May 25, 2018

Financial Results for the Fiscal Year Ended March 31, 2018
Asahi Mutual Life Insurance Company (the “Company”; President: Hiroki Kimura) announces financial
results for the fiscal year ended March 31, 2018

［Contents］
１．Business Highlights

･････

Ｐ１

２．Investment Results of General Account Assets

･････

Ｐ4

３．Unaudited Non-consolidated Balance Sheets

･････

Ｐ9

４．Unaudited Non-consolidated Statements of Income

･････

Ｐ11

５．Breakdown of Ordinary Profit (Fundamental Profit)

･････

Ｐ28

６．Unaudited Non-consolidated Statements of Changes in Net Assets

･････

Ｐ29

７．Unaudited Non-consolidated Statements of Proposed Appropriation of Surplus

･････

Ｐ31

８．Disclosed Claims Based on Categories of Obligors

･････

Ｐ32

９．Risk-monitored Loans

･････

Ｐ33

10．Solvency Margin Ratio

･････

Ｐ34

11．Status of Separate Account

･････

Ｐ35

12．Status of the Company, Subsidiaries and Affiliates

･････

Ｐ37

Asahi Mutual Life Insurance Company

1．Business Highlights(1) Policies in Force and New Policies(i) Policies in Force
As of March 31, 2017
Number of policies

As of March 31, 2018

Amount (100 millions of Yen)

Number of policies

Amount (100 millions of Yen)

(Thousands)

Changes(%, Pre-FYE)

Changes(%, Pre-FYE)(Thousands)

Changes(%, Pre-FYE)

Changes(%, Pre-FYE)

Individual insurance

7,173

100.5

181,705

91.3

7,186

100.2

166,410

91.6

Individual annuities

615

97.6

26,820

95.2

584

95.0

25,03993.4

Group insurance--

13,28699.8--

13,235

99.6

Group annuities

-

-

187

94.5

-

-

178

95.6

Notes:
1. Policy amounts for individual annuities are equal to (a) the funds to be held at the time annuity payments are to commence for an annuity
for which annuity payments have not yet commenced and (b) the amount of policy reserves for an annuity for which payments havecommenced.
2. Policy amount in force for group annuities is equal to the amount of outstanding policy reserves.
3. Number of policies includes number of each unit with regard to "Hoken-ou" , "Hoken-ou Plus", etc.

(ii) New Policies
Year ended March 31, 2017
Number of policies(Thousands)

Amount (100 millions of Yen)

Changes(%, YoY)

Changes(%, YoY)

New
policies

Net increase by
conversion

Individual insurance

770

106.0

1,466

54.5

4,002

(2,535)

Individual annuities

15

88.9

406

72.2

575

(169)

Group insurance

-

-

52

29.1

52

-

Group annuities

-

-

-

-

-

-

Year ended March 31, 2018
Number of policies(Thousands)

Amount (100 millions of Yen)

Changes(%, YoY)

Changes(%, YoY)

New
policies

Net increase by
conversion

Individual insurance

701

91.0

1,281

87.4

3,281

(2,000)Individual annuities

-

-

(161)

-

-

(161)

Group insurance

-

-

250

479.8

250

-

Group annuities

-

-

-

-

-

-

Notes:
1. Number of new policies is the sum of new policies and policies after conversion.
2. Amount of new policies for individual annuities, both new policies and net increase by conversion, is equal to
the funds to be held at the time annuity payments are to commence.
3. Number of policies includes number of each unit with regard to "Hoken-ou" , "Hoken-ou Plus", etc.

1Asahi Mutual Life Insurance Company

(2) Annualized Premiums(i) Policies in Force(100 millions of Yen）

As of March 31, 2017

As of March 31, 2018

Changes(%, Pre-FYE)

Changes(%, Pre-FYE)

Individual insurance

3,764

101.2

3,813

101.3

Individual annuities

1,594

95.6

1,511

94.8

Total

5,359

99.4

5,324

99.3

1,978

107.7

2,063

104.3

Third-sector products(ii) New Policies(100 millions of Yen）

Year ended March 31, 2017

Year ended March 31, 2018

Changes(%, YoY)

Changes(%, YoY)

Individual insurance

325

117.3

324

99.6

Individual annuities

15

71.6

(3)

-

Total

341

114.0

320

94.1

266

125.2

215

80.8

Third-sector products

Notes:
1. Annualized premiums are calculated by multiplying factors according to the premium payment method(for single premium contracts, the amount is calculated by dividing the premium by the coverage period).
2. Figures for third-sector products represent portion of annualized premiums corresponding to the medical
benefits (hospitalization benefits, surgery benefits, etc.), living benefits (specific illness benefits, nursing
care benefits, etc.) and waiver benefits (excluding disability benefits, but including specific illness benefits
and nursing care benefits).

2

Asahi Mutual Life Insurance Company

（3）Selected Financial Data
(100 millions of Yen）

Year ended March 31, 2017

Year ended March 31, 2018

3,849

Changes(%, YoY)
100.3

Premium and other income

3,837

Changes(%, YoY)
95.6

Investment income

1,612

126.0

1,665

103.3

Claims and other payments

4,638

99.4

4,389

94.6

Investment expenses

417

111.4

385

92.3

Ordinary profit

389

263.3

375

96.3

（4）Proposed Appropriation of Surplus(100 millions of Yen）

Year ended March 31, 2017

Year ended March 31, 2018

Changes(%, YoY)
Unappropriated surplus

Changes(%, YoY)

313

172.6

373

119.1

Reversal of voluntary surplus reserve

-

-

4

-

Reserve for dividends to policyholders

15

86.0

19

129.2

Net surplus

190

110.2

188

99.0

Surplus carried forward

107

1,258.9

169

157.4

（5）Total Assets(100 millions of Yen）

As of March 31, 2017

As of March 31, 2018

Changes(%, Pre-FYE)
Total assets

Changes(%, Pre-FYE)

53,982

97.7

53,965100.0

3Asahi Mutual Life Insurance Company

２．Investment Results of General Account Assets(1) Asset Composition(Millions of Yen)

Cash, deposits, call loans
Monetary claims bought
Securities
Domestic bonds
Domestic stocks
Foreign securities
Foreign bonds
Foreign stocks and other foreign securities
Other securities
Loans
Policy loans
Industrial and consumer loans
Real estate
Deferred tax assets
OthersAllowance for possible loan losses
Total
Foreign currency-denominated assets

As of March 31, 2017

As of March 31, 2018

Amount152,480
33,202
4,125,107
2,895,636
282,959
869,024
642,030
226,993
77,487557,761
57,577500,184
401,557
22,72576,821(487)
5,369,169
908,336

Amount194,30230,151
4,161,052
2,845,690
323,118
917,147
690,912226,235
75,096484,169
49,637434,532
394,631
16,18787,085(394)
5,367,186
1,054,537

Percentage
2.8
0.6
76.8
53.9
5.3
16.2
12.0
4.2
1.4
10.4
1.1
9.3
7.5
0.4
1.4
(0.0)
100.0
16.9

Percentage
3.6
0.6
77.5
53.0
6.0
17.1
12.9
4.2
1.4
9.0
0.9
8.1
7.4
0.3
1.6
(0.0)
100.0
19.6

(2) Changes(Increases/Decreases) in Assets(Millions of Yen)

Cash, deposits, call loans
Monetary claims bought
Securities
Domestic bonds
Domestic stocks
Foreign securities
Foreign bonds
Foreign stocks and other foreign securities
Other securities
Loans
Policy loans
Industrial and consumer loans
Real estate
Deferred tax assets
OthersAllowance for possible loan losses
Total
Foreign currency-denominated assets

Year ended March 31, 2017
Amount(60,326)(8,704)
14,163(907)
44,178(35,177)(48,450)
13,272
6,070(63,226)(11,236)(51,990)(11,145)
(18)
2,822
91
(126,343)
82,166

4

Year ended March 31, 2018
Amount41,821(3,050)35,945(49,946)
40,15948,12348,882(758)(2,391)(73,592)(7,939)(65,652)(6,925)(6,538)
10,26393(1,983)
146,201

Asahi Mutual Life Insurance Company

（3）Investment Income(Millions of Yen)
Year ended March 31, 2017 Year ended March 31, 2018
Interest, dividends and other income

111,199

109,97800Interest and dividends on securities

83,44984,322

Interest on loans

10,2508,371

Rent revenue from real estate

16,485

16,354

Other interest and dividends

1,013

929

40,38946,779Gains on sales of domestic bonds

25,78744,891

Gains on sales of domestic stocks and other securities

2,725

1,709

Gains on sales of foreign securities

11,875178--

Gains on derivative financial instruments, net--

Foreign exchange gains, net--

Reversal of allowance for possible loan losses

85

74

Interest on deposits

Gains on sales of securities

OthersOther investment income
Total

7,268

7,379

158,942

164,212（4）Investment Expenses(Millions of Yen)
Year ended March 31, 2017 Year ended March 31, 2018
Interest expenses

4,042

4,449

Losses on trading securities--

Losses on sales of securities

11,0252,285

Losses on sales of domestic bonds

24

549

Losses on sales of domestic stocks and other securities

184

487

10,816

1,249

-

-

Losses on sales of foreign securities
Others
Losses on valuation of securities

16

145

Losses on valuation of domestic bonds--

Losses on valuation of domestic stocks and other securities

11

49

Losses on valuation of foreign securities

596

Others--

11,264

13,891326

2,530

Provision for allowance for possible loan losses--

Write-offs of loans

01

Depreciation of rental real estate and other assets

5,500

5,596

Other investment expenses

9,561

9,641

41,73738,542Losses on derivative financial instruments, net
Foreign exchange losses, net

Total

5

Asahi Mutual Life Insurance Company

（5）Investment Indicators(i) Rates of Return（％）
Year ended March 31, 2017

Year ended March 31, 2018

Cash, deposits, call loans

0.00

0.00

Monetary claims bought

2.36

2.33

Securities

2.47

2.76

Domestic bonds

2.41

2.95

Domestic stocks

4.92

3.47

Foreign securities

2.18

1.69

1.63

1.44

1.29

1.10

Real estate

2.36

2.34

Total

2.15

2.35

2.18

1.69

Loans
Industrial and consumer loans

Foreign Investments
Notes:

１．Rates of return above are calculated by dividing the net investment income by the average daily
book value balance.
２．Foreign investments are the sum of assets denominated in foreign currencies and yen.

(ii) Average Daily Balance(Millions of Yen)
Year ended March 31, 2017

Year ended March 31, 2018

Cash, deposits, call loans

184,160

198,147

Monetary claims bought

36,983

31,662

4,119,824

4,096,722

Domestic bonds

2,887,111

2,887,050

Domestic stocks

174,089

174,274

Foreign securities

980,680

956,123590,917522,116

527,797468,209411,436

403,495

5,449,967

5,350,715

980,680

956,247

Securities

Loans
Industrial and consumer loans
Real estate
Total
Foreign Investments

Note:Foreign investments are the sum of assets denominated in foreign currencies and yen.

6

Asahi Mutual Life Insurance Company

(ⅲ) Net Valuation Gains/Losses on Trading Securities(Millions of Yen)
As of March 31, 2018
Net valuation
gains(losses)
Amountincluded in thestatements of income-

As of March 31, 2017
Net valuation
gains(losses)
Amountincluded in thestatements of income-

Trading securities(ⅳ) Fair Value Information on Securities (with fair value, other than trading securities)(Millions of Yen)
As of March 31, 2017
Book value Fair value

As of March 31, 2018

Gains/losses
Gains

Held-to-maturity debt
securities
Policy-reserve-matchingbonds
Stocks of subsidiaries

416,896

45,61745,7012,161,957 2,494,257

332,299

348,124---

Available-for-sale securities

1,417,128 1,503,956

371,278-

86,828131,145

Domestic bonds

550,475

551,345

870

8,259

Domestic stocks

152,037

263,893

111,855

Foreign securities

636,825

611,229(25,595)

Foreign bonds

506,871486,287

Foreign stocks andother foreign securities

129,953

Other securities
Monetary claims bought
Negotiable certificates ofdeposit
Others
Total
Domestic bonds

Book value Fair value

Gains/losses

Losses

Gains

(83)

353,761

Losses397,636

43,87443,900(25)(15,824) 2,094,251 2,397,856

303,605

313,125(9,519)

-

-

-

-

(44,316) 1,563,573 1,667,178--

103,604

174,341(70,736)(7,388)588,848

583,152(5,696)8,594(14,290)

117,840(5,984)

151,964

304,117

152,153

159,772(7,618)2,440(28,035)

746,635

704,812(41,823)

4,446(46,270)(20,584)

1,744(22,329)569,387

535,588(33,799)

3,116(36,915)

124,942(5,010)695(5,706)

177,247

169,223(8,024)

1,329(9,354)77,78977,487

(302)

2,605

(2,907)

76,12575,096(1,028)1,528(2,557)

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

3,950,364 4,415,109

464,745524,970(60,225) 4,011,587 4,462,671

451,084

531,366(80,282)

2,894,765 3,240,626

345,860

369,135(23,274) 2,851,386 3,160,551

309,165

332,986(23,821)

Domestic stocks

152,037

263,893

111,855

117,840(5,984)

151,964

304,117

152,153

159,772(7,618)Foreign securities

792,568

796,222

3,653

31,689(28,035)

901,959

889,570(12,389)

33,880(46,270)

Foreign bonds

662,615

671,279

8,664

30,993(22,329)724,711

720,347(4,364)32,551(36,915)

Foreign stocks andother foreign securities

129,953

124,942(5,010)695(5,706)

177,247

169,223(8,024)

1,329(9,354)

Other securities

77,78977,487

(302)

2,605

(2,907)

76,12575,096(1,028)1,528(2,557)

Monetary claims bought
Negotiable certificates ofdeposit
Others33,20236,880

3,677

3,699

(21)

30,15133,335

3,184

3,198

(14)

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

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

* Book value of securities without fair value is as follows:(Millions of Yen)
As of March 31, 2017

As of March 31, 2018--

Unlisted foreign bonds--

Others----

Held-to-maturity debt securities

Policy-reserve-matching bonds
Stocks of subsidiaries

5,093

5,063

116,024

70,950Unlisted domestic stocks (except over-the-counter stocks)

13,972

13,937

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

102,051

57,012Unlisted foreign bonds--

Others--121,11776,013Available-for-sale securities

Total

7

Asahi Mutual Life Insurance Company

(ⅴ) Fair Value Information on Money Held in Trust
The Company doesn't hold money held in trust.
（6）Fair Value Information on Real estate (land)(Millions of Yen)
As of March 31, 2017
Book valueLand

245,232

As of March 31, 2018

Fair value Gains/losses Book value
244,851(380)

243,149

Fair value Gains/losses
261,268

18,118Notes:
1. Fair Value is calculated based on appraisal value for property tax and others.
2. The amount above includes leasehold.

