August 9, 2018

Financial Results for the Three Months Ended June 30, 2018
Fukoku Mutual Life Insurance Company (President: Yoshiteru Yoneyama) announces
financial results for the three months ended June 30, 2018.

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

P. 1

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

P. 3

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

P. 6

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

P. 7

5. Breakdown of Ordinary Profits (Fundamental Profit) ………………………………

P. 9

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

P.10

7. Status of Separate Account…………………………………………………………

P. 11

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

P.12

Fukoku Mutual Life Insurance Company

1. Business Highlights(1) Policies in Force, New Policies and Surrendered and Lapsed Policies(i) Policies in Force
As of March 31, 2018

As of June 30, 2018

Number of policies

AmountNumber of policies(Thousands)(100 millions of yen)Amount(Thousands)

Changes(%, Pre-FYE)(100 millionsof yen)Changes(%, Pre-FYE)

Individual insurance

3,180

227,653

3,182

100.1

227,473

99.9

Individual annuities

687

26,684679

98.9

26,397

98.9

3,868

254,338

3,862

99.9

253,870

99.8

Group insurance－

170,732－－

171,370

100.4Group annuities－

21,803－－

21,879100.3

Subtotal

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

(ii) New Policies
Three months ended
June 30, 2017

Total

Net increase by
conversion

New business

Number of policies

AmountAmountAmount(Thousands)(100 millions of yen)(100 millions of yen)(100 millions of yen)

Individual insurance

90

3,677

3,528

149

Individual annuities

1

41

45

(3)

Subtotal

92

3,719

3,573

145

Group insurance

－

143

143

－

Group annuities

－

158

158

－

Total
Three months ended
June 30, 2018

Number of policies(Thousands)

AmountChanges(%, YoY)

Net increase by
conversion

New business(100 millionsof yen)AmountChanges(%, YoY)(100 millionsof yen)AmountChanges(%, YoY)(100 millionsof yen)Changes(%, YoY)

Individual insurance

90

100.0

4,089

111.2

3,532

100.1

557

373.5

Individual annuities

1

142.7

55

133.4

59

131.2

(3)

－

Subtotal

92

100.6

4,144

111.4

3,591

100.5

553

380.2

Group insurance

－

－

70

49.2

70

49.2

－

－

Group annuities

－

－

0

0.4

0

0.4

－

－

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

(iii) Surrendered and Lapsed Policies (Individual Insurance and Individual Annuities)
Three months ended
June 30, 2017

Three months ended
June 30, 2018
Changes(%, YoY)

Amount of surrender andlapse (100 millions of yen)

3,271

3,158

96.5

Surrender and lapse ratio (%)

1.26

1.24

(0.02)

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

1

Fukoku Mutual Life Insurance Company

(2) Annualized Premiums(i) Policies in Force(100 millions of yen, %)As of March 31, 2018

As of June 30, 2018
Changes (%, Pre-FYE)

Individual insurance

2,747

2,741

99.8

Individual annuities

1,296

1,283

99.0

Total

4,043

4,024

99.5

1,107

1,110

100.3

Medical coverage and living benefits(ii) New Policies(100 millions of yen, %)Three months ended June 30, 2017

Three months ended June 30, 2018
Changes(%, YoY)

Individual insurance

35

41

117.4

Individual annuities

1

1

130.1

Total

36

43

117.8

20

19

94.4

Medical coverage and living benefits

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

(3) Selected Items of Statements of Operations(100 millions of yen, %)Three months ended June 30, 2017

Three months ended June 30, 2018
Changes (%, YoY)

Premium and other income

1,919

1,560

81.3

464

419

90.3

1,757

1,391

79.2

Investment expenses

125

119

95.5

Ordinary profits

217

151

69.8

Investment income
Claims and other payments(4) Total Assets(100 millions of yen, %)As of March 31, 2018

As of June 30, 2018
Changes(%, Pre-FYE)

