Annual Report

2021

Year Ended March 31, 2021

Asahi Mutual Life Insurance Company

Contents

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

2. Review of the Previous Mid-term Management Plan “TRY NEXT”……………………………………………………… 6

3. New Mid-term Management Plan “Advance: The Road to 2030”……………………………………………………… 7

4. Business Overview……………………………………………………… 8

5. Business Overview for Fiscal Year 2020 (Non-consolidated)……………………………………………………… 9
Business Performance (Annualized Premiums) … 9
Financial Performance ………………………………11
Financial Soundness ………………………………11
Results of Operations ………………………………13
Assets, Liabilities and Net Assets …………………14
Investments (General Account) ……………………15

6. ESG Investment Initiatives………………………………………………………16

7. Addressing the Recommendations of the Task Force on
Climate-related Financial Disclosures (TCFD)………………………………………………………17

8. Insurance Group that Provides a Variety of Insurance Types………………………………………………………18

9. Governance Structure………………………………………………………19
Corporate Governance ……………………………19
Board of Representative Policyholders ……………20Basic Policy on the Internal Control Structure ……20
Promoting Compliance ……………………………20
Protecting Customer Information …………………21
Risk Management Structure ………………………21
Ofﬁcers (as of July 2, 2021) …………………………22

10. Consolidated Financial Statements………………………………………………………23

11. Non-consolidated Financial Statements………………………………………………………46

12. Company Overview (as of March 31, 2021)………………………………………………………68

1

1. Message from the President

In this era of the 100-year lifespan, aiming to be a company
that contributes to resolving social issues and continues tosupport customers’ “life” through the life insurance businessHiroki Kimura

President and Representative Director

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 due to the
support of our customers. We are deeply grateful forall of your support over these many years.

Financial Results for the Fiscal Year
Ended March 31, 2021 (FY 2020)
Financial results for the year ended March 31, 2021
were still good overall, with annualized premiums
from new policies at 100.7% year-over-year andfundamental profit increasing ¥16.8 billion yearover-year, although we were affected by self-imposed
restrictions on sales activities and other factors
associated with the COVID-19 pandemic.

2Asahi Mutual Life Insurance Company Annual Report 2021

1. Message from the President

Looking Back on the Previous
Mid-term Management Plan
“TRY NEXT”
Under the previous mid-term management plan,“TRY NEXT” (FY 2018-2020), we saw growth in newpolicies through an increase in sales representative
headcount and growth of independent agency
channels. We maintained a net increase in annualized
premiums from policies in force for protection-type
products and improved profitability by ensuring
investment income, thereby improving our financial
soundness and ratings and otherwise providing a big
boost to our results.
We will continue to emphasize working earnestlywith customers and continuing or facilitating thisvirtuous cycle.

New Mid-term Management Plan
“Advance: The Road to 2030”
We expect big, rapid-acting changes to affect thebusiness environment in the years ahead as Japan’s
super-aged society takes root, society undergoes
rapid digitalization, and initiatives are put into action
to achieve a sustainable society.
As a life insurance company, Asahi Life’s business
operations themselves are deeply important andconstitute a social responsibility. We hold that ouruniversal mission as a company is to contribute to theachievement of a sustainable society through our corebusinesses, life insurance and investment.
Above all, as people’s medical expenses andnursing-care burden become a serious social problem
in Japan’s super-aged society, we believe it is importantto support the self-help efforts of our customers inthis era of the 100-year lifespan and to contributeto addressing the problems in a society of healthand longevity by providing the medical and nursing
care insurance products and services in which Asahi

Life has strength, as well as by providing value in thehealthcare sector, such as prevention of the worseningof diseases.
Based on the above recognition, we establishedour new mid-term management plan, “Advance: The
Road to 2030,” a three-year plan that lays out a growthtrajectory towards 2030 “aiming to be a company that
contributes to resolving social issues and continues
to support customers’ ‘life’ through our life insurance
business in this era of the 100-year lifespan.” The
new mid-term management plan focuses on threestrategies: the “Third-sector (Products/Services)
Strategy,” the “Channel Strategy,” and the “Investment
Strategy.” In addition, there are two growth drivers
to support these three strategies: the “DX Strategy”
and the “Human Resource Strategy.” Through thesestrategies, we will work to push forward our initiatives
currently underway and create new areas of growth.

Third-sector (Products/Services) Strategy
l Focus on Medical Insurance and Nursing
Care Insurance
In 2003, Asahi Life began full-scale implementationof initiatives focused on third-sector products suchas medical and nursing care insurance, developing
advanced insurance products and services such as“Anshin Kaigo,” the first insurance product to everwin the Good Design Award. We worked to further
expand our nursing care insurance product line-up.
In April 2020, we launched the nursing care insurance
product for mild cognitive impairment, and thenin October we launched the lump-sum payment
insurance for dementia which enabled application to
be conducted over the internet.
In the new mid-term management plan, as
well, we will continue focusing on the third-sector
insurance market, especially the medical/lifestyledisease and nursing care/dementia sectors in which
we have strength. Above all, we aim to establish amarket presence as “the go-to company for nursing
care insurance” by offering new products and31. Message from the President

services that can meet a broader range of customers’
needs and thereby address the increasingly severe
problems caused by nursing care.
l Providing New Value in the Healthcare
SectorAs Japan’s super-aged society takes root andadvances in information technology power ahead,
there is growing needs for coverage in healthcare
sector.
By providing unique products and services suchas support for the early treatment of diseases andprevention of the worsening of lifestyle diseases toa state requiring nursing care, we will perform acomplementary role to the social security system inJapan’s super-aged society.

Channel Strategy
l Building a Strong Sales Representative
Structure
Sales representatives comprise Asahi Life’s
primary sales channel. The COVID-19 pandemic
created a sudden need for non-face-to-facecommunication from our customers, and we will
push our sales activities to evolve by incorporating
digital technology into our specialty of “face-to-faceconsultation that only humans can offer.”
Furthermore, we will build a strong sales
representative structure by working to improve ourtraining systems for such staff.
l Promotion of Multi-channel Strategy
In terms of independent agency channels forindividual customers, Nanairo Life Insurance Co.,
Ltd., which is a newly established company and sell
products through independent agency channels,
is working to strengthen its product development
capabilities and enhance its sales channels in orderto further grow Asahi Life Group’s market share.
Additionally, in order to address rapidly growing
needs for digital solutions, we will develop digitalchannels, in which we sell our products through4

Asahi Mutual Life Insurance Company Annual Report 2021

internet. Further, we will promote data-driven
marketing*1 that analyzes and utilizes customers’
data to provide products and services suited tocustomer needs.
*1 Methodologies of implementing the marketing PDCA cycle
utilizing data that has been accumulated and analyzed.

l Expansion of Overseas BusinessIn preparation for a shrinking domestic market
in the future, we worked to establish an overseas
business model through measures such as providing
our sales expertise on telemarketing for medical
insurance and other products, as well as promoting
consultation on utilizing internet to Vietnamese
insurance companies which are in partnership withus. Moving ahead, we will continue to expand our
insurance business in Vietnam and study further
expansion primarily in Asia.

Investment Strategy
As interest rates decline worldwide, the severe
investment environment is expected to continue. In
order to ensure sustainable investment income, wewill aim to diversify the range of asset classes in which
we invest to mitigate investment risk.
Additionally, we will contribute to the achievementof a sustainable society through ESG (environment,social, governance) investment, thereby reducing
investment risk and creating new opportunities toprofit. Further, we will also shift to an economic value-1. Message from the President

based portfolio in preparation for the implementationof economic value-based regulations in 2025.

DX Strategy*2
To adapt to rapid digitalization and diversifying
customer needs, we will implement DX and provide
added value in the form of an improved customer
experience. In order to improve customer experience,
we will transform our systems infrastructure topromote DX, as well as engage in three reforms tosales channels, products and services, and business
operations.
*2 Abbreviation for digital transformation. This is the utilizationof digital technology and data to provide new products andservices, create value for customers, and gain a competitive
advantage

Human Resource Strategy
In order to promote the vigorous personnel activity
that is at the core of all of our businesses, we will
focus on “developing human resources who continue
to endeavor,” “restructuring our human resources
portfolio,” and “penetrating work style reforms” byensuring that each and every staff member follows
three behavioral guidelines: “Challenging yourself,”“Career self-reliance,” and “Improving productivity.”

Aiming for the achievement of a
Sustainable Society
Based on our basic management philosophyof “Sincere Service,” as well as our belief that ourcompany’s business operations themselves are deeply
important and constitute a social responsibility,
we work to “engage in business that prioritizes the
improvement of customer satisfaction,” pursue “coexistence with society through continued engagement
to create a prosperous society,” and finally to “improve
employee satisfaction through the creation of acomfortable workplace that fosters employees.”

In terms of our businesses, we contribute to theresolution of global social issues by (in our core life
insurance business) providing life insurance products
and services that reinforce a society of health andlongevity, and (in our investment business) bypromoting ESG (environment, social, governance)
investment.
Alongside this, we will work to contribute to
the achievement of all 17 SDGs by working on
environmental initiatives aimed at a decarbonizedsociety, as well as CSR activities, work style reforms,
health and productivity management, human rights
awareness-raising promotion, and other initiatives.
In line with our sustainability management policy
created under the new mid-term management plan,we will actively develop these initiatives with the aimof improving corporate value and contributing to theachievement of a sustainable society as a company
that grows along with society.

Conclusion
My deepest sympathies go out to all of thoseaffected by the COVID-19 global pandemic.
In the context of the COVID-19 pandemic, Asahi
Life has worked to provide special treatment of
insurance policies and, in order to improve customer
convenience as people shift to “new lifestyles” under
the pandemic, to provide options such as online life
insurance policy consultation services and application
for insurance policies using online “web applications.”
Moving forward, Asahi Life will continue to place
the highest priority on the health and safety of ourcustomers and employees, and continue to provide
flexible services that bring our customers comfort.
We look forward to your continued support andpatronage in the future.

52. Review of the Previous Mid-term Management Plan
“TRY NEXT”
Review of the Previous Mid-term Management Plan “TRY NEXT
- Realizing Growth and Shaping the Future”
We did fail to meet some of our strategic targets due to a decline in sales of insurance for corporate
customers, but we nonetheless made progress towards our overall goals.
l Achievement of strategic targets
Beginning of FY 2018
Start of the mid-term
management planEnd of FY 2018

End of FY 2019

2.518 million

2.536 million

2.562 million

2.602 million

2.580 million

39 thousand

42 thousand

41 thousand

41 thousand

43 thousand¥321.2 billion¥339.7 billion¥339.9 billion¥340.7 billion¥347.0 billion¥273.2 billion¥274.0 billion¥277.2 billion¥280.9 billion¥283.0 billion—

100 thousand

101 thousand

99 thousand

98 thousand

Number of individual
customers
Number of corporate
customers
Policies in force for protection-type
products (Annualized premiums)(Subset) Policies forindividual customers*
Nursing care
Number of new
insurance
policies
Number ofcustomers

End of FY 2020
End of FY 2020
(End of mid-termtargets
management plan)* In 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.

