Financial Section

Financial Review
Indicators Showing the Main Results over the Last Five Fiscal Years
Summary of Operations
Accounting Concepts
1. Financial statements
2. Details of assets and liabilities
3. Income and loss details
4. Information about fair values, etc.

28

Japan Earthquake Reinsurance Co., Ltd. Annual Report 2019

FINANCIAL REVIEWBusiness development, results, etc.
The Japanese economy continued its moderate expansion in fiscal 2018, mainly led by an increase in domestic demand such as consumer spending and capital expenditures, despite a temporary impact from earthquakes, heavy
rain and other natural disasters. However, a slowdown in the growth of the world economy that had been the driving
force behind the economic recovery in Japan began to exert an influence in the second half of the fiscal year underreview, as was seen in a decline in exports and a weak note in industrial production.
Premiums written increased 10.2% compared to the previous fiscal year, reflecting an increase in the number ofearthquake insurance contracts, reflecting heightened awareness of earthquake risks. Net claims paid and loss adjustment expenses increased sharply from the previous fiscal year, mainly consisting of payouts for the 2018 Northern Osaka and the 2018 Hokkaido Eastern Iburi Earthquake, which occurred in the fiscal year under review.
Looking at investment, investment income fell from the previous fiscal year, given tough conditions for investment
assets under the on-going situation of extremely low interest rates, despite our focus primarily on asset liquidity andsafety.
In fiscal 2018, which it positioned as the first year under the fifth medium term business plan, JER worked on 10
management items and generally achieved the targets set for those items. Under this medium-term business plan, we
are working on building strong, sustainable earthquake reinsurance systems through early recovery of private-sector
reserves.
Meanwhile, in investment, as initiatives for profitability improvement while guaranteeing asset liquidity and safety wewill develop medium-term portfolio strategies and apply to investment plans in the next fiscal year and thereafter.
Summary of earthquake insurance results① Net premiums written and net claims paid
Net premiums written, which is calculated by deducting
assumed reinsurance premiums from premiums written,
came to 118.6 billion yen (up 22.0% year on year).
In the meantime, net claims paid increased sharply to124.2 billion yen (up 1,292.5% year on year), reflecting
factors including the earthquake centered in the 2018
Northern Osaka and the 2018 Hokkaido Eastern Iburi
Earthquake.

year under review came to 30.6 billion yen (down 35.8%
year on year) after reversal of the risk reserves posted
for the past fiscal year, amounting to 20.1 billion yen in
total, for claims paid, investment loss and advertisingand publicity expenses.

② Risk reserves and underwriting reserves
JER added a total of 43.4 billion yen, including net commissions written and held of 43.3 billion yen, which was
calculated by deducting assumed reinsurance premiums, etc. from net premiums written, and net investment
income of 0.1 billion yen, to its risk reserves.
Moreover, JER implemented a reversal of the risk reserves posted for the past fiscal year for the net claims
paid of 124.2 billion yen stated above, damage researchexpenses of 9.8 billion yen, provision for outstanding
claims of 9.8 billion yen and advertising and publicity
expenses of 0.3 billion yen. As a result, risk reserves atthe end of the fiscal year under review came to 203.0
billion yen (down 33.2% year on year).
Underwriting reserves at the end of the fiscal year underreview amounted to 416.7 billion yen (down 15.9% year
on year) as a result of the addition of unearned premium
reserves to the risk reserves stated above.

Outline of investment
In investment, JER manages assets with top priority
placed on liquidity and safety followed by profitability, in
accordance with its investment policy.
As a result, total assets amounted to 468.4 billion yen(down 14.7% year on year), due to insurance claims payouts, etc. arising from the earthquakes occurred during
the fiscal year under review. Major items in JER’s portfolio included cash and deposits of 211.8 billion yen andsecurities of 228.2 billion yen.
In terms of profit and loss, amid a continued severe
environment for investment, interest and dividend income came to 1.1 billion yen and foreign exchange gain
amounted to 1.1 billion yen. Investment income, including gains on sales of securities, was 2.2 billion yen.
Meanwhile, derivatives expenses amounted to 1.8 billion
yen, and investment expenses, including loss on sales of
securities, came to 1.8 billion yen.
JER hedges foreign exchange risks in almost all its purchases of bonds denominated in foreign currencies sothat foreign exchange hedging costs are the differences
between foreign exchange gains (losses) and derivatives
gains (losses).

③ Risk reserves of direct insurance companies
JER added the balance of net premiums written of 3.0
billion yen to the risk reserves of direct insurance companies recorded as entrusted reserves. The risk reservesof direct insurance companies at the end of the fiscal

Profit and loss for the fiscal year under review
Net income for the fiscal year under review came to 1
million yen, as a result of adding and subtracting otheritems to and from interest and dividend income and subtracting income taxes and residential taxes.

Japan Earthquake Reinsurance Co., Ltd. Annual Report 201929

INDICATORS SHOWING THE MAIN RESULTS
OVER THE LAST FIVE FISCAL YEARS(Yen in millions)Fiscal Year

Division

2014

2015

2016

Net premiums written
Percentage change over the previous term

108,99418.2%

121,986
11.9%

114,114(6.5%)

97,302(14.7%)

118,679
22.0%

Net claims paid
Percentage change over the previous term

9,563
(36.3%)

5,589(41.6%)

220,905
3,852.3%

8,924(96.0%)

124,276
1,292.5%

Ordinary income
Percentage change over the previous term

119,82214.4%

129,1077.7%

289,485
124.2%

101,288(65.0%)

199,94297.4%

Ordinary expenses
Percentage change over the previous term

119,81814.6%

129,1077.8%

289,487
124.2%

101,290(65.0%)

199,940
97.4%

Ordinary profit (loss)
Percentage change over the previous term3
(98.2%)

0(98.4%)(1)(3,537.5%)

(1)
–

1
–

Net income (loss)
Percentage change over the previous term

3
–

(0)
(115.6%)1–(0)(159.8%)

1
–

1,000
2 mil. shares

1,000
2 mil. shares

1,000
2 mil. shares

1,000
2 mil. shares

1,000
2 mil. shares

Common stock
Sum of shares issued

2017

2018

Net assets

1,543

1,542

1,542

1,540

1,543

Total assets

640,137

709,408

511,297549,220

468,425

Underwriting reserves
Percentage change over the previous term

556,727
11.5%

627,34512.7%

456,745(27.2%)

495,634
8.5%

416,700(15.9%)Of the balance, risk reserves
Percentage change over the previous term

417,05610.3%

464.584
11.4%

278,846(40.0%)

303,9549.0%

203,074(33.2%)

Loans
Percentage change over the previous term

–
–

–
–

–
–

–
–

–
–

Securities
Percentage change over the previous term

391,034(25.5%)

401,751
2.7%

234,580(41.6%)

200,239(14.6%)

228,248
14.0%

Non-consolidated solvency-margin ratio

354.5%

392.1%

299.1%

379.6%

297.6%

Dividend propensity

–

–

–

–

–

No. of employees

29

28

26

28

29

Note:
JER’s solvency-margin ratio will not be used as a criterion for the administrative authorities’ order for improvement. For details, please refer to page 34.

