[Presentation Material]

Sony Financial Group
Corporate Strategy Meetingfor Fiscal Year 2015

Sony Financial Holdings Inc.
June 1, 2015
Sony Financial Holdings Inc. All Rights Reserved

Disclaimers:
This presentation material contains statements concerning the current plans, expectations, strategies and beliefs of the Sony Financial Group. Anystatements contained herein that pertain to future operating performance and that are not historic facts are forward-looking statements. Forwardlooking statements may include
include—but
but are not limited to—words
to words such as “believe,”believe, “anticipate,”
anticipate, “plan,”plan, “strategy,”
strategy, “expect,”
expect, “forecast,”
forecast, “predict,”predict, and“possibility” 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 Sony Financial 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 theforecasts expressed or implied in forward-looking statements. Consequently, investors are cautioned not to place undue reliance on forward-looking
statements. The Sony Financial Group disclaims any obligation to revise forward-looking statements in light of new information, future events orotherth findings.
fi di
Sony
S
FinancialFi
i l Holdings
H ldi
didisclaimsl i
any suchh obligation.
bli tiTh
The iinformationfti containedt i d iin thi
this presentationt ti ddoes nott constitutetit t or formf
parttof 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.
*Unless otherwise indicated, in these materials figures less than the indicated unit have been truncated, while ratios and percentage changes have been rounded.
*The amount of net income for and after FY15 is equivalent to the amount of “NetNet income attributable to parent company”
company of Accounting Standard forBusiness Combinations (ASBJ Statement No. 21, on Sep. 13, 2013) and the related revision.
* “Lifeplanner” is a registered trademark of Sony Life. “Foreign Currency World” is a registered trademark of Sony Bank.

Sony Financial Holdings Inc. All Rights Reserved2AgendaSony Financial GroupKey Messages
Medium-term business strategies
gof each ggroup
p company
p ySony Life
Sony AssuranceSony Bank
Sony Lifecare
Sony Financial Group
Consolidated management targets
Returns to shareholders

Sony Financial Holdings Inc. All Rights Reserved3Sony Financial GroupKey Messages

 Operating performance reached record levels in FY14
 The life insurance, non-life insurance and banking businesses each posted increased
revenues and profits, leading to consolidated ordinary profit of ¥90.0 billion
 Sony Life’s new policy amount made a V-shaped recovery to establish a new record The new medium
medium--term management plan to FY17 aims to further
strengthen competitiveness of each group company and ensuresustained and steady growth amid an ultralowultralow-interest
interest--rate environment
 FY17 targets: Consolidated ordinary profit of ¥100.0 billion
and operating income under US-GAAP of ¥200.0 billion

 Further augment returns to shareholders
 Increased the medium-term target
g dividend payout
p yratio to 40–50%,, enhancing
g returns toshareholders
 Expect to raise dividends per share by ¥15 (from ¥40 per share to ¥55) in FY15, for the
fourth consecutive year of increases, since FY12Sony Financial Holdings Inc. All Rights Reserved

4

Sony
y LifeSony Financial Holdings Inc. All Rights Reserved5Sony Life

Achieve Steady Growth
Steadily increase policy amount in force at approx. 4% per annum
while establishing framework for providing lifelong insurance protection toeach customer
Over
Over ¥50 trillion¥45 trillion

Trends of Sony Life’s policy amount in force(Individual life insurance and annuities)(Trillions of yen)

CAGR

4%
39.0

40.9

27.8

FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14Sony Financial Holdings Inc. All Rights Reserved

FY17

FY20
6

Sony Life

Key Messages: Initiatives toward Growth Expand the scope of the Lifeplanner channel andPromote sustainablegrowth of sales
channels

improve productivity
 Increase business in the independent agent channel

in response to changes in the environment
 Continue to concentrate on the death-protection

EntrenchEth competitivetiti
advantages, take on
growth domains

business an area of competitive advantage
business, Undertake new initiatives targeting the corporate andsenior markets

 Maintain a high level of soundness and enhance

Ensure stable growthin corporate value

corporate value
 Steadily increase profits over the medium to long termSony Financial Holdings Inc. All Rights Reserved7Sony Life

Trends of New Policy Amount by Sales Channel
Achieved record sales in new policy amount in FY14,
and will maintain growth
Trends of Sony Life’s new policy amount(Individual life insurance and annuities)■Lifeplanner channel■Independentagency channelhl(Trillions of yen)

4.2

¥5.4 trillion

4.7

4.4

New policy amount increased
substantially centering Lifeplanner
channel while reinforcing
g sales
capabilities in the field of death
protection

38
3.8
Aiming to acquire further contracts
by providing death-protection
cons lting thoroughly
consulting
thoro ghl to customers
c stomers
and strengthening marketing
capabilities through utilizing andmixing each channel sales
advantageadvantage.

+4%

+29%

FY11

FY12

FY13

FY14

FY17

Sony Financial Holdings Inc. All Rights Reserved8Sony Life

Achieving Further Growth in Lifeplanner Channel
Steadily increase the number of Lifeplanners, while maintaining andimproving their productivity
Number of Lifeplanners & productivity
Productivity*

111

100

Over 4,600
4 600

New policy amountproductivity index

4,121

4 133
4,133

4,216

4,329

Number of
Lifeplanners as ofth endthed off fiscalfilyear**

Increase about
100 Lifeplanners
annually(Person)

FY11

FY12

FY13

FY14

FY17

* Productivity is indexed to FY11 = 100, calculated on the basis of new policy amount.
** The figure as of the end of fiscal year includes the number of contracted Lifeplanner sales employees and those rehired on a fixed-term contract basis after retirement.

