Presentation Material

Consolidated Financial Results
for the Three Months Ended June 30
30, 2015
and
S
Sony
Lif ’
Life’sMarket Consistent Embedded Valueas off J
June 30
30, 2012015

Sony Financial Holdings Inc.
A
Augustt7
7, 2015
Sony Financial Holdings Inc. All Rights Reserved

Content
 Consolidated Operating Results for the Three Months Ended June 30, 2015

(FY15.1Q)

P.3

 Consolidated Financial Forecast for the Year Ending March 31
31, 2016 (FY15)

P 28
P.28

 Sony Life’s MCEV and Risk Amount Based on Economic Valueas of June 30, 2015

P.30

 Appendix

P.33

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

Sony Financial Holdings Inc. All Rights Reserved2Consolidated Operatingpg Results for
the Three Months Ended June 30, 2015(
(FY15.1Q))

Sony Financial Holdings Inc. All Rights Reserved

3

Highlights of Consolidated Operating Performancefor FY15.1Q (1)Consolidated ordinary revenues

FY14.1Q

FY15.1Q

Ordinary revenues

270.5

323.9

+53.3

+19.7%

Ordinary profit

17.4

14.9

(2.5)

(14.7%)

Non-life
Insurancebusiness

Ordinary revenues

24.1

24.7

+0.6

+2.7%

Ordinary profit

2.7

2.1

(0.5)

(21.7%)

Bankingbusiness

Ordinary revenues

9.3

9.3

+0.0

+0.4%

Ordinary profit

1.7

1.8

+0.1

+7.2%

Intersegment
adjustments*
adjustments

Ordinary revenues

(0.7)

(0.7)

(0.0)

―

00
0.0

00
0.0

+0.0
00

+2.7%
2 7%

Ordinary revenues

303.2

357.3

+54.0

+17.8%

Ordinary profit

21.9

18.9

(3.0)

(13.8%)

Profit attributableto owners of theparent

14.5

12.8

(1.7)

(11.9%)(Billions of yen)

Consolidated ordinary profit
Life
I
Insurancebusiness

357.3
303.2

+17.8%(13.8%)

18.9

21.9

FY14.1Q

Consolidated

FY15.1Q(Billions of yen)O diOrdinary
profitfit

Change*Ordinary profit in “Intersegment adjustments” is mainly from SFH.
*Comprehensive income : FY14.1Q: ¥22.6 billion, FY15.1Q: ¥5.4 billion

Change from
15.3.3115.3.3115.6.30

Net assets

550.6

538.6

(11.9)(2.2%)

T t l assets
Totalt

9 545 89,545.8

9 732 99,732.9+187 1+187.1

+2 0%
+2.0%

(Billions of yen)

Consolidated

Sony Financial Holdings Inc. All Rights Reserved

4Highlights of Consolidated Operating Performancefor FY15.1Q (2) Life Insurance Business: Policy amount in force increased steadily, reflecting a record-high new policy

amount for this quarter (April 1 to June 30). Ordinary revenues increased year on year due to an increase
in investment performance in the separate account, benefiting from a favorable market condition, in
addition to an increase in income from insurance premiums
premiums. Ordinary profit decreased year on year
year, duemainly to an increase in provision of policy reserves for minimum guarantees for variable life insurance
and an increase in insurance claims and other payments, whereas an increase in net gains on sales of
securities and higher interest and dividend income in the general account.
 Non-life Insurance Business: Ordinary revenues expanded year on year, owing to an increase in net

premiums written primarily for mainstay automobile insurance. Ordinary profit decreased year on year due
mainly to a rise in operating expenses despite the increase in ordinary revenues.
 Banking Business: Ordinary revenues and ordinary profit increased year on year, due mainly to higher

revenues related to foreign currency transactions and mortgage loan business.
 Consolidated ordinary revenues increased 17.8% year on year, to ¥357.3 billion, owing to increases inordinary revenues from all the businesses: life insurance, non-life insurance and banking. Consolidated
ordinaryy profitpdecreased 13.8% yyear on yyear,, to ¥18.9 billion. By
y business segment,g, ordinaryy profitpfrom
the banking business increased, whereas ordinary profit from the life insurance and the non-life insurance
businesses decreased. Profit attributable to owners of the parent was down 11.9% year on year, to ¥12.8
billion.

Sony Financial Holdings Inc. All Rights Reserved

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

Ordinary profit(Billions of yen)

FY15.1Q

270.5

323.9

+53.4

+19.7%

Income from insurance premiums

220.7

254.5

+33.8

+15.3%

Investment income

48 1
48.1

67 7
67.7

+19 5
+19.5

+40 6%+40.6%

Interest income and dividends

32.5

35.3

+2.8

+8.6%

Income from monetary trusts, net

1.3

3.1

+1.8

+138.2%

Gains on sale of securities

0.1

3.6

+3.4

-

Gains on separate accounts, net

14.0

24.7

+10.7

+76.2%

252.8

308.7

+55.9

+22.1%

Insurance claims and other payments

74.4

91.3

+16.9

+22.7%

Provision for policy reserves and others

143.4

176.7

+33.3

+23.2%

Investment expenses

1.9

4.0

+2.0

+103.8%Operating expenses

27.5

30.6

+3.0

+11.1%

Ordinary profit

17.6

15.1

(2.5)

(14.4%)Net income

11.7

10.2

((1.5))((13.1%))

15.3.3115.6.30

Securities

6,543.7

6,723.3+179.6+2.7%

Policy reserves

6,727.2

6,901.4+174.1

+2.6%

432.5

420.8

(11.7)(2.7%)

118.1

110.8

(7.2)

(6.1%)

7,301.3

7,494.5+193.2

+2.6%

793.3

829.8

+36.5

+4.6%

Ordinary revenues

323.9
270.5
+19.7%

Ordinary expenses

15.1
17.6
FY14.1Q(14.4%)

FY15.1Q(Billions of yen)

◆ Ordinary revenues increased but ordinary profit decreased
year on year.
◆ Income from insurance premiums increased year on year,
reflecting a steady increase in policy amount in force.
◆ Investment income increased due to higher gains on separate
accounts, benefiting from a favorable market condition.
◆ Ordinary profit decreased year on year, due mainly to an increasein provision of policy reserves for minimum guarantees forvariable life insurance and an increase in insurance claims andother payment, whereas an increase in net gains on salesof securities and higher interest and dividend income in thegeneral account.

