Annual Report

2019Year Ended March 31, 2019

Asahi Mutual Life Insurance Company

Contents

1. Message from the President……………………………………………………… 2

2. Mid-term Management Plan “TRY NEXT”……………………………………………………… 5

3. Business Overview……………………………………………………… 6

4. Business Overview for Fiscal Year 2018 (Non-consolidated)……………………………………………………… 7
Business Performance (Annualized Premiums) … 7
Financial Performance ……………………………… 8
Financial Soundness ……………………………… 9
Results of Operations ………………………………10
Assets, Liabilities and Net Assets …………………11
Investments (General Account) ……………………12

5. Governance Structure………………………………………………………13
Corporate Governance ……………………………13
Board of Representative Policyholders ……………14
Basic Policy on the Internal Control Structure ……14
Promoting Compliance ……………………………14
Protecting Customer Information …………………15
Risk Management Structure ………………………15
Officers (as of July 2, 2019) …………………………16

6. Consolidated Financial Statements………………………………………………………17

7. Non-consolidated Financial Statements………………………………………………………40

8. Company Overview (as of March 31, 2019)………………………………………………………62

1

1. Message from the President

Hiroki Kimura
President and Representative Director

Aiming to be a company that contributes to society
and continues to be customers’ trusted choice
Thank you for supporting Asahi Life.
Founded in 1888, Asahi Life operates according
to the basic management philosophy of “Sincere
Service,” and we have thrived over the years dueto the support of our customers. This year marks
the 131st year since our founding. We are deeply
grateful for all of your support over these many
years.

Mid-term management plan:“TRY NEXT - Realizing Growth and Shaping the Future”(FY 2018 - FY 2020)

Competition in the market is expected to intensify
even further over the next decade and beyond, due
in part to Japan's declining population.

2

Asahi Mutual Life Insurance Company Annual Report 2019

With various social changes on the horizon,
including the era of the 100-year lifespan, greater
health awareness, and increasing populationsof working women and singles, Asahi Life must
recognize the potential for new insurance-related
needs and work to further enhance our presence inthe market by growing fields in which we ought toplay a role, as a company focused on third-sector
insurance such as nursing care insurance.
Our mid-term management plan “TRY
NEXT,” builds on this perspective. Beginning
implementation last fiscal year, the mid-term
management plan aims to achieve our vision:“Asahi Life: a company that contributes to society
and continues to be customersʼ trusted choice,supporting each and every individual life.” Wepursue various strategies toward achieving this goal1. Message from the President

based on the following three major themes.
Theme 1: “Building upon Asahi Lifeʼs distinctiveness”
Theme 2: “Improving profitability”
Theme 3: “Shaping the future”

have private nursing care insurance. As we recognizethat we have a “social mission to promote thespread of private nursing care insurance,” Asahi Life
will continue to work to provide a variety of usefulproducts and services in the future ahead.
*Source: Japan Institute of Life Insurance

Solid progress was made towards theachievement of FY 2020 targets in FY 2018, with the“number of individual and corporate customers”
and “policies in force for protection-type products(annualized premiums)”̶both strategic targets inthe mid-term management plan̶growing steadily
since the beginning of the year, while “new nursing
care insurance policies” also reached over 100,000,
or 104% on the previous year.

Exerting our market presence as“the go-to company for nursing careinsurance”
In 2003, Asahi Life began full-scale implementationof initiatives for third-sector products such as
medical and nursing care insurance, and since thenwe have developed a wide variety of insurance
products.
We also work in the “TRY NEXT” mid-term
management plan to exert our market presence as“the go-to company for nursing care insurance” andestablish a decisive presence in the senior market
by developing and providing advanced nursing
care insurance products and services. In FY 2018,
we launched the “Anshin Kaigo for those Requiring
Support” product, an industry first nursing careinsurance that covers “Support Level 2” in the public
nursing care insurance system for less severe cases
in which nursing care is required and to help ward
off a worsening of patientsʼ condition. This new
product is sold alongside our conventional nursing
care insurance. When offering these nursing careinsurance products, we also propose an “AsahiʼsAnshin Kaigo Nursing Care Life Plan” that provides
a “necessary level of coverage for nursing care”
as appropriate for the customerʼs age, place ofresidence, and other factors.
An increasing number of people in the public
nursing care insurance system are certified as
needing nursing care, while 14.1%* of households

More sophisticated asset management
We are working to make our asset management
more sophisticated to secure stable investment
income by appropriately adapting to changes inmarket environment.
Because domestic interest rates remained low
in FY 2018, we curtailed investment in yen interestbearing assets. At the same time, we aimed todiversify our revenue sources by expanding therange of asset classes in which we invest, purchasing
foreign currency-denominated bonds as well as
making alternative investments, while curbing risk
through diversification and rigorous selection of
investments.
Moreover, as a responsible institutional investor,
we are promoting good stewardship and pursuing
ESG (environment, social, governance) investment
and lending through our April 1, 2019 signing of the
Principles for Responsible Investment (PRI), and ourMarch 2019 establishment of the Basic Policy on the
ESG Investment and Lending based on the PRI.
Additionally, Asahi Life and our subsidiary Asahi
Life Asset Management Co., Ltd. reached anagreement with French investment giant Natixis
Investment Managers S.A. in March 2019 topursue closer cooperation, thereby growing ourrespective businesses and creating new investment
opportunities.
We will continue to make our asset management
more sophisticated to appropriately adapt tochanges in market environment and secure stable
investment income by seeking to expand the rangeof asset classes in which we invest, to diversify
sources of revenue and further strengthen our asset
allocation functions.
Moreover, as a responsible institutional investor,
we are promoting good stewardship and pursuingasset management that incorporates ESG.

3

1. Message from the President

Improvement of digital marketing anddevelopment of products and services
that utilize ICT
We are pursuing R&D on products and services
that utilize ICT as one initiative to build the futureof Asahi Life. Specifically, we established a “social
cooperation program” with the University of Tokyoand began research in April 2018 to analyze medical
big data and build a predictive model for increased
severity in lifestyle diseases such as diabetes.
We also established a partnership with DeSC
Healthcare, Inc., a subsidiary of DeNA Co., Ltd.,in March 2019 to jointly develop healthcare-typeinsurance products and health-promotion support
services to improve customer health and lower
disease rates.
In the future, we will continue to work to develop
products and services that draw on the outcomes ofthese initiatives.
We also worked to improve the efficiency of oursales representatives through big data analysis
drawing on data we have accumulated about ourcustomers over the years.
We will be employing ICT and AI to research anddevelop new products and services, in addition toaiming to create new points of customer contact
and improve customer convenience. We will also
be employing online digital marketing to take ourmarketing strategy to the next level.

4

Asahi Mutual Life Insurance Company Annual Report 2019

CSR initiatives
Based on our basic management philosophy of“Sincere Service,” as well as our belief that our company's
business operations themselves are the foundation for
fulfilling our corporate social responsibilities (CSR), we
work to engage in business that prioritizes the following:- Engaging in business that prioritizes the
improvement of customer satisfaction- Co-existence with society through continued
engagement to create a prosperous society, and;- Improvement of employee satisfaction throughthe creation of a comfortable workplace that
fosters employees.
Additionally, with the Sustainable Development
Goals (SDGs) adopted by the United Nations as
global goals for 2030, private companies as well as
governments and municipalities are being called
upon to work towards the achievement of the goals,
both within Japan and around the world. At Asahi
Life, we also plan to contribute to the achievementof the SDGs in our CSR initiatives.
FY 2019 marks the second year of “TRY NEXT,”
our mid-term management plan, and through theongoing steady implementation of this plan, we“aim to be a company that contributes to society
and continues to be customersʼ trusted choice.”
In this mission, we humbly ask that you continue
to lend us your incredible support and assistance.

2. Mid-term Management Plan “TRY NEXT”

Mid-term Management Plan
“TRY NEXT - Realizing Growth and Shaping the Future”
Since April 2018, Asahi Life has been advancing our mid-term management plan, “TRY NEXT - Realizing
Growth and Shaping the Future” (FY 2018 - FY 2020). We are working to achieve our corporate vision in thisplan by pursuing various strategies based on the following three major themes.

Corporate vision
Asahi Life: a company that contributes to society
and continues to be customers’ trusted choice,supporting each and every individual life
Theme

Theme

Theme

1 Building upon Asahi Life’s distinctivenessImproving profitability
2Shaping the future3

Improving the quality of business operational systems- Underlying work on the three major themes -[Progress toward strategic targets]
FY 2020 targets

Status at the end of FY 2018

Number of individual
customers

2.58 million

2.536 million (Approx. +18,000 YoY)

Number of corporate
customers

43 thousand

42 thousand (Approx. +2,000 YoY)

Policies in force for protection-type
products*¹ (Annualized premiums)¥347.0 billion¥339.7 billion (+¥18.5 billion YoY)

(Subset) Policies forindividual customers*²¥283.0 billion¥274.0 billion (+¥0.7 billion YoY)

98,000Approx. 100,000 (104% YoY)

Number ofcustomers

Nursing careinsurance

New policies

Notes:
1. Protection-type products are the total of death protection insurance and third-sector products such as medical insurance, nursing care insurance, andnon-participating group medical insurance sold through the agency channels.
2. In the strategic targets, "policies for individual customers" is the total of protection-type products sold by sales representatives to individual customers
and protection-type products sold through the agency channels for individual customers.

5

3. Business Overview
Overview
Asahi Life was established in 1888 as the second
modern life insurance company in Japan under thename Teikoku Life Insurance Company (Teikoku
Seimei Hoken Kabushiki Gaisha). We became amutual company and changed our name to Asahi
Mutual Life Insurance Company (Asahi Seimei Hoken
Sogo Gaisha) in 1947.
Our core business is life insurance for individuals
in Japan, with a specific strategic focus on offering
protection-type products, including medical andnursing care products.
We have been improving our financial soundness
and aim to further improve it through the accumulationof surplus and recapitalization measures. As of
March 31, 2019, we had non-consolidated solvency
margin ratio of 861.1 percent, and insurer financial
strength ratings of BBB- (Stable Outlook) from Fitch,
BB+ (Positive Outlook) from R&I and BBB- (Stable
Outlook) from JCR.

Products
Asahi Life offers a variety of individual life
insurance products, with a focus on protectiontype products including medical and nursing careproducts, aimed at serving its customersʼ financial
needs. We continually review, update, and expand
our product offerings to serve the needs of ourcustomers while maintaining our focus on individuallife insurance.

Our main products for individual customers are
flexible life insurance products named “Hokenou Plus” targeting male customers, and “Yasashisa
Plus” targeting female customers. Each productallows customers to mix and match from a portfolio
of insurance products to create a customized
insurance plan.

Sales Channel
To optimize access to its customers, Asahi Life
operates a multi-channel sales structure utilizing
its sales representative channel and independentagency channels to provide retail products to its
customers.
Our sales representatives, who provide face-toface customer service, comprise our most significant
distribution channel. As of March 31, 2019, we
employed a total of 11,667 sales representatives. As
of April 1, 2019, we had 593 sales offices locatedthroughout Japan.
Our sales representatives engage in customized
consulting when a policy is signed in order to meetthe diverse needs and lifestyles of customers,

6

Asahi Mutual Life Insurance Company Annual Report 2019

and they also provide regular after-sales service
including the regular provision of information
tailored to changes in the life-cycle of the customer.
In order to contribute to society and continue to bechosen by customers as a trusted company, we work
to cultivate high-quality sales representatives who
not only have knowledge of life insurance products,
but are also knowledgeable in various financial
instruments, social insurance, tax, and other related
matters.
Although we continuously strengthen oursales representative channel, we also have been
diversifying our distribution channels by utilizing
independent agencies, such as walk-in insurance
shops, telemarketing, and tax accountants.

4. Business Overview for Fiscal Year 2018 (Non-consolidated)
Business Performance (Annualized Premiums)l New Policies for Individual Insurance/Individual Annuities
Annualized premiums from new policies reached 129.3% of the previous fiscal year.
Of these, the third-sector products reached 81.0% of the previous fiscal year.
(Billions of Yen)
Years ended March 31

2017

New policies
Third-sector products

2018

2019

Year-over-year

34.1

32.0

41.4

129.3%

26.6

21.5

17.4

81.0%

l Surrendered and Lapsed Policies for Individual Insurance/Individual Annuities
Annualized premiums from surrendered and lapsed policies reached 103.5% of the previous fiscal year.
(Billions of Yen)
Years ended March 31

2017

Surrendered and lapsed policies
Surrender and lapse ratio

2018

2019

Year-over-year

20.8

21.2

22.0

103.5%

3.87%

3.97%

4.13%

+0.17points

l Policies in Force for Individual Insurance/Individual Annuities
Annualized premiums from policies in force reached 101.5% of the end of the previous fiscal year.
Of these, the third-sector products reached 101.9% of the end of the previous fiscal year.
(Billions of Yen)
As of March 31
Policies in force
Third-sector products

2017

2018

2019

Year-over-year

535.9

532.4

540.5

101.5%

197.8

206.3

210.2

101.9%l New Policies for Protection-type Products
Annualized premiums from new policies for protection-type products, a focus of Asahi Life, reached130.7% of the previous fiscal year.
(Billions of Yen)
Years ended March 31
New policies

2017

2018

2019

Year-over-year

31.3

31.7

41.4

130.7%

Sales representative channel

27.3

27.2

36.6

134.3%

Independent agency channels forindividual customers

4.0

4.4

4.8

109.1%

7

4. Business Overview for Fiscal Year 2018 (Non-consolidated)l Policies in Force for Protection-type Products
Annualized premiums from policies in force for protection-type products gained +¥18.5 billion on the endof the previous fiscal year, exhibiting an ongoing increasing trend.
(Billions of Yen)
As of March 31
Policies in force
Sales representative channel

2017

2018

2019

Year-over-year

311.2

321.2

339.7

+18.5

303.2

310.0

325.5

+15.4

8.0

11.1

14.2

+3.1

Independent agency channels forindividual customers
Notes:

1. Surrendered and lapsed policies are measured as cancellation plus expiration and reduction less revival.
2. Protection-type products are the total of death protection insurance and third-sector products such as medical insurance, nursing careinsurance, and non-participating group medical insurance sold through the agency channels.

Financial Performancel Fundamental Profit
Due to factors such as increases in death benefit payments and initial costs (e.g. agency commissions)associated with the growth in new policies, fundamental profit dropped ¥5.8 billion relative to the previous
fiscal year to ¥24.2 billion.
(Billions of Yen)
Years ended March 31

2017

Fundamental profit

2018

2019

Year-over-year

22.0

30.1

24.2

(5.8)

Underwriting gains

84.2

87.9

78.9

(8.9)

Negative spread amount(62.1)(57.7)(54.6)+3.1

l Ordinary Profit, Net Surplus
Ordinary profit was ¥24.6 billion, with a net surplus of ¥16.2 billion.
(Billions of Yen)
Years ended March 31

8

2017

2018

2019

Year-over-year

Ordinary profit

38.9

37.5

24.6

(12.9)Net surplus

29.2

25.9

16.2

(9.7)

Asahi Mutual Life Insurance Company Annual Report 2019

4. Business Overview for Fiscal Year 2018 (Non-consolidated)

Financial Soundness
l Solvency Margin Ratio
Solvency margin ratio increased 52.6 points relative to the end of the previous fiscal year, raising it to861.1%.
As of March 31

2017

Solvency margin ratio

2018742.7%

2019

808.5%

Year-over-year

861.1%+52.6pointsl Adjusted Net Assets
Adjusted net assets reached ¥1,052.4 billion, an increase of ¥64.2 billion relative to the end of the previous
fiscal year mainly due to an increase in net unrealized gains on securities.
(Billions of Yen)
As of March 31

2017

Adjusted net assets

2018

930.4

2019

988.2

Year-over-year

1,052.4

l Net Unrealized Gains/Losses on Securities (with fair value, general account)
As of March 31

2017

Securities

2018

+64.2

(Billions of Yen)
2019

Year-over-year

464.7

451.0

508.9

+57.8

Domestic stocks

111.8

152.1

130.9

(21.2)

Domestic bonds

345.8

309.1

347.4

+38.2

Foreign securities

3.6(12.3)

29.8

+42.2

Other securities

(0.3)

(1.0)

(2.5)

(1.4)

l Capital BaseFoundation funds, which are the counterpartsof paid-in capital for joint stock corporations,serve as the primary source of capital for Japanesemutual companies. Unlike paid-in capital, however,foundation funds have a stated maturity and accrue
interest payment obligations. If the principal amountof the foundation funds is repaid by insurancecompanies out of their net assets, the Insurance
Business Act requires that an amount equivalent to
the repayment be set aside in the net assets portionof the balance sheet as reserve for redemptionof foundation funds. As of March 31, 2019, thebalance of foundation funds was ¥91.0 billion andthe amount of reserve for redemption of foundation
funds was ¥166.0 billion, respectively.
Additionally, we have also worked onstrengthening our financial soundness byaccumulating internal reserves and raising funds
in the form of subordinated debt which, whileaccounted for as a liability, function largely like
capital.

