Presentation Materials

Management Vision of the Sony Financial
Holdings Group for Fiscal 2008

Sony Financial Holdings Inc.
May 26, 2008

May 26, 2008

Sony Financial Holdings Inc. All Rights Reserved

Disclaimers:
These presentation materials contain statements concerning the current plans, expectations, strategies and beliefs of the SonyFinancial Holdings Group (the “SFH Group”). Any statements contained herein that pertain to future operating performance andthat are not historic facts are forward-looking statements. Forward-looking statements may include—but are not limited to—words such as “believe,” “anticipate,” “plan,” “strategy,” “expect,” “forecast,” “predict,” “possibility” and similar words that describe
future operating activities, business performance, events or conditions. Forward-looking statements, whether spoken or written,
are based on judgments made by the management of the SFH Group, based on information that is currently available to it. As
such, these forward-looking statements are subject to various risks and uncertainties, and actual business results may vary
substantially from the forecasts expressed or implied in forward-looking statements. Consequently, investors are cautioned not toplace undue reliance on forward-looking statements. The SFH Group disclaims any obligation to revise forward-looking
statements in light of new information, future events or other findings. The information contained in this presentation does notconstitute or form part of any offer for sale or subscription of or solicitation or invitation of any offer to buy or subscribe for 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.
May 26, 2008

Sony Financial Holdings Inc. All Rights Reserved

1Today’s Agenda (From 3:00p.m. to 5:00p.m.) The Consolidated Financial Results of the Sony Financial Holdings Groupfor FY2007
Hiromichi Fujikata
Holdings Inc.

Executive Vice President and Representative Director of Sony Financial

 Management Vision for FY2008
Teruhisa Tokunaka President and Representative Director of Sony Financial Holdings Inc.
Taro Okuda

President of Sony Life Insurance Co., Ltd.

Shinichi Yamamoto President of Sony Assurance Inc.
Shigeru Ishii

President and CEO of Sony Bank Inc.

 Question and Answer

May 26, 2008

Sony Financial Holdings Inc. All Rights Reserved2Explanation of Consolidated Financial Resultsfor FY2007

May 26, 2008

Sony Financial Holdings Inc. All Rights Reserved

3

Highlights of Group Consolidated Operating
Performance for FY2007
FY2006+8%822.1

Change(Billions of yen)

759.2
Life insurance
business

44.5

Non-life
insurancebusiness

18.3

FY2007+143%

Bankingbusiness(Billionsof yenCorporate andeliminations

SFH Group,
consolidated

Ordinary
revenues
Ordinary
profitOrdinary
revenues
Ordinary
profitOrdinary
revenues
Ordinary
profitOrdinary
revenues
Ordinary
profitOrdinary
revenues
Ordinary
profit

689.8

741.3

+51.4

+8%

14.8

39.0

+24.1

+163%

51.0

55.6

+4.6

+9%

2.0

2.8

+0.7

+38%

19.4

25.9

+6.5

+33%

1.3

2.4

+1.0

+77%

(1.0)

(0.8)

+0.2

(25)%

0.0

0.2

+0.1

+203%

759.2

822.1

+62.8

+8%

18.3

44.5

+26.1

+143%

Line item amounts are truncated below ¥100 million; percentage change figures are rounded.

May 26, 2008

Sony Financial Holdings Inc. All Rights Reserved

4Highlights of Group Consolidated Operating
Performance for FY2007
 In the life insurance business, both the policy amount in force and new insurance sales(individual life insurance + individual annuities) remained firm, and general accountinvestment income increased. As a result, ordinary revenues and ordinary profit bothincreased.

 In the non-life insurance business, a steady rise in the number of policies, chiefly for

automobile insurance, boosted net premiums written. The net loss and expense ratios
both improved, pushing up both ordinary revenues and ordinary profit.

 In the banking business, owing to the steady expansion of operations, interest income

increased in line with expanded operations, and ordinary revenues and ordinary profit
both increased.

 Consolidated ordinary revenues grew 8% compared with the prior fiscal year, to ¥822.1

billion. Despite a ¥9.8 billion valuation loss on securities (amount of impairment loss),
ordinary profit increased ¥26.2 billion, or 143%, to ¥44.5 billion. Net income grew ¥14.2
billion, or 142%, to ¥24.2 billion.

 Owing to a downturn in the domestic stock markets, net unrealized gains on othersecurities, net of taxes, were ¥74.9 billion on March 31, 2008, down ¥50.1 billion fromMarch 31, 2007. Consolidated net assets consequently amounted to ¥261.6 billion, down
¥8.5 billion from March 31, 2007. As of March 31, 2008, consolidated total assets
amounted to ¥4,977.4 billion, up ¥653.6 billion from March 31, 2007.

May 26, 2008

Sony Financial Holdings Inc. All Rights Reserved

5Highlights of Operating Performance:
Sony Life (Non-Consolidated)(Billions of yen)

689.5

+7%

741.2

14.8

689.5

741.2

Change
+51.6
+7%

605.5

648.4

+42.8

+7%

Investment income

78.7

87.4

+8.7

+11%

Of which, interest and dividend income
Of which, income from money trusts
Of which, gain on sales of securities
owned
Of which, investment income on assets
held in separate accounts

34.2
12.1
11.8
14.9

47.9
14.7
24.0
－

+13.6
+2.6
+12.1
(14.9)

+40%
+21%
+102%
－

674.6

701.9

+27.2

+4%

Insurance claims and otherpayments

219.3

241.1

+21.7

+10%

Provision for policy reserveand others

349.6

286.2

(63.4)

(18)%

8.1

69.8

+61.7

+754%

—

48.3

+48.3

—

87.3
14.8
7.4
24.3

94.3
39.2
18.5
23.5

+7.0
+24.3
+11.0
(0.7)

+8%
+164%
+147%
(3)%

Securities

2,217.9

2,388.9+171.0+8%

Policy reserve

3,088.8

3,375.0+286.2+9%

Total net assets
Total assets

216.5
3,445.9

182.6
3,659.7(33.8)+213.8(16)%+6%

Ordinary revenues
Income from insurance
premiums

39.2

Ordinary expenses+164%(Billions of yen)

Investment expenses
Of which, separate account asset
investment expenses

Sony Life

Revenues and profit up compared with FY2006
New insurance sales up 10.9% compared with FY2006
Income from insurance premiums increased, in line with robust
growth in policy amount in force
General account investment income rose
Investment expenses increased, owing to investment losses on
assets held in separate accounts, valuation loss on securities andexpenses on financial derivatives
Net assets fell ¥33.8 billion in FY2007, to ¥182.6 billion, owing toa ¥45.9 billion decline in net unrealized gains on other securities
The lapse and surrender rate increased 0.33 percentage pointcompared with FY2006, to 6.12%

FY2006 FY2007

Operating expenses

Ordinary profit
Net income
Core profit

Line item amounts are truncated below ¥100 million; percentage change figures are rounded.

Note: Each figure of policy amount in force, lapse and surrender rate, new insurance sales from new policies is calculated as the total of individual life
insurance and individual annuities. The lapse and surrender rate is calculated without offsetting policies that are reinstated.
May 26, 2008

Sony Financial Holdings Inc. All Rights Reserved

6Overview of Performance:
Sony Life (Non-Consolidated)(Billions of yen)

FY2006PercentagechangeFY200730,244.4

31,497.3+ 4.1%

504.6

530.0

+ 5.0%

117.4

122.8

+ 4.6%

Annualized premiums from new insurance sales*1

5.79%
3,429.4
65.5

6.12%
3,802.5
63.4+ 0.33pt+ 10.9%(3.2) %Of which, third-sector products

14.4

13.3

(7.7)%

Core profit

605.5
70.5
24.3

648.4
17.5
23.5

+ 7.1%(75.1) %(3.3) %

Negative spread

37.3

26.7

(28.4) %

2.77%

2.68%

(0.09)pt

1,852.0%

1,747.9%(104.1)pt

645.5
900.5

612.0
833.8

(5.2)%(7.4)%

Policy amount in force*1
Annualized premiums from insurance in force*1
Of which, third-sector products

Lapse and surrender rate*1,*2
New insurance sales*1

Income from insurance premiums
Investment profit

Average assumed interest rate
Solvency margin ratio
Real net assets
Embedded value (EV)Line item amounts are truncated below ¥100 million; percentage change figures are rounded.
Notes:*1 Each figure of policy amount in force, annualized premiums from insurance in force, lapse and surrender rate, new insurance sales and annualized premiums
from new policies is calculated as the total of individual life insurance and individual annuities.
*2 The lapse and surrender rate is calculated without offsetting policies that are reinstated.
May 26, 2008

Sony Financial Holdings Inc. All Rights Reserved7Sony Life Operating Performance (1)Insurance in ForceNew Insurance Sales(Individual Life Insurance + Individual Annuities)(Individual Life Insurance + Individual Annuities)(Trillions of yen)

(Millions of policies)

+7.1%

3.55
27.8

3.84
29.0

4.43

(Trillions of yen)(Thousands of policies)

4.14
30.2 +4.1%

31.4

534

3.72

512

517 +1.4% 524
3.80

3.39

3.42 +10.9%

Line item amounts are truncated below ¥100 billion or ¥10 billion; numbers of policies are truncated below 10,000 or 1,000 policies; percentage change figures are rounded.

May 26, 2008

Sony Financial Holdings Inc. All Rights Reserved8Sony Life Operating Performance (2)Annualized Premiums from Insurance in Force

Annualized Premiums from New Insurance Sales(Individual Life Insurance + Individual Annuities)(Individual Life Insurance + Individual Annuities)(Billions of yen)(Billions of yen)

(3.2%)+5.0%(7.7%)+4.6%

Line item amounts are truncated below ¥100 million; percentage change figures are rounded.
May 26, 2008

Sony Financial Holdings Inc. All Rights Reserved

9Sony Life Operating Performance (3)Income from Insurance Premiums

Ordinary Profit (Non-Consolidated)(Billions of yen)(Billions of yen)

+7.1%

551.6

580.5

605.5

39.2

648.4

+163.8%

24.3
17.0

14.8

Line item amounts are truncated below ¥100 million; percentage change figures are rounded.
May 26, 2008

Sony Financial Holdings Inc. All Rights Reserved10Sony Life Operating Performance (4)Core Profit

Embedded Value (EV)(Billions of yen)(Billions of yen)

833.8
900.5
776.1

28.5
24.3

24.3 (3.3%) 23.5
492.0

539.3

261.7

38.9

Line item amounts are truncated below ¥100 million.