ChangeFY14.1Q(Billions of yen)

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

Sony Financial Holdings Inc. All Rights Reserved

Change from 15.3.31

6

Overview of Operating Performance:
Sony Life (Non-consolidated)
FY14.1Q

FY15.1Q

Change<Reasons for changes>

1,135.8

1,324.2+16.6%

Lapse and surrender amount

449.4

495.0

+10.1%◆ Increased due to higher sales ofvariable life insurance and family
income insurance.

Lapse and surrender rate

1.15%

1.21%

+0.06pt

Policy amount in force

39,559.7

41,609.6+5.2%

Annualized premiums from new policies

18.9

22.3

+18.2%Of which,hi h thi
third-sectordt products
d t

37
3.7

39
3.9

+6 5%
+6.5%

706.5

747.6

+5.8%

168.9

174.8

+3.5%

(Billions of yen)

New policy amount

Annualized premiums from insurance in force
Of which, third-sector products◆ Increased due to higher sales ofvariable life insurance.

Notes:
1. Figures for new policy amount, lapse and surrender amount, lapse and surrender rate, policy amount in force,
annualized premiums from new policies and annualized premiums from insurance in force are calculated as
the total of individual life insurance and individual annuities.
2. The lapse and surrender rate shows the ratio derived by dividing the amount of lapses and surrenders, notadjusted for policy amount decreases, increases, and reinstatements, by the policy amount in force at the
beginning of the fiscal year

(Billions of yen)

FY14.1Q

FY15.1Q

ChangeGains from investment, net (General account)

32.1

38.9

+21.2%

Core profit

18.7

13.3

(28.9%)

Positive spread

3.0

4.1

+36.7%

Non-consolidated solvency margin ratio

15.3.3115.6.30

2,555.0%

2,579.9%◆ Decreased year on year, due to anincrease in provision of policy
reserves for minimum guarantees forvariable life insurance and an increase
in insurance claims and other payments
despite an increase in positive spread.

Change from
15.3.31+24.9pt

Sony Financial Holdings Inc. All Rights Reserved

7

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

Annualized Premiums from New Policies(Individual Life Insurance + Individual Annuities)(Individual Life Insurance + Individual Annuities)

New policy amount

Number of new policies

Annualized premiums from new policies

Of which, third-sector(Thousands ofpolicies)

200(Trillions of yen)

+14.2%
1 2%

1.5
15,000

142
1.03

176

(Billions of yen)
en)

25

154

22.3

1.32
150

1.13

+18.2%

18.9

20
0+16.6%

16.8

10,000
1.0

100

15

10
5,000
0.5

50

5

0

0
FY13.1Q

FY14.1Q

FY15.1Q

3.9

3.7

FY13.1Q

FY14.1Q

+6.5%

3.9

0

Sony Financial Holdings Inc. All Rights Reserved

FY15.1Q

8

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

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

Policy amount in force(Trillions of yen)

50

40

6.42
39.5

Annualized premiums from insurance in force

Number of policies in force

Of which, third-sector(Millions of policies)

+5.6%

+5.2%

6.67

+1.7%

6.78
7

41.6

40.9

(Billions of yen)

706.5

+5.8%
5 8%

5

747.6

735 7
735.7
+1.6%

6

+1.5%

30

800

600

4
400
3

20

2

200

+3.5%

10
1
0

0
14.6.30

15.3.3115.6.30

168.9

172.8

14.6.30

15.3.31

+1.2%
1 2%

174.8

0

Sony Financial Holdings Inc. All Rights Reserved

15.6.30

9

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

Lapse andLd surrenderd rate
t
(1Q)

(%)

10

8

6

5.35
4.61

4

2

1.21

1.15

FY13

FY14

+0.06pt

1.21

0
FY15

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

Sony Financial Holdings Inc. All Rights Reserved

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

254.5(Billions of yen)Interest Income and Dividends(Billions of yen)

40

250

221 3
221.3

220 7
220.7

35 3
35.3
+15.3%

32.5

200

30

+8.6%

28.9

150
20
100
10
50

0

0
FY13.1Q

FY14.1Q

FY15.1Q

FY13.1Q

Sony Financial Holdings Inc. All Rights Reserved

FY14.1Q

FY15.1Q

11

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

Ordinary Profit(Billions of yen)

20

18.7

(Billions of yen)

20

17.6

15.3
15

13.3

(28.9%)

15
5

15.1

14.1

(14.4%)

10
10

5

5

0

0
FY13.1Q

FY14.1Q

Positive spread
Provision of policy reserves for minimum guarantees
for variable life insurance (*1)
Effects by the revision of policy reserve discount rate
(Interest rate-sensitive whole life insurance ) (*2)

FY13.1Q

FY15.1Q(Reference) Impact on core profit(Billions of yen)

