February 14, 2018

Financial Results for the Nine Months Ended December 31, 2017
Fukoku Mutual Life Insurance Company (President: Yoshiteru Yoneyama) announces
financial results for the nine months ended December 31, 2017.

[Contents]
1. Business Highlights･････････････････････････

P. 1

2. Investment Results of General Account Assets･････････････････････････

P. 3

3. Non-consolidated Balance Sheets･････････････････････････

P. 6

4. Non-consolidated Statements of Operations･････････････････････････

P. 7

5. Breakdown of Ordinary Profits (Fundamental Profit)･････････････････････････

P. 9

6. Solvency Margin Ratio･････････････････････････

P. 10

7. Status of Separate Account･････････････････････････

P. 11

8. Status of the Company, Subsidiaries and Affiliates･････････････････････････

P. 12

Fukoku Mutual Life Insurance Company

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

As of December 31, 2017

Number of policies

Amount(Thousands)(100 millions of yen)

3,171

Individual insurance

Number of policies

231,606

AmountChanges(%, Pre-FYE)(100 millionsof yen)Changes(%, Pre-FYE)

3,182

100.3

229,045

98.9(Thousands)

719

27,903695

96.7

26,982

96.7

3,890

259,509

3,877

99.7

256,027

98.7

Group insurance－

171,515－－

170,130

99.2

Group annuities－

21,567－－

21,834

101.2

Individual annuities
Subtotal

Notes: 1. Policy amounts for individual annuities are equal to (a) the funds to be held at the time annuity payments are to commence foran annuity for which annuity payments have not yet commenced and (b) the amount of policy reserve for an annuity for which
payments have commenced and (c) special riders for term insurance attached to individual annuities.
2. Policy amount in force for group annuities is equal to the amount of outstanding policy reserve.

(ii) New Policies
Total
Nine months ended
December 31, 2016

Net increase by
conversion

New business

Number of policies

AmountAmountAmount(Thousands)(100 millions of yen)(100 millions of yen)(100 millions of yen)

298

Individual insurance

11,726

10,938

788

17

657

670

(13)

315

12,384

11,609774

Group insurance

－

752

752

－

Group annuities

－

16

16

－

Individual annuities
Subtotal

Total
Nine months ended
December 31, 2017

Number of policies(Thousands)

Individual insurance

AmountChanges(%, YoY)(100 millionsof yen)280

93.8

Net increase by
conversion

New businessAmountChanges(%, YoY)

10,86192.6(100 millionsof yen)AmountChanges(%, YoY)

10,33894.5(100 millionsof yen)522

Changes(%, YoY)

66.3

5

29.3

148

22.7

159

23.7

(10)

－

285

90.2

11,01088.9

10,497

90.4

512

66.2

Group insurance

－

－

338

45.0

338

45.0

－

－

Group annuities

－

－

158

980.6

158

980.6

－

－

Individual annuities
Subtotal

Notes: 1. Number of new policies is the sum of new business and policies after conversion.
2. Amount of new policies for individual annuities, both new business and net increase by conversion, is equal to the funds to be heldat the time annuity payments are to commence and special riders for term insurance attached to individual annuities.
3. Amount for group annuities is equal to the initial premium payment.

(iii) Surrendered and Lapsed Policies (Individual Insurance and Individual Annuities)
Nine months ended December 31, 2016

Nine months ended December 31, 2017
Changes(%, YoY)

Amount of surrender and lapse(100 millions of yen)

9,725

9,486

97.5

Surrender and lapse ratio (%)

3.71

3.66

(0.05)

Notes: 1. The amount of lapse is not offset by the amount of reinstatement which was once lapsed.
2. The column of "Changes" of surrender and lapse ratio is increase-decrease points over year.