Total assets

66,266

2

66,717

100.7

Fukoku Mutual Life Insurance Company

2. Investment Results of General Account Assets(1) Total Assets(Millions of yen, %)Cash, deposits, and call loans
Monetary claims bought

As of March 31, 2018

As of June 30, 2018

AmountAmount% of total

240,4623.7 %% of total

187,525

2.8 %

443

0.0

434

0.0

31,5020.5

31,5390.5

5,380,830

82.2

5,505,157

83.6

Domestic bonds

2,818,618

43.1

2,797,483

42.5

Domestic stocks

740,82811.3

755,510

11.5

Foreign securities

1,713,869

26.2

1,823,896

27.7

Foreign bonds

1,434,457

21.9

1,534,398

23.3

279,4124.3

289,497

4.4

107,5141.6

128,265

1.9

593,734

9.1

576,000

8.7

Policy loans

57,181

0.9

56,724

0.9

Ordinary loans

536,5538.2

519,275

7.9

Real estate

213,674

3.3

213,083

3.2

Others85,664

1.3

74,557

1.1

Allowance for possible loan losses(2,049)(0.0)(2,014)(0.0)

6,544,262

100.0

6,586,283

100.0

1,998,720

30.5

2,108,190

32.0

Money held in trust
Securities

Foreign stocks and other securities
Other securities
Loans

Total
Foreign currency denominated assets

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

3

Fukoku Mutual Life Insurance Company

(2) Fair Value Information on Securities (with fair value, other than trading securities)(Millions of yen)
As of March 31, 2018

As of June 30, 2018

Gains/losses

Book value Fair value

Gains

Gains/losses

Book value Fair value

Losses

Gains

Losses

Held-to-maturity debt securities

758,872

897,574

138,702138,702–759,826

896,343

136,517

136,517–

Domestic bonds

738,632

876,835

138,203138,203–

738,904

875,076

136,171

136,171–

Foreign bonds

20,23920,738

498

498

–

20,921

21,266

345

345

–

Monetary claims bought

–

–

–

–

–

–

–

–

–

–

Negotiable certificate of deposits

–

–

–

–

–

–

–

–

–

–

Others

–

–

–

–

–

–

–

–

–

–

Policy-reserve-matching bonds

973,736

1,134,148

160,412

162,375

1,962

969,672

1,129,517

159,844

161,596

1,751

Domestic bonds

971,937

1,132,289

160,352

162,315

1,962

967,872

1,127,663

159,791

161,542

1,751

Foreign bonds

1,799

1,859

59

59

－

1,799

1,853

53

53

–

–

–

–

–

–

–

–

–

–

–

Available-for-sale securities

2,941,466

3,404,811

463,345531,772

68,427

3,074,990

3,562,974

487,984

543,463

55,479Domestic bonds

1,023,447

1,080,932

57,48467,947

10,462

1,014,331

1,073,467

59,13568,404

9,268

Domestic stocks

305,353

671,850

366,497

370,2783,780

313,879

686,533

372,653

377,032

4,379

Foreign securities

1,538,185

1,558,823

20,63773,35952,721

1,652,531

1,688,897

36,36576,91540,549Foreign bonds

Investments in subsidiaries and affiliates

1,290,483

1,290,268(214)