FY13.1QFY13
1Q FY14.1Q
FY14 1Q FY15.1Q
FY15 1Q
1.2
3.0
4.1
(0.9)

(2.1)

(6.6)

(5.7)

-

-

FY14.1Q

FY15.1Q(Reference) Main differences from Core Profit(Billions of yen)

FY13 1Q
FY13.1Q
Capital gains (losses) excluding gains
or losses on hedges (*1)
Gains (losses) on hedges of variableinsurance
Provision of contingency reserve (*1)

FY14 1Q
FY14.1Q

FY15 1Q
FY15.1Q

0.0

0.2

5.3

-

-

(1.9)

(1.0)

(1.2)

(1.5)

*1: “Provision of policy reserves for minimum guarantees for variable life insurance” and “Provision of contingency reserve” are described as negative amount.
Capital gains (losses) exclude gains or losses on hedges of variable life insurance.
*2: The effected amount of a surge of sales of interest rate-sensitive whole life insurance due to a delay in rising insurance premiums (May 2013) against the revision of policy reserve discount rate.

Sony Financial Holdings Inc. All Rights Reserved

12

Operating Performance :Sony Life (Non-consolidated) (6)
Number of Lifeplanner Sales Employees+124(Number)

4,500

4,216
[138]

4,228
[146]

14.3.3114.6.30

4,248[[150]]

4,216
[155]

4,352
[174]

4,329
[161]
+23

4,000

3 500
3,500

3,000
0

14.9.30

14.12.31

15.3.3115.6.30

Note: Figures in [ ] show the numbers of Lifeplanner sales employees (rehired on a fixed-term contract basis after retirement) included in the overall
numbers, those who have reached retirement age but who continue to work as Lifeplanner sales employees that meet certain sales conditions
and other requirement.

Sony Financial Holdings Inc. All Rights Reserved

13

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

15.6.30(Billions of yen)Amount%Amount%Japanese governmentand corporate bonds

5,606.8

86.2%

5,756.0

86.4%

Japanese stocks

42.4

0.7%

43.8

0.7%

Foreign bonds

105.5

1.6%

100.3

1.5%

Foreign stocks

26.0

0.4%

26.2

0.4%

Monetary trusts

313.2

4.8%

296.5

4.4%

Policy loans

162.3

2.5%

163.5

2.5%

Real estate*

117.7

1.8%

117.2

1.8%

Cash and call loans

56 8
56.8

0 9%
0.9%

58 9
58.9

0 9%
0.9%

Others

76.7

1.2%

101.8

1.5%

6 508 06,508.0

100 0%
100.0%

6 664 6
6,664.6

100 0%
100.0%Total

We have continued to accumulate ultralongterm bonds to match the liability
characteristics of insurance policies withlong term matlong-term
maturities
rities with
ith the aim of red
reducing
cing
interest rate risk.
<Bond duration>
Mar. 31, 2014: 19.7 years
Mar. 31, 2015: 20.3 years
Jun. 30, 2015: 20.1 years■ Investment in the monetary trusts is mainly into
Japanese government and corporate bonds.
■ The holding ratio on the real status of Japanese
government and corporate bonds including
those invested in monetary trusts in the generalaccount assets: As of Jun. 30, 2015: 90.9%(As of Mar. 31, 2015: 91.0%)*Real estate is the total of land, buildings, and construction in progress.

Sony Financial Holdings Inc. All Rights Reserved

14

Operating Performance :Sony Life (Non-consolidated) (8)Non-consolidated Solvency Margin Ratio

(%)

3,000

2,579.9

2,555.0
2,500

2,358.7+24.9pt

2,000

1,500

1,000
0
14.3.3115.3.3115.6.30

Sony Financial Holdings Inc. All Rights Reserved

15

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

Number and Amount of Policies in Force

Number and Amount of New Policies
New policy amount

Policy amount in force

Number of new polices [ ](Thousandsof policies)(Billions of yen)

50

40

(Thousandsof policies)(Billions of yen)

10

39.6
[[6.8]]

Number of policies in force [ ]

500

100

390.4
[63 5][63.5]

407.7[66.6]

8

400

6

300

20

4

200

40

10

2

100

20

0

0

30.5
[5.2]
30

22.3
[3 7]
[3.7]

0
FY13.1Q

FY14.1Q

FY15.1Q80

265.8[43.2]

60

014.6.30

15.3.3115.6.30

Net income (losses) for AEGON Sony Life Insurance and SA Reinsurance(Billions of yen)

FY14.1Q

FY15.1Q

ChangeAEGON Sony Life Insurance

(1.2)

(0.2)

+0.9

SA Reinsurance

0.7

(0.2)

(0.9)

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

Sony Financial Holdings Inc. All Rights Reserved

16

Highlights of Operating Performance:
Sony Assurance
Ordinary revenues

24.1

2.7

FY14.1Q

Ordinary profit+2.7%(21 7%)(21.7%)

FY14.1Q

FY15.1Q

24.1

24.7

+0.6

+2.7%

Underwriting income

23 8
23.8

24 4
24.4

+0 6
+0.6

+2 6%
+2.6%

Investment income

0.3

0.3

+0.0

+4.1%

21.4

22.6

+1.2

+5.8%

Underwriting expenses

16.0

16.5

+0.5

+3.4%

Investment expenses

0.0

0.0

+0.0

－

Operating general andadministrative expenses

5.3

6.0

+0.6

+12.8%

Ordinary profit

2.7

2.1

(0.5)

(21.7%)Net income

1.8

1.4

(0.3)

(19.9%)(Billions of yen)

24.7

Ordinary revenues

2.1

FY15.1Q(Billions of yen)

◆ Ordinary revenues increased but ordinary
profit decreased year on year.
◆ Ordinary revenues increased, due to anincrease in net premiums written primarily for
its mainstay automobile insurance.
◆ Ordinary profit decreased, due mainly to a risein operating expenses despite the increase inordinary revenues.

