2017
Financial Data Book
April 1, 2016 – March 31, 2017

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
18 1. Loans by Borrower Category
18 2. Risk-monitored Loans
18 3. Accounting Indicators
23 4. Reconciliation to Core Profit andNon-consolidated Ordinary Profit
25 5. Fair Value Information on Securities(General Account)
30 6. Fair Value Information on Securities(Company Total)

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

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)
37
38
45
46

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)
54 5. Status of Insurance Claims Paying Ability
55 6. Balance of Separate Account Assets
55 7. Investment Progress of Separate Account Assets
in Individual Variable Life Insurance and Individual
Variable Annuities
57 8. Status of Individual Variable Life Insurance andIndividual Variable Annuities
58 9. Number of Agencies
59 10. Number of Employees and Recruits
59 11. Average Salary78 Consolidated Balance Sheets
80 Consolidated Statements of Income
80 Consolidated Statements of Comprehensive Income
81 Consolidated Statements of Changes in Net Assets
83 Consolidated Statements of Cash Flows
Sony Bank Financial Data (Non-consolidated)
84 Balance Sheets
86 Statements of Income
87 Statements of Changes in Net Assets
89 1. Loans by Borrower Category
89 2. Risk-monitored Loans
89 3. Profit and Loss
92 4. Fair Value Information
Sony Bank Performance Indicators (Non-consolidated)
97
97
98
100

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

MCEV Results for Sony Life
102
108
112
115
117

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.

2017
Annual Report

April 1, 2016–March 31, 2017

Annual Report
http://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 2015 and fiscal 2016 represent the fiscal years ended March 31,
2016 and 2017, 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

2013

2014

2015

2016

2017

¥1,259,041
79,25245,06496,225435,4448,096,164997.94103.60¥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

̶

̶

̶

̶

580,882(550,159)(5,017)201,404
7,841

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, 2013 through 2016 is not shown because there are no latent shares.
%

For the years ended March 31,

2013

2014

2015

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

3.3%

14.9%

9.6%

̶

̶

̶

(0.1)
4.3

9.8
4.8

Consolidated adjusted ROE

3.3%

14.2%

2016
̶%

2017
̶%

14.2
6.0

5.0
13.3
5.0

3.6
14.4
4.1

9.5%

5.2%

3.9%

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 2016
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 20171

SFH Consolidated Financial Statements

Consolidated Balance Sheets
Sony Financial Holdings Inc.
As of March 31, 2016 and 2017
Millions of yen

2016

2017

AssetsCash and due from banks

144,364¥

206,481Call loans and bills bought

88,20061,900

Monetary claims purchased

884

573

303,973

296,877

Securities

8,021,493

8,857,436

Loans

1,515,833

1,720,004

121,376

123,614Land

83,00783,007

Buildings

33,21534,964

Leased assets

40

715

Construction in progress

213

132

Other tangible fixed assets

4,900

4,794

29,88730,776

Software

29,83630,146

Goodwill

19

49

Other intangible fixed assets

31

579

Due from agencies̶0

Due from reinsurers

399

1,438

Foreign exchanges

1,139

7,268

115,474

148,650

Net defined benefit asset

2,216

2,752

Deferred tax assets

8,181

15,313

Reserve for possible loan losses(1,308)(1,243)¥10,352,114¥11,471,845

Money held in trust

Tangible fixed assets

Intangible fixed assets

Other assets

Total Assets

2¥

Sony Financial Holdings Inc. Financial Data Book 2017

SFH Consolidated Financial Statements

Millions of yen

2016

2017

¥ 7,504,420¥ 8,113,153

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

67,17771,306

7,432,237

8,036,118

5,006

5,729

Due to agencies

2,455

2,616

Due to reinsurers

626

3,737

1,912,592

2,071,091

Deposits
Call money and bills sold̶

70,000Borrowed money

40,00090,000Foreign exchanges

87

108

Bonds payable

20,00010,000

Other liabilities

183,835

427,866

Reserve for employees’ bonuses

3,557

3,694

Net defined benefit liability

29,26331,399351

366

Reserve under the special laws

44,41046,182

Reserve for price fluctuations

44,41046,182

Reserve for directors’ retirement benefits

Deferred tax liabilities
Deferred tax liabilities on land revaluation
Total Liabilities

5,647

̶

488

488

9,747,736

10,870,705

Net Assets
Shareholders’ equity
Common stock

19,90019,900Capital surplus

195,277

195,277

Retained earnings

238,079

255,062(0)(81)

453,256

470,157

Net unrealized gains (losses) on other securities, net of taxes

157,364

134,849

Net deferred gains (losses) on hedging instruments, net of taxes(2,347)(1,154)

Land revaluation, net of taxes(1,465)(1,465)Remeasurements of defined benefit plans, net of taxes(3,760)(2,756)

149,791

129,472

̶

49

Treasury stock
Total shareholders’ equity
Accumulated other comprehensive income

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

1,329

1,460

604,377

601,139¥10,352,114¥11,471,845

Sony Financial Holdings Inc. Financial Data Book 20173

SFH Consolidated Financial Statements

Consolidated Statements of Income and Consolidated Statements ofComprehensive Income
Sony Financial Holdings Inc.
For the years ended March 31, 2016 and 2017

(1) Consolidated Statements of Income
Ordinary Revenues
Ordinary Revenues from the Life Insurance Business
Income from insurance premiums
Insurance premiums
Ceded reinsurance commissions

Millions of yen

2016

2017

¥1,362,044¥1,381,667

1,227,409

1,240,764

1,026,615

955,252

1,024,974

952,547

1,640

2,704

170,048244,839

Interest income and dividends

140,981

147,785

Income from money held in trust, net

11,973

4,493

Investment income

Gains on trading securities, net

98

152

Gains on sale of securities

12,204

1,308

Gains on derivatives, net

4,768

̶

Foreign exchange gains, net

̶14,670

Other investment income

215Gains on separate accounts, net

̶

76,423

Other ordinary income

30,74540,672

96,904102,337

Underwriting income

95,612

100,329

Net premiums written

95,549100,274

Interest and dividends on deposits of premiums

62

55

Other underwriting income0̶

Ordinary Revenues from the Non-life Insurance Business

Investment income

1,264

1,957

1,313

1,327

Gains on sale of securities

12

685

Gains on redemption of securities̶0Transfer to interest and dividends on deposits of premiums

(62)

(55)

Interest income and dividends

Other ordinary income
Ordinary Revenues from the Banking Business
Interest income

27

49

37,731

38,31825,481

26,534

Interest income on loans

14,73916,065Interest income and dividends on securities

10,671

10,394

Interest income on call loans and bills bought

7̶Interest income on deposits with banks

61

63Interest income on interest rate swaps

̶8

Other interest income

2

1

Fees and commissions

6,679

6,673

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

5,189

4,871

4,263

4,431

926

439

379

238

̶

247

̶

247

(Continued on next page)

4

Sony Financial Holdings Inc. Financial Data Book 2017

SFH Consolidated Financial Statements

Millions of yen

2016

2017

¥1,290,941¥1,315,341

1,169,419

1,186,465

363,370

372,407

Insurance claims

84,28384,178Annuity payments

11,496

12,019Insurance benefits

74,842

98,252

Surrender payments

184,936

168,409

5,711

3,122

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

2,099

6,423

613,480

596,742

4,185

3,330

609,291

593,4112

0

23,09535,937

Interest expenses

53

44

Losses on redemption of securities

1

53

̶

30,0502,798̶Investment expenses

Losses on derivatives, net
Foreign exchange losses, net
Provision for reserve for possible loan losses

5̶

Depreciation of real estate for rent and others

1,825

1,779

Other investment expenses

3,675

4,008

Losses on separate accounts, net

14,735

̶

Operating expenses

132,896

136,645

Other ordinary expenses

36,57844,733

91,522

96,63967,32670,094

48,11150,181

Loss adjustment expenses

7,098

7,458

Net commission and brokerage fees

1,043

1,187

Provision for reserve for outstanding losses and claims

1,877

798

Provision for underwriting reserves

9,195

10,4690̶

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

Other underwriting expenses
Investment expenses

43

Losses on sale of securities

40

Other investment expenses

̶324,18826,520319

Operating, general and administrative expenses
Other ordinary expenses(Continued on next page)

Sony Financial Holdings Inc. Financial Data Book 20175

SFH Consolidated Financial Statements

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

2016

2017

¥29,999¥31,274

8,884

8,554

4,827

5,104

Interest expenses
Interest expenses on deposits
Interest expenses on call money and bills sold

5

(17)

Interest on borrowed money

32

19

Interest expenses on bonds

98

74

3,921

3,372

Interest expenses on interest rate swaps
Other interest expenses

00Fees and commissions

2,437

3,648

Other operating expenses

181

86

18,347

18,843

147

142

̶

962

̶

962

Ordinary Profit

71,103

66,326Extraordinary Losses

2,793

2,032

Losses on disposal of fixed assets

882

134

Impairment losses

470

118

Provision for reserve under the special laws

1,440

1,772

Provision for reserve for price fluctuations

1,440

1,772

General and administrative expenses
Other ordinary expenses
Other
Other ordinary expenses

Others̶7

Provision for Reserve for Policyholders’ Dividends

3,564

4,153

Income Before Income Taxes

64,74460,140

Income Taxes̶Current

26,191

23,129

Income Taxes̶Deferred(4,856)(4,724)

Total Income Taxes

21,335

18,405

Profit43,40941,734

Profit Attributable to Non-controlling Interests
Profit Attributable to Owners of the Parent

54

113

¥43,355¥41,621(2) Consolidated Statements of Comprehensive Income

Millions of yen

2016

2017

¥43,409¥ 41,734

Net unrealized gains (losses) on other securities, net of taxes

30,198(22,515)

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

ProfitOther Comprehensive Income

(261)

1,192

Land revaluation, net of taxes

14̶Foreign currency translation adjustments(1)̶

(2,254)

1,021

Remeasurements of defined benefit plans, net of taxes
Total other comprehensive income

27,695(20,301)¥71,105¥ 21,433

Comprehensive income attributable to owners of the parent¥71,068¥ 21,301

Comprehensive income attributable to non-controlling interests¥¥

Comprehensive Income
Details:

6

Sony Financial Holdings Inc. Financial Data Book 2017

37

131

SFH Consolidated Financial Statements

Consolidated Statements of Changes in Net Assets
Sony Financial Holdings Inc.
For the years ended March 31, 2016 and 2017

Millions of yen

2016
Shareholders’ equity
Total
shareholders’equityCommonstock

CapitalsurplusRetainedearnings¥19,900¥195,277¥212,124¥ (0)¥427,301

Dividends from surplus̶̶

(17,399)̶

(17,399)

Profit attributable to owners of the parent̶̶

43,355

̶

43,355Purchase of treasury stock

̶

̶

̶

(0)

(0)

Net changes of items other than shareholders’ equity

̶

̶

̶

̶

̶

Balance at the beginning of the period

Treasurystock

Changes during the period

Total changes during the period̶̶

25,955(0)25,954

Balance at the end of the period¥19,900¥195,277¥238,079¥ (0)¥453,256
Millions of yen

2016
Accumulated other comprehensive income
Net unrealized
gains (losses)
on othersecurities,
net of taxes

Net deferredgains (losses)on hedging
instruments,
net of taxes¥127,166¥(2,086)

Dividends from surplus

̶Profit attributable toowners of the parent

Foreigncurrencytranslation
adjustments

Remeasurements ofdefinedbenefit plans,
net of taxes

Total
accumulated
othercomprehensive
income¥(1,480)¥0¥(1,522)¥122,078¥1,292¥550,672

̶

̶

̶

̶

̶

̶

(17,399)

̶

̶

̶

̶

̶

̶

̶

43,355Purchase of treasury stock

̶

̶

̶

̶

̶

̶

̶

(0)

Net changes of items otherthan shareholders’ equity

30,198

(261)

14

(0)

(2,237)

27,71337

27,750Total changes during
the period

30,198

(261)

14

(0)

(2,237)

27,71337

53,705

Balance at the end of
the period¥157,364¥(2,347)¥(1,465)¥̶

¥(3,760)¥149,791¥1,329¥604,377

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

Noncontrollinginterests

Total
net assets

Changes during the period(Continued on next page)

Sony Financial Holdings Inc. Financial Data Book 20177

SFH Consolidated Financial Statements

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

2017
Shareholders’ equity

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

Treasury
stock

Total
shareholders’equityCommonstock

CapitalsurplusRetainedearnings¥19,900¥195,277¥238,079

¥ (0)

̶

̶

105

̶

105

19,900195,277

238,185(0)453,362¥453,256

Changes during the period
Dividends from surplus̶̶

(23,924)

̶

(23,924)

Profit attributable to owners of the parent̶̶

41,621

̶

41,621

Adjustments due to change of scope of consolidation

̶

̶

(818)

̶

(818)

Purchase of treasury stock

̶

̶

̶

(81)

(81)

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 othersecurities,
net of taxes

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

Balance at the beginning of
the period¥ 157,364

Cumulative effects ofchanges in accounting
policiesLand
revaluation,
net of taxes

Remeasurements ofdefinedbenefit plans,
net of taxes

Total
accumulated
othercomprehensive
incomeSubscription
rights toshares

Noncontrollinginterests¥(2,347)¥(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

Adjustments due to changeof scope of consolidation

̶

̶

̶

̶

̶

̶

̶

(818)

Purchase of treasury stock

̶

̶

̶

̶

̶

̶

̶

(81)

Net changes of items otherthan shareholders’ equity(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

Restated balance at the
beginning of the period

Total net
assetsChanges during the period

8Sony Financial Holdings Inc. Financial Data Book 2017

SFH Consolidated Financial Statements

Consolidated Statements of Cash Flows
Sony Financial Holdings Inc.
For the years ended March 31, 2016 and 2017
Millions of yen

2016
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
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 loans and others
Net increase (decrease) in call money and others
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
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 increase (decrease) in collateral for securities lending transactions
OthersTotal 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
Purchases of intangible fixed assets
Purchase of securities of a non-consolidated subsidiary
Purchase of securities of affiliates
OthersNet cash provided by (used in) investing activities
Cash flows from financing activities
Cash dividends paid
Payments for redemption of bonds payable
Purchase of treasury stock
OthersNet 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

¥

2017

64,744
1,825
10,067470
79
6,063
618,487
2
3,564
(113)
2,469
69
1,440
(167,777)
7,620
8,938
22,92418
718(156,996)
39,93520,000
5,115(6,000)1,085
40(16,020)
468,773
180,527(9,196)(2,752)(34,875)
602,475

¥

(76)
5,160
(1,171,569)
375,241(57,798)
27,949247,803(35,401)(608,689)
83,755(3,977)(9,024)

̶

48,465(1,327,890)
698,310(56,782)
28,76162,804(567)(546,898)
55,576(2,049)(6,927)(1,500)(1,450)̶

(3,045)(12)(624,749)̶(558,825)(17,401)
̶

(0)
(36)
(17,437)(13)
26,197
̶

¥

207,422233,620

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(10,843)
107
3,551(195,446)
156,005
50,000311
70,000(6,129)21
28,339541,424
188,230(8,730)(3,430)(25,047)
692,445¥(23,925)(10,000)(81)(51)(34,057)(1)
33,636
1,124
233,620
268,381Note: 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 20179

Sony Life

Financial Data (Non-consolidated)
Balance Sheets
Sony Life Insurance Co., Ltd.
As of March 31, 2016 and 2017
Millions of yen, %2016
Amount2017
Composition

AmountComposition

AssetsCash and deposits
Cash
Deposits¥

18,3940.2%¥

47,0162

2

18,39247,013

0.5%

Call loans

88,2001.1

61,900

Money held in trust

280,973

3.5

273,877

3.1

7,273,361

90.5

8,093,192

91.2

Securities
Japanese government bonds

6,382,481

6,664,639

1,836

1,767

Japanese corporate bonds

125,101

310,466

Japanese stocks

83,411

86,954Foreign securities

471,973782,064

Other securities

208,556

Japanese local government bonds

Loans
Policy loans

171,649

247,2992.1

180,374

171,649

180,339

Commercial loans̶34

Tangible fixed assets

116,256

1.4

118,441Land

83,00783,007

Buildings

32,77734,442

12

10

Leased assets
Construction in progress

31

75

Other tangible fixed assets

427

906

Intangible fixed assets
Software
Other intangible fixed assets

19,1710.7

0.2

19,356

19,162

19,347

9

9

2.0

1.3

0.2

Due from agencies

̶

̶

0

0.0

Due from reinsurers

298

0.0

1,393

0.0

64,9980.8

74,245

0.8

Other assets
Other receivables

33,40735,316

Prepaid expenses

1,216

1,651

Accrued income

17,205

18,621

Money on deposits

5,313

5,269

Initial margins of futures markets

4,797

7,302

Variation margins of futures markets

979

435

1,640

5,212

359

370

Derivatives
Advance payments
Others
Prepaid pension costs

77

65

2,377

0.0

2,376

̶

̶

5,350

0.1

Reserve for possible loan losses

(272)

(0.0)

(271)

(0.0)

Reserve for investment losses̶̶

(3,640)(0.0)¥8,873,613

100.0%

Deferred tax assets

Total Assets

10 Sony Financial Holdings Inc. Financial Data Book 2017

¥8,035,408

100.0%

0.0

Sony Life Financial Data (Non-consolidated)

Millions of yen, %

2016

2017

AmountComposition

AmountComposition¥7,371,174

91.7%¥7,968,639

89.8%

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

29,63532,965

7,336,533

7,929,944

5,006

5,729

2,455

0.0

2,616

0.0

621
104,996

0.0

3,663

0.0

1.3

353,812

4.0

Collateral for securities lending transactions

62,804

310,608

Accrued income tax

8,998

8,095

Other payables

2,765

2,137

Accrued expenses

18,92017,923

Unearned income

995

1,067

Deposits received

1,594

2,094

Deposits received for guarantee

5,186

5,420

Variation margins of futures markets

168

446

Derivative liabilities

711

614

Lease obligations

13

10

Asset retirement obligations

679

2,156

Suspense receipt
Reserve for employees’ retirement benefits
Reserve for directors’ retirement benefits

2,157
21,9443,235
0.3

24,678

0.3

121

0.0

119

0.0

Reserve under the special laws

44,2600.6

46,005

0.5

Reserve for price fluctuations

44,260

Deferred tax liabilities
Deferred tax liabilities on land revaluation
Total Liabilities

7,151

46,005
0.1

̶

̶

488

0.0

488

0.0

7,553,212

94.0

8,400,024

94.7

Net Assets
Common stock

70,0000.9

70,0000.8

Capital surplus

5,865

0.1

5,865

0.1

3.2

271,416

Capital reserve

5,865

Retained earnings

257,175

5,865

Legal retained earnings

26,11830,318Other retained earnings

231,056

241,098

Unappropriated retained earnings

231,056

Total shareholders’ equity

333,040

Net unrealized gains (losses) on other securities, net of taxes
Land revaluation, net of taxes
Total valuation and translation adjustments
Total Net Assets
Total Liabilities and Net Assets

3.1

241,098
4.1

347,2813.9

150,6211.9

127,772

1.4(1,465)(0.0)(1,465)(0.0)

149,155

1.9

126,307

1.4

482,195

6.0

473,589

5.3¥8,035,408

100.0%¥8,873,613

100.0%

Sony Financial Holdings Inc. Financial Data Book 2017 11

Sony Life Financial Data (Non-consolidated)

Statements of Income
Sony Life Insurance Co., Ltd.
For the years ended March 31, 2016 and 2017
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 from securities

2016

2017

¥1,230,141¥1,243,739

1,028,048

956,733

1,026,407

954,028

1,640

2,704

170,517245,339

141,450

148,28400124,943

130,772

Interest income from loans

6,174

6,377

Rent revenue from real estate

10,261

10,869Other interest income and dividends

71

265

Income from money held in trust, net

11,973

4,493

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

98

152

12,204

1,308

̶

̶

4,768

̶

Foreign exchange gains, net

̶14,670

Reversal of reserve for possible loan losses̶1

Other investment income

214Gains on separate accounts, net

̶

76,42331,57541,666

Gains on derivatives, net

Other ordinary income
Income for annuity riders

2,352

3,001

Income for deferred payment of claims

26,82833,879Other ordinary income

2,394

4,785

(Continued on next page)

12 Sony Financial Holdings Inc. Financial Data Book 2017

Sony Life Financial Data (Non-consolidated)

Millions of yen

2016

2017

¥1,169,348¥1,183,558

363,370

372,407

Insurance claims

84,28384,178Annuity payments

11,496

12,019Ordinary Expenses
Insurance claims and other payments

Insurance benefits

74,842

98,252

Surrender payments

184,936

168,409

Refund to policyholders

5,711

3,122

Reinsurance premiums

2,099

6,423

613,480

596,742

Provision for policy reserves and others
Provision for reserve for outstanding claims
Provision for policy reserves
Interest on policyholders’ dividend reserve
Investment expenses

4,185

3,330

609,291

593,4112

0

23,39936,196

Interest expenses

53

44

Losses on sale of securities̶̶

Losses on redemption of securities

1

53

Losses on derivatives, net

̶30,0502,798̶Provision for reserve for possible loan losses

5̶

Depreciation of real estate for rent and others

1,936

1,879

Other investment expenses

3,868

4,167

Losses on separate accounts, net

14,735

̶

Operating expenses

133,334

137,094

Other ordinary expenses

Foreign exchange losses, net

35,764

41,118

Payments of deferred claims

14,93919,889Taxes

12,373

12,171

Depreciation and amortization

5,342

5,299

Provision for reserve for employees’ retirement benefits

3,077

3,745

Provision for reserve for directors’ retirement benefits

30̶

Others01260,79260,180Ordinary Profit(Continued on next page)

Sony Financial Holdings Inc. Financial Data Book 2017 13

Sony Life Financial Data (Non-consolidated)

Statements of Income (Continued)
Millions of yen

Extraordinary Gains
Reversal of reserve for investment loss
Extraordinary Losses
Losses on disposal of fixed assets
Impairment losses

2016

2017

¥ 6,352

¥

̶

6,352

̶

8,466

5,445

7

52

362

7

Provision for reserve under the special laws

1,415

1,744

Provision for reserve for price fluctuations

1,415

1,744

Valuation loss on stocks of affiliated companies

6,682

̶

̶

3,640

Provision for reserve for investment losses
Provision for Reserve for Policyholders’ Dividends

3,564

4,153

Income Before Income Taxes

55,11350,581

Income Taxes̶Current

21,735

18,973

Income Taxes̶Deferred(3,718)(3,577)

Total Income Taxes

18,016

15,395Net Income¥37,096¥35,185

14 Sony Financial Holdings Inc. Financial Data Book 2017

Sony Life Financial Data (Non-consolidated)

Statements of Changes in Net Assets
Sony Life Insurance Co., Ltd.
For the years ended March 31, 2016 and 2017
Millions of yen

2016
Shareholders’ equity
Capital surplus

Retained earnings
Otherretainedearnings

Commonstock

Capitalreserve

Total
capitalsurplusLegalretainedearnings

Unappropriated retained
earnings

Total
retainedearnings

Total
shareholders’equity¥70,000¥5,865¥5,865¥22,128¥217,900¥240,028¥315,893

Dividends from surplus

̶

̶

̶

3,990

(23,940)(19,950)(19,950)

Net income

̶

̶

̶

̶

37,09637,09637,096

Net changes of items other thanshareholders’ equity

̶

̶

̶

̶

̶

̶

̶

Balance at the beginning of the period
Changes during the period

Total changes during the period

̶

̶

̶

3,990

13,15617,14617,146

Balance at the end of the period¥70,000¥5,865¥5,865¥26,118¥231,056¥257,175¥333,040
Millions of yen

2016
Valuation and translation adjustments
Net unrealized
gains (losses)
on othersecurities,
net of taxes

Landrevaluation,
net of taxes

Totalvaluation andtranslation
adjustments

Total
net assets¥118,113¥(1,480)¥116,632¥432,526

Dividends from surplus

̶

̶

̶

(19,950)

Net income

̶

̶

̶

37,096

Balance at the beginning of the period
Changes during the period

Net changes of items other than shareholders’ equity

32,50814

32,52232,522

Total changes during the period

32,50814

32,522

49,669Balance at the end of the period¥150,621¥(1,465)¥149,155¥482,195

Sony Financial Holdings Inc. Financial Data Book 2017 15

Sony Life Financial Data (Non-consolidated)

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

2017
Shareholders’ equity
Capital surplus

Retained earnings
Otherretainedearnings

Commonstock

Capitalreserve

Total
capitalsurplusLegalretainedearnings

Unappropriated retained
earnings

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

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

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

Net unrealized
gains (losses)
on othersecurities,
net of taxes

Landrevaluation,
net of taxes

Totalvaluation andtranslation
adjustments

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

̶

̶

̶

56

150,621(1,465)

149,155

482,252̶̶̶

(21,000)

Changes during the period
Dividends from surplus
Net income
Net changes of items other than shareholders’ equity

̶

̶

̶

35,185(22,848)

̶

(22,848)(22,848)

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

16 Sony Financial Holdings Inc. Financial Data Book 2017

Sony Life Financial Data (Non-consolidated)

Statements of Cash Flows
Sony Life Insurance Co., Ltd.
For the years ended March 31, 2016 and 2017
Millions of yen

2016

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
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
Proceeds from collections of loans
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
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

55,113
1,936
5,342
362
6,682
4,185
609,291
2
3,564
4(6,352)
2,218
30
1,415
(141,450)
14,905
53
2,798
6
̶

(117)
16,9374
35
2,772(25,366)
554,378
151,036(53)(2,752)(3,696)(29,479)
669,432̶

3,330
593,411
0
4,153
(1)
3,640
2,734
(1)
1,744
(148,284)(81,886)
44(14,670)42(0)(1,094)
18,783
161
3,042
805
33,781
477,503
158,014(44)(3,430)(3,912)(19,875)
608,256

47,900(1,127,702)
420,322(56,782)
28,76162,804(567)(625,264)[44,167](565)(1,450)(3,360)(630,640)

(76)
5,160
(936,092)
173,781(57,798)
27,949247,803(35,401)(574,672)[33,584](3,085)(3,045)(4,125)(584,928)(19,950)(4)(19,954)(12)
18,82587,769106,594(21,000)(4)(21,004)(1)
2,321
106,594¥ 108,916

̶¥¥ 50,581
1,879
5,299
7

Sony Financial Holdings Inc. Financial Data Book 2017 17

Sony Life Financial Data (Non-consolidated)

1 Loans by Borrower Category
Millions of yen

As of March 31,

Bankrupt and quasi-bankrupt loans

2016

¥

2017
̶

¥

̶

Doubtful loans̶̶Sub-standard loans̶̶

Subtotal̶̶[% to total]

[̶]

[̶]

Normal loans

223,255

431,372

Total¥223,255¥431,372

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 all other loans.