May 26, 2008

38.1

34.2

36.7

194.8

28.9

The assumptions upon which EV is calculated at the end of FY2003, FY2004,
FY2005, FY2006 and FY2007 differ. For details regarding calculation methods,
please refer to the press releases for each of these years.
Sony Financial Holdings Inc. All Rights Reserved11Sony Life Operating Performance (5)Investment
Investment Yield
Yield forfor CoreCore Profit
Profit andand Investment
Investment Yield
Yield(GeneralAccount)
versusAverage
Assumed(General Account) versus Average Assumed Interest
Interest Rate
Rate

Negative Spread(Billions of yen)

37.3
34.5

33.1
26.7

Line item amounts are truncated below ¥100 million.

May 26, 2008

Sony Financial Holdings Inc. All Rights Reserved

12Sony Life Operating Performance (6)Lapse and Surrender Rate*

Solvency Margin Ratio(Individual Life Insurance + Individual Annuities)
(%)

(%)

6.32

5.84

5.79

6.12

* The lapse and surrender rate is calculated without offsetting policies that are reinstated.

May 26, 2008

Sony Financial Holdings Inc. All Rights Reserved13Sony Life Operating Performance (7)Breakdown of General Account Assets (March 31, 2008 vs. March 31, 2007)

Notes:
Japanese stocks and CBs contained in general account assets asof March 31, 2008 are as follows.
Note: Figures in brackets, [ ], are as of March 31, 2007.
Japanese stocks: ¥206.2 billion [¥298.7 billion]
Of which, Japanese stocks in monetary trusts: ¥33.3 billion [¥54.3
billion]Accounting for 6.2% [9.6%] of general account assets
Convertible bonds: ¥427.0 billion [¥432.0 billion]
Of which, CBs in monetary trusts: ¥139.4 billion [¥128.7 billion]
Accounting for 12.8% [13.8%] of general account assets

May 26, 2008

Sony Financial Holdings Inc. All Rights Reserved

14Sony Life Operating Performance (8)Valuation Gains or Losses on General Account Assets(March 31, 2008 vs. March 31, 2007)(Billions of yen)

03/31/07

03/31/08

ChangeJapanese government and corporate bonds

57.1

83.4

26.3

Japanese stocks

130.0

50.8

(79.1)

Foreign securities

4.2

(95)

(13.7)

Other securities

6.8

3.0

(3.8)

198.2

127.8

(70.4)

Total
Line item amounts are truncated below ¥100 million.

Additional Information Concerning Major Fluctuations■
Lower interest rates caused an increase in valuation gains on
Japanese government and corporate bonds. However, a downturn in the Japanese stock
markets resulted in declines in the market value of Japanese stocks held, resulting in a
substantial decline in valuation gains.
■
The company holds no securitized products backed by U.S.
subprime loans.
May 26, 2008

Sony Financial Holdings Inc. All Rights Reserved15Sony Life Operating Performance (9)Number of Lifeplanners
and Other Salespeople(People)May 26, 2008

Independent Agents(Agencies)

Sony Financial Holdings Inc. All Rights Reserved

16

Highlights of Operating Performance:
Sony Assurance
FY2006

FY2007

51.0

55.6

+4.6

+9%

Underwriting income

50.4

55.0

+4.5

+9%

Investment income

0.4

0.5

+0.1 +22%

Ordinary expenses

48.9

52.8

+3.8

+8%

Underwriting expenses

36.4

38.9

+2.5

+7%

Investment expenses

0.0

0.0

+0.0 +82%

12.4

13.8

+1.3 +11%

Ordinary profit

2.0

2.8

+0.7 +38%

Net income

1.5

2.1

+0.5 +37%

Securities

51.1

56.2

5.0 +10%

Policy reserves

36.1

42.7

6.6 +18%

Total net assets

13.3

15.3

+2.0 +15%

Total assets

67.4

78.6 +11.1 +17%

(Billions of yen)

51.0

+9%

Ordinary revenues

55.6

+42%
2.0

2.8
(Billions of yen)Sony AssuranceRevenues and profit up compared with FY2006
Net premiums written up 9%, to ¥55.0 billion, owing to increase in
number of policies for mainstay automobile insurance
In addition to an increase in net premiums written up, the loss ratio
was stable, resulting in ordinary profit of ¥2.8 billion
Combined ratio improved 0.4 percentage point, to 80.3%

May 26, 2008

Operating, general andadministrative expenses

ChangeLine item amounts are truncated below ¥100 million; percentage change figures
are rounded.

Sony Financial Holdings Inc. All Rights Reserved

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

FY2007

FY2006

ChangeDirect premiums written

50.1

54.6

+9%

Net premiums written

50.4

55.0

+9%

Net losses paid

24.1

26.2

+9%

Underwriting profits

1.6

2.2

+41%

Net loss ratio

53.6%

53.5%

0.1 pt improvement

Net expense ratio

26.3%

26.7%

0.4 pt improvement

Combined ratio

79.9%

80.3%

0.4 pt up

1,009.7%

1,073.9%

64.2 pt up

0.93 million

1.02 million+ 10%

Solvency margin ratio
Number of policies in force

Line item amounts are truncated below ¥100 million; percentage change figures are rounded.
Net expense ratio = Operating expenses related to underwriting ÷ net premiums written
Net loss ratio = (Net losses paid + expenses incurred in surveying damages) ÷ net premiums written
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. These numbers are rounded below 10,000.

May 26, 2008

Sony Financial Holdings Inc. All Rights Reserved18Sony Assurance Operating Performance (1)Net Premiums Written andNumber of Policies in Force(Billions of yen)(Thousands of policies)

55.0
50.4
45.2
37.8

Combined Ratio
(%)

86.5

82.5

79.9

80.3

1,020
930

820

670

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. Most
personal accident insurance is medical and cancer insurance.
Line item amounts are truncated below ¥100 million for net premiums written androunded below 10,000 for the number of policies in force.
May 26, 2008

Net expense ratio = Operating expenses related to underwriting ÷ net
premiums written
Net loss ratio = (Net losses paid + expenses incurred in surveying damages)
÷ net premiums writtenSony Financial Holdings Inc. All Rights Reserved19Sony Assurance Operating Performance (2)Ordinary Profit (Loss)

Solvency Margin Ratio(Billions of yen)

(%)

2.8
2.0

(0.7)

(2.8)

Line item amounts are truncated below ¥100 million.
May 26, 2008

Sony Financial Holdings Inc. All Rights Reserved20Highlights of Operating Performance:
Sony Bank (Non-Consolidated)
Ordinary revenues
Ordinary profit

19.4

+33%

(Billions of yen)

25.9

2.7

1.3
(Billions of yen)

Ordinary revenues

19.4

25.9

+6.5

+33%

Gross operating profit

9.0

10.9

+1.9

+21%

4.5

5.1

+0.5

+11%

0.5

0.3

(0.1)

(28)%

3.9

5.4

+1.5

+40%

7.6

8.1

+0.4

+6%

1.3

2.7

+1.3

+103%

1.0

4.4

+3.4

+339%

381.2

488.7

+107.5

+28%

Loans

284.7

347.0

+62.3

+22%

Deposits

752.3

1,144.3+392.0+52%

Customer assets

848.8

1,247.3+398.4＋47%

Total net assets

36.8

35.7

(1.1)

(3)%

Total assets

806.8

1,211.0+404.1+50%

Net fees andcommissions
Net other operating
incomeGeneral and administrative
expenses
Ordinary profit

FY2006

FY2007

Sony Bank
Revenues and profit were both up, compared with FY2006
Net interest income and net other operating income increased,
owing mainly to higher interest on loans—stemming from a higher
mortgage loan balance—and higher market investment income
 Net income amounted to ¥4.4 billion, owing to an increase indeferred income taxes
Gross operating profit totaled ¥10.9 billion; the sum of net
interest income of ¥5.1 billion, net fees and commissions of ¥0.3
billion and net other operating income of ¥5.4 billion. General andadministrative expenses were up slightly, to ¥8.1 billion
Customer assets were up ¥398.4 billion, compared with March
31, 2007, to ¥1,247.3 billion

May 26, 2008

FY2007
ChangeNet interest income+103%

FY2006（
Net income
億Securities円）

Line item amounts are truncated below ¥100 million; percentage change figures
are rounded.

Sony Financial Holdings Inc. All Rights Reserved

21

Overview of Performance:
Sony Bank (Non-Consolidated)(Billions of yen)

FY2006

FY2007

ChangeGross operating profit

9.0

10.9

+ 21%

General and administrative expenses

7.6

8.1

+ 6%

Net operating profit

1.3

2.8

+ 107%

Ordinary profit

1.3

2.7

+ 103%

Customer assets

848.8

1,247.3

+ 47%

173.7

398.4

+ 129%

284.7

347.0

+ 22%

45.2

62.3

+ 38%

11.49%

9.15%(2.34)pt

491 thousand

610 thousand+ 24%

61 thousand

118 thousand+ 57 thousand

Of which, FY2007 increase
Loans
Of which, FY2007 increase
Capital adequacy ratio(domestic criteria)
Number of accounts
Of which, FY2007 increase

Line item amounts are truncated below ¥100 million; percentage change figures are rounded.