1

Fukoku Mutual Life Insurance Company

(2) Annualized Premiums(i) Policies in Force(100 millions of yen, %)As of March 31, 2017

As of December 31, 2017
Changes(%, Pre-FYE)

Individual insurance

2,779

2,759

99.3

Individual annuities

1,343

1,308

97.4

Total

4,123

4,067

98.6

1,091

1,105

101.3

Medical coverage and living benefits(ii) New Policies(100 millions of yen, %)Nine months ended December 31, 2016

Nine months ended December 31, 2017
Changes(%, YoY)

Individual insurance

149

113

76.1

Individual annuities

21

4

20.3

Total

171

118

69.0

59

60

100.6

Medical coverage and living benefits

Notes: 1. Annualized premiums are calculated by using coefficients based on the premium payment method. (For single premium
contracts, the amount is calculated by dividing the premium by the coverage period.)
Notes: 2. Figures for medical coverage and living benefits represent portion of annualized premium corresponding to the medical
benefits (hospitalization benefits and surgery benefits, etc.), living benefits (nursing care benefits, etc.) and premium
waiver benefits, in which disability cause is excluded but causes such as specific illness are included.
Notes: 3. New policies include net increase by conversion.

(3) Selected Items of Statements of Operations(100 millions of yen, %)Nine months ended December 31, 2016

Nine months ended December 31, 2017
Changes(%, YoY)

Premium and other income

4,441

4,397

99.0

Investment income

1,100

1,385

125.8

Claims and other payments

3,734

3,880

103.9

Investment expenses

267

354

132.2

Ordinary profits

516

636

123.3

(4) Total Assets(100 millions of yen, %)As of March 31, 2017

As of December 31, 2017
Changes(%, Pre-FYE)

Total assets

65,656

2

67,694

103.1

Fukoku Mutual Life Insurance Company

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

As of March 31, 2017
AmountCash, deposits, and call loans

236,274

Monetary claims bought

As of December 31, 2017

% of total

3.6 %Amount243,676% of total

3.6 %

753

0.0

453

0.0

29,7870.5

31,6370.5

5,297,476

81.6

5,528,065

82.7

Domestic bonds

2,843,537

43.8

2,869,537

42.9

Domestic stocks

656,590

10.1

781,410

11.7

Foreign securities

1,702,602

26.2

1,764,986

26.4

Foreign bonds

1,445,002

22.3

1,475,127

22.1

257,599

4.0

289,858

4.3

94,745

1.5

112,1311.7

627,7229.7

598,489

9.0

Policy loans

59,2380.9

57,5850.9

Ordinary loans

568,483

8.8

540,903

8.1

Real estate

214,4273.3

211,741

3.2

Others85,302

1.3

73,5201.1

Allowance for possible loan losses(1,776)( 0.0)(1,954)(0.0)

6,489,968

100.0

6,685,629

100.0

1,966,868

30.3

2,090,442

31.3

Money held in trust
Securities

Foreign stocks and other securities
Other securities
Loans

Total
Foreign currency denominated assets

Note: The amount of real estate is equal to the amounts of land, buildings, and construction in progress.

3

Fukoku Mutual Life Insurance Company

(2) Fair Value Information on Securities (with fair value, other than trading securities)(Millions of yen)