2 Risk-monitored Loans
Not applicable

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

As of March 31,

2016

2017

¥ 8,767¥ 9,148

Insurance claims
Death benefits
Accidental benefits

387

258

Disability payments

2,494

2,200

Maturity benefits

1,504

1,224

Others

2,027

2,281

Subtotal

15,18015,113

Annuity payments

174

170

Insurance benefits

6,210

8,081

Surrender payments

7,726

8,950

Deferred insurance benefits
Total, including others

18 Sony Financial Holdings Inc. Financial Data Book 2017

171

455

¥29,635¥32,965

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

2016

2017

¥7,001,664
6,264,631
737,033
246,585
145,001
101,58422
22¥7,550,631
6,704,429
846,201
285,231
160,079
125,152
47
47

̶

̶

13,09313,093

11,57011,570

̶
̶
̶
̶

̶
̶
̶
̶

7,261,366
6,422,748
838,61775,166¥7,336,533¥6,497,915
838,617

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

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

Premium reserve
Unearned premiums
Refund reserve
Contingency reserve
Total

2016

2017

¥7,036,247
225,118¥7,605,909
241,571̶̶

75,166¥7,336,533

82,463¥7,929,944

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”

2016

2017

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 calculating methods and ratios are set for individual life insurance and individual annuities. The concept of accumulation 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 2017 19

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
FY2014FY2015FY2016¥

Assumed interest rate̶%̶33,37353,230569,606
1,169,696
1,423,295
1,746,298
388,343424,290
389,480
270,607265,004
131,279

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

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 which 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)

2016

2017

¥80,678¥88,485

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 show 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

2016

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¥ 1,794
1
100
129
1,824
[1,533]

Individual
annuities

¥ 230
0
33
39
237
[143]

Asset-formation
insurance,
asset-formation
annuities

Group life
insuranceGroupannuities¥2,133

¥ 33

¥̶

¥̶

̶

̶

2,597
3,326
2,861
[0]

21
70
82
[̶]

̶
̶
̶
̶
[̶]

̶
̶
̶
̶
[̶]

OthersTotal¥ 4,191
2
2,752
3,564
5,006
[1,676]
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

Asset-formation
insurance,
asset-formation
annuities

Individual life
insurance

Individual
annuities

Group life
insuranceGroupannuities¥ 1,824
0
92
126
1,859
[1,488]

¥ 237
0
14
48
270
[152]

¥2,861

¥ 82

¥̶

¥̶

̶

̶

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

82
73
74
[̶]

̶
̶
̶
̶
[̶]

̶
̶
̶
̶
[̶]

Note: Figures in [ ] are accumulated dividends.

20 Sony Financial Holdings Inc. Financial Data Book 2017

OthersTotal¥ 5,006
0
3,430
4,153
5,729
[1,640]Sony Life Financial Data (Non-consolidated)

3- 07 Other reserves
Millions of yen

2016
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

¥

0
267

2017

Balance atthe end of
the period

Increase(decrease)

¥

¥

0
272

Balance atthe end of
the period

Balance atthe beginningof the period

(0)
4

¥

0
272

¥

0
270

Increase(decrease)

¥

0
(1)

̶

̶

̶

̶

̶

̶

6,352
19,72591
42,845

̶(6,352)
2,218
30
1,415

̶

3,640
24,67811946,005

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

21,944
121
44,26021,944
121
44,2603- 08 Insurance premiums
Millions of yen

For the years ended March 31,

2016

2017

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¥ 967,324
93,702
263,622
10,649599,350
53,732
31,586
7,869
284
13,9925,250
99¥1,026,407¥912,353
11,506263,632
10,927626,286
35,633
11,0935,823
321
18,394
5,895
145¥954,028

3- 09 Insurance claims
Millions of yen

2016

Asset-formation
insurance,
asset-formation
annuities

Total

Individual life
insurance

Individual
annuities

Group life
insuranceGroupannuities¥45,530510
3,584
24,749
9,907¥84,283¥47,506437
3,060
20,91910,888¥82,812¥̶

¥1,151

¥̶

¥̶

¥̶

̶

̶

̶

̶

̶

̶

99

̶

̶

̶

̶

̶

̶

̶

̶

̶

115
¥1,366

̶

̶

̶

¥̶

¥̶

¥̶

For the years ended March 31,

Death benefits
Accidental benefits
Disability payments
Maturity benefits
Others
Total

2017

¥̶

OthersTotal¥48,657
437
3,160
20,91911,004¥84,178

3- 10 Annuity payments
Millions of yen

2016

For the years ended March 31,

Annuity payments

Total¥11,4962017
Individual life
insurance

Individual
annuities

Group life
insuranceGroupannuities¥̶¥10,352¥2¥1,664

Asset-formation
insurance,
asset-formation
annuities¥̶

Others¥̶

Total¥12,019

Sony Financial Holdings Inc. Financial Data Book 2017 21

Sony Life Financial Data (Non-consolidated)

3- 11 Insurance benefits
Millions of yen

2016

2017
Asset-formation
insurance,
asset-formation
annuities

Total

Individual life
insurance

Individual
annuities

Group life
insuranceGroupannuities¥ 2,658¥ 2,503

¥ 71

¥̶

¥ ̶

Hospitalization benefits

9,364

9,290

̶

0

̶

Surgery benefits

9,428

9,622

̶

̶

̶

94

114

̶

̶

̶

̶

̶

114

41,09366,042

̶

̶

̶

̶

̶

66,042For the years ended March 31,

Death benefits

Disability benefits
Living benefits

Others

¥̶

Total

¥̶

¥ 2,574

̶

̶

9,291

̶

̶

9,622

Others

12,204

10,208

270

̶

128

̶

̶

10,606

Total¥74,842¥97,781

¥341

¥0

¥128

¥̶

¥̶

¥98,252

3- 12 Surrender payments
Millions of yen

2016

Total

Individual life
insurance

Individual
annuities

Group life
insuranceGroupannuities¥184,936¥162,637¥5,772¥̶¥̶For the years ended March 31,

Surrender payments

2017
Asset-formation
insurance,
asset-formation
annuities

Others

¥̶

Total

¥̶

¥168,409

3- 13 Depreciation and amortization
Millions of yen, %2016
For the years ended March 31,

Acquisition
cost

Tangible fixed assets¥ 4,845

Buildings
Leased assets
Other tangible fixed assets
Intangible fixed assets

Accumulated
depreciation

Balanceat the endof the period¥ 273 ¥ 2,795 ¥ 2,049

Ratio ofdepreciation

Acquisition
cost

Balance
Depreciation Accumulated
at the end
expensesdepreciation of the period

Ratio ofdepreciation¥ 427 ¥ 2,395 ¥ 5,771

29.3%

57.7%

¥ 8,167

3,507

184

1,751

1,756

49.9

6,448

291

1,496

4,952

23.2

20

4

8

12

41.0

22

4

12

10

56.0
52.3

1,317

84

1,036

281

78.7

1,695

130

885

809

41,3805,064

22,218

19,162

53.7

43,6104,868

24,262

19,347

55.6

22

4

12

10

54.6

22

3

15

7

68.4

Others
Total

Depreciation
expenses2017¥46,249¥5,342 ¥25,026 ¥21,222

54.1%¥51,800¥5,299 ¥26,673 ¥25,126

51.5%

3- 14 Operating expenses
Millions of yen

For the years ended March 31,

2016

2017

Sales and marketing expenses¥ 64,852¥ 65,072

Sales administrative expenses

18,09519,080General administrative expenses
Total

50,38652,942¥133,334¥137,094

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,

2016

2017

Life Insurance Policyholders Protection Corporation of Japan

¥703

¥736

22 Sony Financial Holdings Inc. Financial Data Book 2017

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,

Core profit(A)

Capital gains

2016

2017

¥43,019¥ 83,831

27,387

16,114

Income from money held in trust, net

7,119

̶

Income from trading securities, net

41

134

Gains on sale of securities

12,204

1,308

Gains on derivatives, net

4,768

̶

̶

14,670Foreign exchange gains, net
Other capital gains

3,253

̶

2,951

32,276

Losses on money held in trust, net̶̶

Losses on trading securities, net̶̶

Losses on sale of securities̶̶

Devaluation losses on securities̶̶

Losses on derivatives, net

̶30,050Capital losses

Foreign exchange losses, net

2,798

̶

153

2,226

(B)

24,435(16,162)(A) + (B)67,45567,669Other capital losses
Net capital gains (losses)
Core profit plus net capital gains (losses)
Other one-time gains

̶1

Gains from reinsurance̶̶

Reversal of contingency reserve̶̶

Reversal of specific reserve for possible loan losses̶1

Others

̶

̶

6,662

7,490

̶

̶

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

6,458

7,296

Provision for specific reserve for possible loan losses

5̶Provision 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)

197

193

(6,662)(7,488)¥60,792¥ 60,180

Notes: 1. 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, net, along withinterest income and dividends of ¥17 million in income from trading securities, net. Other capital losses consist of the sum of provision for 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 consist of provision of additional policy reserve of ¥193 million.
2. Core profit for the fiscal year ended March 31, 2016 (A) includes income gains of ¥4,853 million in income from money held in trust, net, along withinterest income and dividends of ¥57 million in income from trading securities, net. Other capital gains consist of reversal of policy reserves and othersof ¥3,253 million for currency market fluctuations of products denominated in foreign currencies, while other capital losses consist of impairment lossesof ¥153 million from investment partnerships. “Others” of other one-time losses consist of provision of additional policy reserve of ¥197 million.

Sony Financial Holdings Inc. Financial Data Book 2017 23

Sony Life Financial Data (Non-consolidated)

Reference: Reconciliation to core profit
Millions of yen

For the years ended March 31,

Core Revenues

2016

2017

¥1,206,007¥1,227,623

1,028,048

956,733

1,026,407

954,028

Income from insurance premiums
Insurance premiums
Ceded reinsurance commissions

1,640

2,704

141,472

224,713

141,450

148,284

Gain on redemption of securities

̶̶

Reversal of general reserve for possible loan losses

0̶

Other investment income

214Gains on separate accounts, net

̶

76,42331,57541,666

Investment income
Interest income and dividends

Other ordinary income
Income for annuity riders

2,352

3,001

Income for deferred payment of claims

26,82833,879

̶

̶

2,394

4,785

Reversal of reserves for outstanding claims
Other ordinary income
Other core revenues
Core Expenses
Insurance claims and other payments

4,911

4,510

1,162,988

1,143,791

363,370

372,407

Insurance claims

84,28384,178Annuity payments

11,496

12,019Insurance benefits

74,842

98,252

Surrender payments

184,936

168,409

Refund to policyholders

5,711

3,122

Reinsurance premiums

2,099

6,423

Provision for policy reserves and others

610,076

587,690

Investment expenses

20,442

5,480Interest expenses

53

44

Losses on redemption of securities

1

53

Provision for general reserve for possible loan losses̶0

Depreciation of real estate for rent and others

1,936

1,879

Other investment expenses

3,715

3,502

Losses on separate accounts, net

14,735

̶133,334

137,094

Operating expenses
Other ordinary expenses

35,764

41,118

Payments of deferred claims

14,93919,889Taxes

12,373

12,171

Depreciation and amortization

5,342

5,299

Provision for reserve for employees’ retirement benefits

3,077

3,745

Provision for reserve for directors’ retirement benefits

30̶

Others

0

12

̶

̶

Other core expenses
Core Profit¥

43,019¥83,831

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

Positive spread

2016

2017

¥15.3

¥15.4

Investment yield for core profit

2.31%

2.24%

Investment yield (general account)

2.42%

1.81%

Average assumed interest rate

2.06%

2.00%

24 Sony Financial Holdings Inc. Financial Data Book 2017

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

2016
As of March 31,

2017

Balance sheet amount

Net valuation gains (losses)
recorded in income

Balance sheet amount¥2,215¥153¥2,054

Trading-purpose securities

Net valuation gains (losses)
recorded in income¥(162)

Note: The above table includes trading-purpose securities included in “money held in trust,” etc.

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

2016

As of March 31,

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

Carrying
amountFair value

Net unrealized
gains (losses)

Unrealized
gains

Unrealized
losses¥5,383,938¥7,410,168¥2,026,230¥2,026,230

251,260

292,566

41,30541,306

0

̶

̶

̶

̶

̶

109

¥ ̶

887,973

1,091,602

203,629

203,739

Japanese government and corporate bonds

854,339

1,040,351

186,011

186,011

̶Japanese stocks

13,62525,664

12,03912,04910Foreign securities

19,842

25,279

5,436

5,536

99
99

Bonds

19,842

25,279

5,436

5,536

Stocks, etc.

̶

̶

̶

̶

̶

Other securities

165

307

142

142

̶

Monetary claims purchased

̶

̶

̶

̶

̶

Certificates of deposit

̶

̶

̶

̶

̶

Others

̶

̶

̶

̶

̶

Total

¥6,523,172¥8,794,337¥2,271,165¥2,271,276¥110Japanese government and corporate bonds¥6,444,682¥8,689,521¥2,244,838¥2,244,838¥

Japanese stocks

13,62525,664

12,03912,04910Foreign securities

64,69878,84414,146

14,24599

64,69878,84414,146

14,24599

Stocks, etc.

̶

̶

̶

̶

̶

Other securities

Bonds

0

165

307

142

142

̶

Monetary claims purchased

̶

̶

̶

̶

̶

Certificates of deposit

̶

̶

̶

̶

̶

Others

̶

̶

̶

̶

̶

Sony Financial Holdings Inc. Financial Data Book 2017 25

Sony Life Financial Data (Non-consolidated)

Millions of yen

2017
Carrying
amountFair value

Net unrealized
gains (losses)

Unrealized
gains

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

277,372

303,356

25,98327,876

1,893

As of March 31,

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

̶

̶

̶

̶

̶

896,527

1,069,920

173,392

174,667

1,274Japanese government and corporate bonds

852,604

1,013,331

160,726

160,726

̶Japanese stocks

13,68527,082

13,396

13,45558

Foreign securities

Available-for-sale securities

30,071

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

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 which 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.

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

As of March 31,

Held-to-maturity securities

2016

¥

̶

2017

¥

̶

Unlisted foreign bonds

̶̶

Others̶̶

Policy-reserve-matching bonds

̶̶

Stocks of subsidiaries and affiliated companies

13,267

16,312Available-for-sale securities

12,301

9,896

Unlisted domestic stocks (except OTC stocks)

149

159

Unlisted foreign stocks (except OTC stocks)

439

608

Unlisted foreign bonds
OthersTotal

26 Sony Financial Holdings Inc. Financial Data Book 2017̶

̶11,712

9,127¥25,569¥26,209

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

2016

As of March 31,

Held-to-maturity securities
Policy-reserve-matching bonds
Stocks of subsidiaries and affiliated companies
Available-for-sale securities
Japanese government and corporate bonds
Japanese stocks
Foreign securities
Bonds
Stocks, etc.
Other securities
Monetary claims purchased
Certificates of deposit
Others
Total
Japanese government and corporate 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¥5,383,938
251,260
13,267900,274
854,339
13,77520,281
19,842439
11,877

Unrealized
losses¥7,410,168
292,566
13,267
1,109,405
1,040,351
25,81427,271
25,2791,992
15,967¥2,026,230
41,305¥2,026,230
41,306̶̶̶

209,130
186,011
12,039
6,989
5,436
1,552
4,090

209,792
186,011
12,049
7,089
5,536
1,552
4,641

661

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

¥6,548,741¥6,444,682
20,343
71,83764,698
7,139
11,877¥8,825,407¥8,689,521
32,38287,53678,844
8,692
15,967¥2,276,666¥2,244,838
12,03915,69914,146
1,552
4,090¥2,277,328¥2,244,838
12,04915,79814,245
1,552
4,641

¥662
¥ 0
10
99
99

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

¥ ̶
0

̶

10
99
99
̶

551

̶

551

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 government and corporate bonds
Japanese stocks
Foreign securities
Bonds
Stocks, etc.
Other securities
Monetary claims purchased
Certificates of deposit
Others
Total
Japanese government and corporate 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¥6,068,671
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
27,876¥75,919
1,893

̶

̶

̶

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

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

58
1,215
886
329
581

Sony Financial Holdings Inc. Financial Data Book 2017 27

Sony Life Financial Data (Non-consolidated)

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

2016
Balance sheet
amountAs of March 31,

Money held in trust

Fair value¥280,973

Net unrealized
gains (losses)

Unrealized gains

Unrealized losses

¥̶

¥̶

¥̶

¥280,973

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

Note: The above table includes ¥50 million of jointly invested money held in trust.

Money held in trust for investment
Not applicable

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

2016
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

̶

¥̶

̶

̶

̶

̶

̶

232,491

280,922

48,431

48,431̶Millions 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

41,91941,919̶Note: Money held in trust includes cash and call loans, etc.

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 and losses (Derivatives to which hedge accounting is applied and derivatives to which hedge accounting is
not applied)

Millions of yen

2016

2017

As of March 31,

Interest
raterelated

Currencyrelated

Stockrelated

Bondrelated

OthersHedge accounting is applied

¥ ̶

¥ ̶

¥ ̶

¥̶

¥̶

¥ ̶

¥ ̶ ¥

Hedge accounting is not applied

422

737

(230)

̶

̶

929

337

Total

¥422

¥737

¥(230)

¥̶

¥̶

¥929

Total

Interest
rateCurrencyrelated
relatedStockrelated

Bondrelated

̶

¥ ̶

¥̶

¥̶ ¥

3,797

462

─

─

¥337 ¥3,797

¥462

¥─

¥─ ¥4,597

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

28 Sony Financial Holdings Inc. Financial Data Book 2017

Others

Total

̶

4,597

Sony Life Financial Data (Non-consolidated)

2. Interest rate derivatives

Millions of yen

2016

As of March 31,

Notional
amounttotal

Over 1 year

¥1,000¥1,0002017

Fair value

Valuation
gains(losses)

Notional
amounttotal

Over 1 year

Fair value

¥422

¥422

¥1,000¥1,000¥337

Valuation
gains(losses)Over-the-counter transactions
Interest rate swaps
Fixed-rate receivable/
Floating-rate payable
Total

¥337

¥422

¥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, %2016

As of March 31,

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
Due after
Due after
3 years through 5 years through 7 years through5 years
7 years
10 years

̶

̶

̶

̶

̶

¥̶

¥̶

¥̶

¥̶

¥̶

Due after
10 years

Total¥1,0001.89%
0.12%¥1,000¥1,0001.89%
0.12%¥1,000Millions of yen, %2017

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¥1,0001.89%(0.00%)¥1,000¥1,0001.89%(0.00%)¥1,0003. Currency derivatives

Millions of yen

2016

As of March 31,

Notional
amounttotal

Over 1 year

2017

Fair value

Valuation
gains(losses)

Notional
amounttotal

Over 1 year

Fair value

Valuation
gains(losses)Over-the-counter transactions
Forward foreign exchanges
Sold¥50,035

¥̶

¥737

¥737

¥240,804¥̶

¥3,799¥3,799U.S. dollars

31,792

̶

714

714

212,273

̶

3,284

3,284

Euro

15,387

̶

25

25

28,531

̶

514

514

Australian dollars

2,855

̶

(2)

(2)

̶

̶

̶

̶

̶

̶

̶

̶

169

̶

(1)

(1)

̶

̶

̶

̶

169

̶

(1)

(1)

BoughtU.S. dollars
Total

¥737

¥3,797

Notes: 1. As of March 31, 2016: The forward rate of exchange is used to value forward foreign exchanges at the end of the fiscal year.
2. As of March 31, 2017: The fair value of forward foreign exchanges is calculated using the discounted present value based on the fiscal year-end
interest rate.
3. Fair value is also shown in the column under “Valuation gains (losses).”Sony Financial Holdings Inc. Financial Data Book 2017 29

Sony Life Financial Data (Non-consolidated)

4. Stock derivatives

Millions of yen

2016

As of March 31,

Notional
amounttotal

Over 1 year

¥72,793¥̶2017

Fair value

Valuation
gains(losses)

Notional
amounttotal

Over 1 year

Fair value

Valuation
gains(losses)¥(230)¥(230)¥96,016

¥̶

¥462

¥462

ListedStock index futures
Sold
Total

¥(230)¥462

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

2016
As of March 31,

2017

Balance sheet amount

Net valuation gains (losses)
recorded in income

Balance sheet amount

Net valuation gains (losses)
recorded in income¥796,241¥(75,945)¥921,319¥45,396

Trading-purpose securities

Note: The above table includes trading-purpose securities included in “money held in trust,” etc.