We saw growth in new policies for protection-type products through an increase in sales representative
headcount and growth of our independent agency business. This enabled us to maintain a net increase inpolicies in force for protection-type products. We also secured investment income, thereby improving ourfinancial soundness and ratings.

Growth in new policies forprotection-type products *1(FY 2017 results → FY 2020 results)

Number of sales representatives*2
11,081 → 13,674 (123%)
Annualized premiums from newpolicies for protection-type products*1
Sales representative channel¥17.1 billion → ¥17.8 billion (104%)
Independent agency channels*3¥4.4 billion → ¥6.9 billion (157%)

Improving financial soundness
and ratings(FY 2017 results → FY 2020 results)

Solvency margin ratio

808.5% → 972.0% (+163.5 pts)

Ratings→ BBB+
Fitch : BB+
JCR : BBB– *4 → BBB+
→ BBB
R&I : BB

Improving profitability(FY 2017 results → FY 2020 results)

Annualized premiums from policies
in force for protection-type
products*¹¥298.8 billion→ ¥305.6 billion (+¥6.8 billion)*1 Excluding Grand Stage / Prime Stage, insurance for corporate customers*2 Excluding non-regular staff, etc.
*3 Insurance stores, independent agencies, telemarketing, OTC sales at banks, etc.
*4 JCR ratings was as of Dec. 2018

6

Asahi Mutual Life Insurance Company Annual Report 2021

3. New Mid-term Management Plan
“Advance: The Road to 2030”
New Mid-term Management Plan “Advance: The Road to 2030”
Asahi Life has established a new three-year mid-term management plan for FY 2021 through FY 2023:“Advance: The Road to 2030.”

Establishment of A New Mid-term Management Plan Looking
ahead to 2030
The new mid-term management plan was established based on our clear vision of what kind of company wewant Asahi Life to be in ten years, in light of business environment in 2030.
While the realization of a sustainable society is required towards 2030, Asahi Life will contribute to asustainable society through life insurance business and investment business, based on the belief that Asahi
Lifeʼs business operations themselves are deeply important and constitute a social responsibility.
Above all, as peopleʼs medical expenses and nursing-care burden become a serious social problem inJapanʼs superaged society, we will support the self-help efforts of our customers in this era of the 100-year
lifespan and contribute to addressing the problems in a society of health and longevity by providing the
medical and nursing care insurance products and services in which Asahi Life has strength, as well as byproviding value in the healthcare sector, such as prevention of the worsening of diseases.
Based on this recognition, we established our vision for what we aim for Asahi Life to become towards 2030
as follows.

Asahi Life’s Vision for 2030

Asahi Life: a company that contributes to resolving social issues and continues to support
customers’ “life” through the life insurance business in this era of the 100-year lifespanCorporatevisionAsahi Life’s
Vision for2030

Supporting each and every individual life

Asahi Life: a company that contributes to resolving social issues and continues to support customers’“life” through the life insurance business in this era of the 100-year lifespanSustainability Management
Initiatives of the
New Mid-term Management PlanThree years to create growth trajectory towards 2030
Third-sector Strategy

Channel Strategy

Investment Strategy

Providing value by leveraging
the Company's strength

Developing our sales representative
channelEstablishing multi-channel structure
Creating group synergy

Transitioning to an economic
value-based portfolio
Securing investment income
Promoting ESG investment

Nursing care
Branding

DX Strategy
Growthdrivers

Creating new value-added and a new business model

Human Resource Strategy

Supporting human resource diversity who endeavors to shape the future

Customer-oriented business operations, enhancing compliance,business management sophistication and enhanced governanceInsurance Group Strategy

Advanced Enterprise Risk Management (ERM) Structure7

4. 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, 2021, we had a non-consolidated solvency
margin ratio of 972.0 percent, and insurer financial
strength ratings of BBB+ (Stable Outlook) from Fitch,
BBB (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 customer access, Asahi Life operates
a multi-channel sales structure utilizing our sales
representative and independent agency channels
to provide retail products to our customers.
Our sales representatives, who provide face-toface customer service, comprise our most significant
distribution channel. As of March 31, 2021, we
employed a total of 14,002 sales representatives. As
of April 1, 2021, we had 575 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,
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 the company they trust, we

8Asahi Mutual Life Insurance Company Annual Report 2021

work to cultivate high-quality sales representatives
who are not only knowledgeable about life
insurance products, but also about various financial
instruments, social insurance, tax, and other related
matters.
Although we are continuously strengthening
our sales representative channel, we also havebeen diversifying our distribution channels by
utilizing independent agencies such as walk-in
insurance shops and telemarketing. We have beensuccessfully expanding these independent agency
channels over time, and in order to grow them evenfurther, we spun the channels off into the Nanairo
Life Insurance Co., Ltd. in April 2021. Throughindependent agency channels, Nanairo Life will
provide medical insurance and other third-sector
products to accurately and flexibly serve customersʼ
diversifying needs.

5. Business Overview for Fiscal Year 2020 (Non-consolidated)
Business Performance (Annualized Premiums)l New Policies for Individual Insurance/Individual Annuities
Annualized premiums from new policies reached 100.7% of the previous fiscal year.
Of these, third-sector products reached 101.3% of the previous fiscal year.
(Billions of Yen)
Years ended March 31

2020

2021

New policies
Third-sector products

Year-over-year

25.0

25.1

100.7%

20.7

20.9

101.3%l Surrendered and Lapsed Policies for Individual Insurance/Individual Annuities
Annualized premiums from surrendered and lapsed policies ended at 93.6% of the previous fiscal year.
(Billions of Yen)
Years ended March 31

2020

2021

Year-over-year

Surrendered and lapsed policies

23.4

21.9

93.6%

Surrender and lapse ratio

4.34%

4.14%

(0.20points)l Policies in Force for Individual Insurance/Individual Annuities
Annualized premiums from policies in force ended at 98.2% of the end of the previous fiscal year.
Of these, third-sector products reached 102.6% of the end of the previous fiscal year.
(Billions of Yen)
As of March 31
Policies in force
Third-sector products

2020

2021

Year-over-year

530.7

521.2

98.2%

215.7

221.4

102.6%

9

5. Business Overview for Fiscal Year 2020 (Non-consolidated)l New Policies for Protection-type Products
Annualized premiums from new policies for protection-type products, a focus of Asahi Life, reached101.3% of the previous fiscal year. Annualized premiums from new policies for protection-type products
excluding insurance for corporate customers reached 100.8% of the previous fiscal year.
(Billions of Yen)
Years ended March 31

2020

New policies

2021

Year-over-year

25.0

25.3

101.3%

Sales representative channel

18.3

18.3

100.4%

Independent agency channels for individual
customers

6.7

6.9

103.8%

Excluding insurance for corporate customers

24.6

24.8

100.8%l Policies in Force for Protection-type Products
Annualized premiums from policies in force for protection-type products gained +¥0.7 billion on the endof the previous fiscal year, exhibiting an ongoing increasing trend. Excluding insurance for corporate
customers, the gain was +¥3.9 billion on the end of the previous fiscal year.
(Billions of Yen)
As of March 31
Policies in force

2020

2021

Year-over-year

339.9

340.7

+0.7

Sales representative channel

321.1

317.8

(3.3)

Independent agency channels for individual
customers

18.7

22.8

+4.0

Excluding insurance for corporate customers

301.7

305.6

+3.9

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 (excludes saving-type products).

10

Asahi Mutual Life Insurance Company Annual Report 2021

5. Business Overview for Fiscal Year 2020 (Non-consolidated)

Financial Performancel Fundamental Profit
Due to improvements in negative spread amounts caused by an increase in interest, dividends and otherincome, fundamental profit grew ¥16.8 billion relative to the previous fiscal year to ¥46.5 billion.
(Billions of Yen)
Years ended March 31

2020

Fundamental profit

2021

Year-over-year

29.6

46.5

+16.8

Underwriting gains

77.9

80.4

+2.5

Negative spread amount(48.3)(33.9)+14.3

l Ordinary Profit, Net Surplus
Ordinary profit was ¥36.6 billion, with a net surplus of ¥23.2 billion.
(Billions of Yen)
Years ended March 31

2020

2021

Year-over-year

Ordinary profit

31.0

36.6

+5.5

Net surplus

20.4

23.2

+2.8

Financial Soundness
l Solvency Margin Ratio
Solvency margin ratio increased 29.2 points relative to the end of the previous fiscal year, raising it to972.0%.
As of March 31
Solvency margin ratio

2020
942.8%

2021
972.0%

Year-over-year+29.2pointsl Adjusted Net Assets
Adjusted net assets reached ¥1,159.9 billion, an increase of ¥100.0 billion relative to the end of theprevious fiscal year.
(Billions of Yen)
As of March 31
Adjusted net assets

2020
1,059.82021
1,159.9

Year-over-year+100.011

5. Business Overview for Fiscal Year 2020 (Non-consolidated)l Net Unrealized Gains/Losses on Securities (with fair value, general account)
As of March 31
Securities

2021

Year-over-year

472.4

536.1

+63.7

Domestic stocks

93.0

227.9

+134.8Domestic bonds

322.9

237.3

(85.5)

Foreign securities

64.3

62.7

(1.6)

Other securities(10.9)

5.6+16.6

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 portion

12

2020

(Billions of Yen)

Asahi Mutual Life Insurance Company Annual Report 2021of the balance sheet as reserve for redemption offoundation funds. As of March 31, 2021, the balanceof foundation funds was ¥91.0 billion and the amountof reserve for redemption of foundation funds was¥166.0 billion, respectively.
Additionally, we have also worked on strengthening
our financial soundness by accumulating internal
reserves and raising funds in the form of subordinateddebt which, while accounted for as a liability, functions
largely like capital.