SUMMARY OF OPERATIONS
q Indicators relating to insurance underwriting
Item: earthquake
1. Net premiums written(Yen in millions)

Division

Fiscal Year

2016

2017

2018

Premiums written

247,441

261,556

288,859Return premiums

4,342

4,316

5,325

Assumed net premiums
written (A)243,099257,239

283,534

Reinsurance premiums
ceded (B)

128,984

159,937

164,855

Net premiums written (A – B)

114,114

97,302

118,679

Notes:
1. R
 eturn premiums: Return premiums of receiving reinsurance.
2. 
Assumed net premiums: Produced by deducting return premiums
from premiums written.
3. Net premiums written: Produced by deducting the reinsurance premiums ceded from the assumed net premiums written.

30

2. Rate of premiums written by domestic and overseas contracts
Division

Fiscal Year

2016

2017

2018

100%

100%

100%

2016

2017

2018

Assumed net claims paid (A)388,527

14,786

156,521

Reinsurance claims
recovered (B)167,622

5,861

32,245

Net claims paid (A – B)

220,905

8,924

124,276

Domestic contract

3. Net claims paid
(Yen in millions)

Division

Fiscal Year

Notes:
1. 
Assumed net claims paid: Produced by deducting surrender value
from ceded insurance claims paid
2. Net claims paid: Produced by deducting reinsurance claims recoveredfrom assumed net claims paid

Japan Earthquake Reinsurance Co., Ltd. Annual Report 2019

4. Net loss ratio, net expense ratio and their combined ratio(Yen in millions)

Division

Fiscal Year

2016

2017

2018

Net loss ratio

206.0%

11.4%

113.0%

Underwriting expenses

47,40949,48153,750 Insurance related operating,general and administrative
expenses

734

1,054

 Commissions and brokeragefees

46,67548,426

8. No. of reinsurers that ceded insurance contracts andtop five reinsurers for ceded reinsurance premiums
Fiscal Year

2016

2017

2018

11

9

9

1,075

No. of reinsurersthat ceded insurance
contracts

52,675Rate of top fivereinsurers’ ceded
insurance premiums

89.8%

90.4%

90.5%

Net expense ratio

41.5%

50.9%

45.3%

Combined ratio

247.5%

62.3%

158.3%

Notes:
1. Net loss ratio: (Net claims paid + loss adjustment expenses) / net
premiums written
2. Net expense ratio: (Commissions and brokerage fees + Insurance-related operating and general administrative expenses) / net premiums
written
3.	Combined ratio: Net loss ratio + net expense ratio

5. Rate of damage occurrence, the expenses ratio andrate of sum total before ceded insurance deduction
Not applicable
6. Changes in ordinary income or loss against a risein the loss rate
There are no changes in ordinary income or loss
in earthquake insurance because increases ininsurance payments are set off through the reversalof underwriting reserves in accordance of theprinciple of no loss and no profit.

Division

Note:
The number of reinsurers that ceded insurance contracts is the number
who ceded treaty reinsurance contracts of 10 million or more yen.

9. Ratio of ceded insurance premiums by rating
Not applicable
10. Contractor dividend
Not applicable
11. Conditions at the end of the current fiscal year
(runoff result) of outstanding claims (estimatedamount) at the beginning of the term
Not applicable to earthquake insurance.
12. Amount of estimated final damages associatedwith the elapse of a period from the occurrenceof accidents
Not applicable to earthquake insurance.

7. Underwriting profit(Yen in millions)

Division

Fiscal Year

2016

2017

2018

Underwriting income

284,934

99,430197,716

Underwriting expenses

284,200

98,375

196,641

Operating, general andadministrative expenses

1,075

734

1,054

Other income and expenses

–

–

–

Underwriting profit

–

–

–

Notes:
1. The above operating, general and administrative expenses are thoserelating to the underwriting of insurances mentioned in the operating, general and administrative expenses in a statement of profits andlosses.
2. Other income and expenses are those equivalent to corporate taxes
mentioned in a statement of earthquake insurance profits and losses.

Japan Earthquake Reinsurance Co., Ltd. Annual Report 201931

w Investments
3. 
Amount of interest and dividend received andinvestment assets yield (income yield)

1. Investments policy	JER is the only company in Japan that specializes
in reinsurance for earthquake insurance. JER attaches top priority to the guarantee of liquidity andsafety in earthquake reinsurance payouts because
the time and scale of an earthquake are unpredictable, and the liquidation of all investment assets ispossible. In investment, JER is striving to maintainand strengthen its capacity for earthquake reinsurance payouts through the guarantee of funds forpayments and the expansion of risk reserves.

(Yen in millions)FiscalYear

Percentage
distribution(%)

Division
Deposits

260,534

Call loans
Monetaryreceivablesbought60.7 211,842

45.2

1,040

0.2

90

0.0

141

0.0

–

–

–

–

9,999

2.1

Money trusts

0.00

5

0.00

5

0.00

0

0.00

0

0.00

0

0.00

Monetaryreceivablesbought

3

0.02

–

–

0

0.00

–

–

–

–

–

–

Securities

234,58045.9

200,23936.5

228,248

48.7

Buildings

25

0.0

24

0.0

23

0.0

Total ofinvestments
assets496,18197.0

533,54897.1

450,255

96.1

Total assets

511,297100.0

549,220100.0

468,425

100.0

–

–

–

–

–

–

1,283

0.44

1,176

0.55

1,101

0.51

Buildings

–

–

–

–

–

–

1,294

0.24

1,181

0.23

1,107

0.22

Note:
Investment assets yield (income yield): indicator showing the result of investment assets from a point of income (interest and dividend income)The numerator is composed of interest and dividend income from investment assets while the denominator is an acquisition cost based assets.