46,42546,6401,398,796

1,410,571

11,77547,85636,081

Foreign stocks and other securities

247,701

268,554

20,852

26,933

6,081

253,735

278,325

24,59029,058

4,468

Other securities

74,48093,20518,72520,187

1,462

94,247

114,076

19,828

21,110

1,281

Money held in trust

–

–

–

–

–

–

–

–

–

–

Monetary claims bought

–

–

–

–

–

–

–

–

–

–

Negotiable certificate of deposits

–

–

–

–

–

–

–

–

–

–

Others

–

–

–

–

–

–

–

–

–

–

Total

4,674,074

5,436,534

762,459

832,849

70,3904,804,489

5,588,835

784,346

841,577

57,231

Domestic bonds

2,734,016

3,090,057

356,040

368,465

12,4252,721,109

3,076,208

355,098

366,119

11,020

Domestic stocks

305,353

671,850

366,497

370,2783,780

313,879

686,533

372,653

377,032

4,379

Foreign securities

1,560,224

1,581,421

21,19673,91852,721

1,675,252

1,712,017

36,76477,31440,549Foreign bonds

1,312,522

1,312,866

343

46,984

46,6401,421,517

1,433,691

12,174

48,25536,081

Foreign stocks and other securities

247,701

268,554

20,852

26,933

6,081

253,735

278,325

24,59029,058

4,468

Other securities

74,48093,20518,72520,187

1,462

94,247

114,076

19,828

21,110

1,281

Money held in trust

–

–

–

–

–

–

–

–

–

–

Monetary claims bought

–

–

–

–

–

–

–

–

–

–

Negotiable certificate of deposits

–

–

–

–

–

–

–

–

–

–

Others

–

–

–

–

–

–

–

–

–

–

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

• Book value of securities without fair value are as follows:(Millions of yen)
As of March 31, 2018

As of June 30, 2018––

Unlisted foreign bonds––

Others––

Held-to-maturity debt securities––

Investments in subsidiaries and affiliates

64,83764,837Available-for-sale securities

28,021

27,546

5,697

5,697

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

Unlisted foreign bonds––

22,323

21,84992,85892,383

Policy-reserve-matching bonds

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

OthersTotal

Note: In this table, domestic and overseas investment partnerships are included in “Others” within “Available-for-sale securities.”
However, unrealized gains on available-for-sale securities corresponding to these holdings by domestic and overseas investment
partnerships (¥1,285 million as of March 31, 2018 and ¥1,954 million as of June 30, 2018) are included in their balance sheet
carrying amounts.

4

Fukoku Mutual Life Insurance Company

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

As of March 31, 2018
Carrying
value on the Fair valuebalance sheet

Money held in trust

31,502As of June 30, 2018
Carrying
value on the Fair valuebalance sheet

Gains/losses

31,502

Gains

Losses–––

31,539Gains/losses–

31,539Gains

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

As of March 31, 2018
Carrying valueon the balance sheet

Money held in trust
for trading purpose

As of June 30, 2018

Net valuation gains/losses
included in the statementsof operations

30,502

Net valuation gains/losses
included in the statementsof operations

Carrying valueon the balance sheet

030,539(14)• Money held in trust classified as held-to-maturity, policy-reserve-matching and available-for-sale(Millions of yen)

As of March 31, 2018
Book value

As of June 30, 2018

Gains/losses

Fair value

Book value

Gains

LossesFair value

Gains/losses
Gains

Losses

–

–

–

–

–

–

–

–

–

–

–

Money held in trust
for held-to-maturity

–

–

–

–

–

–

–

Money held in trust
for policy-reservematching

–

–

–

–

–

–

Money held in trust
for available-for-sale

–

–

–

–

–

–

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

As of March 31, 2018
Carrying valueon the balance sheet

125,280

Fair value

253,938

As of June 30, 2018
Carrying valueon the balance sheet

Gains/losses

128,658

125,267

Fair value

253,986

Gains/losses

128,719

Notes: As of June 30, 2018, fair value is based on the appraisal value by the real-estate appraiser, the appraisal value for property tax
as of January 1, 2018 and the road rate as of January 1, 2017.
As of March 31, 2018, fair value is based on the appraisal value by the real-estate appraiser, the appraisal value for property tax
as of January 1, 2018 and the road rate as of January 1, 2017.