As of March 31, 2017

As of December 31, 2017

Gains/losses
Book value

Gains/losses

Fair value
Gains

Book value

Fair value

Losses

Gains

Losses

Held-to-maturity debt securities

764,914908,680

143,766

143,766－

760,857

901,321

140,463

140,463－

Domestic bonds

739,830

882,479

142,649

142,649－

739,450

879,033

139,582

139,582－

Foreign bonds

25,084

26,201

1,116

1,116

－

21,40622,287

881

881

－

Monetary claims bought

－

－

－

－

－

－

－

－

－

－

Negotiable certificate of deposits

－

－

－

－

－

－

－

－

－

－

Others

－

－

－

－

－

－

－

－

－

－

Policy-reserve-matching bonds

1,008,212

1,166,744

158,531

161,427

2,895

977,495

1,135,376

157,881

160,3412,459

Domestic bonds

1,002,413

1,160,832

158,418

161,313

2,895

975,395

1,133,190

157,794

160,254

2,459

5,799

5,912

113

113

－

2,099

2,186

86

86

－

－

－

－

－

－

－

－

－

－

－

2,796,789

3,256,735

459,945484,808

24,862

2,908,304

3,520,837

612,532

627,571

15,038Domestic bonds

997,892

1,067,639

69,74674,152

4,405

1,058,260

1,125,951

67,691

71,327

3,636

Domestic stocks

302,413587,201

284,787

289,0234,235

304,248

711,933

407,684

409,557

1,872

Foreign securities

1,426,510

1,516,052

89,542

104,688

15,146

1,471,237

1,584,758

113,521

121,960

8,439

Foreign bonds

1,207,319

1,268,525

61,20573,765

12,5591,240,875

1,306,085

65,20972,685

7,476

219,190

247,527

28,33630,922

2,586

230,361

278,673

48,311

49,274963

69,97385,842

15,868

16,944

1,075

74,557

98,19323,63524,725

1,089

Money held in trust

－

－

－

－

－

－

－

－

－

－

Monetary claims bought

－

－

－

－

－

－

－

－

－

－

Negotiable certificate of deposits

－

－

－

－

－

－

－

－

－

－

Others

－

－

－

－

－

－

－

－

－

－

4,569,917

5,332,161

762,243790,001

27,757

4,646,657

5,557,535

910,878

928,375

17,497

Domestic bonds

2,740,136

3,110,951

370,814378,1157,300

2,773,107

3,138,175

365,068

371,164

6,096

Domestic stocks

302,413587,201

284,787

289,0234,235

304,248

711,933

407,684

409,557

1,872

Foreign securities

1,457,394

1,548,166

90,772

105,918

15,146

1,494,743

1,609,232

114,488

122,928

8,439

Foreign bonds

7,476

Foreign bonds
Investments in subsidiaries and affiliates
Available-for-sale securities

Foreign stocks and other securities
Other securities

Total

1,238,203

1,300,639

62,43674,995

12,5591,264,381

1,330,559

66,17773,653Foreign stocks and other securities

219,190

247,527

28,33630,922

2,586

230,361

278,673

48,311

49,274963

Other securities

69,97385,842

15,868

16,944

1,075

74,557

98,19323,63524,725

1,089

Money held in trust

－

－

－

－

－

－

－

－

－

－

Monetary claims bought

－

－

－

－

－

－

－

－

－

－

Negotiable certificate of deposits

－

－

－

－

－

－

－

－

－

－

Others

－

－

－

－

－

－

－

－

－

－

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

・Book value of securities without fair value are as follows:(Millions of yen)

As of March 31, 2017

As of December 31, 2017－－

Unlisted foreign bonds－－

Others－－

Held-to-maturity debt securities－－

Investments in subsidiaries and affiliates

64,83764,837Available-for-sale securities

22,04427,924

Policy-reserve-matching bonds

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

6,109

6,196

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

Unlisted foreign bonds－－

15,934

21,72886,881

92,761OthersTotal

Note: In this table, domestic and overseas investment partnerships are included in “Others” within “Available-for-sale securities.” However, unrealized gains on available-for-sale securities
corresponding to these holdingsby domestic and overseas investment partnerships (¥1,484 million as of March 31, 2017 and ¥1,837 million as of December 31, 2017) are includedin their balance sheet carrying amounts.

4

Fukoku Mutual Life Insurance Company

(3) Fair Value Information on Money Held in Trust(Millions of yen)

As of March 31, 2017

Money held in trust

As of December 31, 2017

Gains/losses

Carrying valueon the balance
sheet

Fair value

29,78729,787

Gains－

Losses－－Gains/losses

Carrying valueon the balance
sheet

Fair value

31,637

31,637

Gains－

Losses－－･ Money held in trust for trading purpose(Millions of yen)

As of March 31, 2017
Carrying valueon the balance sheet

Money held in trust
for trading purpose

As of December 31, 2017

Net valuation gains/losses includedin the statements of operations

28,787

Carrying valueon the balance sheet0

Net valuation gains/losses includedin the statements of operations

30,63764･ Money held in trust classified as held-to-maturity, policy-reserve-matching and available-for-sale(Millions of yen)

As of March 31, 2017

As of December 31, 2017

Gains/losses

Book value

Fair value

Money held in trust
for held-to-maturity

－

－

－

－

Money held in trust forpolicy-reserve-matching

－

－

－

Money held in trust
for available-for-sale

－

－

－

Gains/losses

Book value

Fair value

－

－

－

－

－

－

－

－

－

－

－

－

－

－

－

－

－

－

－

－

Gains

Losses

Gains

LossesReference: Fair Value of Real Estate (Land and Leaseholds)(Millions of yen)

As of March 31, 2017
Carrying valueon the balance sheet

125,278

Fair value

241,184

As of December 31, 2017
Carrying valueon the balance sheet

Gains/losses

115,905

124,978

Fair value

241,343

Gains/losses

116,364

Notes: 1.As of December 31, 2017, fair value is based on the appraisal value by the real-estate appraiser, the appraisal value for property tax as of January 1, 2017
and the road rate as of January 1, 2017.
Notes: 2.As of March 31, 2017, fair value is based on the appraisal value by the real-estate appraiser, the appraisal value for property tax as of January 1, 2017
and the road rate as of January 1, 2016.