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

Millions of yen

2016
Carrying
amountFair value

Net unrealized
gains (losses)

Unrealized
gains¥5,383,938
251,260¥7,410,168
292,566¥2,026,230
41,305¥2,026,230
41,306

As of March 31,

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

Unrealized
losses

¥ ̶
0

̶

̶

̶

̶

̶

887,973854,339
13,625
19,842
19,842

1,091,602
1,040,351
25,66425,27925,279203,629
186,011
12,0395,436
5,436

203,739
186,011
12,049
5,536
5,536

109
̶

10
99
99

̶

̶

̶

̶

165

307

142

142

̶
̶
̶

̶
̶
̶

̶
̶
̶

̶
̶
̶

̶
̶
̶
̶
̶

¥6,523,172¥6,444,682
13,62564,69864,698¥8,794,337¥8,689,521
25,66478,84478,844¥2,271,165¥2,244,838
12,03914,14614,146¥2,271,276¥2,244,838
12,04914,245
14,245

¥110
¥ 0
10
99
99
̶
̶
̶
̶
̶

30 Sony Financial Holdings Inc. Financial Data Book 2017

̶

̶

̶

̶

165

307

142

142

̶
̶
̶

̶
̶
̶

̶
̶
̶

̶
̶
̶

Sony Life Financial Data (Non-consolidated)

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 government and corporate bonds
Japanese stocks
Foreign securities
Bonds
Stocks, etc.
Other securities
Monetary claims purchased
Certificates of deposit
Others
Total
Japanese government and corporate 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¥6,068,671
277,372¥7,514,255
303,356¥1,445,584
25,983¥1,521,504
27,876¥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

̶
̶
̶

̶
̶
̶

̶
̶
̶

̶
̶
̶

̶

58
1,215
886
329

̶

147

̶
̶
̶
̶

¥79,087¥54,10858
24,92024,590
329

̶

147

̶
̶
̶
̶

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. 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.

○ Held-to-maturity securities
Millions of yen

2016
As of March 31,

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

2017

Balance sheet
amountDifference

Balance sheet
amountFair value

Fair value

Difference¥5,383,938
5,339,082
44,855¥7,410,168
7,356,603
53,565¥2,026,230
2,017,520
8,709¥5,366,516
5,340,238
26,278¥6,888,020
6,858,928
29,092¥1,521,504
1,518,690
2,813

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

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

̶

̶

̶

̶

̶

̶

Sony Financial Holdings Inc. Financial Data Book 2017 31

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

2016
As of March 31,

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

2017

Balance sheet
amountBalance sheet
amountFair value

Fair value¥245,519
245,519¥286,826
286,826¥41,306
41,306¥230,196
230,196¥258,073
258,073¥27,876
27,876

̶
̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

5,741
5,741

5,740
5,740

(0)
(0)

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

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

Difference

Difference○ Available-for-sale securities
Millions of yen

2016
As of March 31,

Available-for-sale securities whosebalance sheet amount exceeds
carrying amountJapanese government and corporate 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 government and corporate bonds
Japanese stocks
Foreign securities
Other securities
Monetary claims purchased
Certificates of deposit
Others2017

Carrying
amountBalance sheet
amountDifference

Carrying
amountBalance sheet
amountDifference¥883,355
854,339
13,452
15,398165¥1,087,094
1,040,351
25,501
20,934307¥203,739
186,011
12,0495,536
142¥868,161
852,604
12,7932,597
165¥1,042,829
1,013,331
26,2492,935
313¥174,667
160,726
13,455
337
147

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

4,618

4,508

(109)

28,36527,091(1,274)

̶

̶

̶

̶

̶

̶

173
4,444

163
4,344

(10)
(99)

891
27,473833
26,257(58)(1,215)

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

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

32 Sony Financial Holdings Inc. Financial Data Book 2017

2016

¥

̶

2017

¥

̶

̶

̶

̶

̶

̶

̶

13,267
12,301
149
439

16,312
9,896
159
608

̶

̶

11,712¥25,569

9,127¥26,209

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

2016
As of March 31,

Held-to-maturity securities
Policy-reserve-matching bonds
Stocks of subsidiaries and affiliated companies
Available-for-sale securities
Japanese government and corporate bonds
Japanese stocks
Foreign securities
Bonds
Stocks, etc.
Other securities
Monetary claims purchased
Certificates of deposit
Others
Total
Japanese government and corporate 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¥5,383,938
251,260
13,267900,274
854,339
13,77520,281
19,842439
11,877¥7,410,168
292,566
13,267
1,109,405
1,040,351
25,81427,271
25,2791,992
15,967¥2,026,230
41,305¥2,026,230
41,306̶̶̶

209,130
186,011
12,039
6,989
5,436
1,552
4,090

209,792
186,011
12,049
7,089
5,536
1,552
4,641

661

551

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

¥6,548,741¥6,444,682
20,343
71,83764,698
7,139
11,877¥8,825,407¥8,689,521
32,38287,53678,844
8,692
15,967¥2,276,666¥2,244,838
12,03915,69914,146
1,552
4,090¥2,277,328¥2,244,838
12,04915,79814,245
1,552
4,641

¥662
¥ 0
10
99
99

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

Unrealized
losses

¥ ̶
0

̶

10
99
99
̶

̶

551

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 government and corporate bonds
Japanese stocks
Foreign securities
Bonds
Stocks, etc.
Other securities
Monetary claims purchased
Certificates of deposit
Others
Total
Japanese government and corporate 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¥6,068,671
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
27,876¥75,919
1,893

̶

̶

̶

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

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

Sony Financial Holdings Inc. Financial Data Book 2017 33

Sony Life Financial Data (Non-consolidated)

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

Millions of yen

2016
As of March 31,

Balancesheet amountMoney held in trust¥280,973 ¥280,973

Fair value

2017

Net
unrealized
gains (losses)

Unrealized
gains

¥̶

¥̶

Fair valueNet
unrealized
gains (losses)

Unrealized
gains

Unrealized
losses¥̶ ¥273,877 ¥273,877

¥̶

¥̶

¥̶

Unrealized
lossesBalancesheet amountNote: The above table includes ¥50 million of jointly invested money held in trust.

Money held in trust for investment
Not applicable

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

Millions of yen

2016
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

232,491

280,9222017

Net
unrealized
gains (losses)

Unrealized
gains

¥

¥

Unrealized
lossesCarrying
amountFair value

̶

¥̶ ¥

̶ ¥

̶

̶

̶

̶

̶

̶

48,431

48,431

̶

231,907273,826

̶Net
unrealized
gains (losses)¥

Unrealized
gains

̶

¥̶

̶

̶

̶

41,91941,919̶̶¥

Unrealized
lossesNote: Money held in trust includes cash and call loans, etc.

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 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 the Company’s Board of Directors andExecutive Committee.
5. Supplemental information regarding quantitative information
Sony Life does not employ hedge accounting for derivative transactions.

34 Sony Financial Holdings Inc. Financial Data Book 2017

Sony Life Financial Data (Non-consolidated)

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

Millions of yen

2016

2017

As of March 31,

Interest
raterelated

Currencyrelated

Stockrelated

Bondrelated

OthersHedge accounting is applied

¥ ̶

¥ ̶

¥ ̶

¥̶

¥̶

Total

¥ ̶

Interest
rateCurrencyrelated
related¥ ̶ ¥̶Stockrelated

Bondrelated

¥ ̶

¥̶

Others

Total

¥̶ ¥

̶

Hedge accounting is not applied

422

737

(230)

̶

̶

929

337

3,797

462

̶

̶

Total

¥422

¥737

¥(230)

¥̶

¥̶

¥929

¥337 ¥3,797

¥462

¥̶

¥̶ ¥4,597

4,597

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

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

Millions of yen

2016

As of March 31,

Notional
amounttotal

Over 1 year

¥1,000¥1,0002017

Fair value

Valuation
gains(losses)

Notional
amounttotal

Over 1 year

Fair value

¥422

¥422

¥1,000¥1,000¥337

Valuation
gains(losses)Over-the-counter transactions
Interest rate swaps
Fixed-rate receivable/
Floating-rate payable
Total

¥422

¥337
¥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, %2016

As of March 31,

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
3 years through 5 years through 7 years through10 years
7 years
5 years

Due in1 year or lessDue after
1 year through3 years

¥̶

¥̶

¥̶

¥̶

¥̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

¥̶

¥̶

¥̶

¥̶

¥̶

Due after
10 years

Total¥1,0001.89%
0.12%¥1,000¥1,0001.89%
0.12%¥1,000Millions of yen, %2017

As of March 31,

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

Due in1 year or lessDue 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¥1,0001.89%(0.00%)¥1,000¥1,0001.89%(0.00%)¥1,000Sony Financial Holdings Inc. Financial Data Book 2017 35

Sony Life Financial Data (Non-consolidated)

Currency derivatives

Millions of yen

2016

2017

Fair value

Valuation
gains(losses)

Notional
amounttotal

Over 1 year

Fair value

Valuation
gains(losses)

¥̶

¥737

¥737

¥240,804¥̶

¥3,799¥3,79931,792

̶

714

714

212,273

̶

3,284

3,284

Euro

15,387

̶

25

25

28,531

̶

514

514

Australian dollars

2,855

̶

(2)

(2)

̶

̶

̶

̶

̶

̶

̶

̶

169

̶

(1)

(1)

̶

̶

̶

̶

169

̶

(1)

Notional
amounttotal

Over 1 year

¥50,035

U.S. dollars

As of March 31,

Over-the-counter transactions
Forward foreign exchanges
Sold

BoughtU.S. dollars
Total

¥737

(1)
¥3,797

Notes: 1. As of March 31, 2016: The forward rate of exchange is used to value forward foreign exchanges at the end of the fiscal year.
2. As of March 31, 2017: The fair value of forward foreign exchanges is calculated using the discounted present value based on the fiscal year-end
interest rate.
3. Fair value is also shown in the column under “Valuation gains (losses).”

Stock derivatives

Millions of yen

2016

As of March 31,

2017

Notional
amounttotal

Over 1 year

Fair value¥72,793¥̶

¥(230)

Valuation
gains(losses)

Notional
amounttotal

Over 1 year

Fair value

Valuation
gains(losses)¥(230)¥96,016

¥̶

¥462

¥462

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

36 Sony Financial Holdings Inc. Financial Data Book 2017¥(230)¥462

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

2013

2014

2015

2016

2017

¥39,124,675¥40,500,241¥42,430,898¥44,749,196¥47,185,239

37,366,333

38,628,089

40,391,018

42,293,769

44,313,382

Individual annuities

412,709466,915597,682

856,0621,020,810

Group life insurance

1,345,632

1,405,237

1,442,198

1,599,364

1,851,046

Policy amount in force for group annuities

56,50355,196

17,21013,093

11,570

Annualized premiums from insurance in force

669,937

696,986

735,728

781,315820,856

Of which, medical protection, living benefit
protection and other products

158,686

167,075

172,800

179,707

187,449

4,460,210

3,894,484

4,776,917

5,152,456

5,004,921

4,396,676

3,814,291

4,625,700

4,871,062

4,765,257

Individual annuities

57,93175,088145,926

280,332

192,247

Group life insurance

5,602

5,104

5,291

1,061

47,41573,263

63,992

76,61285,01878,127

18,397

13,486

15,285

15,717

15,718

1,142,274

1,197,109

1,223,827

1,230,141

1,243,739

925,874

960,986

914,034

1,028,048

956,733

New policy amountIndividual life insurance

Annualized premiums from new policies
Of which, medical protection, living benefit
protection and other products
Ordinary revenues
Of which, income from insurance
premiums
Of which, investment income

199,833

212,323

280,148

170,517245,339

1,067,614

1,127,904

1,144,162

1,169,348

1,183,558

Of which, insurance claims andother payments

293,929

327,257

382,902363,370

372,407

Of which, investment expenses

11,686

8,506

9,727

23,39936,196

Of which, operating expenses

109,060

113,868

115,603

133,334

137,094

74,65969,20579,66560,79260,180Ordinary expenses

Ordinary profit
Net income

42,44437,06342,52437,09635,185

Core profit

80,04572,36576,50543,01983,831

Common stock

70,00070,00070,00070,00070,000

Number of shares issued and outstanding(thousands of shares)

70,00070,00070,00070,00070,0005,952,750

6,624,903

7,301,350

8,035,408

8,873,613

550,624

640,562

793,344

850,323

989,605

5,472,930

6,123,633

6,727,241

7,336,533

7,929,944

145,104

154,219

162,399

171,649

180,374

Securities

5,211,535

5,954,716

6,543,703

7,273,361

8,093,192

Solvency margin ratio

2,281.8%

2,358.7%

2,555.0%

2,722.8%

2,568.8%

Number of employees

6,323

6,553

6,781

7,289

7,865

Total assets
Of which, 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 payments have commenced.
2. The policy amount in force for group annuities is equal to the amount of outstanding 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 include 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 numberof coverage years.)
5. “Medical protection, living benefit protection and other products” is the portion of the annualized premium 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 2017 37

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, %2016
As of March 31,

Individual life
insurance
Individual annuities
Group life insuranceGroup annuities

NumberChange fromMarch 31, 2015

6,880,470
166,331̶̶

105.0%
139.3
̶
̶

2017
Change fromMarch 31, 2015

Amount¥42,293,769
856,062
1,599,364
13,093104.7%
143.2
110.9
76.1

Change fromMarch 31, 2016

Number7,112,052
196,606

103.4%
118.2

̶
̶

̶
̶

Change fromMarch 31, 2016

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

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 payments have commenced.
2. The policy amount in force for group annuities is equal to the amount of outstanding policy reserves.

New policy amountMillions of yen, %2016

For the year ended March 31,

Individual life insurance
Individual annuities
Group life insuranceGroup annuities

NumberYoY change

579,282
50,709̶̶

100.1%
182.3
̶̶

AmountYoY change¥4,871,062
280,332
1,061

105.3%
192.1
20.1

̶

Amount,of which,increase fromconversion

Amount,of which,
new policies¥4,871,062
280,332
1,061

̶

¥̶
̶
̶
̶

̶

Millions of yen, %2017

For the year ended March 31,

Individual life insurance
Individual annuities
Group life insuranceGroup annuities

NumberYoY change

479,131
34,492
̶
̶

82.7%
68.0
̶
̶

AmountYoY change¥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

̶

¥̶
̶
̶
̶

̶

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, %

2016

2017

Change fromMarch 31, 2015

Change fromMarch 31, 2016

As of March 31,

AmountIndividual life insurance
Individual annuities
Total
Of which, medical protection, living benefit protection
and other products¥751,820
29,495¥781,315

105.2%
139.7
106.2%¥787,005
33,851¥820,856

104.7%
114.8
105.1%

179,707

104.0

187,449

104.3

AmountNew policies

Millions of yen, %2016
For the years ended March 31,

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

Amount2017
YoY change

AmountYoY change¥76,334
8,684¥85,018

106.3%
180.3
111.0%¥72,786
5,340¥78,127

95.4%
61.5
91.9%

15,717102.8

15,718100.0

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. “Medical protection, living benefit protection and other products” indicates the portion of annualized premiums for medical protection benefits (hospitalization benefits, surgical procedure benefits, etc.) and products with living benefit protection (benefits for specific illness, nursing care benefits, etc.).

38 Sony Financial Holdings Inc. Financial Data Book 2017

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

2016
As of March 31,

Number

2017
AmountNumberAmountIndividual life insurance products
5,437,934 ¥40,855,198
Pure death-protection insurance
5,226,764 ¥38,899,244
Variable life insurance (whole life type)823,273
4,275,541
845,906
4,382,838
U.S. dollar-denominated whole life insurance
59,731
567,438
130,292
1,130,333
Modified payment whole life insurance
14,232
126,546
13,886
122,105
Limited payment whole life insurance
340,179
2,699,573
341,278
2,682,182
Family insurance
1,196
10,917
1,178
10,710Interest rate-sensitive whole life insurance
538,555
2,972,267
525,4892,876,061
Whole life insurance (no selection type)
3,908
6,895
3,773
6,606
Single premium whole life insurance (non-notification type)11,93766,51912,96772,743
Living benefit insurance (whole life type)
530,977
1,810,966
525,352
1,779,397
Living benefit whole life insurance (living standard type)95,362
385,449
132,695
538,877
Variable life insurance (term type)
1,225
39,288
1,160
37,585
Family income insurance
271,949
6,968,621
301,711
7,704,077
Living standard insurance
2,624
34,711
2,361
29,361
Level premium plan term life insurance
81,164
1,641,168
79,193
1,579,254
Decreasing term life insurance
69,376
1,303,547
68,881
1,273,146
Living benefit insurance (term type)
79,185735,716
84,107751,117
Living benefit term life insurance (living standard type)12,404
123,077
48,943419,104
Level premium plan term life insurance (non-smoker preferred risk)
17,632
723,217
17,291
712,186
Decreasing term life insurance (non-smoker preferred risk)
22,562
438,058
21,001
381,322
Family income insurance (non-smoker preferred risk)
45,395
1,177,456
43,007
1,057,556
Increasing term life insurance
34
4,032
25
3,802
Long-term level premium plan term life insurance (with disability benefit)
50,5692,386,042
62,8073,079,671
̶̶
Level premium plan term life insurance with reduced surrender value (disability/nursing care type)721
28,698
Increasing term life insurance (reduced surrender value)
2,760
95,717
4,509
182,966
Level premium plan term life insurance with no surrender value
48,685
910,666
50,609954,664̶̶Level premium plan term life insurance with no surrender value (disability/nursing care type)
700
12,546
Income protection insurance to cover three major diseases
22,112
17,85524,02818,933Semi-participating whole life nursing-care insurance
134,657
503,702132,974
495,199
Whole life nursing-care insurance (reduced surrender value)
18,333
3,827
20,5683,995
Cancer insurance
208,483
27,976
208,71027,718Whole-life cancer insurance (08)74,6106,592
80,6857,003
̶̶Cancer hospitalization insurance
29,907
29,409Comprehensive medical insurance
1,602,956
638,904
1,611,376
623,656
Long-term comprehensive medical insurance
10,741
4,564
10,294
4,401
Semi-participating living standard insurance (joint type)
51
990
48
927
Term riders and others[533,419] 8,191,390[525,045] 7,864,446
Mixed insurance
429,167
1,504,136
442,497
1,570,161
Variable life insurance (limited term type)
84,805265,21397,804327,486
U.S. dollar-denominated endowment insurance
3,470
15,5306,019
25,115
U.S. dollar-denominated specialty endowment insurance
3,903
21,8795,451
32,651
Endowment insurance
264,200
998,024
260,200
981,704
Semi-participating endowment insurance
64,159169,527
62,555
163,776
Specialty endowment insurance
8,630
33,961
10,46839,428Pure endowment insurance
1,224,539
1,890,387
1,231,621
1,888,021
Educational endowment insurance
95,68397,571
134,305
145,313
Semi-participating educational endowment insurance
1,128,856
1,792,815
1,097,316
1,742,708
̶̶̶̶Living benefit rider
Total individual life insurance products
6,880,470 42,293,769
7,112,052 44,313,382
Individual annuity products
80,359350,831
Semi-participating individual annuities
75,667334,053
Individual variable annuities
80,862454,185
105,603597,726
Others9,802
67,823
10,64472,252
Total individual annuity products
166,331856,062
196,606
1,020,810
Group life insurance products
118,661
168,646
Group term life insurance
122,445
172,913
Group welfare term life insurance
113,340
67,159119,043
72,089̶̶
Non-participating group welfare term life insurance
13,26740,322
Group credit life insurance
1,507,312
1,359,283
1,407,149
1,569,983
Annuity payment rider
22
7
15
4
Total group life insurance products
1,743,119
1,599,364
1,658,135
1,851,046
Group annuity products
20,85595
New-type corporate annuities
21,177
100
Defined contribution corporate annuities
58,97812,99256,164
11,475
Total group annuity products
80,155
13,09377,019
11,570̶̶̶̶
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 commence.
4. “Others” under individual annuity products include “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 outstanding policy reserves.
5. The numbers of policies for group life insurance products, group annuity products, medical protection insurance (group-type) and “reinsurance
recipients” reflect 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 outstanding 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 2017 39

Sony Life Performance Indicators (Non-consolidated)

New policy amount by productMillions of yen

2016
For the years ended March 31,

Number

2017
AmountNumberAmountIndividual life insurance products
400,145 ¥4,545,352
Pure death-protection insurance
470,261 ¥4,598,378
Variable life insurance (whole life type)154,214824,693
40,986
189,654
U.S. dollar-denominated whole life insurance
14,475150,587
72,587578,975̶̶̶̶
Modified payment whole life insurance
Limited payment whole life insurance
9,380
55,884
7,832
43,152̶̶̶̶
Family insurance
Interest rate-sensitive whole life insurance
3,599
21,104
1,459
9,797
Whole life insurance (no selection type)
278
422
289
440
Single premium whole life insurance (non-notification type)11,99966,9531,201
7,012
Living benefit insurance (whole life type)15,167
57,127
8,648
31,734
Living benefit whole life insurance (living standard type)56,043
230,547
41,141
171,650̶̶̶̶
Variable life insurance (term type)
Family income insurance
40,8701,245,454
44,0391,362,255
̶̶̶̶Living standard insurance
Level premium plan term life insurance
5,019
105,735
4,883
104,897
Decreasing term life insurance
4,683
129,988
4,181
112,575
Living benefit insurance (term type)
16,732
159,800
11,27178,475
Living benefit term life insurance (living standard type)12,497
123,838
37,722
307,038
Level premium plan term life insurance (non-smoker preferred risk)
1,025
52,0171,129
57,078̶̶̶̶
Decreasing 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)
10,060512,301
15,323
826,699
̶̶Level premium plan term life insurance with reduced surrender value (disability/nursing care type)728
28,820
Increasing term life insurance (reduced surrender value)
170
4,929
2,274
102,346
Level premium plan term life insurance with no surrender value
5,560
119,827
5,634
125,467̶̶Level premium plan term life insurance with no surrender value (disability/nursing care type)717
13,022
Income protection insurance to cover three major diseases
3,804
3,287
3,515
2,966
Semi-participating whole life nursing-care insurance
5,874
23,053
2,647
10,020Whole life nursing-care insurance (reduced surrender value)
3,405
803
3,209
332
Cancer insurance
5,777
613
6,957
698
Whole-life cancer insurance (08)10,255
823
9,221
766
̶
̶
Cancer hospitalization insurance
2,288
2,180
Comprehensive medical insurance
77,087
14,39570,372
12,457̶̶̶̶Long-term comprehensive medical insurance̶̶̶̶Semi-participating living standard insurance (joint type)
Term riders and others[36,286]
694,189[19,298]
367,014Mixed insurance
48,942
188,049
39,631
171,232
Variable life insurance (limited term type)
25,951
92,754
16,872
71,611
U.S. dollar-denominated endowment insurance
666
3,292
2,653
10,679U.S. dollar-denominated specialty endowment insurance
670
6,922
1,784
14,187
Endowment insurance
17,104
69,18914,466
61,836
Semi-participating endowment insurance
2,002
7,882
1,435
5,450
Specialty endowment insurance
2,549
8,008
2,421
7,467
Pure endowment insurance
60,07984,63439,35548,673
Educational endowment insurance
22,43019,06139,354
48,670Semi-participating educational endowment insurance
37,64965,5731
3
̶̶̶̶Living benefit rider
Total individual life insurance products
579,282
4,871,062
479,131
4,765,257
Individual annuity products
6,723
29,639Semi-participating individual annuities
14,06065,167
Individual variable annuities
36,649215,165
27,769162,607̶̶̶̶
OthersTotal individual annuity products
50,709280,332
34,492
192,247
Group life insurance products̶̶̶̶Group term life insuranceGroup welfare term life insurance
14,404
1,061
2,001
7,075
̶
̶
Non-participating group welfare term life insurance
13,26440,340̶̶̶̶Group credit life insurance̶̶̶̶Annuity payment rider
Total group life insurance products
14,404
1,061
15,26547,415
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 for policies.
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.