Sony Financial Holdings Inc. All Rights Reserved

9Sony Life

Achieving Further Growth in Lifeplanner Channel
Aiming to hire 500 newly recruited Lifeplanners annually by actively
promoting Lifeplanners to “Office managers”, responsible for recruiting
Number of newly recruited Lifeplanners & Office managers

500

419
Newly recruited
Lifeplanners

353

369

380

403

Over 500

414

Officemanagers

Actively
promotingpgLifeplanners to
Officemanagers(Person)

FY11

FY12

FY13

FY14

Sony Financial Holdings Inc. All Rights Reserved

FY17

10

Sony Life

Further Growth in the Independent Agent Channel
Increase business volume in response to environmental changes
Changes in the regulatory environment

New Policy Amount
New policy amount index

130(FY11 = 100)

100

107

 Duty to prepare systems
 Duty to understand intent
 Duty to provide information

 Independent agents withclose regional ties
System preparation support
Marketing support

 Independent agentscovering
i a broadb
d areaSupport for establishment of
new shops
Support for agent educationand cultivation

FY11 FY12 FY13 FY14FY17Forge stronger trust-based
relationships throughmanagement and sales support
tailored to individual partners

Sony Financial Holdings Inc. All Rights Reserved11Sony Life

Provide Thorough Death Protection Consulting
Maintain and strengthen initiatives dedicated to providing death protection
Share of business by product category(Based on annualized premiums from new policies)

 Enhance education systemsyIndividual annuities
6%
Medicalprotection,
Living benefit
protection, other
20%

First-sector
products(death protection)

74%

Revise our program for educating new Lifeplanner
sales employees
Increase sophistication of manager training which is
conducted for all managers

 Reinforce product capabilities(Reference) overall market

Release new products that expand the scope ofcoverage on family income insurance

 Revise qualification and evaluation systems
29%
53%
18%
(Source) Individual companies’ disclosure data (FY14.3Q)

Introduce a standard for death protection sales
capabilities into our systems for qualifying andevaluating Lifeplanner sales employees andmanagers

Sony Financial Holdings Inc. All Rights Reserved

12Sony Life

Initiatives in Growth Domains
Strengthen and accelerate initiatives in domains offering room for growth(Conceptual representation of Sony Life’s growth)◆ Companies
Enhance cross-channel support structures
Corporrate
insurannceCompany owners,
employees
Seniors

Develop and expand sales support tools
Prepare back-office systems
Consider developing new products forcompanies

Individual
insurance◆ Seniors
Central target
areas forprotection(families)

Launch lump-sum payment whole life
insurance (May 2015)
Cultivate the market from the angle ofinheritance needs

Sony Financial Holdings Inc. All Rights Reserved13Sony Life

Stable Growth in Corporate Value (MCEV)
Achieve steady growth in corporate value through steadily acquiring new
policies as well as keeping a high level of financial soundness
MCEV

Financial soundness based on
economic value(Billions of yen)

ESR (MCEV/ Risk amount)

ROEV
Approx. 6%

Core ROEV＋5.0%

14.3.31＋121.61.775%(32bp)

40 yr

Maintain above
150%

1,221.3,

Economicc variances, etcc.

+1.7
Assumpption changes

w business valu
ue
New

+14.7

664.3

15.3.31

177%

1,322.9+56.5 1,322.9

Expecteed existing
business contribution*1,201.3

184%
150%

＋63 3
＋63.3
+48.6

¥1.5 trillion

18.3.311.455%(JGB yields)*Dividends paid to shareholders of ¥20.0 billion in FY14 are not included.

Sony Financial Holdings Inc. All Rights Reserved

14.3.31745.5

15.3.31(Billions of yen)

MCEV
The risk amount based on
economic value (after tax)

14

Sony Life

Stable Growth in Corporate Value (Ordinary Profit)
Pursuing its upfront investments in FY15,
aiming for middle to long term profit growth
Ordinary profit(Life insurance business)

CAGR
Approx 6%
Approx.

((Billions of yen)
y )

78.3

(2.0)
(2.0)
(3.0)

+2.7

74.1

Positive impactifromincreasinng policies in forrce

Operating expenses(upfront invvestments)

Capital gainss

Provision of pollicy reserves forr
minimum guara
antees for variable
life insurance

FY14

84 0
84.0

FY15

Sony Financial Holdings Inc. All Rights Reserved

FY17

15

Sony Life

Sony Life Medium-term Targets
Strive to ensure continuous growth while expanding business volume

FY14

FY17

Policy amount in
force

¥40.9
trillion

CAGR
approx. 4%

Over ¥45.0
trillion

Number of
Lifeplanners (Note1)

4,329

Approx. 300
increase

Over
4,600

MCEV (Note2)

¥1.3
¥1
3
trillion

ROEV
approx. 6%

¥1.5
¥1
5
trillion

Ordinary profit

¥78.3
¥78
3
billion(Life insurance business)(From FY15)

CAGR
approx. 6%

¥84.0
¥84
0
billion(Note1) The figure includes the number of contracted Lifeplanner sales employees and those rehired on a fixed-term contract basis after retirement.
(Note 2) Sony Life’s assumptions about the market environment as of the middle of May, 2015 for FY17 target.

