and the impact if swap rates were used instead of government bond yields. In each parallel shift sensitivity, adjusted net
worth changes as the market value of bonds and other assets changes; this is not applicable to the case where swap rates are used. In
each of the interest rate sensitivities, the value of existing business changes as interest rates, the discount rate, yields of new bonds to bepurchased in the future as existing bonds mature and the investment returns on stocks and other assets change.
Please note that, due to bonds held for ALM purposes, the adjusted net worth moves in a direction to offset a change in the value ofexisting business.
The sensitivities are calculated for a 50bp increase and decrease rather than a 100bp increase and decrease as illustrated in the MCEV
Principles, considering the level of interest rates in Japan. Here, the sensitivity scenarios were made so that the parameters related to interest rate volatility were equal to those derived for the base case. Only the parameters related to the interest rate term structure were alteredwhen scenarios were developed using the interest rate model. The ultra-long term risk-free rates were extrapolated without changing theultimate forward rate. In the previous year-end disclosure, the floor for downward changes in interest rates was set at 0%, but the floor was
removed from the current year-end disclosure.
The sensitivities of new business value reflect the changes in unrealized gains or losses of pre-hedge assets included in new businessvalue. Please refer to Section 3- 10 for details on pre-hedge.
The rate of change narrowed this fiscal year, due primarily to an increase in hedging of interest rate risk through an extended scope of
products subject to pre-hedge scheme and a change in the product mix.
(2) Stock and real estate market value
This sensitivity represents the impact of an immediate drop in market values of stock and real estate as of the end of March 2018. Adjusted
net worth is directly affected by a change in market value of stock and real estate. The value of existing business would also be affected bya change in the value of assets.
(3) Implied volatility of stock and real estateThis sensitivity represents the impact of an increase in the implied volatilities of stock used in calculating the time value of options andguarantees. The value of existing business changes because changes in stock implied volatilities change the time value of options andguarantees.
(4) Interest swaption implied volatility
This sensitivity represents the impact of a change in the implied volatility of interest swaption used in calculating the time value of options
and guarantees. The value of existing business would change as the time value of options and guarantees changes.
(5) Maintenance expenses
This sensitivity represents the impact of a decrease in maintenance expenses. It should be noted that maintenance expenses do not include
sales commissions from the in-force policies payable to Sony Life’s Lifeplanner sales employees and other sales force in future periods.
(6) Lapse and surrender rates
This sensitivity represents the impact of a decrease in lapse and surrender rates.
(7) Mortality rates
This sensitivity represents the impact of a decrease in mortality rates. Sony Life has shown the impact on “death protection products” andthe impact on “third-sector insurance and annuity products” separately, as they would have different impacts. In the segment of “thirdsector insurance and annuity products,” Sony Life includes base policies and riders of which the principal benefits are accidental death,disability, cancer, medical and nursing care benefits, and individual annuities. No management actions were reflected.
(8) Morbidity rates
This sensitivity represents the impact of a decrease in the morbidity rates of disease and others in third-sector products.
(9) Required capitalThis sensitivity represents the impact in the event that required capital is changed to the regulatory minimum level, which is a solvency
margin ratio of 200%.
(10) Foreign exchange rates
This sensitivity represents the impact of an immediate appreciation of the Japanese yen as of the end of March 2018. Adjusted net worth
is affected by the change in value of assets and liabilities denominated in foreign currency. The value of existing business would also
be affected.
(11) Other
The following points should be noted regarding the sensitivities:• Frictional costs and the cost of non-hedgeable risks do not change in the sensitivity tests, with the exception of frictional costs, which arechanged in terms of (9) required capital.
• Values of subsidiaries and affiliated companies are not changed except in the case of (2) stock and real estate market value and (10)foreign exchange rates, where the stock value of subsidiaries and affiliated companies is altered.
• The impact of changing more than one assumption at a time is not equal to the sum of the impacts for each assumption.

Sony Financial Holdings Inc. Financial Data Book 2018 111

Sony Life MCEV

2 Assumptions
2- 01 Economic assumptions
Sony Life has made economic assumptions in its calculation of MCEV as of the end of March 2018.
(1) Risk-free rate
Sony Life has used the JGB yields and the U.S. Treasury yields as of the end of March 2018 as reference rates for the certainty-equivalentprojections.
Sony Life has not added a liquidity premium on the risk-free rate as there are no products that are considered to have reasonably
predictable and illiquid cash flows and would therefore be appropriate to apply a liquidity premium.
Regarding the extrapolation for ultra-long term risk-free rates where there is no market data, an ultimate forward rate was applied. Morespecifically, the ultimate forward rate was set at 3.5% and the last liquid point was set at 40 years (30 years for USD) and, based on
Smith-Wilson methodology, forward rates on or after 41 years (31 years for USD) were extrapolated to converge to the ultimate forward
rate over 20 years (30 years for USD). These parameters were set primarily in reference to the discussion on ICS. The reasons for setting
the last liquid point at 40 years (30 years for USD) are as follows:• Government bonds with 40-year maturity (30-year maturity for USD) have high liquidity and observable market data.
• Consistency in valuation between assets and liabilities as Sony Life holds a large amount of government bonds with 30- to 40-year
maturity (30-year maturity for USD).
The risk-free rates used in calculation for key terms (on a par-rate basis) are as follows:%
Japanese yen