5

Fukoku Mutual Life Insurance Company

3. Non-consolidated Balance Sheets(Millions of yen)

As of March 31, 2017

Assets:Cash and deposits
Call loans
Monetary claims bought
Money held in trust
Securities[Government bonds][Local government bonds][Corporate bonds][Stocks][Foreign securities]
Loans
Policy loans
Ordinary loans
Tangible fixed assets
Intangible fixed assets
Reinsurance receivables
Other assets
Allowance for possible loan losses
Total assets

44,681
193,000
753
29,787
5,369,678[2,015,161][123,972][733,459][679,556][1,722,752]
627,722
59,238568,483
219,515
22,052200
60,032(1,776)
6,565,647
As of March 31, 2017

Liabilities:
Policy reserves
Reserve for outstanding claims
Policy reserve
Reserve for dividends to policyholders
Reinsurance payables
Subordinated bonds
Other liabilities
Corporate income tax payable
Asset retirement obligations
Rest of the other liabilities
Reserve for employees' retirement benefits
Reserve for price fluctuation
Deferred tax liabilities
Deferred tax liabilities for land revaluation
Total liabilities
Net assets:
Foundation funds
Accumulated foundation funds redeemed
Reserve for revaluation
Surplus
Legal reserve for future losses
Other surplus
Reserve for redemption of foundation funds
Reserve for dividend allowances
Accumulated fund for price fluctuation
Reserve for advanced depreciation of real estate for tax purpose
Reserve for special account for advanced depreciation of real estate for tax purpose
Other reserves
Unappropriated surplus
Total foundation funds, surplus and others
Net unrealized gains (losses) on available-for-sale securities, net of tax
Revaluation reserve for land, net of tax
Total valuation and translation adjustments
Total net assets
Total liabilities and net assets

6

As of December 31, 2017

45,464200,000
453
31,637
5,609,733[2,029,149][115,946][753,346][811,038][1,788,094]
598,489
57,585
540,903
216,808
24,10636
44,704(1,954)
6,769,479
As of December 31, 2017

5,604,007
19,533
5,533,544
50,92962
191,935
44,7974,733
3,250
36,81225,78982,464
19,132
14,2655,982,454

5,634,186
18,8055,551,267
64,112
77
191,935
47,3892,622
3,231
41,53525,536
84,912
61,641
14,2586,059,936

10,000106,000
112
129,427
2,849
126,578
4,000
20,00041,000257
100
767
60,453
245,539
333,545
4,107
337,652
583,192
6,565,647

10,000106,000
112
145,357
2,954
142,403
6,000
20,00041,000255－
767
74,380261,469
443,879
4,192
448,072
709,542
6,769,479

Fukoku Mutual Life Insurance Company

4. Non-consolidated Statements of Operations(Millions of yen)

Ordinary revenues:
Premium and other income[Premium income]Investment income[Interest, dividends and other income][Gains on money held in trust, net]
[Gains on trading securities, net]
[Gains on sales of securities][Gains on derivative instruments, net]
[Gains on separate accounts, net]
Other ordinary revenues[Reversal of reserve for outstanding claims]