Sony Financial Holdings Inc. All Rights Reserved

16

Sony
y AssuranceSony Financial Holdings Inc. All Rights Reserved17Sony Assurance

Key Messages

 Substantial recovery in profitability, due to an improved loss

Ensure soundEdprofitability

ratio
ti on automobilet
bil iinsurance Ensure sound profitability through detailed ongoingmeasures to improve the loss ratio

Maintain growth
and achieve stableprofits over thelong term

Maximize customer
satisfaction, theengine of growth Firmly maintain its leading position in the market for direct

automobile insurance Reinforce the stable earnings base by expanding businessin categories other than automobile insurance Concentrate on further enhancing customer retention

capabilities
 Augment customer satisfaction by optimizing service

throughg individual customer contact p
pointsSony Financial Holdings Inc. All Rights Reserved18Sony Assurance

Direct Automobile Insurance Market
Sony Assurance has remained No. 1 in sales in the growing direct
automobile insurance market over the past 13 years.
Automobile Insurance market and market
share of major direct non-life insurers

Direct premiums written by major direct
Insurers (Automobile insurance)(Billions of yen)(Trillions of yen)
90.0
10%

4

S
Sony
A
Assurance

9% 80.0

3

Total automobile insurance market(Total direct premiums written)

6 9%
6.9%
6.6%
6.2%
5.8%

5.2%
4.7%
4.3%
3.9%
3.6%
3.3%
Market share of
2.8%

2

2.3%
1

7.2% 8% 70.0

Major direct insurers

1.7%

7% 60.0
6% 50.0
5%

Ａ
40.0

Ｂ
Ｃ

4%

30.0

Ｄ

3%

Ｈ

20 0
20.0

Ｅ

2%

1.1%
0.7%
0.3%
0.0%

10.0

Ｇ

1%

Ｆ

0.0

0

0%

Source: Statistics of Life Insurance Business in Japan.

Source: Materials officially disclosed by individual insurers.

Sony Financial Holdings Inc. All Rights Reserved19Sony Assurance

Healthy Profitability FY14 Review
Reached record high in profits in FY14 due mainly to a decline in the loss
ratio for automobile insurance. Aiming to keep healthy profitability in linewith continuous improvement on the loss ratio.
ratio
Trend of loss ratio(Automobile insurance)

Trend of ordinary profit andadjusted ordinary profit(Billions of yen)

Revision of
insurance
premiums
Introduction of a
new non-fleet
driver rating
systemNet loss ratio = (Net losses paid + Loss adjustment expenses ) / Net premiums written
Earned/Incurred loss ratio = (Net losses paid + Provision for reserve for outstanding
losses + Loss adjustment expenses) / Earned premiums

Adjusted ordinary profit = Ordinary profit + Provision for catastrophe reserve

Sony Financial Holdings Inc. All Rights Reserved20Sony Assurance

Maintain Growth
Maintain growth in automobile insurance + expand other categories
Maintain a leading position in mainstay automobile insurance and ensure stable longterm earnings by proactively developing domains of business other than automobile
insurance
Initiatives to achieve sustainable growth
Automobile insurance
・Increase sophistication of risk segmentation, pursue
progressiveness and rationality
・ Develop products to meet more broad-ranging
customer needs
Product
development

Medical insurance, others
・Leverage Sony Assurance’s strengths into new
product development / Introduce and expand into
new lines.
Sony Assurance’s strengths- Direct + Internet- Product uniqueness and outstanding coverage- Rational pricing＋
Marketing・Continue proactive advertising investments, centeringon television and the Internet
・ Apply accumulated expertisein direct marketing to raise
advertising productivity

Total direct premiums written
MaintainMi t i growthth in
i automobilet
bil insuranceianddincrease percentage of business in medical andothers.
CAGR +6%

1,080
108.0

(Billions of yen)
78.3
783

825
82.5

87.3
873

90.4
904

Medical,other

Automobile

FY11

FY12

Sony Financial Holdings Inc. All Rights Reserved

FY13

FY14

FY17

21

Sony Assurance

Pursue Product Progressiveness, Rationality and Uniqueness
Sales launch of Japan’s first driving-characteristic risk-segmented“Gentle Driving Cash-Back Plan”
Strengthen initiatives addressing a new customer baseCash back ofmax. 20% of
paid premiums.

Based on previous experience, pursue further increases in customer
convenience and cost reductions. Also, continue to promote productddevelopmentliinitiatives.
ii iSony Financial Holdings Inc. All Rights Reserved22Sony Assurance

Maximize Customer Satisfaction
Through initiatives to enhance customer value, concentrate on further augmenting
customer retention capabilities
Employp y NPS* to enhance customer experiencepthroughg individual customer contact pointspCustomer satisfaction surveys in FY14

Further customer value enhancement initiatives

Nikkei Business, After-Sales Service
Customer Satisfaction Ranking

Accident response service• Pursue rapid and satisfactory responses to provide a “guaranteed”
level of accident response quality• Expandp
accident responsepsystemyand train respondentsp(fourth straight year)

Oricon High Level of Customer Satisfaction
Overall Automobile Insurance

HDI-Japan Web Support Portal Rating

SapporoContact
CenterCustomer service• Augment telephone reception system and service quality
Establish third center in Kumamoto (July 2015)• Provide optimal services tailored to individual
customer needs and policy status