As of March 31,

U.S. dollar

2017

2018

2017

2018

Term (in years)
1(0.25%)(0.13%)

1.02%

2.09%

5

(0.12)(0.11)

1.92

2.56

10

0.07

0.04

2.39

2.74

20

0.64

0.53

2.75

2.85

30

0.84

0.74

3.01

2.97

40

0.96

0.89

3.04

3.02

50

1.25

1.19

3.07

3.05

60

1.45

1.40

3.09

3.08

70

1.57

1.53

3.11

3.09

80

1.65

1.61

3.12

3.10

(Data: Ministry of Finance Japan for JGB [extrapolated] and Bloomberg for U.S. Treasury [extrapolated])

For the swap rates used for sensitivity in Section 1- 07 (1), the last liquid point and convergence period were set the same as the basecase. The swap rates used for the sensitivity result (on a par-rate basis) are as follows:%

As of March 31,

Japanese yen

U.S. dollar

2018

2018

Term (in years)
1

0.03%

2.42%

5

0.11

2.71

10

0.26

2.78

20

0.62

2.85

30

0.78

2.82

40

0.87

2.86

50

1.16

2.91

60

1.38

2.95

70

1.52

2.97

80

1.60

2.99

(Data: Bloomberg [extrapolated])

112 Sony Financial Holdings Inc. Financial Data Book 2018

Sony Life MCEV

(2) Interest rate modelSony Life has calibrated the interest rate model to the market as of the end of March 2018. Sony Life has estimated parameters for theinterest rate model from the yield curve and the implied volatilities of interest swaptions with different terms. Sony Life has used 1,000
scenarios generated by Milliman, Inc. in calculating the time value of options and guarantees under the stochastic method.
The implied volatilities of the interest swaption used in Sony Life’s estimation are presented below.
bp

As of March 31,

2017

Term of swap (in years)

Term of option (in years)

1
10
10
10
20
20
20

1
1
10
20
1
10
20

Japanese yen

U.S. dollar

11.9bp
21.4
34.6
38.9
32.6
38.2
40.6

50.7bp
76.1
71.9
55.0
72.3
63.8
51.0

Euro

28.8bp
61.2
68.2
56.8
65.5
59.5
46.9

UK pound37.4bp
73.9
69.5
57.9
73.8
64.8
53.0
(Data: Markit)
bp

As of March 31,

2018

Term of swap (in years)

Term of option (in years)

1
10
10
10
20
20
20

1
1
10
20
1
10
20

Japanese yen

U.S. dollar

8.7bp
17.6
29.6
33.6
22.0
31.5
35.9

52.4bp
68.6
64.4
50.3
65.8
57.7
46.8

Euro

20.6bp
45.7
61.1
52.3
45.5
53.6
45.3

UK pound41.3bp
65.4
65.8
57.1
63.5
61.2
51.9
(Data: Markit)(3) Implied volatilities of foreign exchange rates and stocks
Sony Life has obtained spot implied volatilities from options with different terms. Implied volatilities are all those for at-the-money options.
Sony Life has assumed that forward implied volatilities in the 11th year and beyond are equal to those in the 10th year for both foreignexchange rates and the stock price index as these derivatives have low liquidities for the period over 10 years.
Implied volatilities used for the estimation are as follows:%2017
Foreign exchange

Stocks

As of March 31,

U.S. dollar /Japanese yen

Euro /
Japanese yen

UK pound /Japanese yen

Japan TOPIX

U.S. S&P

Euro SX5E

UK FTSE

Term (in years)
1
5
10

9.5%
9.9
12.3

10.4%
11.2
13.0

11.1%
12.3
11.7

17.4%
18.3
18.6

13.7%
19.4
25.0

16.7%
19.4
20.8

13.5%
17.8
20.6

(Data: Bloomberg for foreign exchange and Markit for stocks)%

2018
Foreign exchange

Stocks

As of March 31,

U.S. dollar /Japanese yen

Euro /
Japanese yen

UK pound /Japanese yen

Japan TOPIX

U.S. S&P

Euro SX5E

UK FTSE

Term (in years)
1
5
10

8.7%
9.2
10.7

9.1%
10.2
11.8

10.6%
12.0
13.0

17.5%
17.0
17.3

17.9%
19.6
23.7

15.3%
16.6
17.9

13.8%
15.8
18.4

(Data: Bloomberg for foreign exchange and Markit for stocks)

Sony Financial Holdings Inc. Financial Data Book 2018 113

Sony Life MCEV

(4) Correlation factors
Sony Life has calculated correlation factors from the monthly return of each index for a period of five years from April 2013 to the end of
March 2018 as there is no market-consistent data for correlation factors.
2017