(Reference)
The table below shows the sum of securities with fair value and without fair value (in case that securities without fair value are foreign currency-denominated,the fair value is calculated as the sum of book value and net gains (losses) on foreign exchange valuation).
(Millions of Yen)
As of March 31, 2017
Book value

Fair value

As of March 31, 2018

Gains/losses
Gains

Held-to-maturity debt
securities
Policy-reserve-matching
bonds

Fair value

Gains/losses

Losses371,278

416,896

45,61745,7012,161,957

2,494,257

332,299

348,124

5,093

5,093

-

-

Available-for-sale securities 1,533,152

1,619,979

86,827

131,145

Stocks of subsidiaries

Book value

Gains

(83)

Losses353,761

397,636

43,87443,900(25)(15,824) 2,094,251

2,397,856

303,605

313,125(9,519)

5,063

5,063

-

-

-

(44,317) 1,634,524

1,738,127

103,603

174,341(70,737)-

Domestic bonds

550,475

551,345

870

8,259

(7,388)588,848

583,152(5,696)8,594(14,290)

Domestic stocks

166,010

277,865

111,855

117,840(5,984)

165,901

318,054

152,153

159,772(7,618)Foreign securities

738,876

713,280(25,596)2,440(28,036)803,648

761,823(41,824)

4,446(46,271)

Foreign bonds

506,871486,287(20,584)

1,744(22,329)569,387

535,588(33,799)

3,116(36,915)

Foreign stocks andother foreign securities

232,004

226,993(5,011)695(5,707)234,260

226,235(8,025)

1,329(9,355)77,78977,487

(302)

2,605

(2,907)

76,12575,096(1,028)1,528(2,557)

Monetary claims bought

-

-

-

-

-

-

-

-

-

-

Negotiable certificates ofdeposit

-

-

-

-

-

-

-

-

-

-

Others

-

-

-

-

-

-

-

-

-

-

4,071,481

4,536,226

464,744524,970(60,226) 4,087,600

4,538,684

451,083

531,366(80,283)

Domestic bonds

2,894,765

3,240,626

345,860

369,135(23,274) 2,851,386

3,160,551

309,165

332,986(23,821)

Domestic stocks

171,103282,959

111,855

117,840(5,984)

170,964

323,118

152,153

159,772(7,618)Foreign securities

894,620898,273

3,652

31,689(28,036)

958,972

946,582(12,390)

33,880(46,271)

Foreign bonds

662,615

671,279

8,664

30,993(22,329)724,711

720,347(4,364)32,551(36,915)

Foreign stocks andother foreign securities

232,004

226,993(5,011)695(5,707)234,260

226,235(8,025)

1,329(9,355)

Other securities

77,78977,487

(302)

2,605

(2,907)

76,12575,096(1,028)1,528(2,557)

Monetary claims bought

Other securities

Total

33,20236,880

3,677

3,699

(21)

30,15133,335

3,184

3,198

(14)

Negotiable certificates ofdeposit

-

-

-

-

-

-

-

-

-

-

Others

-

-

-

-

-

-

-

-

-

-

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

8

Asahi Mutual Life Insurance Company

３．Unaudited Non-consolidated Balance Sheets
As of March 31, 2017
Assets:Cash and deposits:
Cash
Deposits
Call loans
Monetary claims bought
Securities:
National government bonds
Local government bonds
Corporate bonds
Domestic stocks
Foreign securities
Other securities
Loans:
Policy loans
Industrial and consumer loans
Tangible fixed assets:
Land
Buildings
Lease assets
Construction in progress
Other tangible fixed assets
Intangible fixed assets:
Software
Other intangible fixed assets
Reinsurance receivables
Other assets:
Accounts receivable
Prepaid expenses
Accrued income
Money on deposit
Derivative financial instruments
Cash collateral paid for financial instruments
Suspense payments
Other assets
Prepaid pension expenses
Deferred tax assets
Customers’ liabilities under acceptances and guarantees
Allowance for possible loan losses
Total assets

932,100260
31,840122,000
33,202
4,152,349
1,929,361
55,807916,978
293,841
878,872
77,487557,761
57,577500,184
406,105
232,995
167,527
2,015
1,033
2,531
33,521
14,647
18,874
194
38,7193,307
3,046
17,040
3,423
8,005
2,482
194
1,218
22,72514(487)
5,398,207(Millions of Yen)
As of March 31, 2018
31,635242
31,392
164,000
30,151
4,188,869
1,866,902
48,785936,856
334,335
926,893
75,096484,169
49,637434,532
401,011
230,913
162,583
3,946
1,134
2,432
34,355
21,295
13,059812
45,6294,029
3,418
17,1983,408
12,525
3,748
238
1,061
70
16,18710(394)
5,396,507

Asahi Mutual Life Insurance Company

３．Unaudited Non-consolidated Balance Sheets （Continued）
As of March 31, 2017
Liabilities:
Policy reserves and other reserves:
Reserve for outstanding claims
Policy reserves
Reserve for dividends to policyholders
Reinsurance payables
Bonds payable
Other liabilities:
Payables under securities borrowing transactions
Loans payable
Income taxes payable
Accounts payable
Accrued expenses
Deferred income
Deposits received
Guarantee deposits received
Derivative financial instruments
Cash collateral received for financial instruments
Lease obligations
Asset retirement obligations
Suspense receipts
Reserve for employees’ retirement benefits
Reserve for price fluctuation
Deferred tax liabilities for land revaluation
Acceptances and guarantees
Total liabilities
Net assets:
Foundation funds
Reserve for redemption of foundation funds
Reserve for revaluation
Surplus:Reserve for future losses
Other surplus:
Reserve for fund redemption
Equalized reserve for dividends to policyholders
Unappropriated surplus (loss)
Total foundation funds and others
Net unrealized gains (losses) on available-for-salesecurities, net of tax
Land revaluation differences
Total valuation and translation adjustments
Total net assets
Total liabilities and net assets

10(Millions of Yen)
As of March 31, 2018

4,768,371
27,3644,700,145
40,861
127
40,349138,429
97,000
1,435
5,143
8,053
192
364
18,171
1,382
4,190
2,015
240
238
37,30736,58018,09114
5,039,270

4,682,246
28,3684,616,919
36,959311
40,349193,656
44,96797,000
3,321
6,869
8,889
184
454
17,433
2,544
7,630
3,946
243
171
35,36538,71017,762
10
5,008,412

126,000
131,000
281
76,313242
76,071
36,0008,718
31,353
333,595

126,000
131,000
281
95,901
266
95,63548,6009,678
37,356353,183

71,104

81,292(45,762)
25,341
358,937
5,398,207(46,380)
34,912
388,095
5,396,507

Asahi Mutual Life Insurance Company

４．Unaudited Non-consolidated Statements of Income(Millions of Yen)
Ordinary income:Premium and other income:Insurance premiums
Reinsurance revenue
Investment income:Interest, dividends and other income:Interest and dividends on securities
Interest on loans
Rent revenue from real estate
Other interest and dividends
Gains on sales of securities
Reversal of allowance for possible loan losses
Other investment income
Investment gains on separate accounts
Other ordinary income:Fund receipt from deposit of claims paid
Reversal of reserve for employees’ retirement benefits
Reversal of reserve for outstanding claims
Reversal of policy reserves
Other ordinary income
Ordinary expenses:
Claims and other payments:
ClaimsAnnuities
Benefits
Surrender benefits
Other payments
Reinsurance premiums
Provision for policy reserves and other reserves:
Provision for reserve for outstanding claims
Provision for interest on policyholders’ dividend
reserves
Investment expenses:
Interest expenses
Losses on sales of securities
Losses on valuation of securities
Losses on derivative financial instruments
Foreign exchange losses
Write-offs of loans
Depreciation of rental real estate and other assets
Other investment expenses
Operating expenses
Other ordinary expenses:
Claim deposit payments
Taxes
Depreciation
Other ordinary expenses
Ordinary profit
Extraordinary gains:
Gains on disposal of fixed assets
Extraordinary losses:
Losses on disposal of fixed assets
Impairment losses
Provision for reserve for price fluctuation
Other extraordinary losses
Surplus before income taxes
Income taxes-current
Income taxes-deferred
Total income taxes
Net surplus

11

Year ended March 31, 2017

Year ended March 31, 2018679,996383,776
383,514262
161,263
111,199
83,44910,250
16,485
1,013
40,389
85
7,268
2,320
134,956
16,427
1,789
585
114,500
1,653
641,009463,808
135,234
128,659
97,962
94,226
7,378
346
33
-

652,225
384,953
383,422
1,531
166,597
109,978
84,322
8,371
16,354929
46,779
74
7,379
2,384
100,674
13,793
1,942
83,226
1,713
614,681438,966
124,809
129,879
82,264
95,710
5,656
645
1,008
1,003

33

4

41,737
4,042
11,02516
11,264
326
0
5,500
9,561
101,452
33,97715,456
7,293
10,126
1,101
38,986
1,243
1,243
5,361
1,633
1,333
2,050
344
34,869
3,777
1,828
5,605
29,26338,542
4,449
2,285
145
13,891
2,530
1
5,596
9,641
102,337
33,827
14,767
7,405
10,354
1,299
37,543
194
194
5,446
1,538
1,778
2,130
32,291
6,680
(377)
6,303
25,988Asahi Mutual Life Insurance Company

I. Presentation of Unaudited Non-consolidated Financial Statements
Basis of Presentation
The accompanying non-consolidated financial statements have been prepared from theaccounts maintained by Asahi Mutual Life Insurance Company (the “Company”) in accordancewith the provisions set forth in the Insurance Business Act of Japan and its related rules andregulations applicable to the mutual life insurance industry and in conformity with accounting
principles generally accepted in Japan, which are different in certain respects from accounting
principles generally accepted in countries and jurisdictions other than Japan.
In addition, the notes to the non-consolidated financial statements include information which
is not required under accounting principles generally accepted in Japan but is presented herein
as additional information.
Amounts of less than one million yen have been eliminated. As a result, total amounts in yen
shown herein do not necessarily agree with the sum of the individual amounts.
The Insurance Business Act shall prescribe the disclosure of a single fiscal year. The Company
provides the disclosure of comparative financial information corresponding to eachcomparative fiscal year in the presented financial statements for use by readers outside Japan.
In preparing the accompanying non-consolidated financial statements, certain reclassifications
have been made to the non-consolidated financial statements issued domestically in order topresent them in a format which is more familiar to readers outside Japan.

II. Notes to Unaudited Non-consolidated Balance Sheet
1.

Significant Accounting Policies(1) Valuation methods of securities
The valuation of securities, including deposits and monetary claims bought which areequivalent to securities is as follows:i)

Trading securities are stated at fair market value. Costs of sales are determined by
the moving average method.

ii)

Held-to-maturity debt securities are stated at amortized cost under the straight-line
method, cost being determined by the moving average method.

iii) Policy-reserve-matching bonds are stated at amortized cost under the straight-line
method, cost being determined by the moving average method in accordance with
“Temporary
TreatmentofAccounting
andAuditing
Concerning
Policy-reserve-matching Bonds in Insurance Industry” (Industry Audit Committee

12

Asahi Mutual Life Insurance Company

Report No. 21 issued by the Japanese Institute of Certified Public Accountants(“JICPA”)).
iv) Investments in subsidiaries and affiliates are stated at cost.
v)

Available-for-sale securities with fair market value are stated at fair market value
based on the market prices at the end of the fiscal year, except for domestic stocks,
domestic exchange-traded funds, domestic listed real estate investment trusts,
foreign exchange-traded funds for which hedge accounting is not applied, foreign
bond exchange-traded funds for which hedge accounting is not applied and foreign
currency-denominated bonds for which hedge accounting is not applied. Suchsecurities are stated based on the average of the market value during the final monthof the fiscal year. Costs of sales are determined by the moving average method. Net
unrealized gains or losses on these available-for-sale securities, net of tax, arerecorded as a separate component of net assets.

Available-for-sale securities whose fair values are deemed extremely difficult to determine
are stated at cost, cost being determined by the moving average method, except for publicand corporate bonds including foreign bonds, of which the difference between acquisition
cost and face value is considered to be an adjustment of interest. Such bonds are stated atamortized cost under the straight-line method, cost being determined by the moving
average method.
(2) Policy-reserve-matching bonds
The Company classifies bonds held with the aim of matching the duration to outstanding
insurance liabilities within the sub-groups (categorized by insurance type, investment
policy and other factors) of individual life insurance and individual annuities aspolicy-reserve-matching bonds in accordance with “Temporary Treatment of Accounting
and Auditing Concerning Policy-reserve-matching Bonds in Insurance Industry” (Industry
Audit Committee Report No. 21 issued by the JICPA on November 16, 2000).
(3) Valuation methods of derivative financial instruments
Derivative financial instruments are stated at fair market value.
(4) Revaluation of land
The Company revalued the land for business purposes based on the Act on Revaluation ofLand (Act No. 34 promulgated on March 31, 1998). The difference between fair value andbook value resulting from the revaluation, net of related taxes, is recorded as land
revaluation differences as a separate component of net assets and the related tax isrecorded as deferred tax liabilities for revaluation.
■

Date of revaluation: March 31, 2001■

Method of revaluation as prescribed for in Article 3, Paragraph 3 of the said Act:The calculation is based on the publicly announced appraisal value with certain

13

Asahi Mutual Life Insurance Company

adjustments set forth in Article 2, Item 1 of the Enforcement Ordinance of the Act on
Revaluation of Land (Government Ordinance No. 119 promulgated on March 31,
1998) or the appraisal value determined by the real-estate appraiser set forth in
Article 2, Item 5 of the said Ordinance with certain reasonable adjustments.
(5) Depreciation of tangible fixed assets
Depreciation of the Company’s tangible fixed assets is calculated by the following
methods.
■

Tangible fixed assets (excluding lease assets): Declining-balance method
However, buildings are depreciated using the straight-line method.