Web/smartphone service

No.1

Automobile Insurance Division

Non-life Insurance DivisionHelp Desk Rating

No. 1((second straightg year)y )Three stars(fifth straight year)

Three stars(third straight year)

Japan Brand Strategy, Overall Customer Support
Automobile Insurance Division

No. 1

Tokyo
Contact
CenterKumamoto Contact Center• Pursue convenience in the aim of becoming the overwhelming
leader in non
non-life
life insurance
ins rance via
ia the Web/smartphones• Make policy procedures a stress-free experience for customers* NPS stands for Net Promoter Score

Sony Financial Holdings Inc. All Rights Reserved23Sony AssuranceSony Assurance Medium-term Targets
Maintaining its leading position in the direct automobile insurance market with thechallenge of recording ¥100.0 billion in the direct premiums written by FY17.
Raising revenues and profits, backed by its steady profitability.

FY14
Direct premiums
written
Net Expense ratio
E. I. loss ratio (*1)
Sum of two ratios

¥90.4
¥90
4
billion
26.7％
64.3％
91.0％

FY17
CAGR +6％¥108.0¥108
0billionDecrease

Sum of two
ratios90% range

Ordinary profit

¥4.2
¥4
2
billionCAGR +7％

Adjusted ordinary
profit (*2)

¥7.1
billionCAGR +6％

Adjusted ROE

14.2%

Flat

* 1 For all types of policies and including loss adjustment expenses.
* 2 Adjusted ordinary profit = Ordinary profit + Provision for catastrophe reserve

Sony Financial Holdings Inc. All Rights Reserved

¥5.0
¥5
0
billion¥8.5
billionApprox.
14%24
24

ソニー銀行Sonyy BankSony Financial Holdings Inc. All Rights Reserved25Sony Bank

Key Messages

Increase business volume
leveraged by customer
evaluation

 Maintain high third-party customer satisfaction

ratings
 Strengthen product and service promotions

 Further enhance “Foreign Currency World”

StrengthenStth strategict t i
products

 Expand the individual loan business, centering on

mortgage loans

 Maintain and improve profit-generatinggg capacityyEnsure stable profitgenerating capacity

through more sophisticated operation of ALM
 Secure a certain level of interest spread

Sony Financial Holdings Inc. All Rights Reserved26Sony Bank

Business Expansion Leveraged by Customer Evaluation
Strengthening promotional activities in order to expand business while
maintaining high levels of customer satisfaction.
Nikkei’s financial institution FY14 after-sales service
customer satisfaction
customer satisfaction
rankings, banking division
rankings
Nihon keizai shimbun
Announced in February 2015

No.

1

Ranked 1st for theeighth consecutive
year((Excluding
g regionalgbanks))
Nikkei BusinessAnnounced in November 2014

No.

1

Ranked 1st for thethird consecutive
year

HDI-Japan sponsoredratings for support
portalsp

HDI-Japan sponsoredratings for inquirydesks

HDI Japan

HDI Japan

★★★★★

★★★★★

Five-star rating

Five-star rating

Retail balance[Sum of deposits, investment trusts, personal loan balance](Billions of yen)Over
3,600.0

Investment trusts
Foreign currency deposits
Yen deposits
Personal loans
2,962.6
2,841.2
117.4
2,621.1 116.9
363.5
102.0
390.2
371 7
371.7

1,390.5756.8

1,467.2

866.8

1,526.4

955.1

3,087.5
129.6
327.2

1,551.0

1,079.6

12.3.31 13.3.31 14.3.31 15.3.31

Sony Financial Holdings Inc. All Rights Reserved

18.3.3127

Sony Bank

Further Enhance “Foreign Currency World” (1)Expand foreign currency services by providing a wide variety offoreign currency products and services by FY17
New foreign exchange
settlement service“Sony Bank WALLET”

Developing administrator's
precise description skills
off productsd tRemittance of foreign currencies

Foreign currency cash

Enhancing its customers’ convenience inthe foreign exchange settlement service

Sony Bank’s “ Foreign Currency World”
Development of a wide variety of foreign
currency asset management services

Foreign currency
deposit

Revision of foreign
currency preferential
systemfinancial products
intermediary services

Foreign exchange
margin trading

Structured deposit
Investment trust / NISASony Financial Holdings Inc. All Rights Reserved28Sony Bank

Further Enhance “Foreign Currency World” (2)Enhance functions for using foreign currencies via Sony Bank WALLET,in the version 2.0 of “Foreign Currency World”

Very usefuloverseas

Foreign Currency World 2.0
The introduction of Sony Bank WALLET
substantially increases the opportunities forusing foreign currencies

Withdraw cash atoverseas ATMs
Use Sony BankWALLET to
withdraw cash to
be used overseas
from accumulated
foreign currencies

Current Foreign
Currency World
Enhanced emphasis on
saving and increasing,focused on foreign
currency deposits
Sony Bank WALLET isvery useful in Japan, too￥

Foreign exchange
settlements on shopping
Make purchases
overseas based on
the Sony BankWALLET balance

Real-time exchange＄

Even without a foreign
currency balance, useSony Bank WALLET topay by changing moneyfrom yen deposit atcurrent rates

Sony Bank,
Bank the foreign currency specialist,
specialist provides easy ways toaccumulate, increase and use foreign currencies
Sony Financial Holdings Inc. All Rights Reserved29Sony Bank