As of March 31,

Japanese yen Interest rate 1Y
U.S. dollar Interest rate 1Y
Euro Interest rate 1Y
UK pound Interest rate 1Y
U.S. dollar / Japanese yen
Euro / Japanese yen
UK pound / Japanese yen
TOPIX
S&P
SX5E
FTSE

UK
U.S.
pound /
Euro /
dollar /Japanese Japanese Japanese
yen
yen
yen

JapaneseyenInterest
rate 1Y

U.S.
dollarInterest
rate 1Y

Euro
Interest
rate 1YUK
pound
Interest
rate 1Y

1.00
0.11
0.04
0.26
0.37
0.25
0.40
0.32
0.10
0.27
(0.08)

0.11
1.00
0.12
(0.01)
0.24
0.15
0.26
0.17
0.05
0.15
(0.12)

0.04
0.12
1.00
0.20
0.14
0.37
0.23
0.16
0.07
0.09
(0.00)

0.26(0.01)
0.20
1.00
0.20
0.30
0.34
0.28
0.15
0.34
0.07

0.37
0.24
0.14
0.20
1.00
0.76
0.79
0.67
0.27
0.40
0.14

0.25
0.15
0.37
0.30
0.76
1.00
0.79
0.61
0.38
0.30
0.20

0.40
0.26
0.23
0.34
0.79
0.79
1.00
0.71
0.43
0.43
0.09

TOPIX

S&P

SX5E

FTSE

0.32
0.17
0.16
0.28
0.67
0.61
0.71
1.00
0.62
0.63
0.39

0.10
0.05
0.07
0.15
0.27
0.38
0.43
0.62
1.00
0.67
0.71

0.27
0.15
0.09
0.34
0.40
0.30
0.43
0.63
0.67
1.00
0.70

(0.08)(0.12)(0.00)
0.07
0.14
0.20
0.09
0.39
0.71
0.70
1.00

(Data: Ministry of Finance Japan for JPY interest rate and Bloomberg for others)

2018

As of March 31,

Japanese yen Interest rate 1Y
U.S. dollar Interest rate 1Y
Euro Interest rate 1Y
UK pound Interest rate 1Y
U.S. dollar / Japanese yen
Euro / Japanese yen
UK pound / Japanese yen
TOPIX
S&P
SX5E
FTSE

UK
U.S.
pound /
dollar /Euro /
Japanese Japanese Japanese
yen
yen
yen

JapaneseyenInterest
rate 1Y

U.S.
dollarInterest
rate 1Y

Euro
Interest
rate 1YUK
pound
Interest
rate 1Y

1.00
0.13
0.16
0.24
0.36
0.37
0.44
0.37
0.12
0.26
(0.06)

0.13
1.00
0.20
0.14
0.18
0.18
0.27
0.19
0.08
0.08
(0.15)

0.16
0.20
1.00
0.12
0.03
0.31
0.23
0.08
0.05
(0.03)(0.14)

0.24
0.14
0.12
1.00
0.08
0.09
0.24
0.16
0.02
0.19
(0.16)

0.36
0.18
0.03
0.08
1.00
0.71
0.76
0.61
0.20
0.37
0.07

0.37
0.18
0.31
0.09
0.71
1.00
0.77
0.51
0.31
0.17
0.03

0.44
0.27
0.23
0.24
0.76
0.77
1.00
0.70
0.39
0.40
(0.05)

TOPIX

S&P

SX5E

FTSE

0.37
0.19
0.08
0.16
0.61
0.51
0.70
1.00
0.58
0.63
0.27

0.12
0.08
0.05
0.02
0.20
0.31
0.39
0.58
1.00
0.66
0.59

0.26
0.08
(0.03)
0.19
0.37
0.17
0.40
0.63
0.66
1.00
0.64

(0.06)(0.15)(0.14)(0.16)
0.07
0.03(0.05)
0.27
0.59
0.64
1.00

(Data: Ministry of Finance Japan for JPY interest rate and Bloomberg for others)(5) Foreign exchange
Assets denominated in foreign currencies and the value of U.S. dollar-denominated products are converted to Japanese yen using the TTM(telegraphic transfer middle exchange rate) as of the end of March 2018.
The table below shows foreign exchange rates of major currencies.
Yen

As of March 31,

2017

2018

U.S. dollar / Japanese yen¥112.19¥106.24

Euro / Japanese yen

119.79130.52UK pound / Japanese yen

140.08148.842- 02 Future asset allocation(1) Asset allocation in the general accountSegment accounting is conducted for individual life insurance and individual annuity based on the classifications of the non-participatingproduct segment, the semi-participating product segment, the interest rate-sensitive whole life insurance segment and the foreigncurrency-denominated product segment. Asset allocation in the general account under the stochastic method was determined based on
the actual asset allocation in each segment as of the end of March 2018 with an assumption of no changes in asset allocation thereafter.
(2) Asset allocation in the separate account
There are eight funds established in the separate account. The asset allocation for each fund at the beginning of the projection is determined based on the actual fund allocation as of the end of March 2018, and no rebalancing adjustments are applied to maintain the initialfund allocation thereafter.