5

Fukoku Mutual Life Insurance Company

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

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

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

6

As of March 31, 2018

As of June 30, 201866,260176,000
443
31,502
5,458,790[2,030,971][114,036][702,661][768,000][1,735,580]
593,734
57,181
536,553
218,549
23,701
167
59,508(2,049)6,626,609

54,692135,000
434
31,5395,585,290[2,030,642][102,375][696,008][781,403][1,846,569]
576,000
56,724519,275
217,81423,00720
49,944(2,014)
6,671,730

As of March 31, 2018

As of June 30, 2018

5,650,879
19,295
5,578,187
53,39556
191,935
46,0662,445
3,088
40,532
25,417
95,798
10,733
14,241
6,035,126

5,684,372
17,3695,586,123
80,88055
191,935
58,2801,092
3,100
54,08725,29096,661
16,977
14,2396,087,812

10,000106,000
112
135,538
2,954
132,584
6,000
20,00041,000255
767
64,561
251,650
335,658
4,173
339,831591,4826,626,609

10,000106,000
112
109,723
3,071
106,652
8,000
20,00041,000210
767
36,674
225,836
353,9124,169
358,081583,917
6,671,730

Fukoku Mutual Life Insurance Company

4. Non-consolidated Statements of Operations(Millions of yen)Three months ended
June 30, 2017

Three months ended
June 30, 2018

Ordinary revenues:
Premium and other income

191,933

156,016[Premium income][191,917][155,995]

Investment income

46,48541,971[Interest, dividends and other income][33,221][34,215][Gains on money held in trust, net]

[483]

[38]

[Gains on trading securities, net]

[3,511][1,868][Gains on sales of securities][6,684][4,186][Gains on separate accounts, net]

[2,561][1,617]

Other ordinary revenues

3,536

3,995

[Reversal of reserve for outstanding claims][1,536][1,926]

Total ordinary revenues

241,955

201,983

Claims and other payments

175,703

139,182[Claims][66,131][49,540][Annuities][40,320][40,363][Benefits][27,980][29,672][Surrenders][32,105][12,324][Other payments][9,108][7,225]

Provision of policy reserve and others:

5,430

7,938

Provision of policy reserve

5,427

7,935

Ordinary expenses:

2

3

Investment expenses

Provision of interest portion of reserve for dividends to policyholders

12,547

11,980[Interest expenses][1,082]

[965]

[845]

[2,660][Losses on derivative instruments, net]

[4,786][3,690][Foreign exchange losses, net]

[3,029][2,082]

Operating expenses

21,807

22,274

Other ordinary expenses

4,718

5,419

Total ordinary expenses

220,208

186,796

Ordinary profits

21,747

15,186

Gains on disposal of fixed assets

0－

Total extraordinary gains

0

－

11

11

[Losses on sales of securities]

Extraordinary gains:

Extraordinary losses:
Losses on disposal of fixed assets
Impairment losses

045

Provision of reserve for price fluctuation

809

863

Total extraordinary losses

821

920

Surplus before income taxes

20,925

14,266

3,800

2,164

Income taxes:
Current
Deferred

(266)

(810)

Total income taxes

3,533

1,353

Net surplus for the period

17,392

12,912

7

Fukoku Mutual Life Insurance Company

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

II. Notes to the Non-consolidated Balance Sheets
1. As the proposal for appropriation of unappropriated surplus for the fiscal year ended March 31, 2018 was approvedby the Board of Representative Member of Policyholders on July 3, 2018, it is included in the non-consolidatedbalance sheet as of June 30, 2018.
2. The amount of securities lent under lending agreements was ¥258,166 million as of June 30, 2018.
3. Changes in reserve for dividends to policyholders for the three months ended June 30, 2018 were as follows:(Millions of yen)

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

¥ 53,395

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

38,630

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

(11,149)

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

3

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

¥ 80,880

8

Fukoku Mutual Life Insurance Company

5. Breakdown of Ordinary Profits (Fundamental Profit)(Millions of yen)Three months ended
June 30, 2017

Three months ended
June 30, 2018

21,14920,561

9,211

4,893

Gains on money held in trust, net

463

16

Gains on trading securities, net

2,063

690

Gains on sales of securities

6,684

4,186

Gains on derivative instruments, net––

Foreign exchange gains, net––

Other capital gains

–

–

8,661

8,432

Losses on money held in trust, net––

Losses on trading securities, net

–

–

845

2,660

–

–

Losses on derivative instruments, net

4,786

3,690

Foreign exchange losses, net

3,029

2,082

–

–

B

550

(3,539)A+B

21,69917,021

52

2

Reinsurance income––

Reversal of contingency reserve

52–

Reversal of specific allowance for possible loan losses–

2

Others

–

–

5

1,837

Reinsurance premiums––

Provision for contingency reserve–

175

Provision of specific allowance for possible loan losses

5–

Provision of allowance for specified overseas loans––

Write-off of loans––

Others

–

1,662

C

47

(1,834)