5. Business Overview for Fiscal Year 2020 (Non-consolidated)

Results of Operationsl Statements of Income(Billions of Yen)
Years ended March 31
Ordinary income:

2020

2021

Year-over-year

622.0

600.7

96.6%

393.6

391.4

99.4%

372.7

369.8

99.2%

139.7

146.5

104.8%

Interest, dividends and other income

108.7

118.1

108.7%

Gains on sales of securities

23.8

15.2

63.9%

88.6

62.7

70.8%

75.3

48.6

64.5%

591.0

564.0

95.4%

406.5

385.3

94.8%

Claims

114.6

112.0

97.7%

Annuities

126.8

122.1

96.3%

Benefits

71.4

68.2

95.5%

Surrender benefits

88.0

77.5

88.1%

Investment expenses:

42.7

34.5

80.9%

Losses on sales of securities

2.8

5.5

196.4%

Losses on valuation of securities

0.3

0.0

5.3%

Losses on derivative financial instruments

16.5

8.8

53.6%

Operating expenses

106.3

110.3

103.8%

Other ordinary expenses

33.6

33.8

100.5%

Ordinary profit

31.0

36.6

117.9%

Extraordinary gains:

0.1

0.2

238.4%

0.0

0.1

161.3%

4.7

8.6

182.0%

Losses on disposal of fixed assets

1.3

1.4

107.9%

Impairment losses

0.9

2.9

307.5%

Provision for reserve for price fluctuation

2.3

2.4

104.7%

Surplus before income taxes

26.4

28.3

107.0%

Total income taxes

6.0

5.0

83.5%

Net surplus

20.4

23.2

114.0%

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:

Gains on disposal of fixed assets
Extraordinary losses:

Ordinary income was ¥600.7 billion (96.6% of theprevious fiscal year), of which ¥391.4 billion (99.4%)
was premium and other income. Investment income
was ¥146.5 billion (104.8%) mainly due to an increase
in interest, dividends and other income.
Ordinary expenses were ¥564.0 billion (95.4%),of which ¥385.3 billion (94.8%) was claims andother payments. Investment expenses were ¥34.5
billion (80.9%) mainly due to a decrease in losses

on derivative financial instruments. Operating
expenses were ¥110.3 billion (103.8%).
This resulted in an ordinary profit of ¥36.6 billion(117.9%).
Extraordinary gains were ¥0.2 billion (238.4%),
and extraordinary losses were ¥8.6 billion (182.0%).
Total income taxes reached ¥5.0 billion.
As a result of the above factors, net surplus was¥23.2 billion (114.0%).

13

5. Business Overview for Fiscal Year 2020 (Non-consolidated)

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

2020

2021

Year-over-year

5,388.6

5,539.4+150.7

Cash, deposits and call loans

112.5

148.3

+35.8

Monetary claims bought

26.9

25.0

(1.8)

4,373.7

4,612.3+238.5

Domestic bonds

2,727.9

2,714.7(13.2)

Domestic stocks

288.1

447.3

+159.2Foreign securities

1,294.0

1,368.8

+74.8

Loans

377.9

303.4

(74.4)

Tangible fixed assets

382.7

377.8

(4.8)

Others

114.7

72.3

(42.4)

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

2020

2021

Year-over-year

4,997.1

5,014.8+17.7

4,529.4

4,477.9(51.4)

4,467.9

4,419.3(48.6)

Bonds payable

88.2

127.7

+39.4

Others

379.3

409.1

+29.7

391.5

524.5

+132.9

339.1

356.6

+17.5

Foundation funds

91.0

91.0

–

Reserve for redemption of foundation funds

166.0

166.0

–

Reserve for revaluation

0.2

0.2

–

Surplus:

81.8

99.3

+17.5

Reserve for future losses

0.3

0.3

+0.0

Other surplus:

81.5

99.0

+17.5

Reserve for fund redemption

35.3

44.4

+9.1

Equalized reserve for dividends to policyholders

7.3

7.0

(0.2)

Unappropriated surplus (loss)

38.8

47.5

+8.6

Total valuation and translation adjustments:

52.4

167.8

+115.4

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

97.6

213.2

+115.5Land revaluation differences(45.1)(45.3)(0.1)

5,388.6

5,539.4+150.7

Policy reserves and other reserves:
Policy reserves

Total net assets:
Total foundation funds and others:

Total liabilities and net assets

14(Billions of Yen)

Asahi Mutual Life Insurance Company Annual Report 2021

5. Business Overview for Fiscal Year 2020 (Non-consolidated)

As of March 31, 2021, total assets were ¥5,539.4
billion, with securities accounting for ¥4,612.3
billion, loans at ¥303.4 billion, and tangible fixed
assets at ¥377.8 billion. Securities saw an increasefor domestic stocks primarily due to increased stock
prices. Foreign securities also saw an increase as
we allocated some funds to relatively higher-yieldforeign securities.
Total liabilities were ¥5,014.8 billion, of which
policy reserves accounted for ¥4,419.3 billion.
Total net assets were ¥524.5 billion, of which
total foundation funds and others amounted to¥356.6 billion, and total valuation and translation
adjustments amounted to ¥167.8 billion.

Investments (General Account)
Investment Environment
In the year ended March 31, 2021 (FY 2020), theJapanese economy overall continued to face toughconditions due to effects of the global COVID-19
pandemic, however policy effects and improvements
in foreign economies resulted in partial recovery

primarily in exports and manufacturing.
Although overseas economies remained indifficult situation as well, there were signs of somerecovery primarily in the United States and China,
supported by aggressive macroeconomic policy.

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 alternative investments*1 and credit
investments*2, which have relatively higher yields,
while still working to control foreign exchange risk

and diversify investment currencies and regions.
Moreover, as a responsible institutional investor,
we are promoting good stewardship and pursuingasset management that incorporates ESG factors.
*1 Investments in infra-funds, real estate investment trusts,
hedge funds, etc., which are considered as alternative
investments to traditional investment assets such as stocks
and bonds.
*2 Investments in corporate bonds, loans, and similar products.

Overview of Investment Performance
In the fiscal year ended March 31, 2021, we limited
allocations to government bonds while focusing
funding on relatively higher-yield alternative
investments and credit investments.
For domestic bonds, we mainly purchased
relatively higher-yield assets such as corporate
bonds, while limiting purchases of long-term
government bonds.
For loans, we reduced overall balance due to
low interest rates, however we made aggressive
investments in project finance for domestic andforeign renewable energy-related projects.
For domestic stocks, we purchased a certain

quantity of primarily high dividend yield stocks.
For foreign currency-denominated bonds, welimited fund allocation due to low foreign interest
rate environment, and shifted funds to foreign
credit investment trusts. Additionally, we invested
in alternative investments managed by our business
partner, major French asset management firm
Natixis Investment Managers S.A. with the aimof expanding our investment opportunities anddiversifying our sources of earnings.
We made an effort to improve real estate
profitability by attracting new tenants and othermeasures.

15

6. ESG Investment Initiatives
As initiatives aimed at creating sustainable
societies are pursued throughout the world, Asahi
Life is engaged in ESG investment with the goalof contributing to the resolution of environmental
issues and other social problems throughinvestment.
In this context, we signed the Principles for
Responsible Investment (PRI)* and are strengthening
initiatives pertaining to ESG investment basedon the Basic Policy on ESG Investment, which is

focused on ESG issues.
In 2020ʼs Annual PRI Assessments (which arefocused on activities in 2019), these efforts earned
us the highest rating, A+, for our stewardship
activities for listed stocks.
* The Principles for Responsible Investment advocate that
institutional investors should incorporate considerationof environmental, social, and governance issues into theirinvestment decision-making process in order to bring about asustainable society.

Specific ESG Investment Initiatives
ESG Integration
In making investment decisions mainly in stocks,
we consider investee companiesʼ non-financial ESG

information as well as their financial data.

Negative Screening
As a general rule, Asahi Life does not invest incompanies that manufacture cluster munitions andother inhumane weapons or in projects to develop

coal-fired power generation facilities that emit highlevels of CO2 and have a significant negative impact
on climate change.

ESG-themed Investment
Asahi Life actively conducts themed investment
and lending activities focused on assets that
contribute to the resolution of environmental,social, and governance issues. In the past, wehave conducted investment and lending activities

involving green bonds (focused on environmental
conservation, etc.), social bonds (focused on
resolving social issues, etc.), and renewable energy
projects such as solar power.

Engagement
Engagement in constructive dialogue withinvestee companies is a central pillar of Asahi Lifeʼsstewardship activities as a responsible institutional

investor, and we incorporate ESG issues into that
dialogue process.

Other
When outsourcing asset management to an
investment trust or fund, we work to choose primarily

16

Asahi Mutual Life Insurance Company Annual Report 2021

asset management firms that are PRI signees.

7. Addressing the Recommendations of the Task Forceon Climate-related Financial Disclosures (TCFD)
Asahi Life endorsed the recommendations of
the TCFD, which was established by the Financial
Stability Board, in June 2019.
With respect to the climate change-relatedthematic areas of “governance,” “strategy,” “riskmanagement,” and “metrics and targets” containedin the TCFDʼs climate recommendations, we will
work to make full disclosures regarding the status ofinitiatives that “contribute to the achievement of asustainable society” from both our primary business,life insurance, and from our investment business as
an institutional investor.

■ Governance
Asahi Life has established the Asahi Life
Environmental Policy for the implementation ofclimate change initiatives and other initiatives toprotect the Earthʼs environment. As a responsible
institutional investor, we have also established the
Basic Policy on ESG Investment with the aim ofcontributing to the achievement of a sustainable
society.
Based on these policies, we will build a structureby which managers can monitor Asahi Lifeʼs responseto the TCFD and climate change generally.

■ Strategy (Risk and Opportunity)
Life Insurance

Investment

We view the medium- to long-term impact ofincreasing average temperatures and abnormal
weather on peopleʼs health as well as theintensification of natural disasters as physical risks.
Additionally, we view any increased operating
costs that exceed estimates for the transition to a
decarbonized society as a transition risk.
We will continue gathering information on each ofthese issues as we move forward.

We believe that physical and transition risks
associated with climate change will have an impact
on our investee companiesʼ sustainability, and that
this represents a risk of damaging asset values.
Meanwhile, we view the increase in investment
opportunities contributing to the resolution ofclimate change as a profit opportunity, regarding
which we are promoting themed investments andother initiatives.
In addition, we will engage in discussions withinvestees in order to lower the risks associatedwith climate change described above.

■ Risk Management
Life Insurance

Investment

We will conduct studies and research on the effects
of climate change on morbidity and mortality
rates, as well as the effects of natural disasters on
insurance claims and other payments. Further, we
will continuously review business continuity plansby taking into account the likely intensification ofnatural disasters.
We will also conduct studies and research on theeffects of transitioning to a decarbonized society.

We will put in place systems that enable us toanalyze the impact on our investment portfolio.

■ Metrics and Targets
Life Insurance
We have set CO2 emissions reduction targets
through FY 2030.
[40% reduction from FY 2013 levels]17

8. Insurance Group that Provides a Variety of Insurance Types
In order to precisely respond to customersʼ
diversifying needs, Asahi Life will partner withGroup companies to implement agile productdevelopment as well as a “multi-channel” strategy

that features expanded independent agency
channels such as insurance shops and telemarketingin addition to our sales representative channel.

Asahi Mutual Life Insurance Company
Our roughly 14,000 sales representatives
throughout Japan provide face-to-face service forcustomers. They provide thorough consultation
services during the application process and provide

extensive follow-up service to address the needsof each individual customer, such as information assuited to changes in customersʼ life cycles.

Nanairo Life Insurance Co., Ltd.
Established in April 2021, Nanairo Life plans
to begin selling life insurance in October 2021.
Primarily working through channels such as
independent agencies and direct marketing,Nanairo Life will provide third-sector products suchas medical insurance to accurately and flexibly serve
customersʼ diversifying needs.

NHS Insurance Group Inc.
NHS Insurance Group is a holding company offour insurance agencies, NHS Inc., Sokisha Inc., FEA
Inc., and Life Navi Partners Inc. In telemarketingand door-to-door sales, they select and suggest

the insurance product that best suits the needs ofeach individual customer from a range of products
offered by various insurance companies.

