Securities Code:7157
TSE Mothers

Investor Meeting
Presentationfor 2Qof Fiscal 2016

November 11, 2016

Key Highlight
Launched sales of “au Life Insurance”

Ordinary income up 8% year on year
Bottoming out of new business performance
Continuously recorded ordinary profit1
Promote investment in ordinary expenses
to aim for returning to steady growth of
new business performance1.

Ordinary profit before amortization of deferred assets under Article 113 of the Insurance Business Act

1

Summary of 2Q for FY2016 Results(JPY mn)

2015/1H

2016/1H

Year on year

Ordinary income

4,629

5,016

108.3%

Operating expenses

1,460

1,716

117.6%

Ordinary profit1

418

327

78.2%

Cash flows fromoperating activities

2,252

2,122

94.2%

1,059
9,043
219,471548
11,403

1,139
9,693
231,538635
13,619107.6%
107.2%
105.5%
115.7%
119.4%

Mortality margin
Annualized premium2 ofpolicies-in-force
Number of policies-in-force
Annualized premium2 of
new business

Number of new business
1.
2.

The ordinary profit before amortization of deferred assets under Article 113 of the Insurance Business Act
The amount of money equivalent to what is to be paid to have the insurance coverage for one year. All payments are monthly installments, thus the annualized premium is calculated as multiplying themonthly premium by 12 months.

2

Contents

1. Results for 2Q of Fiscal 2016

2. Progress of Mid-term Business Plan

3

Key Accomplishment in FY2016 1H
Commenced sales of “au Life Insurance”
Launched new product “Hataraku-Hito 2”
Improvement of customer convenience
Started insurance consultation service
via LINE
More prompt payment via smartphone
Highest rating in the 2016 HDI Benchmarking
4Commenced Sales of “au Life Insurance”
 Started sales through KDDI from April
Smartphone website

8 ： 2

PC website1

http://au.lifenet-seimei.co.jp/
1.

Ratio of applicant by device from April to September 20165

Launched New Product “Hataraku-Hito 2”
 Offer coverage to meet customer needs
to chooseelimination period,
60 days or 180 days

to choose policy term
according to purpose
Short-type
Until

Recommend
self-employed

Recommend
office worker

55y/o Until60y/o

Coverageaccording to the purpose

Long-type
Until

65y/o

Until

70y/o

Coverage until retirement

Also added options to choose the way of benefit receipt, Standard-type or Half-type6

Started Insurance Consultation Service
via LINE
 Provide convenient insurance consultation
service via smartphone

7More Prompt Payment
via Smartphone Filing for benefit claims can be completed
via smartphone
Previous benefit claim by mailNotificationof claim

Dispatchingof documents

Sendingback ofdocuments

Receipt &Assessment

Via smartphone

Payment

Average 2.55 days1

Notificationof claim
Submissionof data

Payment in a minimum 3 days
after notification of claim
1.

Number of days is business day, with the day Lifenet receives all necessary documents counted as the first day from April to September 2016. Does not include the number of days required to obtainlacking documents. Cases which required fact confirmation before insurance payments were made are not included when calculating the average number of days required for payment.

8

Highest Ratingin the 2016 HDI Benchmarking
 Contact center and website awarded highest
rating 3 stars for 5th consecutive year1
 Phone Support (Contact Center)

1.

Awarded in the 2016 Benchmarking (Life Insurance Industry) hosted by HDI-Japan

 Web Support (Website)

9Ordinary Income
Y-on-Y 8%
increase(JPY mn)

4,629

5,016
4,757

 Steadily increased
108% Y-o-Y
 4,858 million yen of
insurance premiums
and other

15/1H

15/2H

16/1H

10

Annualized Premium /Number of Policies-in-force:Number of policies-in-force:Annualized premium of policies-in-force (JPY bn)

231,538  9.6 billion yen

225,534
219,471
9.0

9.3

of annualized
premium ofpolicies-in-force

9.6

 Exceeded 230,000
of number ofpolicies-in-force
15/09

16/03

16/09

(YY/MM)11

Breakdown of Policies-in-force
 145,626 in-force policyholders (as of Sep. 30)
Number of policies-in-force- Term Life1- Whole-Life Medical1- Term Medical Care1- Long-term Disability1
Sum insured of policies-in-force2 (JPY mn)
Number of policyholders

15/09

16/09

component
ratio

219,471
114,91266,623
11,49826,438
1,868,961
135,017

231,538
120,070
69,441
10,806
31,221
1,936,576
145,626

100.0％
51.9％
30.0％
4.7％
13.5％

15/1H

16/1H

(Reference) Surrender and lapse ratio3

6.7%

6.6%

1.