Percentage
distribution(%)

51.0 333,194

Yield (%)

7

Securities

As of the end of
fiscal 2018

Percentage
distribution(%)

Yield (%)

Call loans

Total

As of the end of
fiscal 20172018

Deposits

Money trusts(Yen in millions)

As of the end of
fiscal 20162017

Yield (%)

Division

2. Total assets and investments assets
Year

2016

Numerator = Interest and dividend income (including the amount equivalent to interest and dividend income of profit (or loss) from monetarytrust operation)
Denominator = Acquisition cost or depreciation based average balance

4. Asset management yield (realized yield)(Yen in millions)2016

Fiscal Year

2017

2018

Division

Amount ofnumerator

Amount ofdenominator

Yield onworking
assets (%)

Amount ofnumerator

Amount ofdenominator

Yield onworking
assets (%)

Amount ofnumerator

Amount ofdenominator

Yield onworking
assets (%)

Deposits

7

233,6710.00

5300,366

0.00

5

271,5290.00

Call loans

0

1,471

0.00

0

388

0.00

0

125

0.00

Monetary receivables bought

3

20,157

0.02

–

–

–

0

7,628

0.00

Money trusts

–

–

–

–

–

–

–

–

–

1,419

294,061

0.48

1,216

215,283

0.57

1,167

217,0130.54

662

251,1260.26

556

179,4250.31

491

185,171

0.27

–

–

–

–

–

–

–

–

–

757

42,9341.76

659

35,8571.84

676

31,842

2.12–

Securities
Public and corporate bonds
StocksForeign securities

–

–

–

–

–

–

–

–

Loans

Other securities

–

–

–

–

–

–

–

–

–

Buildings

–

27

–

–

25

–

–

24

–

Derivatives

3,329

–

–

929

–

–

(1,863)––

Others(3,791)––(1,404)

–

–

1,116

–

–

Total

968

549,3900.18

747

516,0640.14

426

496,322

0.09

Notes:
1. Asset management yield (realized yield): indicator to show the result of managing of assets from the point of contribution to the current profit andloss. The numerator is realized profit and loss while the denominator is an acquisition cost based assets.
Numerator = profit from asset management + investment income on savings premiums – expenses of assets management
Denominator = acquisition cost or writing-off cost based average balance
2. Profit and loss from derivatives principally involve foreign exchange forward contracts with the remainder primarily involving currency exchange of foreign
currency-denominated bonds. JER deals in foreign exchange forward contracts and other transactions for the purpose of hedging risks associated with foreign
currency-denominated bonds.

32

Japan Earthquake Reinsurance Co., Ltd. Annual Report 2019

5. Market-price based overall yield (for reference)(Yen in millions)2016

Fiscal Year

2017

2018

Division

Amount ofnumerator

Amount ofdenominator

Yield onworking
assets (%)

Amount ofnumerator

Amount ofdenominator

Yield onworking
assets (%)

Amount ofnumerator

Amount ofdenominator

Yield onworking
assets (%)

Deposits

7

233,6710.00

5300,366

0.00

5

271,5290.00

Call loans

0

1,471

0.00

0

388

0.00

0

125

0.00

Monetary receivables bought

3

20,157

0.02

–

–

–

0

7,628

0.00

Money trusts

–

–

–

–

–

–

–

–

–

212

297,783

0.07

(71)

217,797(0.03)

1,656

218,239

0.76

(227)

254,512(0.09)(63)

181,922(0.04)

489

187,047

0.26

–

–

–

–

–

–

–

–

–

Foreign securities

439

43,2701.01(7)35,874(0.02)

1,166

31,192

3.74

Other securities

Securities
Public and corporate bonds
Stocks

–

–

–

–

–

–

–

–

–

Loans

–

–

–

–

–

–

–

–

–

Buildings

–

27

–

–

25

–

–

24

–

Derivatives

3,329

–

–

929

–

–

(1,863)––

Others(3,791)––(1,404)

–

–

1,116

–

–

Total

(239)

553,111(0.04)(540)

518,578(0.10)

914

497,5480.18

Notes:
1. M arket-price based overall yield: indicator showing the efficiency of operation on a market price basis. The numerator reflects realized profit and loss
and fluctuations in market price appraisal while the denominator is market-price based assets.
Numerator = (income from operated assets management + investment income on savings premium – expenses for assets management) + (after-tax
unrealized gain for the year – after-tax unrealized gain for previous year)* + fluctuation in deferred hedge profit and loss
Denominator = acquisition cost or write-off based average balance + after-tax unrealized gain for previous year of other securities + profit and loss
for the previous year related to securities for transaction* Based on the amount before tax effect deduction
2. P rofit and loss from derivatives principally involve foreign exchange forward contracts with the remainder primarily involving currency exchange of foreign
currency-denominated bonds. JER deals in foreign exchange forward contracts and other transactions for the purpose of hedging risks associated with foreign
currency-denominated bonds.

6. B alance, percentage distribution and yield of Foreign Loans & Investments(Yen in millions)

Year

As of the end of fiscal 2016

As of the end of fiscal 2017

As of the end of fiscal 2018

Percentage
distribution(%)

Percentage
distribution(%)

Percentage
distribution(%)

Division
Foreign currency denominatedForeign public and corporate bonds

14,91056.4

24,36170.0

28,903

85.5

11,525

43.6

10,460

30.0

4,915

14.5

26,435100.0

34,822100.0

33,818100.0

Yen denominatedForeign public and corporate bonds
Total
Yield on foreign loans & investments
Investment assets yield (income yield)

1.45%

1.88%

2.17%

Assets management yield (realized yield)

1.76%

1.84%

2.12%

Market-price based overall yield (for reference)

1.01%(0.02%)

3.74%

Note:
Of the yield on foreign loans & investments, the investment assets yield was calculated in the same manner as 3., Amount of interest and dividend
received and yield on investment assets (income yield) in connection with the assets involving foreign investments.

Japan Earthquake Reinsurance Co., Ltd. Annual Report 201933

e Informationonthenon-consolidated
solvency-margin ratio (the ratio that shows
the ability to pay out claims)(Yen in millions)Year
Division
Total amount of non-consolidated solvency-margin306,691

203,899

1,539

1,541

Price fluctuation reserves

1

1

Risk reserves––

303,954

203,074

Common stock, etc.

Catastrophe reserves
Reserves for ordinary bad debts

(A)

–

–

1,195

1,532

Unrealized gain and loss included land holdings––

Surplus such as premium reserves––

Funding instruments with a debt-like nature––

Surplus such as premium reserves and funding
instruments with a debt-like nature that are notincluded in the margin––

Items deductible

–

2,250

Others––161,550

137,011

General underwriting risk (RI)––

Underwriting risk in third-area insurance (R2)––

Anticipated rate of return risk (R3)

–

–

7,482

6,924

Unrealized gain/loss on available-for-salesecurities / Deferred gain/loss on hedges

Total amount of non-consolidated risk√(R1 + R2)2 + (R3 + R4)2 + R5 + R6

(B)

Investment risk (R4)(C)

As of theAs of theend ofend offiscal 2017 fiscal 2018

Management risk (R5)

3,167

2,686

Catastrophe risk (R6)

150,900

127,400

Non-consolidated solvency-margin ratio[(A) / { (B) x 1 / 2 }] x 100

379.6%

297.6%

Note:
Amounts and other figures presented above are calculated on the basisof the provisions of Article 86 and Article 87 of the Enforcement Regulations for the Insurance Business Act and Notification No. 50 of the Ministry of Finance issued in 1996.