Nine months ended
December 31, 2016

Nine months ended
December 31, 2017444,117[444,015]
110,084[95,287]439,712[439,593]
138,510[104,159][1,895][8,506][14,307][－][－][8,353][2,309][3,923]7,797[2,439]Total ordinary revenues
Ordinary expenses:
Claims and other payments[Claims][Annuities][Benefits][Surrenders][Other payments]
Provision of policy reserve and others
Provision of policy reserve
Provision of interest portion of reserve for dividends to policyholders
Investment expenses[Interest expenses][Losses on money held in trust, net]
[Losses on trading securities, net]
[Losses on sales of securities][Losses on valuation of securities][Losses on derivative instruments, net]
[Foreign exchange losses, net]
Operating expenses
Other ordinary expenses
Total ordinary expenses
Ordinary profits
Extraordinary gains:
Gains on disposal of fixed assets
OthersTotal extraordinary gains
Extraordinary losses:
Losses on disposal of fixed assets
Impairment losses
Provision of reserve for price fluctuation
Losses on advanced depreciation of real estate for tax purpose
Total extraordinary losses
Surplus before income taxes
Income taxes：
Current
Deferred
Total income taxes
Net surplus for the period
7[－][8,856]
6,801
[727]

561,998

585,025

373,425[83,368][132,441][79,391][54,845][23,054]
31,501
31,48318
26,779[2,972][1,390][3,358][2,862]

388,047[105,376][125,439][77,093][59,161][20,768]
17,731
17,722
835,414[3,251][－][－][8,470]64,51014,177[－][－][2,059][44][10,918][10,321]
66,15814,048510,394
51,604

521,400
63,625

2
42

244

45
82
51
2,381

－
244
162
140
2,448
3

－
2,514
49,134

2,754
61,1149,820(3,209)10,511(104)

6,611
42,522

10,40750,707

Fukoku Mutual Life Insurance Company

Notes to the Non-consolidated Financial Statements
I.

Presentation of the Non-consolidated Financial Statements

1. Basis of presentation
The accompanying non-consolidated financial statements have been prepared from the accounts maintained by
Fukoku Mutual Life Insurance Company (the “Company”) in accordance with the provisions set forth in the
Insurance Business Act of Japan and its related rules and regulations and in conformity with accounting principles
generally accepted in Japan, which are different in certain respects from accounting principles generally accepted incountries 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 rounded down. As a result, the totals do not add up.
II. Notes to the Non-consolidated Balance Sheets
1. The amount of securities lent under lending agreements was ¥209,955 million as of December 31, 2017.
2. Changes in reserve for dividends to policyholders for the nine months ended December 31, 2017 were as follows:(Millions of yen)

Balance at the beginning of the current period………….....................................
Transfer from surplus in the previous fiscal year…….........................................
Dividend payments to policyholders during the current period…………….......
Increase in interest................................................................................................
Balance at the end of the current period……………...........................................

8¥ 50,929
34,592(21,417)8¥ 64,112

Fukoku Mutual Life Insurance Company

5. Breakdown of Ordinary Profits (Fundamental Profit)(Millions of yen)
Nine months ended
December 31, 2016

Nine months ended
December 31, 2017

61,95966,884

10,663

20,187

Gains on money held in trust, net

－

1,769

Gains on trading securities, net

－

4,110

Gains on sales of securities

8,353

14,307

Gains on derivative instruments, net

2,309

－

Foreign exchange gains, net－－

Other capital gains－－

21,14023,345Losses on money held in trust, net

1,486

－

Losses on trading securities, net

8,320

－

Losses on sales of securities

2,862

2,059

Losses on valuation of securities－

44

Losses on derivative instruments, net－

10,918

8,470

10,321－－

B(10,477)(3,157)

A+B

51,481

63,726

122

17

Reinsurance income－－

Reversal of contingency reserve

91－

Reversal of specific allowance for possible loan losses

31

17

Others

－

－

－

118

Reinsurance premiums－－

Provision for contingency reserve－

118

Provision of specific allowance for possible loan losses－－

Provision of allowance for specified overseas loans－－

Write-off of loans－－

Others

－

－

C

122

(101)

A+B+C

51,604

63,625A

Fundamental profit
Capital gains

Capital losses

Foreign exchange losses, net
Other capital losses
Net capital gains (losses)
Fundamental profit plus net capital gains (losses)
Non-recurring gains

Non-recurring losses

Non-recurring gains (losses)
Ordinary profits

Notes: 1. The following amounts in respect of gains / losses on money held in trust have been excluded from capital gains / losses
and included in fundamental profit due to their income nature (being interest and dividend income): ¥95 million in respectof the nine months ended December 31, 2016 and ¥126 million in respect of the nine months ended December 31, 2017.
Notes: 2. The following amounts in respect of gains / losses on trading securities have been excluded from capital gains / losses
and included in fundamental profit due to their income nature (being interest and dividend income): ¥4,962 million in respectof the nine months ended December 31, 2016 and ¥4,395 million in respect of the nine months ended December 31, 2017.