Term Life insurance: “Kazoku” and “au Term Insurance”, Whole-Life Medical insurance: “Jibun”, New “Jibun”, New “Jibun” for Women, “au Medical Insurance” and “au Medical Insurance for
Women”, Term Medical Care insurance: “Jibun Plus”, Long-term Disability insurance: “Hataraku-Hito” and “Hataraku-Hito 2”.

2.

Sum insured of polices-in-force is the sum of death coverage, and does not include third-sector insurance.

3.

The surrender and lapse ratio is the annual equivalent of the monthly number of policies surrendered and/or lapsed divided by the monthly average number of policies-in-force.

12Annualized Premium /Number of New Business:Number of new business:Annualized premium of new business (JPY mn)

Y-on-Y 19%
increase

13,747

13,619  Annualized premium

11,403
640
548

15/1H

635
Y-on-Y 16%
increase

15/2H

16/1H

of new business
635 million yen Number of new
business 13,619
13

Amount of Insurance Claims
and Benefits:Amount of insurance payments (JPY mn):Amount of insurance payments / Premiums income (%)

772
559
208

12.6

264
518
234
11.3

351

284

15/1H

15/2H

Benefitclaims 33 insurance claims
and2,856 benefit claims

16.3


Ratio
to
premiums
Insurance
508 claims
income 16%

16/1H

14

Amount of Insurance Claims
and Benefits (Quarterly)
 Payment of 267 million yen for 2Q:Amount of insurance payments (JPY mn):Amount of insurance payments / Premiums income (%)

505
130

306
109
13.7

293
225
120

267

375

134

114
12.7

9.9
105

179

15/2Q 15/3Q

15/4Q

197

21.5

11.2
133
16/1Q

16/2Q

BenefitclaimsInsurance
claims15

Provision for Policy Reserves:Provision for policy reserves (JPY mn):Provision for policy reserves / Premiums income (%)

1,877

1,867 1,837

42.4

40.8

38.8

15/1H

15/2H

16/1H

 Remaining
at the same level Decreased in some
in-force policies
in accordance withelapsed years
16Operating Expenses(JPY mn)

1,779 1,716
1,460

753

662

Marketing

273

273

Customer
service548252

 Increasing for
returning to
growth of
new businessperformance Operating
expensesratio1 36%

658

752

781

Systemand other

15/1H

15/2H

33%

39%

16/1H
36%

Operating expenses ratio¹

1. The ratio of operating expenses to premiums income

17Marketing Expenses per New Business:Marketing expenses per new business (JPY thousand):Marketing expenses / Annualized premium of new business

54
48

1.1
1.0

15/1H

15/2H

48

1.0

16/1H

 Remaining
at the same level
despite increased
marketing expenses

18

Ordinary Profit / Loss
 Recorded positive profitability1 continuously(JPY mn)

418

327
165

15/1H

15/2H

16/1H

Ordinary profit
beforeamortizationof deferredassetsAmortization
cost

418

165

327

(530)

(530)

(530)

Ordinary profit(loss)

(111)

(364)

(202)

15/1H 15/2H 16/1H1.

The ordinary profit (loss) before amortization of deferred assets under Article 113 of the Insurance Business Act

19

Structure Breakdown of Ordinary Profit Decreased due to increase in insurance
payment and operating expenses
Transition of ordinary profit 1(JPY mn)Decrease ofprovisionfor policy
reservesand other

Other

31

418

Increase of
insurance
premiums
and other

Increase of
insurance
claims and
other

40

(235)

355

15/1H
1.

IncomeOrdinary profit before amortization of deferred assets under Article 113 of the Insurance Business Act

327

Increase ofoperatingexpenses

Other

(256)

(26)

Expense

16/1H

20

Condensed Statements of Operation(JPY mn)

15/1H

16/1H

Change

4,502
127
4,629

4,858
158
5,016

355
31
386

658

893

235

1,877

1,837

(40)

(B)

1,460
214
4,211

1,716
240
4,688

256
26
477

Ordinary profit before amortization of deferredassets under Article 113 of IBA1 (A-B)

418

327

(91)

Amortization of deferred assets under Article
113 of IBA1
(C)

530

530

-

Ordinary loss

(111)