Non-consolidated solvency-margin ratio
The non-life insurance companies deposit reserves incase that they pay insurance money for any insurance
accident that occurred or refund depository insurance
at maturity. It is also necessary for them to maintaina satisfactory ability to make payments or solvency
even in case of unusual, unforeseeable risk, including
a huge disaster or sharp drop in price of such assets
as owned by them.
The rate of “Non-life insurance company’s ability tomake payments by owned assets and reserves (A in theabove table) over any risk unforeseeable (B in the abovetable)” is indicated as the non-consolidated solvencymargin ratio (C in the above table) which is calculated
according to the pertinent rules, including the Insurance Business Law.

34

[Unforeseeable risk] (Total of risks): Sum of 1–5
1. General underwriting risk: risk associated with aninsurance accident rate that is higher than normallypredictable (other than the risk associated with ahuge disaster).
2. Anticipated ratio of return risk: the risk that may
arise for saving-type insurance if the actual yieldfrom operations is lower than it was when calculating depository insurance premiums.
3. Investment risk: management risk that might arise
when the value of assets owned including securities
changes in an unforeseeable manner.
4. Management risk: risk that might arise on business
management in an unforeseeable manner, otherthan 1–3 and 5.
5. Catastrophe risk: risk that might arise with a hugedisaster (such as the Great Kanto Earthquake)
which is normally unforeseeable.
Capability of payment by non-life insurance company
owned capital and reserves (total amount of non-consolidated solvency-margin) is the total of capital owned
by a non-life insurance company, various reserves (pricefluctuation reserve, catastrophe reserve, etc.), part of latent profit from land, and so on.
The solvency-margin ratio is one of the indicators used
when the administrative authorities check insurancecompanies to determine the soundness of management
for supervisory purposes. When the rate is 200% or
more, the insurance company is deemed satisfactory interms of its ability to make insurance and other payouts.
◎ JER has entered into a reinsurance contract with thegovernment of Japan for earthquake insurance in accordance with Law concerning Earthquake Insurance.
The law stipulates in addition that the government takes
responsibility for support and for lending funds for thepayment of insurance money. Because this is a form ofspecial business, JER’s solvency-margin ratio is not usable as a figure to enable the administrative authorities
to trigger an order for improvement, irrespective of theabove solvency-margin ratio, as provided for in Paragraph 4, Article 3, Order to specify the division statedin Paragraph 2, Article 132, Insurance Business Law.
Note: The article is as follows.
[In the event that an insurance company has entered into a reinsurance
contract with the government as stated in Paragraph 1, Article 3, Law
concerning Earthquake Insurance (law No. 73, 1966), any order to be issued according to the listed division in Section 1 of the Article applicableto the insurance company shall be issued in accordance with the list of
inapplicable division.]

Japan Earthquake Reinsurance Co., Ltd. Annual Report 2019

ACCOUNTING CONCEPTS(NET ASSETS)

q Financial statements(Yen in millions)2017(As of March
31, 2018)

2018(As of March
31, 2019)

Item

AmountAmountCommon stock

1,000

1,000

545

546



Fiscal Year

1. Balance sheets(ASSETS)

(Yen in millions)2017(As of March
31, 2018)

2018(As of March
31, 2019)

Item

AmountAmount Other legal reserve of retained earnings

Cash and deposits
Deposits

333,194
333,194

211,842
211,842  Special reserves

1717  Special price fluctuation reserves3939  Retained earnings carried forward

487

489



Fiscal Year

Call loans

90

141

Monetary receivables bought

–

9,999

200,239
62,581
20,05182,78434,822

228,248
52,57813,416
128,435
33,818

Tangible fixed assets
Buildings Other tangible fixed assets

125
24
101

90
23
66

Intangible fixed assets
Software Other intangible fixed assets

261
259
1

209
208
1

Other assets Reinsurance accounts receivable
Accounts receivable
Uncollected income
Deposits
Suspense payments
Derivatives

15,30914,234
0
309
46
2
715

17,892
17,408
3
280
46
1
152

Total assets

549,220

468,425

Securities
Government bonds
Municipal bonds
Corporate bonds
Foreign securities(LIABILITIES)
(Yen in millions)Fiscal Year

Item

2017
(As of March
31, 2018)

2018(As of March
31, 2019)

AmountAmountUnderwriting funds
Outstanding claims
Underwriting reserves

497,407
1,773
495,634

428,289
11,589416,700

Entrusted reserves

37,49923,759Other liabilities
Reinsurance accounts payable
Income taxes payable
Deposits payable
Accrued amounts payable
Derivatives

11,36011,180109
561
3

12,928
11,903
189
5
666
163

Reserve for retirement benefits

154

152

Reserve for directors’ retirement benefits

913

Reserve for bonus payments

21

23

Reserves under the special law
Reserve for price fluctuation

1
1

1
1

1,225

1,711

Net unrealized gains on available-for-salesecurities of earthquake insurance
Deferred tax liabilities
Total liabilities

00547,680

446,881

Retained earnings Legal reserve of retained earnings

Treasury Stock
Total shareholders’ equity
 et unrealized gains on available-for-saleNsecurities Total valuation and translation adjustments
Total net assets
Total liabilities and net assets

1

1

544

545

(5)

(5)

1,539

1,541

0

1

0

1

1,540

1,543

549,220

468,425

Notes for fiscal 2018
1. Matters relating to accounting policies are as follows.
(1)	Appraisal standards and method of securities
and method of indication are as follows.
(i)	Of available-for-sale securities, those to which
the market price is applicable is appraised according to the market price at term end.
(ii)	With respect to the unrealized gain of assets
corresponding to the underwriting reserves andentrusted reserves of earthquake insurance, theamount before tax effect deduction is shownas Net unrealized gains on other securities ofearthquake insurance in Liabilities on the form
attached to the Enforcement Rules of Insurance
Business Act. For other unrealized gains, theamount after tax effect deduction is processed
entirely according to the direct capital injection
method and indicated in Shareholders’ Equity.
The calculation of the sales price is based on
the moving average method.
(2) The appraisal of derivatives is done on the basisof market price.
(3) Although depreciation of tangible fixed assets
is calculated using the declining balance method, buildings (excluding equipment attached tobuildings) that were acquired on or after April 1,
1998 and equipment attached to buildings andstructures that were acquired on or after April
1, 2016 were depreciated using the straight-line
method.