94. Business Overview for Fiscal Year 2018 (Non-consolidated)

Results of Operationsl Statements of Income
Years ended March 31

2018

2019

652.2

638.4

97.9%

384.9

396.7

103.1%

364.9

376.1

103.1%

166.5

152.6

91.6%

Interest, dividends and other income

109.9

107.8

98.1%

Gains on sales of securities

46.7

34.6

74.1%

100.6

89.0

88.4%

83.2

73.5

88.4%

614.6

613.7

99.9%

438.9

418.2

95.3%

Claims

124.8

121.5

97.4%

Annuities

129.8

128.4

98.9%

Benefits

82.2

71.7

87.2%

38.5

56.2

145.9%

Losses on sales of securities

2.2

12.5

547.8%

Losses on valuation of securities

0.1

0.6

433.2%

Operating expenses

102.3

105.8

103.4%

Other ordinary expenses

33.8

33.4

98.8%

Ordinary profit

37.5

24.6

65.6%

Extraordinary gains:

0.1

3.4

1,761.2%

0.1

3.4

1,761.2%

5.4

10.9

201.9%

Losses on disposal of fixed assets

1.5

7.0

461.5%

Impairment losses

1.7

1.2

69.5%

Provision for reserve for price fluctuation

2.1

2.1

102.3%

Surplus before income taxes

32.2

17.0

52.9%

Total income taxes

6.3

0.8

13.5%

Net surplus

25.9

16.2

62.4%

Ordinary income:Premium and other income:Insurance premiums from individual insurance andindividual annuities
Investment income:

Other ordinary income:Reversal of policy reserves
Ordinary expenses:
Claims and other payments:

Investment expenses:

Gains on disposal of fixed assets
Extraordinary losses:

Ordinary income was ¥638.4 billion (97.9% of theprevious fiscal year), of which ¥396.7 billion (103.1%)
was premiums and other income. Investment
income decreased to ¥152.6 billion (91.6%) primarily
due to a drop in gains on sales of securities. Other
ordinary income decreased to ¥89.0 billion (88.4%)
mainly due to reversal of policy reserves reaching¥73.5 billion (88.4%).
Ordinary expenses were ¥613.7 billion (99.9%),of which ¥418.2 billion (95.3%) was claims and otherpayments. Investment expenses increased to ¥56.2

10(Billions of Yen)

Asahi Mutual Life Insurance Company Annual Report 2019Year-over-year

billion (145.9%) primarily due to increased losses onsales of securities. Operating expenses were ¥105.8
billion (103.4%).
This results in an ordinary profit of ¥24.6 billion(65.6%).
Extraordinary gains were ¥3.4 billion (1,761.2%),and extraordinary losses were ¥10.9 billion (201.9%).
Total income taxes reached ¥0.8 billion.
As a result of the above factors, net surplus was¥16.2 billion (62.4%).

4. Business Overview for Fiscal Year 2018 (Non-consolidated)

Assets, Liabilities and Net Assets
l Selected Assets Data
As of March 31(Billions of Yen)
2018

2019

5,396.5

5,356.3(40.1)

Cash, deposits and call loans

195.6

176.1

(19.5)

Monetary claims bought

30.1

28.9

(1.1)

4,188.8

4,257.4+68.5

Domestic bonds

2,852.5

2,775.4(77.1)

Domestic stocks

334.3

320.9

(13.3)

Foreign securities

926.8

1,089.6+162.7

Loans

484.1

426.8

(57.3)

Tangible fixed assets

401.0

388.8

(12.1)

Deferred tax assets

16.1

10.4

(5.7)

Others

80.4

67.7(12.7)

Total assets:

Securities:l Selected Liabilities/Net Assets Data
As of March 31

Year-over-year(Billions of Yen)
2018

2019

5,008.4

4,977.5(30.8)

4,682.2

4,605.0(77.1)

4,616.9

4,543.3(73.5)

Bonds payable

40.3

88.2

+47.9

Others

285.8

284.1

(1.6)

388.0

378.8

(9.2)

353.1

324.3

(28.8)

Foundation funds

126.0

91.0

(35.0)

Reserve for redemption of foundation funds

131.0

166.0

+35.0

Surplus:

95.9

67.0

(28.8)

Reserve for future losses

0.2

0.2

+0.0

Other surplus:

95.6

66.7

(28.8)

Reserve for fund redemption

48.6

26.2

(22.4)

Equalized reserve for dividends to policyholders

9.6

9.2

(0.4)

Unappropriated surplus (loss)

37.3

31.3

(6.0)

Total valuation and translation adjustments:

34.9

54.4

+19.5

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

81.2

99.0

+17.7

Land revaluation differences(46.3)(44.5)+1.8

5,396.5

5,356.3(40.1)

Total liabilities:
Policy reserves and other reserves:
Policy reserves

Total net assets:
Total foundation funds and others:

Total liabilities and net assets

Year-over-year11

4. Business Overview for Fiscal Year 2018 (Non-consolidated)

As of March 31, 2019, total assets were ¥5,356.3
billion, with securities accounting for ¥4,257.4 billion,loans at ¥426.8 billion, and tangible fixed assets at¥388.8 billion. In securities, we partially reduced
our balance of domestic bonds and increased ourbalance of relatively higher-yield foreign bonds.

Total liabilities were ¥4,977.5 billion, of which
policy reserves accounted for ¥4,543.3 billion.
Total net assets were ¥378.8 billion, of which
total foundation funds and others amounted to¥324.3 billion, and total valuation and translation
adjustments amounted to ¥54.4 billion.

Investments (General Account)
Investment Environment
During the fiscal year ended March 31, 2019, theJapanese economy continued its gradual recovery
due to the Bank of Japanʼs ongoing monetaryeasing policies as well as solid growth in consumer
spending, backed by improved employment
and income conditions, and increases in capital
expenditures.

Globally, the slowing pace of recovery in Europe
and the slowdown in China caused by the U.S.China trade conflict placed downward pressure on
the world economy, but the steady performanceof the U.S. economy resulted in gradual growth
overall.

Investment Policy
Asahi Life structures its asset portfolio
concentrating on yen interest-bearing assets such as
domestic bonds and loans, taking into consideration
the liability characteristics of insurance policies.
We are working to improve investment income inan environment of low domestic interest rates byinvesting in foreign currency-denominated bonds
and alternative investments*, which have relatively
higher yields, while still working to control foreignexchange risk and diversify investment currencies
and regions.
Moreover, as a responsible institutional investor,
we are promoting good stewardship and pursuingasset management that incorporates ESG.
* These are investment methods such as infra-funds, real estate
investment trusts, or hedge funds, which are alternative
investments to traditional investment assets such as stocks andbonds.

Overview of Investment Performance
In the fiscal year ended March 31, 2019, we
limited allocations to yen interest-bearing assets
while focusing funding on currency-hedged,
foreign currency-denominated bonds, as well as onalternative investments.
For domestic bonds, we mainly purchased assets
with yield spreads such as corporate bonds, while
limiting the allocation to government bonds.
For loans, we attempted to limit our total amountof loans due to the low-interest rate environment.
For domestic stocks, we purchased a certain
quantity of primarily high dividend yield stocks.
For foreign currency-denominated bonds, we

12Asahi Mutual Life Insurance Company Annual Report 2019

worked to improve yields by building balances andflexibly controlling currency-hedged positions while
diversifying currency from U.S. dollars to euros andAustralian dollars.
Additionally, with the support of an overseas asset
management partner, we invested some funds inalternative investments with the aim of expanding
our investment opportunities and diversifying oursources of earnings.
We made an effort to improve real estate
profitability by reviewing rent levels of rental realestate properties and improving operating rates.

5. Governance Structure
Corporate Governance
Basic Philosophy on Corporate Governance
Recognizing that the life insurance industry plays
an important role in supporting Japanese society
in cooperation with the social security system,
Asahi Life holds a basic management philosophyof “Sincere Service.” This is guided by the ideathat fulfilling our responsibilities to our customers,society, and our employees is fundamental to ourbusiness.
Based on our basic management philosophy,
we work to maintain strong cooperation with allof our stakeholders and promote corporate social
responsibility-based management centered on thefollowing:- Engaging in business that prioritizes the
improvement of customer satisfaction- Co-existence with society through continued
engagement to create a prosperous society,and;- Improvement of employee satisfaction throughthe creation of a comfortable workplace that
fosters employees.
We are also making efforts to achieve effective
corporate governance in order to both maintainour financial soundness and make decisions in atransparent, fair, quick, and decisive manner.
In December 2015, we established and published
our Basic Policy on Corporate Governance, which
set forth our basic philosophy on corporate
governance and the structure of our organizationand operating policy, with the aim of making explicit
the transparency and fairness of our corporate
governance. In accordance with this Basic Policy,
we are working to achieve practical corporate
governance, sustained growth, and medium- tolong-term improvement in corporate value.

Overview of the Corporate Governance Structure
Asahi Life is a mutual company. A mutual company isa corporate structure in which individual policyholders(excluding holders of non-participating policies) may
directly participate in the management. Instead ofholding a General Meeting of Policyholders, we haveestablished a Board of Representative Policyholders.
This serves as the highest decision-making bodywhich consists of representatives elected fromamong our policyholders.

Additionally, in accordance with the institutional
design required by the Insurance Business Act, wehave opted to be a company with a Board of Statutory
Auditors. The Board of Directors makes decisions on
basic company management issues and supervises
the execution of the duties of the directors. While
the Statutory Auditors also supervise the executionof the duties of the directors, they do this as anindependent body entrusted by the policyholders.

Management Organization
Policyholders
Board of Representative
Policyholders

Board of Statutory Auditors

Conference with Customers

Board of Trustees
Board of Directors

Statutory Auditors
Nomination andCompensation Committee
Chief of Internal
Audit Department
Executive Officers' Meeting

Chief ActuaryManagement Meeting

Meetings
Committees

13

5. Governance Structure

Board of Representative Policyholders
Framework and Functions of the Board of Representative Policyholders
Asahi Life has adopted a mutual company
corporate structure that is only permitted for
insurance companies in Japan. While a General
Meeting of Policyholders serves as the highest
decision-making body in mutual companies,
we have established a Board of Representative
Policyholders, in accordance to the Insurance
Business Act, in place of holding a General Meetingof Policyholders. This board serves to represent ourroughly 1.99 million policyholders.
The main issues reported and resolutions madein the Board of Representative Policyholders are as
follows.

Reported issues:
Business reports, balance sheets, statements ofincome, statements of changes in net assets,
operational reports specific to the mutualcompany structure
Resolutions:
Appropriation of surplus, allotment ofdividends to policyholders, changes in articles
of incorporation, appointment of nominating
committee members for representative
policyholders, appointment of trustees,
appointment of directors/statutory auditors, etc.

Basic Policy on the Internal Control Structure
Asahi Lifeʼs Board of Directors has establishedthe Basic Policy on the Internal Control Structure
to ensure appropriate operations. We continuously

strive to strengthen our compliance and risk
management structures in accordance with thisbasic policy.

Promoting Compliance
Asahi Life positions compliance with laws andordinances as one of the most critical issues ofmanagement, needed to conduct sound, transparent
and fair business as well as to maintain the trust of
our customers. We work to foster a corporate culturethat both promotes and emphasizes compliance.

All employees devote themselves to legallycompliant and appropriate business. We strive toprevent any illegal or inappropriate practices andwill also endeavor to make quick and appropriate
responses in the event that any illegal or inappropriate
business practices are encountered.

Basic Policy/Compliance with Standards
Asahi Life has established the Basic Policy on
Compliance and Compliance Standards as theprimary guidelines to be observed by all employees.
These are made widely and thoroughly known
among all executives and employees throughour Compliance Manual and rigorous training.
All employees must conduct and are conducting

business strictly in accordance with these policy andstandards.
Furthermore, we have also created theCompliance Program which includes a detailed
action plan. By implementing this action plan andmaking periodical reviews, we are attempting toestablish a more advanced compliance framework.

Organization/System
Asahi Life holds discussions on compliance with
the Compliance Committee. The Committee iscomposed of the Company President as chair, as
well as Management Meeting members and thirdparty lawyers. The Committee discusses compliance

14

Asahi Mutual Life Insurance Company Annual Report 2019

issues with the expert input of the third-party lawyers.
Additionally, a compliance control department
implements specific measures pertaining tocompliance.

5. Governance Structure

Protecting Customer Information
Management System to Appropriately Protect Information Assets
Asahi Life maintains customersʼ personal
information related to their policies and health status
insofar that the information is needed for businesspurposes. Recognizing that keeping such customer
information secure is a crucial management issue, wehave established a framework to protect customer
information, personal information, and personallyidentifiable information. We strictly implement thatframework based on relevant laws and ordinances.
Furthermore, we have also formulated a Security
Policy to provide appropriate protection for ourcustomersʼ information. All employees perform
appropriate and strict information management
based on this policy to both fulfill our responsibility
towards our policyholders and the society, andfurther improve the credibility of our company.

Risk Management Structure
Overview
The environment surrounding life insurancecompanies is constantly changing. Against such a
backdrop, Asahi Life believes it is very importantto accurately ascertain various risks and to manage
them appropriately and strictly. Doing so helps tostabilize profits and boost financial health, which
eventually leads to increased corporate value.

In order to ensure the fulfillment of our longterm obligations with respect to our insurance
policies, we value risk management as one ofour most important management issues and areworking to further improve and strengthen our risk
management structure.

Risk Management Structure
Asahi Lifeʼs Board of Directors has established a
Basic Policy on Risk Management. This is a companywide policy that aims to implement appropriate
risk management towards the achievement of ourstrategic targets.
Within this Basic Policy, we have identified thevarious types and locations of risks faced by alife insurance company, and with respect to eachrisk, set down certain risk management methods
and management structures. Further, we haveestablished management policies, regulations, andrules appropriate for the characteristics of eachidentified risk.
Each operational department in the company
works to appropriately control risk in the operations
under their jurisdiction as per the Basic Risk
Management Policy, while each risk management

department works to control risk appropriately
through regular identification and reporting
according to the risk-specific basic policy, rules, andregulations.
Furthermore, specific risks are not necessarily
independent and may be linked to and affect one
another, and for this reason we have establishedan overarching department responsible forcomprehensive quantitative and qualitative risk
management for the business as a whole.
The status of our risk management is reported to
our Board of Directors and Management Meeting,upon which, management decisions are made.
Moreover, the appropriateness and effectivenessof our risk management structure are audited by
our Internal Audit Department.

Risk Appetite
In order to promote the achievement of ourstrategic targets in the mid-term management
plan and annual business plan, we set a certain risk
appetite policy to ensure appropriate risk-taking
and risk control based on both quantitative andqualitative risk evaluation. This policy sets bothlevels of tolerable risk for generating earnings
and risks to be curbed in the interest of financial
soundness.

