November 22, 2018

Financial Results for the Six Months Ended September 30, 2018
Asahi Mutual Life Insurance Company (the “Company”; President: Hiroki Kimura) announces financial
results for the six months ended September 30, 2018

［Contents］
１．Business Highlights

･････

Ｐ１

２．Investment Results of General Account Assets

･････

Ｐ3

３．Unaudited Non-consolidated Balance Sheets

･････

Ｐ7

４．Unaudited Non-consolidated Statements of Income

･････

Ｐ8

５．Unaudited Non-consolidated Statements of Changes in Net Assets

・・・・

Ｐ9

６．Breakdown of Ordinary Profit (Fundamental Profit)

･････

Ｐ22

７．Disclosed Claims Based on Categories of Obligors

･････

Ｐ23

８．Risk-monitored Loans

･････

Ｐ24

９．Solvency Margin Ratio

･････

Ｐ25

１０．Status of Separate Account

･････

Ｐ26

１１．Status of the Company, Subsidiaries and Affiliates

･････

Ｐ27

Asahi Mutual Life Insurance Company

1．Business Highlights(1) Sum Insured of Policies in Force and New Policies(i) Policies in Force
As of March 31, 2018
Number of policies

As of September 30, 2018

Amount(100 millions of Yen)

(Thousands)

Number of policies

Amount (100 millions of Yen)

(Thousands)

Changes(%, Pre-FYE)

Changes(%, Pre-FYE)

Individual insurance

7,186

166,410

7,165

99.7

159,42295.8

Individual annuities

584

25,039572

97.8

24,29997.0

Group insurance-

13,235--

13,992105.7

Group annuities

-

178

-

-

173

97.3

Notes:
1. Policy amounts for individual annuities are equal to (a) the funds to be held at the time annuity payments are to commence for an annuity
for which annuity payments have not yet commenced and (b) the amount of policy reserves for an annuity for which payments havecommenced.
2. Policy amount in force for group annuities is equal to the amount of outstanding policy reserves.
3. Number of policies includes number of each unit with regard to "Hoken-ou" , "Hoken-ou Plus", etc.

(ii) New Policies
Six months ended September 30, 2017
Amount (100 millions of Yen)

Number of policies

New
policies(Thousands)

Net increase by
conversion

Individual insurance

337

590

1,587

(997)

Individual annuities

-

(79)

-

(79)

Group insurance

-

125

125

-

Group annuities

-

-

-

-

Six months ended September 30, 2018
Number of policies(Thousands)

Amount (100 millions of Yen)

Changes(%, YoY)

Changes(%, YoY)

New
policies

Net increase by
conversion

Individual insurance

318

94.6

736

124.7

1,477

(740)

Individual annuities

-

-

(55)

-

-

(55)

Group insurance

-

-

891

708.6

891

-

Group annuities

-

-

-

-

-

-

Notes:
1. Number of new policies is the sum of new policies and policies after conversion.
2. Amount of new policies for individual annuities, both new policies and net increase by conversion, is equal to
the funds to be held at the time annuity payments are to commence.
3. Number of policies includes number of each unit with regard to "Hoken-ou" , "Hoken-ou Plus", etc.

1Asahi Mutual Life Insurance Company

(2) Annualized Premiums(i) Policies in Force(100 millions of Yen）

As of March 31, 2018

As of September 30, 2018
Changes(%, Pre-FYE)

Individual insurance

3,813

3,882

101.8

Individual annuities

1,511

1,482

98.1

Total

5,324

5,365

100.8

2,063

2,079

100.8

Third-sector products(ii) New Policies(100 millions of Yen）

Six months ended
September 30, 2017

Six months ended
September 30, 2018

Individual insurance

131

212

161.8

Individual annuities

(1)

(1)

-

129

210

163.0

109

82

75.6

Total
Third-sector products

Changes(%, YoY)

Notes:
1. Annualized premiums are calculated by multiplying factors according to the premium payment method(for single premium contracts, the amount is calculated by dividing the premium by the coverage period).
2. Figures for third-sector products represent portion of annualized premiums corresponding to the medical
benefits (hospitalization benefits, surgery benefits, etc.), living benefits (specific illness benefits, nursing
care benefits, etc.) and waiver benefits (excluding disability benefits, but including specific illness benefits
and nursing care benefits).