114 Sony Financial Holdings Inc. Financial Data Book 2018

Sony Life MCEV

2- 03 Other assumptions
Assumptions including mortality and morbidity rates, lapse and surrender rates, and operating expense rates were developed based onbest estimates by product as of the end of March 2018. Best-estimate assumptions are developed to reflect past and current experiences
as well as expected experiences in the future. Expected future changes in assumptions should be reflected only when they are supported
by sufficient reasons. Except for a deteriorating trend in morbidity rates, no other expected future changes are assumed in the bestestimate assumptions applied. Assumptions were developed as follows:(1) Mortality and morbidity rates
Developed based on experiences over the past three years. Deteriorating trends in morbidity rates are taken into account for those
accidental and health (A&H) products for which deteriorating trends were observed when the experience data were analyzed in conducting
the statutory stress test.
(2) Lapse and surrender rates
Lapse and surrender rates for the base case were developed based on experience over the past three years. Sony Life has also developed
dynamic assumptions in accordance with the level of interest rate or investment performance. The dynamic assumptions are made for thefollowing products:• Variable life insurance• Interest rate sensitive whole life insurance• Semi-participating products• Non-participating whole life insurance (including U.S. dollar-denominated insurance)• Non-participating endowment insurance (including U.S. dollar-denominated insurance)• Non-participating educational endowment insurance
Since Sony Life has not identified explicit correlations that relate interest rates or the level of account value against minimum guarantee
amount to lapse and surrender rates for policies other than variable insurance, Sony Life has developed dynamic surrender rates by examining experience on similar products, and taking into account current domestic and overseas practice. Going forward, Sony Life will strive toimprove its approach to dynamic surrender assumptions for the relevant products by carefully monitoring experience data and referring toexperience with similar products and trends of practice in Japan and other countries.
(3) Flexible premiums
There are no flexible premium products and thus no assumptions were developed.
(4) Renewal rates
Developed based on past experiences. Deterioration in mortality and morbidity rates after renewal due to anti-selection is also reflected.
(5) Operating expense rates
Sony Life has developed unit costs of the expenses incurred for maintenance and administration of policies and payments of claims basedon the actual operating expenses in the past fiscal year and the depreciation costs over the past three years. For expected system-related
expenses in the future, the unit costs reflect the average of depreciation costs over the past three years excluding one-off expenses thatare not expected to recur in the future. The one-off expenses excluded from the depreciation costs are ¥1.5 billion (fiscal 2017 base), which
are for system revisions.
MCEV Principles require that, where costs of managing the covered business are incurred within group companies, profit or losses tothose companies are to be valued on a “look through” basis. In relation to the parent company, SFH, unit cost includes managementadministration charges payable to the parent company. In relation to subsidiaries and affiliated companies, unit cost includes the cost
incurred at Sony Life to manage those companies. Other look-through effects are not considered.
(6) Effective tax rate
The effective tax rate is set at 28.00%.
(7) Consumption tax rate
The consumption tax rate is set at 8% in and before September 2019 and at 10% in and after October 2019 to reflect the increase in
expenses due to the increase of the consumption tax rate.
(8) Inflation rate
Inflation rates for the first 40 years were set at 0.426% by referring to a 10-year inflation swap rate and removing the effect of the consumption tax increase. For the 41st year and later, to assure consistency with the extrapolation of ultra-long term risk-free rates, inflation rates
were assumed to gradually increase to 2.0% in the 60th year, which is the inflation rate assumed for the ultimate forward rate.

Sony Financial Holdings Inc. Financial Data Book 2018 115

Sony Life MCEV

3 Calculation Method of MCEV
3- 01 Covered business
The covered business is the business operated by Sony Life, its subsidiaries and its affiliated companies.

3- 02 Treatment of subsidiaries and affiliated companies
Sony Life’s calculations include the following values regarding its subsidiaries and affiliated companies in the calculation of adjusted
net worth:• AEGON Sony Life Insurance Co., Ltd. is valued at ¥3.8 billion, which is equal to net asset value plus reserve for price fluctuations andcontingency reserve, minus intangible fixed assets, reinsurance credits on modified coinsurance (to be amortized in the future) andInsurance Business Law Article 113 deferred assets, plus the tax effect equivalent on Insurance Business Law Article 113 deferredassets, multiplied by the participation rate.
• Sony Life Singapore Pte. Ltd. is valued at book value under Japanese GAAP adjusted for unrealized gains/losses due to foreignexchange rate movement (after tax), which is ¥0.3 billion.
• Other companies are valued at book value under Japanese GAAP, which is ¥8.0 billion.
There are no other values reflected in the values of Sony Life’s subsidiaries and affiliated companies except for the above, and all otherresults solely reflect Sony Life (on a non-consolidated basis).