■

Lease assets related to finance lease transactions that do not transfer ownership:
Straight-line method over the lease term with no residual value(6) Foreign currency translation
Foreign currency-denominated assets and liabilities are translated into Japanese yen at
the effective exchange rate prevailing at the balance sheet date, except for foreignexchange-traded funds for which hedge accounting is not applied, foreign bondexchange-traded funds for which hedge accounting is not applied and foreign
currency-denominated bonds for which hedge accounting is not applied categorized asavailable-for-sale securities with fair market value. Such securities are translated into
Japanese yen at the average of the effective exchange rate during the final month of the
fiscal year.
(7) Allowance for possible loan losses
Allowance for possible loan losses is provided in accordance with the Company’s standardsof self-assessment and write-offs and reserves on credit quality:i)

For credit to borrowers who are legally bankrupt such as being in bankruptcy
proceedings or civil rehabilitation (hereinafter “legally bankrupt borrowers”) and whoare substantially bankrupt (hereinafter “substantially bankrupt borrowers”), theCompany provides the remaining amount of credits after the direct write-off
described below and the deductions of the amount expected to be collected throughthe disposal of collateral or the execution of guarantees.

ii)

For credit to borrowers who are not currently bankrupt but have a high risk ofbankruptcy (hereinafter “not currently bankrupt borrowers”), the Company provides
the amounts deemed as necessary considering the borrowers’ ability to pay, within
the amounts after deductions of the amount expected to be collected through thedisposal of collateral or the execution of guarantees.

iii) For credit to borrowers other than the above, the Company provides the amounts
calculated by multiplying the borrowers’ balance by the actual ratio of bad debt losses
on defaults during a certain past period.

14

Asahi Mutual Life Insurance Company

All credit is assessed by the relevant departments in accordance with the Company’s
standards of self-assessment on credit quality. The results of the assessment are reviewed
by the audit department, which is independent of business-related divisions. Subsequently,
allowance for possible loan losses is provided based on the results of these assessments.
For credit to legally bankrupt borrowers and substantially bankrupt borrowers, theamounts remaining after deductions of collateral value or the amounts collectible throughthe execution of guarantees are written-off directly from the borrower’s balance as theestimated uncollectible amounts. The amount written-off as of March 31, 2018 was ¥60
million.
(8) Accounting for employees’ retirement benefits and method of amortizing retirement
benefit expenses
Reserve for employees’ retirement benefits and prepaid pension expenses are presented
for the employees’ retirement benefits based on projected benefit obligation and pension
plan assets at the balance sheet date.
The Company uses the following methods of accounting in relation to retirement benefits.
■

The retirement benefit obligation is attributed to each period by the benefit formula
method.

■Actuarial differences are amortized under the straight-line method over a period ofseven years starting from the following year.

■

Prior service cost is charged to income when incurred.

(9) Reserve for price fluctuation
Reserve for price fluctuation is calculated in accordance with Article 115 of the Insurance
Business Act.
(10) Accounting for hedging activities
Hedging activities are accounted for in accordance with the “Accounting Standards for
Financial Instruments” (Accounting Standards Board of Japan (“ASBJ”) Statement No.
10).
The Company applies deferred hedge accounting and the exceptional accounting
treatment (“Tokurei-shori”) for interest rate swaps used to hedge the cash flow volatility ofcertain loans.
The Company also applies fair value hedge accounting for hedging activities related toforeign exchange rate fluctuation exposures on certain bonds and investment trusts
denominated in foreign currencies.
The Company also applies designated hedge accounting (“Furiate-shori”) for currency

15

Asahi Mutual Life Insurance Company

swaps used to hedge foreign exchange rate fluctuation exposures on the foreign
currency-denominated bonds issued by the Company.
The Company also applies designated hedge accounting (“Furiate-shori”) for the foreign
currency-denominated transactions other than the above.
The effectiveness of a hedge is mostly assessed by a ratio analysis, comparing thefluctuations in the fair value or cash flows of hedged items and hedging instruments.
(11) Accounting for consumption taxes
The Company accounts for consumption tax and local consumption tax by the
tax-exclusion method. The consumption taxes on certain assets, which are not deductible
from consumption taxes withheld and that are stipulated to be deferred under the
Corporation Tax Act of Japan, are deferred as prepaid expenses and amortized equally
over five years.
Consumption taxes other than deferred consumption taxes are recognized as an expense
when incurred.
(12) Policy reserves
Policy reserves are based on Article 116 of the Insurance Business Act and the premium
reserve at the end of fiscal year is calculated by the following method:
In regard to the policies subject to the standard policy reserves, the method as prescribedby the Commissioner of Financial Services Agency (Japanese Ministry of Finance Public
Notice No. 48, 1996) is applied.
In regard to the policies not subject to the standard policy reserves, the net level premium
method is applied.
(13) Software
Capitalized software for internal use owned by the Company is amortized using thestraight-line method over the estimated useful lives.
2.

Financial Instruments

Asset management of the general accounts other than the separate accounts stipulated in
Article 118, Paragraph 1 of the Insurance Business Act is conducted based on the following
principles.
■

For accumulation whole life with varying interest rates, accumulation insurance withvarying interest rates and new single premium individual annuities which have aneffective date on or after April 2, 2012, the Company mainly invests in domestic bonds,
engaging in matching asset liability management, or Matching ALM, which aims atmatching the duration to outstanding insurance liabilities to avoid interest rate

16

Asahi Mutual Life Insurance Company

fluctuation risks.
■

For individual life insurance and individual annuities other than above, the Company
holds yen-denominated fixed income investments, including bonds and loans, as the coreof its asset portfolio. The Company also holds domestic stocks, foreign securities and realestate assets to enhance its profitability.

Derivatives are mainly used to hedge market price fluctuation risk and exchange rate
fluctuation risk regarding securities and exchange rate fluctuation risk related to the foreign
currency-denominated bonds issued by the Company. As the major financial instruments,
securities are exposed to market risk and credit risk, loans are exposed to credit risk andexchange rate fluctuation risk, and derivatives are exposed to market risk and credit risk.
In administrating market risks, the following two methods are used. One is the quantitativerisk management of securities etc. using the Value at Risk (“VaR”) method and the other is therisk management by stress test and sensitivity analysis which analyze the effect on the
Company’s whole portfolio, simulating scenarios of deteriorating market environments. This is
for the purpose of managing an appropriate asset allocation within the ranges of acceptablerisks.
In administrating credit risks, the Company quantifies the credit risks of entire portfolio
through VaR method and controls the amount of risks within an acceptable range.
Furthermore, the Company assigns in-house credit ratings to our borrowers in accordance withthe creditworthiness of each borrower. Strict credit research of each borrower before lending aswell as following up on any changes of creditworthiness of each borrower after lending are
implemented. Maximum limits of credit are set up for each borrower in accordance with its
credit risks to avoid the concentration of credit risks on specific corporations and specificcorporation groups. Through all these measures, the Company endeavors to develop highquality portfolio.

17

Asahi Mutual Life Insurance Company

The balance sheet amounts, fair values and the differences between them of major financial
assets and liabilities as of March 31, 2018 were as follows:
Millions of Yen
As of March 31, 2018
Balance Sheet
AmountCash and deposits
Call loans
Monetary claims bought
Trading securities
Held-to-maturity debt securities
Policy-reserve-matching bonds
Available-for-sale securities
Securities
Trading securities
Held-to-maturity debt securities
Policy-reserve-matching bonds
Available-for-sale securities
Loans
Policy loans
Industrial and consumer loans
Total assets
Bonds payable
Loans payable
Total liabilities
Derivative financial instruments
Hedge accounting not applied
Hedge accounting applied¥

31,635
164,000
30,15130,151
4,112,857
27,816323,610
2,094,251
1,667,178
484,169
49,637434,532
4,822,813
40,34997,000137,349
9,980
1,811
8,169

Fair Value¥

31,635
164,000
33,33533,335
4,457,152
27,816364,300
2,397,856
1,667,178
494,561
49,637444,924
5,180,685
43,58596,768140,354
9,980
1,811
8,169

Difference
¥

3,184
3,184
344,295
40,690303,605
10,391
10,391
357,871
3,236
(231)
3,005
-

*Assets and liabilities generated by derivative financial instruments are offset and presented net.
Net liabilities in total are presented in parentheses.

(1) Securities including deposits and monetary claims bought which are treated as securities
based on “Accounting Standards for Financial Instruments” (ASBJ Statement No. 10)
As for available-for-sale securities of which market value is readily available, domestic
stocks, domestic exchange-traded funds, domestic listed real estate investment trusts,
foreign exchange-traded funds for which hedge accounting is not applied, foreign bondexchange-traded funds for which hedge accounting is not applied and foreign
currency-denominated bonds for which hedge accounting is not applied are stated at the
average of the market value during the final month of the fiscal year. Available-for-salesecurities of which market value is readily available excluding the securities mentioned
above are stated at the market value at the balance sheet date.
Other securities of which market value is readily available are stated at market value atthe balance sheet date.
Unlisted stocks and others of which market value is not readily available are not subject

18

Asahi Mutual Life Insurance Company

to fair value disclosure and are therefore not included in the table above because it isregarded as extremely difficult to determine their fair value.
The amount of the unlisted stocks and others reported in the non-consolidated balance
sheet was ¥76,012 million as of March 31, 2018.
(2) Loans and loans payableAs credit exposure for policy loans without specific repayment periods is limited to theamount of the cash surrender value, the Company considers book value as fair value withthe assumption that fair value approximates book value in light of factors such as
projected repayment period and interest terms.
As for industrial and consumer loans and loans payable, the fair value of loans is
primarily stated at theoretical prices calculated by discounting the future cash flows to thepresent value. The fair value of loans to legally bankrupt borrowers, substantiallybankrupt borrowers and not currently bankrupt borrowers is stated at the amounts bydeducting estimated losses from the book value before direct write-offs.
(3) Bonds payable
The fair value of bonds payable is based on the market value, etc. as of March 31, 2018.
(4) Derivative financial instruments
The fair values of options traded over the counter are based on the quoted prices offered bycounterparty financial institutions.
The fair values of foreign currency forward contracts are stated at theoretical prices basedon the TTM at the balance sheet date.
Regarding the derivative transactions for which designated hedge accounting(“Furiate-shori”) of currency swaps is applied, these fair values are included in bonds
payable since they are treated together with hedged bonds payable.
3.

Investments and Rental Properties

The Company holds investment and rental properties such as office buildings in Tokyo andother areas. The carrying amount and the fair value of investment and rental properties were¥268,270 million and ¥265,583 million, respectively, as of March 31, 2018. The fair value ismainly based on the value (including some adjustments using the reference prices) of realestate appraisal report prepared by the external real-estate appraiser in accordance with realestate appraisal standards.
4.

Securities Lent under Lending Agreements

The amount of securities lent under lending agreements was ¥121,177 million as of March 31,
2018.

19

Asahi Mutual Life Insurance Company

5.

Loans

The total amount of loans to bankrupt borrowers, delinquent loans, delinquent loans three ormore months past due and restructured loans, which were included in loans, was ¥906 million
as of March 31, 2018.
i)

Loans to bankrupt borrowers were ¥0 million as of March 31, 2018.

ii)

Delinquent loans were ¥748 million as of March 31, 2018.

iii) Delinquent loans three or more months past due were ¥120 million as of March 31, 2018.
iv) Restructured loans were ¥36 million as of March 31, 2018.
Loans to bankrupt borrowers represent loans, excluding the balances already written-off,which meet the conditions prescribed in Article 96, Paragraph 1, Items 3 and 4 of the
Enforcement Regulations of the Corporate Tax Act. Moreover, accruing interest on these loans
is not recorded as income after determining that principal of or interest on these loans isunlikely to be collected due to the significant delay in repayment of principal or interest
payments or for other reasons.
Accruing interest on delinquent loans is not recorded as income due to the same reasons as
described above, and delinquent loans exclude loans to bankrupt borrowers and loans for whichinterest payments have been suspended and rescheduled to assist and support the borrowers
in the restructuring of their businesses.
Delinquent loans three or more months past due are loans for which interest payments or
repayments of principal are delinquent for three months or more from the due dates under theterms of the related loan agreements, excluding those loans classified as loans to bankrupt
borrowers and delinquent loans.
Restructured loans are loans for which certain concessions favorable to borrowers, such as
interest reduction or exemptions, rescheduling of due dates of principal or interest payments,
waivers of claim or other terms, have been negotiated for the purpose of assisting andsupporting the borrowers in the restructuring of their businesses. This category excludes loansclassified as loans to bankrupt borrowers, delinquent loans and delinquent loans three or moremonths past due.
The direct write-offs related to loans decreased the amounts of loans to bankrupt borrowers
described above by ¥13 million as of March 31, 2018.
In addition, the direct write-offs related to loans decreased delinquent loans described above by¥46 million as of March 31, 2018.
6.

Accumulated Depreciation of Tangible Fixed Assets

Accumulated depreciation of tangible fixed assets totaled ¥279,518 million as of March 31,

20

Asahi Mutual Life Insurance Company

2018.
7.