Expand Loans to Individual Customers
Continue to strengthen the mortgage loan business, and enhance productcharacteristics to meet customers’ needs for funding throughout their lives
Mortgage loan balance
and loan-deposit rate
All banks *Six months ended September 30, 2014

Strengthen channels

Over
90%

Sony Bank (based on yen deposits)■ Mortgage loan balance (billions of yen)

76 5%
76.5%
68.9%

68.5%
66.1%

69.3%

Strengthen and diversify product value

68.5%*

Over
1,300.0

68.4%

60.1%

・Strengthen alliances with realtors and increase
the number of alliance partners
・Invigorate the agent channel centered on Sony
Life’s Lifeplanner sales employees

1,074.3
949.3

・Respond to customers’ needs for funding
throughout their lives－Reintroduce card loans (first half of FY15)－Consider planning loan products for seniors
・Expand mortgage loan ancillary services

860 3
860.3
749.6

Promote increases in operating efficiency
・Thoroughly promote efficiencies in loanbusiness

12.3.3113.3.3114.3.3115.3.31

18.3.31

Source: Nationwide Bank Financial Statement Analysis, Japanese Bankers Association

Sony Financial Holdings Inc. All Rights Reserved30Sony Bank

Maintain and Increase Profitability
Enhance profitability to secure a certain level of interest spared bycontrolling deposit structure under the low interest rate environment.
Enhance profitability
by controlling deposit structure

Trend of interest spread

Increase liquid deposit and foreign
currency deposit ratio¥1 8 trillion¥1.8

Aiming to maintaincurrent level¥2.0 trillion

Sony Financial Holdings Inc. All Rights Reserved31Sony Bank

Sony Bank: Medium-term Targets
Achieving a more stable revenue stream that cannot be easily swayed by market
conditions by offering high-value services to customers and enhancing ALM

FY14
Retail balance[Sum of deposits, investment trusts
and personal loan balance]

Gross Operating Profit(Sony Bank consolidated)

Operating Profit(Sony Bank consolidated)

ROE(Sony Bank consolidated)

FY17Over ¥3.6
trillion¥3.0
trillion

CAGR
Over 6%¥24.9
billion(Change From ¥23.9
billion of FY15)
CAGR
approx. 5%¥26.3
billion¥7.3
billion(Change From ¥6.4
billion of FY15)
CAGROver 10%¥7.8
billion

6.0%

Maintaining
6% level

Around6%*As for the CAGR targets of gross operating profit and operating profit, forecast amounts from FY15 to FY17 are used for the calculation consideringgains on the sale of bonds recorded in FY14.

Sony Financial Holdings Inc. All Rights Reserved

32

S
Sony
Lif
Lifecareソニーフィナンシャルグループ(Nursing Care Business）
Business）

Sony Financial Holdings Inc. All Rights Reserved33Sony Lifecare

Progress in the Nursing Care Business
Aim to expand business through two pillars: opening newly constructed homes andforging strategic alliances<Open new homes>
Springp g 2016+

Sonyy Lifecare Groupp plansptoopen first newly built nursing carehome (Soshigaya, Setagaya-ku, Tokyo)"Life Focus"<Form strategic alliances>May
y 2015Sonyy Lifecare to enter capitalpparticipation in Yuuai Holdings(Acquiring 14.5% of issued shares)

Hanakotoba series

We provide services to ensure thatregardless of your age, you can live the sortof life that suits you best. Sony Lifecare
makes
a es residents’es de ts lives―up
es up to tthe
eppresent
ese t
and from here on out―the focus of theirservices.

29 facilities
Approx. 1,400 rooms

Hanakotoba Machida Tsurukawa, Tokyo• Focus on residents’ lifestyles, propose individually
tailored plans, by utilizing operating know-how at thenursing care home in Fujigaoka, Yokohama acquired inAutumn 2013.
• By
B openingi hhomes centeredt d on th
the T
Tokyo
k metropolitantlitarea and three surrounding prefectures to establish adistinctive brand in the upper/middle layer of the market• Establish presence in the nursing care service market• Enter the broad “volume zone” customer base• Acquire full development expertise, human resources andother management resources
reso rces

Sony Financial Holdings Inc. All Rights Reserved34ソニーフィナンシャルグループ
Sony Financial GroupSony Financial Holdings Inc. All Rights Reserved35Sony Financial Group

Growth in Each of the Group’s Businesses
Maintain toptop-line growth through the steady expansion of our three core businesses
S
Sony
Lif
Life

S
Sony
Assurance
A

S
Sony
B
Bankk

Policy amount in force

Direct premiums written

Retail balance(Trillions of yen)Over ¥45
trillion

CAGR
Approx. 4%

CAGR
Approx. 6%¥108.0billion

FY15

FY16

FY17

Previous
mid-term
plan

Current
mid-term
plan

FY14

Yen and foreign currency deposits +investment trusts + personal loans(Trillions of yen)

90.4

40.9

FY14

(Billions of yen)Over ¥3.6¥3 6
trillion

CAGR
Approx. 6%
3.0

FY15

FY16

FY17

Previous
mid-term
plan

Current
mid-term
planSony Financial Holdings Inc. All Rights Reserved

FY14

FY15

FY16

FY17

Previous
mid-term
plan

Current
mid-term
plan

36Sony Financial Group

Consolidated Ordinary Revenues and Profit
Operating results are expected to be higher than previous medium-term forecast,targeting consolidated ordinary revenues of ¥1,500.0 billion, consolidated ordinary
profit of ¥100.0 billion, and consolidated net profit of ¥65.0 billion in FY17(Billions of yen)Life Insurance business