Japan Earthquake Reinsurance Co., Ltd. Annual Report 2019

35

(4)

Software for in-house use that is recorded as
an intangible fixed asset is amortized using thestraight-line method over the estimated usable
life (five years).
(5) The conversion of foreign currency assets and liabilities into Japanese currency is processed according to the accounting standards for foreign
currency transactions.
(6)	Reserve for bad debts is written as follows against
losses from bad debts in accordance with theself-appraisal standard of assets and depreciation and reserve standards.
	
In connection with claims against debtors who
have gone bankrupt legally and formally, including bankruptcy, special liquidation or disposition
by suspension of business at a clearing house, ordebtors who are effectively bankrupt, the rest of
any of the claims deducting an estimated amountof disposable mortgage and a deductible amountby guarantee was appropriated for such reserves.
	
In connection with the other claims, the rate ofbad debts calculated according to past bad debts
and other factors is multiplied by the amount ofclaims to appropriate for reserves.
	In addition, all claims are written after the financedepartment appraises the assets, and the result
is audited by the planning and controller department independent of the finance department toappropriate the appraisal for reserves.
	
There are no assets in the current term that are
to be appropriated for reserves and no reserve isrequired.
(7) For employees’ retirement and severance benefits, reserve for retirement benefits is appropriated according to estimated retirement allowanceliabilities at the end of the term.
	Retirement allowance liabilities are calculated using a simple method on the basis of the allowance to be supplied at the end of the term for any
employee who retires for his/her own reasons.
(8) For reserve for directors’ retirement benefits, thebenefits to be paid at the end of the term arerecorded according to the relevant in-house rules.
(9) Reserve for bonus payments is calculated according to the standards for the estimated bonuses
payable as of the end of the fiscal year underreview.
(10) To prepare for a loss from price changes ofshares and others, reserve for price fluctuation isappropriated according to Article 115, Insurance
Business Law.

36

2. Financial instruments and fair values of financial
instruments(1) Situation of financial instruments
We mainly hold highly rated short- and mediumterm Japanese and foreign bonds and short-term
financial instruments in preparation for reinsurance payouts. We manage assets by attaching
top priority to liquidity and safety and giving
additional consideration to profitability. It is ourpolicy to engage in derivatives trading or forward
exchange contracts to reduce the market risks offoreign-currency receivables associated with exchange fluctuations, within the limits of actual
demand. In addition, we maintain an understanding of market risks, credit risks and liquidity risks
and manage current quotations and credit information on a regular basis in this regard.
(2) Fair values of financial instruments
The table below shows the balance sheet amounts
and fair values of financial instruments and thedifferences between them as of March 31, 2019.
(Yen in millions)

Balancesheet
amountFair value

Difference(i) Cash and deposits

211,842

211,842

–

141

141

–

(iii) Monetary receivablesbought

9,999

9,999

–

(iv) Securities
Available-for-sale securities

228,248

228,248–

Total assets(ii) Call loans

450,232450,232–(v) Derivatives* to which
hedge accounting is notapplied

(11)

(11)

–

Derivatives total

(11)

(11)

–

* Derivatives recorded in other assets and other liabilities.
Net claims and debts derived from derivatives represent the net amounts, and items
whose net balance becomes debts are stated in brackets.

Note: Methods for calculating the fair values of financial instruments(i) Cash and deposits
Cash and deposits are settled in the short term and their fair values
are based on their carrying values as their fair values and carrying
values are similar.
(ii) Call loans
Call loans are settled in the short term and their fair values are
based on their carrying values as their fair values and carrying values are similar.
(iii) Monetary receivables bought
Monetary receivables bought are settled in the short term and theirfair values are based on their carrying values as their fair values andcarrying values are similar.
(iv) Securities
The fair values of securities are based on their market prices atterm end, which are reference prices in the trading statistics of theJapan Securities Dealers Association or market prices obtained
from outside vendors or brokers.
(v) Derivatives
The fair values of derivatives are determined by prices offered bycorrespondent financial institutions.

Japan Earthquake Reinsurance Co., Ltd. Annual Report 2019

3. Taxes are included when preparing accounts for
consumption tax and other items.
4. Risk reserves contained in Underwriting reserves
have been deposited based on instructions for the
calculation of underwriting reserves by accumulating the amounts that result from subtracting anamount equivalent to corporate taxes from the net
premiums written and profit from operating the assets.
5. The accumulated depreciation of tangible fixed assets is 147 million yen.
6. See below for a breakdown of outstanding claims.
(Yen in millions)

Outstanding claims (before the deduction ofoutstanding reinsurance claims)

14,950

Outstanding reinsurance claims related to theabove claims

3,361

Net outstanding claims

11,589

7. Total deferred tax assets amount to 533 million yen,while total deferred tax liabilities come to 0 million
yen. Deferred tax assets are all deducted from thetotal amount for a valuation reserve.
A breakdown of deferred tax assets reveals tax loss
carried forward of 426 million yen, a reserve for retirement benefits of 42 million yen, unpaid businesstaxes of 37 million yen and unpaid special local corporate tax of 15 million yen. Deferred tax liabilities
resulted mainly from unrealized gains on securitiesof 0 million yen.
8. No event that could have a material impact on assets
or profits or losses in or after the next fiscal year
has arisen since the last day of the fiscal year underreview.
9. Net assets per share are 776.01 yen. The basis forthis calculation is that net assets are 1,543 million
yen, net assets accrued from ordinary shares are
1,543 million yen and the number of ordinary sharesat the end of the term is 1.988 million.
10. Each amount is rounded down to the nearest
whole unit.

Japan Earthquake Reinsurance Co., Ltd. Annual Report 201937

2. Statements of income(Yen in millions)

Fiscal Year

2017

2018

(from April 1, 2017
to March 31, 2018)(from April 1, 2018
to March 31, 2019)

Item

AmountOrdinary income

Notes for fiscal 2018
1. See below for a breakdown of net premiums written.
(Yen in millions)

Premiums written:

283,534

AmountReinsurance premiums ceded:

164,855

101,288

199,942

Net premiums written:

118,679

Underwriting income

99,430197,716   Net premiums written

97,302

118,679  Investment income on savings
premiums

319

103  Reversal of outstanding claims

1,808

–

–

78,933

Investment income

1,858

2,212

   Interest and dividend income

1,181

1,107

   Gains on sales of securities

63

80   Gains on derivatives929–   Foreign exchange gains

–

1,124

   Other investment income

3

3

(319)

(103)

0

13

  Reversal of policy reserve  Transfer of investment income on
savings premiums
Other ordinary income
Ordinary expenses
Underwriting expenses

9,815  Commissions and brokerage fees

48,42652,675–

9,815

Other ordinary expenses

38,888

–

1,429

1,890

22

14

–

1,863

1,386

–

20

12

1,413

1,409

71

–

  Interest paid

71–

Ordinary profit (loss)(1)

1

Extraordinary income

1–

Reversal of reserve for price fluctuation
Extraordinary losses

12,068Net provision of outstanding claims  Provision of outstanding claims Operating, general and administrative
expenses(Yen in millions)

Provision of outstanding claims(before the deduction of outstanding
reinsurance claims)

2,252

9,874

   Other investment expenses

3. See below for a breakdown of the provision of outstanding claims (figures in parentheses are the reversal of outstanding claims).