May 26, 2008

Sony Financial Holdings Inc. All Rights Reserved22Sony Bank Operating Performance (1)Customer Assets (Deposits + Investment Trusts)
and Number of Accounts(Billionsof yen)610

Number of accounts (thousands)
Investment trusts

1,247.3

Foreign-currency deposits
Yen deposits

491
430

367
848.8
675.1

Loans

(Billions of yen)

Investment
trusts:¥102.9 billion

347.0

Foreigncurrency
deposits:¥251.7 billion

284.7
239.4

Yen deposits:¥892.6 billion

Others:¥8.1
billionMortgageloans:¥338.8billion

576.3

126.3

Amounts are truncated below ¥100 million.
May 26, 2008

Sony Financial Holdings Inc. All Rights Reserved23Sony Bank Operating Performance (2)Gross Operating Profit, General and
Administrative Expenses, Ordinary Profit(Billions of yen)

Capital Adequacy Ratio(Domestic Criteria)
(%)

10.9
9.4

6.9

7.0

9.0
7.6

8.1
11.97

11.49
9.24

9.15

5.3
2.7

2.2
1.3

Notes: On April 23, 2008, Sony Financial Holdings increased Sony Bank’s capital by
accepting an allocation of new shares.

(1.6)

Amounts are truncated below ¥100 million.
May 26, 2008

Capital adequacy ratios as of March 31, 2007 and March 31, 2008 were
calculated based on the standard stipulated in the Financial Services Agency
Public Announcement No. 19 of 2006. The capital adequacy ratios up to andincluding those for March 31, 2006 were calculated based on the standard
stipulated in the former public announcement.
Sony Financial Holdings Inc. All Rights Reserved24Sony Life’s Embedded Value (EV)May 26, 2008

Sony Financial Holdings Inc. All Rights Reserved25Overview of Embedded Value in FY2007
 EV came to ¥833.8 billion, down ¥66.7 billion from March 31, 2007.
 The value of in-force business was ¥638.9 billion, up ¥0.1 billion from March 31, 2007, and adjusted net worth was ¥194.8 billion,

down ¥66.9 billion.
 EV of new policies during FY2007 amounted to ¥28.9 billion, down ¥7.8 from March 31, 2007.

Embedded
Embedded Value
Value(Billions of yen)

1,000
900
800
700
600
500
400
300
200
100
0

In force businessadjusted net worth

03/31/04

03/31/05

03/31/06

03/31/07

03/31/08(Billions of yen)

03/31/04

03/31/05

03/31/06

03/31/07

03/31/08

Total EV

492.0

539.3

776.1

900.5

833.8

In-force business

381.7

409.6

499.8

638.8

638.9

Adjusted net worth

110.2

129.7

276.3

261.7

194.8

Of which, EV of new policies

38.9

38.1

34.2

36.7

28.9

Source: Sony Life
Note: Assumptions and calculation methods differ for EV calculated as of March 31, 2004, March 31, 2005, March 31, 2006, March 31, 2007, and March 31, 2008.

May 26, 2008

Sony Financial Holdings Inc. All Rights Reserved26EV: Assumptions and Movement Analysis
Major
Major Assumptions
Assumptions Employed
Employed inin
Calculating
EV
at
March
31,
2008
Calculating EV at March 31, 2008

Movement
Movement Analysis
Analysis of
of EV
EV
from
March
31,
2007
from March 31, 2007
(Billions of yen)

Discount rate

6.0%

Investment
yield on newinvestments

Investment yield on new investments isbased on implied forward rates, assumingSony Life makes all new investments only inJapanese government bonds.

EV as of March 31, 2007

900.5

Shareholder dividends(6.5)

Release from the value of in-force
business*

38.1

Mortality andmorbidity
rates

Based on Sony Life’s experience over thethree most recent fiscal years (FY2005–
FY2007)

EV of new policies for the year ended
March 31, 2008

28.9

Lapse andsurrender rate

Based on Sony Life’s experience over thethree most recent fiscal years (FY2005–
FY2007)

Difference between assumptions andactual results for the year ended March
31, 2008(113.2)

Operatingexpenses(unit costs)

Calculated using the cost (unit cost) for the
maintenance and administration of policies
and for payments of claims based on Sony
Life’s experience during the most recent
fiscal year (FY2007)

Difference from changes in theassumptions(14.1)

EV as of March 31, 2008

833.8

Effective tax
rate

Based on the most recent effective tax rate(based on the rate for FY2007)* This item corresponds to unwinding of the amount of discount for one
year made as of March 31, 2007 on the value of in-force business.

Solvency
margin ratio

For the purpose of calculating the cost ofcapital, maintenance of a solvency margin
ratio of 600% was assumed.

May 26, 2008

IPOプレゼン資料より抜粋

Sony Financial Holdings Inc. All Rights Reserved27EV: Sensitivity
EV
EV Sensitivity
Sensitivity at
at March
March 31,
31, 2008
2008(Billions of yen)Amount of
Increase(Decrease)

EV Amount

From 6.0% to 5.0%

83.1

916.9

From 6.0% to 7.0%

(67.5)

766.3

From 600% to 500%

7.7

841.5

From 600% to 700%

(8.6)

825.2

On total investments

59.1

892.8

On new investments

34.8

868.6

On total investments(61.2)

772.5

On new investments(35.0)

798.7

Mortality and morbidity

Assumption x 1.1(65.3)

768.5

Lapse and surrender rate

Assumption x 1.1(16.1)

817.7

Operating expenses (unit cost to maintain policy)

Assumption x 1.1

(6.5)

827.2

Discount rate
Solvency margin ratio
Investment yield: +0.25%*
Investment yield: –0.25%** The impact of changes in investment yield assumptions is shown after taking into account the impact on policyholders’ dividends.

May 26, 2008

Sony Financial Holdings Inc. All Rights Reserved28EV: Breakdown of Adjusted Net Worth
Breakdown
Breakdown ofof Adjusted
Adjusted Net
Net Worth
Worth(Billions of yen)

As of March 31,
2008
Adjusted net worth

As of March 31,
2007

Change

194.8

261.7

(66.9)

Total net assets*

136.9

207.6

(70.7)

Reserve for price fluctuations

24.1

20.9

3.2

Contingency reserve

61.8

59.0

2.8

Reserve for possible loan losses

0.0

0.0

0.0

Net unrealized gains on land

8.4

6.8

1.6

Unfunded employees’ retirement
benefits liability

(3.5)

(1.9)

(1.6)

Deferred tax assets corresponding topreceding five items(32.9)(30.7)(2.2)* Excluding net unrealized gain on bonds except for convertible and certain other bonds

May 26, 2008

Sony Financial Holdings Inc. All Rights Reserved29EV: Major Assumptions (Investment Yield)
Investment
Investment Yield
Yield onon New
New Investments
Investments

Investment
Investment Yield
Yield onon Existing
Existing Assets
Assets

The implied forward rates that were used are as follows.

The weighted average investment yields on newinvestments and existing assets that were used are as
follows.

May 26, 2008

FY

Investment Yield

FY

Investment Yield

2008

0.57%

2008

1.92%

2009

0.61%

2009

1.88%

2010

0.81%

2010

1.89%

2011

0.98%

2011

1.91%

2012

0.98%

2012

1.88%

2017

2.78%

2017

2.90%

2022

3.18%

2022

3.24%

2027

3.50%

2027

3.66%

2032

3.40%

2032

3.63%

2037

3.51%

2037

3.77%

Sony Financial Holdings Inc. All Rights Reserved30Key Management Benchmarks

May 26, 2008

Sony Financial Holdings Inc. All Rights Reserved

31Key Management Benchmarks (1)¾ Consolidated ordinary revenues, consolidated ordinary profit andconsolidated net income¾ Consolidated adjusted ROE
Perspective on Consolidated Adjusted ROESony Financial Holdings GroupSony Life

Sony Assurance

Net increase in EV
plus dividend
Numerator

Denominator

Note: Changes in provision forcontingency reserves and thefuture value of existing policies
are added to net income.

The average of (EV atprevious fiscal year-end
minus dividend plus EV atcurrent fiscal year-end)
Note: The contingency reserveand the future value of existing
policies are added tostockholders’ equity or net
assets.

Sony Bank

Net income+ Increase in provision for special
catastrophe reserves (after tax)++

+ Increase in reserve for pricefluctuations (after tax)

The average of (net assets +special catastrophe reserveand reserve for pricefluctuations (after-tax)) as ofthe previous fiscal year-end
and the current fiscal year-end

Net income++

The average of net assets asof the previous fiscal year-end
and the current fiscal yearend

Note: Calculations take dividends and taxes into consideration.

May 26, 2008

Sony Financial Holdings Inc. All Rights Reserved

32Key Management Benchmarks (2)Key Management Benchmarks
 Consolidated ordinary revenues, consolidated

ordinary profit and consolidated net income
 Consolidated adjusted ROESony Life
Life Embedded
Embedded Value
Value andandSony
Adjusted
ROE
Adjusted ROE(Billionsof yen)Source: Sony Life
Notes: Calculation of Adjusted ROE
Numerator: Net increase in EV plus dividend
Denominator: The average of (EV at previous fiscal year-end — dividend +EV at current fiscal year-end）

May 26, 2008

(Millions of yen, %)FY2004

FY2005

FY2006

FY2007

Consolidated ordinary revenues

653,259

758,711759,280

822,153

Consolidated ordinary profit

12,26925,377

18,35444,500Consolidated net income

6,375

11,537

10,021

24,255

Consolidated adjusted ROE

8.0%

35.1%

15.2%

(5.7%)

Sony Assurance
Assurance Net
Net Income
Income andandSony
Adjusted
ROE
Adjusted ROE(Billionsof yen)Source: Sony Assurance
Notes: Calculation of Adjusted ROE
Numerator: Net income plus an increase in provision for special
catastrophe reserves (after-tax) and an increase in reserve for pricefluctuations (after-tax)
Denominator: The average of (shareholders’ equity or net assets + special
catastrophe reserve and reserve for price fluctuations (after-tax)) as of theprevious fiscal year-end and the current fiscal year-end

Sony Financial Holdings Inc. All Rights ReservedSonySony Bank
Bank NetNet Income
Income andand ROE
ROE(Billionsof yen)Source: Sony Bank
Notes：Calculation of ROE:
Numerator: Net income
Denominator: The average of shareholders’ equity or net assets as of theprevious fiscal year-end and the current fiscal year-end

33

Management Vision for FY2008

May 26, 2008

Sony Financial Holdings Inc. All Rights Reserved34About the Sony Financial Holdings GroupThe Sony Financial Holdings Group aims to integrate the diverse functions that are inherent to such financial services
as savings, investment, borrowing and protection; offer high-value added products and quality services that meet
individual customers' economic needs; and become one of the most trusted financial services groups.