A+B+C

21,747

15,186

Fundamental profit

A

Capital gains

Capital losses

Losses on sales of securities
Losses on valuation of securities

Other capital losses
Net capital gains (losses)
Fundamental profit plus net capital gains (losses)
Non-recurring gains

Non-recurring losses

Non-recurring gains (losses)
Ordinary profits

Notes: 1. The following amounts in respect of gains / losses on money held in trust have been excluded from capital gains / losses andincluded in fundamental profit due to their income nature (being interest and dividend income): ¥20 million in respect of thethree months ended June 30, 2017 and ¥21 million in respect of the three months ended June 30, 2018.
Notes: 2. The following amounts in respect of gains / losses on trading securities have been excluded from capital gains / losses andincluded in fundamental profit due to their income nature (being interest and dividend income): ¥1,447 million in respect of thethree months ended June 30, 2017 and ¥1,177 million in respect of the three months ended June 30, 2018.

9

Fukoku Mutual Life Insurance Company

6. Solvency Margin Ratio(Millions of yen)

As ofMarch 31, 2018

As ofJune 30, 2018

1,475,658

1,507,411

Foundation funds and surplus

210,194

213,507

Reserve for price fluctuation

95,79896,661

Contingency reserve

187,050

187,225

1,501

1,470

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

418,167

440,945

Net unrealized gains on real estate × 85%

122,692

123,681

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

252,776

255,277

Qualifying subordinated debt

191,935

191,935－－

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

Others42,32543,490272,942286,255

Total solvency margin(A)

General allowance for possible loan losses

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

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

(B)

Insurance risk

R1

23,252

23,178

3rd sector insurance risk

R8

9,687

9,699

Assumed investment yield risk

R2

32,15631,990

Minimum guarantee risk

R7

－

－

Investment risk

R3

232,788

246,108

Business risk

R4

5,957

6,219

× 100

1,081.2%

1,053.1%

Solvency margin ratio(A)(1/2) × (B)Notes: 1. Figures as of March 31, 2018, are calculated based on the provisions of Articles 86 and 87 of the Enforcement Regulation of the
Insurance Business Act and Ministry of Finance Notification No. 50, 1996. Figures as of June 30, 2018, are calculated inaccordance with these provisions.
Notes: 2. "Deductible items" represent the capital increase to the subsidiary, Fukokushinrai Life Insurance Co., Ltd.
Notes: 3 "Minimum guarantee risk" is calculated by standard method.

10

Fukoku Mutual Life Insurance Company

7. Status of Separate Account(1) Separate Account Assets by Products(Millions of yen)
As of March 31, 2018

As of June 30, 2018

AmountAmountIndividual variable insurance－－

Individual variable annuities

33

34

Group annuities

82,31385,413

Total

82,34785,447(2) Policies in Force(i) Individual Variable Insurance

The Company has not sold the individual variable insurance.
(ii) Individual Variable Annuities(Millions of yen except number of policies)
As of March 31, 2018
Number ofpolicies

As of June 30, 2018
Number ofpolicies

AmountAmountIndividual variable annuities

10

27

10

27

Total

10

27

10

27

11

Fukoku Mutual Life Insurance Company

8. Status of the Company, Subsidiaries and Affiliates(1) Selected Financial Data
(100 millions of yen)Three months ended
June 30, 2017