F.L.P. Co., Ltd.
FLP is an independent agency which runs achain of over twenty insurance shops in the Tokyo
Metropolitan Area under the brand “Insurance
Consultation Salon FLP.” FLP selects and suggests

18

Asahi Mutual Life Insurance Company Annual Report 2021

the insurance product that best suits the needs ofeach individual customer from a range of products
offered by various insurance companies.

9. 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

199. 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. Under this structure, thecompany is comprised of individual insurance
policyholders, who are considered members of
the company. Therefore, the General Meetingof Policyholders serves as the highest decisionmaking body at Asahi Life, but since it is difficult torealistically hold a General Meeting for all roughly
1.92 million policyholders, we have establisheda Board of Representative Policyholders inaccordance with the Insurance Business Act to act
on behalf of the General Meeting of 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 compliance20

Asahi Mutual Life Insurance Company Annual Report 2021

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

9. Governance Structure

Protecting Customer Information
Management System to Appropriately Protect Information Assets
Asahi Life maintains customersʼ personal
information related to their policies and healthstatus insofar that the information is needed forbusiness purposes. Recognizing that keeping
such customer information secure is crucially
important for management, we have establisheda framework to protect customer information,
personal information, and personally identifiable
information. We strictly implement that framework

based on the 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 society, and tofurther 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 establisheda Basic Policy on Risk Management. This policy
is established to comprehensively identify risks
managed by Asahi Life and its Group, and to manage
such risks appropriately to achieve managementtargets.
Within this Basic Policy, we have identified thevarious types and locations of risks faced by Asahi
Life and the Group, and with respect to each risk,
we set down certain risk management methods.
Each executive department in the company
works to appropriately control risk in the operations
under their jurisdiction as per the basic policy andrules for each risk type, while each risk management

department works to properly control risks throughregular identification and reporting of the status ofrisks facing Asahi Life and the Group.
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.
Risk management status is periodically reported inmanagement meetings and the Board of Directors,
and the appropriateness and effectiveness of ourrisk management structure are audited by ourInternal Audit Department.

Risk Appetite
In order to promote the achievement of ourstrategic targets in the mid-term management
plan and comprehensive annual business plan,
we set a certain risk appetite policy to ensure
appropriate risk-taking and risk control based on

both quantitative and qualitative risk evaluation.
This policy sets both levels of tolerable risk forgenerating earnings and risks to be curbed in theinterest of financial soundness.

21

9. 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. Specifically, for economic value-based
evaluation, we monitor and manage 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, 2021)
President and Representative Director

Director

Hiroki Kimura

Kazuko Ohya(1)Representative Director and Managing Executive Officer

Director

Yasuhiro Iguchi
Director and Managing Executive Officer

Yukihiro Fujioka
Director and Managing Executive Officer

Kenichiro Ishijima
Director and Managing Executive Officer

Kenichi Ikeda
Director and Managing Executive Officer

Kouichi Kashimada
Director and Executive Officer

Masahiro Shimotori

Takashi Tsukamoto(1)Director

Kenji Watanabe(1)Standing Statutory Auditor

Hideki KonishiStanding Statutory Auditor

Kaoru Masuda
Statutory Auditor

Tadayuki Seki(2)Statutory Auditor

Mitsuyoshi Shibata(2)Statutory Auditor

Yoichi Kikuchi(2)(1) Outside director(2) Outside statutory auditor

22

Asahi Mutual Life Insurance Company Annual Report 2021

10. 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

2021¥

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
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¥¥¥

44,149113,000
25,094
4,598,851
303,4512020¥

35,22782,00026,915
4,369,302
377,913

2021
$

398
1,020
226
41,5392,740

221,081
150,539
1,459
1,589
3,376
378,046

224,609
152,653
1,963
614
2,933
382,776

1,996
1,359
13
14
30
3,414

16,93513,00629,941
14
987
46,670
494
152
1
(406)
5,540,449

18,735
5,995
24,73111446
82,963
178
8,863
3
(391)
5,390,941

152
117
270
0
8
421
4
1
0
(3)
50,04428,572
4,419,372
30,0504,477,995
680
127,773295,766
32,91445,68022,354
16,2681
5,019,435¥¥

29,3784,467,997
32,0734,529,448
563
88,295
288,156
34,98543,230–16,83835,001,521$$

258
39,918271
40,447
6
1,154
2,671
297
412
201
146
0
45,33891,000166,000
281
97,154354,436

91,000166,000
281
81,429338,711

821
1,499
2
877
3,201

213,201(45,354)(1,349)166,49779
521,014
5,540,449

97,625(45,183)(1,814)50,627
81
389,420
5,390,941

1,925
(409)
(12)
1,503
0
4,706
50,044¥$23

10. 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
Gains on redemption of securities
Foreign exchange gains
Other investment income
Investment gains on separate accounts
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 trading securities
Losses on sales of securities
Losses on valuation of securities
Losses on redemption of securities
Losses on derivative financial instruments
Foreign exchange losses
Provision for allowance for possible loan losses
Depreciation of rental real estate and other assets
Other investment expenses
Investment losses on separate accounts
Operating expenses
Other ordinary expenses
Total ordinary expenses
Ordinary profit
Extraordinary gains:
Gains on disposal of fixed assets
Other extraordinary gains
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

24

Asahi Mutual Life Insurance Company Annual Report 2021

2021
¥

2020

391,410¥2021

393,639$

3,535

117,912
15,249
77
387
6,941
5,740
146,309
66,577604,297

108,447
23,85450–
7,143–
139,494
93,228626,362

1,065
137
0
3
62
51
1,321
601
5,458

112,015
122,158
68,241
77,5385,431
385,384

114,654
126,889
71,46988,0175,530
406,561

1,011
1,103
616
700
49
3,481

–
3
3

1,798
3
1,801

–
0
0

4,470
485
5,520
19
65
8,898
–
10
5,503
9,584
–
34,559115,565
33,833569,347
34,950

4,526
–
2,810
368
140
16,588
2,058
8
5,327
9,761
1,111
42,703
110,795
33,458595,32131,040

40
4
49
0
0
80
–
0
49
86
–
312
1,043
305
5,142
315

146
129
275

90
24
115

1
1
2

1,484
2,971
2,450
5
1,694
8,605
26,620

1,373
966
2,340
–
48
4,728
26,427

13
26
22
0
15
77
240

10. Consolidated Financial Statements

Millions of
U.S. Dollars

Millions of Yen
For the years ended March 31
Income taxes:
Current
Deferred
Total income taxes
Net surplus
Net surplus attributable to non-controlling interests
Net surplus attributable to the Parent Company

2021

¥

10,226(5,074)
5,152
21,46737
21,430

2020
6,635
(542)
6,093
20,33338
20,294

¥

2021
92
(45)
46
193
0
193

$

[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

2021
¥

¥

21,467

2020¥

20,333

2021
$

193

115,575465
116,040(1,408)176(1,232)

1,043
4
1,048

137,471

19,062

1,241

37
137,508¥

38
19,101

$

0
1,242

25

10. 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, 2021

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¥ 91,000 ¥ 166,000 ¥281 ¥ 81,429 ¥ 338,711(1,794)(4,081)
21,430171––¥ 91,000 ¥ 166,000 ¥(1,794)(4,081)
21,430171–
15,725
15,725281 ¥ 97,154 ¥ 354,436

Millions of Yen
Accumulated other comprehensive income

For the year ended March 31, 2021

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 balance

26

Asahi Mutual Life Insurance Company Annual Report 2021

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¥ 97,625 ¥ (45,183) ¥(1,814) ¥ 50,627 ¥Total net
assets81 ¥ 389,420(1,794)(4,081)
21,430171
115,575(171)
115,575(171)¥ 213,201 ¥ (45,354) ¥465
115,869
465
115,869(1,349) ¥ 166,497 ¥(1)
115,868(1)
131,59379 ¥ 521,014

10. Consolidated Financial Statements

Millions of Yen
Foundation funds and others
For the year ended March 31, 2020

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¥ 91,000 ¥ 166,000 ¥281 ¥ 66,801 ¥ 324,083(2,173)(4,116)
20,294622––¥ 91,000 ¥ 166,000 ¥(2,173)(4,116)
20,294622–
14,627
14,627281 ¥ 81,429 ¥ 338,711

Millions of Yen
Accumulated other comprehensive income

For the year ended March 31, 2020

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 balance

Net
Total
unrealized
NonAccumulated accumulatedLand
gains (losses)
controlling
remeasurementsotheron available- revaluation of definedinterests
differences benefit plans comprehensive
for-saleincomesecurities,
net of tax¥ 99,034 ¥ (44,561) ¥(1,990) ¥ 52,482 ¥Total net
assets83 ¥ 376,650(2,173)(4,116)
20,294622(1,408)(622)(1,408)(622)¥ 97,625 ¥ (45,183) ¥176(1,854)176(1,854)(1,814) ¥ 50,627 ¥(2)(1,857)(2)
12,77081 ¥ 389,420

27

10. 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, 2021

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

$

821

$

1,499

$

2

$

735

$

(16)
(36)
193
1

$

–
821

$

–
1,499

–
2

$

$

142
877

3,059
(16)
(36)
193
1

$

142
3,201

Millions of U.S. Dollars
Accumulated other comprehensive income

For the year ended March 31, 2021

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 balance

28

Asahi Mutual Life Insurance Company Annual Report 2021

Net
Total
unrealized
NonAccumulated accumulatedLand
gains (losses)
controlling
remeasurementsotheron available- revaluation of definedinterests
differences benefit plans comprehensive
for-saleincomesecurities,
net of tax
$

881 $

(408) $

(16) $

457 $Total net
assets

0 $

3,517

(16)
(36)
193
1

$

1,043
1,043
1,925 $

(1)(1)(409) $

44(12) $

1,046
1,046
1,503 $

(0)
(0)
0 $

1,046
1,188
4,706

10. 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 transactions
Others, net①Total 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
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

2021
¥

¥

2020

26,620
5,503
11,905
2,971(806)(48,624)
3
10(1,677)2,450(117,912)(14,976)
8,898
4,470
(387)
952
(540)

¥

2021

26,427
5,327
11,586966
1,798(75,380)38(1,106)2,340(108,447)(19,473)
16,588
4,526
2,058
1,053
(19)

$

240
49
107
26
(7)
(439)
0
0
(15)
22
(1,065)
(135)
80
40
(3)
8
(4)

(2,837)
117(3,849)
165

(25)
1

2,312
(4,344)(125,891)
124,006(4,343)(3,820)(9,286)(19,335)

907
5,549(128,967)
114,322(4,531)(4,208)(1,387)(24,771)20(39)(1,137)
1,120
(39)
(34)
(83)
(174)

(93)

(281)

(0)

1,899
(415,682)
441,355(41,265)
115,364(47,257)

2,373(553,820)
371,280(41,128)
87,50921,76017(3,754)
3,986
(372)
1,042
(426)

(884)
(485)
52,94933,614(10,079)
1,501(9,608)34,76391,078–(21,228)(46,000)(7,464)
1,814(6,575)(33,453)

(7)
(4)
478
303
(91)
13
(86)
314

(10,000)
39,477(4,081)(38)(863)
24,49439,922
117,227
157,149––(4,116)(41)(1,019)(5,177)(63,402)180,630
117,227

(90)
356
(36)
(0)
(7)
221
360
1,058
1,419

¥

$

29

10. 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 ¥110.71 = US$1.00,
the effective rate of exchange at the balance sheet date of March 31, 2021.
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.