100%

Sales
channels

100%

100%

 Consulting sales
 Lifeplanner (sales employees)
 Partners (independent agencies) Direct sales
 Telephone Internet

 Internet

 Death protection life insurance
 Medical insurance, etc.

 Automobile insurance(risk segmented)
 Medical and cancer insurance Deposits (yen, foreign currencies) Mortgage loans
 Investment trusts

 Individuals

 Individuals

 Individuals

Main
products
TargetcustomersScale1

Policies in force:2 4.43 mn
Capital:3 ¥65.8 bn
Total assets: ¥3,659.7 bn
Employees:4 5,3725






Policies in force: 1,020 thousand
Capital:3 ¥40.0 bn
Total assets: ¥78.6 bn
Employees:4 651






Accounts: 610 thousand
Capital:3 ¥40.0 bn
Total assets: ¥1,211.0 bn
Employees:4 165 (including Sony Bank Securities)

1 As of March 31, 2008.
2 Sony Life’s

policies in force are for individual life insurance and individual annuities.

3 The amounts of capital above include capital surplus.
4 Employee numbers indicate the number of employees in each of the Company’s business segments.
5 Lifeplanners: 3,779
6 Other consolidated subsidiaries include Sony Life (Philippines) and Sony Bank Securities

May 26, 2008

Sony Financial Holdings Inc. All Rights Reserved35Views on Raising Corporate Value
 Value Creation =Raising the value of each of the three financial companies + synergy + moving into new fields of business In addition to raising corporate value through the steady growth of all three companies, we will foster
cross-selling and other synergies within Group companies, as well as move into new fields of business.
As a result, we will raise the corporate value of the SFH Group.

Corporatevalue3) Move into new fields of business2) Contribute to cross-sellingand other synergies

1) Ongoing growth from our current three main businesses
zSony LifezSony AssurancezSony Bank
SFH establishedMay 26, 2008

Now

Sony Financial Holdings Inc. All Rights Reserved

Time

36

Ongoing Growth in Each of Our Three Existing
Businesses

May 26, 2008

Sony Financial Holdings Inc. All Rights Reserved37Sony Life
Today’s Topics for Explanation

1. Overview of Sony Life
2. Sony Life’s Operating Performance
3. Sony Life’s Medium-Term Strategies

May 26, 2008

Sony Financial Holdings Inc. All Rights Reserved38Sony Life: Corporate Philosophy
Mission
To work for customers’ financial security and stability by offering optimal life insurance products
and high-quality services.

Basic Management Philosophy
Meet customer expectations and earn their trust by providing customers with satisfactory, highquality services.
Always meet changes in the environment by proactively taking on new challenges, and stay aheadof demands through innovative management that anticipates emerging needs.
Respect the individuality of employees and employ their skills and aptitudes appropriately, thereby
creating an unconstrained workplace and maintaining a dynamic organization.

May 26, 2008

Sony Financial Holdings Inc. All Rights Reserved39Sony Life: Corporate Philosophy
Corporate Vision

Always
ForeverLive safely and energetically
Reach for your dreams

Always
Forever
Hold on to your sense of wonder
Helping you turn your dreams into reality

With you each step of the way

May 26, 2008

Sony Financial Holdings Inc. All Rights Reserved40Sony Life: Business Model/Characteristics
 Sony Life has expanded its market share by offering primarily death protection life insurance, tailored toeach customer through consulting-based sales and detailed after-sale follow-up services

Main
Main markets
marketsandandcustomers
customers

Sales
Sales
channelschannelsStrengths
Strengths

Main markets
 Center on the field of death protection, where profitable and highly stable consulting-based sales
are effective
 Also make an early entry into third-sector areas that offer high profitability and growth potential
Main customers
Heads of families in their 30s and 40s, for whom consulting sales activities work wellAlso focus on small and medium-sized companies
 Sales force with strong consulting skills
 Lifeplanner sales employees /Partners (independent agencies)z Special knowledge and abundant experiencez High morale and motivationz High productivity
 Offering insurance tailored to each customer through consulting-based sales and detailed aftersale follow-up services
 Stable acquisition of new policies
 Low lapse and surrender rate and a steady increase in policies in force
 Maintaining a high level of customer satisfaction and earning us high evaluations from themedia and other third parties
Robust financial healthMay 26, 2008

Sony Financial Holdings Inc. All Rights Reserved

41

Today’s Topics for Explanation

1. Overview of Sony Life
2. Sony Life’s Operating Performance
3. Sony Life’s Medium-Term Strategies

May 26, 2008

Sony Financial Holdings Inc. All Rights Reserved42Sony Life: Market Position (1) Share Despite a shrinking market, our share of new policy amount and policy amount in force is
growing steadily
PolicyPolicy AmountAmount inin Force
Force (Individual(Individual Life
Life Insurance)
Insurance)New
New Policy
Policy AmountAmount (Individual(Individual Life
Life Insurance)
Insurance)(Trillions of yen)

(%)

200
Sony Life's share

(%)

2,000

1H 07
6.3%

Total of all insurers(Trillions of yen)

1H 07
3.1%
06
05

Total of all insurers

6.0%Sony Life's share

06

5.0%

150

1,500

00
98
100

99

03

05
01

2.5%

04

04

3.0%

4.0%

03

2.0%

02
01

02

1,000

00

3.0%

97

1.5%

99

96
95

98

2.0%

1.0%

97

500

50

96

94

95

1.0%

0.5%

94

93
92
0.0%

0
92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07

0

92

93

92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07(FY)

Source: Statistics of Life Insurance Business in Japan

0.0%
(FY)

Source: Statistics of Life Insurance Business in Japan

Note: New policy amount is calculated without adjusting for the impact of conversion.

May 26, 2008

Sony Financial Holdings Inc. All Rights Reserved43Sony Life: Market Position (2) Industry Ranking
 Sony Life ranks sixth in new policy amount, and is closing in on the top five insurers
 Sony Life maintained its top net increase ranking
New Policy Amount* Ranking
Ranking

InsurerPolicy Amount in Force

ResultShare(YoY increase/(YoY increase/decrease)

Decrease)Ranking

InsurerNet Increase

ResultShare(YoY increase/(YoY increase/decrease)

Decrease)Ranking

Insurer

Result1(3)Sony Life

605.6

2(2)

ALICO

517.5

3(4)

Tokio

423.4

4(1)

Prudential

369.9

1(1)

Nippon3,655.5(63.6)

12.4(-3.2)

1(1)Nippon214,187.5(92.9)

21.4(-0.3)2(2)Dai-ichi

3,599.5(81.4)

12.2(-1.1)

2(2)Dai-ichi

171,175.1(95.5)

17.1(±0.0)3(3)Sumitomo

3,033.7(71.6)

10.3(-1.1)3(3)Sumitomo

136,482.7(93.9)

13.6(-0.1)

4(5)

Daido

2,390.7(108.5)

8.1(+1.8)

4(4)Meiji Yasuda

120,007.0(92.9)

12.0(-0.1)

5(4)Meiji Yasuda

2,165.0(87.5)

7.4(-0.1)

5(5)

Asahi

42,054.2(91.2)

4.2(-0.1)5(10)Mitsui
Sumitomo

278.6

6(6)

Sony Life

1,849.3(110.1)

6.3(+1.2)

6(7)

Daido

38,657.3(99.8)

3.9(+0.2)

6(6)

Aflac

269.3

7(8)

ALICO

1,431.2(102.7)

4.9(+0.7)7(6)Mitsui38,454.2(90.7)

3.8(-0.1)

7(5)Himawari

264.3

8(7)

Prudential

1,275.2(93.6)

4.3(-0.2)

8(8)Fukoku32,372.2(97.0)

3.2(±0.0)

8(28)

Daido

176.9

9(9)

Fukoku1,025.1(88.1)

3.5(+0.1)9(9)Sony Life

30,643.7(103.9)

3.1(+0.2)9(7)Nipponkoa

88.8

10(10)

Tokio

986.8(109.3)

3.4(+0.4)

10(10)

Prudential

25,147.5(105.0)

2.5(+0.1)

10（8)

Aioi

78.6

* Excluding on rollover basis

All-company total down 14.7% year on year

All-company total down 4.5% year on year

Notes: Comparisons for the first half of
FY2007
Individual insurance (Units in billionsof yen, %)Source:Materials officially disclosed byindividual insurers

May 26, 2008

Sony Financial Holdings Inc. All Rights Reserved

44Sony Life: Revenue and Profit Structure (1)Product Portfolio
 Product portfolio, centering on death protection

Industrywide Product Portfolio（As of March 31, 2007）

Sony Life’s Product Portfolio（As of March 31, 2007）

Annualized premiums (Policy amount in force)

Annualized premiums (Policy amount in force)

Medical protection
and living benefit
23.3%

Individual annuities
24.4%

Medical protection
and living benefit
23.1%

Death protectionand endowment(First-sector products)
52.5%

Individual annuities
1.4%

Death protectionand endowment(First-sector products)
75.3%
Source: Statistics of Life Insurance Business in JapanMay 26, 2008

Sony Financial Holdings Inc. All Rights Reserved

45Sony Life: Revenue and Profit Structure (2) EV
 In general, Sony Life’s EV, which is a measure of corporate value for life insurers, has been increasing,although EV declined in FY2007
Embedded
Embedded Value
Value

EV
EV Sensitivity
Sensitivity at
at March
March 31,
31, 2008
2008(Billions of yen)(Billions of yen)

1,000

Amount of
Increase(Decrease)

EV
AmountFrom 6.0% to 5.0%

83.1

916.9

From 6.0% to 7.0%

(67.5)

766.3

From 600% to 500%

7.7

841.5

From 600% to 700%

(8.6)

825.2

On total investments

59.1

892.8

On new investments

34.8

868.6

On total investments(61.2)

772.5

On new investments(35.0)

798.7

Mortality and morbidity

Assumption x 1.1(65.3)

768.5

Lapse and surrender rate

Assumption x 1.1(16.1)

817.7

Operating expenses (unitcost to maintain policy)

Assumption x 1.1

(6.5)

827.2

900.5
833.8

776.1

800

Discount rate

600

492.0

539.3
Solvency margin ratio

400
Investment yield: +0.25%*

200

Investment yield: –0.25%*

03/20043/20053/20063/20073/2008

Total EV

492.0

539.3

776.1

900.5

833.8

EV of new policies

38.9

38.1

34.2

36.7

28.9

In force business

381.7

409.6

499.8

638.8

638.9

Adjusted net worth

110.2

129.7

276.3

261.7

194.8

Note: Assumptions and calculation methods differ for EV calculated in March 2004, March
2005, March 2006, March 2007 and March 2008.