Three months ended
June 30, 2018

Ordinary revenues

2,547

2,163

Ordinary profits

221

155

Net surplus attributable to the parent company

173

123

Comprehensive income

536

308

As of March 31, 2018

Total assets
Solvency margin ratio

As of June 30, 201884,88885,261

1,127.4%

1,098.2%(2) Scope of Consolidation and Application of Equity Method
Number of consolidated subsidiaries: 6
Number of unconsolidated subsidiaries accounted for under the equity method: 0
Number of affiliates accounted for under the equity method: 0

12

Fukoku Mutual Life Insurance Company

(3) Consolidated Balance Sheets(Millions of yen)

As of March 31, 2018

As of June 30, 2018

Cash and deposits

157,703

146,490

Call loans

176,000

135,000

443

434

Assets:Monetary claims bought
Money held in trust

31,502

31,5397,203,196

7,321,908

Loans

597,285

579,526

Tangible fixed assets

218,895

218,147

Intangible fixed assets

38,056

36,8330

0

Securities

Agency receivables
Reinsurance receivables

221

26

67,341

57,992

Net defined benefit asset

107

125

Deferred tax assets

166

153

(2,049)(2,014)

8,488,872

8,526,164

As of March 31, 2018

As of June 30, 2018

7,467,875

7,494,521

22,166

20,045

7,391,773

7,393,165

53,39580,880Reserve for dividends to policyholders (subsidiary)

539

430

Agency payables

70

61

Other assets

Allowance for possible loan losses
Total assets

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

Reinsurance payables

75

65

Subordinated bonds

191,935

191,935

Other liabilities

59,50970,674

Net defined benefit liabilities

34,01933,481

Reserve for price fluctuation

105,521

106,473

Deferred tax liabilities

8,875

15,882

Deferred tax liabilities for land revaluation

14,241

14,2397,882,122

7,927,334

Total liabilities
Net assets:
Foundation funds

10,00010,000

Accumulated foundation funds redeemed

106,000

106,000

112

112

Consolidated surplus

139,621113,247

Total foundation funds, surplus and others

255,733

229,359

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

344,585

362,824

4,173

4,169

Reserve for revaluation

Revaluation reserve for land, net of tax
Foreign currency translation adjustment

(377)

(462)

Accumulated remeasurements of defined benefit plans(6,055)(5,752)

Total accumulated other comprehensive income

342,326

360,778

8,690

8,692

606,750

598,830

8,488,872

8,526,164

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

13

Fukoku Mutual Life Insurance Company

(4) Consolidated Statements of Operations and Comprehensive Income[Consolidated Statements of Operations](Millions of yen)Three months ended
June 30, 2017

Three months ended
June 30, 2018

198,165

163,630

Ordinary revenues:
Premium and other income
Investment income

52,495

48,210[Interest, dividends and other income][39,166][39,968][Gains on money held in trust, net]

[483]

[38]

[Gains on trading securities, net]

[3,511][1,868][Gains on sales of securities][6,752][4,671][Gains on separate accounts, net]

[2,561][1,617]

Other ordinary revenues

4,128

4,514

[Reversal of reserve for outstanding claims][1,930][2,121]

254,790

216,355

Claims and other payments

189,601

156,796[Claims][67,507][51,219][Annuities][40,627][44,248][Benefits][31,449][32,929][Surrenders][40,814][21,089][Other payments][9,113][7,232]

Provision of policy reserve and others:

1,453

1,395

Provision of policy reserve

1,450

1,392

Provision of interest portion of reserve for dividends to policyholders

2

3

Provision of interest portion of reserve for dividends to policyholders (subsidiary)00Investment expenses

12,221

11,640[Interest expenses][1,083]

[973]

[845]

[2,660][Losses on derivative instruments, net]

[4,786][3,690][Foreign exchange losses, net]

[3,029][2,083]Operating expenses

24,16824,301Other ordinary expenses

5,202

6,647

Total ordinary expenses

232,647

200,780

Ordinary profits

22,142

15,574

Gains on disposal of fixed assets

0－

Total extraordinary gains

0－

Losses on disposal of fixed assets

11

11

Impairment losses

045

Total ordinary revenues
Ordinary expenses:[Losses on sales of securities]