Separate Accounts

Total assets in separate accounts provided for in Article 118 of the Insurance Business Act were¥29,382 million as of March 31, 2018. The amounts of separate account liabilities were thesame as separate account assets.
8.

Receivables from/Payables to Subsidiaries

The total amounts of receivables from/payables to subsidiaries were ¥285 million and ¥991
million, respectively, as of March 31, 2018.
9.

Receivables from/Payables to Directors and Audit Board Members

There were no receivables from directors and audit board members as of March 31, 2018. The
total amount of payables to directors and audit board members was ¥15 million as of March 31,
2018.
10. Deferred Taxes(1) Deferred tax assets/liabilities were recognized as follows:

Deferred tax assets
Valuation allowance for deferred tax assets
Subtotal
Deferred tax liabilities
Net deferred tax assets (liabilities)

Millions of Yen
As ofMarch 31,2018¥
61,21921,48839,73023,543¥
16,187

Major components of deferred tax assets/liabilities were as follows:

Millions of Yen
As ofMarch 31, 2018
Deferred tax assets
Contingency reserve
Reserve for price fluctuation
Reserve for employees’ retirement benefits
Impairment losses
Losses on valuation of securities
Net unrealized losses on available-for-sale securities
Deferred tax liabilities
Net unrealized gains on available-for-sale securities¥

14,14010,800
9,866
8,526
5,542
3,988

¥

22,605(2) The statutory tax rate was 28.1% for the fiscal year ended March 31, 2018. The main

21

Asahi Mutual Life Insurance Company

factors causing the differences between the statutory tax rate and the actual effective tax
rate after considering deferred taxes were as follows:

Interest on foundation funds
Change of valuation allowance for deferred tax assets

Year ended
March 31, 2018(4.8)%(3.8)%

11. Reserve for Dividends to Policyholders

Balance at the beginning of the fiscal year
Transfer to reserve from surplus in the previous fiscal year
Dividends to policyholders paid out during the fiscal year
Increase in interest
Decrease in others
Balance at the end of the fiscal year

Millions of Yen
Year ended
March 31, 2018¥
40,861
1,519
5,426
58
53
¥
36,95912. Stocks of Subsidiaries and Affiliates
The amount of stocks of subsidiaries and affiliates the Company held as of March 31, 2018 was¥5,063 million.
13. Pledged Assets
Assets pledged as collateral as of March 31, 2018 were securities in the amount of ¥4,325
million.
14. Policy Reserves for the Reinsurance Contracts
Policy reserves for the reinsurance contracts provided in accordance with Article 71, Paragraph
1 of the Enforcement Regulation of the Insurance Business Act (hereinafter “policy reserves forceded reinsurance”) were ¥177 million as of March 31, 2018.
15. Adjustment to Redemption of Foundation Funds and Appropriation of Net Surplus
The total amount of adjustment to redemption of foundation funds and appropriation of net
surplus defined in Article 30, Paragraph 2 of the Enforcement Regulation of the Insurance
Business Act was ¥81,574 million as of March 31, 2018.
16. Assets with Rights to Sell
The Company has the legal right to sell or collateralize securities borrowed under loan

22

Asahi Mutual Life Insurance Company

agreements.
The market value of these assets that were not sold or mortgaged as of March 31, 2018 was¥73,317 million. No assets were mortgaged as of March 31, 2018.
17. Commitment LineAs of March 31, 2018, there were unused commitment line agreements under which theCompany is the lender of ¥4,101 million.
18. Subordinated Bonds
As of March 31, 2018, bonds payable are subordinated bonds, for which the repayments aresubordinated to other obligations.
19. Subordinated Loans
As of March 31, 2018, loans payable are subordinated loans, for which the repayments aresubordinated to other obligations.
20. Contributions to Policyholders Protection Corporation
The estimated future contributions to the Life Insurance Policyholders Protection Corporationof Japan under Article 259 of the Insurance Business Act as of March 31, 2018 were ¥9,750
million. These contributions are charged as operating expenses in the fiscal years in which
they are paid.
21. Reserve for Employees’ Retirement Benefits(1) Summary of retirement benefit plans
As defined benefit plan, the Company has defined benefit corporate pension plans, which
are funded-type, and lump-sum retirement allowance plans which are non-funded typebut resulted in funded type due to setting of employee pension trust.
(2) Defined benefit plani)

Reconciliation of beginning and ending balance of retirement benefit obligations

Retirement benefit obligations at the beginning of the current fiscal year
Service cost
Interest cost
Actuarial difference occurred during the fiscal year
Retirement benefit payments
Retirement benefit obligations at the end of the fiscal year

23

Millions of Yen
Year ended
March 31, 2018¥46,250
1,970
462
1,471
(4,986)¥45,167

Asahi Mutual Life Insurance Company

ii)

Reconciliation of beginning and ending balance of pension plan assets
Millions of Yen
Year ended
March 31, 2018
¥
8,493
60
1,928
129
(192)
¥
10,418Pension plan assets at the beginning of the fiscal year
Expected return on pension plan assets
Actuarial difference occurred during the fiscal year
Contributions by the employer
Retirement benefit payments
Pension plan assets at the end of the fiscal yeariii) Reconciliation of retirement benefit obligation and pension plan assets with reservefor employees’ retirement benefits and prepaid pension expenses presented on the
non-consolidated balance sheet
Millions of Yen
As ofMarch 31, 2018¥
45,167(10,418)
34,749546

a. Funded plan retirement benefit obligationb. Pension plan assetsc. ( a + b )d. Unrecognized actuarial differences
e. Net amount of liabilities and assets presented on the
non-consolidated balance sheet
f. Reserve for employees’ retirement benefits
g. Prepaid pension expenses
h. Net amount of liabilities and assets presented on the
non-consolidated balance sheet

35,29535,365(70)¥

35,295iv) Breakdown of retirement benefit expenses

Service cost
Interest cost
Expected return on pension plan assets
Amortization of actuarial differences
Retirement benefit expenses related to defined benefit planv)

Millions of Yen
Year ended
March 31, 2018
¥
1,970
462
(60)
538
¥
2,910

Breakdown of main pension plan assets
The breakdown of main asset categories as a percentage of pension plan assets was asfollows:
As ofMarch 31,2018
Stocks62%
Bonds
6%
Others
32%
Total
100%

24

Asahi Mutual Life Insurance Company

vi) Method for determining the expected long-term rate of return
To determine the expected long-term rate of return on pension plan assets, theCompany takes into account the present and future allocation of pension plan assets,
and the present and expected future long-term rate of return on the diverse range ofassets that makes up the pension assets.
vii) Underlying actuarial assumptions
The main underlying actuarial assumptions were as follows:

Discount rate
Expected long-term rate of return on pension plan assets
Defined benefit corporate pension plans

III.

Notes to Unaudited Non-consolidated Statement of Income

1.

Transactions with Subsidiaries

As ofMarch 31, 2018
1.0%
0.7%
1.7%

The total amounts of revenues and expenditures in connection with subsidiaries were ¥442
million and ¥10,245 million, respectively, for the fiscal year ended March 31, 2018.
2.

Investment Income and Expenses

The major components of gains on sales of securities were as follows:

Domestic bonds
Domestic stocks and other securities
Foreign securities

Millions of Yen
Year ended
March 31, 2018¥
44,891
1,709
178

The major components of losses on sales of securities were as follows:

Domestic bonds
Domestic stocks and other securities
Foreign securities

Millions of Yen
Year ended
March 31, 2018
¥
549
487
1,249

The major components of losses on valuation of securities were as follows:

Domestic stocks and other securities
Foreign securities

Millions of Yen
Year ended
March 31, 2018
¥
49
96
25

Asahi Mutual Life Insurance Company

Losses on derivative financial instruments included net valuation losses of ¥76 million for the
fiscal year ended March 31, 2018.
3.

Policy Reserves for the Reinsurance Contracts

Provision for policy reserves for ceded reinsurance considered in calculating reversal of policy
reserves for the fiscal year ended March 31, 2018 was ¥47 million.
4.

Impairment Losses of Fixed Assets

For the fiscal year ended March 31, 2018, impairment losses of fixed assets by the Company
were as follows:(1) Method of grouping
Real estate and other assets used for insurance business operations are classified as one
asset group as a whole. Other assets such as real estate for rent and unused real estate
are classified as one group individually.
(2) Background information on recognizing the impairment losses
As the profitability of certain real estate for rent dropped down significantly due to adecrease in the level of rental income and a declining trend in the market prices of land,
the Company reduced the book values of such real estate for rent and unused real estate
to their recoverable amounts. The write-downs were recognized as impairment losses andincluded in the extraordinary losses.
(3) Asset groups for which impairment losses were recognized and losses by classification of
fixed assets

Millions of Yen
Year ended
March 31, 2018
Real estate for rent:
Land
Building
Total real estate for rent (i)Unused real estate:
Land
Building
Total unused real estate (ii)
Total:Land
Building
Total (i) + (ii)

¥

518
699
1,217
369
191
560
888
890
1,778

¥

26

Asahi Mutual Life Insurance Company

(4) Calculation method of recoverable amounts
The recoverable amounts of real estate for rent are determined at net realizable value orvalue in use. The recoverable amounts for unused assets are net realizable value. Value in
use is determined as the estimated net future cash flows, reflecting the volatility risk,
discounted at 3.6% for the fiscal year ended March 31, 2018. Net realizable value iscalculated based on the appraisal value in accordance with “Real Estate Appraisal
Standards” or the publicly announced appraisal value after deducting expected disposal
costs.

27

Asahi Mutual Life Insurance Company

５．Breakdown of Ordinary Profit (Fundamental Profit)(Millions of Yen)
Year ended
March 31, 2017

Year ended
March 31, 2018

22,04930,13940,38946,779Gains on money held in trust--

Gains on trading securities--

Gains on sales of securities

40,38946,779Gains on derivative financial instruments--

Foreign exchange gains--

Other capital gains--

22,631

18,852Losses on money held in trust--

Losses on trading securities--

Losses on sales of securities

11,025

2,285

16

145

11,264

13,891

326

2,530

-

-

Ｂ

17,75727,927

Ａ＋Ｂ

39,80758,066

80

78

Reinsurance revenue--

Reversal of contingency reserve
Reversal of specific allowance for possible loan
lossesOthers

-

-

80

78

-

-

Other one-time losses

900

20,601

Reinsurance premiums

-

-

900

20,600----

Write-offs of loans

01

Others

-

-

Ｃ

(820)

(20,523)

Ａ＋Ｂ＋Ｃ

38,98637,543Fundamental profit

Ａ

Capital gains

Capital losses

Losses on valuation of securities
Losses on derivative financial instruments
Foreign exchange losses
Other capital losses
Net capital gains (losses)
Fundamental profit plus net capital gains(losses)
Other one-time gains

Provision for contingency reserve
Provision for specific allowance for possible loan
lossesProvision for allowance for specified overseas loans

Other one-time gains (losses)
Ordinary profit

28

Asahi Mutual Life Insurance Company

６．Unaudited Non-consolidated Statements of Changes in Net Assets
Year ended March 31, 2017

(Millions of Yen)
Foundation funds and others
Surplus

Beginning balance

Foundation
funds

Reserve forredemption offoundation
funds

Reserve forrevaluation

126,000

120,000

281

Other surplus
Reserve for
future losses

Reserve forfund
redemption

219

35,500Equalized
Unappropriatedreserve forsurplusdividends to(loss)
policyholders

10,485

18,163Total
surplus64,368

Total
foundation
funds andothers

310,650

Changes in the fiscal year:
Issuance of foundation funds

11,00011,000Additions to reserve for dividends topolicyholders(1,767)23

Additions to reserve for future losses
Additions to reserve for redemption offoundation funds

11,000(1,767)(1,767)(23)(11,000)(11,000)

Payment of interest on foundation
funds(5,787)(5,787)(5,787)

Net surplus

29,26329,26329,263

Redemption of foundation funds(11,000)(11,000)

Additions to reserve for fundredemption

11,500

Reversal of equalized reserve fordividends to policyholders(11,500)(1,767)

Reversal of land revaluation differences

1,767
1,235

1,235

1,235

Net changes, excluding foundation
funds and others
Net changes in the fiscal year
Ending balance-

11,000-23

500(1,767)

13,18911,94422,944

126,000

131,000

281

242

36,0008,718

31,35376,313

333,595

Valuation and translation adjustments
Net unrealized
gains (losses)
on availablefor-salesecurities,
net of tax
Beginning balance

62,953Landrevaluationdifferences(44,527)

Total
valuation andtranslation
adjustments

18,426Total
net assets

329,077

Changes in the fiscal year:
Issuance of foundation funds

11,000Additions to reserve for dividends topolicyholders(1,767)

Additions to reserve for future losses
Additions to reserve for redemption offoundation funds
Payment of interest on foundation
funds(5,787)

Net surplus

29,263

Redemption of foundation funds(11,000)

Additions to reserve for fundredemption
Reversal of equalized reserve fordividends to policyholders

1,235

Reversal of land revaluation differences
Net changes, excluding foundation
funds and others

8,150(1,235)

6,915

6,915

Net changes in the fiscal year

8,150

(1,235)

6,915

29,859Ending balance

71,104(45,762)

25,341

358,937

29

Asahi Mutual Life Insurance Company

Year ended March 31, 2018

(Millions of Yen)
Foundation funds and others
Surplus

Beginning balance

Foundation
funds

Reserve forredemption offoundation
funds

Reserve forrevaluation

126,000

131,000

281

Other surplus
Reserve for
future losses

Reserve forfund
redemption

242

36,000Equalized
Unappropriatedreserve forsurplusdividends to(loss)
policyholders

8,718

Total
surplusTotal
foundation
funds andothers31,35376,313

333,595(1,519)(1,519)(1,519)Changes in the fiscal year:
Additions to reserve for dividends topolicyholders
Additions to reserve for future losses