3- 03 Treatment of reinsurance
As Sony Life utilizes reinsurance for some in-force business, it reflects reinsurance premiums as expenses and reinsurance benefits andreinsurance commissions as income in the projections. Because part of the reinsurance commissions received on coinsurance-typereinsurance is recognized as a reinsurance debit to defer the recognition of revenue in Japanese GAAP, the reinsurance debit forcoinsurance-type reinsurance is added to the adjusted net worth.

3- 04 Treatment of semi-participating policies
Sony Life has calculated dividends in accordance with the level of future investment returns, based on the same method used to determine
the dividend rate for the accounting closure of March 31, 2018, reflecting the present value of certainty-equivalent profit and the time valueof options and guarantees.

3- 05 MCEVMCEV is defined as the expected present value of distributable earnings to shareholders generated from assets allocated to the coveredbusiness after making appropriate allowance for aggregate risks in the covered business. MCEV is presented as the sum of adjusted net
worth and value of existing business.

3- 06 Adjusted net worth
Adjusted net worth is calculated as the market value of assets allocated for the covered business in excess of statutory policy reserves andother liabilities as of the valuation date. Based on Japanese GAAP, it is calculated as the total amount of the net assets section on the balance sheets, adding reserve for price fluctuations, contingency reserve, reserve for possible loan losses, reinsurance debit for coinsurancetype reinsurance (future profits to be recognized), unrealized gains or losses on held-to-maturity securities, unrealized gains or losses onpolicy-reserve-matching bonds and unrealized gains or losses on land and buildings, less unfunded pension liabilities and intangible fixed
assets, and adjusting for the amount of tax effect equivalent to these nine items, on which valuation gains or losses on subsidiaries andaffiliated companies are added. Adjusted net worth can be split into required capital and free surplus.

3- 07 Required capital
The MCEV Principles define required capital as the amount of assets that should be held in addition to the assets corresponding to thestatutory liability to fulfill in-force policy obligations, which by nature is restricted from distribution to shareholders. The level of required capital should be the larger of the solvency capital to meet the regulatory minimum level or the capital required to meet the internal objectives interms of marketing or risk management purposes, or to achieve the company’s targeted credit rating.
Sony Life sets its required capital as the larger of the amount of capital required for the Japanese regulatory minimum at the solvency
margin ratio of 200% or the amount of capital to cover risks based on the internal model on an economic value basis. The latter is larger asof the end of March 2018.
Sony Life defines the amount of capital to cover risks based on the internal model as the total amount of technical provision and solvency
risk capital on an economic value basis in excess of statutory policy reserves (excluding contingency reserves). The solvency risk capital onan economic value basis is calibrated at VaR (99.5%) over one year and based on the internal model, which was revised to better reflect
Sony Life’s risk profile in reference to EU Solvency II and the discussion on economic value-based solvency regulation in Japan.
The solvency risk capital on an economic value basis as of the end of March 2018 was ¥729.7 billion (after tax). The effective tax rateused to adjust to the after-tax basis is 28.00%. The required capital is ¥860.0 billion, which is 2,500.8% of the regulatory minimum capitalrequirement.

116 Sony Financial Holdings Inc. Financial Data Book 2018

Sony Life MCEVSony Life will consider revising the internal model as appropriate when necessary, taking into account domestic and overseas conditions,
including developments in international accounting standards, valuation methods of insurance liability on an economic value basis andsolvency margin standard trends, as well as the analysis of Sony Life’s internal mortality and morbidity rates data.
The methodologies for the quantification of major risks in the internal model are as follows:(1) Market risk
Sony Life modified risk factors specified in EU Solvency II standard method to make them more suitable in light of the market risk attributeto which Sony Life is exposed, where risk factors specified in EU Solvency II standard method or its previous risk measure is consideredunable to reflect enough of the risk amount at a 99.5% confidence level.
For interest rate risk in Japanese yen, principal component analysis is employed, where yield curve changes are disaggregated into threecomponents—parallel shift, twist and butterfly—and the yield curve is shocked by each component, to capture the risk of yield curvechanges more precisely.
(2) Insurance risk
Insurance risks are quantified as changes in the value of insurance liabilities on an economic value basis due to changes in insurance
assumptions such as improvement or deterioration of mortality, deterioration of morbidity and fluctuations in surrender rate. Until the end of
the previous fiscal year, methodologies that followed the EU Solvency II standard method were adopted from the viewpoint of transparency
and comparability. From the end of this fiscal year, because discussions on risk quantification and an internal model have progressed in theinsurance industry, because Sony Life has accumulated its own experience data for insurance risk and because it has gained experience
deploying its internal model using these data, Sony Life revised its internal model to better reflect its risk profile. This revision decreased thesolvency risk capital on an economic value basis (after tax) by ¥275.3 billion from ¥1,005.0 billion to ¥729.7 billion as of the end of thisfiscal year. This revision caused a decrease in the cost of non-hedgeable risks of ¥138.3 billion, an increase in the value of existing businessof ¥149.6 billion and also a decrease in the required capital of ¥413.6 billion.
(3) Operational risk
EU Solvency II standard method is followed.