Extraordinary gains:

Extraordinary losses:

Provision of reserve for price fluctuation

900

952

Total extraordinary losses

913

1,009

Provision of reserve for dividends to policyholders (subsidiary)

92

94

21,137

14,470Surplus before income taxes
Income taxes:
Current

3,987

2,250

Deferred

(282)

(144)

Total income taxes

3,704

2,105

Net surplus for the period

17,432

12,36533

12

17,39912,353

Net surplus attributable to non-controlling interests
Net surplus attributable to the parent company

14

Fukoku Mutual Life Insurance Company

(4) Consolidated Statements of Operations and Comprehensive Income (Continued)[Consolidated Statements of Comprehensive Income](Millions of yen)Three months ended
June 30, 2017

Three months ended
June 30, 2018

Net surplus

17,432

12,365

Other comprehensive income:

36,216

18,454

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

35,863

18,236

Foreign currency translation adjustments

(55)

(85)

Remeasurements of defined benefit plan, net of tax

408

303

Comprehensive income:

53,64930,819Comprehensive income attributable to the parent company

53,65030,809(1)

10Comprehensive income attributable to non-controlling interests

15

Fukoku Mutual Life Insurance Company

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

II. Notes to the Consolidated Balance Sheets
1. As the proposal for appropriation of unappropriated surplus for the fiscal year ended March 31, 2018 was approvedby the Board of Representative Member of Policyholders on July 3, 2018, it is included in the consolidated balance
sheet as of June 30, 2018.
2. The amount of securities lent under lending agreements was ¥258,166 million as of June 30, 2018.
3. Changes in reserve for dividends to policyholders for the three months ended June 30, 2018 were as follows:(Millions of yen)

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

¥ 53,395

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

38,630

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

(11,149)

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

3

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

¥ 80,880

4. Changes in reserve for dividends to policyholders (Fukokushinrai Life Insurance Co., Ltd.) for the three months
ended June 30, 2018 were as follows:(Millions of yen)

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

¥ 539

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

(202)

Increase in interest…………..

0

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

94

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

¥ 430

III. Notes to the Consolidated Statements of Operations
1. For the three months ended June 30, 2018, the total amount of depreciation, including depreciation of real estate forrent, was ¥4,016 million and the amount of amortization of goodwill was ¥9 million.

16

Fukoku Mutual Life Insurance Company

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

As ofMarch 31, 2018

As ofJune 30, 2018

1,556,422

1,588,191

Foundation funds and surplus

223,166

225,922

Reserve for price fluctuation

105,521

106,473

Contingency reserve

189,211

189,416

－

－

1,502

1,470

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

429,908

452,670

Net unrealized gains on real estate × 85%

122,692

123,681

Sum of unrecognized actuarial differences and unrecognized prior service cost

(8,410)(7,989)

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

255,285

257,749

Qualifying subordinated debt

191,935

191,935

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

Deductible items－－

45,60946,861

276,097289,217

Total solvency margin(A)

Catastrophe loss reserve
General allowance for possible loan losses

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

(B)

Insurance risk

R1

23,756

23,680General insurance risk

R5

－

－

Catastrophe risk

R6

－

－

3rd sector insurance risk

R8

9,798

9,810

Small amount and short-term insurance risk

R9

－

－

Assumed investment yield risk

R232,54232,375

Minimum guarantee risk

R7

－

－

Investment risk

R3

235,431248,563

Business risk

R4

6,030

6,288

1,127.4%

1,098.2%

Solvency margin ratio
(A)
× 100
(1/2) × (B)Notes: 1. Figures as of March 31, 2018, are calculated based on the provisions of Articles 86-2 and 88 of the Enforcement Regulation of
the Insurance Business Act and Financial Service Agency Notification No. 23, 2011. Figures as of June 30, 2018, are calculated
in accordance with these provisions.
Notes: 2. "Minimum guarantee risk" is calculated by standard method.

17

Fukoku Mutual Life Insurance Company