40 Sony Financial Holdings Inc. Financial Data Book 2017

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
Accidental deathIndividual life insurance
Individual annuities
Group life insuranceGroup annuities
Total
Death protection with other conditions
Individual life insurance
Individual annuities
Group life insuranceGroup annuities
Total
Living protection
Maturity and living benefits
Individual life insurance
Individual annuities
Group life insuranceGroup annuities
Total
Annuities
Individual life insurance
Individual annuities
Group life insuranceGroup annuities
Total
OthersIndividual life insurance
Individual annuities
Group life insuranceGroup annuities
Total
Hospitalization protection
Accidental hospitalization
Individual life insurance
Individual annuities
Group life insuranceGroup annuities
Total
Sickness hospitalization
Individual life insurance
Individual annuities
Group life insuranceGroup annuities
Total
Hospitalization with other conditions
Individual life insurance
Individual annuities
Group life insuranceGroup annuities
Total

2016

2017

¥40,403,381[191,749]
1,599,357¥42,425,360[233,025]
1,851,042

̶̶

42,002,738

44,276,402[6,376,107][6,156,920]

̶

̶

[339]

[310]

̶

̶

[6,376,447][6,157,230][1,222,535][1,179,842]

̶
̶
̶

̶
̶
̶

[1,222,535][1,179,842]

1,890,387
789,03501,888,021
949,391̶̶̶

2,679,424

2,837,413

̶̶

[100,324][2][118,959]
[1]

̶

̶

[100,327][118,960]

̶̶67,026
6
13,09380,126

71,418
4
11,57082,994[18,156][18,188]

̶

̶

[7]

[17]

̶

̶

[18,164][18,205][18,156][18,188]

̶
̶
̶

̶
̶
̶

[18,156][18,188][7,142][7,067]

̶
̶
̶

̶
̶
̶

[7,142][7,067]

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 policies forindividual 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 in sickness 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 2017 41

Sony Life Performance Indicators (Non-consolidated)

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

2016

2017

Disability protection
Individual life insurance

600,135

676,158

Individual annuities̶̶Group life insurance

9,934

11,993̶̶

610,069

688,151

1,685,198

1,690,123

Individual annuities̶̶Group life insurance̶̶Group annuities̶̶

1,685,198

1,690,123

Group annuities
Total
Surgery protection
Individual life insurance

Total

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

As of March 31,

2016

2017

Pure death-protection insurance
Whole life insurance
Whole life insurance with term rider¥ 8,646,575¥ 9,219,018

─̶

Term life insurance

16,507,322

18,140,113

Total (including other types of insurance)

38,899,244

40,855,198

Mixed insurance
1,183,082

1,170,595

Endowment insurance with term rider─̶Term life insurance with living benefits─̶Endowment insurance

Total (including other types of insurance)

1,504,136

1,570,161

1,890,387

1,888,021

856,0621,020,810

Rider to cover accidental death3,214,336

3,087,697

Injury rider

3,161,771

3,069,222

445

426

Comprehensive protection riders covering hospitalization for family

18

16Comprehensive protection riders covering lifestyle-related disease48

46

Medical treatment rider for adults

1,216

1,183

Medical treatment rider for women

Pure endowment insurance
Annuity products
Individual annuities
Riders for disaster and disease

Comprehensive protection riders covering hospitalization

1,238

1,220

Lifestyle diseases medical treatment rider

14

14

New medical treatment rider for women

4

4

251

259

6,737

6,835

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.

42 Sony Financial Holdings Inc. Financial Data Book 2017

Sony Life Performance Indicators (Non-consolidated)

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

2016

2017

For the years ended March 31,

NumberAmountNumberAmountBalance at the beginning of the period

6,552,685¥40,391,018

6,880,470¥42,293,769

New policy amount579,282

4,871,062

479,131

4,765,257

Increase from renewal

13,05347,587

12,61946,029

Increase from reinstatement

18,479119,711

18,191

120,415

Increase in policy amount

[309]

1,897

[234]

2,178

Increase from conversion

̶

̶

̶

̶

Increase for other reasons

10,341

187,579

5,553

149,243

Decrease from death

11,38968,065

11,957

69,785Decrease for maturity

36,532

123,90346,733

138,327

Decrease in policy amount[44,682]

204,038[40,318]

188,878

Decrease from conversion

̶

̶

̶

̶

Surrender amount

196,144

1,684,170

182,344

1,578,540

Lapse amount

34,374

227,980

33,406

234,703

Decrease for other reasons

14,931

1,016,928

9,472

853,275

Balance at the end of the period

6,880,470

42,293,769

7,112,052

44,313,382[Increase ratio][5.0%][4.7%][3.4%][4.8%]Net increase

327,785

1,902,751

231,5822,019,612[Increase ratio][3.5%][7.9%][(29.3%)][6.1%]

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

Individual annuities
Millions of yen, %

2016

2017

For the years ended March 31,

NumberAmountNumberBalance at the beginning of the period

119,419¥597,682

166,331¥ 856,062

New policy amount

50,709280,332

34,492

192,247

421

2,325

672

3,867

Increase from reinstatement

AmountIncrease from conversion

̶

̶

̶

̶

Increase for other reasons

1,732

4,257

1,656

5,009

82

389

78

362

Decrease from death
Decrease for maturity

986

487

784

459

Decrease in annuity amount

[446]

2,810

[506]

4,757

Decrease from conversion
Surrender amount
Lapse amount

̶

̶

̶

̶

3,113

15,9683,651

19,979

621

3,321

1,073

6,162

1,142

5,557

957

4,654

Balance at the end of the period

166,331856,062

196,606

1,020,810[Increase ratio][39.3%][43.2%][18.2%][19.2%]Net increase

46,912

258,379

30,275

164,748[Increase ratio][87.6%][97.6%][(35.5%)][(36.2%)]

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 2017 43

Sony Life Performance Indicators (Non-consolidated)

Group life insurance

Millions of yen, %

2016

2017

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]

1,819,421
14,404
236,054¥1,442,198
1,061
239,581

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%]

̶̶

87,754[2,682]
72
8,769
235,732
168,510[629,904]
391
348
836
1,743,119[(4.2%)](76,302)[̶]

299,944
677
68
1,566
245,808
61,18374,137890
348
233
1,599,364[10.9%]
157,166[325.2%]

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, %2016
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]

Number

2017
AmountNumberAmount

81,396¥17,21080,155̶̶̶

¥13,093
̶

223,456
1,718

1,765
192

211,085
1,510

1,664
128

̶

̶

̶

̶

80,155[(1.5%)](1,241)[̶]

13,093[(23.9%)](4,117)[̶]77,019[(3.9%)](3,136)[̶]

11,570[(11.6%)](1,522)[̶]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%

2016
̶

1.55%
1.40%
̶

1.20%
1.05%

2017

0.70%
1.55%
1.40%
0.35%
1.20%
1.05%

2. The following is an example of policyholder dividends for semi-participating whole life nursing-care insurance (before annuity
payments commence) using figures for the fiscal year ended March 31, 2017.
<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)

44 Sony Financial Holdings Inc. Financial Data Book 2017

Sony Life Performance Indicators (Non-consolidated)

Yen
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
Nov. 2, 2007

Assumed interest rateYears elapsed

1.00%
1.00
1.00
1.50
1.50
1.50
1.50
1.50
1.50

2 years
3
4
5
6
7
8
9
10

Ongoing policy¥̶̶̶Policies to which nursing care applies,
ending at death of policyholder¥15,165
22,91730,790
0
0
0
0
0
0

0
̶
̶
̶
̶

0

Notes: 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, 2017.
2. The above-stated dividend amount is the sum of the pro-rated dividend amount (policy reserve × dividend participation ratio) and interest throughNovember 2, 2017 (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 1.80%, using figures for the fiscal year ended March 31, 2017.
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,

2016

2017

Individual life insurance
Individual annuities
Group life insuranceGroup annuities

4.7%
43.2
10.9
(23.9)

4.8%
19.2
15.7
(11.6)

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

For the years ended March 31,

2016

2017

Average policy amount for new policies
Average policy amount for policies in force¥8,4086,146¥9,945
6,230

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,

2016

2017

Individual life insurance
Individual annuities
Group life insurance

12.1%
52.5
0.1

11.3%
24.4
3.0

%

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 cancellations and lapses 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,

2016

2017

Individual life insurance
Individual annuities
SubtotalGroup life insurance

4.94%
3.70
4.92
5.18

4.44%
3.42
4.43
5.12

The following lapse and surrender rate is expressed as a ratio calculated by dividing the amounts of cancellations and lapses 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,

2016

2017

Individual life insurance + Individual annuities

4.72%

4.27%

%

Sony Financial Holdings Inc. Financial Data Book 2017 45

Sony Life Performance Indicators (Non-consolidated)

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

For the years ended March 31,

2016

2017

Average premiums for new policies¥12,851¥13,582

For the years ended March 31,

2016

2017

Based on number of policies
Based on policy amount

1.69‰
1.65

1.71‰
1.61

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

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

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

2016
For the years ended March 31,

Number ofpolicies

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

0.075‰
0.086
3.651
38.13916.01145.97011.5672017
Policy amount0.097‰
0.100
88.569615.824
411.494

Number ofpolicies

0.070‰
0.100
3.636
38.017
16.26146.97412.184

Policy amount0.075‰
0.053
90.257611.877418.8173- 08 Operating expense ratio (to insurance premiums)%

For the years ended March 31,

2016

2017

Operating expense ratio

13.0%

14.4%

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, 2017(1) Investment Environment
During the fiscal year ended March 31, 2017, the Japanese economy remained on a track of gradual growth. Real GDP growth, year
on year, for the April–June quarter, July–September quarter, October–December quarter, and January–March quarter were 1.6%, 1.0%,
1.4% and 1.0%*, respectively. While the Japanese economy has been underpinned by an increase in exports attributable mainly to therecovery in emerging economies along with the recovery in capital expenditure thanks to improvement in business confidence since
the July–September quarter, its recovery remained at a modest level as improvements in employment and income conditions failed to
sufficiently influence personal consumption. In the meantime, the consumer price index remained at the low level of near 0%, despite thepositive shift in core CPI due to the decline in energy prices this year, which no longer exerted downward pressure on prices.
The Japanese bond market saw an increase in the interest rate in the latter part of the fiscal year. Yields on 10-year JGBs decreased toreach, at one point, the negative 0.3% level over the summer under tight supply and demand in the bond market, triggered by the introduction of “quantitative and qualitative monetary easing incorporating negative interest rates,” and positive buying operations by the Bank ofJapan. Subsequently, the Bank of Japan newly adopted its “policy for quantitative and qualitative monetary easing with short- and longterm interest rate control” based on a “comprehensive assessment” of the monetary easing, and the central banks of major countries
changed their direction toward higher rates under the tapering. Against the backdrop of such situations, the interest rate started to rise,pushing the long-term interest rate as high as 0.067% (up 0.116 percentage point year on year), as of March 31, 2017.
Stock markets rose in the latter part of the fiscal year. The Nikkei Stock Average fell below the ¥15,000 level at one point in June 2016
amid global risk-off behavior following the U.K.’s decision on Brexit. However, this was followed by a significant rally of stock prices toward
the year-end thanks to the Bank of Japan’s policy to increase the purchase of ETF underpinning the stock prices, and the expectation of
expansionary fiscal policy by newly elected U.S. President Trump along with the yen depreciation in the foreign exchange market. As of
March 31, 2017, the Nikkei Stock Average was ¥18,909.26, up ¥2,150.59 from its level on March 31, 2016.
The foreign exchange market experienced some fluctuations. In the first half of the fiscal year, the yen appreciated against the U.S. dollar
to reach the ¥99 level at one point, due to the expectation of a rather moderate pace of rate increase by the Federal Reserve Board, as wellas the results of the Brexit referendum in the U.K. However, the yen depreciated rapidly against the U.S. dollar due to inflationary expectations and the associated rise in the U.S. interest rate, triggered by the prospect of expansionary fiscal policy to be adopted by the next U.S.
administration, following the victory of Republican candidate Mr. Trump in the U.S. presidential election in November. As of March 31, 2017,
the yen was traded at ¥112.19 to the U.S. dollar, almost flat compared with ¥112.68 as of the end of the previous fiscal year.
*Second preliminary estimates

46 Sony Financial Holdings Inc. Financial Data Book 2017

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 ultra-long term Japanese government and corporate bonds with longer remaining maturity, to meet thelong-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, 2017, general account assets totaled ¥7,884.0 billion, up 9.7%, or ¥698.9 billion, from a year earlier. Within generalaccount assets, Japanese government and corporate bonds totaled ¥6,828.7 billion (accounting for 86.6% of total general accountassets), foreign bonds ¥274.3 billion (3.5%), Japanese stocks ¥37.6 billion (0.5%), money held in trust ¥273.8 billion (3.5%), policy loans¥180.3 billion (2.3%), real estate ¥117.5 billion (1.5%) 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, %2016
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 government and corporate 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¥2017
Composition

52,551

0.7%

Amount¥Composition

40,896

̶
̶
̶
̶

̶
̶
̶
̶

̶
̶
̶
̶

280,973
6,479,336
6,351,176
33,364
93,14070,13423,005
1,654
171,649
171,649

3.9
90.2
88.4
0.5
1.3
1.0
0.3
0.0
2.4
2.4

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
309,046̶̶

115,8161.6

̶

85,031(272)¥7,185,084
91,817

̶

1.2
(0.0)
100.0%
1.3

0.5%
̶
̶
̶
̶

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

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,

2016

2017

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 government and corporate 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¥ (4,267)¥ (11,655)

─
─
─
─

̶
̶
̶
̶

(32,302)
696,043744,291(9,131)(38,487)(35,422)(3,065)
(629)
9,249
9,251
(2)
(1,948)(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

─

10,309(4)¥677,078
9,658

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 2017 47

Sony Life Performance Indicators (Non-consolidated)

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

For the years ended March 31,

2016

2017

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 government and corporate bonds
Japanese stocks
Foreign securities
Loans
Commercial loans
Real estate
Total

0.05%

0.00%

̶

̶

̶

̶

̶

̶

̶

̶

4.84
2.23
2.16
4.90
4.13
3.71
0.83
4.90
2.42%

1.94
2.19
1.88
2.80
13.41
3.64
0.02
5.52
1.81%

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 government and corporate bonds
Japanese stocks
Foreign securities
Loans
Commercial loans
Real estate
Total
Of which, overseas investment

2016

¥

2017

75,378Interest 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

48 Sony Financial Holdings Inc. Financial Data Book 201756,120

̶

̶

̶

̶

̶

̶

̶

̶

247,391
5,992,602
5,879,645
24,46887,047
166,487
0
113,719¥6,675,387
87,965

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

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

Millions of yen

2016

2017

¥141,450¥148,284̶̶

11,97398
12,204

4,493
152
1,308

̶

̶

4,768

̶

̶

14,6701
4¥168,915̶21¥170,517

Sony Life Performance Indicators (Non-consolidated)

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

For the years ended March 31,

2016

Interest 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

¥

2017

53

¥

44

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

1

53
30,050

̶

2,798
5

̶
̶

̶

̶

1,936
3,868
¥8,664

1,879
4,167¥36,196

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

For the years ended March 31,

2016

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

2017

¥
0
124,943
115,655
522
7,246
6,174
10,261¥141,450¥0130,772
121,103
527
8,886
6,377
10,869¥148,284

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

For the years ended March 31,

2016

2017

Gains on sale of Japanese bonds (including JGBs)
Gains on sale of Japanese stocks, etc.
Gains on sale of foreign securities
Total¥11,247882
75¥12,204

¥

20
̶

1,287
¥1,3084- 08 Losses on sale of securities (general account)
Millions of yen

For the years ended March 31,

2016

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

2017

¥̶

¥̶

̶

̶

̶

̶

¥̶

¥̶

4- 09 Devaluation losses on securities (general account)Not applicableSony Financial Holdings Inc. Financial Data Book 2017 49

Sony Life Performance Indicators (Non-consolidated)

4- 10 Securities (general account)

Millions of yen, %2016
As of March 31,

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

2017
Composition¥6,233,852

96.2%

̶

̶

117,324
113,424
33,364
93,14070,13423,005
1,654¥6,479,336

1.8
1.8
0.5
1.4
1.1
0.4
0.0
100.0%

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%

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

Millions of yen

2016
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

¥24,336More than
1 year to
3 years

More than
3 years to
5 years

More than
5 years to
7 years

Over 10 years(including nofixed maturity)

Total¥322,431
320,234¥6,071,355
5,883,743¥6,479,336
6,233,852¥23,322
13,243¥16,746

̶

̶

̶

̶

̶

̶

̶

20,282

571

̶

̶

1,631

117,324
33,364
93,14070,13423,0051,654

̶̶¥21,143
16,630More than
7 years to
10 years

̶

̶

̶

̶

̶

4,054

16,746
13,615
3,131
̶

3,848
2,296
1,552
664

565

̶

8,824
1,822
7,002
682

̶

94,83833,364
59,10052,400
6,700
307

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

¥24,336¥23,322¥16,746¥21,143¥322,431¥6,071,355¥6,479,336

̶

4,054

̶

565

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

¥16,624
11,638More than
1 year to
3 years¥5,493̶More than
3 years to
5 years¥8,805
5,422

More than
5 years to
7 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
31,539
1,678

̶

̶

̶

̶

̶

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

̶

̶

̶

̶

̶

561

̶

̶

1,627

̶

̶

̶

̶

̶

̶

4,424

4,918

2,592

457

̶

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,

2016

2017

Japanese government and corporate bonds
Foreign bonds

1.97%
4.14

1.87%
2.37

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

50 Sony Financial Holdings Inc. Financial Data Book 2017

Sony Life Performance Indicators (Non-consolidated)

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

Millions of yen, %2016
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

¥

2017
Composition

Amount¥Composition

̶

̶%

̶

̶

̶

̶

1,758

5.3

1,729

4.6

1,214

3.6

1,047

2.8

̶

̶

̶

̶

̶

̶

̶

̶

1,143
1,420

3.4
4.3

1,557
1,484

4.1
3.9

̶

̶

̶

̶

̶

̶

̶

̶

107

0.3

128

0.3

̶

̶

̶

̶

̶

̶

̶

̶

418
1,279
4,229
2,394
389
433
476

1.3
3.8
12.7
7.2
1.2
1.3
1.4

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

1.0
4.3
13.6
6.5
1.1
1.6
1.2

1,753

5.3

1,706

4.5

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

3,042

9.1

3,542

9.4

̶

̶%

̶

̶

3,057

9.2

212
3,183

0.6
8.5

̶

̶

̶

̶

̶

̶

̶

̶

6,717
935

20.1
2.8

8,522
960

22.6
2.6

̶

2,594
¥33,364̶

7.8
100.0%

̶

2,528¥37,659̶

6.7
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 of 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

2016

2017

¥171,649
155,413
16,235¥180,339
163,580
16,758
34
[̶]

̶

[̶]
̶

̶

[̶]

[̶]

̶

̶

̶

̶

̶

̶

̶

̶

̶

34
¥180,374¥171,649

Sony Financial Holdings Inc. Financial Data Book 2017 51

Sony Life Performance Indicators (Non-consolidated)

4- 15 Tangible fixed assets (general account)
Tangible fixed assets

Millions of yen, %2016
For the year ended March 31,

Land
Buildings
Leased assets
Construction in progress
Other tangible assets

Balance atthe beginning of
the period

Increase in
the period

Decrease in
the period¥ 83,007
34,757

¥ ̶
364

¥ ̶
318
[312]

15

̶
̶

452

0
31
169

¥118,232¥566

114,552

122

̶

Total
Of which, investment
and rental properties

Amount ofdepreciation in
the period

Balance atthe end of
the period

Amount ofaccumulated
depreciation% ofaccumulated
depreciation

¥ ̶
2,025

¥ 83,007
32,777

̶
¥25,852

44.1

4

8

41.0

̶

̶

144

12
31
427

1,723

80.1

¥2,173¥116,256¥27,584

45.4%

1,900

112,769

24,788

̶

50
[49]
¥368
[362]
5

̶%

44.3
Millions of yen, %2017
For the year ended March 31,

Balance atthe beginning of
the period

Land
Buildings
Leased assets
Construction in progress
Other tangible assets
Total
Of which, investment
and rental properties

Amount ofdepreciation in
the period

Balance atthe end of
the period

Amount ofaccumulated
depreciation% ofaccumulated
depreciation

¥ ̶
2,103

¥ 83,007
34,442

̶
¥27,406

̶%
44.3

̶

4
̶

̶

̶

180

10
75
906

12

119
18

1,617

64.1

Increase in
the period

Decrease in
the period¥ 83,007
32,777

¥ ̶
3,810

¥ ̶
41
[7]

12
31
427

2
163
677

¥116,256¥4,653¥180[7]¥2,288¥118,441¥29,03645.1%

112,769

357

0

1,861

111,265

26,64147.4

56.0

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

2016

2017

¥115,816
3,193
112,623
3¥117,525
6,357
111,1683

4- 16 Overseas investment (general account)
Millions of yen, %Details by assets
2016
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 of Japan
Foreign bonds and others
Subtotal
Total
Overseas investment

Amount2017
Composition¥70,134
1,992
19,69091,817
̶
̶
̶

70.6%
2.0
19.8
92.4
̶
̶
̶

AmountComposition¥274,306
12,95021,789309,046
̶
̶
̶

86.4%
4.1
6.9
97.3
̶
̶
̶

̶

̶

̶

̶

7,576
7,576

7.6
7.6

8,590
8,590

2.7
2.7

¥99,394

100.0%¥317,636

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.

52 Sony Financial Holdings Inc. Financial Data Book 2017

Sony Life Performance Indicators (Non-consolidated)

Overseas investment by region
Millions of yen, %2016
Of which,foreign bonds

Foreign securities

Of which,foreign stocks, etc.

Loans to borrowers
located outside of Japan

As of March 31,

AmountComposition

AmountComposition

AmountComposition

AmountComposition

North America¥72,64478.0%¥67,24295.9%¥ 5,402

23.5%

¥̶

̶%

Europe

4,428

4.8

̶

̶

4,428

19.2

̶

̶

Oceania

2,892

3.1

2,892

4.1

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

13,17514.1

̶̶

13,17557.3

̶̶Middle East

̶

̶

̶

̶

̶

̶

̶

̶

Africa

̶

̶

̶

̶

̶

̶

̶

̶

International organizations

̶

̶

̶

̶

̶

̶

̶

̶

100.0%

¥̶

̶%

Asia
Latin America

Total¥93,140

100.0%¥70,134

100.0%¥23,005

Millions of yen, %2017

Foreign securities

Of which,foreign bonds

Of which,foreign stocks, etc.

Loans to borrowers
located outside of Japan

As of March 31,

AmountComposition

AmountComposition

AmountComposition

AmountComposition

North America¥278,242

91.0%¥274,306

100.0%¥ 3,936

12.5%

¥̶

̶%

Europe

3,707

1.2

̶

̶

3,707

11.8

̶

̶

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

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

2016

2017

As of March 31,

AmountComposition

AmountComposition

U.S. dollar¥291,759

94.4%¥82,500

89.9%

Euro

6,151

6.7

5,853

1.9

Australian dollar

2,914

3.2

11,199

3.6

British pound

248

0.3

229

0.1

2

0.0

̶

̶

New Taiwanese dollar
Singapore dollar
Total

̶

¥91,8174̶

100.0%

0.0¥309,046

100.0%For the years ended March 31,

2016

2017

Yield on overseas investments

4.09%

13.25%

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 2017 53

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 other securities (before tax deductions) and net deferred gains or losses 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

2016

2017

¥1,169,875
319,740
44,26075,1660¥1,176,229
324,181
46,00582,463
0

188,217
20,778

159,672
30,847

̶̶

302
83,648
470,777442
82,980495,984̶̶(31,308)(1,707)(42,891)(3,457)85,93023,5768,519
30,613
15,90230,831
2,188

91,57624,1698,541
31,35618,14033,5542,315

2,722.8%

2,568.8%

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 other 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 other securities
Deferred tax liabilities for net deferred gains (losses) on hedging instruments
Real net assets (A) (1)–(2) (including unrealized gains and losses on held-to-maturity securities andpolicy-reserve-matching bonds)(3) Unrealized gains and losses on held-to-maturity securities and policy-reserve-matching bonds
Real net assets (B) (1)–(2)–(3) (excluding unrealized gains and losses on held-to-maturity securities andpolicy-reserve-matching bonds)

Billions of yen

2016

2017

¥10,128.3
8,035.4
2,067.5
25.4¥10,382.4
8,873.6
1,471.5
37.2

̶

̶

̶

̶

̶

̶

6,904.1
7,553.2
44.2
75.1
471.0
470.7
0.3
58.5

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

̶

̶

3,224.1
2,067.5

2,656.9
1,471.5

1,156.6

1,185.3

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 and losses on held-to-maturity securities and on policy-reserve-matching bonds which are
not accounted 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.