May 26, 2008

Sony Financial Holdings Inc. All Rights Reserved

46

Today’s Topics for Explanation

1. Overview of Sony Life
2. Sony Life’s Operating Performance
3. Sony Life’s Medium-Term Strategies

May 26, 2008

Sony Financial Holdings Inc. All Rights Reserved

47Sony Life: Future Management Policies (1)Understanding the Environment People in their 30s and 40s, Sony Life’s primary target customer base, are expected to continue to account for a large
portion of Japan’s population, offering high growth potential
 However, the senior market will expand as the baby boomer generation moves into retirement, and Japan’s low birthratemeans that our main customer segment will become smaller. We will need to respond to these upcoming changes inmarket composition.
Demographic Composition and Percentage of New Policies
by Age of Insured (Individual Annuities)(Percentage)

Changes in Population Composition(Thousands)

Second-generation
baby boomers

(age)

(age)
Source: Prepared by Sony Life based on the Life Insurance Business Overview, fiscal 2006

May 26, 2008

Sources: Annual Report on Current Population Estimates (Statistics Bureau, Ministry ofInternal Affairs and Communications) and Population Projections for Japan(National Institute of Population and Social Security Research)48

Sony Financial Holdings Inc. All Rights Reserved8Sony Life: Future Management Policies (2)Major Tasks
Strengthen and confirm our insurance claim payment management structure Ensure thorough customer follow-up and measures to prevent recurrence through a special project for the introduction of countermeasures
to strengthen the insurance claim payment management structureEnhance market share in the highly profitable death protection field, ensuring profitability


Make even better use of our sales channels in this domain, where consulting-based sales is particularly effectiveStrengthen our after-sale follow-up structure to build lifelong relationships with customers

Concentrate on the medical and nursing care field Provide attractive products and services for this sector, expanding and entrenching business in this market

Prepare a product development structure in the individual annuities segment
 By establishing a joint venture with AEGON in the field of annuities, employ consulting-based sales to make individual annuities a pillar ofsurvivor protection, along with death protection

Expand business domains
 Ensure growth through the expansion of business in Japan, including through M&A activities, as well as by developing business in overseas
markets

Recent Initiatives

Planned Future Initiatives

 Introduced proprietary Life Planning Support Service (LiPSS) software Expand and improve efficiency of Lifeplanner and Partner channels

to help customers develop life plans and select optimal coverage forsuch plans (October 2006)
 Concluded basic agreement to form business tie-up with Watami Co.,

Ltd., in the nursing care business (September 2006)
 Began selling whole life nursing-care insurance (November 2006)
 Established company to prepare for the establishment of annuities joint

venture (August 2007)
 Introduced new system spanning entire insurance operation (October

2007, March 2008)

 Ensure profitability by maintaining or improving productcompetitiveness Introduce customer communication support system (FY2009)
 Begin operations at annuities joint venture subsidiary (FY2008)
Commence sales at bank counters and through Lifeplanner

channel Consider establishing life insurance subsidiary in East Asia (Greater

China)

 Began selling whole life cancer insurance (April 2008)

May 26, 2008

Sony Financial Holdings Inc. All Rights Reserved49Sony Life: Target Figures from a Business
Perspective
Hone our competitive edge, from the dual standpoints of growth and soundness
GrowthSoundness

Expand sales channels
 Aim for Lifeplanner sales employees to number
4,000 by FY2010

Maintain a high level of financial soundness

Raise corporate value
 Continue to raise corporate value, achieving EV
of between ¥1 trillion and ¥1.1 trillion by March 31,
2011

 Maintain or increase ratings
 Take appropriate action to shift toward accounting
standard based on economic value Through annual growth of more than 4%, aim toachieve policy amount in force of ¥36 trillion by
March 31, 2011
 Also continue to expand business domains toachieve higher levels of future growth(Reference) Credit Ratings (as of March 31, 2008)
A.M. Best Company, Inc.

Financial strength rating

A+ (Superior)

Rating and Investment Information, Inc.

Insurance claims paying ability

AA (A very high capacity for payment of insurance claims)

Japan Credit Rating Agency, Ltd.

Ability to pay insurance claims

AA(A very high capacity to honor the financial commitment on the
obligation)

Moody’s Investors Service, Inc.

Insurance financial strength rating

Aa3

Standard and Poor’s

Financial strength rating

A+ (Strong)

May 26, 2008

Sony Financial Holdings Inc. All Rights Reserved50Sony Life: EV Growth Targets through FY2010(Billions of yen)

1,200

1,000.0~1,100.0

Value of insurance in force

1,000

Adjusted net assets

833.8

'07.3

'08.3

776.1

800
600

900.5

539.3

492.0

400
200
0
'04.3

'05.3

'06.3

・・・

3/20043/20053/20063/20073/2008

Total EV

492.0

539.3

776.1

900.5

833.8

In force business

381.7

409.6

499.8

638.8

638.9

EV of new policies

38.9

381

34.2

36.7

28.9

Adjusted net worth

110.2

129.7

276.3

261.7

194.8

'11.3

(Billions of yen)
Note: These figures indicate traditional embedded value (TEV). The company is considering a shift to market consistent embedded value (MCEV).
May 26, 2008

Sony Financial Holdings Inc. All Rights Reserved51

Ongoing Growth in Each of Our Three Existing
Businesses

May 26, 2008

Sony Financial Holdings Inc. All Rights Reserved52Sony Assurance
Today’s Topics for Explanation

1. Overview of Sony Assurance
2. Sony Assurance’s Operating Performance
3. Sony Assurance’s Medium-Term Strategies

May 26, 2008

Sony Financial Holdings Inc. All Rights Reserved53Sony Assurance, Present and Past
Overview
Name

Sony Assurance Inc.

President

Shinichi Yamamoto

Established

June 10, 1998 (as Sony Insurance Planning Co., Ltd.)

Head office

11F Aroma Square, 37-1, Kamata 5-chome, Ota-ku, Tokyo, Japan 144-8741

Phone+81-3-5744-0300

Capitalization ¥40,000 million (common stock of ¥20,000 million, capital reserve of ¥20,000 million)
Share ownership
Business

Wholly owned by Sony Financial Holdings Inc.

Non-life insurance businessTimeline
Jun.

1998

Sony Insurance Planning Co., Ltd., established

Jul.

1999

Head office moves to Ota-ku, Tokyo

Aug. 1999

Capital increased to ¥10,000 million

Sep. 1999
Receives license from the Financial Reconstruction Commission, Financial Services Agency, to conduct
non-life insurance business (Name changed to Sony Assurance Inc.)
Begins accepting automobile insurance applications over the Internet
Oct.

1999

Begins accepting automobile insurance applications over the telephone

Jul.

2000

Capital raised to ¥20,000 million (¥10,000 million increase)Aug. 2001

Capital raised to ¥30,000 million (¥10,000 million increase)

Jun.

2002

Begins offering medical and cancer insurance

Jun.

2003

Capital raised to ¥40,000 million (¥10,000 million increase)

Apr.

2004

Becomes subsidiary of Sony Financial Holdings

May 26, 2008

Sony Financial Holdings Inc. All Rights Reserved

54

Vision & Mission

Instilled with a Sony-likeenvironment of unconstrainedof ideas, we offer new lifestyleopportunities in a spirit ofcreativity and innovation.

May 26, 2008

Through direct communication,
we provide reasonable, quality
insurance services that help
make customers’ lives safer
and more secure.

Sony Financial Holdings Inc. All Rights Reserved

55

Corporate Slogan

A difference that will change insurance
Innovative and Professional
Always innovative; professional product quality guaranteed

Progress with Customers
Moving alongside and progressing in step with our customers

Committed Service and One-on-One Solutions
Service that demonstrates our deep commitment to customers and tailored solutions that show wevalue the individual

Sincere and Faithful
Acting in the best of faith and responding with sincerity

Convincing Satisfaction
Dedicated to ensuring our customers are satisfied

May 26, 2008

Sony Financial Holdings Inc. All Rights Reserved

56

Operations (1)Main Types of Insurance: Distinctive Products−Sony Assurance automobile insurance
Automobile insurance offering extensive indemnifications that policyholders appreciate, as well as careful risk
segmentation
Original Sony Assurance discount:
Kurikoshi discount system to match insurance premiums with distance driven;
continuation discount; new vehicle discountOriginal Sony Assurance policy rider: Oritemo coverage policy rider−SURE medical and cancer insurance policies

Kurikoshi discount on
insurance covering distancenot driven this year
Insurance covering
distance not driven

Kurikoshi discount¥2,000¥2,000

Medical insurance with a wide range of coverage and premium options
Original Sony Assurance rider: Half-price policy riders for policyholders
from age 60

This year

Next year
Note: Sample of Kurikoshi discountfor illustrative purposes only

60 yearsof ageHigh-Quality Services

Monthly premiumfor insurance
entered into
before age 59−Advanced accident resolution service
Committed service: Speedy accident resolution eases the uncertainty
policyholders feel at the time of an accident

Coverage begins

Monthly payments

Down 50%

Monthly premiumfrom age 60

High-Quality
Services

Age 60

Customer response by an appointed staff member within three hours of receiving an accident report“On the Day, Any Day, Response” service

May 26, 2008

Sony Financial Holdings Inc. All Rights Reserved

57

Operations (2)Target customers−

Individual customers

Number of policies in force−

1,024,448 polices, as of March 31, 2008

Sales channels−

Direct channel via customer centers (telephone) and the Internet−

Tie-up channel that operates via agencies and other tie-up partners

Television commercial

Newspaper advertisement

May 26, 2008

Sony Financial Holdings Inc. All Rights Reserved

58

Today’s Topics for Explanation

1. Overview of Sony Assurance
2. Sony Assurance’s Operating Performance
3. Sony Assurance’s Medium-Term Strategies

May 26, 2008

Sony Financial Holdings Inc. All Rights Reserved59Direct Automobile Insurance Market
Sony Assurance—the leader in direct premiums written since FY2002
Increasing
Increasing Share
Share byby Direct
Direct Insurers
Insurers