9

Fukoku Mutual Life Insurance Company

6. Solvency Margin Ratio(Millions of yen)

As ofMarch 31, 2017

As ofDecember 31, 2017

1,414,023

1,595,849

Foundation funds and surplus

208,227

232,861

Reserve for price fluctuation

82,464

84,912

Contingency reserve

171,033

171,152

1,213

1,408

(Net unrealized gains (losses) on securities (before tax)
and deferred hedge gains (losses) (before tax)) × 90%

415,287

552,933

Net unrealized gains on real estate × 85%

111,340

114,424

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

237,089

239,541

Qualifying subordinated debt

191,935

191,935－－

Deductible items(46,783)(46,783)

Others42,21753,463

232,798

272,823

Total solvency margin(A)

General allowance for possible loan losses

The amount of "excess amount of policy reserve based on full-time Zillmer method"and "qualifying subordinated debt" excluded from the calculation of solvency margin

Total amount of risk

( R1  R8 )2  R2  R3  R7   R4
2

(B)

Insurance risk

R1

23,94923,3793rd sector insurance risk

R8

9,740

9,684

Assumed investment yield risk

R232,83532,907

Minimum guarantee risk

R7

0

－

Investment risk

R3

192,279

231,901

Business risk

R4

5,176

5,957

1,214.8%

1,169.8%

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

Notes: 1. Figures as of March 31, 2017, are calculated based on the provisions of Articles 86 and 87 of the Enforcement Regulationof the Insurance Business Act and Ministry of Finance Notification No. 50, 1996. Figures as of December 31, 2017,
are calculated in accordance with these provisions.
Notes: 2."Deductible items" represent the capital increase to the subsidiary, Fukokushinrai Life Insurance Co., Ltd.
Notes: 3."Minimum guarantee risk" is calculated by standard method.

10

Fukoku Mutual Life Insurance Company

7. Status of Separate Account(1) Separate Account Assets by Products(Millions of yen)

As of March 31, 2017

As of December 31, 2017

AmountAmountIndividual variable insurance－－

Individual variable annuities

39

34

Group annuities

75,63983,814

Total

75,67883,849(2) Policies in Force(i) Individual Variable Insurance
The Company has not sold the individual variable insurance.

(ii) Individual Variable Annuities(Millions of yen except number of policies)

As of March 31, 2017

As of December 31, 2017

Number ofpolicies

AmountNumber ofpolicies

AmountIndividual variable annuities

13

33

10

27

Total

13

33

10

27

11

Fukoku Mutual Life Insurance Company

8. Status of the Company, Subsidiaries and Affiliates(1) Selected Financial Data
(100 millions of yen)

Nine months ended
December 31, 2016

Nine months ended
December 31, 2017

Ordinary revenues

6,495

6,273

Ordinary profits

541

647

Net surplus attributable to the parent company

433

508

Comprehensive income

463

1,623

As of
March 31, 2017

Total assets
Solvency margin ratio

As ofDecember 31, 201784,32986,353

1,257.3%

1,212.5%(2) Scope of Consolidation and Application of Equity Method
Number of consolidated subsidiaries: 6
Number of unconsolidated subsidiaries accounted for under the equity method: 0
Number of affiliates accounted for under the equity method: 0

12

Fukoku Mutual Life Insurance Company

(3) Consolidated Balance Sheets(Millions of yen)
As of March 31, 2017

As of December 31, 2017

Assets:Cash and deposits

136,494

123,030

Call loans

193,000

200,000

Monetary claims bought

753

453

29,787

31,637

7,130,780

7,370,280

Loans

631,109

601,985

Tangible fixed assets

219,873

217,123

Intangible fixed assets

26,326

39,592

Money held in trust
Securities

Agency receivables

40

Reinsurance receivables

200

37

Other assets
Net defined benefit asset

66,23752,934

Deferred tax assets
Allowance for possible loan losses
Total assets

42

92

153

162

(1,776)(1,954)8,432,988
As of March 31, 2017

Liabilities:
Policy reserves

7,438,936

Reserve for outstanding claims
Policy reserve
Reserve for dividends to policyholders