54 Sony Financial Holdings Inc. Financial Data Book 2017

Sony Life Performance Indicators (Non-consolidated)

6 Balance of Separate Account Assets
Millions of yen

As of March 31,

2016

2017

Individual variable life insurance and individual variable annuities¥850,323¥989,605

̶̶¥850,323¥989,605

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%
2017

As of March 31,

Equity-based
investment

Results of investment

14.62

Japanese
growth equitybased
investment

12.13

Global core
equity-based
investment

Global equitybased
investment

14.05

11.35

Bond-based
investment

Global bondbased
investment

Hybridinvestment

Short-termmonetary
market-based
investment(1.11)(4.04)

5.25(0.02)

7- 02 Investment progress (for the fiscal year ended March 31, 2017)
Equity-based investment
Benchmark: The Nikkei Stock Average
Investment progress in the period
The Japanese stock market rose. The market remained bearish at the beginning of this period under the stronger yen, which was followed
by a trend toward full risk aversion resulting from the victory of the Brexiteers at the referendum held in June, pushing the Nikkei Stock
Average down as low as ¥14,952. However, the Japanese stock market showed a strong rally subsequently, as market participants
reacted positively to the rising overseas stock markets triggered by the victory of Mr. Trump in the U.S. presidential election in November,
along with the trend of yen depreciation in the foreign exchange market. After the Nikkei Stock Average achieved the ¥19,000 level in
December, selling and buying alternately prevailed for a period. Investment results of the fund were positive 14.62% year on year, while thebenchmark return stood at positive 12.83%.
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 12.13% year on year, while thebenchmark return stood at positive 14.69%.
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 14.05% year on year, while thebenchmark return was positive 14.87%.
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 2017 55

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 economies around the world. In the U.S., the stock market was bearish at one point, as a result of the victoryof the Brexiteers at the U.K. referendum held in June. However, following the victory of Mr. Trump in the U.S. presidential election in
November, U.S. share prices rallied in anticipation of his economic policy, marking a record high in major U.S. stock indices. Investment
results of the fund were positive 11.35% year on year, while the benchmark return was positive 14.87%.
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
Interest rates of Japanese bonds rose after having been continuously subjected to historically low levels. At the beginning of the period, the10-year JGB yield remained low, confined to the negative range. JGBs known as safe-haven assets became the focus of buying following
the decision on Brexit at the end of June in the U.K., pushing down the 10-year JGB yield to the negative 0.30% level at one point. However, the 10-year JGB yield improved into the positive range, due to the rise in the U.S. interest rate along with the global stock market rally
in response to the victory of Mr. Trump in the U.S. presidential election in November. Investment results of the fund were negative 1.11%
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 Citigroup World Government Bond Index (unhedged, in yen terms)
Investment progress in the period
Bond markets in major economies around the world saw a rise in interest rates centered on the U.S. Interest rates continued to fluctuate in
the U.S., but significantly increased thereafter in anticipation of economic policies following Mr. Trump’s victory in the U.S. presidential
election in November. In European markets, interest rates fell in the first half of the year, due to risk aversion among investors in view offactors including the Brexit decision in the U.K. However, interest rates rose in the latter half of the year, thanks to the recovery in business
confidence in European economies. The investment results of the fund were negative 4.04% year on year, while the benchmark returnstood at negative 3.95%.
Investment policy for the futureSony Life will continue investing in countries, where 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 Citigroup 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 5.25% year on year, thanks to the buoyant domestic stock market more thanoffsetting the adverse effect of the rise in interest rates in the Japanese bond market (and the associated fall in bond prices).
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 0.02% 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.

56 Sony Financial Holdings Inc. Financial Data Book 2017

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

2016

2017

As of March 31,

NumberAmountNumberAmountVariable life insurance (whole life type)823,273¥8,690,797

845,906¥8,680,668

Variable life insurance (limited term type)

84,805323,349

97,804421,300

Variable life insurance (term type)

1,225

40,5381,160

38,716909,303¥9,054,686

944,870¥9,140,684

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

Individual variable annuities
Millions of yen

2016
As of March 31,

NumberIndividual variable annuities

81,3252017
AmountNumberAmount¥456,096

106,276¥600,331

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, %2016
As of March 31,

Amount2017
Composition

AmountComposition

Cash and deposits, call loans¥ 54,043

6.4%¥ 68,020

6.9%

Securities

794,025

93.4

919,265

92.9

Japanese government and corporate bonds

158,24418.6

148,130

15.0

Japanese stocks

50,046

5.9

49,2945.0

Foreign securities

378,83344.6

476,21848.1

62,5047.4

68,315

6.9

Bonds
Stocks, etc.

316,32837.2

407,902

41.2

Other securities

206,90224.3

245,621

24.8

Loans

̶

̶

̶

̶

Others

2,254

0.3

2,320

0.2

Reserve for possible loan losses
Total

̶

¥850,323

̶

100.0%

̶¥989,605̶

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 2017 57

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)

2016

2017

¥ 15,220
36,481
4
163,414
12,643¥ 14,498
22,211
21
215,402

̶

̶

0
2,103
33
239,51301,001
37
169,842
4,021

̶

̶
̶

̶

850
¥ (14,735)

806¥ 76,423

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

2016

2017

As of March 31,

Balance sheet
amountNet valuation
gains (losses)
recordedin income

Trading-purpose securities¥794,025¥(76,099)

Balance sheet
amountNet valuation
gains (losses)
recordedin income¥919,265¥45,559

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,

2016

2017

Number of agencies

1,864

1,818

58 Sony Financial Holdings Inc. Financial Data Book 2017

Sony Life Performance Indicators (Non-consolidated)

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

2016

2017

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

2,096
[995]
[1,101]
5,193[5,088]
[105]

2,280
[1,064][1,216]
5,585*[5,447][138]*Number of Lifeplanner sales employees (including those rehired on a fixed-term contract basis after retirement and contracted Lifeplanner sales employees) is
4,933 as of March 31, 2017.

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

2016

2017

Office employees

325

339

[Male][89][81][Female]

[236]

[258]

577

685

[Male]

[537]

[643]

[Female]

[40]

[42]

Sales employees

10- 03 Average age and years of service
2016
As of March 31,

Office employees

Average age

2017
Average yearsof service

Average age

Average yearsof service

40.3

8.8

40.5

9.0

[Male][41.9][11.4][42.2][11.9][Female][39.8][6.4][39.0]

[6.5]

45.3

10.2

44.9

10.0

[Male][45.4][10.4][45.0][10.2][Female][39.8][2.1][39.1][2.3]

Sales employees

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

For the years ended March 31,

2016

2017

Office employees

¥388

¥392

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,

2016

2017

Sales employees

¥693

¥653

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 2017 59

Sony Assurance

Financial Data
Balance Sheets
Sony Assurance Inc.
As of March 31, 2016 and 2017
Millions of yen, %2016
Amount2017
Composition

AmountComposition

ChangeAssetsCash and deposits
Cash

¥

8,381

4.86%

¥

8,951

0

0

Deposits

8,381

8,951

Securities

127,25673.85

137,553

Japanese government bonds

82,42784,455

Japanese local government bonds

27,20729,308Japanese corporate bonds

12,66021,544

Japanese stocks

3,708

2,046

Foreign securities

197

197

Other securities

1,055

̶

Tangible fixed assets

4,024

Buildings

2.34

201

3,399

181

22

Other tangible fixed assets

3,641

3,188

5,988

3.48

6,529

Software

3,347

5,833

Software in progress

2,640

144

0

550

Other intangible fixed assets
Other assets

20,363

11.82

22,125

Accrued premiums

1,273

1,270

Due from reinsurers

96

36

Due from foreign reinsurers

4

8

13,49315,097

Accrued income

152

149

Money on deposits

443

506

Accounts receivable

Suspense payments
Deferred tax assets
Total Assets

60 Sony Financial Holdings Inc. Financial Data Book 2017

4,900
6,308
¥172,323

¥

569

73.74

10,296

1.82

(624)

3.50

540

11.86

1,762

4.28

1,669

100.00%¥14,213188

Construction in progress
Intangible fixed assets

4.80%

5,056
3.66
100.00%7,978¥186,537

Sony Assurance Financial Data

Millions of yen, %

2016

2017

AmountComposition

AmountComposition

Change¥133,246

77.32%¥144,514

77.47%¥ 11,267

Liabilities
Underwriting reserves
Reserve for outstanding losses and claims

37,542

Underwriting reserves

95,704

Other liabilities

8,339

38,340106,173
4.84

9,877

Due to reinsurers

̶68

Due to foreign reinsurers

5

5

1,442

1,746

Income taxes payable
Deposits received

15

65

Accounts payable

2,724

3,021

Suspense receipt

4,152

4,969

5.29

1,537

158

Reserve for employees’ retirement benefits

1,281

0.74

1,440

0.77

Reserve for directors’ retirement benefits

44

0.03

36

0.02

(7)

Reserve for employees’ bonuses

956

0.55

1,082

0.58

125

Reserve under the special laws

149

0.09

177

0.10

27

144,018

83.57

157,128

84.23

13,109Common stock

20,00011.61

20,00010.72

̶Capital surplus

3,389

1.97

3,389

1.82

̶

2.58

2,221

Reserve for price fluctuations
Total Liabilities

149

177

Net Assets

Capital reserve

3,389

3,389

Retained earnings (deficits)

2,586

Legal retained earnings

̶

258

2,586

4,549

Other retained earnings (deficits)
Unappropriated retained earnings (deficits)

1.50

2,586

4,808

4,549

Total shareholders’ equity

25,97615.07

28,197

15.12

2,221

Net unrealized gains (losses) on other securities,
net of taxes

2,328

1.35

1,211

0.65

(1,116)

Total valuation and translation adjustments

2,328

1.35

1,211

0.65

(1,116)

Total Net Assets

28,30516.43

29,409

15.77

1,104

¥172,323

100.00%¥186,537

100.00%Total Liabilities and Net Assets¥ 14,213

Sony Financial Holdings Inc. Financial Data Book 2017 61

Sony Assurance Financial Data

Statements of Income
Sony Assurance Inc.
For the years ended March 31, 2016 and 2017
Millions of yen

Ordinary Revenues

2016

2017

Change¥96,905¥102,333¥ 5,428

Underwriting income

95,612

100,330

4,717

Net premiums written

95,549100,274

4,724

62

55

(7)

Interest and dividends on deposits of premiums
Other underwriting income

0

̶

(0)

1,263

1,957

693

1,313

1,327

13

Gains on sale of securities

12

685

672

Gains on redemption of securities

̶

0

0

Transfer to interest and dividends on deposits of premiums

(62)

(55)

7

29

45

16

Investment income
Interest income and dividends

Other ordinary income
Ordinary Expenses

92,22597,336

5,111

67,79870,553

2,755

Net losses paid

48,11150,181

2,070

Loss adjustment expenses

7,098

7,458

359

Net commissions and brokerage fees

1,515

1,646

130

Provision for reserve for outstanding losses and claims

1,877

798

(1,079)Provision for underwriting reserves

9,195

10,469

1,274

0

̶

(0)
(4)

Underwriting expenses

Other underwriting expenses
Investment expenses
Losses on sale of securities
Operating, general and administrative expenses
Other ordinary expenses
Ordinary Profit

4

0

4

0

(4)

24,41826,763

2,344

3

19

16
316

4,680

4,996

Extraordinary Gains

̶

̶

̶

Extraordinary Losses

890

47

(843)

864

19

(845)

Provision for reserve under the special laws

25

27

2

Provision for reserve for price fluctuations

25

27

2

Income Before Income Taxes

3,790

4,949

1,159

Income Taxes̶Current

2,417

2,669

252

Income Taxes̶Deferred(1,213)(1,235)(21)

Total Income Taxes

1,203

1,434

230

Losses on sale or disposal of fixed assets

Net Income

62 Sony Financial Holdings Inc. Financial Data Book 2017

¥ 2,586

¥

3,515

¥

928

Sony Assurance Financial Data

Statements of Changes in Net Assets
Sony Assurance Inc.
For the years ended March 31, 2016 and 2017
Millions of yen

2016
Shareholders’ equity
Capital surplus

Retained earnings (deficits)
Otherretainedearnings(deficits)
Unappropriated retained
earnings(deficits)

Total
retainedearnings(deficits)

Totalshareholders’equity¥ 20,000¥(16,610)¥(16,610)¥23,389

Commonstock

Capitalreserve¥20,000¥ 20,000

Reversal of capital reserve̶(16,610)

16,610̶̶̶̶

Deficit disposition̶̶

(16,610)(16,610)

16,61016,610̶

Net income

̶

̶

̶

̶

2,586

2,586

2,586

Net changes of items other thanshareholders’ equity

̶

̶

̶

̶

̶

̶

̶

Balance at the beginning of the period

Other capitalsurplusTotal
capitalsurplus¥

̶

Changes during the period

Total changes during the period̶(16,610)

Balance at the end of the period¥20,000¥ 3,389¥̶

(16,610)

19,197

19,1972,586

̶

¥ 3,389¥ 2,586¥ 2,586¥25,976
Millions of yen

2016
Valuation and translation
adjustments
Net unrealized
gains (losses)
on othersecurities,
net of taxes

Totalvaluation andtranslation
adjustments

Total
net assets¥1,351¥1,351¥24,741

Reversal of capital reserve

̶

̶

̶

Deficit disposition

̶

̶

̶

2,586

Balance at the beginning of the period
Changes during the period

Net income

̶

̶

977

977

977

Total changes during the period

977

977

3,563

Balance at the end of the period¥2,328¥2,328¥28,305

Net changes of items other than shareholders’ equity

Sony Financial Holdings Inc. Financial Data Book 2017 63

Sony Assurance Financial Data

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

2017
Shareholders’ equity
Capital surplus

Retained earnings (deficits)
Otherretainedearnings(deficits)
Legalretainedearnings

Unappropriated retained
earnings(deficits)

Total
retainedearnings(deficits)

Totalshareholders’equityCommonstock

Capitalreserve

Total
capitalsurplus¥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 period
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
Total
gains (losses)
valuation andon othertranslation
securities,
adjustments
net of taxes

Balance at the beginning of the period

Total
net assets¥ 2,328¥ 2,328¥28,305

Dividends from surplus̶̶

(1,294)

Net income

̶

̶

3,515

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

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

64 Sony Financial Holdings Inc. Financial Data Book 2017

Sony Assurance Financial Data

Statements of Cash Flows
Sony Assurance Inc.
For the years ended March 31, 2016 and 2017
Millions of yen

2016

2017

ChangeIncome before income taxes¥ 3,790¥ 4,949¥ 1,159

Depreciation and amortization

2,645

3,493

847

Increase (decrease) in reserve for outstanding losses and claims

1,877

798

(1,079)

Increase (decrease) in underwriting reserves

1,274

Cash flows from operating activities

9,195

10,469

Increase (decrease) in reserve for employees’ retirement benefits

151

158

7

Increase (decrease) in reserve for directors’ retirement benefits

10

(7)

(18)

Increase (decrease) in reserve for employees’ bonuses

28

125

97

Increase (decrease) in reserve for price fluctuations

25

27

2

(1,313)(1,327)(13)(Gains) losses on securities

(7)

(685)

(677)

(Gains) losses on tangible fixed assets

0

0

(0)

(Gains) losses on intangible fixed assets

864

19

(844)

(1,052)(1,764)

(711)

(52)

1,369

1,421

16,162

17,6261,464Interest income and dividends(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)
SubtotalInterest and dividends received

1,578

1,642

63

Income taxes (paid) refund(3,000)(2,376)624

Net cash provided by (used in) operating activities

14,74016,8922,151

Purchases of securities(45,735)(24,161)

21,573

Proceeds from sale and redemption of securities

31,019

11,630(19,388)

Total of net cash provided by (used in) investment transactions(14,716)(12,530)

2,185[4,337]

Cash flows from investing activities[Total of net cash provided by (used in) operating activities and investment transactions][24][4,361]

Purchases of tangible fixed assets(1,215)

(460)

754

Others, net(1,495)(3,092)(1,597)

Net cash provided by (used in) investing activities(17,427)(16,084)

1,342

Cash dividends paid̶(1,294)(1,294)

Net cash provided by (used in) financing activities̶(1,294)(1,294)̶̶̶Cash flows from financing activities

Effect of exchange rate changes on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents(2,686)

(486)

2,200

Cash and cash equivalents at the beginning of the period

12,1249,437(2,686)¥ 9,437¥ 8,951

Cash and cash equivalents at the end of the period

¥

(486)

Sony Financial Holdings Inc. Financial Data Book 2017 65

Sony Assurance Financial Data

1 Loans by Borrower Category

Millions of yen

As of March 31,

2016

2017

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 to support
the borrowers’ recovery from financial difficulties.
4. Normal loans Normal loans are all other loans.

2 Risk-monitored Loans

Millions of yen

As of March 31,

2016

2017

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 principles 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, %2016
As of March 31,

2017

AmountComposition

AmountComposition¥ 82,427

64.8%¥ 84,455

61.4%

Japanese local government bonds

27,20721.4

29,308

21.3

Japanese corporate bonds

12,6609.9

21,544

15.7

Japanese stocks

3,708

2.9

2,046

1.5

Foreign securities

197

0.2

197

0.1

Japanese government bonds

Other securities
Total

66 Sony Financial Holdings Inc. Financial Data Book 2017

1,055
¥127,2560.8
100.0%

̶¥137,553

̶

100.0%

Sony Assurance Financial Data

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

For the years ended March 31,

2016

2017

Japanese government and corporate bonds

1.10%

1.01%

Japanese stocks

̶

1.08

Foreign securities

2.84

2.82

Other securities

0.03

0.01

Total

1.08%

1.01%

Yield on investments

1.09

1.53

Reference: Yield on investments (fair value basis)

2.16

0.34

3- 03 Balance of securities by remaining period

Millions of yen

2016
More than
3 years to
5 years

More than
7 years to
10 years

Over 10 years(including nofixed maturity)

Total

97

¥104

¥49,688¥ 82,427

More than
5 years to
7 years

Within 1 year

More than
1 year to
3 years

Japanese government bonds¥3,277¥15,406¥13,853

Japanese local government bonds

4,251

13,665

5,902

1,566

612

1,207

27,207

Japanese corporate bonds

1,268

7,261

1,806

466

201

1,654

12,660Japanese stocks

̶

̶

̶

̶

̶

3,708

3,708

Foreign securities

̶

̶

101

95

̶

̶

197

Other securities

̶

̶

̶

̶

̶

1,055

1,055

¥8,798¥36,333¥21,664¥2,226¥918¥57,314¥127,256

As of March 31,

Total

¥

Millions of yen

2017

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

98¥

Over 10 years(including nofixed maturity)

Total¥ 84,455¥ 5,720¥18,157¥ 5,22472¥55,182

Japanese local government bonds

8,760

11,575

5,587

1,523

854

1,007

29,308Japanese corporate bonds

3,716

10,653

5,267

301

100

1,505

21,544

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¥

More than
7 years to
10 years

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

Millions of yen

As of March 31,

2016

Fire

¥

Marine

2017

1
17

¥

1
10

Personal accident

654

680

Voluntary automobile

36,38837,176

480

471

̶

̶

¥37,542¥38,340

Compulsory automobile liability
Others
Total

Sony Financial Holdings Inc. Financial Data Book 2017 67

Sony Assurance Financial Data

Underwriting reserves

Millions of yen

As of March 31,

2016

Fire

¥

Marine

2017

421

¥

439

24

2

Personal accident

43,31547,861

Voluntary automobile

50,14355,848Compulsory automobile liability

1,799

2,023

̶

̶

¥95,704¥106,173

Others
Total

Breakdown of the balance of underwriting reserves
Millions of yen

2016

As of March 31,

Unearnedpremium
reserve

Catastrophe
reserve

Fire

¥

¥

382

Contingency
reserve

Reserve forpolicyholders’dividends

Refundreserve

Total

38

¥ 0

¥̶

¥̶

22

2

̶

̶

̶

24

Personal accident

40,466

2,755

90

2

̶

43,315

Voluntary automobile

38,56911,567

̶

6

̶

50,143

Compulsory automobile liability

1,799

̶

̶

̶

̶

1,799

̶

̶

̶

̶

̶

̶

¥81,239¥14,363

¥91

¥8

¥̶

¥95,704

MarineOthers
Total

¥

421

Millions of yen

2017

As of March 31,

Unearnedpremium
reserve

Fire

¥

390

MarineCatastrophe
reserve¥

Contingency
reserve

47¥

Reserve forpolicyholders’dividends

Refundreserve

0

¥̶

¥̶

Total

¥

439

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

Others
Total

̶

̶

̶

̶

̶

̶

¥88,521¥17,542

¥101

¥8

¥̶

¥106,173

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,

2016

2017

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.

68 Sony Financial Holdings Inc. Financial Data Book 2017

Sony Assurance Financial Data

3- 06 Other reserves

Millions of yen
2015

2016
For the year ended March 31,
Decrease

As ofMarch 31,

Increase

Specific

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

33

10

̶

̶

44

Reserve for employees’ bonuses

927

956

927

̶

956

Reserve for price fluctuations

124

25

̶

̶

149

Other

As of
March 31,

Reserve for possible loan losses

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

¥

¥

̶

̶

̶

̶

̶

̶

44

6

14

̶

36

Reserve for employees’ bonuses

956

1,082

956

̶

1,082

Reserve for price fluctuations

149

27

̶

̶

177

Reserve for directors’ retirement benefits

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

2016
For the years ended March 31,

2017

Gains onsales

Losses on
sales

Devaluation
lossesJapanese government bonds, etc.

Gains onsales

Devaluation
losses

¥12

¥4

¥̶

6

¥0

¥̶

Japanese stocks

̶

̶

̶

679

̶

̶

Foreign securities

̶

̶

̶

̶

̶

̶

¥4

¥̶

¥0

¥̶

Total

¥12

¥

Losses on
sales

¥685

4- 02 Gains (losses) on trading securities
Not applicableSony Financial Holdings Inc. Financial Data Book 2017 69

Sony Assurance Financial Data

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

2016
For the years ended March 31,

2017

Gains

LossesLand and buildings¥̶

Other tangible fixed assets
Intangible fixed assets
Total

¥

Gains

Losses

0

¥̶

¥ 0

̶

0

̶

0

̶

864

̶

19

¥̶

¥864

¥̶

¥19

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

For the years ended March 31,

2016

2017

Personnel expenses¥ 9,438¥ 9,875

Non-personnel expenses

21,352

23,504

726

841

0

0

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

̶

̶

1,515

1,646

¥33,033¥35,867

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 of Sony Assurance.