3. Principles of Consolidation(1) Scope of consolidation
The consolidated subsidiaries as of March 31, 2021 are listed below:
Info Techno Asahi Co., Ltd.
Asahi Life Asset Management Co., Ltd.
Asahi Natixis Investment Managers Co., Ltd.
Asahi NewCo Preparatory Co., Ltd
Asahi NewCo Preparatory Co., Ltd., which was newly established by the Company in the fiscal year
ended March 31, 2021 and renamed as Nanairo Life Insurance Co., Ltd. on April 1, 2021, was includedin the scope of consolidation for the fiscal year ended March 31, 2021.
The consolidated subsidiaries as of March 31, 2020 are listed below:
Info Techno Asahi Co., Ltd.
Asahi Life Asset Management Co., Ltd.
Asahi Natixis Investment Managers 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, 2021. 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.

30

Asahi Mutual Life Insurance Company Annual Report 2021

10. Consolidated Financial Statements(2) Application of equity method
Unconsolidated subsidiaries (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 a whole,
therefore, the equity method is not applied.
(3) Fiscal year-end of consolidated subsidiaries
The fiscal year-end of the consolidated subsidiaries is March 31.
(4) Amortization of goodwill
Goodwill is fully expensed as incurred.

II. Notes to 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 averagemethod.
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.

31

10. Consolidated Financial Statements(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 (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 stock exchange-traded funds for which hedge accounting
is not applied, foreign bond exchange-traded funds for which hedge accounting is not applied andforeign currency-denominated bonds for which hedge accounting is not applied categorized asavailable-for-sale securities with fair market value. Such securities are translated into Japanese yen at
the average of the effective exchange rate during the final month of the fiscal year.
(7) Allowance for possible loan losses
Allowance for possible loan losses is provided in accordance with the 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.

32

Asahi Mutual Life Insurance Company Annual Report 2021

10. Consolidated Financial Statements

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, 2021 and 2020 were ¥28 million (US$0 million) and ¥34 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 of
the balance sheet date.
The Company uses the following methods of accounting in relation to retirement benefits.
■ The retirement benefit obligation is attributed to each period by the benefit formula method.
■ Actuarial differences are amortized under the straight-line method over a period 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) Premium and other income (excluding reinsurance revenue)
Premium and other income (excluding reinsurance revenue) are recorded in principle for insurance
policies for which insurance premium has been received and the insurerʼs liability under the insurance
policies or insurance coverage period has commenced by the relevant amounts received.
Of insurance premiums, the portion corresponding to the period that has yet to pass as of the end of
the fiscal year is set aside as policy reserves in accordance with Article 116 of the Insurance BusinessAct and Article 69, Paragraph 1, Item 2 of the Enforcement Regulation of the Insurance Business Act.

33

10. Consolidated Financial Statements(13) Claims and other payments (excluding reinsurance premiums)
Claims and other payments (excluding reinsurance premiums) are recorded for insurance policies forwhich amounts calculated under policy conditions have been paid in the occurrence of insured events
under the policy conditions by the relevant amounts paid.
In accordance with Article 117 of the Insurance Business Act and Article 72 of the Enforcement
Regulation of the Insurance Business Act, reserve for outstanding claims is set aside for claims, etc.
which is not recorded as payment of claims, etc. but for which the Company has payment obligationor the occurrence of insured events has not been reported but the Company finds that insured events
have already occurred, as of the end of the fiscal year.
(14) Policy reserves
Policy reserves are calculated as stated in accordance with the methods stated in the statement ofcalculation procedures for insurance premiums and policy reserves (Article 4, Paragraph 2, Item 4 of
the Insurance Business Act) pursuant to Article 116, Paragraph 1 of the Insurance Business Act, forinsurance policies under which the insurerʼs liability has started as of the end of the fiscal year, in
preparation for the performance of future obligations under the insurance policies.
Of policy reserves, the premium reserves at the end of the fiscal year are 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.
Regarding a part of policy reserves, the chief actuary checks that policy reserves are appropriately
accumulated in each fiscal year, pursuant to Article 121, Paragraph 1 of the Insurance Business Act andArticle 80 of the Enforcement Regulation of the Insurance Business Act.
Contingency reserves included in policy reserves are set aside in accordance with Article 116 of the
Insurance Business Act and Article 69, Paragraph 1, Item 3 of the Enforcement Regulation of the
Insurance Business Act to cover risks that may accrue in the future in order to ensure the performanceof future obligations under insurance policies.
(15) 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. Accounting Standards Issued but Not Yet Effective
The accounting standards and relevant implementation guidance issued by the fiscal year-end but not yet
effective are as follows:■ “Accounting Standard for Fair Value Measurement” (ASBJ Statement No. 30, issued on July 4, 2019)■ “Implementation Guidance on Accounting Standard for Fair Value Measurement” (ASBJ Guidance
No. 31, issued on July 4, 2019)■ “Accounting Standard for Financial Instruments” (ASBJ Statement No. 10, revised on July 4, 2019)(i) Overview
In these accounting standards and relevant implementation guidance, the guidance on themethods for measuring fair values of financial instruments are set to enhance comparability
between Japanese accounting standards and international accounting standards.
(ii) Schedule date of application
The above revisions are scheduled to be applied from the beginning of the fiscal year ending
March 31, 2022.

34

Asahi Mutual Life Insurance Company Annual Report 2021

10. Consolidated Financial Statements(iii) Effects of application of the Accounting Standards and relevant implementation guidance
The effects of the application are under assessment at the time of preparing these consolidated
financial statements.

3. 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.

3510. Consolidated Financial Statements

The balance sheet amounts, fair values and the differences between those of major financial assets andliabilities as of March 31, 2021 and 2020 were as follows:
Millions of Yen
2021
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
Payables under securities borrowing transactions
Loans payable
Total liabilities
Derivative financial instruments
Hedge accounting not applied
Hedge accounting applied

Balance Sheet
Amount¥44,149113,000
25,094–
24,125–969
4,577,687
26,307
296,880
2,039,060
2,215,438
303,451
35,182
268,268
5,063,382
127,773
178,81041,000347,584(31,522)(1,875)(29,646)

Fair Value¥

44,149113,000
27,415–26,446–969
4,830,694
26,307
333,953
2,254,994
2,215,438
311,163
35,182275,980
5,326,422
130,313
178,81042,548351,673(31,522)(1,875)(29,646)

Difference
¥

–
–
2,321
–
2,321
–
–
253,006–
37,073215,933
–
7,712
–
7,712
263,040
2,540
–
1,548
4,088
–
–
–

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

Millions of Yen
2020
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
Payables under securities borrowing transactions
Loans payable
Total liabilities
Derivative financial instruments
Hedge accounting not applied
Hedge accounting applied

Balance Sheet
Amount¥35,22782,00026,915–25,997–918
4,353,757
20,372
308,469
2,050,330
1,974,584
377,91340,553
337,359
4,875,813
88,295
179,695
51,000318,990
21,251566
20,684

Fair Value¥

35,22782,00029,796–28,878–918
4,693,418
20,372
344,876
2,353,584
1,974,584
386,550
40,553345,997
5,226,993
81,164
179,695
52,776313,636
21,251566
20,684

Difference
¥

–
–
2,881
–
2,881
–
–
339,661–
36,406303,254
–
8,637
–
8,637
351,180(7,130)–1,776(5,354)–––* Assets and liabilities generated by derivative financial instruments are offset and presented net. Net liabilities in total are presented
in parentheses.

36

Asahi Mutual Life Insurance Company Annual Report 2021

10. Consolidated Financial Statements

Millions of U.S. Dollars
2021
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
Payables under securities borrowing transactions
Loans payable
Total liabilities
Derivative financial instruments
Hedge accounting not applied
Hedge accounting applied

Balance Sheet
Amount
$

398
1,020
226
–
217
–
8
41,348237
2,681
18,41820,011
2,740
317
2,423
45,735
1,154
1,615
370
3,139
(284)
(16)
(267)

Fair Value
$

398
1,020
247
–
238
–
8
43,633237
3,016
20,36820,011
2,810
317
2,492
48,111
1,177
1,615
384
3,176
(284)
(16)
(267)

Difference
$

–
–
20
–
20
–
–
2,285
–
334
1,950
–
69
–
69
2,375
22
–
13
36
–
–
–

* 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 ¥21,164 million (US$191 million) and ¥15,544 million
as of March 31, 2021 and 2020, 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 at theoreticalprices calculated by discounting the future cash flows to the present value. The fair value of loans to legallybankrupt 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.

37

10. Consolidated Financial Statements(3) Bonds payable
The fair values of bonds payable are based on the market value, etc. as of March 31, 2021 and 2020,
respectively.
(4) Payables under securities borrowing transactions
The Company considers book value as fair value with the assumption that fair value approximatesbook value.
(5) 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.

4. 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 ¥246,901 million (US$2,230
million) and ¥288,948 million (US$2,609 million) as of March 31, 2021 and ¥248,380 million and ¥288,820
million as of March 31, 2020, 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.

5. Securities Lent under Lending Agreements
The amounts of securities lent under lending agreements were ¥265,606 million (US$2,399 million) and¥225,171 million as of March 31, 2021 and 2020, respectively.

6. 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 ¥677 million (US$6 million)and ¥735 million as of March 31, 2021 and 2020, respectively.
i)

Loans to bankrupt borrowers were ¥0 million (US$0 million) and ¥2 million as of March 31, 2021 and2020, respectively.

ii) Delinquent loans were ¥563 million (US$5 million) and ¥589 million as of March 31, 2021 and 2020,
respectively.
iii) Delinquent loans three or more months past due were ¥94 million (US$0 million) and ¥122 million
as of March 31, 2021 and 2020, respectively.
iv) Restructured loans were ¥20 million (US$0 million) and ¥20 million as of March 31, 2021 and 2020,
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

38

Asahi Mutual Life Insurance Company Annual Report 2021

10. Consolidated Financial Statements

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 ¥3 million as of March 31, 2021 and 2020, respectively.
In addition, the direct write-offs related to loans decreased the amounts of delinquent loans describedabove by ¥25 million (US$0 million) and ¥31 million as of March 31, 2021 and 2020, respectively.

7. Accumulated Depreciation of Tangible Fixed Assets
Accumulated depreciation of tangible fixed assets totaled ¥285,628 million (US$2,579 million) and ¥283,301
million as of March 31, 2021 and 2020, respectively.