15

5. Governance StructureEnterprise Risk Management (ERM)
Asahi Life promotes Enterprise Risk Management(ERM) in order to secure financial soundness andimprove profitability through comprehensive
management of risk facing the entire company.
Specifically, we establish risk management
indicators based on a risk appetite policy, conduct
quantitative and qualitative assessments to identify
problems, and then implement countermeasures asappropriate for risk severity.
Additionally, we implement the Own Risk andSolvency Assessment (ORSA), a process to evaluate
our management risks and own capital, and pursue
risk management that is integrated with ourbusiness strategy.
With respect to qualitative risk evaluation, we
ascertain our risk profile and specify crucial risks tomanagement by identifying not only current but

also potential risks which are discovered throughour Control Self-Assessment (CSA), which we
conduct in each operational division. We also strive
to identify risks at an early stage and to reduce theserisks through measures such as warning analysis.
With respect to quantitative risk evaluation, we
evaluate the sufficiency of our own capital(surplus) based on both accounting standards
and economic value. We then use this data to
confirm the appropriateness of our asset/liability
strategy and risk/return strategy. Specifically, foreconomic value-based evaluation, we monitor andmanage the sufficiency of current surplus against
overall risk volume (i.e. the Economic Solvency
Ratio, ESR), and we work to improve that ratio by
setting ESR targets.

Asset Liability Management (ALM)
Asahi Life engages in asset liability management(ALM) that is guided by the asset and risk
management policies established by liability groups.
These liability groups are categorized according
to the characteristics of insurance policies. Basedon the asset and risk management policies, we
confirm the appropriateness of our investments.
We structure our asset portfolio concentrating on

yen interest-bearing assets such as domestic bonds
and loans, taking into consideration the adaptationof existing assets to the liability characteristics of
insurance policies. The majority of domestic bonds
are classified as policy-reserve-matching bonds,
which are valued at their amortized cost, with the aimof reducing the impact of interest rate fluctuation.

Officers (as of July 2, 2019)
Chairman of the Board

Director

Yoshiki Sato

Kazuko Ohya(1)President and Representative Director

Director

Hiroki Kimura

Takashi Tsukamoto(1)Representative Director and Senior Managing Executive
Officer

Director

Tatsuya Kikuchi
Director and Managing Executive Officer

Hiroshi Tatara
Director and Managing Executive Officer

Yasuhiro Iguchi
Director and Managing Executive Officer

Yukihiro Fujioka
Director and Executive Officer

Ryouichi Motoda
Director and Executive Officer

Kenichiro Ishijima

Kenji Watanabe(1)Standing Statutory Auditor

Hiroyuki Somekawa
Standing Statutory Auditor

Hideki Konishi
Statutory Auditor

Yukio Machida(2)Statutory Auditor

Tadayuki Seki(2)Statutory Auditor

Mitsuyoshi Shibata(2)(1) Outside director(2) Outside statutory auditor

16

Asahi Mutual Life Insurance Company Annual Report 2019

6. Consolidated Financial Statements
Consolidated Balance Sheets
Asahi Mutual Life Insurance Company and its Consolidated Subsidiaries
Millions of
U.S. Dollars

Millions of Yen
As of March 31
ASSETS:Cash and deposits
Call loans
Monetary claims bought
Securities
Loans
Tangible fixed assets:
Land
Buildings
Lease assets
Construction in progress
Other tangible fixed assets

2019¥

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

40,630140,000
28,984
4,252,984
426,8042018¥

36,143164,000
30,151
4,185,104
484,169

2019
$

366
1,261
261
38,3183,845

226,451
156,234
2,922
516
2,749
388,875

230,913
162,593
3,946
1,134
2,473
401,061

2,040
1,407
26
4
24
3,503

18,933
5,903
24,8363427
42,947292
11,262
6(378)
5,357,677

20,691
13,04433,7350812
46,632351
16,06210(394)
5,397,841

170
53
223
0
3
386
2
101
0
(3)
48,271

27,5804,543,377
34,1044,605,062
397
88,295
192,779
36,48040,89017,116
6
4,981,027¥¥

28,3684,616,919
36,9594,682,246
311
40,349194,908
35,056
38,71017,76210
5,009,355$$

248
40,935307
41,490
3
795
1,736
328
368
154
0
44,87891,000166,000
281
66,801
324,083

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

819
1,495
2
601
2,919

99,034(44,561)(1,990)52,482
83
376,650
5,357,677

81,293(46,380)377
35,29081
388,486
5,397,841

892
(401)
(17)
472
0
3,393
48,271¥$17

6. Consolidated Financial Statements

Consolidated Statements of Income and Consolidated Statements ofComprehensive Income
Asahi Mutual Life Insurance Company and its Consolidated Subsidiaries[Consolidated Statements of Income]Millions of
U.S. Dollars

Millions of Yen
For the years ended March 31
Ordinary income:Premium and other income
Investment income:Interest, dividends and other income
Gains on sales of securities
Foreign exchange gains
Reversal of allowance for possible loan losses
Other investment income
Investment gains on separate accounts

2019¥

Other ordinary income
Total ordinary income
Ordinary expenses:
Claims and other payments:
ClaimsAnnuities
Benefits
Surrender benefits
Other payments
Provision for policy reserves and other reserves:
Provision for reserve for outstanding claims
Provision for interest on policyholders' dividend reserves
Investment expenses:
Interest expenses
Losses on sales of securities
Losses on valuation of securities
Losses on derivative financial instruments
Foreign exchange losses
Write-offs of loans
Depreciation of rental real estate and other assets
Other investment expenses
Operating expenses
Other ordinary expenses
Total ordinary expenses
Ordinary profit
Extraordinary gains:
Gains on disposal of fixed assets
Extraordinary losses:
Losses on disposal of fixed assets
Impairment losses
Provision for reserve for price fluctuation
Losses on reduction entry of real estate
Other extraordinary losses
Surplus before income taxes
Income taxes:
Current
Deferred
Total income taxes
Net surplus
Net surplus attributable to non-controlling interests
Net surplus attributable to the Parent Company

18

Asahi Mutual Life Insurance Company Annual Report 2019

¥

2018

396,726¥2019

384,953$

3,574

107,335
34,648
2,257
11
7,452
340
152,045
93,865642,637

109,723
46,779
–
74
7,355
2,384
166,318
105,698
656,971

967
312
20
0
67
3
1,369
845
5,790

121,536
128,425
71,70190,757
5,823
418,245

124,809
129,879
82,264
95,7106,302
438,966

1,095
1,157
646
817
52
3,768

–
3
3

1,003
4
1,008

–
0
0

4,700
12,521628
22,923–0
5,361
10,10456,239110,327
33,288618,104
24,532

4,449
2,285
145
13,891
2,530
1
5,596
9,641
38,542
106,653
33,712
618,883
38,088

42
112
5
206
–
0
48
91
506
994
299
5,569
221

3,433
3,433

194
194

30
30

7,098
1,235
2,180
241
239
10,995
16,970

1,538
1,778
2,130
–
–
5,446
32,836

63
11
19
2
2
99
152

3,160
(2,250)910
16,06041
16,018

6,946
(318)
6,628
26,20739
26,168

28
(20)
8
144
0
144

¥

$

6. Consolidated Financial Statements[Consolidated Statements of Comprehensive Income]Millions of
U.S. Dollars

Millions of Yen
For the years ended March 31
Net surplus
Other comprehensive income:Net unrealized gains (losses) on available-for-salesecurities, net of tax
Remeasurements of defined benefit plans
Total other comprehensive income
Comprehensive income:Comprehensive income attributable to the Parent
Company
Comprehensive income attributable to non-controllinginterests
Total comprehensive income

2019
¥

¥

16,0602018¥

26,207

2019
$

144

17,740(2,367)
15,372

10,188735
10,924

159
(21)
138

31,39137,092282

41
31,432¥

39
37,132

$

0
283

19

6. Consolidated Financial Statements

Consolidated Statements of Changes in Net Assets
Asahi Mutual Life Insurance Company and its Consolidated Subsidiaries
Millions of Yen
Foundation funds and others
For the year ended March 31, 2019

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

Reserve for
Total
Foundation redemption Reserve for Consolidated foundationof foundation revaluation
surplusfunds and
funds
funds
others¥ 126,000 ¥ 131,000 ¥281¥ 95,832¥ 353,114(1,963)(1,963)35,000(35,000)(6,266)
16,018(35,000)(1,819)(35,000)
35,000¥ 91,000 ¥ 166,000 ¥–281(6,266)
16,018(35,000)(1,819)(29,030)(29,030)¥ 66,801 ¥ 324,083

Millions of Yen
Accumulated other comprehensive income

For the year ended March 31, 2019

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

20

Asahi Mutual Life Insurance Company Annual Report 2019

Net
unrealized
Total
NonAccumulated accumulated
gains (losses)
Land
controlling
remeasurements
on available- revaluation of defined
otherinterests
for-saledifferences benefit plans comprehensive
securities,
incomenet of tax¥ 81,293¥ (46,380) ¥377¥ 35,290¥

81

Total net
assets¥ 388,486(1,963)(6,266)
16,018(35,000)(1,819)17,74017,740¥ 99,034

1,819
1,819
¥ (44,561) ¥(2,367)
17,192(2,367)
17,192(1,990) ¥ 52,482

¥

2
2
83

17,194(11,835)¥ 376,650

6. Consolidated Financial Statements

Millions of Yen
Foundation funds and others
For the year ended March 31, 2018

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

Reserve for
Total
Foundation redemption Reserve for Consolidated foundationof foundation revaluation
surplusfunds and
funds
funds
others¥ 126,000 ¥ 131,000 ¥––¥ 126,000 ¥ 131,000 ¥

281

–
281

¥ 76,065¥ 333,347(1,519)(5,499)26,168617(1,519)(5,499)26,168617

19,766¥ 95,832

19,766¥ 353,114

Millions of Yen
Accumulated other comprehensive income

For the year ended March 31, 2018

Beginning balance
Changes in the fiscal year:
Additions to reserve for dividends topolicyholders
Payment of interest on foundation funds
Net surplus attributable to the Parent
Company
Reversal of land revaluation differences
Net changes, excluding foundation
funds and others
Net changes in the fiscal year
Ending balanceNet
unrealized
Total
NonAccumulated accumulated
gains (losses)
Land
controlling
remeasurements
on available- revaluation
otherof defined comprehensive interests
for-saledifferences benefit
plans
securities,
incomenet of tax¥ 71,105¥ (45,762) ¥(358) ¥ 24,983¥

73

Total net
assets¥ 358,404(1,519)(5,499)26,168617
10,188
10,188¥ 81,293

(617)
(617)
¥ (46,380) ¥

735
735
377

10,306
10,306¥ 35,290

¥

7
7
81

10,31430,081¥ 388,48621

6. Consolidated Financial Statements

Millions of U.S. Dollars
Foundation funds and others
Reserve for
Total
Foundation redemption Reserve for Consolidated foundationof foundation revaluation
surplusfunds and
funds
funds
othersFor the year ended March 31, 2019

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

$

1,135

$

1,180

$

2

$

863

$

(17)
315

(17)

(315)
(56)
144

(56)
144
(315)
(16)

(315)
(16)

$

(315)
819

$

315
1,495

–
2

$

$

(261)
601

3,181

$

(261)
2,919

Millions of U.S. Dollars
Accumulated other comprehensive income

For the year ended March 31, 2019

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

22

Asahi Mutual Life Insurance Company Annual Report 2019

Net
unrealized
Total
NonAccumulated accumulated
gains (losses)
Land
controlling
remeasurements
on available- revaluation of defined
otherinterests
for-saledifferences benefit plans comprehensive
securities,
incomenet of tax
$

732

$

(417) $

3

$

317

$

0

Total net
assets

$

3,500

(17)

(56)
144
(315)
(16)

$

159
159
892

$

16
16
(401) $

(21)
(21)(17) $

154
154
472

$

0
0
0

$

154
(106)
3,393

6. Consolidated Financial Statements

Consolidated Statements of Cash FlowsAsahi Mutual Life Insurance Company and its Consolidated Subsidiaries
Millions of
U.S. Dollars

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

2019
¥

¥

16,9705,361
11,263
1,235(788)(73,541)3(11)(1,725)2,180(107,335)(21,839)
22,9234,700(2,257)
(957)
384

2018
¥

2019

32,836
5,596
10,133
1,778
1,003(83,226)
4(74)(1,942)2,130(109,723)(46,733)
13,891
4,449
2,530
970
(617)

$

152
48
101
11
(7)
(662)
0
(0)
(15)
19
(967)
(196)
206
42
(20)
(8)
3

(2,271)
85

(903)
184

(20)
0

(910)
1,917
(144,612)
110,216(5,309)(4,821)(7,830)(52,357)

1,612
6,606
(159,491)
113,182(4,446)(5,426)(4,827)(61,010)(8)
17(1,302)
993
(47)
(43)
(70)
(471)

(1,170)

(500)

(10)

2,354
(628,864)
624,046(40,838)
98,573(23,572)3,544(643,165)
632,895(52,331)
120,479
17,673

21(5,665)
5,622
(367)
888
(212)

43,64974,177
21,820(7,404)
9,597(3,224)
73,14544,967
123,564
62,554(6,603)
1,782(8,611)
110,132

393
668
196
(66)
86
(29)
659

(46,000)
47,946(35,000)(6,134)(39)(1,074)(40,301)(19,512)200,143
180,630–––(5,499)(31)(958)(6,490)42,631
157,511200,143

(414)
431
(315)
(55)
(0)
(9)
(363)
(175)
1,803
1,627

¥

$

23

6. Consolidated Financial Statements

Notes to Consolidated Financial Statements
Asahi Mutual Life Insurance Company and its Consolidated Subsidiaries

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

2. U.S. Dollar Amounts
The translations of yen amounts into U.S. dollar amounts are included solely for the convenience of thereader and have been made, as a matter of arithmetical computation only, at the rate of ¥110.99 = US$1.00,
the effective rate of exchange at the balance sheet date of March 31, 2019.
The translations should not be construed as representations that such yen amounts have been or could in
the future be, converted into U.S. dollars at that or any other rates.

3. Principles of Consolidation(1) Scope of consolidation
The consolidated subsidiaries as of March 31, 2019 and 2018 are listed below:
Info Techno Asahi Co., Ltd.
Asahi Life Asset Management Co., Ltd.
Asahi Nvest Investment Advisory Co., Ltd.
The major unconsolidated subsidiary is Asahi Real Estate Management Co., Ltd.
Each non-consolidated subsidiary is small in scale in terms of total assets, amount of sales, net income
and surplus for the fiscal year ended March 31, 2019. As such non-consolidated subsidiaries are notconsidered to materially affect any reasonable determination as to the financial position and result of
operation of the Companyʼs group, these companies are excluded from the consolidation.
(2) Application of equity method
Unconsolidated subsidiaries and affiliates (such as Asahi Real Estate Management Co., Ltd, etc.) are
immaterial in terms of their impact on consolidated net income and surplus, and also immaterial as awhole, therefore, the equity method is not applied.
(3) Fiscal year-end of consolidated subsidiaries
The fiscal year-end of the consolidated subsidiaries is March 31.