Ordinary expenses(Billions of yen)

15.3.3115.6.30

ChangeChange from
15.3.31

Underwriting reserves

86.5

89.7

+3.2

+3.7%

N t assets
Net
t

24 7
24.7

26 3
26.3

+1 6
+1.6

+6 5%
+6.5%

Total assets

157.9

159.9

+2.0

+1.3%

Sony Financial Holdings Inc. All Rights Reserved

17Overview of Operating Performance:
Sony Assurance(Billions of yen)

FY14.1Q

FY15.1Q

ChangeDirect premiums written

23.1

24.0

+4.2%

Net premiums written

23 4
23.4

24 3
24.3

+4 0%
+4.0%

Net losses paid

11.1

11.2

+0.9%

Underwriting profit

2.4

1.8

(24.8%)Net loss ratio

54 7%
54.7%

53.4%

(1 3pt)(1.3pt)Net expense ratio

24.4%

26.3%

+1.9ptCombined ratio

79.1%

79.6%

+0.5pt<Reasons for changes>◆ Increased mainly in its mainstay
automobile insurance.

◆ Increased due mainly to higher
advertising expenses.

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

FY14.1Q

FY15.1Q

ChangeE II. loss ratio
E.

58 0%
58.0%

58 4%
58.4%

+0 4pt+0.4ptE. I. loss ratio +Net expense ratio

82.4%

84.7%

+2.3pt◆ Rose due to a decrease inreversal of reserve for outstanding
losses despite persistently low car
accident ratio.

Notes:
Earned/Incurred (E.I.) loss ratio = (Net losses paid + Provision for reserve for outstanding losses + Loss adjustment expenses) / Earned premiums[E th[Earthquake
k insuranceiandd compulsory
lautomobilet
bil liability
li bilit iinsurance are excluded
l d d ffrom th
the aboveb
calculation.]l l ti ]Number of policies in force
Non-consolidated
Nonconsolidated
solvency margin ratio

15.3.3115.6.30

1.70 million

1.72 million

629.6%

655.1%

Change from 15.3.31+0.02 million+1.6%+25.5pt

Note: The number of policies in force is the total of automobile insurance and medical and cancer insurance, which accounts for 99% of net premiums written.

Sony Financial Holdings Inc. All Rights Reserved18Sony Assurance’s Underwriting Performanceby Type of Policy
Direct Premiums Written

Net Premiums Written

FY14.1Q

FY15.1Q

Change

Fire

62

89

+42.4%

Marine－－－Personal accident

2,134

2,156

+1.0%

Voluntary automobile

20,92021,840

+4.4%

－

－

－

23 117
23,11724,086

+4 2%
+4.2%

(Millions of yen)Compulsory
automobile liability
Total

FY14.1Q

FY15.1Q

Change

Fire

8

13

+51.3%

Marine50

11(78.0%)

Personal accident

2,218

2,245

+1.2%

Voluntary automobile

20,86821,793+4.4%

Compulsory
automobile liability

289

311

+7.6%

23,434

24,375+4.0%
4.0%(Millions of yen)

Total

*Medical and cancer insurance is included in personal accident.

Net losses paid
FY14.1Q

FY15.1Q

ChangeFire1

0(92.7%)

Marine4712(74.6%)

Personal accident

541
1

593
93

+9.7%
9 %

Voluntary automobile

10,28810,359+0.7%

Compulsory
automobile liability

291

303

+4.0%

11,17011,268+0.9%(Milli(Millions
off yen))

Total

Sony Financial Holdings Inc. All Rights Reserved

19

Operating Performance:
Sony Assurance (1)Ordinary Profit andAdjusted Ordinary Profit

Net Premiums Written andNumber of Policies in Force

Voluntary automobile insurance
Personal accident insurance
Ordinaryy p
profitOthersNumber of policies in force(Millions of policies) (Billions of yen)(Billions of yen)
4

30

1.56
22.7

1.63

+5.7%

Adjustedjordinary
yp
profit1.72

3.4
24.3 0.3

23.4
+4.0%

1.5

2.2

3

2.8

2.7
(21.7%)

20

21.7

1

21
2.1
2

1.7
1.3

10

0
FY13.1Q

FY14.1Q

FY15.1Q

The number of policies in force is the total of automobile insurance and medical
and cancer insurance policies, which account for 99% of net premiums written.
More than 90% of personal accident insurance is medical and cancer insurance.

0.5

1

0

0
FY13.1Q

FY14.1Q

FY15.1Q*Adjusted ordinary profit = Ordinary profit + Provision for catastrophe reserve(Reference) Provision for catastrophe reserve
FY13.1Q
Provision for catastrophe reserve(Billions of yen)

FY14.1Q

+0.4

+0.7

FY15.1Q+0.7*Provision for catastrophe reserve is described as positive amountSony Financial Holdings Inc. All Rights Reserved

20

Operating Performance:
Sony Assurance (2)Earned/Incurred Loss Ratio +Net Expense Ratio
E
Earned/Incurredd/Id loss
l
ratio
ti
(%)
100

93.8

91.0

(Reference) Combined Ratio(Net Loss Ratio+ Net Expense Ratio)
N t loss
Net
l
ratio
ti