8. Separate Accounts
Total assets in separate accounts provided for in Article 118 of the Insurance Business Act were ¥28,078
million (US$253 million) and ¥24,381 million as of March 31, 2021 and 2020, respectively. The amounts ofseparate account liabilities were the same as separate account assets.

9. Receivables from/Payables to Directors and Audit Board Members
There were no receivables from directors and audit board members as of March 31, 2021 and 2020,
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, 2021 and 2020, respectively.

10. 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

2021
¥

¥

32,073
1,794
3,820
3
–
30,0502020¥¥

34,104
2,173
4,208
131
128
32,073

2021
$

$

289
16
34
0
–
271

11. Stocks of Unconsolidated Subsidiaries and affiliates
The amounts of stocks of unconsolidated subsidiaries and affiliates the Company held as of March 31, 2021
and 2020 were ¥7,878 million (US$71 million) and ¥2,205 million, respectively.

12. Pledged Assets
Assets pledged as collateral as of March 31, 2021 and 2020 were securities in the amount of ¥32,653 million(US$294 million) and ¥7,030 million, respectively.

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, 2021 and2020 were ¥72,634 million (US$656 million) and ¥72,765 million, respectively. No assets were pledged ascollateral as of March 31, 2021 and 2020.

39

10. Consolidated Financial Statements

14. Commitment LineAs of March 31, 2021 and 2020, there were unused commitment line agreements under which the Company
is the lender of ¥10,240 million (US$92 million) and ¥9,418 million, respectively.

15. Subordinated Bonds Payable
As of March 31, 2021 and 2020, bonds payable are subordinated bonds payable, for which the repayments
are subordinated to other obligations.

16. Subordinated Loans Payable
As of March 31, 2021 and 2020, other liabilities included subordinated loans payable of ¥41,000 million(US$370 million) and ¥51,000 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, 2021 and 2020 were ¥8,016 million (US$72
million) and ¥8,609 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)

2021
¥

¥

66,824
14,98051,84374,045(22,202)2020¥

69,17322,487
46,68537,822
8,863

¥

2021
$

603
135
468
668
(200)

$

Major components of deferred tax assets/liabilities were as follows:
Millions of
U.S. Dollars

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

2021¥

17,422
12,744
9,183
7,930
5,406
4,110
72,5202020¥

14,447
12,061
9,762
7,743
6,279
9,642
36,552

2021
$

157
115
82
71
48
37
655

(2) The statutory tax rates were 27.9% and 27.9% for the fiscal years ended March 31, 2021 and 2020,
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 year ended March 31
Interest on foundation funds
Change of valuation allowance for deferred tax assets
Reserve for dividends to policyholders

40

Asahi Mutual Life Insurance Company Annual Report 2021

2021(4.3)%(2.9)%(2.0)%

10. Consolidated Financial Statements

For the year ended March 31

2020

Interest on foundation funds
Reserve for dividends to policyholders(4.3)%(1.9)%

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

2021

2020

2021

¥

42,065
1,905
416
866
(4,051)¥

44,293
1,852
439
(231)
(4,288)

$

379
17
3
7
(36)

¥

41,202¥

42,065$372ii) 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

2021
¥

¥

7,258
70
1,405
239
(191)
8,782

2020
¥

8,106
76
(905)
226
(246)
7,258

¥

2021
$

65
0
12
2
(1)
79

$

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

2021¥

41,202(8,782)2020¥

32,42032,914(494)¥

32,42042,065(7,258)2021$

34,80634,985(178)¥

34,806

372
(79)
292
297
(4)

$

292

41

10. 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

2021

2020

2021

¥

1,905
416
(70)
111
–

¥

1,852
439
(76)
909
6

$

17
3
(0)
1
–

¥

2,362

¥

3,130

$

21

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

2021

2020

¥

649
–
649

¥

¥

2021
236
6
243

¥

$

5
–
5

$

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
Total

2021
¥
¥

2020

1,875
1,875

¥
¥

2021

2,524
2,524

$
$

16
16

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

2021

2020

43%
15%
42%
100%

36%
16%
48%
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
assetsDefined benefit corporate pension plans

42

Asahi Mutual Life Insurance Company Annual Report 2021

2021

2020
1.0%

1.0%

0.9%
1.6%

0.9%
1.7%

10. 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

2021
¥

2020

9,357
3,332
2,559

¥

2021

21,832
2,020
1

$

84
30
23

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

2021
¥

2020

892
1,893
2,733

¥

2021

690
2,120
–

$

8
17
24

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

2021
¥

2020
17
1

¥

2021
368
–

$

0
0

Losses on trading securities were losses on sales of ¥485 million (US$4 million) for the fiscal year ended
March 31, 2021.
Losses on derivative financial instruments included net valuation losses of ¥2,667 million (US$24 million)
and losses of ¥1,456 million for the fiscal years ended March 31, 2021 and 2020, respectively.

2. Impairment Losses of Fixed Assets
For the fiscal year ended March 31, 2021, 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, real estate not in use and real estate scheduled tobe sold are classified as one group individually.
(2) Background information on recognizing the impairment losses
As the profitability of certain real estate for rent dropped down significantly due to 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, real estate not in use and real estate scheduled to be sold totheir recoverable amounts. The write-downs were recognized as impairment losses and included in theextraordinary losses.

4310. Consolidated Financial Statements(3) Asset groups for which impairment losses were recognized and losses by classification of fixed assets
Millions of Yen

Millions of
U.S. Dollars

2021

2021

For the year ended March 31
Real estate for rent:
Land
Building
Total real estate for rent (i)Real estate not in use:Land
Building
Total real estate not in use (ii)Real estate scheduled to be sold:Land
Building
Total real estate scheduled to be sold (iii)
Total:Land
Building
Total (i) + (ii) + (iii)

¥

721
156
877

¥

$

6
1
7

457
141
598

4
1
5

1,309
185
1,494

11
1
13

2,488
483
2,971

22
4
26

$

(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 real estate not in use and real estate scheduled to be sold are
net realizable value. Value in use is determined as the estimated net future cash flows, reflecting thevolatility risk, discounted at 3.4% for the fiscal year ended March 31, 2021. Net realizable value iscalculated based on the appraisal value in accordance with “Real Estate Appraisal Standards” or the
publicly announced appraisal value after deducting expected disposal costs.

3. Extraordinary Losses
The expenses related to salary guarantees for sales representatives and others as countermeasures toprevent the spread of COVID-19 for the fiscal year ended March 31, 2021 were ¥1,572 million (US$14
million), which were included in other extraordinary losses.

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 of tax
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

44

Asahi Mutual Life Insurance Company Annual Report 2021

2021
¥

¥

153,034(2,072)150,961(35,385)

2020
¥

(65)
1,253
1,188
(2,596)

2021
$

1,382
(18)
1,363
(319)

115,575(1,408)

1,043

538
111
649
(184)
465
116,040

(673)
916
243
(67)
176
(1,232)

4
1
5
(1)
4
1,048

¥

$

10. Consolidated Financial Statements

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.

The consolidated financial statements in this annual report have been audited by Ernst & Young ShinNihon LLC, an independentcertified public accountant.

45

11. 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

2021¥

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

46

Asahi Mutual Life Insurance Company Annual Report 2021¥

15
35,35235,368113,000
25,0942020¥

18
30,53530,55482,00026,915

2021

$

0
319
319
1,020
226

1,692,106
49,130973,538
447,371
1,368,844
81,3304,612,320

1,728,003
54,671
945,309288,114
1,294,012
63,666
4,373,776

15,284
443
8,793
4,040
12,364734
41,66135,182
268,268
303,451

40,553
337,359
377,913

317
2,423
2,740

221,081
150,533
1,459
1,589
3,186
377,849

224,609
152,646
1,963
614
2,887
382,722

1,996
1,359
13
14
28
3,412

17,722
9,075
26,79714987

19,463
6,077
25,541
11
446

160
81
242
0
8

7,278
4,027
20,230
2,898
1,949
6,202
677
1,427
44,692
233
–
1
(406)
5,539,404

11,022
3,619
20,367
4,577
31,618
6,570
270
2,890
80,937
179
8,044
3
(391)
5,388,655

65
36
182
26
17
56
6
12
403
2
–
0
(3)
50,035¥$

11. 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

2021

¥

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
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

¥

2020

28,572
4,419,372
30,0504,477,995
680
127,773¥2021

29,3784,467,997
32,0734,529,448
563
88,295$258
39,918271
40,447
6
1,154

178,81041,000
5,042
4,422
8,424
186
631
17,53333,471
896
1,459
851
87
292,81730,85645,68022,826
16,2681
5,014,899

179,695
51,000
4,121
4,782
7,868
171
585
17,647
10,367
7,526
1,963
263
206
286,199
32,533
43,230–16,8383
4,997,112

1,615
370
45
39
76
1
5
158
302
8
13
7
0
2,644
278
412
206
146
0
45,29791,000166,000
281

91,000166,000
281

821
1,499
2

328

310

2

44,4007,091
47,55899,05099,378356,660

35,3007,318
38,89081,50981,819339,100

401
64
429
894
897
3,221

213,200(45,354)
167,845524,505
5,539,404

97,625(45,183)
52,442391,5435,388,655

1,925
(409)
1,516
4,737
50,035¥$47

11. 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
Gains on redemption of securities
Foreign exchange gains
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 trading securities
Losses on sales of securities
Losses on valuation of securities
Losses on redemption of securities
Losses on derivative financial instruments
Foreign exchange losses
Provision for allowance for possible loan losses
Depreciation of rental real estate and other assets
Other investment expenses
Investment losses on separate accounts
Operating expenses
Other ordinary expenses:
Claim deposit payments
Taxes
Depreciation
Other ordinary expenses
Total ordinary expenses
Ordinary profit

48

Asahi Mutual Life Insurance Company Annual Report 2021

2021

¥

2020

388,896
2,514
391,410¥2021

391,600
2,038
393,639

$

3,512
22
3,535

95,8494,639
16,543
1,078
118,111
15,249
77
387
6,968
5,740
146,534

85,1795,949
16,606970
108,705
23,85250–
7,167–
139,776

865
41
149
9
1,066
137
0
3
62
51
1,323

8,927
1,677
806
48,624
2,732
62,767600,713

10,355
1,106–
75,3801,836
88,678622,094

80
15
7
439
24
566
5,426

112,015
122,158
68,241
77,5383,158
2,272
385,384

114,654
126,889
71,46988,017
3,744
1,786
406,561

1,011
1,103
616
700
28
20
3,481

–
3
3

1,798
3
1,801

–
0
0

4,470
485
5,520
19
65
8,898
–
10
5,503
9,584
–
34,559110,323

4,526
–
2,810
368
140
16,588
2,057
8
5,327
9,761
1,111
42,702
106,323

40
4
49
0
0
80
–
0
49
86
–
312
996

10,491
9,126
12,181
2,013
33,812564,083
36,62911,5108,503
11,8401,793
33,647591,037
31,056

