Q&A (Summary) of the Corporate Strategy Meeting of theSony Financial Group for Fiscal 2017
Date:

May 31, 2017 (Wednesday), 15:30–17:00 (JST)Respondents*:

Shigeru Ishii, President, Representative Director of Sony Financial Holdings Inc.
Tomoo Hagimoto, President, Representative Director of Sony Life Insurance Co., Ltd.
Atsuo Niwa, President, Representative Director of Sony Assurance Inc.
Yuichiro Sumimoto**, Senior Managing Director of Sony Financial Holdings Inc.

*Respondents’ positions were as of the indicated meeting date.
**To be appointed as President, Representative Director of Sony Bank Inc. on June 21, 2017.
Note: The original content has been revised and edited for ease of understanding.

[Q&A]
Q1: [SFH]
With regard to the change of your dividend policy, you have indicated that the company will place
importance on profit indicators on the basis of economic value. What indicators, in particular, will
you be looking at? Also, what are your thoughts concerning a standard that would trigger adecision to raise dividends?
If you place importance on new business value, conditions would be strongly affected by interest
rate fluctuations as in Q1 of FY2016. How would you eliminate the impact of interest rate
fluctuations? Also, how would you go about placing a value on the non-life insurance business andthe banking business?
A:(Page 62 of the presentation materials) As economic value is substantially affected by interest rate
conditions, in principle we will consider increases in Sony Life’s value based on core ROEV. This will
eliminate the impact of interest rate fluctuations to some extent. With regard to decisions on increasing
dividends, at this point we do not have clear standards in place.
This policy revision involved substantial internal discussion and took into consideration profits basedon statutory accounting as the basis for the source of dividends. However, we have decided to place
importance on profit indicators on the basis of economic value, as this is a better target for profit growthover the medium to long term. This indicator is linked to increases in corporate value, and it is one that
we believe investors can accept. Sony Assurance and Sony Bank will be valued as in the past, based on
calculations of adjusted ROE and ROE, which are included in consolidated adjusted ROE.
Q2: [SFH]
What was the biggest reason for your decision to maintain dividends at ¥55 per share? Was it
because you took into consideration changes in the market environment during the year? New
business value varies significantly due to interest rate fluctuations, but for example, even if core
ROEV is low at the end of the fiscal year due to a sharp drop in interest rates, what would be yourthoughts on shareholder returns if business operations are expanding steadily?

1A:We kept the dividend forecast at ¥55 per share for FY2017 because of uncertainty in the market
environment and in the competitive environment following revisions in the standard yields used for
calculating policy reserves, and our decision to assess the situation. Some may find our decisionconservative, but we have kept the figure at ¥55 per share because this is the level we can indicate withconfidence at this juncture. We are aware that the interest rate sensitivity of new business value is high;we would like you to understand that we determined to provide a dividend of ¥55 per share even if
interest rates fall. With regard to a decision on raising the dividend, let us look at new business value. AsSony Life’s new business value was around ¥15.0 billion in Q4 of FY2016, for example, new businessvalue of around ¥60.0 billion on an annual basis would be one guide. If the actual figure were to be higher
than that, we could consider raising the dividend.
Q3: [SFH]
If Sony Corporation’s performance were to improve significantly, would discrepancies arise
between the dividend policies of Sony and SFH, given that SFH’s profits account for a substantial
portion of Sony’s profits?
A:
Sony Corporation is a major shareholder, but it is only one shareholder. We do not base our dividend
policy solely on considerations of Sony Corporation.
Q4: [SFH]
Sony Corporation has increased its stake in two steps. Have communications increased?
Also, are you making clear progress toward the goal of generating synergies within the SonyGroup? Put another way, what things should we look forward to in this area going forward?
A:
The Sony Financial Group uses the “Sony” brand, but Sony Corporation is only one of our shareholders
and we also take minority shareholders into consideration. Consequently, we limit communications tosome extent. On the other hand, Sony Corporation’s management team has deep ties in the financial
business, and we believe understanding has increased.
Regarding synergies with Sony, we are exploring a variety of collaboration possibilities with the SonyGroup. These include Sony Computer Science Laboratories (Sony CSL) in the Fintech domain. SonyCSL excels at big data analysis, and the Sony Financial Group is considering collaboration in order toleverage this technology. On the SFH side, we have created the “SFG Fintech Forum” as a groupwideorganization. By consolidating the point of contact, we have created a structure that facilitatescommunication.
Q5: [SFH]
In his presentation, Sony Corporation’s President Hirai said that “Sony is a ‘Kando’ company.”
How is SFH responding to this?
A:President Hirai talks about connecting with customers at the last one inch (“Kando @ the Last One Inch”).