8,635,376
As of December 31, 2017

7,455,290

22,22321,094

7,365,185

7,369,597

50,92964,112

Reserve for dividends to policyholders (subsidiary)
Agency payables

598

485

98

68

Reinsurance payables

79

95

Subordinated bonds

191,935

191,935

Other liabilities

46,00660,867

Net defined benefit liabilities

38,76736,856

Reserve for price fluctuation

91,827

94,547

Deferred tax liabilities

16,23359,015

Deferred tax liabilities for land revaluation

14,265

14,258

7,838,150

7,912,934

Total liabilities
Net assets:
Foundation funds

10,00010,000

Accumulated foundation funds redeemed

106,000

106,000

112

112

Consolidated surplus

133,217

149,266

Total foundation funds, surplus and others

249,329

265,379

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

342,470452,643

Revaluation reserve for land, net of tax

4,107

4,192

Foreign currency translation adjustment
Accumulated remeasurements of defined benefit plans

(433)

(387)

(9,240)(8,014)

Total accumulated other comprehensive income

336,904

448,434

Reserve for revaluation

Non-controlling interests
Total net assets
Total liabilities and net assets

13

8,603

8,628

594,837

722,441

8,432,988

8,635,376

Fukoku Mutual Life Insurance Company

(4) Consolidated Statements of Operations and Comprehensive Income[Consolidated Statements of Operations](Millions of yen)
Nine months ended
December 31, 2016

Nine months ended
December 31, 2017

Premium and other income

512,255

462,010Investment income

128,883

157,274[Interest, dividends and other income][113,410][122,396][Gains on money held in trust, net][－]

[1,895][Gains on trading securities, net][－]

[8,506][Gains on sales of securities][9,037][14,839][Gains on derivative instruments, net]

[2,309][－][Gains on separate accounts, net]

[3,923][8,856]

Ordinary revenues:

Other ordinary revenues

8,448

8,086

[Reversal of reserve for outstanding claims][2,426][1,128]

Total ordinary revenues

649,588627,371

Ordinary expenses:
Claims and other payments

416,825

433,872[Claims][87,164][110,105][Annuities][133,448][126,526][Benefits][87,971][86,638][Surrenders][84,649][89,465][Other payments][23,144][20,807]

Provision of policy reserve and others

64,881

4,420

Provision of policy reserve

64,863

4,412

18

8

Provision of interest portion of reserve for dividends to policyholders

00Investment expenses

Provision of interest portion of reserve for dividends to policyholders (subsidiary)

25,891

34,402[Interest expenses][2,976][3,260][Losses on money held in trust, net]

[1,390][－][Losses on trading securities, net]

[3,358][－][Losses on sales of securities][2,862][2,059][Losses on valuation of securities]

[－]

[44]

[Losses on derivative instruments, net][－]

[10,918][Foreign exchange losses, net]

[8,470][10,321]

Operating expenses

72,06573,743

Other ordinary expenses

15,794

16,146

Total ordinary expenses

595,458

562,585

Ordinary profits

54,12964,785

Gains on disposal of fixed assets

2

244

Others42－

Total extraordinary gains

45

244

Losses on disposal of fixed assets

84

163

Impairment losses

51

140

2,653

2,719

－

3

2,789

3,027

Extraordinary gains:

Extraordinary losses:

Provision of reserve for price fluctuation
Losses on advanced depreciation of real estate for tax purpose
Total extraordinary losses
Provision of reserve for dividends to policyholders (subsidiary)

315

250

51,06961,752Current

10,587

11,114

Deferred(3,113)(247)

Total income taxes

7,473

10,867

Net surplus

43,59550,884

Surplus before income taxes
Income taxes：

Net surplus attributable to non-controlling interests
Net surplus attributable to the parent company

14

214

57

43,38150,826

Fukoku Mutual Life Insurance Company

(4) Consolidated Statements of Operations and Comprehensive Income (Continued)[Consolidated Statements of Comprehensive Income](Millions of yen)

Nine months ended
December 31, 2016

Nine months ended
December 31, 2017

Net surplus

43,59550,884

Other comprehensive income

2,778

111,426

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

2,124

110,154

Foreign currency translation adjustments

(550)

46

Remeasurements of defined benefit plan, net of tax

1,204

1,225

Comprehensive income

46,374

162,310Comprehensive income attributable to the parent company

46,415

162,271(41)

38

Comprehensive income attributable to non-controlling interests

15

Fukoku Mutual Life Insurance Company

Notes to the Consolidated Financial Statements
I.