Provision of outstanding reinsurance claims
related to the above claims

124,276  Foreign exchange losses

124,276

199,9402,135   Losses on derivatives

32,245

Net claims paid:

196,6418,924   Loss on sales of securities

156,521

Reinsurance claims recovered:

98,375   Net claims paid

Investment expenses(Yen in millions)

Claims paid:

101,290   Loss adjustment expenses   Provision of underwriting reserves

2. S ee below for a breakdown of net claims paid.

1

–

–

0

Provision of price fluctuation reserves–

0

Net income (loss) before income taxes(0)1

Income taxes

00

Total income taxes00

Net income (loss)(0)1

4. The interest and dividend income are given below
by category:(Yen in millions)

Deposits:

5

Call loans:0

Monetary receivables bought:

0

Securities:

1,101

Total:

1,107

5. Paper profit/loss involved in the gains on derivatives
is a loss of 11 million yen.
6. Net
income per share is 0.79 yen.
The basis for this calculation is such that net income is 1 million yen, net income accrued from
common stocks is 1 million yen and the term average number of common stocks amount to 1.988
million.
7. The legal effective tax rate at the end of the termis 28.00%, and the corporate tax burden after applying the tax effect is 15.52%. The difference is
explained by the following breakdown: valuation reserve 4,906.97%, the amount of the write-off carried from publicity expenses related to risk reserves(4,952.16%).
8. Each amount is rounded down to the nearest whole
unit.

38

Japan Earthquake Reinsurance Co., Ltd. Annual Report 2019

3. Statements of cash flow
(Yen in millions)

Fiscal Year

Item

2017

2018

(from April 1, 2017
to March 31, 2018)(from April 1, 2018
to March 31, 2019)

AmountAmountNotes for fiscal 2018
1. 
Relationship of cash and cash equivalents at theend of the year with the amounts mentioned in therelevant balance sheet item.
(Yen in millions)

Cash flow from operating activities
Net income before income taxes
Depreciation

(0)

1

115

115

Increase (decrease) in outstanding
claims(1,808)

9,815

Increase (decrease) in underwriting
reserves

38,888

Increase (decrease) in entrusted
reserves
Increase (decrease) in reserve forretirement benefits

Monetary receivables bought

141

–

9,999

200,239

228,248

1,396(13,740)(14,000)(14,000)

2(1)

Increase (decrease) in reserve forbonus payments(0)1

Increase (decrease) in reserve forprice fluctuation(1)

0(1,181)(1,107)

Losses (gains) on investment insecurities

(40)

(66)

Foreign exchange losses (gains)

1,904(1,110)Decrease (increase) in other assets(other than investment and financial
activities related)244(3,176)

Increase (decrease) in other liabilities(other than investment and financial
activities related)

1,205

1,327

Others(1,110)803   Subtotal

39,620(86,065)

1,654

1,645

(0)

(0)

41,274(84,419)

Net decrease (increase) in cash anddeposits–(19,999)

Proceeds from sales and redemptionof monetary receivables bought

–

9,999

Purchase of securities(112,994)(73,760)

Proceeds from sales and redemptionof securities

143,662

46,907    Total investment assets activities

30,667(36,852)    Total operating activities and   investment assets activities

71,941(121,272)

Net cash provided by operating activities

211,84290

Deposits of a depository period
over three months

4

Income taxes paid

333,194

Securities

4

Interest and dividends received(As of March
31, 2019)(78,933)

Increase (decrease) in reserve fordirectors’ retirement benefits

Interest and dividend income

Cash and deposits
Call loans(As of March
31, 2018)

Monetary receivables bought other thancash equivalents–(9,999)Securities other than cash equivalent(200,239)(228,248)

Cash and cash equivalents

319,284

197,983

2. Cash flow in investing activities includes cash flowfrom the investment assets operations in the insurance business.

Cash flow from investing activities

Acquisition of tangible fixed assets

(117)

–

Others

(114)

(28)

30,435(36,880)

Cash flow in financing activities

Net cash provided by investing activities–– ffect of exchange rate changes on cashEand cash equivalents––

 et increase (decrease) in cash andNcash equivalents

71,709(121,300)

Cash and cash equivalents at the
beginning of the year

247,574

319,284

Cash and cash equivalents at the endof the year

319,284

197,983

Japan Earthquake Reinsurance Co., Ltd. Annual Report 201939

4. Statement of Changes in Shareholders’ Equity
Fiscal 2017 (from April 1, 2017 to March 31, 2018)(Yen in millions)

Valuation andtranslation adjustments

Shareholder’s equity
Retained earnings
Commonstock

Legalreserve ofretainedearnings

1,000

1Balance at the
beginning of theperiodOther legal reserve of retained earnings
Total
retainedearnings

Specialreserves

Specialprice
fluctuation
reserves

Retainedearnings
carriedforward

17

39

488

546

(0)

(0)

Treasury
stock

Total
shareholders’equity

(5)

Net
Total
unrealized
valuation
gains onandavailabletranslation
for-saleadjustments
securities

1,540

2

2

Total net
assets1,542

Changes during
the period
Net income(loss)(0)(0)

Net changes
other thanshareholders’equityTotal changes
Balance at theend of the period

1,000

1

17

39

(0)

(0)

487

545

(5)

(1)

(1)

(1)

(0)

(1)

(1)

(2)

1,539

0

0

1,540

Fiscal 2018 (from April 1, 2018 to March 31, 2019)(Yen in millions)

Valuation andtranslation adjustments

Shareholder’s equity
Retained earnings
Commonstock

Legalreserve ofretainedearnings

1,000

1Balance at the
beginning of theperiodOther legal reserve of retained earnings
Total
retainedearnings

Specialreserves

Specialprice
fluctuation
reserves

Retainedearnings
carriedforward

17

39

487

545

1

1

Treasury
stock

Total
shareholders’equity

(5)

Net
Total
unrealized
valuation
gains onandavailabletranslation
for-saleadjustments
securities

1,539

0

0

Total net
assets1,540

Changes during
the period
Net income(loss)

1

1

Net changes
other thanshareholders’equityTotal changes
Balance at theend of the period

1,000

1

17

39

1

1

489

546

Notes for fiscal 2018
1. Matters related to the types and total number ofstocks outstanding and the types and number oftreasury stock(Stock)Issuedstock
Treasury
stock

1

1

1

1

1

2

1,541

1

1

1,543

5. Dividend per share and total assets per employee(Yen in millions)
Division

Fiscal Year

Dividend per share
Net income (loss) per share

2016

2017

2018

–

–

–

0.57 yen(0.34 yen)

0.79 yen

Balance asof the endof fiscal
2017

Increase in
fiscal 2018

Decrease in
fiscal 2018

Balance asof the endof fiscal
2018

Dividend propensity

–

–

–

Net assets per share

775.67 yen

774.54 yen

776.01 yen

19,665

19,615

16,152

Ordinary stock

2,000,000––

2,000,000

Total

Notes:
1. Net income (loss) per share comes from net income (loss) / term average
number of shares
2. The number of treasury stock is deducted from producing information per share
3. The total assets per employee come from the total assets at the end of
the term / number of employees at the end of the term.