Non-life insurance business

1,500.0
1,352.3

1,300.0

90.0

FY15

85.0
8 0

65.0
54.4

57.0

(Previous)
FY16
Approx.56.0(Previous)
FY16
Approx.86.0

FY17Previous
mid-term
plan

Banking business

100.0(Previous)
FY16
1,360.0

FY14

Consolidated net profit

Consolidated ordinary profit

Consolidated ordinary revenues

Current
mid-term
plan

FY14

FY15

FY17
Previous
mid-term
plan

Current
mid-term
planSony Financial Holdings Inc. All Rights Reserved

FY14

FY15

FY17
Previous
mid-term
plan

Current
mid-term
plan

37Sony Financial Group

Consolidated ROE
SFH’s consolidated ROE has been over 10% both in Japanese GAAP and US-GAAP
FY10

FY11

FY12

FY13

FY14

ROE (J-GAAP)

14.8%

10.2%

11.5%

9.0%

10.7%

ROE (US-GAAP)

10.0%

14.6%

11.1%

11.3%

13.0%

ROE (J-GAAP, US-GAAP) = Net income / Average of stockholders‘ equity( Total net assets minus minority interests)

Consolidated adjusted ROE is expected to be approx. 6% in FY17, reflecting Sony
Life’s ROEV, which is depressed by the current market assumptions, including low
interest rates.
FY12

FY13

FY14

FY17
Approx. 6%

Consolidated adjusted ROE

3.3%

14.2%

9.5%

Sony Life: ROEV

3.3%

14.9%

9.6%

core ROEV

5.2%

6.0%

5.0%

Sonyy Assurance: Adjustedj
ROE((0.1%)
%)

9.8%
%

14.2%
%

Approx.
pp o 14%%

Sony Bank (Consolidated): ROE

4.3%

4.8%

6.0%

Approx. 6%*

Approx. 6%*

Please see slide 46 for the formula of adjusted ROE calculation* Assumption for calculating adjusted ROE for FY17Sony Life： Interest rate assumptions are projected in the middle of May 2015; Sony Bank： Please see slide 49 for Interest rate assumptions by currency.

Sony Financial Holdings Inc. All Rights Reserved38Sony Financial GroupOperating Income under US-GAAP [Reference]Sony financial Group’s operating income (US(US-GAAP) is expected to stably growand reach ¥200.0 billion by FY17
Pushed up by market factors(Approx. ¥20.0 billion)(Billions of yen)¥200.0 billion

193.3

170.3

FY13

FY14

FY15

FY16

FY17

 SFH
s parent company,
U.S.
GAAP. The financial information for the Sony Group’sGroup sSFH’scompany Sony Corporation,
Corporation presents its consolidated financial statements in accordance with U
S GAAP
Financial Services segment, which includes the Sony Financial Group, is presented in accordance with U.S. GAAP. Although the Sony Financial Group constitutes the
majority of the Sony Group’s Financial Services segment, our Group presents its consolidated financial statements in accordance with Japanese GAAP.
 Please see slide 45 for an explanation of the primary discrepancies and differences in scope between U.S. and Japanese accounting practices.

Sony Financial Holdings Inc. All Rights Reserved39Sony Financial Group

Enhance Shareholder Returns
 We will enhance shareholder returns by revising upward our medium-term target

for the dividend payout ratio into 40% to 50% of consolidated net income.
 The proposed dividend for FY15 is ¥55 per share,share up ¥15 year on year,
year showing

the fourth consecutive year of dividend increases since FY12.
Mid--term dividend payout ratio targetMid

40～50%

30～40%
Dividend payout ratio (%)

42.0
32.2
26.5

26.4
21.2

20.9

32.0

24.1

23.9

13.6
17.3
Annual dividend amount (Billions of yen)

13.0
10.8

Dividend per share

8.7

8.7

FY09
09

FY10
0

FY11

FY12

FY13
3

¥15

¥20

¥20

¥25

¥30

6.5

6.5

6.5

FY07
0

FY08
08

¥15

¥15

Sony Financial Holdings Inc. All Rights Reserved

FY14

FY15
5

¥40
¥55
(Planned) (Forecast)

40

End

Sony Financial Holdings Inc. All Rights Reserved

41

Appendix

Sony Financial Holdings Inc. All Rights Reserved42Sony Financial Group (Reference 1)

Financial Review for FY14Sony Life

Sony AssuranceSony Life posted a record high newpolicy amount in line with the sales
promotion of death protection
products

Sony Assurance posted a record
highg ordinaryyp
profit,, mainly
y becauseof a steady increase in new policies
in automobile insurance and a
decline in the loss ratio.

New Policy amount(Trillions of yen)

4.19

FY10

4.20

FY11

FY13

(Billions of yen)

73.3

3.88

FY12

FY14

FY10

Ordinary profit (Non-consolidated)
69.4

74.6

79.1

83.5

FY11

FY12

FY12

FY13

79.6

(Billions of yen)(Trillions of yen)

2.62

FY14

FY10

FY11

4.2

(Billions of yen)

2.84

2.96

3.08

FY12

FY13

FY14

Ordinary profit (Consolidated) 7.3
5.6

69.2
3.0

FY13

FY14

FY10

3.9

2.3

2.1

FY11

Retail balance
91.7

2.41

2.8

FY10

88.6

Ordinary profit(Billions of yen)

73.1

Sony Bank’s retail balanceexceeded 3 trillion yen andrenewed its record-high ordinary
profit.