2Sony Life’s Lifeplanner sales employees are the closest to customers. Using the “Sony” brand,
Lifeplanner sales employees, who are able to forge direct connections with customers provide that sort ofKando in their customer response. Our concept is to increase brand value through life planning. We also
aim to deliver Kando through collaborative development with Sony in the Fintech field.
Q6: [Sony Life ]Other companies are shifting toward protection-type products, with a particular shift toward thethird sector. I understand that Sony Life’s business model involves a low share of business in thethird sector, but wouldn’t it be possible to increase the share of third-sector business in the interestof improving profitability amid the ongoing low-interest-rate environment?
A:
At present, Sony Life’s share of annualized premiums from new policies in the third sector is around 20%.
Unit sales of medical insurance are decreasing, but living benefit insurance includes nursing care andpersonal accident coverage. This is compensating for the drop in sales of medical insurance, so the shareof business in the third sector is growing to some extent.
Sony Life is prioritizing and launching new products at a rate of two per year, and we would like tolaunch third-sector products in the future. Profits on third-sector products are generally considered to behighly profitable, but price competition is heating up in some areas. It would be inaccurate to think that
we could ensure high margins in all areas of medical insurance. We will take this factor into consideration
when developing new products.
Q7: [Sony Life]MCEV sensitivity was fairly low as of March 31, 2017. Was this due to a rise in ultralong-term
interest rates led by the introduction of an ultimate forward rate (UFR)? Would it be accurate toassume that MCEV will not rise much even if ultralong-term interest rates increase?
A:
Interest rate rises in the market are one factor causing interest rate sensitivity to decrease, but theintroduction of a UFR was the biggest factor. MCEV will not increase as much as it did in the past even if
interest rates rise, but conversely, neither will MCEV fall as much as before when interest rates decrease.
Additional Q:
Would it be accurate to say that management believes it is preferable to have less change(inability to take advantage of upsides) due to interest rate fluctuations?
A:
To date we have pursued ultralong-term investments in order to reduce interest rate sensitivity withrespect to overall MCEV. We view little change in response to interest rate fluctuations as a positive.
Because changes in MCEV due to interest rate fluctuations have grown smaller, accumulating
new business value is a more important consideration for boosting MCEV. New business value is also
affected by interest rate fluctuations, but we are working to steadily increase new business value
through appropriate measures such as product pricing that take interest rate circumstances into account.

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Q8: [Sony Life]In Q4 of FY2016, asset-side duration shortened a bit, and efforts to lengthen the duration appear to
be at a standstill. Going forward, will you change your policy with regard to duration mismatches?
A:Sony Life’s portfolio includes a large quantity of yen-denominated bonds, so the overall duration will not
be affected significantly even if new investment amounts change somewhat. Duration shortens when yen
interest rates rise, and lengthen when they fall. In Q4 of FY2016, the duration shortened mainly becauseof an increase in interest rates.
Q9: [Sony Bank](Page 42 of the presentation materials) Sony Payment Services’ share of the market for e-commerce
settlement services is growing steadily. What is its competitive advantage? Also, what is thestandard percentage from which spread revenue derives?
A:
We believe the strength of Sony Payment Services’ settlement lies in its strong authentication function.
The brand, which is backed up by a high degree of safety, has an excellent foundation of trust andcreditworthiness. We do not disclose spreads.
Additional Q:
Given the figures in your presentation materials, I would calculate a spread of around 50bp,
given that transaction volume is ¥700.0 billion and sales are ¥3.4 billion. Would that be accurate?
A:
Yes, that figure is in the right ballpark.
Q10: [Nursing Care]Regarding the nursing care business, five years have passed since I first heard your explanationthat your aim was to turn this business into one generating several billion yen in ordinary
profit—like the non-life insurance and banking businesses—within around 10 years. How is yourprogress toward that goal?
A:Although I will refrain from any detailed explanations, our initiatives in the nursing care business areprogressing steadily. Having entered this business, we believe it is imperative to make it profitable. We
are converting Yuuai Holdings to a subsidiary somewhat later than we had initially planned, but we aim
to make up ground in moving toward profitability.
Note: The “10 years” referred to here was not meant to be from the time the intention was stated, but rather from the time ofactually entering into that business, which was in November 2013. Three and a half years have passed since then.

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