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

2016
For the years ended March 31,

Buildings

Acquisition cost¥

For corporate use

583

Depreciation
expenses¥583

For rent

Accumulated
depreciation

30

¥

30

Balance at theend of the period

381

¥ 201

381

201

̶

̶

̶

̶

Other tangible fixed assets

5,215

719

1,574

3,641

Software15,917

1,895

12,569

3,347

13

0

12

0

¥21,730¥2,645¥14,538¥7,191Other intangible fixed assets
Total

Millions of yen

2017
For the years ended March 31,

Buildings
For corporate use
For rent

Acquisition cost¥

597

Depreciation
expenses¥27

Accumulated
depreciation¥

Balance at theend of the period

408

¥ 188

597

27

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
Total

70 Sony Financial Holdings Inc. Financial Data Book 2017

1,113

550

562

550

¥27,781¥3,493¥18,020¥9,761

Sony Assurance Financial Data

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

Held-to-maturity securities
Millions of yen

2016

2017

Balance sheet
amountFair value

Difference

Balance sheet
amountFair value

Difference¥71,050¥92,796¥21,745¥71,765¥87,810¥16,045

197

221

23

197

215

18

71,24893,017

21,76971,962

88,026

16,063

Japanese government and corporate bonds

̶

̶

̶

3,873

3,424

(449)

Foreign securities

̶

̶

̶

̶

̶

̶

Subtotal

̶

̶

̶

3,873

3,424

(449)

¥71,248¥93,017¥21,769¥75,836¥91,451¥15,614

As of March 31,

Fair value is higher than balance sheet amountJapanese government and corporate bonds
Foreign securities
Subtotal
Fair value is lower than balance sheet amount

Total

Stock of subsidiaries and affiliated companies
Not applicable

Available-for-sale securities
Millions of yen

2016

2017

Balance sheet
amountAcquisition
cost

Difference

Balance sheet
amountAcquisition
cost

Difference¥45,054¥44,787¥ 266¥45,082¥44,900

¥ 181

3,708

729

2,978

2,046

529

1,517

̶

̶

̶

̶

̶

̶

48,76245,517

3,245

47,12945,430

1,698

6,190

6,201

(10)

14,587

14,603

(15)

̶

̶

̶

̶

̶

̶

Others

1,055

1,055

̶

̶

̶

̶

Subtotal

7,245

7,256

(10)

14,587

14,603(15)¥56,008¥52,774¥3,234¥61,716¥60,033¥1,683As of March 31,

Balance sheet amount is higher thanacquisition cost
Japanese government and corporate bonds
Japanese stocks
OthersSubtotal
Balance sheet amount is lower thanacquisition cost
Japanese government and corporate bonds
Japanese stocks

Total

Available-for-sale securities sold during the year
Millions of yen

2016

2017

For the years ended March 31,

Amountof salesJapanese government and corporate bonds¥9,480¥12¥4¥1,885

̶

̶

̶

937

679

̶

¥9,480¥12¥4¥2,823¥685¥0Japanese stocks
Total

Total gains
on salesTotal losses
on salesAmountof salesTotal gains
on sales¥6

Total losses
on sales¥0Sony Financial Holdings Inc. Financial Data Book 2017 71

Sony AssuranceSony Assurance Performance Indicators
1 Principal Indicators of Operating Performance
Millions of yen

For the years ended March 31,

2013

2014

2015

2016

2017

Net premiums written¥ 83,582¥ 88,600¥ 91,712¥ 95,549¥100,274

Year-on-year change

5.6%

6.0%

3.5%

4.2%

4.9%

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

1,398

1,874

3,044

3,470

3,070

(33.7%)

34.0%

62.4%

14.0%

(11.5%)

84,71189,86493,022

96,905102,333

5.8%

6.1%

3.5%

4.2%

5.6%
4,996

2,371

3,003

4,209

4,680

(17.1%)

26.7%

40.1%

11.2%

6.8%

1,454

1,664

2,233

2,586

3,515

11.9%

14.4%

34.2%

15.8%

35.9%

Net loss ratio

63.2%

59.3%

57.6%

57.8%

57.5%

Net expense ratio

26.0%

25.6%

26.7%

27.1%

28.3%

Interest income and dividends

1,027

1,209

1,268

1,313

1,327

17.6%

17.7%

4.9%

3.6%

1.0%

1.09%

1.17%

1.10%

1.03%

0.95%

Year-on-year change
Net income
Year-on-year change

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

1.11%

1.19%

1.11%

1.03%

1.44%

¥ 88,670¥101,245¥111,809¥127,256¥137,553

─

̶

̶

̶

̶

Underwriting reserves

70,60978,04386,50895,704

106,173

Common stock

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

400,000

400,000

400,000

400,000

Securities
Loans

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

19,934

21,41824,741

28,30529,409Total assets

127,421

142,714

157,919

172,323

186,537

Assets accounted for as deposit premium accounts
Capital adequacy ratio

─

̶

̶

̶

̶

15.6%

15.0%

15.7%

16.4%

15.8%

Dividend payout ratio
Non-consolidated solvency margin ratio
Number of employees

─

̶

̶

50.0%

50.0%

504.2%

527.6%

629.6%

693.5%

730.8%

1,079

1,090

1,119

1,178

1,203

2 Underwriting Performance2- 01 Direct premiums written
Millions of yen, %2016
For the years ended March 31,

Amount

Fire

¥

2017

Composition

YoY change

348

0.4%

4.6%

̶

̶

̶

Personal accident

8,679

9.2

Voluntary automobile

85,308Compulsory automobile liability
OthersMarineComposition

YoY change

245

0.2%

(29.6%)

̶

̶

̶

1.2

8,767

8.9

1.0

90.4

4.6

90,001

90.9

5.5

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

100.0%

4.2%¥99,014100.0%

5.0%(1.0%)¥

Total¥94,336

Direct premiums written per employee¥

80

Amount¥82

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.

72 Sony Financial Holdings Inc. Financial Data Book 20172.8%

Sony Assurance Performance Indicators

2- 02 Net premiums written
Millions of yen, %2016
For the years ended March 31,

AmountFire¥

MarineComposition

2017
YoY change

44

0.0%

(2.8%)

44

0.0(59.7)

Amount¥Composition

YoY change

24

0.0%

(43.9%)

(2)

(0.0)

(105.5)

Personal accident

8,953

9.4

1.2

9,044

9.0

1.0

Voluntary automobile

85,12389.1

4.6

89,746

89.5

5.4

Compulsory automobile liability

1,384

1.4

3.6

1,460

1.5

5.5

̶

̶

̶

̶

̶

̶

100.0%

4.2%

100.0%

4.9%

OthersTotal¥95,549¥100,274

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, %2016
For the years ended March 31,

AmountFire¥

Marine2017

Composition

Net loss ratio

1

0.0%

65.7%

46

0.1

103.7

Amount¥Composition

Net loss ratio

6

0.0%

117.5%

(6)

(0.0)

̶

Personal accident

2,472

5.1

30.5

2,615

5.2

32.0

Voluntary automobile

44,32092.1

60.1

46,263

92.2

59.5

Compulsory automobile liability

1,270

2.6

91.8

1,301

2.6

89.1

̶

̶

̶

̶

̶

̶

100.0%

57.8%

100.0%

57.5%

OthersTotal¥48,111¥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

2- 04 Expenses and net expense ratio related to underwriting

Millions of yen

For the years ended March 31,

2016

2017

Expenses related to underwriting¥25,862¥28,352

Operating, general and administrative expenses related to underwriting

24,347

26,706

Net commissions and brokerage fees

1,515

1,646

27.1%

28.3%

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,

2016

2017

Underwriting income¥95,612¥100,330

Underwriting expenses

67,79870,553Operating, general and administrative expenses

24,347

26,706

Other income (expenses)
Underwriting profit3¥ 3,470

(0)
¥

3,070

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

Sony Financial Holdings Inc. Financial Data Book 2017 73

Sony Assurance Performance Indicators

Underwriting profit by type of policy

Millions of yen

For the years ended March 31,

2016

2017

Fire

¥

¥ (326)(80)

Marine100

31Personal accident(293)(1,013)

Voluntary automobile

3,744

4,378

Compulsory automobile liability̶̶

Others̶̶¥3,470¥ 3,070Total

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

2016
For the years ended March 31,

Net loss
ratio

2017

Net expense
ratio

Combinedratio

Net lossratio

Net expense
ratio

Combined
ratio

1,232.7%

1,350.2%

Fire

65.7%

140.7%

206.4%

117.5%

Marine

103.7

13.2

116.9

̶

̶

̶

Personal accident

30.5

22.6

53.1

32.0

28.6

60.7

Voluntary automobile

60.1

27.9

88.0

59.5

28.4

87.9

Compulsory automobile liability

91.8

̶

91.8

89.1

̶

89.1

Others

̶

̶

̶

̶

̶

̶

Total

57.8%

27.1%

84.8%

57.5%

28.3%

85.8%

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

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, %2016
As of March 31,

Cash and deposits

Amount

¥

8,381

2017
Composition

4.9%

Amount¥8,951

Composition

4.8%

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

̶

̶

̶

̶

127,25673.8

137,553

73.7

̶

̶

̶

̶

201

0.1

188

0.1

Total

135,83978.8

146,693

78.6

Total assets¥172,323

100.0%¥186,537

100.0%

74 Sony Financial Holdings Inc. Financial Data Book 2017

Sony Assurance Performance Indicators

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

Millions of yen, %

2016

2017

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)

¥

1

0.02%

¥

0

0.00%

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

1,312

1.08

1,327

1.01

̶

̶

̶

̶

̶

̶

̶

̶

1,313
0
¥1,313

1.03

1,327
0
¥1,327

0.95

1.03%
2.05

1.44%
0.32

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 is thedenominator.
• 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 other securities at end of previous period**Amounts before tax deductions

3- 04 Overseas investment

Millions of yen, %2016
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)

2017

AmountComposition

AmountComposition

¥ ̶

̶%

¥ ̶

̶%

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

̶

197

100.0

197

100.0

̶

̶

̶

̶

197
¥197

100.0
100.0%

197
¥197

100.0
100.0%

2.84%
2.84%
2.84%

2.82%
2.82%
2.82%

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 2017 75

Sony Assurance Performance Indicators

4 Non-consolidated Solvency Margin Ratio
Millions of yen

As of March 31,

2016

2017

(A) Total non-consolidated solvency margin¥42,701¥46,724

24,682

26,439Reserve for price fluctuations

149

177

Contingency reserve

91

101

Catastrophe reserve

14,363

17,542

̶

̶

2,910

1,514

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

̶

̶

502

948

12,313

12,786

Capital or treasury, etc.

General reserve for possible loan losses
Net unrealized gains on other 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

10,906

11,370Third-sector insurance risk

R2

̶

̶

Assumed interest rate risk

R3

96

105

Asset management risk

R4

1,416

1,431

Business management risk

R5

269

278

Major catastrophe risk

R6

1,033

1,033

693.5%

730.8%(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 catastrophe 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 other securities and net deferred gains (losses) on hedging instruments (before tax deductions)
Net unrealized gains on other securities (securities other than trading-purpose securities, held-to-maturity securities, stock of 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.

76 Sony Financial Holdings Inc. Financial Data Book 2017

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, financial institutions or possesses other such means of raisingfunds, 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 2017 77

Sony Bank

Financial Data (Consolidated)
Consolidated Balance Sheets
Sony Bank Inc. and consolidated subsidiaries
As of March 31, 2016 and 2017
Millions of yen

2016

2017

Cash and due from banks¥ 114,213¥ 180,581

Monetary claims purchased

884

573

Money held in trust

23,00023,000

Securities

618,942629,254

1,344,184

1,539,630

Foreign exchanges

1,139

7,268

Other assets

31,50753,223

Tangible fixed assets

1,057

710

Buildings

254

106

Leased assets

28

0

Other tangible fixed assets

774

602

4,711

4,803

Software

4,677

4,789

Goodwill19

̶Other intangible fixed assets

14

13

Deferred tax assets

1,681

762

Reserve for possible loan losses(1,035)(971)¥2,140,286¥2,438,836

AssetsLoans

Intangible fixed assets

Total Assets

78 Sony Financial Holdings Inc. Financial Data Book 2017

Sony Bank Financial Data (Consolidated)

Millions of yen

2016

2017

Liabilities
Deposits
Call money and bills soldBorrowed money
Foreign exchanges
Other liabilities
Reserve for employees’ bonuses¥1,921,805¥2,109,583

̶

70,00060,000103,000

87

108

78,084

71,520

714

782

1,103

1,117

Reserve for directors’ retirement benefits

41

56

Provision for reimbursement of deposits

58

62

2,061,895

2,356,231

Common stock

31,00031,000Capital surplus

21,00021,000Retained earnings

24,41925,815

Total shareholders’ equity

76,41977,815Net defined benefit liability

Total Liabilities
Net Assets

Net unrealized gains (losses) on other securities, net of taxes

3,331

4,776

Net deferred gains (losses) on hedging instruments, net of taxes(2,531)(1,338)Remeasurements of defined benefit plans, net of taxes

(157)

(109)

Total accumulated other comprehensive income

643

3,328

Non-controlling interests

1,329

1,460

Total Net Assets

78,39182,604¥2,140,286¥2,438,836

Total Liabilities and Net Assets

Sony Financial Holdings Inc. Financial Data Book 2017 79

Sony Bank Financial Data (Consolidated)

Consolidated Statements of Income
Sony Bank Inc. and consolidated subsidiaries
For the years ended March 31, 2016 and 2017
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
Provision of reserve for possible loan losses
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

2016

2017

¥37,937
25,482
14,73910,671
7
61
3
6,886
5,189
379

¥38,510
26,533
16,065
10,394

̶

54
325
31,949
9,022
4,829
5
266
̶

3,921
4,054
181
18,541
150
36
113
5,987
11
11
̶
̶

5,976
1,954
62
2,017
3,959
54
¥ 3,905

̶

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

Consolidated Statements of Comprehensive Income
Sony Bank Inc. and consolidated subsidiaries
For the years ended March 31, 2016 and 2017

ProfitOther Comprehensive Income
Net unrealized gains (losses) on other securities, net of taxes
Net deferred gains (losses) on hedging instruments, net of taxes
Foreign currency translation adjustments
Remeasurements of defined benefit plans, net of taxes
Comprehensive Income
Comprehensive income attributable to parent company
Comprehensive income attributable to non-controlling interests

80 Sony Financial Holdings Inc. Financial Data Book 2017

Millions of yen

2016

2017

¥ 3,959(3,632)(3,286)
(261)
(1)
(82)
327
290
37

¥3,420
2,703
1,444
1,192
̶

65
6,123
5,992
131

Sony Bank Financial Data (Consolidated)

Consolidated Statements of Changes in Net Assets
Sony Bank Inc. and consolidated subsidiaries
For the years ended March 31, 2016 and 2017
Millions of yen

2016
Shareholders’ equity
Commonstock

CapitalsurplusRetainedearnings

Total
shareholders’equity¥31,000¥21,000¥20,514¥72,514

Profit attributable to owners of the parent

̶

̶

3,905

3,905

Net changes of items other than shareholders’ equity

̶

̶

̶

̶

Total changes during the period

̶

̶

3,905

3,905

Balance at the end of the period¥31,000¥21,000¥24,419¥76,419

Balance at the beginning of the period
Changes during the period

Millions of yen

2016
Accumulated other comprehensive income

Balance at the beginning of the period

Net unrealized
gains (losses)
on othersecurities,
net of taxes

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

Foreigncurrencytranslation
adjustments

Remeasurements ofdefinedbenefit plans,
net of taxes

Total
accumulated
othercomprehensive
incomeNoncontrollinginterests¥ 6,618¥(2,269)¥0¥ (91)¥ 4,258¥1,292¥78,064

̶

̶

̶

̶

̶

̶

3,905
(3,577)

Total net
assetsChanges during the period
Profit attributable to owners of the parent
Net changes of items other thanshareholders’ equity(3,286)

(261)

(0)

(65)

(3,614)37

Total changes during the period(3,286)

(261)

(0)

(65)

(3,614)37

327

Balance at the end of the period¥ 3,331¥(2,531)¥̶

¥(157)

643¥1,329¥78,391¥

Sony Financial Holdings Inc. Financial Data Book 2017 81

Sony Bank Financial Data (Consolidated)

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

2017
Shareholders’ equity
Commonstock

CapitalsurplusRetainedearnings

Total
shareholders’equity¥31,000¥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
Changes during the period

Millions of yen

2017
Accumulated other comprehensive income
Net unrealized
gains (losses)
on othersecurities,
net of taxes

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

Remeasurements ofdefinedbenefit plans,
net of taxes¥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

Totalaccumulated
othercomprehensive Non-controllinginterests
incomeTotal 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

82 Sony Financial Holdings Inc. Financial Data Book 2017

Sony Bank Financial Data (Consolidated)

Consolidated Statements of Cash Flows
Sony Bank Inc. and consolidated subsidiaries
For the years ended March 31, 2016 and 2017
Millions of yen

2016

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 others
Net increase (decrease) in call money and others
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

¥

2017

5,976
1,951
̶

79
(118)
(38)
85
(26)
34
(25,482)
9,022(7,222)(54)
20,126
13(156,996)
43,751
20,000
5,115(6,000)1,085
40
28,395(9,279)(6,131)(75,671)(2,322)(77,993)

¥

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(154,201)
87,584
159,383565(268)(2,071)
90,992(210,315)
51,393
138,435

̶

(7,000)(1,959)(30)(8,989)

̶

(32)
(32)
(1)
12,965
101,248¥ 114,213

̶

(154)(1,793)(22,434)

̶

66,367
114,213¥ 180,581

Sony Financial Holdings Inc. Financial Data Book 2017 83

Sony Bank

Financial Data (Non-consolidated)
Balance Sheets
Sony Bank Inc.
As of March 31, 2016 and 2017
Millions of yen

2016

2017

¥ 110,669¥ 177,468

AssetsCash and due from banks
Cash

18

̶

110,650

177,468

884

573

Money held in trust

23,00023,000

Securities

620,993631,296

Japanese government bonds

81,487103,083

Japanese local government bonds

37,811

34,866

Japanese corporate bonds

64,626

63,611

Japanese stocks

2,050

2,050

Other securities

435,017427,684

1,344,184

1,539,630

1,332,050

1,521,546

12,13318,084

1,139

7,268

1,139

7,268

21,272

41,770

Domestic exchange settlement account debit

207

258

Prepaid expenses

130

149

Accrued income

3,889

3,859

Derivatives

5,235

5,153

Cash collateral paid for financial instruments

7,701

21,650Accounts receivable

1,740

7,879

Others

2,367

2,821

Due from banks
Monetary claims purchased

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

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

667

398

210

65

0

̶

456

332

3,253

3,170

3,248

3,165

5

4

Deferred tax assets

1,536

632

Reserve for possible loan losses(1,035)(971)¥2,126,564¥2,424,236

Total Assets

84 Sony Financial Holdings Inc. Financial Data Book 2017

Sony Bank Financial Data (Non-consolidated)

Millions of yen

2016

2017

¥1,923,506¥2,112,985

Liabilities
Deposits
Ordinary deposits

503,957

630,964

Time deposits

1,080,159

1,129,004

Other deposits

339,388

353,017

Call money
Borrowed money̶

70,00060,000103,000

Borrowed money

60,000103,000

Foreign exchanges

87

108

Foreign bills sold

1231

Foreign bills payable

74

77

64,08855,199Other liabilities
Income taxes payable

950

582

Accrued expenses

4,845

4,646

Initial margins of futures markets

22,041

20,661

Derivatives

30,913

20,582

312

757

0

̶

Cash collateral received for financial instruments
Leased obligation
Asset retirement obligations

139

144

4,886

7,825

Reserve for employees’ bonuses

645

705

Reserve for employees’ retirement benefits

731

815

Reserve for directors’ retirement benefits

20

27

OthersProvision for reimbursement of deposits

58

62

2,049,136

2,342,904

Common stock

31,00031,000Capital surplus

21,00021,000Capital reserves

21,00021,000Retained earnings

24,62725,893

Total Liabilities
Net Assets

Legal retained earnings̶391

Other retained earnings

24,62725,501

24,62725,501

Total shareholders’ equity

Unappropriated retained earnings

76,627

77,893Net unrealized gains (losses) on other securities, net of taxes

3,331

4,776

Net deferred gains (losses) on hedging instruments, net of taxes(2,531)(1,338)

800

3,438

Total valuation and translation adjustments
Total Net Assets
Total Liabilities and Net Assets

77,42881,332¥2,126,564¥2,424,236

Sony Financial Holdings Inc. Financial Data Book 2017 85

Sony Bank Financial Data (Non-consolidated)

Statements of Income
Sony Bank Inc.
For the years ended March 31, 2016 and 2017
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
Provision of reserve for possible loan losses
Write-off of loans
OthersOrdinary Profit
Extraordinary Losses
Impairment losses
Income Before Income Taxes
Income Taxes̶Current
Income Taxes̶Deferred
Total Income Taxes
Net Income

86 Sony Financial Holdings Inc. Financial Data Book 2017

2016

2017

¥34,892
25,482
14,73910,671
7
61¥35,105
26,534
16,066
10,394

̶

3
3,842
177
3,664
5,189
4,263
799
0
126
0
377
̶

54
323
29,035
9,021
4,829
5
264
̶

3,921
0
3,692
134
3,558
181
181
̶
̶

15,991
148
36
0
111
5,857
̶
̶

5,857
1,920
24
1,944
¥ 3,912

̶

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
150
4,484
1,307
1
1,308
¥ 3,176

Sony Bank Financial Data (Non-consolidated)

Statements of Changes in Net Assets
Sony Bank Inc.
For the years ended March 31, 2016 and 2017
Millions of yen

2016
Shareholders’ equity
Capital surplus

Retained earnings

Commonstock

Capitalreserve

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

Net income̶̶

Net changes of items otherthan shareholders’ equity

̶

Total changes during the period̶Balance at the end of the period¥31,000

Balance at the beginning of the periodLegalretainedearnings

Other retained
earnings
Unappropriatedretained earnings

Total
retainedearnings

Total
shareholders’equity¥̶¥20,715¥20,715¥72,715

̶

̶

3,912

3,912

3,912

̶

̶

̶

̶

̶

̶

̶

̶

̶

3,912

3,912

3,912

¥21,000¥21,000¥̶

¥24,627¥24,627¥76,627

Changes during the period

Millions of yen

2016
Valuation and translation adjustments

Balance at the beginning of the period

Net unrealized
gains (losses)
on othersecurities,
net of taxes

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

Totalvaluation andtranslation
adjustments

Total
net assets¥ 6,618¥(2,269)¥ 4,348¥77,064

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

̶

̶

̶

3,912

(3,286)(261)(3,548)(3,548)

Total changes during the period(3,286)(261)

Balance at the end of the period¥ 3,331¥(2,531)¥(3,548)363

800¥77,428

Sony Financial Holdings Inc. Financial Data Book 2017 87

Sony Bank Financial Data (Non-consolidated)

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

2017
Shareholders’ equity
Capital surplus

Retained earnings
Other retained
earnings

Commonstock

Capitalreserve

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

̶̶

31,000

Dividends from surplus
Net income

Legalretainedearnings

Unappropriatedretainedearnings

Total
retainedearnings

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

̶

̶

48

48

48

21,00021,000̶

24,676

24,676

76,676

̶

̶

̶

391

(2,351)(1,959)(1,959)

̶

̶

̶

̶

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

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

Millions of yen

2017
Valuation and translation adjustments
Net unrealized
gains (losses)
on othersecurities,
net of taxes

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

Totalvaluation andtranslation
adjustments

Total
net assets¥3,331¥(2,531)¥ 800¥77,428

̶

̶

̶

48

3,331

(2,531)

800

77,477

Dividends from surplus

̶

̶

̶

(1,959)Net income

̶

̶

̶

3,176

1,444

1,192

2,637

2,637

Balance at the beginning of the period
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

1,444

1,192

2,637

3,854

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

88 Sony Financial Holdings Inc. Financial Data Book 2017

Sony Bank Financial Data (Non-consolidated)

1 Loans by Borrower Category
Millions of yen

As of March 31,

2016

2017

Category
Bankrupt and quasi-bankrupt loans¥

Doubtful loans

732
890

Sub-standard loans
Normal loans
Total

¥

743
1,021

1,443

1,227

1,342,916

1,544,587¥1,345,983¥1,547,579

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,

2016

2017

Bankrupt loans

¥ 285

¥ 176

Non-accrual delinquent loans

1,332

1,580

Past due loans (3 months or more)̶̶

Restructured loans

1,443

1,227

Total

¥3,061¥2,984

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

2016

2017

For the years ended March 31,

Domestic
division

Net interest income¥12,649¥3,876

Interest income

16,8858,652Interest expenses

International
division

Domestic
division

Total¥16,525[56]
25,482[56]

International
division¥13,813¥4,104

17,951

8,588

4,138

4,483

Total

¥17,917[5]
26,534
[5]

4,236

4,776

72

78

150

(1,665)84(1,580)Fees and commissions received

3,753

88

3,842

3,328

136

3,465

Fees and commissions paid

3,681

10

3,692

4,994

51

5,046

Net trading income

̶

̶

̶

̶

̶

̶

Trading income

̶

̶

̶

̶

̶

̶

Net fees and commissions

Trading expenses

8,956

8,616

̶

̶

̶

̶

̶

̶

Net other operating income

377

4,631

5,008

4

4,780

4,785

Other operating income

398

4,791

5,189

49

4,821

4,871

Other operating expenses

21

160

181

44

41

86

Gross operating profit

13,098

8,585

21,684

12,152

8,968

21,121Gross operating profit ratio

0.83%

1.86%

1.08%

0.69%

2.09%

0.96%

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 (¥64 million̶FY2015, ¥54 million̶FY2016).
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 2017 89

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, %2016
For the years ended March 31,

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

Averagebalance

2017

Interest[40,019]¥1,577,374
1,249,373
209,673
5,598
67,444275[̶]1,565,074
1,531,568
5,669
50,765Yield[56]¥16,885
14,651
2,106
7
61
0
[̶]
4,236
2,149
5
264

1.07%
1.17
1.00
0.12
0.09
0.14
0.27
0.14
0.09
0.52

Averagebalance

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

̶

̶

̶

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

63
0
[̶]
4,138
2,322
(17)
211

0.05
0.08
0.23
0.13
(0.07)
0.29

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” (¥1,531 million—FY2015, ¥1,500 million—FY2016) is
excluded. In the financing accounts, the average balance of funds for investing money held in trust (¥23,000 million—FY2015, ¥23,000 million—
FY2016) and the interest expenses on money held in trust (¥62 million—FY2015, ¥54 million—FY2016) are excluded, respectively.