24

Asahi Mutual Life Insurance Company Annual Report 2019

6. Consolidated Financial Statements(4) Amortization of goodwill
Goodwill is fully expensed as incurred.

II. Notes to Consolidated Balance Sheets
1. Significant Accounting Policies(1) Valuation methods of securities
The valuation of securities, including deposits and monetary claims bought which are equivalent tosecurities is as follows:i)

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

ii) Held-to-maturity debt securities are stated at amortized cost (straight-line method) determined by
the moving average method.
iii) Policy-reserve-matching bonds, which are in accordance with “Temporary Treatment of Accounting
and Auditing Concerning Policy-reserve-matching Bonds in Insurance Industry” (Industry Audit
Committee Report No. 21 issued by the Japanese Institute of Certified Public Accountants (“JICPA”)),
are stated at amortized cost (straight-line method) determined by the moving average method.
iv) Investments in unconsolidated subsidiaries and affiliates not accounted for under the equity
method are stated at cost.
v) Available-for-sale securities with fair market value except for the following are stated at fair market
value based on the market prices at the end of the fiscal year. Available-for-sale securities with fairmarket value, of which domestic stocks, domestic stock exchange-traded funds, domestic listed
real estate investment trusts, foreign stock exchange-traded funds for which hedge accounting
is not applied, foreign bond exchange-traded funds for which hedge accounting is not appliedand foreign currency-denominated bonds for which hedge accounting is not applied, are stated
at fair market value based on the average of the market prices during the final month of the fiscal
year. Costs of sales are determined by the moving average method. Available-for-sale securities
with extreme difficulty of measuring fair market value, of which public and corporate bonds
including foreign bonds with the difference between acquisition cost and face value considered
as an adjustment of interest, are stated at amortized cost (straight-line method) determined by
the moving average method. The other securities are stated at cost determined by the moving
average method. Net unrealized gains or losses on these available-for-sale securities, net of tax,
are recorded as a separate component of net assets.
(2) Policy-reserve-matching bonds
The Company classifies bonds held with the aim of matching the duration to outstanding insurance
liabilities within the sub-groups (categorized by insurance type, investment policy and other factors)of individual life insurance and individual annuities as policy-reserve-matching bonds in accordancewith “Temporary Treatment of Accounting and Auditing Concerning Policy-reserve-matching Bonds inInsurance Industry” (Industry Audit Committee Report No. 21 issued by the JICPA).
(3) Valuation methods of derivative financial instruments
Derivative financial instruments are stated at fair market value.
(4) Revaluation of land
The Company revalued the land for business purposes based on the Act on Revaluation of Land (ActNo. 34 promulgated on March 31, 1998). The difference between fair value and book value resulting
from the revaluation, net of related taxes, is recorded as land revaluation differences as a separate
component of net assets and the related tax is recorded as deferred tax liabilities for revaluation.
■ Date of revaluation: March 31, 2001
■ Method of revaluation as prescribed for in Article 3, Paragraph 3 of the said Act:25

6. Consolidated Financial Statements

The calculation is based on the publicly announced appraisal value with certain adjustments set forthin Article 2, Item 1 of the Enforcement Ordinance of the Act on Revaluation of Land (Government
Ordinance No. 119 promulgated on March 31, 1998) or the appraisal value determined by thereal-estate appraiser set forth in Article 2, Item 5 of the said Ordinance with certain reasonableadjustments.
(5) Depreciation of tangible fixed assets
Depreciation of the Companyʼs tangible fixed assets is calculated by the following methods.
■ Tangible fixed assets (excluding lease assets): Declining-balance method
However, buildings are depreciated using the straight-line method.
■ Lease assets related to finance lease transactions that do not transfer ownership: Straight-line
method over the lease term with no residual value(6) Foreign currency translation
Foreign currency-denominated assets and liabilities (excluding the shares of unconsolidated
subsidiaries and affiliates) are translated into Japanese yen at the effective exchange rate prevailing at
the balance sheet date, except for foreign exchange-traded funds for which hedge accounting is notapplied, foreign bond exchange-traded funds for which hedge accounting is not applied and foreign
currency-denominated bonds for which hedge accounting is not applied categorized as available-forsale securities with fair market value. Such securities are translated into Japanese yen at the average ofthe effective exchange rate during the final month of the fiscal year.
(7) Allowance for possible loan losses
Allowance for possible loan losses is provided in accordance with the Companyʼs standards of selfassessment and write-offs and reserves on credit quality:i)

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

ii) For credit to borrowers who are not currently bankrupt but have a high risk of bankruptcy(hereinafter “not currently bankrupt borrowers”), the Company provides the amounts deemed
as necessary considering the borrowersʼ ability to pay, within the amounts after deductions of
the amount expected to be collected through the disposal of collateral or the execution ofguarantees.
iii) For credit to borrowers other than the above, the Company provides the amounts calculated bymultiplying the book value by the actual ratio of bad debt losses on defaults during a certain past
period.
All credit is assessed by the relevant departments in accordance with the Companyʼs standards ofself-assessment on credit quality. The results of the assessment are reviewed by the audit department,
which is independent of business-related divisions. Subsequently, allowance for possible loan losses isprovided based on the results of these assessments.
For consolidated subsidiaries, the Company records the allowance amounts deemed necessary inaccordance mainly with the Companyʼs standards of self-assessment and write-offs and reserves on
credit quality.
For credit to legally bankrupt borrowers and substantially bankrupt borrowers, the amounts remaining
after deductions of collateral value or the amounts collectible through the execution of guarantees are
written-off directly from the book value as the estimated uncollectible amounts. The amounts writtenoff as of March 31, 2019 and 2018 were ¥47 million (US$0 million) and ¥60 million, respectively.
(8) Accounting for employeesʼ retirement benefits and method of amortizing retirement benefit expenses
Net defined benefit liabilities and assets are presented for the employeesʼ retirement benefits after
deducting pension plan assets from retirement benefit obligations, based on estimated amounts as of26

Asahi Mutual Life Insurance Company Annual Report 2019

6. Consolidated Financial Statements

the balance sheet date.
The Company uses the following methods of accounting in relation to retirement benefits.
■ The retirement benefit obligation is attributed to each period by the benefit formula method.
■ Actuarial differences are amortized under the straight-line method over a period of seven years
starting the following year.
■ Prior service cost is charged to income when incurred.
(9) Reserve for price fluctuation
Reserve for price fluctuation is calculated in accordance with Article 115 of the Insurance Business Act.
(10) Accounting for hedging activities
Hedging activities are accounted for in accordance with the “Accounting Standards for Financial
Instruments” (Accounting Standards Board of Japan (“ASBJ”) Statement No. 10).
The Company mainly applies the following hedging activities:
The Company applies deferred hedge accounting and the exceptional accounting treatment (“Tokureishori”) for interest rate swaps used to hedge the cash flow volatility of certain loans.
The Company also applies fair value hedge accounting for hedging activities related to foreignexchange rate fluctuation exposures on certain bonds, investment trusts and others denominated inforeign currencies.
The Company also applies designated hedge accounting (“Furiate-shori”) for currency swaps used
to hedge foreign exchange rate fluctuation exposures on the foreign currency-denominated bonds
issued by the Company.
The Company also applies designated hedge accounting (“Furiate-shori”) for the foreign currencydenominated transactions other than the above.
The effectiveness of a hedge is mostly assessed by a ratio analysis, comparing the fluctuations in thefair value or cash flows of hedged items and hedging instruments.
(11) Accounting for consumption taxes
The Company and its subsidiaries account for consumption tax and local consumption tax by the
tax-exclusion method. The consumption taxes on certain assets, which are not deductible fromconsumption taxes withheld and that are stipulated to be deferred under the Corporation Tax Act ofJapan, are deferred as prepaid expenses and amortized equally over five years.
Consumption taxes other than deferred consumption taxes are recognized as an expense whenincurred.
(12) Policy reserves
Policy reserves are based on Article 116 of the Insurance Business Act and the premium reserve at the end of
fiscal year is calculated by the following method:
In regard to the policies subject to the standard policy reserves, the method as prescribed by the Commissionerof Financial Services Agency (Japanese Ministry of Finance Public Notice No. 48, 1996) is applied.
In regard to the policies not subject to the standard policy reserves, the net level premium method is applied.
(13) Software
Capitalized software for internal use owned by the Company and its subsidiaries (included in intangible
fixed assets in the consolidated balance sheets) is amortized using the straight-line method over theestimated useful lives.

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

27

6. Consolidated Financial Statements■ For accumulation whole life with variable interest rates, accumulation insurance with variableinterest rates and new single premium individual annuities which have an effective date on or after
April 2, 2012, the Company mainly invests in domestic bonds, engaging in matching asset liability
management, or Matching ALM, which aims at matching the duration to outstanding insurance
liabilities to avoid interest rate fluctuation risks.
■ For individual life insurance and individual annuities other than above, the Company holds yendenominated fixed income investments, including bonds and loans, as the core of its asset portfolio.
The Company also holds domestic stocks, foreign securities and real estate assets to enhance its
profitability.
Derivatives are mainly used to hedge market price fluctuation risk and exchange rate fluctuation risk
regarding securities and exchange rate fluctuation risk related to the foreign currency-denominated bonds
issued by the Company. As the major financial instruments, securities are exposed to market risk and credit
risk, loans are exposed to credit risk and exchange rate fluctuation risk, and derivatives are exposed tomarket risk and credit risk.
In managing market risks, the following two methods are used. One is the quantitative risk managementof securities etc. using the Value at Risk (“VaR”) method and the other is the risk management by stress test
and sensitivity analysis which analyze the effect on the Companyʼs whole portfolio, simulating scenarios ofdeteriorating market environments. This is for the purpose of managing an appropriate asset allocation
within the ranges of acceptable risks.
In managing credit risks, the Company quantifies the credit risks of entire portfolio through VaR method
and controls the amount of risks within an acceptable range. Furthermore, the Company assigns in-housecredit ratings to our borrowers in accordance with the creditworthiness of each borrower. Strict credit
research of each borrower before lending as well as following up on any changes of creditworthiness ofeach borrower after lending are implemented by Risk Management Department, which is independent of
the departments executing investments and lending. Maximum limits of credit are set up for each borrowerin accordance with its credit risks to avoid the concentration of credit risks on specific corporations andspecific corporation groups. Through all these measures, the Company endeavors to develop high quality
portfolio.

28

Asahi Mutual Life Insurance Company Annual Report 2019

6. Consolidated Financial Statements

The balance sheet amounts, fair values and the differences between those of major financial assets andliabilities as of March 31, 2019 and 2018 were as follows:
Millions of Yen
2019
As of March 31
Cash and deposits
Call loans
Monetary claims bought
Trading securities
Held-to-maturity debt securities
Policy-reserve-matching bonds
Available-for-sale securities
Securities
Trading securities
Held-to-maturity debt securities
Policy-reserve-matching bonds
Available-for-sale securities
Loans
Policy loans
Industrial and consumer loans
Total assets
Bonds payable
Loans payable
Total liabilities
Derivative financial instruments
Hedge accounting not applied
Hedge accounting applied

Balance Sheet
Amount¥40,630140,000
28,984–28,339–645
4,226,995
25,410316,473
2,074,484
1,810,626
426,804
44,272
382,531
4,863,414
88,29551,000139,295
766
221
544

Fair Value¥

40,630140,000
32,137–31,492–645
4,604,074
25,410360,188
2,407,849
1,810,626
436,600
44,272
392,327
5,253,442
89,20050,855140,055
766
221
544

Difference
¥

–
–
3,153
–
3,153
–
–
377,079–
43,714
333,364
–
9,795
–
9,795
390,028
905
(144)
760
–
–
–

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

Millions of Yen
2018
As of March 31
Cash and deposits
Call loans
Monetary claims bought
Trading securities
Held-to-maturity debt securities
Policy-reserve-matching bonds
Available-for-sale securities
Securities
Trading securities
Held-to-maturity debt securities
Policy-reserve-matching bonds
Available-for-sale securities
Loans
Policy loans
Industrial and consumer loans
Total assets
Bonds payable
Loans payable
Total liabilities
Derivative financial instruments
Hedge accounting not applied
Hedge accounting applied

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

Fair Value¥

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

Difference
¥

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

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

29

6. Consolidated Financial Statements

Millions of U.S. Dollars
2019
As of March 31
Cash and deposits
Call loans
Monetary claims bought
Trading securities
Held-to-maturity debt securities
Policy-reserve-matching bonds
Available-for-sale securities
Securities
Trading securities
Held-to-maturity debt securities
Policy-reserve-matching bonds
Available-for-sale securities
Loans
Policy loans
Industrial and consumer loans
Total assets
Bonds payable
Loans payable
Total liabilities
Derivative financial instruments
Hedge accounting not applied
Hedge accounting applied

Balance Sheet
Amount
$

366
1,261
261
–
255
–
5
38,084228
2,851
18,69016,313
3,845
398
3,446
43,818
795
459
1,255
6
1
4

Fair Value
$

366
1,261
289
–
283
–
5
41,481
228
3,245
21,694
16,313
3,933
398
3,534
47,332
803
458
1,261
6
1
4

Difference
$

–
–
28
–
28
–
–
3,397
–
393
3,003
–
88
–
88
3,514
8
(1)
6
–
–
–

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

(1) Securities including deposits and monetary claims bought which are treated as securities based on“Accounting Standards for Financial Instruments” (ASBJ Statement No. 10)
As for available-for-sale securities of which market value is readily available, domestic stocks, domestic
stock exchange-traded funds, domestic listed real estate investment trusts, foreign stock exchangetraded funds for which hedge accounting is not applied, foreign bond exchange-traded funds forwhich hedge accounting is not applied and foreign currency-denominated bonds for which hedge
accounting is not applied are stated at the average of the market value during the final month of
the fiscal year. Available-for-sale securities of which market value is readily available excluding thesecurities mentioned above are stated at the market value at the balance sheet date.
Other securities of which market value is readily available are stated at market value at the balance
sheet date.
Unlisted stocks and others, including investments in subsidiaries and affiliates, of which market value is
not readily available are not subject to fair value disclosure and are therefore not included in the table
above because it is regarded as extremely difficult to determine their fair value.
The amounts of the unlisted stocks and others, including investments in subsidiaries and affiliates,
reported in the consolidated balance sheets were ¥25,989 million (US$234 million) and ¥71,523 million
as of March 31, 2019 and 2018, respectively.
(2) Loans and loans payableAs credit exposure for policy loans without specific repayment periods is limited to the amount of
the cash surrender value, the Company and its subsidiaries consider book value as fair value with theassumption that fair value approximates book value in light of factors such as projected repayment
period and interest terms.
As for industrial and consumer loans and loans payable, the fair value of loans is primarily stated attheoretical prices calculated by discounting the future cash flows to the present value. The fair valueof loans to legally bankrupt borrowers, substantially bankrupt borrowers and not currently bankrupt
borrowers is stated at the amounts by deducting estimated losses from the book value before direct
write-offs.

30

Asahi Mutual Life Insurance Company Annual Report 2019

6. Consolidated Financial Statements(3) Bonds payable
The fair values of bonds payable are based on the market values, etc. as of March 31, 2019 and 2018,
respectively.
(4) Derivative financial instruments
The fair values of stock options and currency options traded over the counter are based on the quoted
prices offered by counterparty financial institutions.
The fair values of foreign currency forward contracts are stated at theoretical prices based on the TTM
at the balance sheet date.
Regarding the derivative transactions for which designated hedge accounting (“Furiate-shori”) ofcurrency swaps is applied, these fair values are included in bonds payable since they are treated
together with hedged bonds payable.

3. Investments and Rental Properties
The Company holds investment and rental properties such as office buildings in Tokyo and other areas. The
carrying amounts and the fair values of investment and rental properties were ¥250,349 million (US$2,255
million) and ¥273,135 million (US$2,460 million) as of March 31, 2019 and ¥267,163 million and ¥264,669
million as of March 31, 2018, respectively. The fair value is mainly based on the value (including someadjustments using the reference prices) of real estate appraisal report prepared by the external real-estateappraiser in accordance with real estate appraisal standards.

4. Securities Lent under Lending Agreements
The amounts of securities lent under lending agreements were ¥157,185 million (US$1,416 million) and¥121,177 million as of March 31, 2019 and 2018, respectively.

5. Loans
The total amounts of loans to bankrupt borrowers, delinquent loans, delinquent loans three or moremonths past due and restructured loans, which were included in loans, were ¥757 million (US$6 million)and ¥906 million as of March 31, 2019 and 2018, respectively.
i)

Loans to bankrupt borrowers were ¥0 million (US$0 million) and ¥0 million as of March 31, 2019 and2018, respectively.

ii) Delinquent loans were ¥619 million (US$5 million) and ¥748 million as of March 31, 2019 and 2018,
respectively.
iii) Delinquent loans three or more months past due were ¥110 million (US$0 million) and ¥120 million
as of March 31, 2019 and 2018, respectively.
iv) Restructured loans were ¥27 million (US$0 million) and ¥36 million as of March 31, 2019 and 2018,
respectively.
Loans to bankrupt borrowers represent loans, excluding the balances already written-off, which meet theconditions prescribed in Article 96, Paragraph 1, Items 3 and 4 of the Enforcement Regulations of the
Corporate Tax Act. Moreover, accruing interest on these loans is not recorded as income after determiningthat principal of or interest on these loans is unlikely to be collected due to the significant delay inrepayment of principal or interest payments or for other reasons.
Accruing interest on delinquent loans is not recorded as income due to the same reasons as describedabove, and delinquent loans exclude loans to bankrupt borrowers and loans for which interest payments
have been suspended and rescheduled to assist and support the borrowers in the restructuring of theirbusinesses.
Delinquent loans three or more months past due are loans for which interest payments or repayments ofprincipal are delinquent for three months or more from the due dates under the terms of the related loan
agreements, excluding those loans classified as loans to bankrupt borrowers and delinquent loans.
Restructured loans are loans for which certain concessions favorable to borrowers, such as interest
reduction or exemptions, rescheduling of due dates of principal or interest payments, waivers of claim

31

6. Consolidated Financial Statements

or other terms, have been negotiated for the purpose of assisting and supporting the borrowers in the
restructuring of their businesses. This category excludes loans classified as loans to bankrupt borrowers,
delinquent loans and delinquent loans three or more months past due.
The direct write-offs related to loans decreased the amounts of loans to bankrupt borrowers describedabove by ¥3 million (US$0 million) and ¥13 million as of March 31, 2019 and 2018, respectively.
In addition, the direct write-offs related to loans decreased the amounts of delinquent loans describedabove by ¥43 million (US$0 million) and ¥46 million as of March 31, 2019 and 2018, respectively.