2,000,000––

2,000,000

Ordinary stock

11,400––11,400Total

11,400––11,400Total assets per employee

2. Each amount is rounded down to the nearest whole
unit.

40

(5)

1

Japan Earthquake Reinsurance Co., Ltd. Annual Report 2019

5. Balance Current Maturity of securities by category
As of the end of fiscal 2017

w Details of assets and liabilities(Yen in millions)

1.	Deposits(Yen in millions)Year
Division

As of the endof fiscal 2016

As of the endof fiscal 2017

As of the endof fiscal 2018

Deposits

260,534

333,194

211,842

Ordinary deposits

236,504

309,164

187,812

Time deposits

24,03024,03024,0302.	Average balance and trading amount of commodity
securities
Not applicable
3.	Balance of securities by category and percentage
distribution(Yen in millions)

Year

As of the end of
fiscal 2016

As of the end of
fiscal 2017

Percentage
distribution(%)

Division

As of the end of
fiscal 2018

Percentage
distribution(%)

62,581

Municipal
bonds

8,834

6,960

2,327

1,928

–

–

20,051

Corporatebonds

12,45557,82910,642

1,856

–

–

82,784

–

–

–

–

–

–

–

Foreignsecurities

Stocks9,858

17,615

7,348

–

–

–

34,822Other
securities

–

–

–

–

–

–

–

35,297 119,512

32,388

3,785

–

Total

(Yen in millions)

52,578–Municipal
bonds

3,975

6,139

2,500

330

202

267

13,416

14.8

Corporatebonds

37,57557,02022,250

2,261

6,095

–

–

–

–

–

–

–

6,276

26,137

1,405

–

–

–

33,818

–

–

–

–

–

–

–

56,747 119,003

30,905

2,591

6,297

13,416

5.9

Corporatebonds

92,46739.4

82,78441.3 128,435

56.3

–

–

–

–

–

26,435

11.3

34,822

17.4

33,818–228,248

5 over 7 over
up to up to Over 10
7
10
years
years years
9,204

10.0

–

9,256 200,239–

20,051

100.0

9,256

–

10.3

200,239–

4,749

24,257100.0–

29,706

Municipal
bonds

234,580

12,069

8,919

23.0

Total

37,106

Government
bonds

52,578–4,148

3 overup to
5 years

31.3–

Government
bonds

Total

1 overup to
3 years

62,581–3 overup to
5 years

Up to
1 year

39.0

Othersecurities

1 overup to
3 years

As of the end of fiscal 2018

91,419Foreignsecurities

Up to
1 yearDivision

Percentage
distribution(%)

Government
bonds

Stocks5 over 7 over
up to up to Over 10
7
10
years
years years

–
100.0

Division

StocksForeignsecurities
Other
securities

4. Yield on securities held

Total

Total

3,231 128,435

12,702 228,248(%)

Division

Fiscal Year

2016

2017

2018

0.26

0.28

0.22

–

–

–

1.45

1.88

2.17

Investment assets yield (income yield)
Public & corporate bonds
StocksForeign securities
Other securities
Total

–

–

–

0.44

0.55

0.51

0.26

0.31

0.27

–

–

–

1.76

1.84

2.12

Assets management yield (realized yield)
Public & corporate bonds
StocksForeign securities
Other securities
Total

–

–

–

0.48

0.57

0.54

(0.04)

0.26

Market-price based overall yield (for reference)
Public & corporate bonds
StocksForeign securities
Other securities
Total(0.09)
–

–

–

1.01

(0.02)

3.74

–

–

–

0.07

(0.03)

0.76

6.	Amount of stocks held by type of business
There are no stocks.
7.	Loans
There are no notes with the following items; amountof stocks held by type of business, balance current
maturity of loan by remaining life, balance ofloans by type of collateral secured, balance andpercentage distribution of loan by designated use,balance of loan by industry and its ratio to the total,and balance of amortization of loans.
8.	Risk management credits
Not applicable

Note:
Public & corporate bonds include government bonds, municipal bonds, andcorporate bonds.

Japan Earthquake Reinsurance Co., Ltd. Annual Report 2019

41

9.	
Present conditions of loans involving trust withcontact for replacement of losses
Not applicable
10. Credits classified in accordance with debtor
classification
Not applicable
11. Self-appraisal of assets
We categorize assets in accordance with the level ofrisk associated with collection and the level of riskof a loss in the value by carrying out self-appraisal
and individually examining holding assets. There
were no category assets (II through IV categories)
as of March 31, 2019.

(Yen in millions)
As of the endof fiscal 2016Land

As of the endof fiscal 2017

As of the endof fiscal 2018

–

–

–

for underwriting

–

–

–

for investment

–

–

–

Buildings

25

24

23

for underwriting

25

24

23

for investment

–

–

–

–

–

–

Construction in progressfor underwriting

–

–

–

for investment

–

–

–

Total of property

25

24

23

for underwriting

25

24

23

for investment

–

–

–

–

–

–

Other tangible fixed assets

17

101

66

Total

43

125

90

Leased assets(Yen in millions)
Division–––

Reserve for individual bad debts

–

–

–

–

Reserve for specificforeign securities

–

–

–

–

Reserve for retirement benefits

151

14

12

154

Reserve for directors’ retirement
benefits

5

4

–

9

Reserve for bonus
payments

22

21

22

21

Total

Division

1
186

Balance asof the end of
fiscal 2017

Balance
Decrease
as of the end of
in fiscal 2018
fiscal 2018

Increase in
fiscal 2018

Reserve for ordinary
bad debts

–

–

–

–

Reserve for individual bad debts

–

–

–

–

Reserve for specificforeign securities

–

–

–

–

Reserve for retirement benefits

154

15

17

152

Reserve for directors’ retirement
benefits

9

4

–

13

Reserve for bonus
payments

21

23

21

23

Reserve for pricefluctuation

1

0

–

1

186

43

39

191

As of the endof fiscal 2017

As of the endof fiscal 2018

Outstanding claims

3,581

1,773

11,589Underwriting reserves

456,745495,634

416,700

Risk reserves

278,846

303,954

203,074

Unearned premium
reserves

177,899

191,679

213,625

460,327

497,407428,289

16. Level of underwriting reserves
There is no target contact.

42

1
36

(Yen in millions)(Yen in millions)

Total

–
40

As of the end of fiscal 201815.	Underwriting funds
As of the endof fiscal 2016

2
182

18. Detailed listing of shareholders’ equity
Please refer to the statement of changes in shareholders’ equity on page 40.