International division

Millions of yen, %2016
For the years ended March 31,

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

Averagebalance

2017

Interest

Yield

[̶]
¥459,444
9,051
445,850[̶]¥8,652
88
8,564

̶
̶
̶

̶
̶
̶

[40,019]364,696324,800

[56]
4,776
2,680

Averagebalance

Interest

Yield

0.97
1.92

[̶]
¥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

1.88%

1.30
0.82

2.00%

1.29
0.81

̶
̶
̶
̶
̶
̶
̶
̶
̶
̶
̶
̶
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 financing accounts, the average balance of funds for investing money held in trust (¥200 million—FY2015, ¥– million—FY2016) and the interest
expenses on money held in trust (¥2 million—FY2015, ¥– million—FY2016) are excluded, respectively.

Total

Millions of yen, %2016
For the years ended March 31,

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

Averagebalance¥1,996,800
1,258,425
655,523
5,598
67,444275
1,889,751
1,856,369
5,669
50,765

2017

Interest

Yield¥25,482
14,73910,671
7
61
0
8,956
4,829
5
264

1.27%
1.17
1.62
0.12
0.09
0.14
0.47
0.26
0.09
0.52

Averagebalance¥2,182,089
1,448,319
602,167Interest

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

Note: In the investment accounts, the average balance of non-interest-bearing “due from banks” (¥1,531 million—FY2015, ¥1,500 million—FY2016) is excluded.
In the financing accounts, the average balance of funds for investing money held in trust (¥23,200 million—FY2015, ¥23,000 million—FY2016) and theinterest expenses on money held in trust (¥64 million—FY2015, ¥54 million—FY2016) are excluded, respectively.

90 Sony Financial Holdings Inc. Financial Data Book 2017

Sony Bank Financial Data (Non-consolidated)

Interest spread%2016
For the years ended March 31,

Yield on investment
Yield on financing
Interest spread

Domestic
division

2017

International
division

1.07%
0.27
0.79

1.88%
1.30
0.57

Domestic
division

Total

1.27%
0.47
0.80

International
division

1.02%
0.23
0.78

2.00%
1.29
0.70

Total

1.21%
0.41
0.80

3- 03 Interest income and interest expenses
Domestic division

Millions of yen

2016

For the years ended March 31,

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

Increase(decrease)
due to balance

¥ 522
2,037
(496)
(0)
(26)
̶

157
67
(0)
68

2017

Increase(decrease)
due to yield¥ (105)(1,395)
359
(0)
(5)
0
(749)
(396)
(0)
(56)

Net increase(decrease)

¥ 417
642
(137)
(0)
(32)
0
(591)
(329)
(0)
11

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

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

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

International division

Increase(decrease)
due to balance

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

2017

Increase(decrease)
due to yield

Net increase(decrease)

Increase(decrease)
due to balance

Increase(decrease)
due to yield¥(287)(9)(290)¥(1,124)
26(1,151)¥(571)
(6)
(595)

¥506
0
536

¥ (64)
(5)
(58)

̶
̶
̶

̶
̶
̶

̶
̶
̶

̶
̶
̶

̶
̶
̶

̶
̶
̶

(598)
(178)

622
323

24
145

(230)
149

(61)
(46)

(292)
102

̶
̶

̶
̶

̶
̶

̶
̶

̶
̶

̶
̶

Millions of yen

2016

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

Net increase(decrease)¥(837)
35
(860)

Total

For the years ended March 31,¥1,065
1,332
(218)
(7)
2
0
(97)
173
(23)
(53)
Millions of yen

2016

For the years ended March 31,

Net increase(decrease)

Increase(decrease)
due to balance

¥

450
2,078
(1,623)
(0)
(26)
̶

127
43
(0)
68

Increase(decrease)
due to yield¥(1,100)(1,409)
334
(0)
(5)
0
(638)
(227)
(0)
(56)

2017
Net increase(decrease)¥ (649)668(1,288)
(0)
(32)
0
(510)
(183)
(0)
11

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

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)

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 2017 91

Sony Bank Financial Data (Non-consolidated)

3- 04 General and administrative expenses
Millions of yen

For the years ended March 31,

2016

2017

¥ 3,592¥ 3,775

Employee retirement benefits

131

141

Fringe benefit expenses

524

542

Depreciation and amortization

1,249

1,280

Leases on land, buildings and machinery

1,173

1,299

Maintenance fees

2,055

1,924

Repairs and utilities

53

Supplies expenses

222

234

Heat, light and water

31

28

Travel expenses

15

9Communication expenses

743

754

1,927

1,598

Salaries

Advertising expenses
Membership fees, donations and social expenses
Outsourcing
Taxes and public dues
Deposit insurance

18

18

1,629

1,877

918

1,066

612

629

Others

1,139

1,341

Total

¥15,991¥16,524

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 bonds

Millions of yen

2016

2017

Balance sheet
amountFair value

Difference

Balance sheet
amountFair value

Difference

Japanese government bonds¥7,980¥8,212¥231¥5,990¥6,073¥83

Japanese corporate bonds

273

283

10

228

232

4

As of March 31,

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

Subtotal
Total

8,254

8,495

241

6,218

6,306

87

¥8,254¥8,495¥241¥6,218¥6,306¥87

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.

92 Sony Financial Holdings Inc. Financial Data Book 2017

Sony Bank Financial Data (Non-consolidated)

Available-for-sale securities

Millions of yen

2016
As of March 31,

2017

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 cost
Bonds

¥175,071¥164,469¥10,602¥162,942¥154,516¥ 8,425

Japanese government bonds

73,506

66,273

7,233

69,59663,897

5,699

Japanese local government bonds

37,811

36,384

1,427

34,866

33,697

1,168

Japanese corporate bonds
OthersForeign bonds
OthersSubtotal

63,753

61,812

1,941

58,47956,921

1,557

289,500

283,186

6,314

283,047

277,903

5,143

284,640

280,016

4,624

278,572

275,617

2,955

4,860

3,170

1,689

4,474

2,286

2,188

464,572447,655

16,916445,989

432,419

13,569Available-for-sale securities of which balance sheet
amount does not exceed acquisition cost
Bonds

599

600

(0)

32,39933,090(690)

Japanese government bonds

̶

̶

̶

27,49628,175(679)

Japanese local government bonds

̶

̶

̶

̶

̶

̶

Japanese corporate bonds
OthersForeign bonds

599

600

(0)

4,903

4,914

(11)

146,400

147,110(709)

145,210

145,977(767)

146,400

147,110(709)

144,636

145,404

(767)

̶

̶

̶

573

573

(0)

OthersSubtotal
Total

147,000

147,710(709)

177,610179,067(1,457)¥611,572¥595,366¥16,206¥623,599¥611,487¥12,112

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,

2016

2017

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 2017 93

Sony Bank Financial Data (Non-consolidated)

Other money held in trust
Millions of yen

2016
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

¥̶

¥̶

¥̶

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

2017
Balance sheet
amountAs of March 31,

Other money held in trust

Acquisition cost

¥23,000

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

Difference¥23,000

¥̶

¥̶

¥̶

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

2016
Notional amount

Notional amountover 1 year

Interest rate swaps
Fixed-rate receivable/Floating-rate payable¥25,921

Floating-rate receivable/Fixed-rate payable

25,921
̶

Type

Total

Fair value

Valuation gains(losses)¥25,921

¥ 25

¥ 25

25,921

(25)

(25)

̶

¥̶

¥̶

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,

2016
Notional amount

Notional amountover 1 year

Deferred hedge
accounting

Interest rate swaps
Floating-rate receivable/Fixed-rate payable Loans, deposits¥ 50,111¥ 49,942¥ (2,048)

Fair value hedge
accounting

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

333,785

286,112(26,945)̶̶¥(28,993)

MethodType

Hedged item

Total

Fair value

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

2017
Type

Interest rate swaps
Fixed-rate receivable/Floating-rate payable
Floating-rate receivable/Fixed-rate payable

Total

Notional amount¥3,528

Notional amountover 1 year

Fair value¥3,528

3,528

3,528

̶

̶

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.

94 Sony Financial Holdings Inc. Financial Data Book 2017¥(50)

Valuation gains(losses)

¥(50)

50

50

¥̶

¥̶

Sony Bank Financial Data (Non-consolidated)

Millions of yen

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

2017

MethodType

Hedged item

Notional amount

Notional amountover 1 year

Fair value

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)

304,661

266,269(17,639)̶̶¥(17,285)

Total

¥

353

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,

2016
Notional amount

Notional amountover 1 year

Sold

¥ 80,622¥̶Bought146,481

̶

239

239

Sold

54,688

̶

1,920

1,920

Bought20,508

̶

794

794

Sold

210

̶

(2)

0

Bought

211

̶

2

0

Category

Over-the-countertransactions

Type

Fair value

Valuation gains(losses)¥¥

Forward foreign exchanges
(23)

(23)

Foreign exchange margin transactions

Currency options

Currency forwards
Sold
Bought
Total

̶

̶

̶

̶

12,735

̶

680

680

¥3,611¥3,612̶̶

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

2016
Type

Currency swaps

Hedged item

Notional amount

Available-for-sale securities (bonds)

Total

Notional amountover 1 year

¥15,206̶¥̶̶

Fair value¥(296)¥(296)

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 2017 95

Sony Bank Financial Data (Non-consolidated)

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
Bought
Total

̶

̶

̶

̶

15,265

̶

(126)

(126)

¥2,529¥2,530̶̶Notes: 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
Notes: 1. Fair value hedge accounting is applied.
2. Fair value is calculated using the discounted present value.

96 Sony Financial Holdings Inc. Financial Data Book 2017

Notional amount

Notional amountover 1 year

¥14,645¥4,700¥(673)

̶̶

¥(673)

Fair value

Sony Bank

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

For the years ended March 31,

2013

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

2014

¥

31,351
4,282
879
31,000620,000
67,811
2,005,081
1,857,447
970,226
908,847
11.98%

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%

─

̶

̶

371

430

455

¥

2017

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¥

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

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 “fundamental internal rating based approach.”

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

2016

2017

For the years ended March 31,

Domestic
divisionInternational
division

Total

Domestic
divisionInternational
division

Total

Floating deposits
Time and saving deposits
Other deposits
Total¥ 522,222
1,009,260
85¥1,531,568¥167,584
157,2141¥324,800¥ 689,806
1,166,475
86¥1,856,369¥ 563,912
1,101,104300¥1,665,317¥177,323
165,52127¥342,872¥ 741,235
1,266,626
328¥2,008,190

Year-end balance
Millions of yen

2016
As of March 31,

Floating deposits
Time and saving deposits
Other deposits
Total

2017

Domestic
divisionInternational
division

Total

Domestic
divisionInternational
division

Total¥ 503,957
1,080,159
150¥1,584,267¥178,474
160,749
14¥339,238¥ 682,432
1,240,909
164¥1,923,506¥ 630,964
1,129,004
348¥1,760,317¥178,597
174,02346¥352,668¥ 809,562
1,303,027
395¥2,112,985

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 ¥10,913 million and ¥41,894 million as of March 31, 2016 and 2017, respectively.

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

2016

2017

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

¥ 290,247
315,660
459,673
13,882
9,101
84,184¥1,172,749

¥̶
̶
̶
̶
̶
̶

¥̶

Total

Fixed rate
time deposits

Floating rate
time deposits¥ 290,247
315,660
459,673
13,882
9,101
84,184¥1,172,749¥ 284,575
411,120
403,920
60,494
15,381
52,275¥1,227,766

¥̶
̶
̶
̶
̶
̶

¥̶

Total

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

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

Sony Financial Holdings Inc. Financial Data Book 2017 97

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

2016
Domestic
division

For the years ended March 31,

Loans on bills¥

Loans on deeds

1,241,588

̶International
division¥̶

Domestic
division

Total

¥

̶

¥

1,250,640

1,423,903

7,785

0

7,785

̶

̶

̶

¥1,249,373¥9,051¥1,258,425

Bills discounted

International
division

¥

̶

9,051

Overdrafts
Total

2017

̶

Total

¥

̶

8,390

1,432,294

16,023

1

16,025̶̶̶

¥1,439,927¥8,391¥1,448,319

Year-end balance
Millions of yen

2016
Domestic
division

As of March 31,

2017International
division

Total

Loans on deeds

1,322,682

9,368

1,332,050

1,514,358

7,187

1,521,546

12,133

0

12,13318,081

2

18,084

Overdrafts
Bills discounted
Total

̶

¥

¥

Total

¥

̶

¥

International
division

Loans on bills

̶¥

Domestic
division

̶

̶

¥

̶

̶

̶

̶

̶

̶

̶

¥1,334,815¥9,368¥1,344,184¥1,532,440¥7,190¥1,539,630

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

2016
As of March 31,

Fixedinterest rates

Floating
interest rates

Less than 1 year¥585

¥ 30,049

Over 1 year, not exceeding 3 years

3,297

30,649Over 3 years, not exceeding 5 years

4,790

22,932

Over 5 years, not exceeding 7 years

9,523

Over 7 years, not exceeding 10 years

23,881

2017
Total

¥

Fixed
interest rates

30,634¥

Floating
interest rates

Total

913

¥ 32,871¥

33,78533,946

2,675

20,897

27,722

5,658

22,14327,802

22,91432,438

10,631

13,76824,39918,30442,18528,493

16,32444,81823,572

Over 10 years

502,278

674,977

1,177,256

630,990754,262

1,385,252

Total¥544,356¥799,827¥1,344,184¥679,363¥860,267¥1,539,630

3- 03 Balance of loans by collateralMillions of yen

As of March 31,

Pledged securities
Pledged receivables
Pledged merchandise
Pledged real estate
Others

2016

¥

2017
̶
̶

¥

̶
̶

̶

̶

922,520

1,081,498

̶̶

Subtotal

922,520

1,081,498

Guaranteed

121,070

160,081

Credit300,593

298,050

Total¥1,344,184¥1,539,630

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

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

98 Sony Financial Holdings Inc. Financial Data Book 2017

Sony Bank Performance Indicators (Non-consolidated)

3- 04 Balance of loans by industry
Millions of yen, %2016
As of March 31,

Individual

2017

BalanceComposition

BalanceComposition¥1,247,703

92.82%¥1,470,596

95.52%

Corporation

96,4807.18

69,034

Manufacturing industries

34,605

2.57

25,8284.48
1.68

Construction

1,536

0.11

1,519

0.10

Electricity, gas, heat and water supplies

1,000

0.07

̶

̶

Information and telecommunications

1,907

0.14

2,589

0.17

Transportation/Mail services

6,969

0.52

6,156

0.40

Wholesalers/Retailers

7,432

0.55

4,752

0.31
0.33

Financial services/Insurance

9,821

0.73

5,010

Real estate/Goods leasing services

26,431

1.97

21,317

1.38

Various service

3,750

0.28

337

0.02

Local government

3,026

0.23

1,521

0.10

Total

¥1,344,184

100.00%¥1,539,630

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

2016

2017

For the years ended March 31,

Domestic
divisionInternational
division

Total

Domestic
divisionInternational
division

At the year-end

84.25%

2.76%

69.88%

87.05%

2.03%

72.86%

Annual average

81.57

2.78

67.78

86.46

2.44

72.12

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

2016

2017

Balance at the endof the period

Increase(Decrease)

Balance at the endof the period

Increase(Decrease)

General reserve for possible loan losses¥ 512¥ (82)

¥438

¥(73)

Specific reserve for possible loan losses

523

(35)

532

9

̶

̶

̶

̶

¥1,035¥(118)

¥971

¥(64)

For the years ended March 31,

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

2016

2017

¥0

¥0

Sony Financial Holdings Inc. Financial Data Book 2017 99

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

2016

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¥

1,056¥ 2,147¥

Over 10 years

Unspecified
term

Total

̶

¥44,475¥̶¥ 81,487

̶

37,81164,626

4,009¥ 29,798

Japanese local government
bonds

2,629

̶

14,922

20,259̶̶Japanese corporate bonds

4,729

8,060

22,05427,427

2,080

273

̶

Japanese stocks

̶

̶

̶

̶

̶

̶

2,050

2,050

Other securities

126,787

147,855

86,37841,874

22,676

5,469

3,975

435,017

126,787

147,855

86,37841,874

22,6765,469

̶

431,041

Of which: Foreign bonds
Others
Total

̶

̶

̶

̶

̶

̶

3,975

3,975

¥138,155¥185,714¥124,411¥91,708¥24,757¥50,218¥6,026¥620,993
Millions of yen

2017

As of March 31,

Within 1 year

More than
1 year to
3 years

Japanese government bonds¥ 19,154¥ 15,117

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

Japanese local government
bonds

̶

516

34,034

315

̶

̶

̶

34,866

Japanese corporate bonds

5,055

13,04237,066

6,139

2,079

228

̶

63,611

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

̶

̶

̶

̶

̶

̶

4,474

4,474

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

Of which: Foreign bonds
OthersTotal

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

2016

2017

For the years ended March 31,

Domestic
divisionInternational
division

Total

Domestic
divisionInternational
division

Japanese government bonds¥ 79,519¥

̶¥ 79,519¥ 85,241

¥

Total

̶

¥ 85,241

Japanese local government bonds

44,202

̶

44,20235,520̶

35,520Japanese corporate bonds

81,542

̶81,542

62,143

̶62,143

Japanese stocks

2,050

̶

2,050

2,050

̶

2,050

Other securities

2,358

445,850448,209

2,348

414,862

417,211

̶

445,850445,850̶

414,862

414,862

2,358

̶

2,358

2,348

̶

2,348

¥209,673¥445,850¥655,523¥187,305¥414,862¥602,167

Of which: Foreign bonds
OthersTotal

100 Sony Financial Holdings Inc. Financial Data Book 2017

Sony Bank Performance Indicators (Non-consolidated)

Year-end balance
Millions of yen

2016

2017

As of March 31,

Domestic
divisionInternational
division

Total

Domestic
divisionInternational
division̶Japanese government bonds¥ 81,487

¥

¥

Total

¥ 81,487¥103,083

Japanese local government bonds

37,811

̶

37,811

34,866

̶

34,866

Japanese corporate bonds

64,626

̶64,626

63,611

̶

63,611

Japanese stocks

2,050

̶

2,050

2,050

̶

2,050

Other securities

3,975

431,041

435,0174,474

423,209427,684̶

431,041

431,041̶

423,209423,209

Of which: Foreign bonds
OthersTotal̶¥103,083

3,975

̶

3,975

4,474

̶

4,474

¥189,951¥431,041¥620,993¥208,086¥423,209¥631,296

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

2016

2017

For the years ended March 31,

Domestic
divisionInternational
division

Domestic
divisionInternational
division

Total

At the year-end

11.98%

127.06%32.28%

11.82%

120.00%29.87%

Annual average

13.69

137.26

35.31

11.24

120.99

29.98

Total

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

Sony Financial Holdings Inc. Financial Data Book 2017 101

Sony Life MCEVMCEV Results for Sony Life
1 MCEV Results
1- 01 MCEV results
Beginning with the disclosure as of March 31, 2017, the extrapolation methodology for ultra-long term risk-free rates was changed fromassuming a flat forward rate after the last market data to applying an ultimate forward rate. Due to this change, Sony Life restated its MCEV
as of March 31, 2016 and new business value during the fiscal year ended March 31, 2016 by applying the same methodology. Pleaserefer to Section 2-01 (1) for the risk-free rates used for restatement.
Billions of yen

2016

2016
(Restated)

ChangeAs of March 31,

MCEV¥ 1,063.7¥1,330.1¥266.4

Adjusted net worth

2,074.4

2,074.4

̶

Value of existing business(1,010.7)(744.4)

266.4

2016

2016
(Restated)

Change

¥35.2

¥50.4

¥15.1

Billions of yen

For the year ended March 31,

New business value

Sony Life’s MCEV as of March 31, 2017 increased ¥111.0 billion, due to an increase in interest rates and other factors. Please note thatthe significant changes in adjusted net worth and value of existing business offset each other with the effect of ALM.
Billions of yen

2017

ChangeAs of March 31,

2016(Restated)

MCEV¥1,330.1¥1,441.1¥ 111.0

Adjusted net worth

2,074.4

1,657.7(416.7)

Value of existing business(744.4)(216.7)527.7

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 decreased ¥416.7 billion, primarily because of the decrease in unrealized gain on held-to-maturity securities caused byan increase in interest rates. The breakdown is shown in the table below. Please note that the restatement as of March 31, 2016 had no
impact on the adjusted net worth as of March 31, 2016.
Billions of yen

As of March 31,

2016

2017

ChangeAdjusted net worth¥2,074.4¥1,657.7¥(416.7)

Total net assets

482.2

473.6

(8.6)

Reserve for price fluctuations

44.3

46.0

1.7

Contingency reserve

75.2

82.5

7.3

Reserve for possible loan losses

0.0

0.0

0.0

Reinsurance debit for coinsurance-type reinsurance

̶

1.2

1.2

2,026.2

1,445.6(580.6)

Unrealized gains or losses on policy-reserve-matching bonds

41.3

26.0

(15.3)

Unrealized gains or losses on land and buildings

56.5

71.0

14.5

Unfunded pension liabilities

(4.8)

(3.6)

1.3

Intangible fixed assets(19.2)(19.4)(0.2)

Tax effect equivalent of above nine items(621.4)(461.8)

159.6

(5.8)

(3.4)

2.5

Unrealized gains or losses on held-to-maturity securities

Valuation gain or loss on subsidiaries and affiliated companies

Sony 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 a decrease in the economic value of technical provisions that mainly resulted from an increase ininterest rates. Please refer to Section 3-07 for the method used to calculate required capital.