3- 08 Free surplus
Free surplus is the amount of adjusted net worth other than that for required capital.

3- 09 Value of existing business
The value of existing business is calculated as the present value of certainty-equivalent profit less the time value of options and guarantees,
the frictional costs and the cost of non-hedgeable risks.

3- 10 New business value
New business value represents the value at point of sale of new business acquired during the fiscal year ended March 31, 2018. The
definition of new business is consistent with the financial information Sony Life disclosed. New business value does not include the value of
new business expected to be acquired in the future. As with value of in-force business, new business value is calculated as the present
value of certainty-equivalent profit less the time value of options and guarantees, the frictional costs and the cost of non-hedgeable risks. In
addition, other profits and losses are reflected that represent unrealized gains or losses in assets purchased prior to acquisition of new
business to hedge interest rate risk on new business (pre-hedge gains or losses).
The assumptions used in calculation, other than surrender and lapse rates, economic assumptions and inflation rates, are the same as
those used to value in-force business as of the end of the previous fiscal year. The impact of changing these assumptions to those used tovalue in-force business as of the end of this fiscal year is included in the line item described in Section 1- 06 (7).
The assumptions for lapse and surrender rates are those as of the end of the previous quarter. The impact of changing theseassumptions to those used to value in-force business as of the end of this fiscal year is included in the line items described in (7) under
Section 1- 06 (7).
Economic assumptions and inflation rates are set as those as of the end of each month. The impact of changing these assumptions tothose used to value in-force business as of the end of this fiscal year is included in the line item described in Section 1- 06 (10).
The revision of the methodologies for the quantification of insurance risks that took effect at the end of this fiscal year was not reflectedin the new business value. The impact of applying this revision to the value of new business is included in the line item described in
1- 06 (8).

3- 11 Present value of certainty-equivalent profit
The present value of certainty-equivalent profit is the present value of profit based on the future cash flows generated from the coveredbusiness. The risk-free rate is used as the assumed investment return on all assets and the discount rate.
The present value of certainty-equivalent profit reflects the intrinsic value of options and guarantees.

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Sony Life MCEV

3- 12 Time value of options and guarantees
Sony Life has calculated the time value of options and guarantees using the stochastic method with risk-neutral scenarios. The time valueof options and guarantees is calculated as the difference between the present value of certainty-equivalent profit and the present value ofstochastic future profits.
The time value of options and guarantees considers the following items:• Minimum guarantees of variable life insurance
The excess of account value over the scheduled policy reserves is attributed to policyholders. However, when the account value is lessthan the scheduled policy reserves, the cost incurred from executing guaranteed minimum death benefits for variable life insurance isattributed to shareholders.
• Minimum interest rate guarantee for interest rate sensitive whole life insurance
When the investment return exceeds the assumed interest rate, the outperforming portion is credited to policyholder account value.
However, when the investment return underperforms the assumed interest rate, the cost for the difference is attributed to shareholders,
as the assumed interest rate is guaranteed.
• Interest dividend for semi-participating products
When the investment return exceeds the assumed interest rate, the outperforming portion is credited to the fund for policyholder dividends and paid to policyholders every five years as interest dividends. Accordingly, none of such interest gains would be attributed toshareholders, while interest losses would be attributed to shareholders.
• Surrender options
Policyholders have various options in insurance contracts. Reflected among them are the costs of policyholders exercising the right ofsurrender in the event of increased interest rates. Since Sony Life has not identified explicit correlations that relate interest rates or thelevel of account value against the minimum guarantee amount to lapse and surrender rates for policies other than variable insurance,
Sony Life has developed dynamic surrender rates by examining experience on similar products, and taking into account current domestic
and overseas practices. Going forward, Sony Life will strive to improve its approach to dynamic surrender assumptions for the relevant
products by carefully monitoring experience data and referring to experience with similar products and trends of practice in Japan andother countries.

3- 13 Frictional costs
Sony Life has calculated frictional costs as the present value of investment costs and taxes on assets backing the required capital at eachpoint of time in the future.

3- 14 Cost of non-hedgeable risks
As risks regarding the asymmetric nature of cash flows not reflected in the present value of certainty-equivalent profit are fully reflected in
the time value of options and guarantees, Sony Life has reflected an allowance for the uncertainty of non-economic assumptions and the
portion of economic assumptions considered non-hedgeable with respect to the cost of non-hedgeable risks.
Specifically, Sony Life has assumed a risk margin based on the internal model as the cost of non-hedgeable risks and calculated it using
the cost of capital approach.