Net premiums written
4.77

4.45

Sony Bank (Consolidated)

4.4

2.9

FY11

FY12

FY13

FY14

Sony Financial Holdings Inc. All Rights Reserved

FY10

FY11

FY12

FY13

FY14

43

Sony Financial Group (Reference 2)

Consolidated Financial Forecast for FY15
Consolidated ordinary revenues and ordinary profit are expected to decrease, while net income to increase(Billions of yen)
Consolidated ordinary revenues

FY15(Forecast)

FY14(Actual)Change1 352 3
1,352.3

1 300 01,300.0(3 9%)(3.9%)

1,223.9

1,168.0(4.6%)

Non-life insurance business

93.0

97.1

+4.4%

Banking business

38.4

36.8

(4.2%)

Consolidated ordinary profit

90.0

85.0

(5.6%)

Life insurance business

78.3

74.1

(5.4%)

Non-life insurance business

4.2

4.4

+4.5%

7.3

6.4

(12.7%)

54.4

57.0

+4.7%

Life insurance businessBanking business
Consolidated net income

For FY15, stable and sustainable business growth is expected in all the businesses.
Consolidated ordinary revenues are expected to decrease because we do not anticipate an improvement in investment income backed by favorable market
conditions,, as was presentpin FY14,, mainlyy in the life insurance business. Consolidated ordinaryy profitp
is expectedpto decrease because we anticipatepanincrease in spending for medium-term business growth activities, an increase in provision of policy reserves for minimum guarantees for variable life
insurance in the life insurance business, and lower gains on sale of securities in the life insurance and banking businesses. On the other hand, consolidated
net income is expected to increase due to the reduction in the corporate tax rate.
<Segment information for ordinary revenues and ordinary profit>■Life insurance business
Ordinary revenues are expected to decrease because we do not anticipate an increase in investment income backed by favorable market conditions,as was present in FY14. Ordinary profit is expected to decrease because we anticipate an increase in spending for medium-term business growth
activities and an increase in provision of policy reserves for minimum guarantees for variable life insurance.
■Non-life insurance business
Ordinary revenues and ordinary profit are expected to increase in line with growth in net premiums written primarily for mainstay automobile insurance.
■Banking business
Alth
Althoughh we anticipate
ti i t businessb i
expansioni underd suchh a lowliinteresttt ratet environment,it ordinarydirevenues andd ordinarydiprofitfit are expectedt d tto d
decreasebecause we do not anticipate an increase in gains on bond-dealing transactions including sale of bonds as was present in FY14.

Sony Financial Holdings Inc. All Rights Reserved

44Sony Financial Group (Reference 3)

U.S. GAAP-based Operating Income
As for profit of an insurer with growing policies in force, the following two reasons increase
profit for U.S. GAAP-based operating income of the Sony Group’s financial services segmentcomparedpwith Japanesep
GAAP-based ordinaryy p
profit of the Sonyy Financial Group:p Different accounting treatment for policy reserves (future insurance policy benefits) Accounting treatment of deferred insurance acquisition costs (recorded in U.S. GAAP only)
SFH’s consolidated results* are prepared in accordance with Japanese GAAP. As such, these figures differ in significant respects from the financial information
reported by Sony, the SFH’s parent company, which prepares its financial statements in accordance with U.S. GAAP. Sony Financial Group’s scope of
consolidation and that of Sony Group’s Financial Services segment are described below.
<Sony Financial Group’sGroup s scope of consolidation under Japanese GAAP>*SFH’s scope of consolidation includes Sony Financial Holdings Inc., Sony Life Insurance Co. Ltd., Sony Assurance Inc., Sony Bank Inc., Sony Life Insurance(Philippines) Corporation, Sony Bank Securities Inc., SmartLink Network, Inc., and SmartLink Network Hong Kong Limited. It also includes AEGON Sony Life
Insurance Co., Ltd. and SA Reinsurance Ltd., as affiliated companies accounted for under the equity method. Smart Link Network, Inc. and SmartLink Network
Hong Kong Limited were included in the scope of consolidation from the second quarter of the year ended March 31, 2012 and the fourth quarter of the year
ended March 31, 2014, respectively. Sony Bank Securities Inc. and Sony Life Insurance (Philippines) Corporation were out of the scope of consolidation fromquarter of the yyear ended March 31,, 2013 and the third q
quarter of the yyear ended March 31,, 2013,, respectivelypy and thereafter.
the second q<Scope of consolidation of the Sony Group’s Financial Services segment under U.S. GAAP>
Sony Group’s Financial Services segment includes Sony Financial Holdings Inc., Sony Life Insurance Co. Ltd., Sony Assurance Inc., Sony Bank Inc., Sony Bank
Securities Inc., SmartLink Network, Inc., SmartLink Network Hong Kong Limited and Sony Finance International, Inc. as consolidated subsidiaries. It also
includes AEGON Sony Life Insurance Co., Ltd., SA Reinsurance Ltd., and SFI Leasing Company, Limited as affiliated companies accounted for under the equity
method. However, from the fiscal year ended March 31, 2013, Sony Finance International, Inc., and the equity results of SFI Leasing Company, Limited, are notincluded in the Sony Group’s Financial Services segment. Sony Bank Securities Inc. was out of the scope of consolidation from the second quarter of the year
ended March 31, 2013 and thereafter.
*SmartLink Network,Inc. changed its corporate name to Sony Payment Services Inc. on April 1, 2015