DirectDirect Premiums
Premiums Written
Written by
by SixSix Companies
Companies(Billions of yen)

Total direct premiums written (all non-life insurancecompanies in Japan)

4,000

Direct automobile insurance market share(%)²(Billions of yen)

50

5.0%

Sony
Company A

3,500

Company B

40

4.0%

Company C

3,000

Company D
Company E

2,500

3.0%

30

2,000
1,500

2.0%

20

1.0%

10

0.0%

0

1,000
500
0
97

98

99

00

01

02

03

04

05

06

(FY)

FY97 FY98 FY99 FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07

Source: Insurance magazine
May 26, 2008

Sony Financial Holdings Inc. All Rights Reserved60Profit/Expense Structure• In our revenue/expense structure, maintenance of existing policies recover initial costs
and generate profits
Profit/Expense Structure for Automobile Insurance
New
Newpolicies
policies

Maintenance
Maintenanceofofexisting
existingpolicies
policies

ProfitProfitLosses
LossesOperating expenses

Operating expenses

Premiums on
maintenanceof existing
policies

New policy
premiums

Loss amount
Loss amountMay 26, 2008

Sony Financial Holdings Inc. All Rights Reserved61

Automobile Insurance•As the percentage of maintenance of existing policies rises, the profit/expense balance improves(Moved into the black in FY2006, calculated according to Japanese GAAP)
Automobile Insurance Policies
Net automobile premiums written

1,000,000

New policies

Underwriting profits

Maintenance of existing policies

900,000+9%800,000

47.0

700,000

43.9

600,000

39.9

500,000

34.2

400,000
300,000+61%

200,000

1.1

100,000

(1.0)

0.7

(2.3)

0
FY04
May 26, 2008

FY05

FY06

FY07

FY04

Sony Financial Holdings Inc. All Rights Reserved(Billions of yen)

FY05

FY06

FY07

62

Past Operating Expense Ratios(Automobile Insurance)
Automobile Insurance Operating Expense Ratio

値は5/21に確定

34%

Major company E
Major company D
Major company A

32%

Major company C
Major company B
30%

Sony Assurance
28%
FY2004

FY2005

FY2006

FY2007

Sources: Compiled by Sony Assurance based on individual companies’ financial reports
May 26, 2008

Sony Financial Holdings Inc. All Rights Reserved

63

Past Loss Ratios (Automobile Insurance)
値は5/21に確定
Automobile Insurance Loss Ratio (Written Basis)70%

Automobile Insurance Loss Ratio (Earned Basis)
75%

Major company C

Major company C

Major company E
Major company B

65%

Major company A

Major company B
Major company E
70%

Major company D
60%
Major company A

Sony Assurance

65%
Major company D

55%Sony Assurance

60%

50%
FY2004

FY2005

FY2006

FY2007

Loss ratio = net claims paid/net premiums written(Including loss adjustment expenses)

FY2004

FY2005

FY2006

FY2007

Loss ratio = (net claims paid + provision for outstanding claims) /earned premium (要確認: 既経過保険料)(Including loss adjustment expenses)

Sources: Compiled by Sony Assurance based on individual companies’ financial reports
May 26, 2008

Sony Financial Holdings Inc. All Rights Reserved

64

Operating Performance (1)Net Premiums Written andNumber of Policies in Force(Billions of yen)

Combined Ratio(Thousands of policies)

55.0
50.4

(%)

86.5

82.5

79.9

80.3

45.2
1,020
930

37.8
820
670

Number of policies in force = Automobile insurance + SURE

May 26, 2008

Net loss ratio includes loss adjustment expenses.

Sony Financial Holdings Inc. All Rights Reserved

65

Operating Performance (1) Reference
Combined Ratio (Using the Earned Loss Ratio)

Combined Ratio
Net expense ratio(%)

Net loss ratio

(%)

100

100

86.5

82.5

80

80.3

79.9

100.1

51.9

52.3

60

64.6

53.5

53.6

89.9

89.0

63.6

62.3

26.3

26.7

FY06

FY07

40

40

20

94.9

Earned loss ratio

80
65.5

60

Net expense ratio

34.6
30.3

20
26.3

26.7

FY06

FY07

34.6
30.3

0

0
FY04

FY05

Net loss ratio includes loss adjustment expenses.

FY04

FY05

Earned loss ratio = net claims paid + loss adjustment expenses +accumulation in reserves for outstanding claims / earned premium(要確認: 既経過保険料)
Excluding earthquake insurance and automobile liability insurance

May 26, 2008

Sony Financial Holdings Inc. All Rights Reserved

66

Operating Performance (2)Ordinary Profit (Loss)(Billions of yen)

Solvency Margin Ratio

2.8

(%)

2.0

(0.7)

(2.8)

May 26, 2008

Sony Financial Holdings Inc. All Rights Reserved

67

Today’s Topics for Explanation

1. Overview of Sony Assurance
2. Sony Assurance’s Operating Performance
3. Sony Assurance’s Medium-Term Strategies

May 26, 2008

Sony Financial Holdings Inc. All Rights Reserved

68Medium- to Long-Term Strategies

Medium- to Long-Term Targets

Profitability:
Maintain profitability sufficient to sustain adjusted ROE of 10% or more

Growth:Continue growing, with the aim of achieving direct premiums written of¥100.0 billion

May 26, 2008

Sony Financial Holdings Inc. All Rights Reserved69Growth (Direct Premiums Written) andSoundness
FY2004 direct
premiums written¥37.5 billion

FY2007 direct
premiums written¥54.6 billion

FY2010 direct
premiums written¥70.0 billion

80

Solvency Margin Ratio(%)(Thousans ofpolicy)2,000 1,500(Billions of yen)

Direct premiums written
Number of policies in force

70

1,095

1,500

60

1,074
976

1,000

1,104

1,128

1,140

FY08

FY09

FY10

1,010

50
1,000

40
30

500

500

20
10

0

0
FY04

FY05

FY06

FY07

FY08

FY09

FY10

0
FY04

FY05

FY06

FY07

Number of policies in force = automobile insurance + SURE
May 26, 2008

Sony Financial Holdings Inc. All Rights Reserved70Profitability: Combined Ratio
Combined Ratio (Using the Earned Loss Ratio)

(%)

100

Net expense ratio

Earned loss ratio

100.1
94.9

89.9

89.0

63.6

62.3

26.3

26.7

92.3

92.0

91.3

80
65.5
64.6

60

40

20

34.6

30.3

0
FY2004 FY2005 FY2006 FY2007 FY2008 FY2009 FY2010
Earned loss ratio = net claims paid + loss adjustment expenses +accumulation in reserves for outstanding claims / earned premium(要確認: 既経過保険料)
Excluding earthquake insurance and automobile liability insurance
May 26, 2008

Sony Financial Holdings Inc. All Rights Reserved71Profitability: Adjusted ROE
Adjusted ROE and Adjusted Profit(Billions of yen)

20%

4Adjusted ROE
Adjusted profit
15%

3

10%

2

5%

1

0%

0

FY04

FY05

FY06

FY07

FY08

FY09

FY10

-5%

-1

-10%

-2

Adjusted ROE = Adjusted profit / adjusted capital
Adjusted profit = net income (after tax) + provision for special catastrophe reserves(要確認：危険準備金繰入額＝異常危険準備金繰入額？) (after tax) + provision for reserves for price fluctuation (after tax)
Adjusted capital = average value during the year of (net assets + special catastrophe reserves(要確認：危険準備金＝異常危険準備金？) (after tax) + provision for reserves for price fluctuation (after tax))

May 26, 2008

Sony Financial Holdings Inc. All Rights Reserved72

Ongoing Growth in Each of Our Three Existing
Businesses

May 26, 2008

Sony Financial Holdings Inc. All Rights Reserved73Sony Bank
Today’s Topics for Explanation

1. Overview of Sony Bank
2. Sony Bank’s Operating Performance
3. Sony Bank’s Medium-Term Strategies

May 26, 2008

Sony Financial Holdings Inc. All Rights Reserved

74Corporate Philosophy

 Be fair Support the growth of the Japanese economy
 Provide asset management tools
 Make maximum use of information technology
 Offer individually tailored services
 Provide more advantageous products and better services
 Create an infrastructure to provide services over the Internet
 Foster a liberating and pleasant business environment

May 26, 2008

Sony Financial Holdings Inc. All Rights Reserved

75

Business Model

Customer profile

A “money toolbox” interface
to assist customers as they
consider, research and carryout transactions

 For individuals’ portfolios
 Provide innovative products
and services


Sex: 70% male
Age: 80% in 30s to 50s
Location: 80% in Japan’s
three major metro areas

 Raise flexibility for individuals
 Yen deposits
 Foreign currency
deposits

Metropolitan
businesspeople

 Investment trusts
 Mortgage loans Financial productintermediation
 “Life passbook”

May 26, 2008

By forging a link between banking
and securities, propose newfinancial products and services thatare one-half step ahead of themarketSony Financial Holdings Inc. All Rights Reserved

Increase the freedom individuals
feel from the constraints of time andlocation by allowing banking
transactions to be conducted 24
hours a day from the comfort ofhome Bring individuals and markets
closer

Use information technologies tooffer interest rates, pricing andcommissions that are nearer
market rates

76

Market Position
We enjoy a unique position as an “investment bank for individuals.”
Main bank◆◆◆◆

Main bank◆◆

Settlement

Asset
Management

◆

◆

◆

◆

Sony Bank◆◆

Settlement bank◆◆

Asset managementbank

Sub-bank
May 26, 2008

Sony Financial Holdings Inc. All Rights Reserved

77

Business Expansion and Profits
Retail Balance

Profits

Retail balance: Total of customer transactions
Number of accounts (thousands)

61.0
49.2

43.0

(Billions of yen)(Billions of yen)