3- 15 Cost of capital rate
EU Solvency II has set the cost of capital rate at 6%, which is used for the cost of capital calculation. On the other hand, the CRO (Chief
Risk Officer) Forum, comprising CROs from leading insurance companies in Europe, proposed that 2.5% to 4.5% would be the appropriate
level based on several trial calculations. Following the philosophy of the CRO Forum’s approach, Sony Life has decided to use a cost ofcapital rate of 3.0% consistent with the MCEV framework, considering Japanese long-term equity risk premiums, the beta of SFH, and theanticipated impact of Sony Life’s equity risk exposure on the beta of SFH, which is a hedgeable risk. The cost of capital rate increased by
0.5 percentage points compared to the end of the previous fiscal year. This revision increased the cost of non-hedgeable risks by ¥51.8
billion, decreased the value of existing business by ¥53.0 billion and increased the required capital by ¥51.8 billion.
Sony Life may revise the method of setting the cost of capital rate in the future, as an industry standard has not yet been established.

Sony Life requested Milliman, Inc., an external actuarial consulting firm with expert knowledge in the area of MCEV valuations,
to review the methodology, assumptions and calculations and obtained an opinion from this firm. For further details, please refer toSony Life’s press release “Disclosure Market Consistent Embedded Value as of March 31, 2018” (https://www.sonyfh.co.jp/index_
en.html)

118 Sony Financial Holdings Inc. Financial Data Book 2018

Sony Life MCEV

4 Overview of MCEV
4- 01 What is MCEV?
Embedded value (EV) is an indicator used to evaluate corporate value in the life insurance industry. In Europe, EV is disclosed bymany life insurers as part of their financial reports and is used as an internal management tool. Under Japanese GAAP, which isapplied to life insurance companies in Japan, the balance sheets do not indicate the present value of future profits on in-force
business, while EV indicates the present value of future profits on in-force business together with the company’s adjusted net
worth. Sony Life believes EV serves as a valuable supplement to the financial information provided under Japanese GAAP and is a
helpful indicator used to evaluate corporate value.
As an alternative to traditional EV, Sony Life began disclosing, as of March 31, 2008, Market Consistent Embedded Value(MCEV), based on European Insurance CFO Forum Market Consistent Embedded Value Principles©* (MCEV Principles). MCEV
represents the present value of the current and future distributable earnings to shareholders generated from assets allocated tothe covered business after sufficient allowance for the aggregate risks in the covered business. MCEV is presented as the sum ofadjusted net worth and value of existing business.
However, MCEV covers only policy amount in force as of the date of valuation, and excludes the potential value of future new
business, which is considered a constituent of the economic value of an insurance company.
* Copyright©Stichting CFO Forum Foundation 2008MCEV ＝+Adjusted net worth

Adjusted net worth
Results of business activities to date
The accumulation of profit determined in the past

Value of existing business

Value of existing business
Expected future profits from existing business

The relation between MCEV and balance sheets (under Japanese GAAP) is as follows. Adjusted net worth is calculated as the total
amount of the net assets section on the balance sheets, adding reserve for price fluctuations, contingency reserve and unrealized
gains or losses on held-to-maturity securities, etc., less intangible fixed assets, etc., and adjusting for the amount of tax effectequivalent to these items, on which valuation gains or losses on subsidiaries and affiliated companies are added. The value ofexisting business is the present value of certainty-equivalent profit, namely the present value of profit based on future cash flows
generated from the covered business, minus the time value of options and guarantees, the cost of non-hedgeable risks and otheritems, which approximately equates to the value of statutory policy reserves minus policy reserve based on market value (after tax).

Relation between balance sheets (under Japanese GAAP) and MCEVJapanese GAAP

Statutory
asset

Statutory (book value)policy reserve

Net assets

MCEV
Market value-based
policy reserve
Marketvalue-based
asset
Adjusted
net worth

Value of existing businessNet assets

Marketvalue-based
net assets(=MCEV)

Unrealized gains or losses on heldto-maturity securities and other items

Sony Financial Holdings Inc. Financial Data Book 2018 119

Sony Life MCEV

4- 02 Sony Life’s initiatives
Recognizing EV as a useful indicator of corporate value and a supplementary to the financial information based on Japanese
GAAP from an early stage, Sony Life has been disclosing traditional embedded value (Traditional EV) from March 31, 2005 andthen MCEV based on MCEV Principles from March 31, 2008.
Meanwhile, Sony Life has been disclosing the risk amount based on economic value since March 31, 2012 in an effort to provide aclearer picture of its financial soundness based on economic value. The risk amount based on economic value* refers to the total amountof Sony Life’s risks, comprehensively examined, and includes insurance risk and market-related risk. The solvency risk capital on an
economic value basis at Sony Life decreased ¥250.8 billion from March 31, 2017 to ¥729.7 billion, due mainly to the revision of themethodologies for the qualification of insurance risk. The breakdown of the risk amount is as follows:
Billions of yen

As of March 3 1,

2017

2018

Insurance risk1¥ 937.5¥ 497.5

Market-related risk

405.1
308.9
28.1
1.9
(392.0)
980.6

380.6
275.3
31.0
2.6
(182.0)729.7

Of which interest rate risk 2
Operational risk
Counterparty risk
Variance effectRisk amount based on economic value
Notes: 1. Insurance risk as of March 31, 2017 excludes the variance effect within Life module and Health module.
2. Interest rate risk excludes the variance effect within market-related risk.