Presentation of the Consolidated Financial Statements

1. Basis of presentation
The accompanying consolidated financial statements have been prepared from the accounts maintained by Fukoku
Mutual Life Insurance Company (the “Company”) and its consolidated subsidiaries in accordance with theprovisions set forth in the Insurance Business Act of Japan and its related rules and regulations 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 consolidated financial statements include information which is not required underaccounting principles generally accepted in Japan but is presented herein as additional information.
Amounts of less than one million yen have been rounded down. As a result, the totals do not add up.
II. Notes to the Consolidated Balance Sheets
1. The amount of securities lent under lending agreements was ¥209,955 million as of December 31, 2017.
2. Changes in reserve for dividends to policyholders for the nine months ended December 31, 2017 were as follows:(Millions of yen)

Balance at the beginning of the current period…….............................................
Transfer from surplus in the previous fiscal year…….…....................................
Dividend payments to policyholders during the current period….......................
Increase in interest................................................................................................
Balance at the end of the current period...............................................................

¥50,929
34,592(21,417)8¥64,112

3. Changes in reserve for dividends to policyholders (Fukokushinrai Life Insurance Co., Ltd.) for the nine months
ended December 31, 2017 were as follows:(Millions of yen)

Balance at the beginning of the current period.....................................................

¥598

Dividend payments to policyholders during the current period……...................

(363)

Increase in interest................................................................................................

0

Provision of reserve for dividends to policyholders.............................................

250

Balance at the end of the current period...............................................................

¥485

III. Notes to the Consolidated Statements of Operations
1. For the nine months ended December 31, 2017, the total amount of depreciation, including depreciation of realestate for rent, was ¥9,091 million and the amount of amortization of goodwill was ¥572 million.

16

Fukoku Mutual Life Insurance Company

R
R895763142(5) Status of Insurance Claims Paying Ability of the Company and Insurance Subsidiaries(Millions of yen)

As ofMarch 31, 2017

As ofDecember 31, 2017

1,488,469

1,672,969

Foundation funds and surplus

220,040

245,326

Reserve for price fluctuation

91,827

94,547

Contingency reserve

173,088

173,298

－

－

1,213

1,408

(Net unrealized gains (losses) on securities (before tax) and deferred hedge gains (losses)(before tax)) × 90%

427,019564,473

Net unrealized gains on real estate × 85%

111,340

114,424

Sum of unrecognized actuarial differences and unrecognized prior service cost

(12,833)(11,131)

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

239,650

242,089

Qualifying subordinated debt

191,935

191,935

The amount of "excess amount of policy reserve based on full-time Zillmer method"and "qualifying subordinated debt" excluded from the calculation of solvency margin－－

Deductible items－－

45,18756,597

236,754

275,946

Total solvency margin(A)

Catastrophe loss reserve
General allowance for possible loan losses

OthersTotal amount of risk

( ( R1  R5  R8  R9 ) 2  ( R 2  R3  R7 ) 2  R 4  R6
2

2

(B)

Insurance risk

R1

24,45923,882

General insurance risk

R5

－

－

Catastrophe risk

R6

－

－

3rd sector insurance risk

R8

9,851

9,795

Small amount and short-term insurance risk

R9

－

－

Assumed investment yield risk

R2

33,22533,294

Minimum guarantee risk

R7

0

－

Investment risk

R3

195,706

234,513

Business risk

R4

5,264

6,029

1,257.3%

1,212.5%

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

Notes: 1. Figures as of March 31, 2017, are calculated based on the provisions of Articles 86-2 and 88 of the Enforcement Regulationof the Insurance Business Act and Financial Service Agency Notification No. 23, 2012. Figures as of December 31, 2017,
are calculated in accordance with these provisions.
Notes: 2. "Minimum guarantee risk" is calculated by standard method.

17

Fukoku Mutual Life Insurance Company