24

(24)

Payment of interest on foundation
funds(5,499)(5,499)(5,499)Net surplus

25,98825,98825,988

617

617

617

Additions to reserve for fundredemption

12,600Additions to equalized reserve fordividends to policyholders(12,600)
960

Reversal of land revaluation differences(960)

Net changes, excluding foundation
funds and others
Net changes in the fiscal year
Ending balance

-

-

-

24

12,600960

6,003

19,587

19,587126,000

131,000

281

266

48,6009,678

37,356

95,901

353,183

Valuation and translation adjustments
Net unrealized
gains (losses)
on availablefor-salesecurities,
net of tax
Beginning balance

71,104Land
revaluationdifferences(45,762)

Total
valuation andtranslation
adjustments

25,341Total
net assets

358,937

Changes in the fiscal year:
Additions to reserve for dividends topolicyholders(1,519)Additions to reserve for future losses
Payment of interest on foundation
funds(5,499)Net surplus

25,988Additions to reserve for fundredemption
Additions to equalized reserve fordividends to policyholders
Reversal of land revaluation differences
Net changes, excluding foundation
funds and others

617
10,188

(617)

9,570

9,570

Net changes in the fiscal year

10,188

(617)

9,570

29,158Ending balance

81,292(46,380)

34,912

388,095

30

Asahi Mutual Life Insurance Company

７．Unaudited Non-consolidated Statements of Proposed Appropriation of Surplus(Millions of Yen)
Year ended
March 31, 2017

Year ended
March 31, 2018

31,35337,356

-

420

-

420

31,35337,777

20,603

20,854

Reserve for dividends to policyholders

1,519

1,963

Net surplus (loss)

19,08318,891

24

25

Interest on foundation funds

5,499

6,266

Voluntary surplus reserves

13,56012,60012,60012,600960-

10,75016,922

Unappropriated surplus (loss)
Reversal of voluntary surplus reserves
Reversal of equalized reserve for dividends topolicyholders
Total
Appropriation of surplus (loss)

Reserve for future losses

Reserve for fund redemption
Equalized reserve for dividends topolicyholders
Surplus (loss) carried forward

31

Asahi Mutual Life Insurance Company

８．Disclosed Claims Based on Categories of Obligors(Millions of Yen, ％)As of March 31, 2017

As of March 31, 2018

Claims against bankrupt and quasi-bankrupt
obligors

733

529

Claims with collection risk

307

237

Claims for special attention

155

161

Subtotal

1,196

928

（Percentage of total）(0.21)(0.15)

Claims against normal obligors

558,825

606,280

Total

560,022607,208

Notes:
1.Claims against bankrupt and quasi-bankrupt obligors are claims to obligors who are subject tobankruptcy, corporate reorganization or rehabilitation or other similar proceedings and other obligors
in serious financial difficulities.
2.Claims with collection risk are claims to obligors (other than bankrupt and quasi-bankrupt obligors) withdeteriorated financial condition and results of operations from which it is unlikely that the principal andinterest on the claims will be recovered.
3.Claims for special attention are claims on which principal and/or interest are past due for three months ormore and claims with a concessionary interest rate, as well as claims with renegotiated conditions in favor of
the borrower, including renegotiated schedule and/or waivers, in each case, other than the claims describedin note 1. or 2. above.
4.Claims against normal obligors are all other claims.

(Reference)
Amount of loans based on self-assessment categories(Millions of Yen)
As of March 31, 2018

As of March 31, 2017
Write-offs, provision for allowance
BeforeWrite-offs, provision for allowance

After

BeforeAfter

Category II

8,927

8,927

6,625

6,625

Category III

307

91

237

102

Category IV

252

-

89

-

32

Asahi Mutual Life Insurance Company

９．Risk-monitored Loans(Millions of Yen, ％)As of March 31, 2017

Loans to bankrupt borrowers

As of March 31, 2018

0

0

1,015

748

Delinquent loans three or more months past due

112

120

Restructured loans

38

36

Total

1,166

906

（Percentage of total loans）(0.21)(0.19)

Delinquent loans

Notes:
1.For credit to legally bankrupt borrowers and substantially bankrupt borrowers, the amounts remaining after
the deductions of amount expected to be collected through the disposal of collateral or the execution ofguarantees are written-off directly from the borrower's balance as the estimated uncollectible amounts.
The amounts written-off related to loans to bankrupt borrowers were \22 million as of March 31, 2017 and\13 million as of March 31, 2018. The amounts written-off related to delinquent loans were \193 million
as of March 31, 2017 and \46 million as of March 31, 2018.
2.Loans to bankrupt borrowers represent non-accrual loans to borrowers which are subject to bankruptcy,
corporate reorganization or rehabilitation or other similar, including but not limited to foreign, proceedings.
Accruing interest on these loans is not recorded as income after determining that principal of or interest on
these loans is unlikely to be collected due to the significant delay in repayment of principal or interest
repayments or for other reasons.
3.Delinquent loans are loans whose accruing interest is not recorded as income and exclude loans tobankrupt borrowers and loans for which interest payments have been suspended and rescheduled to assist
and support the borrowers in the restructuring of their business.
4.Delinquent loans three or more months past due are loans for which interest payments or repayments ofprincipal are delinquent for three months or more from the due dates under the terms of the related loan
agreements, excluding those loans classified as loans to bankrupt borrowers or delinquent loans.
5.Restructured loans are loans for which certain concessions favorable to borrowers, such as interest reduction
or exemptions, rescheduling of due dates of principal or interest payments, waivers of claim or other terms,
have been negotiated for the purpose of assisting and supporting the borrowers in the restructuring of theirbusinesses. This category excludes loans classified as loans to bankrupt borrowers, delinquent loans anddelinquent loans three or more months past due.

33

Asahi Mutual Life Insurance Company

10．Solvency Margin Ratio(Millions of Yen)

As of March 31, 2017

Total solvency margin（Ａ）

As of March 31, 2018

700,120

787,114Foundation funds and surplus

326,576

344,953

Reserve for price fluctuation

36,58038,710Contingency reserve

30,08250,682

14

17(Net unrealized gains on available-for-sale securities (before tax effect) anddeferred hedge gains (before tax effect)) × 90% (in case of losses： × 100%)

78,144

93,243Net unrealized gains on land × 85%(in case of losses： × 100%)(28,052)(10,499)

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

111,415

122,802

Qualifying subordinated debt

General allowance for possible loan losses

137,349

136,949

Excess amount of policy reserves based on full-time Zillmer method and qualifying subordinateddebt excluded from the calculation of solvency margin--

Deduction

-

-

8,011

10,256

188,516

194,693

OthersTotal amount of risk

( R1  R8 ) 2  ( R2  R3  R7 ) 2  R4

（Ｂ）

Insurance risk

R1

15,177

14,415

Third sector insurance risk

R8

9,176

9,450

Risk of assumed yield

R2

82,03478,490

Minimum guarantee risk

R7

1,096

1,076

Investment risk

R399,628109,368

Operational risk

R4

4,142

4,256

742.7%

808.5%

Solvency margin ratio(Ａ) / {(1/2)×(Ｂ)} × 100

Notes:
1. The figures above are calculated based on Articles 86 and 87 of the Ordinance for Enforcement of the Insurance Business Act and the Public Notice
No. 50 of the Ministry of Finance of 1996.
2. "Excess amount of policy reserves based on full-time Zillmer method", "Qualifying subordinated debt" and "Excess amount of policy reserves basedon full-time Zillmer method and qualifying subordinated debt excluded from the calculation of solvency margin" are calculated based on the Public
Notice No.25 of the Financial Service Agency of 2011.
3. "Minimum guarantee risk" is calculated by standard method.

34

Asahi Mutual Life Insurance Company

11．Status of Separate Account(1) Separate Account Assets by Products(Millions of Yen)

As of March 31, 2017

As of March 31,2018

AmountAmountIndividual variable insurance

29,19929,382

Individual variable annuities--

Group annuity products--

29,19929,382

Total（２）Individual Variable Insurance (Separate Account)(ⅰ)Policies in Force
As of March 31,2017
Number of policies(Thousands)

Individual variable insurance(fixed-term)
Individual variable insurance(whole life)
Total

As of March 31,2018

AmountNumber of policies(Thousands)(Millions of Yen)

Amount(Millions of Yen)

0

9

0

5

14

102,134

14

98,383

14

102,143

14

98,38835

Asahi Mutual Life Insurance Company

(ⅱ)Breakdown of Separate Account Assets for Individual Variable Insurance(Millions of Yen)
As of March 31,2018

As of March 31,2017
AmountPercentage

AmountPercentage

Cash, deposits, call loans

1,620

5.6

1,332

4.5

Securities

27,242

93.3

27,816

94.7

Domestic bonds

6,510

22.3

6,854

23.3

Domestic stocks

10,882

37.3

11,21638.2

Foreign securities

9,848

33.7

9,745

33.2

Foreign bonds

2,984

10.2

2,979

10.1

Foreign stocks and other foreign securities

6,863

23.5

6,766

23.0

-

-

-

-

Loans

-

-

-

-

Others

336

1.2

233

0.8

-

-

-

-

29,199100.0

29,382

100.0

Other securities

Allowance for possible loan losses
Total(ⅲ)Investment Income and Expenses of Separate Account for Individual Variable Insurance(Millions of Yen)
Year ended
Year ended
March 31, 2017 March 31, 2018
AmountInterest, dividends and other income

Amount

600

651

2,357

3,189

-

-

3,417

2,337

Foreign exchange gains

33

21

Gains on derivative financial instruments--

Other investment income

1

1

1,659

960

13

11

2,383

2,816

Foreign exchange losses

31

28

Losses on derivative financial instruments--

Other investment expenses

0

0

2,320

2,385

Gains on sales of securities
Gains on redemptions of securities
Gains on valuation of securities

Losses on sales of securities
Losses on redemptions of securities
Losses on valuation of securities

Net Investment Income（３）Individual Variable Annuities(Separate Account)
The Company does not have individual variable annuity contracts in force.

36

Asahi Mutual Life Insurance Company

12．Status of the Company, Subsidiaries and Affiliates(1) Selected Financial Data
(Millions of Yen)

Year ended
March 31, 2017

Year ended
March 31, 2018

Ordinary income

683,715

656,971

Ordinary profit

39,24538,088Net surplus attributable to the Parent Company

29,282

26,168Comprehensive income

39,526

37,132(Millions of Yen)

As of March 31, 2017
Total assets
Solvency margin ratio

37

As of March 31, 2018

5,398,884

5,397,841

748.0%

815.4%

Asahi Mutual Life Insurance Company

（2）Unaudited Consolidated Balance Sheets

Assets:Cash and deposits
Call loans
Monetary claims bought
Securities
Loans
Tangible fixed assets:
Land
Buildings
Lease assets
Construction in progress
Other tangible fixed assets
Intangible fixed assets:
Software
Other intangible fixed assets
Reinsurance receivables
Other assets
Net defined benefit assets
Deferred tax assets
Customers’ liabilities under acceptances and guarantees

Allowance for possible loan losses
Total assets
Liabilities:
Policy reserves and other reserves:
Reserve for outstanding claims
Policy reserves
Reserve for dividends to policyholders
Reinsurance payables
Bonds payable
Other liabilities
Net defined benefit liabilities
Reserve for price fluctuation
Deferred tax liabilities for land revaluation
Acceptances and guarantees
Total liabilities
Net assets:
Foundation funds
Reserve for redemption of foundation funds
Reserve for revaluation
Consolidated surplus
Total foundation funds and others
Net unrealized gains (losses) on available-for-salesecurities, net of tax
Land revaluation differences
Accumulated remeasurements of defined benefit plans
Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets

38

As of March 31, 2017

(Millions of Yen)
As of March 31, 201835,511122,000
33,202
4,148,686
557,761
406,159
232,995
167,538
2,015
1,033
2,575
33,285
14,13019,154
194
39,595
11
22,94714(487)
5,398,884

36,143164,000
30,151
4,185,104
484,169
401,061
230,913
162,593
3,946
1,134
2,473
33,735
20,691
13,044812
46,632351
16,06210(394)
5,397,841

4,768,371
27,3644,700,145
40,861
127
40,349139,189
37,75736,58018,091145,040,479

4,682,246
28,3684,616,919
36,959311
40,349194,908
35,056
38,71017,76210
5,009,355

126,000
131,000
281
76,065
333,347

126,000
131,000
281
95,832353,114

71,10581,293(45,762)(358)
24,983
73358,404
5,398,884(46,380)377
35,29081
388,486
5,397,841

Asahi Mutual Life Insurance Company

（3）Unaudited Consolidated Statements of Income and Statements of Comprehensive Income（Unaudited Consolidated Statements of Income）
Year ended March 31, 2017
Ordinary income:(Millions of Yen)
Year ended March 31, 2018

683,715

656,971

Premium and other income

383,776

384,953

Investment income:

160,986

166,318

Interest, dividends and other income

110,945

109,723

Gains on sales of securities

40,391

46,779

Reversal of allowance for possible loan losses
Other investment income
Investment gains on separate accounts

85

74

7,244

7,355

2,320

2,384

138,951

105,698

644,469

618,883

463,808

438,966

Claims135,234

124,809

Annuities

128,659

129,879

Benefits

97,96282,264

Surrender benefits

94,226

95,710

Other payments

7,725

6,302

33

1,008

Provision for reserve for outstanding claims

-

1,003

Provision for interest on policyholders’ dividend reserves

33

4

Investment expenses:

41,73738,542

Interest expenses

4,042

4,449

Losses on sales of securities

11,025

2,285

Other ordinary income
Ordinary expenses:
Claims and other payments:

Provision for policy reserves and other reserves:

Losses on valuation of securities

16

145

11,264

13,891

325

2,530

0

1

Depreciation of rental real estate and other assets

5,500

5,596

Other investment expenses

9,561

9,641

Operating expenses

105,072

106,653

Other ordinary expenses

33,81833,712

Ordinary profit

39,24538,088Extraordinary gains:

1,243

194

1,243

194

Losses on derivative financial instruments
Foreign exchange losses
Write-offs of loans

Gains on disposal of fixed assets
Extraordinary losses:

5,363

5,446

Losses on disposal of fixed assets

1,635

1,538

Impairment losses

1,333

1,778

Provision for reserve for price fluctuation

2,050

2,130

344

-

Other extraordinary losses
Surplus before income taxes

35,126

32,836

Income taxes-current

3,859

6,946

Income taxes-deferred

1,952

(318)

Total income taxes

5,812

6,628

Net surplus

29,313

26,207

Net surplus attributable to non-controlling interests
Net surplus attributable to the Parent Company

39

31

39

29,282

26,168Asahi Mutual Life Insurance Company

（Unaudited Consolidated Statements of Comprehensive Income）(Millions of Yen)
Year ended March 31, 2017

Year ended March 31, 2018

Net surplus

29,313

26,207

Other comprehensive income:

10,212

10,924

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

8,150

10,188Remeasurements of defined benefit plans

2,061

735

39,526

37,13239,49437,09231

39

Comprehensive income:Comprehensive income attributable to the Parent Company
Comprehensive income attributable to non-controlling interests

40

Asahi Mutual Life Insurance Company

（4）Unaudited Consolidated Statements of Cash Flows(Millions of Yen)
Year ended March 31, 2017 Year ended March 31, 2018
I. Cash flows from operating activities
Surplus before income taxes
Depreciation of rental real estate and other assets
Depreciation
Impairment losses
Increase (decrease) in reserve for outstanding claims
Increase (decrease) in policy reserves
Provision for interest on policyholders’ dividend reserves
Increase (decrease) in allowance for possible loan losses
Increase (decrease) in net defined benefit liabilities
Increase (decrease) in reserve for price fluctuation
Interest, dividends and other income(Gains) losses on securities(Gains) losses on derivative financial instruments
Interest expenses
Foreign exchange (gains) losses, net(Gains) losses on tangible fixed assets(Increase) decrease in reinsurance receivables(Increase) decrease in other assets except from investing and financing activities
Increase (decrease) in reinsurance payables
Increase (decrease) in other liabilities except from investing and financing activities
Others, net
SubtotalInterest, dividends and other income received
Interest paid
Dividends to policyholders paid
Income taxes (paid) refunded
Net cash provided by (used in) operating activities
II. Cash flows from investing activities
Purchases of monetary claims bought
Proceeds from sales and redemptions of monetary claims bought
Proceeds from decreases in money held in trust
Purchases of securities
Proceeds from sales and redemptions of securities
Disbursements for loans
Proceeds from collections of loans
Proceeds from derivative financial instruments
Increase (decrease) in payables under securities borrowing transactions①Total of investing activities[I+①]
Purchases of tangible fixed assets
Proceeds from sales of tangible fixed assets
Others, net
Net cash provided by (used in) investing activities
III. Cash flows from financing activities
Proceeds from debt borrowing
Redemption of debt borrowing
Proceeds from issuance of bonds
Proceeds from issuance of foundation funds
Redemption of foundation funds
Payment of interest on foundation funds
Dividends paid to non-controlling interests
Others, net
Net cash provided by (used in) financing activities
IV.Net increase (decrease) in cash and cash equivalents
V.Cash and cash equivalents at the beginning of the year
VI. Cash and cash equivalents at the end of the year41

35,126
5,500
9,881
1,333
(585)
(114,500)33(85)(1,789)2,050(110,945)(31,669)
11,264
4,042
325
(84)
(161)
(1,385)
31
520
7,296
(183,802)
116,136(3,957)(5,660)(185)(77,469)

32,836
5,596
10,133
1,778
1,003(83,226)
4(74)(1,942)2,130(109,723)(46,733)
13,891
4,449
2,530
970
(617)
(903)
184
1,612
6,606
(159,491)
113,182(4,446)(5,426)(4,827)(61,010)

(500)
9,198
9
(968,725)
993,520(66,526)
125,897(20,059)(53,610)
19,204(58,265)(7,447)
8,341(7,903)
12,194(500)
3,544(643,165)
632,895(52,331)
120,479
17,67344,967
123,564
62,554(6,603)
1,782(8,611)
110,1322,000(30,000)
40,34911,000(11,000)(5,787)
(37)
(871)
5,652
(59,622)
217,133
157,511(5,499)(31)(958)(6,490)42,631
157,511200,143

Asahi Mutual Life Insurance Company

（5）Unaudited Consolidated Statements of Changes in Net Assets
Year ended March 31, 2017

(Millions of Yen)
Foundation funds and others

Beginning balance

Foundation
funds

Reserve forredemption offoundation
funds

126,000

120,000

Reserve forrevaluation

Consolidated
surplus281

64,102

Total
foundation
funds andothers

310,384

Changes in the fiscal year:
Issuance of foundation funds

11,000Additions to reserve for dividends topolicyholders
Additions to reserve for redemption offoundation funds
Payment of interest on foundation
funds
Net surplus attributable to the Parent
Company
Redemption of foundation funds

11,000(1,767)
11,000(1,767)(11,000)(5,787)(5,787)29,282

29,282(11,000)(11,000)

Reversal of land revaluation differences

1,235

1,235

Net changes, excluding foundation
funds and others
Net changes in the fiscal year
Ending balance-

11,000-11,96322,963126,000

131,000

281

76,065

333,347

Accumulated other comprehensive income
Net unrealized
gains (losses)
on availablefor-salesecurities,
net of tax
Beginning balance

62,954Land
revaluationdifferences(44,527)

Total
Accumulated
accumulated
remeasurements
otherof definedcomprehensive
benefit plansincome(2,420)16,006

Noncontrollinginterests

79

Total
net assets

326,470

Changes in the fiscal year:
Issuance of foundation funds

11,000Additions to reserve for dividends topolicyholders
Additions to reserve for redemption offoundation funds
Payment of interest on foundation
funds
Net surplus attributable to the Parent
Company(1,767)(5,787)29,282

Redemption of foundation funds(11,000)

Reversal of land revaluation differences
Net changes, excluding foundation
funds and others

1,235
8,150

(1,235)

2,061

8,976

(5)

8,971

Net changes in the fiscal year

8,150

(1,235)

2,061

8,976

(5)

31,934Ending balance

71,105(45,762)(358)

24,983

73358,404

42

Asahi Mutual Life Insurance Company

Year ended March 31, 2018

(Millions of Yen)
Foundation funds and others

Beginning balance

Foundation
funds

Reserve forredemption offoundation
funds

126,000

131,000

Reserve forrevaluation

Consolidated
surplus281

Total
foundation
funds andothers

76,065

333,347(1,519)(1,519)(5,499)(5,499)26,16826,168617

617

Changes in the fiscal year:
Additions to reserve for dividends topolicyholders
Payment of interest on foundation
funds
Net surplus attributable to the Parent
Company
Reversal of land revaluation differences
Net changes, excluding foundation
funds and others
Net changes in the fiscal year
Ending balance

-

-

-

19,766

19,766

126,000

131,000

281

95,832353,114

Accumulated other comprehensive income
Net unrealized
gains (losses)
on availablefor-salesecurities,
net of tax
Beginning balance

71,105Landrevaluationdifferences(45,762)

Total
Accumulated
accumulated
remeasurements
otherof definedcomprehensive
benefit plansincome(358)

24,983

Noncontrollinginterests

Total
net assets

73

358,404

Changes in the fiscal year:
Additions to reserve for dividends topolicyholders
Payment of interest on foundation
funds
Net surplus attributable to the Parent
Company(1,519)(5,499)26,168

Reversal of land revaluation differences
Net changes, excluding foundation
funds and others

617
10,188(617)

735

10,306

7

10,314

Net changes in the fiscal year

10,188(617)

735

10,306

7

30,081Ending balance

81,293(46,380)377

35,29081

388,486

43

Asahi Mutual Life Insurance Company

I.

Presentation of Unaudited Consolidated Financial Statements

1.

Basis of Presentation

The accompanying consolidated financial statements have been prepared from the accounts
maintained by Asahi Mutual Life Insurance Company (the “Company”) and its consolidated
subsidiaries in accordance with the provisions set forth in the Insurance Business Act of Japanand its related rules and regulations applicable to the mutual life insurance industry and in
conformity with accounting principles generally accepted in Japan, which are different incertain respects from accounting principles generally accepted in countries and jurisdictions
other than Japan.
In addition, the notes to the consolidated financial statements include information which is not
required under accounting principles generally accepted in Japan but is presented herein as
additional information.
Amounts of less than one million yen have been eliminated. As a result, total amounts in yen
shown herein do not necessarily agree with the sum of the individual amounts.
The Insurance Business Act shall prescribe the disclosure of a single fiscal year. The Company
provides the disclosure of comparative financial information corresponding to eachcomparative fiscal year in the presented financial statements for use by readers outside Japan.
In preparing the accompanying consolidated financial statements, certain reclassifications
have been made to the consolidated financial statements issued domestically in order topresent them in a format which is more familiar to readers outside Japan.
2.

Principles of Consolidation(1) Scope of consolidation
The consolidated subsidiaries as of March 31, 2018 are listed below:
Info Techno Asahi Co., Ltd.
Asahi Life Asset Management Co., Ltd.
Asahi Nvest Investment Advisory Co., Ltd.
The major unconsolidated subsidiary is Asahi Real Estate Management Co., Ltd.
Unconsolidated subsidiaries are excluded from the scope of consolidation, as each one ofthem is small in terms of its total assets, amount of sales, net income for the year andsurplus and is sufficiently immaterial to reasonable judgment with regards to its impact
on the financial position and results of operation of the Company’s group.
(2) Application of equity method
Unconsolidated subsidiaries and affiliates (such as Asahi Real Estate Management Co.,

44

Asahi Mutual Life Insurance Company

Ltd, etc.) are immaterial in terms of their impact on consolidated net income and surplus,
and also immaterial as a whole, therefore, the equity method is not applied.
(3) Fiscal year-end of consolidated subsidiaries
The fiscal year-end of the consolidated subsidiaries is March 31.
(4) Amortization of goodwill
Goodwill is fully expensed as incurred.

II. Notes to Unaudited Consolidated Balance Sheet
1.

Significant Accounting Policies(1) Valuation methods of securities
The valuation of securities, including deposits and monetary claims bought which areequivalent to securities is as follows:i)

Trading securities are stated at fair market value. Costs of sales are determined by
the moving average method.

ii)

Held-to-maturity debt securities are stated at amortized cost under the straight-line
method, cost being determined by the moving average method.

iii) Policy-reserve-matching bonds are stated at amortized cost under the straight-line
method, cost being determined by the moving average method in accordance with
“Temporary
TreatmentofAccounting
andAuditing
Concerning
Policy-reserve-matching Bonds in Insurance Industry” (Industry Audit Committee
Report No. 21 issued by the Japanese Institute of Certified Public Accountants(“JICPA”)).
iv) Investments in unconsolidated subsidiaries and affiliates not accounted for under theequity method are stated at cost.
v)

Available-for-sale securities with fair market value are stated at fair market value
based on the market prices at the end of the fiscal year, except for domestic stocks,
domestic exchange-traded funds, domestic listed real estate investment trusts,
foreign exchange-traded funds for which hedge accounting is not applied, foreign
bond exchange-traded funds for which hedge accounting is not applied and foreign
currency-denominated bonds for which hedge accounting is not applied. Suchsecurities are stated based on the average of the market value during the final monthof the fiscal year. Costs of sales are determined by the moving average method. Net
unrealized gains or losses on these available-for-sale securities, net of tax, arerecorded as a separate component of net assets.

45

Asahi Mutual Life Insurance Company

Available-for-sale securities whose fair values are deemed extremely difficult to determine
are stated at cost, cost being determined by the moving average method, except for publicand corporate bonds including foreign bonds, of which the difference between acquisition
cost and face value is considered to be an adjustment of interest. Such bonds are stated atamortized cost under the straight-line method, cost being determined by the moving
average method.
(2) Policy-reserve-matching bonds
The Company classifies bonds held with the aim of matching the duration to outstanding
insurance liabilities within the sub-groups (categorized by insurance type, investment
policy and other factors) of individual life insurance and individual annuities aspolicy-reserve-matching bonds in accordance with “Temporary Treatment of Accounting
and Auditing Concerning Policy-reserve-matching Bonds in Insurance Industry” (Industry
Audit Committee Report No. 21 issued by the JICPA on November 16, 2000).
(3) Valuation methods of derivative financial instruments
Derivative financial instruments are stated at fair market value.
(4) Revaluation of land
The Company revalued the land for business purposes based on the Act on Revaluation ofLand (Act No. 34 promulgated on March 31, 1998). The difference between fair value andbook value resulting from the revaluation, net of related taxes, is recorded as land
revaluation differences as a separate component of net assets and the related tax isrecorded as deferred tax liabilities for revaluation.
■

Date of revaluation: March 31, 2001■

Method of revaluation as prescribed for in Article 3, Paragraph 3 of the said Act:The calculation is based on the publicly announced appraisal value with certain
adjustments set forth in Article 2, Item 1 of the Enforcement Ordinance of the Act on
Revaluation of Land (Government Ordinance No. 119 promulgated on March 31,
1998) or the appraisal value determined by the real-estate appraiser set forth in
Article 2, Item 5 of the said Ordinance with certain reasonable adjustments.

(5) Depreciation of tangible fixed assets
Depreciation of the Company’s tangible fixed assets is calculated by the following
methods.
■

Tangible fixed assets (excluding lease assets): Declining-balance method
However, buildings are depreciated using the straight-line method.