SFH announced [Reference Disclosure] Key Performance Figures Based on U.S. GAAP on Apr. 30, 2015. Please refer the announcement.
http://www.sonyfh.co.jp/en/financial_info_/results_/sfh_fy2014_4q_02.pdf

Sony Financial Holdings Inc. All Rights Reserved

45Sony Financial Group (Reference 4)

Definition of Adjusted ROE
Calculation of Adjusted ROE
Since each company of Sony Financial Group differs by industry such as insurance and banking, each group company
calculate its “Adjusted ROE” based on adjusted profit and adjusted capital to realize its corporate value and capital efficiency.

Sony Financial Group

Numerator(Adjusted
profit)Denominator(Adjusted
capital)Sony Life
ROEVSony Assurance
Adjustedj
ROE

The amount of increase in
Embedded Value (EV) during the
fiscal year plus dividends paid＋

(1)

Net income plus provision
amount for catastrophe reserveand its provision amount forreserve for price fluctuations, ineach case after taxes
(2)

＋

(4)

The average amount of net
assets plus the sum ofcatastrophe reserve and its
reserve for price fluctuations
during the fiscal year, in each(5)case after taxes

EV as of the beginning of thefifiscall year lessldividends
di id d paid
idplus EV as of the end of the
fiscal year, divided by two.

＋＋Sony BankROE

Net income(3)

The average amount of net
assets during the fiscal year(6)

* Consolidated Adjusted ROE= Consolidated Adjusted Profit divided by Consolidated Adjusted Capital
Consolidated Adjusted Profit＝ (1)＋(2)＋(3)Consolidated Adjusted Capital ＝ (4)＋(5)＋(6)* Sony Life
Life’ss Core ROEV=ROEV Calculated by excluding impact of environmental changes such as interest rate fluctuations
fluctuations.
Numerator ： New business value plus expected existing business contribution (risk-free-rate)
Denominator ：EV as of the end of the fiscal year less dividends paid plus EV as of the end of the fiscal year, divided by two

Sony Financial Holdings Inc. All Rights Reserved

46Sony Life (Reference 5)

The Risk Amount Based on Economic Value (after tax)

2015.3.31

Sony Life’s Basic Policy on
Ri k P
Risk
Preferencesf(Billions of yen)

1,322.9

Counter party risk

1.8
25.9

(293.4)Marketrelated risk

variancce
effect

745.5

287.0

Operational risk

724.2
Insurance
risk(Break down)

MCEV

The Risk Amount Based on Economic Value(after tax)

 Aims for stable and sustainablebusiness growth in corporate value
by aggressively increasing policies
in force and underwriting insurance
risk, while maintaining sufficientsolvency
y based on economic value.
 Prioritizes investment in assets thatmatch insurance liability
characteristics to reduce interest
rate risk pertaining to liabilities of
insurance policies with long-term
maturities, with the aim of stably
growing corporate value of lifeiinsurancebbusiness.
i*Interest rate risk amounted to ¥218.5 billion,
excluding the variance effect within marketrelated risk
risk.

Sony Financial Holdings Inc. All Rights Reserved

47Sony Assurance (Reference 6)

Automobile Insurance
Combined Ratio(Net Expense Ratio + Net Loss Ratio)

Net Expense Ratio
40%
110%

35%

D

30%

C
B
A

105%

100%

25%

D
B
C

Sony Assurance

95%

20%
FY09

FY10

FY11

FY12

FY13

Sony Assurance
Net Expense Ratio+ E.I. Loss Ratio

FY14
90%

Net Loss Ratio

A

75%
Sony Assurance
Combined Ratio

85%
Sony Assurance
E.I. Loss Ratio

70%

80%
FY09

65%

B
A
D
C

60%
Sony Assurance
Net Loss Ratio

55%
FY09

FY10

FY11

FY12

FY13

FY14

FY10

FY11

FY12

FY13

FY14

Notes: Sony Assurance
Earned/Incurred loss ratio = (Net losses paid + Provision for reserve for outstanding
losses + Loss adjustment expenses) / Earned premiums.
[Earthquake insurance and compulsory automobile liability insurance are excluded
from the above calculation.]
Net loss ratio= (Net losses paid + Loss adjustment expenses) / Net premiums written
Net expense ratio= Expenses related to underwriting / Net premiums written
Source: Disclosure from each insurer

Sony Financial Holdings Inc. All Rights Reserved48Sony Bank (Reference 7)Interest Rate Assumptions by Currency* Solid lines show the assumption as of the end of Jan. 2015, while dotted lines show those set as of the end of Jan. 2014
* Implied forward rates are used for the future assumption.

Sony Bank: Assumption on interest rates of each currency as of Feb. 2015.

FY10

FY11

FY12

FY13

FY14

FY15

Sony Financial Holdings Inc. All Rights Reserved

FY16

FY17

49

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

Sony Financial Holdings Inc. All Rights Reserved50