N t expense ratioNetti

N t expense ratio
Net
ti

(%)
100

89.0

84 7
84.7

82.4
80

84.9

84.3

82.0

80

+2.3pt79.6

79.1+0.5pt

60

68.2

64.3

65.2

58.4

58.0

59.3

+0.4pt

57.6

58.2

54.7

53.4
(1.3pt)

40

40

20

60

25.6

26.7

20

+1.9pt

23.8

24.4

26.3

FY13.1Q

FY14.1Q

FY15.1Q

25.6+1.9pt

26.7
23.8

24.4

26.3

FY13.1Q

FY14.1Q

FY15.1Q

0

0
FY13

FY14

Notes:
Earned/Inc rred loss ratio = (Net losses paid + Provision
Earned/Incurred
Pro ision for reserve
reser e for outstandingo tstanding
losses + Loss adjustment expenses) / Earned premiums[Earthquake insurance and compulsory automobile liability insurance are excluded
from the above calculation.]

FY13

FY14

Notes:Net loss ratio = (Net losses paid + Loss adjustment expenses ) / Net premiums written
Net expense ratio = Expenses related to underwriting / Net premiums writtenSony Financial Holdings Inc. All Rights Reserved

21

Operating Performance:
Sony Assurance (3)Non-consolidated Solvency Margin Ratio

(%)

800

655.1%

629.6%
600

527.6%+25.5pt

400

200

0
14.3.3115.3.3115.6.30

Sony Financial Holdings Inc. All Rights Reserved

22Highlights of Operating Performance:
Sony Bank (Consolidated/Non-consolidated)
Consolidated ordinary revenues
Consolidated ordinary profit

9.3<Consolidated>
FY14.1Q

FY15.1Q

Consolidated ordinary revenues

9.3

9.3

+0.0

+0.4%

Consolidated ordinary profit

17
1.7

18
1.8

+0 1
+0.1

+7 3%
+7.3%

Profit attributable to owners of theparent

1.1

1.2

+0.1

+12.6%

FY14.1Q

FY15.1Q

Ordinary revenues

8.6

8.6

+0.0

+0.0%

Gross operating profit

5.2

5.3

+0.0

+1.6%

Net interest income

4.1

3.9

(0.1)

(3.8%)Net fees and commissions

(0.2)

0.0

+0.2

―

Net other operating income

1.3

1.3

+0.0

+0.9%

General and administrative expenses

3.7

3.5

(0.1)

(4.6%)Net operating profit

1.5

1.8

+0.2
0.2

+16.1%
16.1%

Ordinary profit

1.7

1.8

+0.1

+8.9%

Net income

1.1

1.2

+0.1

+13.4%(Billions of yen)

9.3
+0.4%
0.4%

Change<Non-consolidated>(Billions of yen)

1.8
1.7
FY14.1Q+7.3%

FY15.1Q(Billions of yen)<Consolidated>◆Ordinary revenues and ordinary profit increased year on year,
due to higher revenues related to foreign currencytransactions and mortgage loan business.
<Non-consolidated>◆Both gross operating profit and net operating profit increased
year on year.
・Net interest income decreased, due to lower interest income
and dividends on securities.
securities
・Net fees and commissions increased, due to higher fees on
mortgage loans.
・Net other operating income increased, due to higher gains on
foreign exchange transactions stemming from customers’ active
foreign currency trading whereas gains on the bond-dealingtransaction was recorded in the same period of the previous
fiscal year.

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

Sony Financial Holdings Inc. All Rights Reserved

15.3.3115.6.30

ChangeChange from 15.3.31

77.0

77.8

+0.7

+1.0%

6.6

5.9

(0.6)

(9.7%)

2,062.5

2,055.6(6.8)(0.3%)

23

Overview of Operating Performance:
Sony Bank (Non-consolidated) (1)<Reasons for changes>
14.6.30

15.3.3115.6.30

Change from
15.3.31

Customer assets

1,950.0

2,007.9

2,001.1(6.7)(0.3%)

Deposits

1,829.7

1,878.2

1,872.2(6.0)(0.3%)

Yen

1 462 81,462.8

1 551 01,551.0

1,558.9

+7
7.8
8

+0
0.5%
5%

366.9

327.2

313.3

(13.9)(4.3%)

Investment trusts

120.2

129.6

128.9

(0.7)

(0.6%)L
Loans
outstandingt t di

1 071 6
1,071.6

1 187 1
1,187.1

1 226 01,226.0

+38 8
+38.8

+3 3%
+3.3%

Mortgage loans

962.7

1,074.3

1,111.2

+36.8

+3.4%

Others

108.9

112.8

114.7*1

+1.9

+1.8%

11.68%

10.66%

10.56%(Billions of yen)

Foreign currency

Capital adequacy ratio *2(domestic criteria)◆ Yen deposit balance remained at
the same level
level, reflecting severeinterest rate competitions despite anincrease due to a conversion fromforeign currencies to yen.
◆ Yen-denominated balance of foreign
currency deposit decreased due to aconversion and a transfer into yen
deposit led by yen depreciation.
◆ Loan balance expanded reflecting
a growing balance of mortgage loans.