■

Lease assets related to finance lease transactions that do not transfer ownership:
Straight-line method over the lease term with no residual value

46

Asahi Mutual Life Insurance Company

(6) Foreign currency translation
Foreign currency-denominated assets and liabilities (excluding the shares of
unconsolidated subsidiaries and affiliates) are translated into Japanese yen at theeffective exchange rate prevailing at the balance sheet date, except for foreignexchange-traded funds for which hedge accounting is not applied, foreign bondexchange-traded funds for which hedge accounting is not applied and foreign
currency-denominated bonds for which hedge accounting is not applied categorized asavailable-for-sale securities with fair market value. Such securities are translated into
Japanese yen at the average of the effective exchange rate during the final month of the
fiscal year.
(7) Allowance for possible loan losses
Allowance for possible loan losses is provided in accordance with the Company’s standardsof self-assessment and write-offs and reserves on credit quality:i)

For credit to borrowers who are legally bankrupt such as being in bankruptcy
proceedings or civil rehabilitation (hereinafter “legally bankrupt borrowers”) and whoare substantially bankrupt (hereinafter “substantially bankrupt borrowers”), theCompany provides the remaining amount of credits after the direct write-off
described below and the deductions of the amount expected to be collected throughthe disposal of collateral or the execution of guarantees.

ii)

For credit to borrowers who are not currently bankrupt but have a high risk ofbankruptcy (hereinafter “not currently bankrupt borrowers”), the Company provides
the amounts deemed as necessary considering the borrowers’ ability to pay, within
the amounts after deductions of the amount expected to be collected through thedisposal of collateral or the execution of guarantees.

iii) For credit to borrowers other than the above, the Company provides the amounts
calculated by multiplying the borrowers’ balance by the actual ratio of bad debt losses
on defaults during a certain past period.
All credit is assessed by the relevant departments in accordance with the Company’s
standards of self-assessment on credit quality. The results of the assessment are reviewed
by the audit department, which is independent of business-related divisions. Subsequently,
allowance for possible loan losses is provided based on the results of these assessments.
For consolidated subsidiaries, the Company records the allowance amounts deemednecessary in accordance mainly with the Company’s standards of self-assessment andwrite-offs and reserves on credit quality.
For credit to legally bankrupt borrowers and substantially bankrupt borrowers, theamounts remaining after deductions of collateral value or the amounts collectible throughthe execution of guarantees are written-off directly from the borrower’s balance as theestimated uncollectible amounts. The amount written-off as of March 31, 2018 was ¥60
million.

47

Asahi Mutual Life Insurance Company

(8) Accounting for employees’ retirement benefits and method of amortizing retirement
benefit expenses
Net defined benefit liabilities and assets are presented for the employees’ retirement
benefits after deducting pension plan assets from retirement benefit obligations, based on
estimated amounts as of the balance sheet date.
The Company uses the following methods of accounting in relation to retirement benefits.
■

The retirement benefit obligation is attributed to each period by the benefit formula
method.

■Actuarial differences are amortized under the straight-line method over a period ofseven years starting from the following year.

■

Prior service cost is charged to income when incurred.

(9) Reserve for price fluctuation
Reserve for price fluctuation is calculated in accordance with Article 115 of the Insurance
Business Act.
(10) Accounting for hedging activities
Hedging activities are accounted for in accordance with the “Accounting Standards for
Financial Instruments” (Accounting Standards Board of Japan (“ASBJ”) Statement No.
10).
The Company applies deferred hedge accounting and the exceptional accounting
treatment (“Tokurei-shori”) for interest rate swaps used to hedge the cash flow volatility ofcertain loans.
The Company also applies fair value hedge accounting for hedging activities related toforeign exchange rate fluctuation exposures on certain bonds and investment trusts
denominated in foreign currencies.
The Company also applies designated hedge accounting (“Furiate-shori”) for currency
swaps used to hedge foreign exchange rate fluctuation exposures on the foreign
currency-denominated bonds issued by the Company.
The Company also applies designated hedge accounting (“Furiate-shori”) for the foreign
currency-denominated transactions other than the above.
The effectiveness of a hedge is mostly assessed by a ratio analysis, comparing thefluctuations in the fair value or cash flows of hedged items and hedging instruments.
(11) Accounting for consumption taxes
The Company and its subsidiaries account for consumption tax and local consumption tax

48

Asahi Mutual Life Insurance Company

by the tax-exclusion method. The consumption taxes on certain assets, which are notdeductible from consumption taxes withheld and that are stipulated to be deferred under
the Corporation Tax Act of Japan, are deferred as prepaid expenses and amortized equally
over five years.
Consumption taxes other than deferred consumption taxes are recognized as an expense
when incurred.
(12) Policy reserves
Policy reserves are based on Article 116 of the Insurance Business Act and the premium
reserve at the end of fiscal year is calculated by the following method:
In regard to the policies subject to the standard policy reserves, the method as prescribedby the Commissioner of Financial Services Agency (Japanese Ministry of Finance Public
Notice No. 48, 1996) is applied.
In regard to the policies not subject to the standard policy reserves, the net level premium
method is applied.
(13) Software
Capitalized software for internal use owned by the Company and its subsidiaries (included
in intangible fixed assets in the consolidated balance sheet) is amortized using thestraight-line method over the estimated useful lives.
2.

Financial Instruments

Asset management of the general accounts other than the separate accounts stipulated in
Article 118, Paragraph 1 of the Insurance Business Act is conducted based on the following
principles.
■

For accumulation whole life with varying interest rates, accumulation insurance withvarying interest rates and new single premium individual annuities which have aneffective date on or after April 2, 2012, the Company mainly invests in domestic bonds,
engaging in matching asset liability management, or Matching ALM, which aims atmatching the duration to outstanding insurance liabilities to avoid interest rate
fluctuation risks.

■

For individual life insurance and individual annuities other than above, the Company
holds yen-denominated fixed income investments, including bonds and loans, as the coreof its asset portfolio. The Company also holds domestic stocks, foreign securities and realestate assets to enhance its profitability.

Derivatives are mainly used to hedge market price fluctuation risk and exchange rate
fluctuation risk regarding securities and exchange rate fluctuation risk related to the foreign
currency-denominated bonds issued by the Company. As the major financial instruments,
securities are exposed to market risk and credit risk, loans are exposed to credit risk and49

Asahi Mutual Life Insurance Company

exchange rate fluctuation risk, and derivatives are exposed to market risk and credit risk.
In administrating market risks, the following two methods are used. One is the quantitativerisk management of securities etc. using the Value at Risk (“VaR”) method and the other is therisk management by stress test and sensitivity analysis which analyze the effect on the
Company’s whole portfolio, simulating scenarios of deteriorating market environments. This is
for the purpose of managing an appropriate asset allocation within the ranges of acceptablerisks.
In administrating credit risks, the Company quantifies the credit risks of entire portfolio
through VaR method and controls the amount of risks within an acceptable range.
Furthermore, the Company assigns in-house credit ratings to our borrowers in accordance withthe creditworthiness of each borrower. Strict credit research of each borrower before lending aswell as following up on any changes of creditworthiness of each borrower after lending are
implemented. Maximum limits of credit are set up for each borrower in accordance with its
credit risks to avoid the concentration of credit risks on specific corporations and specificcorporation groups. Through all these measures, the Company endeavors to develop highquality portfolio.
The balance sheet amounts, fair values and the differences between them of major financial
assets and liabilities as of March 31, 2018 were as follows:
Millions of Yen
As of March 31, 2018

Cash and deposits
Call loans
Monetary claims bought
Trading securities
Held-to-maturity debt securities
Policy-reserve-matching bonds
Available-for-sale securities
Securities
Trading securities
Held-to-maturity debt securities
Policy-reserve-matching bonds
Available-for-sale securities
Loans
Policy loans
Industrial and consumer loans
Total assets
Bonds payable
Loans payable
Total liabilities
Derivative financial instruments
Hedge accounting not applied
Hedge accounting applied

Balance Sheet
Amount¥36,143164,000
30,15130,151
4,113,581
27,816324,3142,094,251
1,667,198
484,169
49,637434,532
4,828,046
40,34997,000137,349
9,980
1,811
8,169

Fair Value¥

36,143164,000
33,33533,335
4,457,878
27,816
365,006
2,397,856
1,667,198
494,561
49,637444,924
5,185,919
43,58596,768140,354
9,980
1,811
8,169

Difference
¥

3,184
3,184
344,297
40,692
303,605
10,391
10,391
357,873
3,236
(231)
3,005
-

* Assets and liabilities generated by derivative financial instruments are offset and presented net.
Net liabilities in total are presented in parentheses.

50

Asahi Mutual Life Insurance Company

(1) Securities including deposits and monetary claims bought which are treated as securities
based on “Accounting Standards for Financial Instruments” (ASBJ Statement No. 10)
As for available-for-sale securities of which market value is readily available, domestic
stocks, domestic exchange-traded funds, domestic listed real estate investment trusts,
foreign exchange-traded funds for which hedge accounting is not applied, foreign bondexchange-traded funds for which hedge accounting is not applied and foreign
currency-denominated bonds for which hedge accounting is not applied are stated at the
average of the market value during the final month of the fiscal year. Available-for-salesecurities of which market value is readily available excluding the securities mentioned
above are stated at the market value at the balance sheet date.
Other securities of which market value is readily available are stated at market value atthe balance sheet date.
Unlisted stocks and others of which market value is not readily available are not subject
to fair value disclosure and are therefore not included in the table above because it isregarded as extremely difficult to determine their fair value.
The amount of the unlisted stocks and others reported in the consolidated balance sheet
was ¥71,523 million as of March 31, 2018.
(2) Loans and loans payableAs credit exposure for policy loans without specific repayment periods is limited to theamount of the cash surrender value, the Company and its subsidiaries consider book value
as fair value with the assumption that fair value approximates book value in light offactors such as projected repayment period and interest terms.
As for industrial and consumer loans and loans payable, the fair value of loans is
primarily stated at theoretical prices calculated by discounting the future cash flows to thepresent value. The fair value of loans to legally bankrupt borrowers, substantiallybankrupt borrowers and not currently bankrupt borrowers is stated at the amounts bydeducting estimated losses from the book value before direct write-offs.
(3) Bonds payable
The fair value of bonds payable is based on the market value, etc. as of March 31, 2018.
(4) Derivative financial instruments
The fair values of options traded over the counter are based on the quoted prices offered bycounterparty financial institutions.
The fair values of foreign currency forward contracts are stated at theoretical prices basedon the TTM at the balance sheet date.
Regarding the derivative transactions for which designated hedge accounting(“Furiate-shori”) of currency swaps is applied, these fair values are included in bonds

51

Asahi Mutual Life Insurance Company

payable since they are treated together with hedged bonds payable.
3.

Investments and Rental Properties

The Company holds investment and rental properties such as office buildings in Tokyo andother areas. The carrying amount and the fair value of investment and rental properties were¥267,163 million and ¥264,669 million, respectively, as of March 31, 2018. The fair value ismainly based on the value (including some adjustments using the reference prices) of realestate appraisal report prepared by the external real-estate appraiser in accordance with realestate appraisal standards.
4.

Securities Lent under Lending Agreements

The amount of securities lent under lending agreements was ¥121,177 million as of March 31,
2018.
5.

Loans

The total amount of loans to bankrupt borrowers, delinquent loans, delinquent loans three ormore months past due and restructured loans, which were included in loans, was ¥906 million
as of March 31, 2018.
i)

Loans to bankrupt borrowers were ¥0 million as of March 31, 2018.

ii)

Delinquent loans were ¥748 million as of March 31, 2018.

iii) Delinquent loans three or more months past due were ¥120 million as of March 31, 2018.
iv) Restructured loans were ¥36 million as of March 31, 2018.
Loans to bankrupt borrowers represent loans, excluding the balances already written-off,which meet the conditions prescribed in Article 96, Paragraph 1, Items 3 and 4 of the
Enforcement Regulations of the Corporate Tax Act. Moreover, accruing interest on these loans
is not recorded as income after determining that principal of or interest on these loans isunlikely to be collected due to the significant delay in repayment of principal or interest
payments or for other reasons.
Accruing interest on delinquent loans is not recorded as income due to the same reasons as
described above, and delinquent loans exclude loans to bankrupt borrowers and loans for whichinterest payments have been suspended and rescheduled to assist and support the borrowers
in the restructuring of their businesses.
Delinquent loans three or more months past due are loans for which interest payments or
repayments of principal are delinquent for three months or more from the due dates under theterms of the related loan agreements, excluding those loans classified as loans to bankrupt
borrowers and delinquent loans.

52

Asahi Mutual Life Insurance Company

Restructured loans are loans for which certain concessions favorable to borrowers, such as
interest reduction or exemptions, rescheduling of due dates of principal or interest payments,
waivers of claim or other terms, have been negotiated for the purpose of assisting andsupporting the borrowers in the restructuring of their businesses. This category excludes loansclassified as loans to bankrupt borrowers, delinquent loans and delinquent loans three or moremonths past due.
The direct write-offs related to loans decreased the amounts of loans to bankrupt borrowers
described above by ¥13 million as of March 31, 2018.
In addition, the direct write-offs related to loans decreased delinquent loans described above by¥46 million as of March 31, 2018.
6.

Accumulated Depreciation of Tangible Fixed Assets

Accumulated depreciation of tangible fixed assets totaled ¥279,695 million as of March 31,
2018.
7.

Separate Accounts

Total assets in separate accounts provided for in Article 118 of the Insurance Business Act were¥29,382 million as of March 31, 2018. The amounts of separate account liabilities were thesame as separate account assets.
8.

Receivables from/Payables to Directors and Audit Board Members

There were no receivables from directors and audit board members as of March 31, 2018. The
total amount of payables to directors and audit board members was ¥15 million as of March 31,
2018.
9.

Reserve for Dividends to Policyholders

Balance at the beginning of the fiscal year
Transfer to reserve from surplus in the previous fiscal year
Dividends to policyholders paid out during the fiscal year
Increase in interest
Decrease in others
Balance at the end of the fiscal year

Millions of Yen
Year ended
March 31, 2018¥
40,861
1,519
5,426
58
53
¥
36,959

10. Stocks of Unconsolidated Subsidiaries and affiliates
The amount of stocks of unconsolidated subsidiaries and affiliates the Company held as ofMarch 31, 2018 was ¥574 million.