Sony Life is making every effort to ensure its financial soundness by maintaining the risk amount based on economic value at an
appropriate level relative to MCEV, which is capital based on economic value.
*The risk amount based on economic value is calibrated at VaR (99.5%) over one year and based on the internal model.

120 Sony Financial Holdings Inc. Financial Data Book 2018

Sony Life MCEV

5 Glossary of MCEV-related Terminology (in Alphabetical Order)

A

I

R

Appraisal value

ICS (Insurance Capital Standard)

Required capital• Corporate value based on projected cash
flows receivable for shareholders fromexisting business and future new business.
It is defined as the current MCEV plus new
business value acquired in the future.

• The capital standard for internationally active
insurance groups (IAIGs) developed by theInternational Association of Insurance
Supervisors (IAIS).

Asymmetric risk

• The expected rate of future variability
embedded in current option prices, representing represents the expected value of themarket against price fluctuation.

• The MCEV Principles define required capitalas the capital that is needed in excess ofstatutory policy reserves (excluding contingency reserves). It is determined as thelarger of the solvency capital to meet thestatutory required minimum level or thecapital necessary to meet internal objectives or to achieve the company’s targeted
credit rating.
The required capital of Sony Life is set as
the larger of the amount of capital corresponding to the solvency margin ratio of
200% or the amount of capital to cover risks
based on the internal model on an economic
value basis.

• The risk where symmetric upward anddownward changes on assumptions do not
result in symmetric changes in cash flow.
Such risk includes minimum guarantee ofvariable life insurance and policyholder dividend payment. These risks are evaluatedwith a stochastic method and presented asa time value of options and guarantees.

B
Best estimate assumption• The assumption that is most likely to occur
in the future.

C
Calibration• To set various stochastic model parameters
in a market-consistent manner.

Cost of capital approach• One of the approaches to calculate the risk
margin. The cost of risk is determined as
the present value of the cost to hold capitalrequired in the future.

Cost of non-hedgeable risk
• The present value of the cost to holdrequired capital to cover future non-hedgeable risks. As risks regarding the asymmetricnature of cash flows not reflected in thepresent value of certainty-equivalent profit
are fully reflected in the time value of options
and guarantees, Sony Life has reflected thefollowing in this cost: allowance for uncertainty of non-economic assumptions andthe portion of economic assumptions considered non-hedgeable with respect to thecost of non-hedgeable risks.

E
EU Solvency II• Insurance regulation (economic value-based
solvency regulation) that was introduced to
the European Union in January 2016.

F
Free surplus

Implied volatility

L
Look through• To measure the impact of an action on an
entire business group rather than only on aparticular part of the group.

N
Non-financial risk
• Examples are mortality risk, longevity risk,
disability risk, operating expense risk,surrender risk and operational risk.

Non-hedgeable non-financial risk
• A non-financial risk such that deep andliquid capital markets do not exist to hedge
such risk.

Risk-free rate
• The reference rate defined in the MCEV
Principles. The MCEV Principles state that itshould be the swap rate of the currency of
cash flows.

Risk margin• The cost to hold capital to cover nonhedgeable risks reflected in evaluating theinsurance liability on an economic value
basis.

Risk-neutral probability• Non-hedgeable risk is composed of
non-hedgeable financial risk andnon-hedgeable non-financial risk.

• A pseudo probability derived so that thepresent value of future expected values
under multiple scenarios discounted withcurrent risk-free rates is equal to the current
value.

O

Risk-neutral scenario

Options and guarantees• An interest rate scenario generated underrisk-neutral probabilities.

Non-hedgeable risk

• The following are some features of options
and guarantees:
・Policy cash flow would be changed byexercising options granted to the policyholder. An example of such features is theexercise of the surrender option.
・It includes guarantee of benefits orpolicyholder values. An example isguaranteed minimum death benefits forvariable life insurance.

T
Time value and intrinsic valueP• An option value that has two elements: timevalue and intrinsic value. Intrinsic value is theoption value under certainty-equivalent conditions. Time value is the value of options
other than intrinsic value, which is calculated
as the difference between the present valueof certainty-equivalent profit and the present
value of stochastic future profit.

Present value of certaintyequivalent profit

U• Present value of certainty-equivalent profit is
the present value of profit based on the
future cash flows generated from thecovered business.

Ultimate forward rate
• The level of forward rate to which future
forward rates are assumed to ultimately
converge. It is generally determined in amacroeconomic approach.

• The portion of adjusted net worth other than
the required capital.

Frictional costs• The present value of investment costs andtaxes on assets backing the required capitalat each point of time in the future.

Sony Financial Holdings Inc. Financial Data Book 2018 121

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