(202)

(91)

Insurance premiums and other
Other
Ordinary income(A)

Insurance claims and other
Provision for policy reserves
and other
Operating expenses
Other
Ordinary expenses

1.

the Insurance Business Act(A-B)-(C)21Mortality Margin
Y-on-Y 8%
increase(JPY mn)

1,059

1,041

1,139
 Steadily recorded
mortality margin
 Increased
108% Y-o-Y
due to premiums
income up

15/1H

15/2H

16/1H

22

Fundamental Profit(JPY mn)

15/1H

1,059
Expense margin(1,150)(loss)
Interest margin
22
Fundamental profit(68)(ref.) Insurance
premiums and
4,502
other
Mortality margin

15/2H

16/1H

1,041 1,139(1,444) (1,311)
21
14
(382)
(157)
4,615 4,858

461

 Expense loss
increased Y-o-Y
due to operating
expenses up

372  Adjusted

Adjusted
fundamental
profit1(JPY mn)

148

1.

Fundamental profit before amortization of deferred assets under Article 113 of the Insurance Business Act.

fundamental
profit1 continued
profitable
23

Operating Cash Flows(JPY mn)

2,252

2,358

2,122  Steadily recorded
positive operating
cash flows
 Increased
assets undermanagement

15/1H

15/2H

16/1H

24

Financial Condition(JPY mn)(YY/MM)

Total assets
Cash and deposits
Monetary claimsboughtMoney held in trust
Securities
Government bonds
Municipal bonds
Corporate bonds
Stocks1
Foreign securities2
Other securities

Total liabilities
Policy reserves andotherTotal net assets
1.
2.

15/09

16/03

16/09

27,972 30,317 31,883

 Promote
1,499
1,999
1,499
diversification
in
1,033
1,035
999
20,804 23,067 25,447
investment assets
9,338 10,102 10,126
with investment
1,449
1,521
1,531
8,980 10,428 10,753
trust
210
211
287
680

734

884

825
12,601804
14,893748
2,000
16,573

11,93013,90815,703

 Modified duration

13.6 years

15,371 15,423 15,310

Lifenet is holding shares of Advance Create Co., Ltd., its insurance sales agent, for the purpose of maintaining equity and business partnership.
Investment in Kyobo Lifeplanet Life Insurance Company in Korea

25

Solvency Margin Ratio1
2,747% 2,805% 2,809%

Average of 4 major
insurance companies2
as of March 31, 2016

 Maintained
at high level
continuously

894%
15/09

16/03

16/09

1.

The solvency margin ratio measures a life insurance company’s ability to pay out claims when unforeseen events occurs, such as natural disaster or a stock market collapse.

2.

Simple arithmetic average

26

European Embedded Value (EEV)1(JPY mn)

32,416 31,284 32,008

 Increased due to
Value ofincorporationof
15,377 in-force
businesspayment results
despitecontinuous impact
Adjusted
16,630 net worth
of lower interest
rates

15/092

16/032

16/09(YY/MM)

1.

Lifenet’s EEV is calculated following the EEV Principles and Guidance and in terms of allowance for risk, MCEV Principles (The European Insurance CFO Forum Market Consistent Embedded Value
Principles© ) is referred.

2.

EEV of FY2015 is restated by changing extrapolation method of interest rates.

27

Change in Extrapolation Method ofInterest Rates for EEV

 Adopted more stable method for ultra-longinsurance liabilities
Extrapolation method of interest rates
beyond the last liquid data point (40th year)…
…assuming the forward rate
at the last liquid data point
to remain constant beyond this point…using a predetermined
ultimate forward rate28

Value of New Business (VoNB)(Ultimate Unit Cost Base) 1: Fiscal year
: First-half of fiscal year

386

(JPY mn) Decreased Y-o-Y
mainly due todecline ofinterest rates
64
20152

16
16

1.

The expense assumptions used to calculate the EEV and the value of new business are set based on the premise that unit costs decrease as the number of policies in force increases, andreach their ultimate equilibrium levels, at which income and expenses are equal, in the tenth year after the company’s start-up (fiscal 2017). For reference, “Value of new business(Ultimate Unit Cost base)” shows the value of new business calculated applying the ultimate unit costs to all years.

2.

VoNB of FY2015 is restated by changing extrapolation method of interest rates.