(0.10pt)*1 Loans in others include corporate loans of ¥109.7 billion*2 Please refer to the graph of the nonnon-consolidated
consolidated capital adeq
adequacy
ac ratio (domestic criteria) on P27

Sony Financial Holdings Inc. All Rights Reserved

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

FY14.1Q

FY15.1Q

52
5.2

53
5.3

+0 0
+0.0

+1 6%
+1.6%

4.4

4.5

+0.0

+1.0%

(0.0)

0.2

+0.3

―

0.8

0.5

((0.3))((37.0%))Gross operating profit (core profit)(A)＝①＋②

4.4

4.8

+0.4

+9.2%

Operating expenses and otherexpenses
③

3.6

3.5

(0.0)

(1.5%)Net operating profit (core profit)＝(A)－③

0.7

1.2

+0.4

+57.6%(Billions of yen)

Gross operating profit
Net interest income*1①

Net fees and commissions*2g income
Net other operating②*3

Change■Managerial accounting basisg adjustmentsjare made to the figuresgon a financial account for p
profits and
The following

Yield on investment

Yield on financing

Interest spread
(%)

1.5

1.18
1

0.91

1.17
(0.02pt)

0.89

0.5

losses more appropriately.

0.27

0.27

FY14 1Q
FY14.1Q

FY15 1Q
FY15.1Q*1: Net interest income: Includes profits and losses associated with fund investment recorded in
net other operating income, including gains or losses from currency swap transactions.
*2: Net fees and commissions: Includes profits and losses for customer dealings in foreign
currency transactions recorded in net other operating income.

0*3: Net other operating income: After the above adjustments (*1 and *2), mainly consists ofprofits and losses for bond and derivative dealing transactions.
■Core profit

Note: Interest spread=(Yield on investment)-(Yield on financing)

Profits and losses exclude net other operating income, which includes those on bond andderivative dealing transactions, and stands for Sony Bank’s basic profits.

Sony Financial Holdings Inc. All Rights Reserved

25

Operating Performance:
Sony Bank (Non-consolidated) (1)Loans

Deposits
Yen depositspForeigng currency
y depositspMortgageg g loans

Others(Billions of yen)

1,500(Billions of yen)

2,000

1,890.0

1,872.2

1,878.2
(6.0)

363.5

327.2

313.3

1,500

1,226.0

1,187.1
1,057.4
1 000
1,000

112.8

+38.8

114.7

*corporate loansof ¥109.7 billion

108 1
108.1

1,111.2

1,000

1,526.4

1,551.0

1,558.9949.3

1,074.3

14.3.3115.3.31

500
500

0

0
14.3.3115.3.3115.6.30

Sony Financial Holdings Inc. All Rights Reserved

15.6.30

26

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

Balance of Securities by Credit Rating
AAA
BBB

AA
A
Others(Domestic Criteria)(%)

15(Billions of yen)

1,000

11 72
11.72
800

773.8

10.66
730.0

711.9

(0.10pt)

10.56

10

(18 0)(18.0)

600

5
400

200
0
14.3.31013.3.3114.3.3115.6.30

15.3.3115.6.30*Calculated based on the standard FSA Notification No. 19 (2006), which establishes
standards based on Article 14-2 of the Banking Act of Japan for determining thecapital adequacy of a bank in light of the assets held by the bank.
Sony bank calculates this ratio based on Basel III from March 31, 2014.

Sony Financial Holdings Inc. All Rights Reserved27

Consolidated Financial Forecast
for the Year Ending March 31, 2016
(FY15)

Sony Financial Holdings Inc. All Rights Reserved28

Consolidated Financial Forecast for FY15
Consolidated Financial Forecast for FY15 is unchanged from the forecast announced on April 30, 2015
(Billions of yen)

FY14
(Actual)FY15(Forecast)

ChangeFY15.1Q(3M) Actual

Progress rate

1,352.3

1,300.0(3.9%)

357.3

27.5%

1,223.9

1,168.0(4.6%)

323.9

27.7%

Non-life insurance business

93.0

97.1

+4.4%

24.7

25.5%

Banking business

38.4

36.8

(4.2%)

9.3

25.4%

Consolidated ordinary profit

90.0

85.0

((5.6%))

18.9

22.3%

Life insurance business

78.3

74.1

(5.4%)

14.9

20.1%

Non-life insurance business

4.2

4.4

+4.5%

2.1

48.2%

Banking business

7.3

6.4

(12.7%)

1.8

29.1%

54.4

57.0

+4.7%

12 8
12.8

22 5%
22.5%

Consolidated ordinary revenues
Life insurance businessProfit attributable to owners of the parent<Segment information for ordinary revenues and ordinary profit>■Life insurance business
In FY15.1Q, ordinary revenues was higher than initially expected due to an increase in income from insurance premiums and higher gains investment
income in the separate accounts
accounts. However
However, ordinary profit was lower than initially expected
expected, due mainly to an increase in provision of policy reserves forminimum guarantees for variable life insurance. We remain unchanged our forecast for FY15 taking into account the potential impact of sales trends ofvariable life insurance and market price fluctuations from FY15.2Q onward.
■Non-life insurance business
In FY15.1Q, the loss ratio improved more than initially expected, but we remain unchanged our forecast for FY15 because we expect a rise in operating
expenses and a higher loss ratio associated with natural disasters and other factors from FY15.2Q onward.
■Banking business
In FY15.1Q, ordinary revenues and ordinary profit was higher than initially expected due to higher revenues related to foreign currency transactions andmortgage loan business. We remain unchanged our forecast for FY15 taking into account the business trends and market environment from FY15.2Q
onward.

Sony Financial Holdings Inc. All Rights Reserved29Sony Life’s MCEV and
Risk Amount Based on Economic Valueas of June 30, 2015

Please keep in mind that the validity of these calculations of MCEV as of June 30
30, 2015
2015, has not been verified by outside specialists.
specialists
A part of the calculations of MCEV as of June 30, 2015, adopted simplified method.