102 Sony Financial Holdings Inc. Financial Data Book 2017

Sony Life MCEVBillions of yen

2017

ChangeAs of March 31,

2016(Restated)

Adjusted net worth¥2,074.4¥1,657.7¥(416.7)

Free surplus

394.0

496.1

102.0

1,680.4

1,161.7(518.7)

Required capital

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, 2017 increased ¥527.7 billion, primarily becauseof an increase in interest rates. The breakdown of the value of existing business is shown in the table below.
Billions of yen

2017

ChangeAs of March 31,

2016(Restated)

Value of existing business¥(744.4)¥(216.7)¥527.7

Present value of certainty-equivalent profit(169.9)

350.0

519.9

Time value of options and guarantees(137.3)(145.2)(7.8)

Frictional costs(36.4)(35.6)

0.8

Cost of non-hedgeable risks(400.7)(385.9)14.8

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, 2017, and does
not include the value of new business expected to be acquired in the future. In the previous year-end disclosure, new business value wascalculated quarterly using the assumptions as of the end of each quarter. From this year-end disclosure, economic assumptions as of theend of each month are applied. Please refer to Section 3-10 for details. The new business value in this fiscal year decreased ¥21.3 billion,
primarily because the overall level of interest rates throughout the year decreased compared with the previous fiscal year. The breakdown of
new business value is as follows:
Billions of yen

2016(Restated*)

2017

Change¥ 50.4¥ 29.1¥(21.3)Present value of certainty-equivalent profit

114.2

68.3

(45.8)

Time value of options and guarantees(29.6)

(9.1)

20.5

Frictional costs

(0.4)

(0.1)

0.3

Cost of non-hedgeable risks(35.0)(29.8)

5.2

1.3

(0.2)

(1.5)

For the years ended March 31,

Value of new business

Other profits or losses*The new business value as of March 31, 2016 was restated for the change in extrapolation methodology for ultra-long term risk-free rates and calculated
quarterly using the assumptions as of the end of each quarter.

Sony Financial Holdings Inc. Financial Data Book 2017 103

Sony Life MCEV

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.
Billions of yen

For the years ended March 31,

2016(Restated)

Value of new business¥

Present value of premium income
Value of new business / Present value of premium income

50.4

2017

¥

Change29.1¥ (21.3)

1,475.9

1,297.4(178.5)

3.4%

2.2%

(1.2) 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,

New business single premium
Annualized premiums from level premium new business1

Average annualization multiplier 2

2016(Restated)

2017

Change¥125.2¥ 22.6¥(102.6)

111.0

104.7

(6.2)

12.17

12.17

(0.00)

1

Annualized premiums from level premium new business is calculated by multiplying the number of payments in a year by the amount of premiums received at atime. 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.
2
The average annualization multiplier is calculated as (Present value of premium income – New business single premium) / Annualized premiums from level
premium new business.

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, 2017, from MCEV as of March 31, 2016.
Billions of yen
Free surplus

Required capital

Value of existing
business

Opening MCEV (MCEV as of March 31, 2016)¥100.1¥1,974.3¥(1,010.7)¥1,063.7

Change in extrapolation methodology for risk-free rates

293.9(293.9)

266.4

266.4

Opening MCEV (MCEV as of March 31, 2016) (restated)

394.0

1,680.4(744.4)1,330.1

Free surplus

Required capital

Value of existing
business

MCEV¥394.0¥1,680.4¥(744.4)¥1,330.1

MCEV

Billions of yen

Opening MCEV (MCEV as of March 31, 2016) (restated)
Opening adjustments(21.0)

̶̶

(21.0)

Adjusted opening MCEV

373.0

1,680.4(744.4)

1,309.1

New business value

(1.3)

1.1

29.3

29.1

Expected existing business contribution (risk-free rate)

(0.5)

(2.6)

23.6

20.4

Expected existing business contribution (in excess of risk-free rate)

0.9

4.2

10.5

15.6

18.2
(56.5)
47.0(61.9)
0.0
2.3
119.1
1.6
123.0

(69.7)

51.5
56.5
3.3
(45.0)
0.0
73.1
453.2
1.4
527.7

̶

Transfers from value of existing business and required capital
to free surplus

Of which, on new business
Experience variances
Assumption changes
Other operating variance
Operating MCEV earnings
Economic variances
Other non-operating varianceTotal MCEV earnings
Closing adjustments
Closing MCEV (MCEV as of March 31, 2017)

104 Sony Financial Holdings Inc. Financial Data Book 2017

̶(39.9)
61.9(0.0)(44.9)(472.2)(1.6)(518.7)̶

10.4(45.0)
0.0
30.5
100.0
1.4
132.0

̶

̶

̶

̶

¥496.1¥1,161.7¥(216.7)¥1,441.1

Sony Life MCEV

(1) Change in extrapolation methodology for risk-free rates
This figure reflects the impact of the change in the extrapolation methodology for ultra-long term risk-free rates from assuming a flat forward
rate after the last market data to applying an ultimate forward rate. It also includes the impact of the change in inflation rates for the 41styear and later to assure consistency with the extrapolation methodology for ultra-long term risk-free rates. For details of the inflation rates,
please refer to Section 2-03 (8).
(2) Opening adjustments
These adjustments reflect changes in dividends paid to shareholders.
(3) New business value
This figure reflects increases resulting from the acquisition of new business during the fiscal year ended March 31, 2017. Please refer to
Section 3-10 for information concerning the calculation method.
(4) Expected existing business contribution (risk-free rate)
This figure includes the release of the portion for the fiscal year ended March 31, 2017 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.
(5) 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, 2017 was 0.095%, which was developed by reflecting
Sony Life’s view of the market environment and annual investment plans for the year against the asset balance at the end of the previous
fiscal year.
(6) 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.
(7) 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, 2017 under the MCEV calculation as of March 31, 2016, and of the differences between actual policies in force as ofMarch 31, 2017, and those that were projected to be in force on March 31, 2016 using persistency assumptions.
(8) Assumption changes
This figure primarily indicates the impact of changes in assumptions based on experience data in mortality and morbidity rates, lapse andsurrender rates, and operating expense rates. While mortality and morbidity rates are declining, the value of existing business fell primarily
because of a decrease in assumed lapse and surrender rates this fiscal year. The primary cause for this is higher persistency on thoseblocks of business for which risk-free rates are below the assumed interest rates underlying statutory reserve in the low interest rates
environment in Japan.
(9) Other operating varianceThis represents the impact of improvements and corrections of the model used in calculating MCEV.
(10) Operating MCEV earnings
This figure shows the aggregate amount of items (3) through (9).
(11) 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, 2016 (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, 2017 under MCEV as of March 31, 2016.
The major reasons for the increase in the value of existing business include an update of economic scenarios due to changes in themarket environment such as an increase in interest rates, an increase in stock prices and changes in implied volatilities, accounting for an
increase in the present value of certainty-equivalent profit of ¥416.2 billion, a decrease in the time value of options and guarantees of ¥14.6
billion, a decrease in frictional costs of ¥4.6 billion and a decrease in the cost of non-hedgeable risks of ¥35.4 billion. Another factor is anincrease in expenses tied to the rise in inflation rates, accounting for a decrease in the value of existing business of ¥17.6 billion. The major
reason for the decline in the adjusted net worth was the decrease in prices of government bonds caused by an increase in interest rates.
The required capital fell primarily because the amount of liabilities and risks on an economic basis decreased due to an increase in interest
rates, causing declines 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 are disaggregated into an increase of ¥117.6 billion as a result of changes in the market environment
such as the increase in interest rates, and a decrease of ¥17.6 billion as a result of the increase in inflation rates.

Sony Financial Holdings Inc. Financial Data Book 2017 105

Sony Life MCEV(12) Other non-operating varianceThis figure includes the impact of the change in timing of the consumption tax increase. Please refer to Section 2-03 (7) for details.
(13) Closing adjustments
No items were included in closing adjustments.

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

Change in amountBase

No change¥1,441.1

Interest rates

50bp decrease

1,309.6(131.4)50bp increase

1,492.3

51.2

4%

Swap rates

1,404.4(36.7)(3%)¥

̶

Rate of change

̶

(9%)

Stock / Real estate market value

10% decrease

1,418.6(22.5)(2%)

Stock / Real estate implied volatility

25% increase

1,413.1(27.9)(2%)

Interest swaption implied volatility

25% increase

1,420.2(20.9)(1%)

Maintenance expenses

10% decrease

1,464.7

23.7

2%
(1%)

Lapse and surrender rates

× 0.9

1,427.6(13.5)

Mortality rates

Death protection products × 0.95

1,503.7

62.6

4%

Third-sector and annuity products × 0.95

1,429.5(11.5)(1%)

Morbidity rates

× 0.95

1,504.1

63.0

4%

Required capital

Regulatory minimum

1,472.7

31.6

2%

Foreign exchange rates

10% appreciation of JPY

1,432.6

(8.5)

(1%)

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¥(131.4)¥ 695.0¥(826.4)

50bp increase

51.2(664.4)715.6

Stock / Real estate market value

10% decrease(22.5)(10.9)(11.6)

Foreign exchange rates

10% appreciation of JPY

(8.5)

3.6

(12.1)

Sensitivity of new business value
Billions of yen
Assumption

Change in assumption

Base

No change

Interest rates

50bp decrease
50bp increase
Swap rates

Stock / Real estate market value

New business
value

¥29.1

Change in amount¥Rate of change

̶

̶

0.7

(28.4)

(98%)

51.7

22.7

78%

17.7

(11.4)(39%)

10% decrease

29.0

(0.0)

(0%)

Stock / Real estate implied volatility

25% increase

28.4

(0.7)

(2%)

Interest swaption implied volatility

25% increase

27.5

(1.6)

(6%)

Maintenance expenses

10% decrease

30.7

1.6

6%

Lapse and surrender rates

× 0.9

36.2

7.1

24%

Mortality rates

Death protection products × 0.95

34.1

5.0

17%

Third-sector and annuity products × 0.95

28.7

(0.4)

(1%)

Morbidity rates

× 0.95

31.1

2.0

7%

Required capital

Regulatory minimum

29.1

0.0

0%

Foreign exchange rates

10% appreciation of JPY

27.5

(1.5)

(5%)

106 Sony Financial Holdings Inc. Financial Data Book 2017

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, and theimpact if swap rates were used instead of government bond yields. In each parallel shift sensitivity, adjusted net worth changes as themarket value of bonds and other assets changes; this is not applicable to the case where swap rates are used. In each of the interest ratesensitivities, the value of existing business changes as interest rates, the discount rate, yields of new bonds to be purchased in the future asexisting 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 changes 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. The floor for downward changes in interest rates was set at 0%.
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.
(2) Stock and real estate market value
This sensitivity represents the impact of an immediate drop in market values of stock and real estate. Adjusted net worth is directly affectedby the change in market value of stock and real estate. The value of existing business would also be affected by the change in the valueof 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 change.
Please note that the definition of implied volatility was changed as of this fiscal year-end. Please refer to Section 2-01 (2) for details.
(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 sickness 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 Japanese yen. Adjusted net worth is directly 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, where thestock value of subsidiaries and affiliated companies are 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 2017 107

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 2017.
(1) Risk-free rate
Sony Life has used the JGB yields and the U.S. Treasury yields as of the end of March 2017 as risk-free rates for the certainty-equivalentprojections.
Sony Life has not added a liquidity premium on the risk-free rate as there are no products which are considered to have reasonably
predictable and illiquid cash flows and would therefore be appropriate to apply a liquidity premium.
Previously, regarding the extrapolation for ultra-long term risk-free rates where there is no market data, flat forward rates were assumed
after the latest market data (40 years for JPY and 30 years for USD). From this year-end disclosure, an ultimate forward rate was applied.
More specifically, 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 Insurance Capital Standard(ICS) being developed by the International Association of Insurance Supervisors (IAIS) for the international capital standard. The reasons forsetting 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).
%
Japanese yen

2016
As of March 31,

U.S. dollar

2016(Restated)

2017

2016

2016
(Restated)

2017

Term (in years)
1(0.15)%(0.15)%(0.25)%

0.58%

0.58%

1.02%

5

(0.19)(0.19)(0.12)

1.21

1.21

1.92

10

(0.05)(0.05)

0.07

1.77

1.77

2.39

20

0.44

0.44

0.64

2.17

2.17

2.75

30

0.55

0.55

0.84

2.61

2.61

3.01

40

0.63

0.63

0.96

2.81

2.75

3.04

50

0.70

0.98

1.25

2.92

2.82

3.07

60

0.74

1.23

1.45

2.98

2.86

3.09

70

0.77

1.38

1.57

3.02

2.88

3.11

80

0.79

1.47

1.65

3.04

2.90

3.12

(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

2017

2017

Term (in years)
1

0.05%

1.38%

5

0.11

2.05

10

0.27

2.38

20

0.68

2.62

30

0.83

2.65

40

0.91

2.72

50

1.20

2.78

60

1.41

2.83

70

1.54

2.86

80

1.63

2.88

(Data: Bloomberg [extrapolated])

108 Sony Financial Holdings Inc. Financial Data Book 2017

Sony Life MCEV

(2) Interest-rate modelSony Life has calibrated the interest rate model to the market as of the end of March 2017. 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)

Until the previous fiscal year, implied volatilities were expressed as a percentage change in interest rates assuming the Black model. As ofthis fiscal year, they are expressed as a basis point change in interest rates assuming a normal distribution on the Bachelier model. The
implied volatilities as of the end of March 2016 based on the same method are presented below.
bp

As of March 31,

2016

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

29.2bp
33.5
44.5
43.1
45.9
48.9
42.3

60.3bp
80.9
76.5
59.5
78.4
66.7
53.1

Euro

25.0bp
63.2
72.3
64.5
72.1
63.9
54.9

UK pound58.0bp
84.5
70.5
55.4
80.1
64.5
49.8
(Data: Markit)

Sony Financial Holdings Inc. Financial Data Book 2017 109

Sony Life MCEV

(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:%2016
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

9.8%
10.6
13.7

10.5%
12.7
14.5

15.0%
16.0
14.2

20.3%
18.7
19.0

16.3%
21.0
26.4

21.1%
20.2
20.7

18.2%
19.6
21.7

(Data: Bloomberg for foreign exchange and Markit for stocks)%

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)(4) Correlation factors
Sony Life has calculated correlation factors from the monthly return of each index for a period of five years from April 2012 to the end of
March 2017 as there is no market-consistent data for correlation factors.
2016

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(0.40)(0.02)
0.22
0.23
0.12
0.33
0.25
0.05
0.29
0.01

(0.40)
1.00
0.19(0.14)
0.03(0.03)(0.08)
0.10
0.07
0.05
0.00

(0.02)
0.19
1.00
0.10
0.23
0.44
0.34
0.34
0.40
0.44
0.34

0.22
(0.14)
0.10
1.00
0.25
0.23
0.24
0.27
0.10
0.21
0.06

0.23
0.03
0.23
0.25
1.00
0.70
0.75
0.64
0.32
0.39
0.31

0.12
(0.03)
0.44
0.23
0.70
1.00
0.83
0.56
0.50
0.36
0.41

0.33
(0.08)
0.34
0.24
0.75
0.83
1.00
0.72
0.58
0.50
0.42

TOPIX

S&P

SX5E

FTSE

0.25
0.10
0.34
0.27
0.64
0.56
0.72
1.00
0.60
0.62
0.49

0.05
0.07
0.40
0.10
0.32
0.50
0.58
0.60
1.00
0.76
0.82

0.29
0.05
0.44
0.21
0.39
0.36
0.50
0.62
0.76
1.00
0.81

0.01
0.00
0.34
0.06
0.31
0.41
0.42
0.49
0.82
0.81
1.00

(Data: Ministry of Finance Japan for JPY interest rate and Bloomberg for others)

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)

110 Sony Financial Holdings Inc. Financial Data Book 2017

Sony Life MCEV

(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 2017.
The table below shows foreign exchange rates of major currencies.
Yen

As of March 31,

2016

2017

U.S. dollar / Japanese yen¥112.68¥112.19

Euro / Japanese yen

127.70119.79UK pound / Japanese yen

161.92140.082- 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 2017 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 2017 and no rebalancing adjustments are applied to maintain the initialfund allocation thereafter.

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 2017. 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• Non-participating endowment insurance• Non-participating educational endowment insurance• U.S. dollar-denominated 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.

Sony Financial Holdings Inc. Financial Data Book 2017 111

Sony Life MCEV

(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 2016 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, Sony Financial Holdings Inc., unit cost
includes management administration 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 28.24% in the fiscal years 2016 and 2017, and 28.00% in and after the fiscal year 2018.
(7) Consumption tax rate
As a result of bills passed by the Japanese Diet on November 18, 2016 to postpone, until October 1, 2019, the consumption tax increase
to 10%, future expenses grew from the reflection of this increase on and after October 1, 2019.
(8) Inflation rate
Inflation rates for the first 40 years were set at 0.376% 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.

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 ¥1.3 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.
• 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 we utilize reinsurance for some in-force business, we reflect reinsurance premiums as expenses and reinsurance benefits and reinsurance commissions as income in the projections. Because part of the reinsurance commissions received on coinsurance-type reinsurance
are recognized as a reinsurance debit to defer the recognition of revenue in Japanese GAAP, the reinsurance debit for coinsurance-typereinsurance 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, 2017, 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.

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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 2017.
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 is a similar but modified model
based on EU Solvency II standard method.
The solvency risk capital on an economic value basis as of the end of March 2017 was ¥980.6 billion (after tax). The effective tax rateused to adjust to the after-tax basis is 28.00%. The required capital is ¥1,161.7 billion, which is 3,508.7% of the regulatory minimum capitalrequirement.
Sony Life will also revise the internal model itself as appropriate, taking into account domestic and overseas conditions, including developments in international accounting standards, valuation methods of insurance liability on an economic value basis and solvency margin
standard trends, as well as the analysis of Sony Life’s internal mortality and morbidity rates data.
Major differences between the internal model approach and EU Solvency II standard formula are as follows:(1) Market risk
Market risk quantification follows EU Solvency II standard method approach in principle. However, Sony Life modified risk factors specified
in EU Solvency II standard method to make them more suitable in light of the market risk attribute to which Sony Life is exposed, where risk
factors specified in EU Solvency II standard method or its previous risk measure are considered unable to reflect enough of the risk amountat 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. For other risks, major stress parameters different from EU Solvency II include 45% for listed stocks, 100% forsubsidiaries and affiliated companies’ stocks and 35% for currency risk.

(2) Insurance underwriting risk
Quantification of insurance underwriting risk follows EU Solvency II standard method, with the exception of quantification of morbidity, lapse
and catastrophe risk which follows the QIS4 approach.
(3) Operational risk
EU Solvency II standard method is followed.
(4) Correlation parameters
Correlation parameters follow EU Solvency II standard method except that the correlation parameter between Global and Other equities is
set to one to exclude any diversification effect while it is set to 0.75 under EU Solvency II standard.

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, 2017. The
definition of new business is consistent with the financial information we have 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 which represents 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, consumption tax, 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 to value in-force business as of the end of this fiscal year is included in the line item described in Section 1-06 (8).
The assumptions for lapse and surrender rates and the consumption tax rate are those as of the end of the previous quarter. The timingof the consumption tax increase to 10% is assumed to be April 1, 2017 for new business acquired before December, and October 1, 2019
for new business acquired after January. The impact of changing these assumptions to those used to value in-force business as of the endof this fiscal year is included in the line items described in (8) and (12) under Section 1-06.
In the previous year-end disclosure, economic assumptions and inflation rates were those as of the end of the previous quarter. From
this year-end disclosure, economic assumptions and inflation rates as of the end of each month are applied. The impact of changing
these assumptions to those 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 (11).
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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.

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 EU Solvency II standard method as the cost of non-hedgeable risks and calculated it using the cost of capital approach. It should be noted that the following points are different from EU Solvency II standard method:• Non-hedgeable interest rate risk, which is not subject to risk margin in EU Solvency II, reflects the uncertainty of the risk-free rate beyond
the 40th year for Japanese yen and the 30th year for U.S. dollars.
• Morbidity, lapse, and catastrophe risk follows the QIS4 approach as described in Section 3-07 (2).
• Sony Life has used risk amounts quantified after taking into consideration the risk mitigation effect through policyholder dividends without
any adjustments.
• Sony Life has used the cost of capital rate described in Section 3-15.

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 2.5 % consistent with the MCEV framework considering Japanese long-term equity risk premiums, the beta of SonyFinancial Holdings Inc., and the anticipated impact of Sony Life’s equity risk exposure on the beta of Sony Financial Holdings Inc., which isa hedgeable risk. We 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 opinion from this firm. For further details, please refer toSony Life’s press release of “Disclosure of Market Consistent Embedded Value as of March 31, 2017” (http://www.sonyfh.co.jp/
index_en.html)

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4 Overview of MCEV
4- 01 What is MCEV?
Embedded value (EV) is an indicator used to evaluate the corporate value of a life insurance business. Many insurance companies
in Europe disclose EV as part of their financial reports and use EV as an internal management tool. Under Japanese GAAP for life
insurance companies, the balance sheets do not indicate the present value of future profits from existing business, while EV
indicates the present value of future profits from existing business along with total net assets of an insurance company.
The CFO Forum, formed by the Chief Financial Officers (CFOs) of major European insurance companies, published the European
Embedded Value Principles (EEV Principles) in May 2004. This led to the disclosure by many leading European insurers of EEV
based on market consistent methods.
However, as the EEV Principles allow various calculation methodologies, the CFO Forum published the MCEV Principles in June2008 in order to make EV information more effective and appropriate for investors by streamlining MCEV disclosure standards forinternational use.
MCEV represents the present value of the current and future distributable profits to shareholders generated from assets allocatedto the covered business after sufficient allowance for the aggregate risks in the covered business. MCEV is calculated as the sumof adjusted net worth and the value of existing business. However, MCEV is calculated based on the policies in force on the calculation date, and does not include the value of new business it may write in the future. (It is generally believed that the value of new
business must be taken into consideration when evaluating the corporate value of an insurance company.)

MCEV structure

MCEV ＝+Adjusted net worth

Adjusted net worth
Results of business activities to date

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, plus reserve for price fluctuations, contingency reserve and unrealized
gains or losses on held-to-maturity securities, etc., less intangible fixed assets, etc., subject to the adjustment for the amount of tax
effect equivalent to the aforementioned items. The value of existing 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 other items, 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

MCEV
Market value-based
policy reserve

Statutory (book value)policy reserve
Marketvalue-based
asset
Net assets

Adjusted net worth

Value of existing businessNet assets

Marketvalue-based
net assets(=MCEV)

Unrealized gains or losses on heldto-maturity securities and other items

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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 increased ¥8.2 billion since March 31, 2016, to ¥980.6 billion, due mainly to an increase in market-related
risk (mainly interest rate risk), despite a decrease in insurance risk associated with an increase in interest rates. The breakdown of the risk
amount is as follows:
Billions of yen

2016(Restated)2017

Insurance risk1¥ 989.3¥ 937.5

Market-related risk

324.2
255.2
31.4
2.0
(374.4)
972.4

405.1
308.9
28.1
1.9
(392.0)980.6

As of March 3 1,

Of which interest rate risk 2
Operational risk
Counterparty risk
Variance effectRisk amount based on economic value
1
2

Insurance risk excludes the variance effect within Life module and Health module.
Interest rate risk excludes the variance effect within market-related risk.
Billions of yen

2017

As of March 3 1,

2016
(Restated)

MCEV¥1,330.1¥1,441.1

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, which is a similar but modified
model based on the EU Solvency II standard method.

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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), being developedby the International Association of Insurance
Supervisors (IAIS).

Asymmetric risk

• The expected rate of future variability
embedded in current option prices, andrepresents the expected value of the market
against the price fluctuation.

• The MCEV Principles define required capitalas the capital necessary to hold in excess
of statutory policy reserves (excluding contingency reserve), and it is considered to be
the larger of the solvency capital to meetthe statutory required minimum level orthe capital 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 bytaking the present value of the cost to holdcapital required in future periods.

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) which was introduced
to the European Union in January 2016.

F
Free surplus• 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.

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.

P
Present value of certaintyequivalent profit• Present value of certainty-equivalent profit is
the present value of profit based on the
future cash flows generated from thecovered business.

Q

T
Technical provision• The value of liability on an economic value
basis, which equals the present value ofbest estimate cash flows plus the risk
margin.

Time value and intrinsic value• 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.

U
Ultimate forward rate

QIS4
• Quantitative Impact Study. Conducted prior
to implementation of EU Solvency II. The
fourth study was conducted in May 2008
and is referred to as QIS4.

• The level of forward rate to which future
forward rates are assumed to ultimately
converge. It is generally determined throughthe macro-economic approach.

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