6. Accumulated Depreciation of Tangible Fixed Assets
Accumulated depreciation of tangible fixed assets totaled ¥278,017 million (US$2,504 million) and ¥279,695
million as of March 31, 2019 and 2018, respectively.

7. Separate Accounts
Total assets in separate accounts provided for in Article 118 of the Insurance Business Act were ¥27,560
million (US$248 million) and ¥29,382 million as of March 31, 2019 and 2018, respectively. The amounts ofseparate account liabilities were the same as separate account assets.

8. Receivables from/Payables to Directors and Audit Board Members
There were no receivables from directors and audit board members as of March 31, 2019 and 2018,
respectively. The total amounts of payables to directors and audit board members were ¥15 million (US$0
million) and ¥15 million as of March 31, 2019 and 2018, respectively.

9. Reserve for Dividends to Policyholders
Millions of
U.S. Dollars

Millions of Yen
For the years ended March 31
Balance at the beginning of the fiscal year
Transfer to reserve from surplus in the previous fiscal year
Dividends to policyholders paid out during the fiscal year
Increase in interest
Decrease in others
Balance at the end of the fiscal year

2019
¥

¥

36,959
1,963
4,821
53
49
34,1042018¥¥

40,861
1,519
5,426
58
53
36,959

2019
$

$

332
17
43
0
0
307

10. Stocks of Unconsolidated Subsidiaries and affiliates
The amounts of stocks of unconsolidated subsidiaries and affiliates the Company held as of March 31, 2019and 2018 were ¥2,160 million (US$19 million) and ¥574 million, respectively.

11. Pledged Assets
Assets pledged as collateral as of March 31, 2019 and 2018 were securities in the amount of ¥16,506 million(US$148 million) and ¥4,325 million, respectively.

12. Redemption of Foundation Funds
Accompanying the redemption of foundation funds totaling ¥35,000 million (US$315 million), in accordancewith Article 56 of the Insurance Business Act, the Company transferred the same amount from reserve forfund redemption to reserve for redemption of foundation funds for the fiscal year ended March 31, 2019.

32

Asahi Mutual Life Insurance Company Annual Report 2019

6. Consolidated Financial Statements

13. Assets with Rights to Sell
The Company has the legal right to sell or collateralize securities borrowed under loan agreements.
The market values of these assets that were not sold or pledged as collateral as of March 31, 2019 and2018 were ¥69,344 million (US$624 million) and ¥73,317 million, respectively. No assets were pledged ascollateral as of March 31, 2019 and 2018.

14. Commitment LineAs of March 31, 2019 and 2018, there were unused commitment line agreements under which the Company
is the lender of ¥3,922 million (US$35 million) and ¥4,101 million, respectively.

15. Subordinated Bonds Payable
As of March 31, 2019 and 2018, bonds payable are subordinated bonds payable, for which the repayments
are subordinated to other obligations.

16. Subordinated Loans Payable
As of March 31, 2019 and 2018, other liabilities included subordinated loans payable of ¥51,000 million(US$459 million) and ¥97,000 million, respectively, for which the repayments are subordinated to otherobligations.

17. Contributions to Policyholders Protection Corporation
The estimated future contributions to the Life Insurance Policyholders Protection Corporation of Japan
under Article 259 of the Insurance Business Act as of March 31, 2019 and 2018 were ¥8,899 million (US$80
million) and ¥9,750 million, respectively. These contributions are charged as operating expenses in thefiscal years in which they are paid.

18. Deferred Taxes(1) Deferred tax assets/liabilities were recognized as follows:
Millions of
U.S. Dollars

Millions of Yen
As of March 31
Deferred tax assets
Valuation allowance for deferred tax assets
Subtotal
Deferred tax liabilities
Net deferred tax assets (liabilities)

2019
¥

¥

63,691
20,31043,38032,117
11,262

2018¥¥

61,321
21,49439,827
23,765
16,062

2019
$

$

573
182
390
289
101

33

6. Consolidated Financial Statements

Major components of deferred tax assets/liabilities were as follows:
Millions of Yen
As of March 31
Deferred tax assets
Contingency reserve
Reserve for price fluctuation
Net defined benefit liabilities
Impairment losses
Losses on valuation of securities
Deferred tax liabilities
Net unrealized gains on available-for-sale securities2019¥

14,27911,408
10,1787,968
7,532
30,834

Millions of Yen
As of March 31
Deferred tax assets
Contingency reserve
Reserve for price fluctuation
Net defined benefit liabilities
Impairment losses
Losses on valuation of securities
Net unrealized losses on available-for-sale securities
Deferred tax liabilities
Net unrealized gains on available-for-sale securities2018¥

14,14010,800
9,780
8,526
5,546
3,988
22,605

Millions of
U.S. Dollars
As of March 31
Deferred tax assets
Contingency reserve
Reserve for price fluctuation
Net defined benefit liabilities
Impairment losses
Losses on valuation of securities
Deferred tax liabilities
Net unrealized gains on available-for-sale securities

2019
$

128
102
91
71
67
277

(2) The statutory tax rates were 27.9% and 28.1% for the fiscal years ended March 31, 2019 and 2018,
respectively. The main factors causing the differences between the statutory tax rates and the actual
effective tax rates after considering deferred taxes were as follows:
For the years ended March 31

Change of valuation allowance for deferred tax assets
Interest on foundation funds
Reserve for dividends to policyholders

34

Asahi Mutual Life Insurance Company Annual Report 20192019(8.9)%(8.5)%(3.1)%

2018(3.7)%(4.7)%(1.5)%

6. Consolidated Financial Statements

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

Reconciliation of beginning and ending balance of retirement benefit obligations
Millions of
U.S. Dollars

Millions of Yen
For the years ended March 31
Retirement benefit obligations at the beginning of
the fiscal year
Service cost
Interest cost
Actuarial difference occurred during the fiscal year
Retirement benefit payments
Retirement benefit obligations at the end of the
fiscal year

2019

2018

2019

¥

45,743
1,932
458
813
(4,653)¥

46,769
2,029
468
1,473
(4,998)

$

412
17
4
7
(41)

¥

44,293¥45,743$399ii) Reconciliation of beginning and ending balance of pension plan assets
Millions of
U.S. Dollars

Millions of Yen
For the years ended March 31
Pension plan assets at the beginning of the fiscal
year
Expected return on pension plan assets
Actuarial difference occurred during the fiscal year
Contributions by the employer
Retirement benefit payments
Pension plan assets at the end of the fiscal year

2019
¥

¥

11,03868(3,015)
207
(192)
8,106

2018
¥

9,024
70
1,944
203
(204)
11,038

¥

2019
$

99
0
(27)
1
(1)
73

$

iii) Reconciliation of retirement benefit obligation and pension plan assets with net defined benefit
liabilities and assets presented on the consolidated balance sheets
Millions of
U.S. Dollars

Millions of Yen
As of March 31
a. Funded plan retirement benefit obligationb. Pension plan assets
c. Net amount of liabilities and assets presented on
the consolidated balance sheet
d. Net defined benefit liabilities
e. Net defined benefit assets
f. Net amount of liabilities and assets presented on
the consolidated balance sheet

2019¥44,293(8,106)2018¥

36,18736,480(292)¥

36,18745,743(11,038)

2019$

34,70435,056(351)¥

34,704

399
(73)
326
328
(2)

$

326

35

6. Consolidated Financial Statementsiv) Breakdown of retirement benefit expenses
Millions of
U.S. Dollars

Millions of Yen
For the years ended March 31
Service cost
Interest cost
Expected return on pension plan assets
Amortization of actuarial differences
Amortization of prior service cost
Retirement benefit expenses related to defined
benefit plan

2019

2018

2019

¥

1,932
458
(68)
532
6

¥

2,029
468
(70)
545
6

$

17
4
(0)
4
0

¥

2,861

¥

2,979

$

25

v) Breakdown of items included in other comprehensive income
The breakdown of items included in other comprehensive income (before tax effects) was asfollows:
Millions of
U.S. Dollars

Millions of Yen
For the years ended March 31
Amortization of actuarial differences
Amortization of prior service cost
Total

2019
¥
¥

(3,296)
6(3,289)

2018
¥

2019

1,015
6
1,022

¥

$

(29)
0
(29)

$

vi) Breakdown of items included in accumulated other comprehensive income
The breakdown of items included in total accumulated other comprehensive income (before tax
effects) was as follows:
Millions of
U.S. Dollars

Millions of Yen
For the years ended March 31
Unrecognized actuarial differences
Unrecognized prior service cost
Total

2019
¥
¥

2,761
6
2,768

2018
¥

2019
(534)
13
(521)

¥

$

24
0
24

$

vii) Breakdown of main pension plan assets
The breakdown of main asset categories as a percentage of pension plan assets was as follows:
As of March 31
Stocks
Bonds
Others
Total

2019
44%
14%
42%
100%

2018
60%
9%
31%
100%

viii) Method for determining the expected long-term rate of return
To determine the expected long-term rate of return on pension plan assets, the Company takes
into account the present and future allocation of pension plan assets, and the present and expected
future long-term rate of return on the diverse range of assets that makes up the pension assets.
ix) Underlying actuarial assumptions
The main underlying actuarial assumptions were as follows:
As of March 31
Discount rate
Expected long-term rate of return on pension plan assets
Defined benefit corporate pension plans

36

Asahi Mutual Life Insurance Company Annual Report 2019

2019
1.0%
0.5%
1.5%

2018
1.0%
0.7%
1.7%

6. Consolidated Financial Statements

III. Notes to Consolidated Statements of Income
1. Investment Income and Expenses
The major components of gains on sales of securities were as follows:
Millions of
U.S. Dollars

Millions of Yen
For the years ended March 31
Domestic bonds
Domestic stocks and other securities
Foreign securities

2019
¥

2018

32,424
1,685
538

¥

2019

44,891
1,709
178

$

292
15
4

The major components of losses on sales of securities were as follows:
Millions of
U.S. Dollars

Millions of Yen
For the years ended March 31
Domestic bonds
Domestic stocks and other securities
Foreign securities

2019
¥

2018

2,224
800
9,495

¥

2019

549
487
1,249

$

20
7
85

The major components of losses on valuation of securities were as follows:
Millions of
U.S. Dollars

Millions of Yen
For the years ended March 31
Domestic stocks and other securities
Foreign securities

2019
¥

2018
628
–

¥

2019
49
96

$

5
–

Losses on derivative financial instruments included net valuation losses of ¥1,091 million (US$9 million) andlosses of ¥76 million for the fiscal years ended March 31, 2019 and 2018, respectively.

2. Impairment Losses of Fixed Assets
For the fiscal years ended March 31, 2019 and 2018, impairment losses of fixed assets by the Company
were as follows:(1) Method of grouping
Real estate and other assets used for insurance business operations are classified as one asset groupas a whole. Other assets such as real estate for rent and unused real estate are classified as one groupindividually.
(2) Background information on recognizing the impairment losses
As the profitability of certain real estate for rent dropped down significantly due to a decrease in thelevel of rental income and a declining trend in the market prices of land, the Company reduced thebook values of such real estate for rent and unused real estate to their recoverable amounts. The writedowns were recognized as impairment losses and included in the extraordinary losses.

37

6. Consolidated Financial Statements(3) Asset groups for which impairment losses were recognized and losses by classification of fixed assets
Millions of
U.S. Dollars

Millions of Yen
For the years ended March 31
Real estate for rent:
Land
Building
OthersTotal real estate for rent (i)Unused real estate:
Land
Building
OthersTotal unused real estate (ii)
Total:Land
Building
OthersTotal (i)+(ii)

2019
¥

¥

2018
0
0
0
0

¥

2019

518
699
–
1,217

$

0
0
0
0

918
264
52
1,235

369
191
–
560

8
2
0
11

918
264
52
1,235

888
890
–
1,778

8
2
0
11

¥

$

(4) Calculation method of recoverable amounts
The recoverable amounts of real estate for rent are determined at net realizable value or value in use.
The recoverable amounts for unused assets are net realizable value. Value in use is determined as
the estimated net future cash flows, reflecting the volatility risk, discounted at 3.5% and 3.6% for the
fiscal years ended March 31, 2019 and 2018, respectively. Net realizable value is calculated based on
the appraisal value in accordance with “Real Estate Appraisal Standards” or the publicly announced
appraisal value after deducting expected disposal costs.

38

Asahi Mutual Life Insurance Company Annual Report 2019

6. Consolidated Financial Statements

IV. Notes to Consolidated Statements of Comprehensive Income
Other Comprehensive Income
The reclassification adjustments and tax effect amounts related to other comprehensive income were as follows:
Millions of
U.S. Dollars

Millions of Yen
For the years ended March 31
Net unrealized gains on available-for-sale securities, net oftax
Amount incurred during the fiscal year
Reclassification adjustments
Before tax adjustment
Tax effects
Net unrealized gains on available-for-sale securities, netof taxAccumulated remeasurements of defined benefit plans
Amount incurred during the fiscal year
Reclassification adjustments
Before tax adjustment
Tax effects
Accumulated remeasurements of defined benefit plans
Total other comprehensive income

2019

¥

¥

15,426
9,643
25,070(7,329)2018¥

18,028(1,251)
16,776(6,587)

2019

$

138
86
225
(66)

17,740

10,188159(3,828)539(3,289)921(2,367)
15,372

470
552
1,022
(286)
735
10,924

(34)
4
(29)
8
(21)
138

¥

$

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

397. Non-consolidated Financial Statements
Non-consolidated Balance Sheets
Asahi Mutual Life Insurance Company
Millions of
U.S. Dollars

Millions of Yen
As of March 31
ASSETS:Cash and deposits:
Cash
Deposits

2019¥

Call loans
Monetary claims bought
Securities:
National government bonds
Local government bonds
Corporate bonds
Domestic stocks
Foreign securities
Other securities
Loans:
Policy loans
Industrial and consumer loans
Tangible fixed assets:
Land
Buildings
Lease assets
Construction in progress
Other tangible fixed assets
Intangible fixed assets:
Software
Other intangible fixed assets
Agency accounts receivable
Reinsurance receivables
Other assets:
Accounts receivable
Prepaid expenses
Accrued income
Money on deposit
Derivative financial instruments
Cash collateral paid for financial instruments
Suspense payments
Other assets
Prepaid pension cost
Deferred tax assets
Customers' liabilities under acceptances and guarantees
Allowance for possible loan losses
Total assets

40

Asahi Mutual Life Insurance Company Annual Report 2019¥

219
35,882
36,102140,000
28,984

2018

¥

242
31,392
31,635
164,000
30,151

2019

$

1
323
325
1,261
261

1,790,446
49,768935,197
320,964
1,089,669
71,411
4,257,457

1,866,902
48,785936,856
334,335
926,893
75,096
4,188,869

16,131
448
8,425
2,891
9,817
643
38,35844,272
382,531426,804

49,637434,532
484,169

398
3,446
3,845

226,451
156,225
2,922
516
2,703
388,821230,913
162,583
3,946
1,134
2,432
401,011

2,040
1,407
26
4
24
3,503

19,5995,976
25,5763427

21,295
13,05934,355
0
812

176
53
230
0
3

6,750
3,439
19,277
3,998
3,080
3,677
241
1,525
41,991
145
10,413
6(375)
5,356,358