Gross operating profit

36.8

1,800

26.9

1,594.2

General and administrative expenses

12

Ordinary profit

1,600

9.4

10
1,400
1,200

8

Investment trusts

1,133.4

Foreign-currency deposits
1,000

Yen deposits

914.4

102.9

800

400
200

458.2
63.0
16.4
107.2
271.6

702.6

239.4

126.3
29.6
159.1

75.1

284.7

7.1

7.7

5.3
3.8

96.5

2.7

2.2
1.4

2

147.8

148.9
892.6

0
-2

451.0

8.1

5.8

251.7

604.4
387.6

6.9

6
4

600

9.1

347.0
Loans

11.0

-2.2

-1.7

-4

0
2003

May 26, 2008

2004

2005

2006

2007

03

Sony Financial Holdings Inc. All Rights Reserved

04

05

06

07

(FY)

78

Securities (Breakdown)
Securities, by Sector

Securities (by Ratings)(Billions of yen)

600
(Billions of yen)

500

600
500

451.5

400

354.4

323.6

182.6
215.2

169.1

25.9

23.0
10.0

84.7

110.3

110.5

95.1

03/31/04

03/31/05

03/31/06

100

200

47.3
112.5
31.8

183.0

195.2

200

53.4

400
300

381.2

300

0

488.8

18.3

45.6

122.4

100
0

39.2

141.9

121.1
69.4
81.5
17.0
146.6

53.6

113.3
32.8

69.2

110.1
54.8

214.5

03/31/05 03/31/06

277.3

P-2
P-1
BB or lower
BBB
A
AA
AAA

157.5

95.1

03/31/04

03/31/07 03/31/08

45.6

76.0

Unrealized Gains and Losses

03/31/07

03/31/08

85.4(Billions of yen)

2

OthersFunds

0

Corporate and financial bonds-2

Japanese government-affiliated institution and foreign
government bonds-4

Floating-rate Japanese government bonds-6

Fixed-rate Japanese government bonds

-8

0.7

0.4

03/31/04

03/31/05

03/31/06

03/31/07

03/31/08

-4.4
-6.0
-9.0

-10

May 26, 2008

Sony Financial Holdings Inc. All Rights Reserved

79Revenue and Profit Composition
Gross Operating Profit

Basic Balance and Interest Spread* Internal management basis
Average balance of deposits* Internal management basis

918.2

683.3

0.88%

586.4

12
10

9.4
2.8

5.3

6
3.8

1.4
0.3

9.1
1.3
0.4

9.3

-4

-2

FY 03

9.3
7.3

6.4
4.0
2.3

1.1

0
-2

7.3

4.0
-0.1

Net interest income
General and administrative expenses
Basic balance

8

2

-3.6
-5.8

-6

2.3
0

10

4

0.3

6.4

* Interest spread = Yield on investment – Yield on financing(Billions of yen)

6

1.4

1.6
2

0.56%

11.0

8

4

0.64%

324.4
Net other income (loss)
Net fees and commissions
Net interest income

-0.7

-0.3

-6.9

-7.1

-7.7

-8.1

FY 04

FY 05

FY 06

FY07

-2.9

-8
-0.0

FY 04

0.91%

Interest spread

466.8(Billions of yen)

0.90%

-10
FY 05

FY 06

FY 03

FY 07

* Internal management basis: Of transactions treated as “net other income (loss)” and “net fees and commissions” from a financial accounting standpoint,
real investment gains or losses are recognized as “investment of assets” from a managerial accounting standpoint.
May 26, 2008

Sony Financial Holdings Inc. All Rights Reserved

80Future Management Policy:
The Second Stage—Acceleration of Growth
Positioning fiscal 2008 as our “second stage,” we aim to takea new step toward realizing our corporate philosophy. At thesame time, we will fully leverage the management base wehave established to date to achieve an acceleration of growth.

“Second Stage”
From customer satisfaction to increased loyalty
Business
expansion,
revenue andprofit strength

FY2008 to FY2010
FY2006 to FY2008
Until FY2006

Acceleration
Accelerationofofgrowth
growthSetting
Settingthe
thestagestagetotoaccelerate
accelerategrowth
growthBuilding
Buildingaaprofitableprofitablebusinessbusiness

May 26, 2008

Sony Financial Holdings Inc. All Rights Reserved

81Medium-Term Management Targets,Management Policies and Priority Measures
Medium-Term
Management Targets
Establish
Establishourselves
ourselvesas
asbankbankthatthatisisthe
theclear
clear
leaderleaderin
incustomer
customersatisfaction
satisfaction

Medium-Term Priority

Numeric Targets

Measures
Strengthen
Strengthenproducts
products
andandservices
services

1.
Maintain our unique position
1.
Maintain our unique position
2.
Earn unswerving customer
2.
Earn unswerving customer
supportsupport3.
Leverage existing customer base3.
Leverage existing customer baseto cultivate new customers
to cultivate new customers◆ FY2007
ROE*

4.5%

Capital adequacy
ratio

9.15%

Retail balanceMedium-Term
Management Policies
Acceleration
Accelerationof
ofgrowth
growthEstablish
Establishaafirm
firm
presence
aspresence asan
anassetasset
managementbankmanagement bankRaiseRaiseefficiency
efficiency
Forge
Forgestronger
strongerwin–win
win–winrelationships
relationshipswith
withcustomers
customers
May 26, 2008

EnhanceEnhanceALM
ALM

1.
Promote ALM through1.
Promote ALM throughoverall balance sheet optimization
overall balance sheet optimization2.
Raise ROE by optimizing
2.
Raise ROE by optimizing
allocation of capital
allocation of capital
3.
Strengthen investment to3.
Strengthen investment toaccelerate growth
accelerate growth

Raise
RaiseLevel
LevelofofReliability
Reliability
Raise the level of trust with each
Raise the level of trust with eachstakeholder, building even stronger win–stakeholder, building even stronger win–
win relationships at each level.
win relationships at each level.
1.
Achieve operational
1.
Achieve operational
excellence
excellence2.
Initiate environmental
2.
Initiate environmental
activities
activities
3.
Balance profitability and3.
Balance profitability andsoundnesssoundness
4.
Strengthen management
4.
Strengthen management
control structure
control structureSony Financial Holdings Inc. All Rights Reserved¥1,594.4 billion* Real ROE after adjusting for tax
effects (effective tax rate of 40%).
ROE of 12.4% on a financial
accounting basis.

◆ FY2010
ROE*

More than 8%

Capital adequacy
ratio

Approx. 10%

Retail balance¥2,600 billion

82

Responding to Customers’ Asset Management
Needs
 The Sony Bank Hypothesis

 Changing Asset Management(at Establishment)

StylesAlthough individuals are perceived to be riskAlthough individuals are perceived to be riskaverse, if they are given more flexibility andaverse, if they are given more flexibility andallowed to conduct transactions at nearallowed to conduct transactions at nearmarket rates, even if they shoulder somemarket rates, even if they shoulder somedegree of risk they will be interested indegree of risk they will be interested inearning high rates of interest through foreignearning high rates of interest through foreign
currency deposits.
currency deposits.

Emergence of medium- to long-term asset
Emergence of medium- to long-term asset
management styles employing foreign
management styles employing foreign
currency time deposits with high interest
currency time deposits with high interest
rates, as well as short-term asset
rates, as well as short-term asset
management styles targeting foreign
management styles targeting foreignexchange gains on transactions taking
exchange gains on transactions taking
advantage of exchange rate fluctuations
advantage of exchange rate fluctuations

 Transactions possible over the Internet 24
 Transactions possible over the Internet 24
hours a day, 365 days a year
hours a day, 365 days a year
 Transaction rates linked to market rates
 Transaction rates linked to market rates
and shown in real timeand shown in real time One-way foreign exchange commissions
 One-way foreign exchange commissionsof ¥0.25 yen to the U.S. dollarof ¥0.25 yen to the U.S. dollar

Market share

August 2007 introduction of “preferential
August 2007 introduction of “preferential
system on foreign currency deposits,”
system on foreign currency deposits,”
offering preferential rates on foreignoffering preferential rates on foreignexchange commissions according to
exchange commissions according todeposit balance
deposit balanceMay
May2008
2008
Commenced
foreign
Commenced foreignexchange
exchange
margintransactions
margin transactions

 Growing Needs
 Desire to hedge foreign exchange Desire to hedge foreign exchange Desire to generate profits denominated Desire to generate profits denominatedin yenin yen Lower exchange commissions
 Lower exchange commissions

Rates set every 0.01 of a yen
Rates set every 0.01 of a yen
Real time shifts from regular foreign
Real time shifts from regular foreign
currency deposits
currency deposits
Extensive information content
Extensive information content

Emergence of FX providers* Market share calculated from the Bank of Japan’s “Domestic
Bank Accounts/Individual Foreign Currency Deposits”
Foreign currency deposits(billions of yen)Sony Bank’s Response

4.5%

5.2%

3.6%

2.5%

1.5%
251.7

0.5%
15.2

48.6

FY2002

FY2003

May 26, 2008

5.7% (As of February 2008)

107.2
FY2004

159.1

148.9

147.9

FY2005

FY2006

FY2007

Sony Financial Holdings Inc. All Rights Reserved

FY200883

Product and Service Expansion and a Broader
Base to Generate Revenue and Profits
Sony Bank Securities
Yen deposits
ForeignForeigncurrency
deposits

StocksSony Bank customer
portfolios

ETF

Loans

While developing products to meet
diverse customer needs, we will build
a broader base from which to generate
revenue and profits.