Sony Financial Holdings Inc. All Rights Reserved30Sony Life’s MCEV as of June 30, 2015
(Billions of yen)

MCEV
Adjusted net worth
Value of existing business(Billions of yen)

New business value

New business margin15.3.3115.6.30

Change from
15.3.31

1 322 91,322.9

1 388 8
1,388.8

+66 0
+66.0

1,119.2

1,017.1(102.1)

203.7

371.8

+168.1

15.3.3115.6.30

48.6 (12M)

12.5 (3M)

3.8%

3.2%

Notes:
1. New business margin equals new business value divided by present value of premium income.
2. In calculating MCEV as of June 30, 2015, Sony Life updated economic assumptions and lapse and surrender rates from March 31, 2015.

 Reasons for changes in MCEV
・MCEV as of June 30, 2015 increased ¥66.0 billion from March 31, 2015, due mainly to a rise in interest rates and an
acquisition of new policies.
 New business value and new business margin
・New business value as of June 30, 2015 (3M) was ¥12.5 billion. (¥50.0 billion / annualized)
・New business margin as of June 30, 2015 (3M) was down 0.6pt from March 31, 2015 (12M), due mainly to a change of productmix despite higher interest rates.

*Please see page 42 for trend on JGB yields.

Sony Financial Holdings Inc. All Rights Reserved31Sony Life’s Risk Amount Based on Economic Valueas of June 30, 2015
(Billions of yen)

15.3.3115.6.30

Insurance risk

724.2

732.8

Market-related risk

287.0

300.0

Of which, interest rate risk*

218.5

227.7

Operational risk

25 9
25.9

26 3
26.3

Counter party risk

1.8

2.1

(293.4)(299.9)

745.5

761.2

Variance effect
The risk amount based on economic value(*) Interest amount excluding the variance effect within market-related risk.
(Billions of yen)

15.3.3115.6.30

MCEV

1,322.9

1,388.8

ESR

177%

182%

Notes:
1. The risk amount based on economic value refers to the total amount of Sony Life’s risks, comprehensively examined and including insurance risk andmarket-related risk.
2. The solvency risk capital on an economic value basis is calibrated at VaR (99.5) over one year and based on the internal model, which is a similar but
modified model based on the EU Solvency II (QIS5) standard method.
3. ESR=MCEV/ Risk amount based on economic value.

 Maintained financial soundness by controlling market-related risk.
Sony Financial Holdings Inc. All Rights Reserved

32

Appendix

Sony Financial Holdings Inc. All Rights Reserved33

Recent Topics 1
AEGON Sony Life Insurance
Launch of sales: December 1, 2009
Common stock: ¥26 billion (including capital surplus of ¥13 billion)
Equityy ownership: Sonyy Life insurance Co Ltd 50%, AEGON international B V 50%
Marketing products: Individual Variable Annuities
Sales Channels: Lifeplanner sales employees and partner Banks (22*) *As of Aug. 7, 2015

SA Reinsurance Ltd
Established： October 29
29, 2009
Common stock: ¥11 billion
Equity ownership: Sony Life insurance Co., Ltd. 50%, AEGON international B.V. 50%
Business： Reinsurance business*AEGONAEGON Sony Life Insurance and SA Reinsurance are equity method companies, 50
50-50
50 joint ventures established by Sony Life and AEGON Group.

Sony Bank’s Mortgage Loans through Sony Life
■Sonyy Life accounts for 22% of the balance of mortgage
g g loans as of Jun. 30, 2015
Sony Life accounts for 16% of the amount of new mortgage loans for FY15.1Q*Sony Life started handling banking agency business in January 2008.

S
Sony
Assurance’s
A
’ A
Auto
t Insurance
I
Sold
S ld bby S
Sony Lif
Life■Sony Life accounts for approx. 4% of new automobile policies for FY15.1Q*Sony Life started handling automobile insurance in May 2001.

Sony Financial Holdings Inc. All Rights Reserved34

Recent Topics 2<Highlights for FY2015.1Q>
2015-04-01 Sony Life changed its President, Representative Director
2015-04-01 Sony Life opened its new sales office in Fukui prefecture
2015-04-01 SmartLink Network, Sony Bank’s subsidiary, changed its corporate name to Sony Payment Services Inc.
2015-04-30 Sony Lifecare entered into an agreement to enter capital participation with Yuuai Holdings Co., Ltd.
2015-05-02 Sony Life commenced sale of a new product: “Lump-sum Payment Whole Life Insurance (No-notification Type) “
2015-06-01 Sony Bank began offering “Yen Time Deposits plus+ ”
2015-06-24 Sony Bank changed its President, Representative Director
2015-07-01 Sony Assurance commenced operations at “Kumamoto Contact Center”
2015-07-13 Sony Bank began handling a new type of card loans

Sony Financial Holdings Inc. All Rights Reserved35Sony Life: Fair Value Information on Securities(General Account Assets)
Fair Value Information on Securities
Fair Value Information on Securities with market value (except trading-purpose securities)(Billions of yen)

Notes:
1. The above table includes monetary trusts other than trading-purpose securities.
2. Derivative financial products such as principal protected 30 year notes with Nikkei 225 index-linked coupons are included in the “Held-to-maturity-securities” above.
Principal protected 30 year notes with Nikkei 225 index-linked coupons
As of March 31, 2014; Carrying amount: ¥43.8 billion, Fair market value: ¥56.0 billion, Net unrealized gain (losses): ¥12.2 billion
As of March 31, 2015; Carrying amount: ¥44.2 billion, Fair market value: ¥57.5 billion, Net unrealized gain (losses): ¥13.2 billion
As of June 30,, 2015 ; Carrying
y g amount: ¥36.4 billion,, Fair market value: ¥45.5 billion,, Net unrealized gaing((losses):) ¥9.1 billion

Valuation gains (losses) on trading-purpose securities(Billions of yen)

Note: The above chart includes trading-purpose securities included in “monetary trusts,” etc.