53

Asahi Mutual Life Insurance Company

11. Pledged Assets
Assets pledged as collateral as of March 31, 2018 were securities in the amount of ¥4,325
million.
12. Assets with Rights to Sell
The Company has the legal right to sell or collateralize securities borrowed under loan
agreements.
The market value of these assets that were not sold or mortgaged as of March 31, 2018 was¥73,317 million. No assets were mortgaged as of March 31, 2018.
13. Commitment LineAs of March 31, 2018, there were unused commitment line agreements under which theCompany is the lender of ¥4,101 million.
14. Subordinated Bonds
As of March 31, 2018, bonds payable are subordinated bonds, for which the repayments aresubordinated to other obligations.
15. Subordinated Loans
As of March 31, 2018, other liabilities included subordinated loans of ¥97,000 million, forwhich the repayments are subordinated to other obligations.
16. Contributions to Policyholders Protection Corporation
The estimated future contributions to the Life Insurance Policyholders Protection Corporationof Japan under Article 259 of the Insurance Business Act as of March 31, 2018 were ¥9,750
million. These contributions are charged as operating expenses in the fiscal years in which
they are paid.

54

Asahi Mutual Life Insurance Company

17. Deferred Taxes(1) Deferred tax assets/liabilities were recognized as follows:

Millions of Yen
As ofMarch 31, 2018¥
61,321
21,49439,827
23,765¥
16,062

Deferred tax assets
Valuation allowance for deferred tax assets
Subtotal
Deferred tax liabilities
Net deferred tax assets (liabilities)

Major components of deferred tax assets/liabilities were as follows:

Millions of Yen
As ofMarch 31,2018
Deferred tax assets
Contingency reserve
Reserve for price fluctuation
Net defined benefit liabilities
Impairment losses
Losses on valuation of securities
Net unrealized losses on available-for-sale securities
Deferred tax liabilities
Net unrealized gains on available-for-sale securities¥

14,14010,800
9,780
8,526
5,546
3,988

¥

22,605(2) The statutory tax rate was 28.1% for the fiscal year ended March 31, 2018. The main
factors causing the differences between the statutory tax rate and the actual effective
tax rate after considering deferred taxes were as follows:

Interest on foundation funds
Change of valuation allowance for deferred tax assets

Year ended
March 31, 2018(4.7)%(3.7)%

18. Accrued Retirement Benefits and Net Defined Benefit Liabilities(1) Summary of retirement benefit plans
As defined benefit plan, the Company and its consolidated subsidiaries have defined
benefit corporate pension plans, which are funded-type, and lump-sum retirement
allowance plans which are non-funded type but resulted in funded type due to setting of
employee pension trust.

55

Asahi Mutual Life Insurance Company

(2) Defined benefit plani)

Reconciliation of beginning and ending balance of retirement benefit obligations

Retirement benefit obligations at the beginning of the current fiscal year
Service cost
Interest cost
Actuarial difference occurred during the fiscal year
Retirement benefit payments
Retirement benefit obligations at the end of the fiscal year

ii)

Millions of Yen
Year ended
March 31, 2018¥
46,769
2,029
468
1,473
(4,998)¥45,743

Reconciliation of beginning and ending balance of pension plan assets

Pension plan assets at the beginning of the fiscal year
Expected return on pension plan assets
Actuarial difference occurred during the fiscal year
Contributions by the employer
Retirement benefit payments
Pension plan assets at the end of the fiscal year

Millions of Yen
Year ended
March 31, 2018
¥
9,024
70
1,944
203
(204)
¥
11,038iii) Reconciliation of retirement benefit obligation and pension plan assets with net
defined benefit liabilities and assets presented on the consolidated balance sheet

a. Funded plan retirement benefit obligationb. Pension plan assets
c. Net amount of liabilities and assets presented on the
consolidated balance sheet
d. Net defined benefit liabilities
e. Net defined benefit assets
f. Net amount of liabilities and assets presented on the
consolidated balance sheet

56

Millions of Yen
As ofMarch 31,2018¥
45,743(11,038)
34,70435,056(351)¥

34,704

Asahi Mutual Life Insurance Company

iv) Breakdown of retirement benefit expenses

Service cost
Interest cost
Expected return on pension plan assets
Amortization of actuarial differences
Amortization of prior service cost
Retirement benefit expenses related to defined benefit planv)

Millions of Yen
Year ended
March 31, 2018
¥
2,029
468
(70)
545
6
¥
2,979

Breakdown of items included in other comprehensive income
The breakdown of items included in other comprehensive income (before tax effects)
was as follows:

Amortization of actuarial differences
Amortization of prior service cost
Total

Millions of Yen
Year ended
March 31, 2018
¥
1,015
6
¥
1,022

vi) Breakdown of items included in accumulated other comprehensive income
The breakdown of items included in total accumulated other comprehensive income(before tax effects) was as follows:
Millions of Yen
Year ended
March 31, 2018
¥
(534)
13
¥
(521)

Unrecognized actuarial differences
Unrecognized prior service costTotalvii) Breakdown of main pension plan assets
The breakdown of main asset categories as a percentage of pension plan assets was asfollows:
As ofMarch 31,2018
60%
9%
31%
100%

Stocks
Bonds
OthersTotal

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Asahi Mutual Life Insurance Company

viii) Method for determining the expected long-term rate of return
To determine the expected long-term rate of return on pension plan assets, theCompany takes into account the present and future allocation of pension plan assets,
and the present and expected future long-term rate of return on the diverse range ofassets that makes up the pension assets.
ix) Underlying actuarial assumptions
The main underlying actuarial assumptions were as follows:

Discount rate
Expected long-term rate of return on pension plan assets
Defined benefit corporate pension plans

58

As of
March 31, 2018
1.0%
0.7%
1.7%

Asahi Mutual Life Insurance Company

III. Notes to Unaudited Consolidated Statement of Income
1.

Investment Income and Expenses

The major components of gains on sales of securities were as follows:

Millions of Yen
Year ended
March 31, 2018¥
44,891
1,709
178

Domestic bonds
Domestic stocks and other securities
Foreign securities

The major components of losses on sales of securities were as follows:

Millions of Yen
Year ended
March 31, 2018
¥
549
487
1,249

Domestic bonds
Domestic stocks and other securities
Foreign securities

The major components of losses on valuation of securities were as follows:

Millions of Yen
Year ended
March 31, 2018¥
49
96

Domestic stocks and other securities
Foreign securities

Losses on derivative financial instruments included net valuation losses of ¥76 million for the
fiscal year ended March 31, 2018.
2.

Impairment Losses of Fixed Assets

For the fiscal year ended March 31, 2018, impairment losses of fixed assets by the Company
were as follows:(1) Method of grouping
Real estate and other assets used for insurance business operations are classified as one
asset group as a whole. Other assets such as real estate for rent and unused real estate
are classified as one group individually.
(2) Background information on recognizing the impairment losses
As the profitability of certain real estate for rent dropped down significantly due to adecrease in the level of rental income and a declining trend in the market prices of land,
the Company reduced the book values of such real estate for rent and unused real estate
to their recoverable amounts. The write-downs were recognized as impairment losses andincluded in the extraordinary losses.

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Asahi Mutual Life Insurance Company

(3) Asset groups for which impairment losses were recognized and losses by classification of
fixed assets

Millions of Yen
Year ended
March 31, 2018
Real estate for rent:
Land
Building
Total real estate for rent (i)Unused real estate:
Land
Building
Total unused real estate (ii)
Total:Land
Building
Total (i) + (ii)

¥

518
699
1,217
369
191
560

¥

888
890
1,778

(4) Calculation method of recoverable amounts
The recoverable amounts of real estate for rent are determined at net realizable value orvalue in use. The recoverable amounts for unused assets are net realizable value. Value in
use is determined as the estimated net future cash flows, reflecting the volatility risk,
discounted at 3.6% for the fiscal year ended March 31, 2018. Net realizable value iscalculated based on the appraisal value in accordance with “Real Estate Appraisal
Standards” or the publicly announced appraisal value after deducting expected disposal
costs.

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Asahi Mutual Life Insurance Company

IV. Notes to Unaudited Consolidated Statement of Comprehensive Income
Other Comprehensive Income
The reclassification adjustments and tax effect amounts related to other comprehensive income
were as follows:
Millions of Yen
Year ended
March 31, 2018
Net unrealized gains on available-for-sale securities, net of tax
Amount incurred during the fiscal year¥
18,028
Reclassification adjustments(1,251)
Before tax adjustment
16,776
Tax effects(6,587)Net unrealized gains on available-for-sale securities, net of tax
10,188
Accumulated remeasurements of defined benefit plans
Amount incurred during the fiscal year
470
Reclassification adjustments
552
Before tax adjustment
1,022
Tax effects(286)
Accumulated remeasurements of defined benefit plans
735
Total other comprehensive income¥
10,924V.

Notes to Unaudited Consolidated Statement of Cash Flows

Scope of Cash and Cash Equivalents
For the purpose of presenting the consolidated statements of cash flows, cash and cash
equivalents are comprised of cash on hand, demand deposits and all highly liquid short-term
investments with a maturity of three months or less when purchased, which are readily
convertible into cash and present an insignificant risk of changes in value.

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Asahi Mutual Life Insurance Company

（6）Risk-monitored Loans(Millions of Yen, ％)As of March 31, 2017

As of March 31, 2018

0

0

1,015

748

Delinquent loans three or more months past due

112

120

Restructured loans

38

36

Total

1,166

906

（Percentage of total loans）(0.21)(0.19)

Loans to bankrupt borrowers
Delinquent loans

Notes:
1.For credit to legally bankrupt borrowers and substantially bankrupt borrowers, the amounts remaining after
the deductions of amount expected to be collected through the disposal of collateral or the execution ofguarantees are written-off directly from the borrower's balance as the estimated uncollectible amounts.
The amounts written-off related to loans to bankrupt borrowers were \22 million as of March 31, 2017 and\13 million as of March 31, 2018. The amounts written-off related to delinquent loans were \193 million
as of March 31, 2017 and \46 million as of March 31, 2018.
2.Loans to bankrupt borrowers represent non-accrual loans to borrowers which are subject to bankruptcy,
corporate reorganization or rehabilitation or other similar, including but not limited to foreign, proceedings.
Accruing interest on these loans is not recorded as income after determining that principal of or interest on
these loans is unlikely to be collected due to the significant delay in repayment of principal or interest
repayments or for other reasons.
3.Delinquent loans are loans whose accruing interest is not recorded as income and exclude loans tobankrupt borrowers and loans for which interest payments have been suspended and rescheduled to assist
and support the borrowers in the restructuring of their business.
4.Delinquent loans three or more months past due are loans for which interest payments or repayments ofprincipal are delinquent for three months or more from the due dates under the terms of the related loan
agreements, excluding those loans classified as loans to bankrupt borrowers or delinquent loans.
5.Restructured loans are loans for which certain concessions favorable to borrowers, such as interest reduction
or exemptions, rescheduling of due dates of principal or interest payments, waivers of claim or other terms,
have been negotiated for the purpose of assisting and supporting the borrowers in the restructuring of theirbusinesses. This category excludes loans classified as loans to bankrupt borrowers, delinquent loans anddelinquent loans three or more months past due.

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Asahi Mutual Life Insurance Company

(7) Consolidated Solvency Margin Ratio(Millions of yen)

As of March 31, 2017

As of March 31, 2018

699,823

788,037

Foundation funds and surplus

326,828

345,401

Reserve for price fluctuation

36,58038,710Contingency reserve

30,08250,682

Catastrophe loss reserve--

General allowance for possible loan losses

Total solvency margin

（Ａ）

15

19

(Net unrealized gains on available-for-sale securities (before tax effect) and deferredhedge gains (before tax effect)) × 90% (in case of losses： × 100%)

78,14593,244

Net unrealized gains on land × 85%(28,052)(10,499)

(501)

521

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

111,415

122,802

Qualifying subordinated debt

137,349

136,949

-

-

(50)

(50)

8,011

10,256

187,100

193,282(in case of losses： × 100%)

Sum of unrealized actuarial differences and unrealized past service cost

Excess amount of policy reserves based on full-time Zillmer method and qualifying
subordinated debt excluded from the calculation of solvency margin
Deduction
OthersTotal amount of risk(

R R R R ) ( R R R ) R R
2

2

1

5

2

8

9

2

2

3

7

4

6

（Ｂ）

Insurance risk

R1

15,177

14,415

Ordinary insurance risk

R5

-

-

Disaster insurance risk

R6

-

-

Third sector insurance risk

R8

9,176

9,450

Small amount short-term insurance provider insurance risk

R9

-

-

Risk of assumed yield

R2

82,03478,490

Minimum guarantee risk

R7

1,096

1,076

Investment risk

R3

98,227

107,974

Operational risk

R4

4,114

4,228

748.0%

815.4%

Solvency margin ratio(Ａ) / {(1/2)×(Ｂ)} × 100

Notes:
1. The figures above are calculated based on Articles 86-2 and 88 of the Ordinance for Enforcement of the Insurance Business Act and the Public Notice No.23
of the Financial Service Agency of 2011.
2. "Excess amount of policy reserves based on full-time Zillmer method", "Qualifying subordinated debt" and "Excess amount of policy reserves based on
full-time Zillmer method and qualifying subordinated debt excluded from the calculation of solvency margin" are calculated based on the Public Notice No.25
of the Financial Service Agency of 2011.
3. "Minimum guarantee risk" is calculated by standard method.

(8) Segment information
The Company and its consolidated subsidiaries operate investment advisory business, etc., in addition to life insurance businessin Japan. However, information on these segments and related information are omitted because they represent such a minor proportionof total segments.

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Asahi Mutual Life Insurance Company