94
82
110
18
305
5,095
330

11. Non-consolidated Financial Statements

Millions of
U.S. Dollars

Millions of Yen
For the years ended March 31

2021

Extraordinary gains:
Gains on disposal of fixed assets
Other extraordinary gains
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

¥

2020

2021

146
129
275

90
24
115

1
1
2

1,481
2,971
2,450
5
1,694
8,602
28,302

1,372
966
2,340
–
48
4,727
26,444

13
26
22
0
15
77
255

10,122(5,084)
5,038
23,263

6,537
(505)
6,031
20,412

91
(45)
45
210

¥

$

49

11. 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, 2021

Beginning balance

Reserve forredemption Reserve
Foundation
Reserve
of
for
funds
foundation revaluation for future
lossesfunds¥ 91,000 ¥ 166,000 ¥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
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¥ 91,000 ¥166,000 ¥

281 ¥

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

310 ¥ 35,300 ¥

7,318 ¥ 38,890 ¥ 81,819 ¥339,100

18

9,100

(1,794)(18)(1,794)(1,794)(4,081)
23,263(4,081)
23,263(4,081)
23,263

171

171(9,100)
(227)

227
171

–
281 ¥

18
9,100
328 ¥ 44,400 ¥

(227)
8,668
17,55917,5597,091 ¥ 47,558 ¥ 99,378 ¥356,660

Millions of Yen
Valuation and translation adjustments
For the year ended
March 31, 2021

Beginning balance

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

Land revaluationdifferences

Total valuationand translation
adjustments

Total net assets

¥

¥

¥

¥

97,625(45,183)

52,442

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
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

50

Asahi Mutual Life Insurance Company Annual Report 2021

391,543(1,794)(4,081)
23,263

171¥

115,574
115,574
213,200

¥

(171)
(171)
(45,354)¥

115,403
115,403167,845¥

115,403
132,962
524,505

11. Non-consolidated Financial Statements

Millions of Yen
Foundation funds and others
Surplus
For the year ended
March 31, 2020

Beginning balance

Reserve forredemption Reserve
Foundation
Reserve
of
for
funds
foundation revaluation for future
lossesfunds¥ 91,000 ¥ 166,000 ¥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
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¥ 91,000 ¥166,000 ¥

281 ¥

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

291 ¥ 26,200 ¥9,258 ¥ 31,324 ¥ 67,073 ¥324,355

19

9,100

(2,173)(19)(2,173)(2,173)(4,116)
20,412(4,116)
20,412(4,116)
20,412622

622(9,100)(1,939)

1,939
622

–
281 ¥

19
9,100
(1,939)7,566
14,745
14,745310 ¥ 35,300 ¥ 7,318 ¥ 38,890 ¥ 81,819 ¥339,100

Millions of Yen
Valuation and translation adjustments
For the year ended
March 31, 2020

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
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

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

Land revaluationdifferences

Total valuationand translation
adjustments

Total net assets

¥

¥

¥

¥

99,032(44,561)

54,471

378,826(2,173)(4,116)
20,412622¥(1,406)(1,406)
97,625

¥

(622)
(622)
(45,183)¥(2,029)(2,029)52,442¥(2,029)12,716
391,54351

11. Non-consolidated Financial Statements

Millions of U.S. Dollars
Foundation funds and others
Surplus
For the year ended
March 31, 2021

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
Payment of interest on foundation
funds
Net surplus
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
$

821 $

1,499 $

2$

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

2 $Other surplus

318 $

66 $

0

82

351 $

739 $

(16)
(0)

(16)

(16)

(36)
210

(36)
210

(36)
210

1

1

1

78
429 $

158
897 $

(82)
(2)

–
821 $

–
1,499 $

–
2$

0
2 $

3,062

82
401 $

(2)
64 $

2

158
3,221

Millions of U.S. Dollars
Valuation and translation adjustments
For the year ended
March 31, 2021

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
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

52

Asahi Mutual Life Insurance Company Annual Report 2021

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

Land revaluationdifferences

Total valuationand translation
adjustments

Total net assets

$

$

$

$

881

(408)

473

3,536

(16)
(36)
210

1

$

1,043
1,043
1,925

$

(1)
(1)
(409)

$

1,042
1,042
1,516

$

1,042
1,200
4,737

11. 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 to policyholders
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

2021
¥

¥

47,558108
108
47,667
15,361
2,153
13,208
19
4,089
9,100
9,100
32,3052020¥¥

38,890227
227
39,117
14,993
1,794
13,199
18
4,081
9,100
9,100
24,123

2021
$

$

429
0
0
430
138
19
119
0
36
82
82
291

53

11. 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 ¥110.71 = US$1.00,
the effective rate of exchange at the balance sheet date of March 31, 2021.
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 averagemethod.
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 fair

54

Asahi Mutual Life Insurance Company Annual Report 2021

11. Non-consolidated Financial Statements

market 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: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 stock 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 notapplied 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:55

11. Non-consolidated Financial Statementsi)

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 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 of guarantees are
written-off directly from the book value as the estimated uncollectible amounts. The amounts writtenoff as of March 31, 2021 and 2020 were ¥28 million (US$0 million) and ¥34 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.

56

Asahi Mutual Life Insurance Company Annual Report 2021

11. 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) Premium and other income (excluding reinsurance revenue)
Premium and other income (excluding reinsurance revenue) are recorded in principle for insurance
policies for which insurance premium has been received and the insurerʼs liability under the insurance
policies or insurance coverage period has commenced by the relevant amounts received.
Of insurance premiums, the portion corresponding to the period that has yet to pass as of the end of
the fiscal year is set aside as policy reserves in accordance with Article 116 of the Insurance BusinessAct and Article 69, Paragraph 1, Item 2 of the Enforcement Regulation of the Insurance Business Act.
(13) Claims and other payments (excluding reinsurance premiums)
Claims and other payments (excluding reinsurance premiums) are recorded for insurance policies forwhich amounts calculated under policy conditions have been paid in the occurrence of insured events
under the policy conditions by the relevant amounts paid.
In accordance with Article 117 of the Insurance Business Act and Article 72 of the Enforcement
Regulation of the Insurance Business Act, reserve for outstanding claims is set aside for claims, etc.
which is not recorded as payment of claims, etc. but for which the Company has payment obligationor the occurrence of insured events has not been reported but the Company finds that insured events
have already occurred, as of the end of the fiscal year.
(14) Policy reserves
Policy reserves are calculated as stated in accordance with the methods stated in the statement ofcalculation procedures for insurance premiums and policy reserves (Article 4, Paragraph 2, Item 4 of
the Insurance Business Act) pursuant to Article 116, Paragraph 1 of the Insurance Business Act, forinsurance policies under which the insurerʼs liability has started as of the end of the fiscal year, in
preparation for the performance of future obligations under the insurance policies.
Of policy reserves, the premium reserves at the end of the fiscal year are 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.
Regarding a part of policy reserves, the chief actuary checks that policy reserves are appropriately
accumulated in each fiscal year, pursuant to Article 121, Paragraph 1 of the Insurance Business Act andArticle 80 of the Enforcement Regulation of the Insurance Business Act.
Contingency reserves included in policy reserves are set aside in accordance with Article 116 of the
Insurance Business Act and Article 69, Paragraph 1, Item 3 of the Enforcement Regulation of the
Insurance Business Act to cover risks that may accrue in the future in order to ensure the performanceof future obligations under insurance policies.
(15) Software
Capitalized software for internal use owned by the Company is amortized using the straight-line
method over the estimated useful lives.

5711. Non-consolidated Financial Statements

2. Accounting Standards Issued but Not Yet Effective
The accounting standards and relevant implementation guidance issued by the fiscal year-end but not yet
effective are as follows:■ “Accounting Standard for Fair Value Measurement” (ASBJ Statement No. 30, issued on July 4, 2019)■ “Implementation Guidance on Accounting Standard for Fair Value Measurement” (ASBJ Guidance
No. 31, issued on July 4, 2019)■ “Accounting Standard for Financial Instruments” (ASBJ Statement No. 10, revised on July 4, 2019)i)

Overview
In these accounting standards and relevant implementation guidance, the guidance on themethods for measuring fair values of financial instruments are set to enhance comparability
between Japanese accounting standards and international accounting standards.

ii) Schedule date of application
The above revisions are scheduled to be applied from the beginning of the fiscal year ending
March 31, 2022.
iii) Effects of application of the Accounting Standards and relevant implementation guidance
The effects of the application are under assessment at the time of preparing these non-consolidated
financial statements.

3. 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.

58

Asahi Mutual Life Insurance Company Annual Report 2021

11. Non-consolidated Financial Statements

The balance sheet amounts, fair values and the differences between those of major financial assets andliabilities as of March 31, 2021 and 2020 were as follows:
Millions of Yen
2021
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
Payables under securities borrowing transactions
Loans payable
Total liabilities
Derivative financial instruments
Hedge accounting not applied
Hedge accounting applied

Balance Sheet
Amount¥35,368113,000
25,094–
24,125–969
4,577,667
26,307
296,880
2,039,060
2,215,419
303,451
35,182
268,268
5,054,581
127,773
178,81041,000347,584(31,522)(1,875)(29,646)

Fair Value¥

35,368113,000
27,415–26,446–969
4,830,674
26,307
333,953
2,254,994
2,215,419
311,163
35,182275,980
5,317,621
130,313
178,81042,548351,673(31,522)(1,875)(29,646)

Difference
¥

–
–
2,321
–
2,321
–
–
253,006–
37,073215,933
–
7,712
–
7,712
263,040
2,540
–
1,548
4,088
–
–
–

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

Millions of Yen
2020
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
Payables under securities borrowing transactions
Loans payable
Total liabilities
Derivative financial instruments
Hedge accounting not applied
Hedge accounting applied

Balance Sheet
Amount¥30,55482,00026,915–25,997–918
4,353,742
20,372
308,469
2,050,330
1,974,569
377,91340,553
337,359
4,871,125
88,295
179,695
51,000318,990
21,251566
20,684

Fair Value¥

30,55482,00029,796–28,878–918
4,693,404
20,372
344,876
2,353,584
1,974,569
386,550
40,553345,997
5,222,305
81,164
179,695
52,776313,636
21,251566
20,684

Difference
¥

–
–
2,881
–
2,881
–
–
339,661–
36,406303,254
–
8,637
–
8,637
351,180(7,130)–1,776(5,354)–––* Assets and liabilities generated by derivative financial instruments are offset and presented net. Net liabilities in total are presented
in parentheses.

5911. Non-consolidated Financial Statements

Millions of U.S. Dollars
2021
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
Payables under securities borrowing transactions
Loans payable
Total liabilities
Derivative financial instruments
Hedge accounting not applied
Hedge accounting applied

Balance Sheet
Amount
$

319
1,020
226
–
217
–
8
41,348237
2,681
18,41820,011
2,740
317
2,423
45,656
1,154
1,615
370
3,139
(284)
(16)
(267)

Fair Value
$

319
1,020
247
–
238
–
8
43,633237
3,016
20,36820,011
2,810
317
2,492
48,031
1,177
1,615
384
3,176
(284)
(16)
(267)

Difference
$

–
–
20
–
20
–
–
2,285
–
334
1,950
–
69
–
69
2,375
22
–
13
36
–
–
–

* 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 non-consolidated balance sheets were ¥34,653 million (US$313 million) and ¥20,034
million as of March 31, 2021 and 2020, 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.