REIT

Net interest income

Investment
trustsNet fees and commissions(Commissions, etc.)
Insurance

Foreignexchange
margintransactions

Credit card
settlement

Non-Interest Income Ratio
More than 30%

19%
15%

2006
May 26, 2008

Sony Financial Holdings Inc. All Rights Reserved

2007

2008

2009

2010
(Fiscal year)84Balance Between Profitability and Soundness
zImprove ROE

ROE of morethan 8%ROE (after adjustment for tax effects)

4.5%

RaiseRaiseefficiency
efficiencythroughthroughbusinessbusiness
expansion
expansion

2.3%

Improve
Improveallocation
allocationof
ofcapital
capitalImprove
Improvenon-interest
non-interestincome
incomeratio
ratio

11.49%

Capitaladequacy ratioof approximately
10%

9.15%
Capital adequacy ratio

zMaintain Capital Adequacy
Ratio
Increase
Increasecapital
capitalasasand
andwhenwhen
appropriate,
in
line
with
acceleration
appropriate, in line with accelerationofofgrowth
growth

Tier2
Tier1

Capital(Billions of yen)

374

374

2006

2007

Employ
Employsubordinate
subordinate(Tier(Tier2)2)capital
capitalMay 26, 2008

Sony Financial Holdings Inc. All Rights Reserved

2008

2009

2010 (Fiscal year)
85Group Synergy

May 26, 2008

Sony Financial Holdings Inc. All Rights Reserved

86Group Synergy Foster steady contribution to revenue and profits by cross-selling automobile insurance and mortgage loans through theLifeplanner channel
 Enjoy mutual benefits from offering fire insurance, group credit insurance and annuities
 Benefit from the December 2007 lifting of the ban on bank counter sales by expanding intra-group product offerings
 Continue to explore Group synergies in addition to cross-selling
Automobile
Automobileinsurance
insurance(via
Lifeplanners)(via Lifeplanners)
2,000

New policy premiums (Millions of yen)
Cross-selling share (%)

Mortgage
Mortgageloans
loans
(via
Lifeplanners)(via Lifeplanners)
20.0%

New financing (Millions of yen)
Cross-selling share (%)

30,000

15.0%

15.0%

25,000
1,500

10.0%

(Millions of yen)

5.0%

1,000

0.0%
-5.0%

10.0%
20,000 of yen)
(Millions

5.0%
0.0%

15,000-5.0%

10,000-10.0%

500-15.0%-20.0%0

FY2007

FY2008FY200920.0%-10.0%
5,000-15.0%

0-20.0%
FY2007FY2010FY2008FY2009FY2010Note: Figures for FY2008 onward are targets.
May 26, 2008

Sony Financial Holdings Inc. All Rights Reserved

87Entering New Fields of BusinessSony Life: Moving toward establishment of joint venture annuities subsidiary with AEGON
In 2007, established AEGON Sony Life Planning as preparatory company
In May 2008, SFH resolved to accept third-party allocation to raise Sony
Life’s capital ¥10.0 billion
Subsidiary to be capitalized initially at ¥20.0 billion (50:50), including capitalreserveSony Bank: Securities subsidiary commenced operations in October 2007
Began accepting account applications: October 1, 2007
Began handling Japanese stock transactions: October 15, 2007
Accounts as of March 31, 2008: 11,883
Customer assets as of March 31, 2008: ¥3,899 million
Established with aim of creating new securities business through tie-up between bank andsecurities company
Creating diverse lineup of asset management products that banks cannot handleAiming for profitability in FY2010

Other
Continuing to explore possibility of establishing a life insurance subsidiary in Greater China
May 26, 2008

Sony Financial Holdings Inc. All Rights Reserved

88Capital and Dividend Policies
 Appropriate assessment of the risks that the Group faces and maintenance of adequate capitalcorresponding to that risk
 In principle the Company will ensure stable ongoing dividends to shareholders, taking into considerationindustry trends and the Group’s operating performance, as long as our ongoing soundness as a financial
institution is ensured

Steady dividend payments since FY2004

Net income

Dividends

Forecast dividends of ¥3,000 per share for FY2007

Additional capital(Raised by newly
issued shares through
IPO)

Risks resulting fromentering new
businesses

Broad-based capital

Amount of risk

External
fund-raising

May 26, 2008

Sony Financial Holdings Inc. All Rights Reserved

89Consolidated Operating Performance
Forecast for FY2008(Billions of yen; line item amounts are truncated below ¥100 million; changes are rounded) Additional Information
FY2008FY2008PercentagechangeWe expect ordinary revenues to continue
increasing, owing to the robust expansionof each business. However, ordinary profit
is expected to decrease, for the reasonsdescribed below.
■ Life insurance business
The yield on general account investments
is expected to fall, compared with FY2008.

FY2004

FY2005

FY2006

FY2007(Interim
forecast)(Full-year
forecast)

Consolidated ordinary revenues

653.2

758.7

759.2

822.1

430.0

884.0

+ 7.5%Of which, life insurance business
Of which, non-life insurance business
Of which, banking business

604.0

696.4

689.5

741.3

386.0

793.0

+ 7.0%

38.1

45.7

51.0

55.6

30.0

59.8

+ 7.5% ■ Non-life insurance business

11.3

17.2

19.4

25.9

14.4

30.7

+ 18.5% The operating expense ratio is expected toConsolidated ordinary profit

12.2

25.3

18.3

44.5

18.0

37.0

(16.9%)Of which, life insurance business
Of which, non-life insurance business
Of which, banking business

17.0

24.3

14.8

39.0

17.0

34.0

(13.0%)

(2.8)

(0.7)

2.0

2.8

0.6

1.3

(53.9%)

(1.6)

2.2

1.3

2.4

0.5

1.3

(45.9%)

Consolidated net income

6.3

11.5

10.0

24.2

10.0

21.0

(13.4%)

Consolidated Ordinary Revenues(Billions of yen)

Banking business
Non-life insurance businessLife insurance business

758.7

759.2

rise slightly, owing to higher system-related
expenses.
■ Banking business
Expenses are expected to increase:system-related and other expenses are
expected to increase, Sony Bank Securities
is expected to operate in the red initially,
and goodwill will be amortized, among
other factors.

Consolidated Ordinary Profit

884.0(Billions of yen)

822.1

Banking business
Non-life insurance businessLife insurance business

44.5

37.0

653.2
25.3
(Forecast)May 26, 2008

12.2

Sony Financial Holdings Inc. All Rights Reserved

18.3(Forecast)90Medium-Term Management Targets (FY2010)
Key Management Benchmarks
 Consolidated ordinary revenues, consolidated ordinary profit and consolidated net income
 Consolidated adjusted ROE
SonySony Life
Life Embedded
Embedded Value
Value and
and
Adjusted
ROE
Adjusted ROE

SonySony Assurance
Assurance Net
Net Income
Income andandAdjusted
ROE
Adjusted ROE

Target EV of ¥1–1.1 Trillion by FY2010

Aim to Maintain Adjusted ROE of 10%
or Higher

Sony
Sony Bank
Bank NetNet Income
Income andand ROE
ROE

Target ROE of 8% or More(Billions of yen)(Billionsof yen)(Billionsof yen)(FY)
Source: Sony Life
Notes: Calculation of Adjusted ROE
Numerator: Net increase in EV plus dividend
Denominator: The average of (EV at previous fiscal year-end — dividend +EV at current fiscal year-end）

May 26, 2008

(FY)
Source: Sony Assurance
Notes: Calculation of Adjusted ROE
Numerator: Net income plus an increase in provision for special
catastrophe reserves (after-tax) and an increase in reserve for pricefluctuations (after-tax)
Denominator: The average of (shareholders’ equity or net assets + special
catastrophe reserve and reserve for price fluctuations (after-tax)) as of theprevious fiscal year-end and the current fiscal year-end

Sony Financial Holdings Inc. All Rights Reserved(FY)
Source: Sony Bank
Notes：Calculation of ROE:
Numerator: Net income
Denominator: The average of shareholders’ equity or net assets as of theprevious fiscal year-end and the current fiscal year-end

91Thank you!

May 26, 2008

Sony Financial Holdings Inc. All Rights Reserved

92

APPENDIX

May 26, 2008

Sony Financial Holdings Inc. All Rights Reserved

93Comparison with Sony Corporation’s
Consolidated Financial Services Segment(Principal Differences between Japan GAAP and U.S. GAAP)* “SFH” refers to “Sony Financial Holdings Inc.”
Financial Services Segment of Sony
Corporation, Consolidated(U.S. GAAP)*SFH Consolidated(Japan GAAP)

Treatment of new policy acquisition
costs(Concerns the life insurance business andthe medical care insurance portion of the
non-life insurance business)

The portion of costs related to acquiring new
policies or changes in these costs that is deemed
recoverable is deferred.

Costs are treated as expenses during the period
in which they are incurred.

Method of calculating policy reserves（insurance policy liabilities)(Concerns the life insurance business andthe medical care insurance portion of the
non-life insurance business)

Under U.S. GAAP, calculated according to the net
level premium method using insurance actuarial
figures.

Calculated according to methods approved byregulatory bodies. Computed with an emphasis on
the early accumulation of policy reserves from thestandpoint of protecting policyholders.

Treatment of the market value of
convertible bonds held
(Concerns the life insurance business)

Changes in the fair value (changes in the market
value) of so-called “hybrid financial products,”
which include derivatives, are posted to theincome statement as profits or losses.

Changes in fair value are posted to the balance
sheets as increases or decreases in net assets.

Notes:
1. The above-mentioned differences between U.S. GAAP and Japan GAAP are deemed material to SFH’s consolidated ordinary profit for FY2007.
2. The scope of Sony Corporation’s consolidated Financial Services segment and SFH’s consolidation differ, as follows:• Sony Corporation’s consolidated Financial Services segment: Sony Life Insurance Co., Ltd., Sony Assurance Inc., Sony Bank Inc., Sony FinanceInternational Inc., others• SFH consolidated: Sony Life Insurance Co., Ltd., Sony Assurance Inc., Sony Bank Inc., Sony Bank Securities Inc., Sony Life Insurance (Philippines)
Corporation
3.Under U.S. GAAP, the book value at the date of conversion to shares is used as the market value of shares converted from convertible bonds (CBs),
whereas under Japanese accounting principles the book value is carried as the CB acquisition price even after conversion. Consequently, total gains orlosses on the sales of shares converted from CBs (differences between selling prices and book values), and total impairment losses (differences between
market value and book value)—of stocks included in the scope of impairment loss accounting—differ depending on the use of U.S. or Japanese GAAP.

May 26, 2008

Sony Financial Holdings Inc. All Rights Reserved

94

Contact:
SFH

May 26, 2008

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

Sony Financial Holdings Inc. All Rights Reserved95