14. Special accountNot applicable

Year
Division

Balance
Decrease
as of the end of
in fiscal 2017
fiscal 2017

Increase in
fiscal 2017

–

Total

13. Unearned claims paid
Not applicable

Balance asof the end of
fiscal 2016

Reserve for ordinary
bad debts

Reserve for pricefluctuation

12. Tangible fixed assets by category
Year
Division

17. Detailed listing of liability reserves
As of the end of fiscal 2017

Japan Earthquake Reinsurance Co., Ltd. Annual Report 2019

7. D
 epreciation expenses by category
As of the end of fiscal 2017e Income and loss details(Yen in millions)

1. Gains on sales of securities by category(Yen in millions)

Division

Fiscal Year

2016

2017

Type of asset

2018

Government bonds

2

63

80

Foreign securities

144

–

–

Total

147

63

80

2. Losses on sales of securities by category(Yen in millions)

Division

Fiscal Year

2016

2017

2018

Government bonds

–

8

1

Foreign securities

10

13

13

Total

10

22

14

3. Losses on valuation of securities
Not applicable

1

61

24

71.4

85

1

61

24

71.4

for
investment

–

–

–

–

–

Other tangible
fixed assets

153

33

52

101

34.1

Total

239

34

113

125

47.4

Intangible fixed assets
Software

504

81

244

259

48.5

Other
intangible
fixed assets

1

–

–

1

–

Total

505

81

244

261

48.3

Grand total

745

115

358

387

48.0

Acquisition
cost

Rate of
Deprecia- Aggregated Balance as
aggregatedtion indeprecia- the end ofdepreciafiscal 2018tions
fiscal 2018
tions %

Tangible fixed assets(Yen in millions)

2017

2018

Personnel expenses

3,311

651

2,496

Non personnel expenses

11,914

2,633

8,463

310

264

323

Taxes

85

for
underwriting

Type of asset

6. Business expenses (inclusive of loss adjustment)
2016

Buildings(Yen in millions)

5. Losses on disposal of fixed assets
Not applicable

Division

Tangible fixed assets

As of the end of fiscal 2018

4. Gains on disposal of fixed assets
Not applicable

Fiscal Year

Rate of
Deprecia- Aggregated Balance as
Acquisition
aggregatedtion indeprecia- the end of
cost
depreciafiscal 2017tions
fiscal 2017
tions %

Commissions and brokeragefees

46,67548,42652,675

Total

62,211

51,976

63,958Note:
Business expenses are the total of loss adjustment expense, operating,general and administrative expenses, commissions and brokerage fees
as shown in the income statement.

Buildings

85

1

62

23

72.9

for
underwriting

85

1

62

23

72.9

for
investment

–

–

–

–

–

Other tangible
fixed assets

151

34

85

66

56.1

Total

237

35

147

90

62.1

Intangible fixed assets
Software

424

79

216

208

51.0

Other
intangible
fixed assets

1

–

–

1

–

Total

426

79

216

209

50.8

Grand total

664

115

364

299

54.9

Japan Earthquake Reinsurance Co., Ltd. Annual Report 201943

(iv) Available-for-sale securities sold at the termr Information about fair values, etc.

(Yen in millions)Fiscal 2017

1. Matters related to financial instruments
For matters related to the status of financial instruments and matters related to the fair values of financial instruments, please refer to Note 2 on thebalance sheet (page 36).
2. Securities(i) Securities held for trading purposes
Not applicable(Yen in millions)

Securities whosecarrying amount
does not exceed
their costType

Acquisition
cost

Book value

Difference

Public &corporatebonds

82,83784,766

1,928

Stocks–––Foreignsecurities

500

502

2

Others–––Subtotal

83,337

85,268

1,931

Public &corporatebonds

80,70380,650

(53)

–

–

–

36,21434,320(1,894)–––

116,918

114,971(1,947)200,256

200,239(16)

OthersSubtotal
Total

As of the end of fiscal 2018Type
Public &corporate
bonds
Securities whosecarrying amountexceeds their cost

–

–

–

11,713

11,794

80

–

–

–

Subtotal

124,148

126,117

1,969

Public &corporatebonds

80,12080,106

(14)

–

–

–

22,39722,024

(372)

–

–

–

102,517

102,130(387)

226,666

228,248

1,582

StocksStocksForeignsecurities
Subtotal44

Difference
1,888

Others
Total

Book value
114,323

OthersSecurities whosecarrying amount
does not exceed
their cost

Acquisition
cost
112,434

Foreignsecurities

Sales
price

Total ofgains onsale

Total oflosseson salePublic &corporatebonds

26,02963

815,044

80

1

–

–

–

–

–
13

Stocks–Foreignsecurities

2,322

–

13

603

–

Others

–

–

–

–

–

–

28,35263

22

15,64780

14

4. Derivative transactions(i) Derivative transactions to which hedge accounting is
not applied
Currency related
As of the end of fiscal 2017
(Yen in millions)Contract amount1 year or
longerones

TypeMarketprice

Appraisal
profit and
loss

711

711

711

711

Over-the-counter transactions Forward foreign exchange contracts  Short positions   US dollar

25,414–As of the end of fiscal 2018
(Yen in millions)Contract amount1 year or
longerones

TypeMarketprice

Appraisal
profit andloss

Over-the-counter transactions(Yen in millions)

Division

Total oflosseson saleTotal

StocksForeignsecurities

Total ofgains onsale

3. Money trust
Not applicable(iii) Available-for-sale securities
As of the end of fiscal 2017

Securities whosecarrying amountexceeds their cost

Sales
price

Type

Total

(ii) Securities to be held to maturity
Not applicable

Division

Fiscal 2018

 Forward foreign exchange contracts  Short positions   US dollar   EuroTotal

28,292

–

(11)

623

–

(0)

(11)
(0)

(11)

(11)

Notes:
1. Currency related derivative transactions other than the above areomitted as there is no applicable item.
2. Calculating a market price: Foreign exchange rates using forward exchange rate provided by banks.

(ii) Derivative transactions to which hedge accounting
is applied
Not applicable

Japan Earthquake Reinsurance Co., Ltd. Annual Report 2019