4,029
3,418
17,1983,408
12,525
3,748
238
1,061
45,62970
16,18710(394)
5,396,507

60
30
173
36
27
33
2
13
378
1
93
0
(3)
48,259¥$

7. Non-consolidated Financial Statements

Millions of
U.S. Dollars

Millions of Yen
As of March 31
LIABILITIES:Policy reserves and other reserves:
Reserve for outstanding claims
Policy reserves
Reserve for dividends to policyholders

2019

¥

Reinsurance payables
Bonds payable
Other liabilities:
Payables under securities borrowing transactions
Loans payable
Income taxes payable
Accounts payable
Accrued expenses
Deferred income
Deposits received
Guarantee deposits received
Derivative financial instruments
Cash collateral received for financial instruments
Lease obligations
Asset retirement obligations
Suspense receipts
Reserve for employees' retirement benefits
Reserve for price fluctuation
Deferred tax liabilities for land revaluation
Acceptances and guarantees
Total liabilities
NET ASSETS:
Foundation funds
Reserve for redemption of foundation funds
Reserve for revaluation
Surplus:Reserve for future losses
Other surplus:
Reserve for fund redemption
Equalized reserve for dividends to policyholders
Unappropriated surplus (loss)
Subtotal
Total foundation funds and others
Net unrealized gains (losses) on available–for–salesecurities, net of tax
Land revaluation differences
Total valuation and translation adjustments
Total net assets
Total liabilities and net assets

¥

2018

27,5804,543,377
34,1044,605,062
397
88,295¥201928,3684,616,919
36,9594,682,246
311
40,349$248
40,935307
41,4903795

88,61651,00060
19,796
7,785
222
482
17,221
2,314
1,320
2,922
246
133
192,123
33,64040,89017,116
64,977,531

44,96797,000
3,321
6,869
8,889
184
454
17,433
2,544
7,630
3,946
243
171
193,656
35,36538,71017,762
10
5,008,412

798
459
0
178
70
2
4
155
20
11
26
2
1
1,730
303
368
154
0
44,84691,000166,000
281

126,000
131,000
281

819
1,495
2

291

266

2

26,2009,258
31,324
66,782
67,073324,355

48,6009,678
37,356
95,63595,901
353,183

236
83
282
601
604
2,922

99,032(44,561)
54,471
378,826
5,356,358

81,292(46,380)
34,912
388,095
5,396,507

892
(401)
490
3,413
48,259¥$41

7. Non-consolidated Financial Statements

Non-consolidated Statements of Income
Asahi Mutual Life Insurance Company
Millions of
U.S. Dollars

Millions of Yen
For the years ended March 31
Ordinary income:Premium and other income:Insurance premiums
Reinsurance revenue
Investment income:Interest, dividends and other income:Interest and dividends on securities
Interest on loans
Rent revenue from real estate
Other interest and dividends
Gains on sales of securities
Foreign exchange gains
Reversal of allowance for possible loan losses
Other investment income
Investment gains on separate accounts
Other ordinary income:Fund receipt from deposit of claims paid
Reversal of reserve for employees' retirement benefits
Reversal of reserve for outstanding claims
Reversal of policy reserves
Other ordinary income
Total ordinary income
Ordinary expenses:
Claims and other payments:
ClaimsAnnuities
Benefits
Surrender benefits
Other payments
Reinsurance premiums
Provision for policy reserves and other reserves:
Provision for reserve for outstanding claims
Provision for interest on policyholders' dividend reserves
Investment expenses:
Interest expenses
Losses on sales of securities
Losses on valuation of securities
Losses on derivative financial instruments
Foreign exchange losses
Write-offs of loans
Depreciation of rental real estate and other assets
Other investment expenses
Operating expenses
Other ordinary expenses:
Claim deposit payments
Taxes
Depreciation
Other ordinary expenses
Total ordinary expenses
Ordinary profit

42

Asahi Mutual Life Insurance Company Annual Report 2019

2019

¥

2018

394,963
1,763
396,726
83,138
7,096
16,637
1,019
107,892
34,648
2,258
14
7,476
340
152,631¥2019

383,422
1,531
384,953
84,322
8,371
16,354929
109,978
46,779
–

74
7,379
2,384
166,597

3,558
15
3,574
749
63
149
9
972
312
20
0
67
3
1,375

11,145
1,725
788
73,541
1,842
89,044
638,402

83,226
1,713
100,674
652,225

100
15
7
662
16
802
5,751

121,536
128,425
71,70190,7574,672
1,151
418,245

124,809
129,879
82,264
95,7105,656
645
438,966

1,095
1,157
646
817
42
10
3,768

–

1,003
4
1,008

0
0

3
3
4,700
12,520628
22,923

13,793
1,942

$

–

–

42
112
5
206

0
5,361
10,10456,239105,845

4,449
2,285
145
13,891
2,530
1
5,596
9,641
38,542
102,337

12,675
7,775
11,462
1,517
33,431
613,765
24,636

14,767
7,405
10,354
1,299
33,827
614,681
37,543

114
70
103
13
301
5,529
221

–

–

0
48
91
506
953

7. Non-consolidated Financial Statements

Millions of
U.S. Dollars

Millions of Yen
For the years ended March 31

2019

Extraordinary gains:
Gains on disposal of fixed assets
Extraordinary losses:
Losses on disposal of fixed assets
Impairment losses
Provision for reserve for price fluctuation
Losses on reduction entry of real estate
Other extraordinary losses
Surplus before income taxes
Income taxes:
Current
Deferred
Total income taxes
Net surplus

¥

2018

2019

3,433
3,433

194
194

30
30

7,098
1,235
2,180
241
239
10,995
17,074

1,538
1,778
2,130
–
–
5,446
32,291

63
11
19
2
2
99
153

3,055
(2,202)853
16,221

6,680
(377)
6,303
25,988

27
(19)
7
146

¥

$

43

7. Non-consolidated Financial Statements

Non-consolidated Statements of Changes in Net Assets
Asahi Mutual Life Insurance Company
Millions of Yen
Foundation funds and others
Surplus
For the year ended
March 31, 2019

Beginning balance

Reserve forredemption Reserve
Foundation
Reserve
of
for
funds
foundation revaluation for future
lossesfunds¥126,000 ¥ 131,000 ¥Changes in the fiscal year:
Additions to reserve for dividends topolicyholders
Additions to reserve for future losses
Additions to reserve for redemptionof foundation funds
Payment of interest on foundation
funds
Net surplus
Redemption of foundation funds
Additions to reserve for fundredemption
Reversal of equalized reserve fordividends to policyholders
Reversal of land revaluationdifferences
Net changes, excluding foundation
funds and others
Net changes in the fiscal year
Ending balance

281 ¥

Total
foundation
Equalized
Total
funds andReserve
reserve for Unappropriated surplus
othersfor funddividends to surplus (loss)
redemption
policyholders
Other surplus

266 ¥ 48,600 ¥

9,678 ¥ 37,356 ¥ 95,901 ¥353,183(1,963)(25)

25
35,000(35,000)(1,963)(1,963)(35,000)(6,266)
16,221(6,266)
16,221(35,000)(6,266)
16,221(35,000)

12,600(12,600)(420)

420(1,819)(35,000) 35,000¥ 91,000 ¥166,000 ¥

–
281 ¥

25 (22,400)
291 ¥ 26,200 ¥(1,819)(1,819)(420)(6,032) (28,827) (28,827)
9,258 ¥ 31,324 ¥ 67,073 ¥324,355

Millions of Yen
Valuation and translation adjustments
For the year ended
March 31, 2019

Beginning balance

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

Land revaluationdifferences

Total valuationand translation
adjustments

Total net assets

¥

¥

¥

¥

81,292(46,380)

34,912

Changes in the fiscal year:
Additions to reserve for dividends topolicyholders
Additions to reserve for future losses
Additions to reserve for redemption offoundation funds
Payment of interest on foundation funds
Net surplus(1,963)(6,266)
16,221

Redemption of foundation funds
Additions to reserve for fund redemption
Reversal of equalized reserve for dividends topolicyholders
Reversal of land revaluation differences
Net changes, excluding foundation funds andothersNet changes in the fiscal year
Ending balance

44

Asahi Mutual Life Insurance Company Annual Report 2019

388,095(35,000)(1,819)¥17,73917,73999,032

¥

1,819
1,819
(44,561)¥

19,55919,55954,471¥

19,559(9,268)378,826

7. Non-consolidated Financial Statements

Millions of Yen
Foundation funds and others
Surplus
For the year ended
March 31, 2018

Beginning balance

Reserve forredemption Reserve
Foundation
Reserve
of
for
funds
foundation revaluation for future
lossesfunds¥126,000 ¥ 131,000 ¥Changes in the fiscal year:
Additions to reserve for dividends topolicyholders
Additions to reserve for future losses
Payment of interest on foundation
funds
Net surplus
Additions to reserve for fundredemption
Additions to equalized reserve fordividends to policyholders
Reversal of land revaluationdifferences
Net changes, excluding foundation
funds and others
Net changes in the fiscal year––
Ending balance¥126,000 ¥131,000 ¥

281 ¥

Total
foundation
Equalized
Total
funds andReserve
reserve for Unappropriated surplus
othersfor funddividends to surplus (loss)
redemption
policyholders
Other surplus

242 ¥ 36,000 ¥

8,718 ¥ 31,353 ¥ 76,313 ¥333,595

24

12,600(1,519)(24)(1,519)(1,519)(5,499)25,988(5,499)25,988(5,499)25,988617

617(12,600)
960

(960)
617

–
281 ¥

24
12,600266 ¥ 48,600 ¥

960
6,003
19,587
19,587
9,678 ¥ 37,356 ¥ 95,901 ¥353,183

Millions of Yen
Valuation and translation adjustments
For the year ended
March 31, 2018

Beginning balance
Changes in the fiscal year:
Additions to reserve for dividends topolicyholders
Additions to reserve for future losses
Payment of interest on foundation funds
Net surplus
Additions to reserve for fund redemption
Additions to equalized reserve for dividends topolicyholders
Reversal of land revaluation differences
Net changes, excluding foundation funds andothersNet changes in the fiscal year
Ending balance

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

Land revaluationdifferences

Total valuationand translation
adjustments

Total net assets

¥

¥

¥

¥

71,104(45,762)

25,341

358,937(1,519)(5,499)25,988617¥

10,188
10,18881,292

¥

(617)
(617)
(46,380)

¥

9,570
9,570
34,912¥

9,570
29,158388,09545

7. Non-consolidated Financial Statements

Millions of U.S. Dollars
Foundation funds and others
Surplus
For the year ended
March 31, 2019

Beginning balance

Reserve forredemption Reserve
Foundation
Reserve
of
for
funds
foundation revaluation for future
lossesfunds$

Changes in the fiscal year:
Additions to reserve for dividends topolicyholders
Additions to reserve for future losses
Additions to reserve for redemptionof foundation funds
Payment of interest on foundation
funds
Net surplus
Redemption of foundation funds
Additions to reserve for fundredemption
Reversal of equalized reserve fordividends to policyholders
Reversal of land revaluationdifferences
Net changes, excluding foundation
funds and others
Net changes in the fiscal year
Ending balance$

1,135 $

1,180 $

2$

Total
foundation
Equalized
Total
funds andReserve
reserve for Unappropriated surplus
othersfor funddividends to surplus (loss)
redemption
policyholders

2 $Other surplus

437 $

87 $

0
315

336 $

864 $

(17)
(0)

(17)

(315)

(56)
146

(56)
146
(315)

(16)

(16)

(16)

(54)
282 $

(259)
604 $

(259)
2,922

(315)
113

(113)
(3)

315
1,495 $

–
2$

0
2 $

(17)

(315)
(56)
146

(315)
819 $

3,182

(201)
236 $

(3)
83 $

3

Millions of U.S. Dollars
Valuation and translation adjustments
For the year ended
March 31, 2019

Beginning balance
Changes in the fiscal year:
Additions to reserve for dividends topolicyholders
Additions to reserve for future losses
Additions to reserve for redemption offoundation funds
Payment of interest on foundation funds
Net surplus
Redemption of foundation funds
Additions to reserve for fund redemption
Reversal of equalized reserve for dividends topolicyholders
Reversal of land revaluation differences
Net changes, excluding foundation funds andothersNet changes in the fiscal year
Ending balance

46

Asahi Mutual Life Insurance Company Annual Report 2019

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

Land revaluationdifferences

Total valuationand translation
adjustments

Total net assets

$

$

$

$

732

(417)

314

3,496

(17)

(56)
146
(315)

(16)

$

159
159
892

$

16
16
(401)

$

176
176
490

$

176
(83)
3,413

7. Non-consolidated Financial Statements

Non-consolidated Statements of Proposed Appropriation of Surplus(Loss)
Asahi Mutual Life Insurance Company
Millions of
U.S. Dollars

Millions of Yen
For the years ended March 31
Unappropriated surplus (loss)
Reversal of Voluntary surplus reserves:
Reversal of equalized reserve for dividends topolicyholders
Total
Appropriation of surplus (loss):Reserve for dividends to policyholders
Net surplus (loss):Reserve for future losses
Interest on foundation funds
Voluntary surplus reserves:
Reserve for fund redemption
Surplus (loss) carried forward

2019
¥

¥

31,324
1,939
1,939
33,264
15,4082,173
13,235
19
4,116
9,100
9,100
17,8552018¥¥37,356420
420
37,777
20,854
1,963
18,891
25
6,266
12,60012,60016,922

2019
$

$

282
17
17
299
138
19
119
0
37
81
81
160

47

7. Non-consolidated Financial Statements

Notes to Non-consolidated Financial Statements
Asahi Mutual Life Insurance Company

I. Presentation of Non-consolidated Financial Statements
1. Basis of Presentation
The accompanying non-consolidated financial statements have been prepared from the accounts
maintained by Asahi 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 applicable to themutual life insurance industry and in conformity with accounting principles generally accepted in Japan,
which are different in certain respects from accounting principles generally accepted in countries andjurisdictions other than Japan.
In addition, the notes to the non-consolidated financial statements include information which is not required
under accounting principles generally accepted in Japan but is presented herein as additional information.
Amounts of less than one million yen have been eliminated. As a result, total amounts in yen shown herein
do not necessarily agree with the sum of the individual amounts.
The Insurance Business Act shall prescribe the disclosure of a single fiscal year. The Company provides
the disclosure of comparative financial information corresponding to each comparative fiscal year in thepresented financial statements for use by readers outside Japan.
In preparing the accompanying non-consolidated financial statements, certain reclassifications have been
made to the non-consolidated financial statements issued domestically in order to present them in aformat which is more familiar to readers outside Japan.

2. U.S. Dollar Amounts
The translations of yen amounts into U.S. dollar amounts are included solely for the convenience of thereader and have been made, as a matter of arithmetical computation only, at the rate of ¥110.99 = US$1.00,
the effective rate of exchange at the balance sheet date of March 31, 2019.
The translations should not be construed as representations that such yen amounts have been or could in
the future be, converted into U.S. dollars at that or any other rate.