29

Structure Breakdown of VoNB per Policy Decreased due to decline of interest rates
VoNB per policy (ultimate unit cost base)(JPY thousand)

33

Initial expense
increased
Change inextrapolation
Insurance
method ofpremiums
interest rates
per policy
decreased

(0)

4

(5)

Interest
rates
declined(28)
Expected
incidence
rate change

Othervariables

5

(6)

1
15/1H1
1.

Restated by changing extrapolation method of interest rates.

16/1H

30

VoNB (Ultimate Unit Cost Base)
15/1H(Restated1)(JPY mn)

Per new businessfor 2016 1H(JPY thousand)

16/1H

1,701

1,761

129

Time value of financial options
and guarantees

－

－

－

Frictional cost of capital

(8)

(765)

(3)
(1,073)(0)(78)

Value of in-force business

927

684

50

－)

(541)

(667)

(49)

386

16

1

384
8,178

14
9,824

1

11,403

13,619Certainty equivalent present value of future profit
－)
－)
－)

Allowance for non-hedgeable risk

Adjusted net worth

Value of new business (Ultimate unit cost base)(Ref.) Value of new business(Ref.) Present value of in-force business premiums
Number of new business1.

Restated by changing extrapolation method of interest rates.

31

EV Sensitivity Analysis1
 Impacts of changes in assumptions (sensitivities)(JPY mn)

EEV and new business value as of September 30, 2016
Sensitivity 1a: 1.0% increase in risk-free rate
Sensitivity 1b: 1.0% decrease in risk-free rate
Sensitivity 1c: 0.5% increase in risk-free rate
Sensitivity 1d: 0.5% decrease in risk-free rate

Sensitivity 1e: Interest rates based on JGB yields
Sensitivity 2: 10% decrease in equity and real estate value
Sensitivity 3: 10% decrease in operating expenses
Sensitivity 4: 10% decrease in lapse rate

Sensitivity 5: 5% decrease in claim incidence rates for life business
Sensitivity 6: 5% decrease in mortality for annuity business
Sensitivity 7: Change the required capital to the statutory minimum
1.

Change in EEV as of
Sep. 30, 2016

Change in VoNB

32,0081,621(3,025)950(1,297)
333
(74)
1,970
(2,172)
4,331
－
44

14
234
(366)
130
(163)
26
－
111
(138)
203
－
2

For each sensitivity, only one specific assumption is changed and other assumptions remain unchanged. It should be noted that the effect of the change of more than one assumption at a time is likely to
be different from the sum of sensitivities carried out separately. As Japanese policy reserves are calculated in accordance with the IBR, the sensitivities carried out do not affect the reserves at thevaluation date. The sensitivity on the value of new business excludes the impact on the adjusted net worth.

32

Impact of Lower Interest Rates
 Impact to our financial resultsin first-half of FY2016
Interest Ensured profitability
margin though certain impact

EEV

Increased though impact
continued from March 31, 2016

VoNB

Drastically decreased Y-o-Y
with high impact
33

Contents

1. Results for 2Q of Fiscal 2016

2. Progress of Mid-term Business Plan

34

New Mid-term Business Plan Summary of new mid-term business plan
FY2018
Management
Goal

13.5 billion yen in ordinary income
Positive profitability of ordinary profit (loss)

Business
Strategy

1. The pillars of business : “Online direct sales”,“KDDI (exclusive alliance agent)” and “Overthe-counter agent”
2. Continuous creation of unique sales point inall channels
3. Commitment to business development for
future growth

Organization

Change, Challenge and Unity
35

To Achieve New Mid-term Business Plan Aiming for returning to growth innew business performance in fiscal 2016

 Return to
growth in new
business
performance Establish a system
realizing sustainableprofitability

 Achieve
Management Goal

2018

2017

2016
36

Revised in Business Forecast for FY2016
 Promote investment in ordinary expenses
to ensure returning to growth of new
business performance(JPY mn)

Ordinary
income1.

Ordinary
profit1

Business forecast (Before)

10,000 Profitable

Business forecast (After)

10,000(300)(Ref.) Results for FY2015

9,387

584

Ordinary profit(loss) before amortization of deferred assets under Article 113 of the Insurance Business Act

37

Progress of Mid-term Business Plan
(Ordinary Income) 8% increase Y-o-Y

13,500: Fiscal year
: First-half of fiscal year

(JPY mn)

10,000

9,387
Up 8%
Y-o-Y

4,629

FY2015

5,016

16Progress ratio
to target
for 2Q
50%

18

38

Progress of Mid-term Business Plan
(Ordinary Profit / Loss) Aiming for positive ordinary profit1
in fiscal 2018
(JPY mn)

Business forecast Management goal
FY2016 (revised)
FY2018

Ordinary profit (loss) before
amortization of deferredassets under Article 113 of
IBA (A)
Amortization of deferredassets under Article 113 of
IBA (B)

Ordinary Profit (Loss)(A)-(B)
1.