Sony Financial Holdings Inc. All Rights Reserved36Sony Life’s Interest Income and Dividends (Details)(Millions of yen)

FY14.1Q

ChangeFY15.1Q

Cash and deposits
Japanese governmentand corporate bonds
Japanese stocks

00+212.6%

26,17327,811

+6.3%

63

79

+24.2%

Foreign securities

2,230

2,334

+4.7%

Other securities

56

1,036

―

Loans

1 457
1,457

1 512
1,512

+3 8%
+3.8%

Real estate

2,570

2,570

+0.0%

5

18

+215.3%32,55735,363+8.6%

Others
Total

Sony Financial Holdings Inc. All Rights Reserved37Sony Life’s Quarterly Trend on New Policy Amount
Quarterly Trend on New Policy Amount(Billions of yen)

1,491.6

1,500

1 324 2
1,324.2
1,250

1,152.5

1,135.8

1,128.3
1,033.3

991.5

1,000

886.2

841.4
750

500

250

0
FY13 1Q
FY13.1Q

FY13 2Q
FY13.2Q

FY13 3Q
FY13.3Q

FY13 4Q
FY13.4Q

FY14 1Q
FY14.1Q

FY14 2Q
FY14.2Q

Sony Financial Holdings Inc. All Rights Reserved

FY14 3Q
FY14.3Q

FY14 4Q
FY14.4Q

FY15 1Q
FY15.1Q

38

Sony Life’s Quarterly Trend on
Annualized Premiums from New Policies
Quarterly Trend on Annualized Premiums from New Policies
Annualized premiums from new policies

Of which, third-sector(Billions of yen)

25

22.3

21.8
20

18.9

18.5

18.5
17.2

16 8
16.8
15.2
15

13.2

10

5

3.9

5.1
3.0

3.6

2.9

FY13.3Q

FY13.4Q

3.7

2.8

3.5

3.9

FY14.4Q

FY15.1Q

0
FY13.1Q

FY13.2Q

FY14.1Q

FY14.2Q

Sony Financial Holdings Inc. All Rights Reserved

FY14.3Q

39

Method of Measuring Risk Amount
Based on Economic Value (1) Market-related Risk*1

Interest rate risk
Fluctuations in net asset
value based on economic
value in response to theshocks in the right columns.
The same applies below.

Sony Life(Reference) EU Solvency II (QIS5)

Percentage increases or decreases differ for eachcurrency and term
term.
As for measuring interest rate risk in Japanese yen,introduced principal component analysis, where yield
curve changes are disaggregated into threecomponents, parallel shift, twist and butterfly, and theyield curve is shocked by each component
component.

Percentage increases or decreases differ for eachcurrency and term but no lower than 1%(Example)
For Yen 30-year, 30% decrease(Example)
For Yen 30-year, 33% decrease (parallel shift),
28% decrease (twist), 8% decrease (butterfly)

Equity risk

Listed equities 45%, Other securities 70%

Global 30%, Others 40%*2

Real estate risk

Actual real estate 25%

Real estate 25%

Credit risk = (market value) x (risk coefficient for eachcredit rating) x duration

Credit risk

Note that durations have caps and floors, depending
on credit ratings.

Same as on the left

(Example)
Rating A: Risk coefficient (1.4%), cap (23), floor (1)Currency risk

30% downside fluctuation

25% downside fluctuation

Notes
1. Principal
p items as of June 30, 2015.
2. Standard risk coefficients are global: 39%/other: 49%. Symmetric adjustment (an adjustment of±10% of the average value of the stock price index during a defined period in
the past) is applied; as of the QIS5 trial introduction (Dec.31, 2009), these were 30%/40%.

Sony Financial Holdings Inc. All Rights Reserved

40

Method of Measuring Risk Amount
Based on Economic Value (2) Insurance Risk*1

Sony Life(Reference) EU Solvency II (QIS5)

Mortalityy risk

Mortalityy rate increases by
y 15% for each yyear elapsedpSame as on the leftLongevity risk

Mortality rate decreases by 20% for each year
elapsedSame as on the left

Lapse risk

The largest amount of these; *2

The largest amount of these;•Lapse rate increases by 50% for each year elapsed• Increases by 50% in the assumed rates of• Lapse rate decreases by 50% for each year elapsed

lapsation for Life module, 20% for Health module• 30% of policies on which surrender value is in•Decreases by 50% in the assumed rates ofexcess of best estimate liability are immediately
surrendered• 30% of policies (70% for group annuities, etc.) on

lapsation for Life module, 20% for Health module
which surrender value is in excess of best
estimate liability are immediately surrendered

Expense risk

Disability risk

Operating expenses increase by 10% for each year
elapsedRate of inflation rises by 1%

Same as on the left

Rate of occurrence increases by 35% in the first fiscal Rate of occurrence increases by 35% in the firstyear, risingi ibby 25% forf eachh year thereafterthftfi
fiscall year, rising
i i bby 25% forf eachh year thereafter.
thft
Recovery rate decreases by 20%.

Notes
1. Principal items as of June 30, 2015.
2. At Sony Life, the largest amount of three options for each insurance policy

Sony Financial Holdings Inc. All Rights Reserved

41

JGB Yields

As of the end of each monthSony Financial Holdings Inc. All Rights Reserved

42

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

Sony Financial Holdings Inc. All Rights Reserved

43