II. Notes to Non-consolidated Balance Sheets
1. Significant Accounting Policies(1) Valuation methods of securities
The valuation of securities, including deposits and monetary claims bought which are equivalent tosecurities is as follows:i)

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

ii) Held-to-maturity debt securities are stated at amortized cost (straight-line method) determined by
the moving average method.
iii) Policy-reserve-matching bonds, which are in accordance with “Temporary Treatment of Accounting
and Auditing Concerning Policy-reserve-matching Bonds in Insurance Industry” (Industry Audit
Committee Report No. 21 issued by the Japanese Institute of Certified Public Accountants (“JICPA”)),
are stated at amortized cost (straight-line method) determined by the moving average method.
iv) Investments in subsidiaries and affiliates are stated at cost.
v) Available-for-sale securities with fair market value except for the following are stated at fair market
value based on the market prices at the end of the fiscal year. Available-for-sale securities with fairmarket value, of which domestic stocks, domestic stock exchange-traded funds, domestic listed
real estate investment trusts, foreign stock exchange-traded funds for which hedge accounting

48

Asahi Mutual Life Insurance Company Annual Report 2019

7. Non-consolidated Financial Statements

is not applied, foreign bond exchange-traded funds for which hedge accounting is not appliedand foreign currency-denominated bonds for which hedge accounting is not applied, are stated
at fair market value based on the average of the market prices during the final month of the fiscal
year. Costs of sales are determined by the moving average method. Available-for-sale securities
with extreme difficulty of measuring fair market value, of which public and corporate bonds
including foreign bonds with the difference between acquisition cost and face value considered
as an adjustment of interest, are stated at amortized cost (straight-line method) determined by
the moving average method. The other securities are stated at cost determined by the moving
average method. Net unrealized gains or losses on these available-for-sale securities, net of tax,
are recorded as a separate component of net assets.
(2) Policy-reserve-matching bonds
The Company classifies bonds held with the aim of matching the duration to outstanding insurance
liabilities within the sub-groups (categorized by insurance type, investment policy and other factors)of individual life insurance and individual annuities as policy-reserve-matching bonds in accordancewith “Temporary Treatment of Accounting and Auditing Concerning Policy-reserve-matching Bonds inInsurance Industry” (Industry Audit Committee Report No. 21 issued by the JICPA).
(3) Valuation methods of derivative financial instruments
Derivative financial instruments are stated at fair market value.
(4) Revaluation of land
The Company revalued the land for business purposes based on the Act on Revaluation of Land (ActNo. 34 promulgated on March 31, 1998). The difference between fair value and book value resulting
from the revaluation, net of related taxes, is recorded as land revaluation differences as a separate
component of net assets and the related tax is recorded as deferred tax liabilities for revaluation.
■ Date of revaluation: March 31, 2001
■ Method of revaluation as prescribed for in Article 3, Paragraph 3 of the said Act:The calculation is based on the publicly announced appraisal value with certain adjustments set forthin Article 2, Item 1 of the Enforcement Ordinance of the Act on Revaluation of Land (Government
Ordinance No. 119 promulgated on March 31, 1998) or the appraisal value determined by thereal-estate appraiser set forth in Article 2, Item 5 of the said Ordinance with certain reasonableadjustments.
(5) Depreciation of tangible fixed assets
Depreciation of the Companyʼs tangible fixed assets is calculated by the following methods.
■ Tangible fixed assets (excluding lease assets): Declining-balance method
However, buildings are depreciated using the straight-line method.
■ Lease assets related to finance lease transactions that do not transfer ownership: Straight-line
method over the lease term with no residual value(6) Foreign currency translation
Foreign currency-denominated assets and liabilities are translated into Japanese yen at the effective
exchange rate prevailing at the balance sheet date, except for foreign exchange-traded funds for which
hedge accounting is not applied, foreign bond exchange-traded funds for which hedge accounting
is not applied and foreign currency-denominated bonds for which hedge accounting is not applied
categorized as available-for-sale securities with fair market value. Such securities are translated into
Japanese yen at the average of the effective exchange rate during the final month of the fiscal year.
(7) Allowance for possible loan losses
Allowance for possible loan losses is provided in accordance with the Companyʼs standards of selfassessment and write-offs and reserves on credit quality:i)

For credit to borrowers who are legally bankrupt such as being in bankruptcy proceedings or49

7. Non-consolidated Financial Statements

civil rehabilitation (hereinafter “legally bankrupt borrowers”) and who are substantially bankrupt(hereinafter “substantially bankrupt borrowers”), the Company provides the remaining amount ofcredits after the direct write-off described below and the deductions of the amount expected tobe collected through the disposal of collateral or the execution of guarantees.
ii) For credit to borrowers who are not currently bankrupt but have a high risk of bankruptcy(hereinafter “not currently bankrupt borrowers”), the Company provides the amounts deemed asnecessary considering the borrowersʼ ability to pay, within the amounts after deductions of theamount expected to be collected through the disposal of collateral or the execution of guarantees.
iii) For credit to borrowers other than the above, the Company provides the amounts calculated bymultiplying the book value by the actual ratio of bad debt losses on defaults during a certain past
period.
All credit is assessed by the relevant departments in accordance with the Companyʼs standards ofself-assessment on credit quality. The results of the assessment are reviewed by the audit department,
which is independent of business-related divisions. Subsequently, allowance for possible loan losses isprovided based on the results of these assessments.
For credit to legally bankrupt borrowers and substantially bankrupt borrowers, the amounts
remaining after deductions of collateral value or the amounts collectible through the execution ofguarantees are written-off directly from the book value as the estimated uncollectible amounts. The
amounts written-off as of March 31, 2019 and 2018 were ¥47 million (US$0 million) and ¥60 million,
respectively.
(8) Accounting for employeesʼ retirement benefits and method of amortizing retirement benefit expenses
Reserve for employeesʼ retirement benefits and prepaid pension cost are presented for the employeesʼ
retirement benefits based on projected benefit obligation and pension plan assets at the balance
sheet date.
The Company uses the following methods of accounting in relation to retirement benefits.
■ The retirement benefit obligation is attributed to each period by the benefit formula method.
■ Actuarial differences are amortized under the straight-line method over a period of seven years
starting the following year.
■ Prior service cost is charged to income when incurred.
(9) Reserve for price fluctuation
Reserve for price fluctuation is calculated in accordance with Article 115 of the Insurance Business Act.
(10) Accounting for hedging activities
Hedging activities are accounted for in accordance with the “Accounting Standards for Financial
Instruments” (Accounting Standards Board of Japan (“ASBJ”) Statement No. 10).
The Company mainly applies the following hedging activities:
The Company applies deferred hedge accounting and the exceptional accounting treatment (“Tokureishori”) for interest rate swaps used to hedge the cash flow volatility of certain loans.
The Company also applies fair value hedge accounting for hedging activities related to foreignexchange rate fluctuation exposures on certain bonds, investment trusts and others denominated inforeign currencies.
The Company also applies designated hedge accounting (“Furiate-shori”) for currency swaps used
to hedge foreign exchange rate fluctuation exposures on the foreign currency-denominated bonds
issued by the Company.
The Company also applies designated hedge accounting (“Furiate-shori”) for the foreign currencydenominated transactions other than the above.
The effectiveness of a hedge is mostly assessed by a ratio analysis, comparing the fluctuations in thefair value or cash flows of hedged items and hedging instruments.

50

Asahi Mutual Life Insurance Company Annual Report 2019

7. Non-consolidated Financial Statements(11) Accounting for consumption taxes
The Company accounts for consumption tax and local consumption tax by the tax-exclusion method.
The consumption taxes on certain assets, which are not deductible from consumption taxes withheld
and that are stipulated to be deferred under the Corporation Tax Act of Japan, are deferred as prepaid
expenses and amortized equally over five years.
Consumption taxes other than deferred consumption taxes are recognized as an expense whenincurred.
(12) Policy reserves
Policy reserves are based on Article 116 of the Insurance Business Act and the premium reserve at theend of fiscal year is calculated by the following method:
In regard to the policies subject to the standard policy reserves, the method as prescribed by theCommissioner of Financial Services Agency (Japanese Ministry of Finance Public Notice No. 48, 1996)
is applied.
In regard to the policies not subject to the standard policy reserves, the net level premium method isapplied.
(13) Software
Capitalized software for internal use owned by the Company is amortized using the straight-line
method over the estimated useful lives.

2. Financial Instruments
Asset management of the general accounts other than the separate accounts stipulated in Article 118,
Paragraph 1 of the Insurance Business Act is conducted based on the following principles.
■ For accumulation whole life with variable interest rates, accumulation insurance with variableinterest rates and new single premium individual annuities which have an effective date on or after
April 2, 2012, the Company mainly invests in domestic bonds, engaging in matching asset liability
management, or Matching ALM, which aims at matching the duration to outstanding insurance
liabilities to avoid interest rate fluctuation risks.
■ For individual life insurance and individual annuities other than above, the Company holds yendenominated fixed income investments, including bonds and loans, as the core of its asset portfolio.
The Company also holds domestic stocks, foreign securities and real estate assets to enhance its
profitability.
Derivatives are mainly used to hedge market price fluctuation risk and exchange rate fluctuation risk
regarding securities and exchange rate fluctuation risk related to the foreign currency-denominated bonds
issued by the Company. As the major financial instruments, securities are exposed to market risk and credit
risk, loans are exposed to credit risk and exchange rate fluctuation risk, and derivatives are exposed tomarket risk and credit risk.
In managing market risks, the following two methods are used. One is the quantitative risk managementof securities etc. using the Value at Risk (“VaR”) method and the other is the risk management by stress test
and sensitivity analysis which analyze the effect on the Companyʼs whole portfolio, simulating scenarios ofdeteriorating market environments. This is for the purpose of managing an appropriate asset allocation
within the ranges of acceptable risks.
In managing credit risks, the Company quantifies the credit risks of entire portfolio through VaR method
and controls the amount of risks within an acceptable range. Furthermore, the Company assigns in-housecredit ratings to our borrowers in accordance with the creditworthiness of each borrower. Strict credit
research of each borrower before lending as well as following up on any changes of creditworthiness ofeach borrower after lending are implemented by Risk Management Department, which is independent of
the departments executing investments and lending. Maximum limits of credit are set up for each borrowerin accordance with its credit risks to avoid the concentration of credit risks on specific corporations andspecific corporation groups. Through all these measures, the Company endeavors to develop high quality
portfolio.

51

7. Non-consolidated Financial Statements

The balance sheet amounts, fair values and the differences between those of major financial assets andliabilities as of March 31, 2019 and 2018 were as follows:
Millions of Yen
2019
As of March 31
Cash and deposits
Call loans
Monetary claims bought
Trading securities
Held-to-maturity debt securities
Policy-reserve-matching bonds
Available-for-sale securities
Securities
Trading securities
Held-to-maturity debt securities
Policy-reserve-matching bonds
Available-for-sale securities
Loans
Policy loans
Industrial and consumer loans
Total assets
Bonds payable
Loans payable
Total liabilities
Derivative financial instruments
Hedge accounting not applied
Hedge accounting applied

Balance Sheet
Amount¥36,102140,000
28,984–28,339–645
4,226,979
25,410316,473
2,074,484
1,810,610
426,804
44,272
382,5314,858,871
88,29551,000139,295
766
221
544

Fair Value¥

36,102140,000
32,137–31,492–645
4,604,058
25,410360,188
2,407,849
1,810,610
436,600
44,272
392,327
5,248,899
89,20050,855140,055
766
221
544

Difference
¥

–
–
3,153
–
3,153
–
–
377,079–
43,714
333,364
–
9,795
–
9,795
390,028
905
(144)
760
–
–
–

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

52

Asahi Mutual Life Insurance Company Annual Report 2019

7. Non-consolidated Financial Statements

Millions of Yen
2018
As of March 31
Cash and deposits
Call loans
Monetary claims bought
Trading securities
Held-to-maturity debt securities
Policy-reserve-matching bonds
Available-for-sale securities
Securities
Trading securities
Held-to-maturity debt securities
Policy-reserve-matching bonds
Available-for-sale securities
Loans
Policy loans
Industrial and consumer loans
Total assets
Bonds payable
Loans payable
Total liabilities
Derivative financial instruments
Hedge accounting not applied
Hedge accounting applied

Balance Sheet
Amount¥Fair Value

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

¥

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

Difference
¥

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

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

Millions of U.S. Dollars
2019
As of March 31
Cash and deposits
Call loans
Monetary claims bought
Trading securities
Held-to-maturity debt securities
Policy-reserve-matching bonds
Available-for-sale securities
Securities
Trading securities
Held-to-maturity debt securities
Policy-reserve-matching bonds
Available-for-sale securities
Loans
Policy loans
Industrial and consumer loans
Total assets
Bonds payable
Loans payable
Total liabilities
Derivative financial instruments
Hedge accounting not applied
Hedge accounting applied

Balance Sheet
Amount
$

325
1,261
261
–
255
–
5
38,084228
2,851
18,69016,313
3,845
398
3,446
43,777
795
459
1,255
6
1
4

Fair Value
$

325
1,261
289
–
283
–
5
41,481
228
3,245
21,694
16,313
3,933
398
3,534
47,291
803
458
1,261
6
1
4

Difference
$

–
–
28
–
28
–
–
3,397
–
393
3,003
–
88
–
88
3,514
8
(1)
6
–
–
–

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

53

7. Non-consolidated Financial Statements(1) Securities including deposits and monetary claims bought which are treated as securities based on“Accounting Standards for Financial Instruments” (ASBJ Statement No. 10)
As for available-for-sale securities of which market value is readily available, domestic stocks, domestic
stock exchange-traded funds, domestic listed real estate investment trusts, foreign stock exchangetraded funds for which hedge accounting is not applied, foreign bond exchange-traded funds forwhich hedge accounting is not applied and foreign currency-denominated bonds for which hedge
accounting is not applied are stated at the average of the market value during the final month of
the fiscal year. Available-for-sale securities of which market value is readily available excluding thesecurities mentioned above are stated at the market value at the balance sheet date.
Other securities of which market value is readily available are stated at market value at the balance
sheet date.
Unlisted stocks and others, including investments in subsidiaries and affiliates, of which market value is
not readily available are not subject to fair value disclosure and are therefore not included in the table
above because it is regarded as extremely difficult to determine their fair value.
The amounts of the unlisted stocks and others, including investments in subsidiaries and affiliates,
reported in the non-consolidated balance sheets were ¥30,478 million (US$274 million) and ¥76,012
million as of March 31, 2019 and 2018, respectively.
(2) Loans and loans payableAs credit exposure for policy loans without specific repayment periods is limited to the amount of the
cash surrender value, the Company considers book value as fair value with the assumption that fairvalue approximates book value in light of factors such as projected repayment period and interest
terms.
As for industrial and consumer loans and loans payable, the fair value of loans is primarily stated attheoretical prices calculated by discounting the future cash flows to the present value. The fair valueof loans to legally bankrupt borrowers, substantially bankrupt borrowers and not currently bankrupt
borrowers is stated at the amounts by deducting estimated losses from the book value before direct
write-offs.
(3) Bonds payable
The fair values of bonds payable are based on the market values, etc. as of March 31, 2019 and 2018,
respectively.
(4) Derivative financial instruments
The fair values of stock options and currency options traded over the counter are based on the quoted
prices offered by counterparty financial institutions.
The fair values of foreign currency forward contracts are stated at theoretical prices based on the TTM
at the balance sheet date.
Regarding the derivative transactions for which designated hedge accounting (“Furiate-shori”) ofcurrency swaps is applied, these fair values are included in bonds payable since they are treated
together with hedged bonds payable.

3. Investments and Rental Properties
The Company holds investment and rental properties such as office buildings in Tokyo and other areas. The
carrying amounts and the fair values of investment and rental properties were ¥251,447 million (US$2,265
million) and ¥274,067 million (US$2,469 million) as of March 31, 2019 and ¥268,270 million and ¥265,583
million as of March 31, 2018, respectively. The fair value is mainly based on the value (including someadjustments using the reference prices) of real estate appraisal report prepared by the external real-estateappraiser in accordance with real estate appraisal standards.

4. Securities Lent under Lending Agreements
The amounts of securities lent under lending agreements were ¥157,185 million (US$1,416 million) and¥121,177 million as of March 31, 2019 and 2018, respectively.