Results for
16/1H

(300)

-

327

(1,060)-(530)(1,360)Turn
profitable(202)

After completion of amortization of deferred assets under Article 113 in FY2017, management indicator for mid-term business plan ending in FY2018 is positive profitability of accounting ordinary
profit (loss).

39

Key Initiatives
 Strengthen product development andchannel utilization
Online direct sales→Strengthen Smartphone
optimization, the way to draw
customers to the website andservices for policyholders

Onlinedirectsales

KDDI (exclusive alliance agent)→Launch “au Life Insurance”
with RefundsKDDI(exclusive
alliance
agent)

Agent

Agent
→Expand sales of“Hataraku-Hito 2” throughface to face consultation40

“au Life Insurance” with Refunds
 Start sales as new product in December 2016
au UsersauSmartphone“au Life Insurance”“au Life Insurance”
with Refunds

Monthly refunds of 200 yen per policy
for up to 60 months
41

LIFENET is…

Comprehensible
Cost-Competitive
Convenient Returning to the original purpose oflife insurance – mutual support – Plugged-in way to reach customers who needinsurance products with necessary coverage
42

LIFENET ManifestoI.

Our Guiding Principles(1) We believe that our responsibility to society is to return life insurance to its
original state. Life insurance is for the customers, not for the company. In
order to achieve this goal, we will only offer products we can recommend
with confidence.
(2) We will be transparent. We will disclose information on our management,
products and company as a whole on our website to actively communicate
with customers and society.
(3) We will be fair. We believe that our services will be more benevolent if theemployees are free of any and all limitations they may feel in the work
environment, and as such, we will not discriminate against education,
gender, age, nationality, or familial situations.
(4) We will adhere to laws protecting personal information and comply withlaws, regulations, and other social standards. We pledge to be respectableglobal citizens, acting fairly and ethically.

III.

Life Insurance will be Cost-Competitive(1) We believe that no one should pay premiums that are more expensive thannecessary, and will be innovative and creative in order to develop andmaintain the most cost-competitive products possible.
(2) We will handle every step of the process in providing good products to ourcustomers; from the development of the products to the sales. This allows
for us to maintain our cost-competitive prices.
(3) Our products will be cost-competitive, but the content of the products andour services will not be sacrificed. All communication with customers will
be conducted accurately and quickly, including claim processes.
(4) Life insurance is a very expensive purchase, and life is also very expensive.
We want for our customers to spend less on life insurance, and more on
enjoying life.

II.

Life Insurance will be Comprehensive(1) Our products will be simple and comprehensible. There will not be complex
policies with special provisions.
(2) Life insurance is a financial product designed to mitigate risk, and we believe
the customer should decide what products are necessary for them. As we
feel it is critical for customers to be well informed of products and policies,
we will make accessible any and all relevant information on our website
for customers to make logical and rational decisions. The Customer
Contact Center is also available for further clarifications and questions.
(3) Our website will promote the understanding of not only our company's
products, but of life insurance in general.
(4) We will make life insurance products tangible via clearly written policies andcomprehensible terms and conditions.

IV.

Life Insurance will be Convenient(1) We know our customers have very busy lives. That is why our customers canapply for our life insurance policies via the internet, 24 hours a day, 7 daysa week.
(2) Our documents require only a signature. There are no other typical official
items required to verify personal identification.
(3) Our definition of "surgery" is aligned with the national healthcare insurance
point table, making the claim process much more convenient andcomprehensible.
(4) We have a proxy claim system, allowing for the third party designated by
the claim holder to file a claim. The appointed proxy need simply to makea phone call to our contact center for necessary documents.

This manifesto is not simply as a declaration. This is how we do things.
Join us on our journey.

43All information on this document that is nothistorical fact constitutes forward-looking
information and is based on assumptions andforecasts available to the company at the time of
preparation. The company cannot guarantee theaccuracy of these assumptions and forecasts.
Earnings projections and other information on thismay differ materially from actual performance due
to various risks and uncertainties.
This is a translation of the original Japanese
document, prepared and provided solely forreaders' convenience. In case of any discrepancy or
dispute, the Japanese document prevails.

http://ir.lifenet-seimei.co.jp/en/
Subscribe to our "IR email service" to receive
news releases and website updates via email.