60

Asahi Mutual Life Insurance Company Annual Report 2021

11. Non-consolidated Financial Statements(3) Bonds payable
The fair values of bonds payable are based on the market value, etc. as of March 31, 2021 and 2020,
respectively.
(4) Payables under securities borrowing transactions
The Company considers book value as fair value with the assumption that fair value approximatesbook value.
(5) 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.

4. 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 ¥247,811 million (US$2,238
million) and ¥289,679 million (US$2,616 million) as of March 31, 2021 and ¥249,504 million and ¥289,781
million as of March 31, 2020, 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.

5. Securities Lent under Lending Agreements
The amounts of securities lent under lending agreements were ¥265,606 million (US$2,399 million) and¥225,171 million as of March 31, 2021 and 2020, respectively.

6. 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 ¥677 million (US$6 million)and ¥735 million as of March 31, 2021 and 2020, respectively.
i)

Loans to bankrupt borrowers were ¥0 million (US$0 million) and ¥2 million as of March 31, 2021 and2020, respectively.

ii) Delinquent loans were ¥563 million (US$5 million) and ¥589 million as of March 31, 2021 and 2020,
respectively.
iii) Delinquent loans three or more months past due were ¥94 million (US$0 million) and ¥122 million
as of March 31, 2021 and 2020, respectively.
iv) Restructured loans were ¥20 million (US$0 million) and ¥20 million as of March 31, 2021 and 2020,
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.
6111. Non-consolidated Financial Statements

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 ¥3 million as of March 31, 2021 and 2020, respectively.
In addition, the direct write-offs related to loans decreased the amounts of delinquent loans describedabove by ¥25 million (US$0 million) and ¥31 million as of March 31, 2021 and 2020, respectively.

7. Accumulated Depreciation of Tangible Fixed Assets
Accumulated depreciation of tangible fixed assets totaled ¥285,435 million (US$2,578 million) and ¥283,126
million as of March 31, 2021 and 2020, respectively.

8. Separate Accounts
Total assets in separate accounts provided for in Article 118 of the Insurance Business Act were ¥28,078
million (US$253 million) and ¥24,381 million as of March 31, 2021 and 2020, respectively. The amounts ofseparate account liabilities were the same as separate account assets.

9. Receivables from/Payables to Subsidiaries
The total amounts of receivables from/payables to subsidiaries were ¥430 million (US$3 million) and ¥2,104
million (US$19 million) as of March 31, 2021 and ¥322 million and ¥1,712 million as of March 31, 2020, respectively.

10. Receivables from/Payables to Directors and Audit Board Members
There were no receivables from directors and audit board members as of March 31, 2021 and 2020,
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, 2021 and 2020, respectively.

11. 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)

2021
¥

¥

65,571
14,467
51,10473,930(22,826)

2020¥

68,31922,48145,83837,794
8,044

¥

2021
$

592
130
461
667
(206)

$

Major components of deferred tax assets/liabilities were as follows:
Millions of
U.S. Dollars

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

62

Asahi Mutual Life Insurance Company Annual Report 2021

2021¥

17,422
12,744
8,608
7,930
5,406
4,106
72,5202020¥

14,447
12,061
9,076
7,743
6,279
9,639
36,552

2021
$

157
115
77
71
48
37
655

11. Non-consolidated Financial Statements(2) The statutory tax rates were 27.9% and 27.9% for the fiscal years ended March 31, 2021 and 2020,
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 year ended March 31

2021

Change of valuation allowance for deferred tax assets
Interest on foundation funds
Reserve for dividends to policyholders(4.5)%(4.0)%(1.9)%For the year ended March 31

2020

Interest on foundation funds
Reserve for dividends to policyholders(4.3)%(1.9)%

12. 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

2021
¥

¥

32,073
1,794
3,820
3
–
30,0502020¥¥

34,104
2,173
4,208
131
128
32,073

2021
$

$

289
16
34
0
–
271

13. Stocks of Subsidiaries and Affiliates
The amounts of stocks of subsidiaries and affiliates the Company held as of March 31, 2021 and 2020 were¥21,367 million (US$193 million) and ¥6,694 million, respectively.

14. Pledged Assets
Assets pledged as collateral as of March 31, 2021 and 2020 were securities in the amount of ¥32,653 million(US$294 million) and ¥7,030 million, respectively.

15. 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”) were ¥6 million (US$0 million) and ¥6 million as of March 31,
2021 and 2020, respectively.
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 ¥359 million (US$3 million) and ¥366 million as of March 31, 2021 and 2020, respectively.

16. 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
¥213,482 million (US$1,928 million) and ¥97,907 million as of March 31, 2021 and 2020, respectively.

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, 2021 and63

11. Non-consolidated Financial Statements

2020 were ¥72,634 million (US$656 million) and ¥72,765 million, respectively. No assets were pledged ascollateral as of March 31, 2021 and 2020.

18. Commitment LineAs of March 31, 2021 and 2020, there were unused commitment line agreements under which the Company
is the lender of ¥10,240 million (US$92 million) and ¥9,418 million, respectively.

19. Subordinated Bonds Payable
As of March 31, 2021 and 2020, bonds payable are subordinated bonds payable, for which the repayments
are subordinated to other obligations.

20. Subordinated Loans Payable
As of March 31, 2021 and 2020, 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, 2021 and 2020 were ¥8,016 million (US$72
million) and ¥8,609 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

2021

2020

2021

¥

41,291
1,829
412
866
(4,035)¥43,586
1,779
435
(235)
(4,275)

$

372
16
3
7
(36)

¥

40,365¥41,291$

364ii) 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

64

Asahi Mutual Life Insurance Company Annual Report 2021

2021
¥

¥

6,507
55
1,371
151
(174)
7,912

2020
¥

¥

7,407
63
(877)
148
(233)
6,507

2021
$

$

58
0
12
1
(1)
71

11. 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

2021
¥

2020

40,365(7,912)32,452(1,829)¥30,62330,856(233)¥

30,6232021

41,291(6,507)34,783(2,429)

$

364
(71)
293
(16)

32,35332,533(179)¥

32,353

276
278
(2)
$

276

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

2021

2020

2021

¥

1,829
412
(55)
95

¥

1,779
435
(63)
896

$

16
3
(0)
0

¥

2,281

¥

3,049

$

20

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

2021

2020

45%
9%
46%
100%

38%
9%
53%
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
assetsDefined benefit corporate pension plans

2021

2020
1.0%

1.0%

0.9%
1.6%

0.9%
1.7%

65

11. 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 ¥1,067
million (US$9 million) and ¥9,020 million (US$81 million) for the fiscal year ended March 31, 2021 and ¥381
million and ¥9,483 million for the fiscal year ended March 31, 2020, 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

2021
¥

2020

9,357
3,331
2,559

¥

2021

21,832
2,018
1

$

84
30
23

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

2021
¥

2020

892
1,893
2,733

¥

2021

690
2,120
–

$

8
17
24

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

2021
¥

2020
17
1

¥

2021
368
–

$

0
0

Losses on trading securities were losses on sales of ¥485 million (US$4 million) for the fiscal year ended
March 31, 2021.
Losses on derivative financial instruments included net valuation losses of ¥2,667 million (US$24 million)
and losses of ¥1,456 million for the fiscal years ended March 31, 2021 and 2020, respectively.

3. Policy Reserves for the Reinsurance Contracts
Provision for reserve for outstanding claims for ceded reinsurance, which was added in calculating reversalof reserve for outstanding claims for the fiscal year ended March 31, 2021 was ¥0 million (US$0 million).
Provision for reserve for outstanding claims for ceded reinsurance, which was deducted in calculating
provision for reserve for outstanding claims for the fiscal year ended March 31, 2020 was ¥2 million.
Reversal of policy reserves for ceded reinsurance, which was deducted in calculating reversal of policy
reserves for the fiscal year ended March 31, 2021 was ¥6 million (US$0 million).
Provision for policy reserves for ceded reinsurance, which was added in calculating reversal of policy
reserves for the fiscal year ended March 31, 2020 was ¥96 million.

4. Impairment Losses of Fixed Assets
For the fiscal year ended March 31, 2021, impairment losses of fixed assets by the Company were as
follows:

66

Asahi Mutual Life Insurance Company Annual Report 2021

11. Non-consolidated Financial Statements(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, real estate not in use and real estate scheduled tobe sold are classified as one group individually.
(2) Background information on recognizing the impairment losses
As the profitability of certain real estate for rent dropped down significantly due to 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, real estate not in use and real estate scheduled to be sold totheir recoverable amounts. The write-downs were recognized as impairment losses and included in theextraordinary losses.
(3) Asset groups for which impairment losses were recognized and losses by classification of fixed assets
Millions of Yen

Millions of
U.S. Dollars

2021

2021

For the year ended March 31
Real estate for rent:
Land
Building
Total real estate for rent (i)Real estate not in use:Land
Building
Total real estate not in use (ii)Real estate scheduled to be sold:Land
Building
Total real estate scheduled to be sold (iii)
Total:Land
Building
Total (i) + (ii) + (iii)

¥

¥

721
156
877

$

6
1
7

457
141
598

4
1
5

1,309
185
1,494

11
1
13

2,488
483
2,971

22
4
26

$

(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 real estate not in use and real estate scheduled to be sold are
net realizable value. Value in use is determined as the estimated net future cash flows, reflecting thevolatility risk, discounted at 3.4% for the fiscal year ended March 31, 2021. Net realizable value iscalculated based on the appraisal value in accordance with “Real Estate Appraisal Standards” or the
publicly announced appraisal value after deducting expected disposal costs.

5. Extraordinary Losses
The expenses related to salary guarantees for sales representatives and others as countermeasures toprevent the spread of COVID-19 for the fiscal year ended March 31, 2021 were ¥1,572 million (US$14
million), which were included in other extraordinary losses.

The non-consolidated financial statements in this annual report have been audited by Ernst & Young ShinNihon LLC, an independentcertified public accountant.

6712. Company Overview (as of March 31, 2021)

Tokyo Head Office

Tama Head Office

Company Name:

Asahi Mutual Life Insurance Company

Founded:March 1, 1888

Total Assets:

5.5394 trillion yen

Number of Offices:

58 branches; 575 sales offices (as of April 1, 2021)

Number of Employees:

18,049 (staff: 4,047; sales representatives: 14,002)

Location of Tokyo Head Office:6-1, Yotsuya 1-chome, Shinjuku-ku, Tokyo 160-8570, Japan
Tel: 81-3-4214-3111

68

Asahi Mutual Life Insurance Company Annual Report 2021