54

Asahi Mutual Life Insurance Company Annual Report 2019

7. Non-consolidated Financial Statements

5. Loans
The total amounts of loans to bankrupt borrowers, delinquent loans, delinquent loans three or moremonths past due and restructured loans, which were included in loans, were ¥757 million (US$6 million)and ¥906 million as of March 31, 2019 and 2018, respectively.
i)

Loans to bankrupt borrowers were ¥0 million (US$0 million) and ¥0 million as of March 31, 2019 and2018, respectively.

ii) Delinquent loans were ¥619 million (US$5 million) and ¥748 million as of March 31, 2019 and 2018,
respectively.
iii) Delinquent loans three or more months past due were ¥110 million (US$0 million) and ¥120 million
as of March 31, 2019 and 2018, respectively.
iv) Restructured loans were ¥27 million (US$0 million) and ¥36 million as of March 31, 2019 and 2018,
respectively.
Loans to bankrupt borrowers represent loans, excluding the balances already written-off, which meet theconditions prescribed in Article 96, Paragraph 1, Items 3 and 4 of the Enforcement Regulations of the
Corporate Tax Act. Moreover, accruing interest on these loans is not recorded as income after determiningthat principal of or interest on these loans is unlikely to be collected due to the significant delay inrepayment of principal or interest payments or for other reasons.
Accruing interest on delinquent loans is not recorded as income due to the same reasons as described above,and delinquent loans exclude loans to bankrupt borrowers and loans for which interest payments have beensuspended and rescheduled to assist and support the borrowers in the restructuring of their businesses.
Delinquent loans three or more months past due are loans for which interest payments or repayments ofprincipal are delinquent for three months or more from the due dates under the terms of the related loan
agreements, excluding those loans classified as loans to bankrupt borrowers and delinquent loans.
Restructured loans are loans for which certain concessions favorable to borrowers, such as interest
reduction or exemptions, rescheduling of due dates of principal or interest payments, waivers of claim
or other terms, have been negotiated for the purpose of assisting and supporting the borrowers in the
restructuring of their businesses. This category excludes loans classified as loans to bankrupt borrowers,
delinquent loans and delinquent loans three or more months past due.
The direct write-offs related to loans decreased the amounts of loans to bankrupt borrowers describedabove by ¥3 million (US$0 million) and ¥13 million as of March 31, 2019 and 2018, respectively.
In addition, the direct write-offs related to loans decreased the amounts of delinquent loans describedabove by ¥43 million (US$0 million) and ¥46 million as of March 31, 2019 and 2018, respectively.

6. Accumulated Depreciation of Tangible Fixed Assets
Accumulated depreciation of tangible fixed assets totaled ¥277,831 million (US$2,503 million) and ¥279,518
million as of March 31, 2019 and 2018, respectively.

7. Separate Accounts
Total assets in separate accounts provided for in Article 118 of the Insurance Business Act were ¥27,560
million (US$248 million) and ¥29,382 million as of March 31, 2019 and 2018, respectively. The amounts ofseparate account liabilities were the same as separate account assets.

8. Receivables from/Payables to Subsidiaries
The total amounts of receivables from/payables to subsidiaries were ¥297 million (US$2 million) and ¥1,318
million (US$11 million) as of March 31, 2019 and ¥285 million and ¥991 million as of March 31, 2018, respectively.

9. Receivables from/Payables to Directors and Audit Board Members
There were no receivables from directors and audit board members as of March 31, 2019 and 2018,
respectively. The total amounts of payables to directors and audit board members were ¥15 million (US$0
million) and ¥15 million as of March 31, 2019 and 2018, respectively.

55

7. Non-consolidated Financial Statements

10. Deferred Taxes(1) Deferred tax assets/liabilities were recognized as follows:
Millions of
U.S. Dollars

Millions of Yen
As of March 31
Deferred tax assets
Valuation allowance for deferred tax assets
Subtotal
Deferred tax liabilities
Net deferred tax assets (liabilities)

2019
¥

¥

62,73820,30442,43432,02010,413

2018
¥

¥

2019

61,21921,48839,73023,543
16,187

$

565
182
382
288
93

$

Major components of deferred tax assets/liabilities were as follows:
Millions of Yen
As of March 31
Deferred tax assets
Contingency reserve
Reserve for price fluctuation
Reserve for employeesʼ retirement benefits
Impairment losses
Losses on valuation of securities
Deferred tax liabilities
Net unrealized gains on available-for-sale securities2019¥

14,27911,408
9,385
7,968
7,528
30,833

Millions of Yen
As of March 31
Deferred tax assets
Contingency reserve
Reserve for price fluctuation
Reserve for employeesʼ retirement benefits
Impairment losses
Losses on valuation of securities
Net unrealized losses on available-for-sale securities
Deferred tax liabilities
Net unrealized gains on available-for-sale securities2018¥

14,14010,800
9,866
8,526
5,542
3,988
22,605

Millions of
U.S. Dollars
As of March 31
Deferred tax assets
Contingency reserve
Reserve for price fluctuation
Reserve for employeesʼ retirement benefits
Impairment losses
Losses on valuation of securities
Deferred tax liabilities
Net unrealized gains on available-for-sale securities

2019
$

128
102
84
71
67
277

(2) The statutory tax rates were 27.9% and 28.1% for the fiscal years ended March 31, 2019 and 2018,
respectively. The main factors causing the differences between the statutory tax rates and the actual
effective tax rates after considering deferred taxes were as follows:
For the years ended March 31

Change of valuation allowance for deferred tax assets
Interest on foundation funds
Reserve for dividends to policyholders

56

Asahi Mutual Life Insurance Company Annual Report 20192019(8.9)%(8.5)%(3.1)%

2018(3.8)%(4.8)%(1.5)%

7. Non-consolidated Financial Statements

11. Reserve for Dividends to Policyholders
Millions of
U.S. Dollars

Millions of Yen
For the years ended March 31
Balance at the beginning of the fiscal year
Transfer to reserve from surplus in the previous fiscal year
Dividends to policyholders paid out during the fiscal year
Increase in interest
Decrease in others
Balance at the end of the fiscal year

2019
¥

¥

36,959
1,963
4,821
53
49
34,1042018¥¥

40,861
1,519
5,426
58
53
36,959

2019
$

$

332
17
43
0
0
307

12. Stocks of Subsidiaries and Affiliates
The amounts of stocks of subsidiaries and affiliates the Company held as of March 31, 2019 and 2018 were
¥6,649 million (US$59 million) and ¥5,063 million, respectively.

13. Pledged Assets
Assets pledged as collateral as of March 31, 2019 and 2018 were securities in the amount of ¥16,506 million(US$148 million) and ¥4,325 million, respectively.

14. Policy Reserves for the Reinsurance Contracts
Reserve for outstanding claims for the reinsurance contracts provided in accordance with Article 73,
Paragraph 3 of the Enforcement Regulation of the Insurance Business Act which applies mutatis mutandis
to Article 71, Paragraph 1 of the Enforcement Regulation of the Insurance Business Act (hereinafter “reservefor outstanding claims for ceded reinsurance”) was ¥4 million (US$0 million) as of March 31, 2019.
Policy reserves for the reinsurance contracts provided in accordance with Article 71, Paragraph 1 of the
Enforcement Regulation of the Insurance Business Act (hereinafter “policy reserves for ceded reinsurance”)
were ¥270 million (US$2 million) and ¥177 million as of March 31, 2019 and 2018, respectively.

15. Adjustment to Redemption of Foundation Funds and Appropriation of Net Surplus
The total amounts of adjustment to redemption of foundation funds and appropriation of net surplus
defined in Article 30, Paragraph 2 of the Enforcement Regulation of the Insurance Business Act were¥99,314 million (US$894 million) and ¥81,574 million as of March 31, 2019 and 2018, respectively.

16. Redemption of Foundation Funds
Accompanying the redemption of foundation funds totaling ¥35,000 million (US$315 million), in accordancewith Article 56 of the Insurance Business Act, the Company transferred the same amount from reserve forfund redemption to reserve for redemption of foundation funds for the fiscal year ended March 31, 2019.

17. Assets with Rights to Sell
The Company has the legal right to sell or collateralize securities borrowed under loan agreements.
The market values of these assets that were not sold or pledged as collateral as of March 31, 2019 and2018 were ¥69,344 million (US$624 million) and ¥73,317 million, respectively. No assets were pledged ascollateral as of March 31, 2019 and 2018.

18. Commitment LineAs of March 31, 2019 and 2018, there were unused commitment line agreements under which the Company
is the lender of ¥3,922 million (US$35 million) and ¥4,101 million, respectively.

57

7. Non-consolidated Financial Statements

19. Subordinated Bonds Payable
As of March 31, 2019 and 2018, bonds payable are subordinated bonds payable, for which the repayments
are subordinated to other obligations.

20. Subordinated Loans Payable
As of March 31, 2019 and 2018, loans payable are subordinated loans payable, for which the repayments
are subordinated to other obligations.

21. Contributions to Policyholders Protection Corporation
The estimated future contributions to the Life Insurance Policyholders Protection Corporation of Japan
under Article 259 of the Insurance Business Act as of March 31, 2019 and 2018 were ¥8,899 million (US$80
million) and ¥9,750 million, respectively. These contributions are charged as operating expenses in thefiscal years in which they are paid.

22. Reserve for Employeesʼ Retirement Benefits(1) Summary of retirement benefit plans
As defined benefit plan, the Company has defined benefit corporate pension plans, which are fundedtype, and lump-sum retirement allowance plans which are non-funded type but resulted in funded type
due to setting of employee pension trust.
(2) Defined benefit plani)

Reconciliation of beginning and ending balance of retirement benefit obligations
Millions of
U.S. Dollars

Millions of Yen
For the years ended March 31
Retirement benefit obligations at the beginning of
the fiscal year
Service cost
Interest cost
Actuarial difference occurred during the fiscal year
Retirement benefit payments
Retirement benefit obligations at the end of the
fiscal year

2019

2018

2019

¥

45,167
1,867
451
743
(4,644)¥

46,250
1,970
462
1,471
(4,986)

$

406
16
4
6
(41)

¥

43,586¥45,167$392ii) Reconciliation of beginning and ending balance of pension plan assets
Millions of
U.S. Dollars

Millions of Yen
For the years ended March 31
Pension plan assets at the beginning of the fiscal
year
Expected return on pension plan assets
Actuarial difference occurred during the fiscal year
Contributions by the employer
Retirement benefit payments
Pension plan assets at the end of the fiscal year

58

Asahi Mutual Life Insurance Company Annual Report 2019

2019
¥

¥

10,41855(3,013)
130
(184)
7,407

2018
¥

¥

8,493
60
1,928
129
(192)
10,418

2019
$

$

93
0
(27)
1
(1)
66

7. Non-consolidated Financial Statementsiii) Reconciliation of retirement benefit obligation and pension plan assets with reserve for employeesʼ
retirement benefits and prepaid pension cost presented on the non-consolidated balance sheets
Millions of
U.S. Dollars

Millions of Yen
As of March 31
a. Funded plan retirement benefit obligationb. Pension plan assets
c. a + b
d. Unrecognized actuarial differences
e. Net amount of liabilities and assets presented on
the non-consolidated balance sheet
f. Reserve for employeesʼ retirement benefits
g. Prepaid pension cost
h. Net amount of liabilities and assets presented on
the non-consolidated balance sheet

2019¥

43,586(7,407)36,179(2,684)2018¥

45,167(10,418)
34,749546

33,49533,640(145)¥

33,495

2019
$

392
(66)
325
(24)

35,29535,365(70)¥

35,295

301
303
(1)
$

301

iv) Breakdown of retirement benefit expenses
Millions of
U.S. Dollars

Millions of Yen
For the years ended March 31
Service cost
Interest cost
Expected return on pension plan assets
Amortization of actuarial differences
Retirement benefit expenses related to defined
benefit plan

2019

2018

2019

¥

1,867
451
(55)
526

¥

1,970
462
(60)
538

$

16
4
(0)
4

¥

2,790

¥

2,910

$

25

v) Breakdown of main pension plan assets
The breakdown of main asset categories as a percentage of pension plan assets was as follows:
As of March 31
Stocks
Bonds
Others
Total

2019
46%
8%
46%
100%

2018
62%
6%
32%
100%

vi) Method for determining the expected long-term rate of return
To determine the expected long-term rate of return on pension plan assets, the Company takes
into account the present and future allocation of pension plan assets, and the present and expected
future long-term rate of return on the diverse range of assets that makes up the pension assets.
vii) Underlying actuarial assumptions
The main underlying actuarial assumptions were as follows:
As of March 31
Discount rate
Expected long-term rate of return on pension plan assets
Defined benefit corporate pension plans

2019
1.0%
0.5%
1.5%

2018
1.0%
0.7%
1.7%

59

7. Non-consolidated Financial Statements

III. Notes to Non-consolidated Statements of Income
1. Transactions with Subsidiaries and Affiliates
The total amounts of revenues and expenditures in connection with subsidiaries and affiliates were ¥678
million (US$6 million) and ¥9,759 million (US$87 million) for the fiscal year ended March 31, 2019 and ¥442
million and ¥10,245 million for the fiscal year ended March 31, 2018, respectively.

2. Investment Income and Expenses
The major components of gains on sales of securities were as follows:
Millions of
U.S. Dollars

Millions of Yen
For the years ended March 31
Domestic bonds
Domestic stocks and other securities
Foreign securities

2019
¥

2018

32,424
1,685
538

¥

2019

44,891
1,709
178

$

292
15
4

The major components of losses on sales of securities were as follows:
Millions of
U.S. Dollars

Millions of Yen
For the years ended March 31
Domestic bonds
Domestic stocks and other securities
Foreign securities

2019
¥

2018

2,224
800
9,495

¥

2019

549
487
1,249

$

20
7
85

The major components of losses on valuation of securities were as follows:
Millions of
U.S. Dollars

Millions of Yen
For the years ended March 31
Domestic stocks and other securities
Foreign securities

2019
¥

2018
628
–

¥

2019
49
96

$

5
–

Losses on derivative financial instruments included net valuation losses of ¥1,091 million (US$9 million) andlosses of ¥76 million for the fiscal years ended March 31, 2019 and 2018, respectively.

3. Policy Reserves for the Reinsurance Contracts
Provision for reserve for outstanding claims for ceded reinsurance considered in calculating reversal ofreserve for outstanding claims for the fiscal year ended March 31, 2019 was ¥4 million (US$0 million).
Provisions for policy reserves for ceded reinsurance considered in calculating reversal of policy reserves forthe fiscal years ended March 31, 2019 and 2018 were ¥92 million (US$0 million) and ¥47 million, respectively.

4. Impairment Losses of Fixed Assets
For the fiscal years ended March 31, 2019 and 2018, impairment losses of fixed assets by the Company
were as follows:(1) Method of grouping
Real estate and other assets used for insurance business operations are classified as one asset groupas a whole. Other assets such as real estate for rent and unused real estate are classified as one groupindividually.
(2) Background information on recognizing the impairment losses
As the profitability of certain real estate for rent dropped down significantly due to a decrease in the

60

Asahi Mutual Life Insurance Company Annual Report 2019

7. Non-consolidated Financial Statements

level of rental income and a declining trend in the market prices of land, the Company reduced thebook values of such real estate for rent and unused real estate to their recoverable amounts. The writedowns were recognized as impairment losses and included in the extraordinary losses.
(3) Asset groups for which impairment losses were recognized and losses by classification of fixed assets
Millions of
U.S. Dollars

Millions of Yen
For the years ended March 31
Real estate for rent:
Land
Building
OthersTotal real estate for rent (i)Unused real estate:
Land
Building
OthersTotal unused real estate (ii)
Total:Land
Building
OthersTotal (i) + (ii)

2019
¥

¥

2018
0
0
0
0

¥

2019

518
699
–
1,217

$

0
0
0
0

918
264
52
1,235

369
191
–
560

8
2
0
11

918
264
52
1,235

888
890
–
1,778

8
2
0
11

¥

$

(4) Calculation method of recoverable amounts
The recoverable amounts of real estate for rent are determined at net realizable value or value in use.
The recoverable amounts for unused assets are net realizable value. Value in use is determined as
the estimated net future cash flows, reflecting the volatility risk, discounted at 3.5% and 3.6% for the
fiscal years ended March 31, 2019 and 2018, respectively. Net realizable value is calculated based on
the appraisal value in accordance with “Real Estate Appraisal Standards” or the publicly announced
appraisal value after deducting expected disposal costs.

61

8. Company Overview (as of March 31, 2019)

Tokyo Head Office

Tama Head Office

Company Name:

Asahi Mutual Life Insurance Company

Founded:March 1, 1888

Total Assets:

5.3563 trillion yen

Number of Offices:

58 branches; 593 sales offices (as of April 1, 2019)

Number of Employees:

15,799 (staff: 4,132; sales representatives: 11,667)

Location of Tokyo Head Office:6-1, Otemachi 2-chome, Chiyoda-ku, Tokyo 100-8103, Japan
Tel: 81-3-6225-3111

62

Daitabashi Office

Asahi Mutual Life Insurance Company Annual Report 2019