Appendix

Embedded Value andValue of New Business(Illustrative purpose only: Based on present value)

Appraisal Value (AV)
Insurance
payments

Premium for
future growthpotential

Insurance
premiums

Initialexpenses
Administration
expenses
Fluctuation risks
and others
Value of new business(One fiscal year)

Embedded
Value
(EV)

Value of in-force business is the present value
at the valuation date of future after-tax profits
distributable to shareholders from in-force
business as of the valuation date, calculated
under a set of assumptions.

Value of inforce business
Adjusted net
asset
Adjusted net asset is defined as the excess of themarket value of a life insurance company’s assets
over the market value of its policy reserves andother liabilities, and is considered to be the value
attributable to the company’s shareholders.

Three Surplus Factors ofFundamental Profit
FY2016 1H(JPY mn)

Ordinary income

Statements of Operations
Insurance premiums and other 4,858

Premiums income 4,735

Reinsurance income 122

Investment income
108
Other ordinary income 50
Insurance claims and other 893

Ordinary expenses

Profit analysis
Net premiums

ReinsuranceincomeReversal ofreserves foroutstanding
claimsReinsurance commissions
121

Insurance claims
and benefits
Reinsurance
commissions

Provision for policy reserves
and others 1,837

Change inpolicy reserves

Insurance claims and benefits
772

Expense loading

Interest anddividends
Other ordinary
incomeChange inpolicy reserves

Investment expenses 0
Operating expenses 1,716

Operatingexpenses

Other ordinary
expenses 770

Other ordinary
expenses

Projected
interest
Interest
expenses

Provision forcontingency
reserves
Losses on salesof securities

Capitalgains－

Ordinary loss (202)

Otheronetimeloss(45)

Extraordinary losses 2

Mortality
marginExpensemarginInterest
marginExtraordinary losses 2

Income taxes (14)1,139

(1,311)

14

Income taxes (14)Net loss (191)1.

Gains on salesof securities

Some items with minimal amounts have been omitted.

Net loss (191)47

Solvency Margin Ratio Calculation
As of Sep. 30, 2016 (JPY mn)

Solvency margin ratio
2,809.4%
Cash and deposits
884
Monetary claimsbought1,499
Money held in trust

999

Securities
25,447(R 1  R 8 )2  (R 2  R 3  R 7 )2  R 4 / 2=

Total amount of solvency margin<numerator>
20,144

Other liabilities
463

Policy reserves 15,388
Contingency reserves 1,352

Excess over the fullZillmerized reserve 4,889

Price fluctuation reserves
15
Deferred tax liabilities onavailable-for-salesecurities
2341

Valuation difference on
available-for-salesecurities
1

Risk of change in mortality rate (calculated based onvalue of policies in force)

Add liabilities
with strong
capitalcharacteristics
such as pricefluctuation
reserves andcontingency
reserves

601

Deferred assets under
Article 113 of the
Insurance Business Act

1,590

Risk of change in medical incidence rate (hospital
admission rate , etc.)

Assumed interest rate risk R2 2
Risk that the actual investment return will fall below
the expected return used as a basis for calculating
policy reserves[Minimum guarantee risk] R7 －Asset management risk R3 439[Credit risk] Risk that asset values decline due todeterioration in financial condition of creditees[Price fluctuation risk]Risk of incurring losses due todecline in market value of stocks and bonds, etc.

13,051

Net assets
15,310

Medical insurance risk R8 278

Risk related to products, such as variable annuities
with minimum guarantees

Tangible fixed assets
Capital stock and102
other assets
Intangible fixed assets

484
Other assets
2,465

Total amount of risk/2< the denominator>
1,434/2

Insurance risk R1 1,030

Deferred tax liabilities(excluding those on availablefor-sale securities) 131
Reserves for outstanding claims 314

÷

Subtract deferred assets
under Article 113 of the
Insurance Business Act fromnet assets

Business management risk R4 52
3% of the total of the amounts of the other 5 risks (in the
Company’s case)1.

90% of the valuation difference on available-for-sale securities and deferred gains or losses on hedges (pre-tax) (if negative, 100%)2.

Items that do not apply to the Company or for which the amount is minimal have been omitted, except for certain bracketed items.

48