2

Asahi Mutual Life Insurance Company

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

As of March 31, 2018
Amount194,30230,151
4,161,052
2,845,690
323,118
917,147
690,912226,235
75,096484,169
49,637434,532
394,631
16,18787,085(394)
5,367,186
1,054,537

Cash, deposits, call loans
Monetary claims bought
Securities
Domestic bonds
Domestic stocks
Foreign securities
Foreign bonds
Foreign stocks and other foreign securities
Other securities
Loans
Policy loans
Industrial and consumer loans
Real estate
Deferred tax assets
OthersAllowance for possible loan losses
Total
Foreign currency-denominated assets

Percentage
3.6
0.6
77.5
53.0
6.0
17.1
12.9
4.2
1.4
9.0
0.9
8.1
7.4
0.3
1.6
(0.0)
100.0
19.6

As of September 30, 2018
Amount225,163
29,9804,333,063
2,806,695
339,846
1,110,238
902,819
207,418
76,283454,419
47,133
407,286
392,031
13,357
85,122(399)
5,532,740
1,258,244

Percentage
4.1
0.5
78.3
50.7
6.1
20.1
16.3
3.7
1.4
8.2
0.9
7.4
7.1
0.2
1.5
(0.0)
100.0
22.7

Note: Real estate is the sum of land,buildings and construction in progress.

(2) Changes(Increases/Decreases) in Assets(Millions of Yen)

Six months ended
September 30, 2017
AmountCash, deposits, call loans
Monetary claims bought
Securities
Domestic bonds
Domestic stocks
Foreign securities
Foreign bonds
Foreign stocks and other foreign securities
Other securities
Loans
Policy loans
Industrial and consumer loans
Real estate
Deferred tax assets
OthersAllowance for possible loan losses
Total
Foreign currency-denominated assets

62,554(1,638)146,376
19,08934,644
79,52740,08839,438
13,115(45,528)(3,937)(41,590)(2,248)(9,025)(4,327)68
146,231
178,286

Six months ended
September 30, 2018
Amount30,861(170)
172,011(38,994)
16,728
193,090
211,906(18,816)
1,186(29,749)(2,503)(27,245)(2,599)(2,829)(1,962)(5)
165,554
203,707

Note: Real estate is the sum of land,buildings and construction in progress.

3

Asahi Mutual Life Insurance Company

（3）Investment Income(Millions of Yen)
Six months ended
September 30, 2018

Six months ended
September 30, 2017
Interest, dividends and other income

54,35854,7320

0Interest and dividends on securities

41,29542,261

Interest on loans

4,469

3,711

Rent revenue from real estate

8,153

8,266

Other interest and dividends

439

493

26,86325,909Gains on sales of domestic bonds

25,67025,451

Gains on sales of domestic stocks and other securities

1,014

455

178

3

-

-

-

-

Foreign exchange gains, net

423

3,662

Reversal of allowance for possible loan losses

61

-

3,641

3,705

85,34988,010Interest on deposits

Gains on sales of securities

Gains on sales of foreign securities
OthersGains on derivative financial instruments, net

Other investment income
Total（4）Investment Expenses(Millions of Yen)
Six months ended
September 30, 2018

Six months ended
September 30, 2017
Interest expenses

2,223

2,323

Losses on sales of securities

1,154

6,380

205

1,599

3

500

945

4,279

-

-

49

32

Losses on sales of domestic bonds
Losses on sales of domestic stocks and other securities
Losses on sales of foreign securities
Others
Losses on valuation of securities
Losses on valuation of domestic bonds--

Losses on valuation of domestic stocks and other securities

49

32

Losses on valuation of foreign securities--

Others

-

-

7,531

12,240Foreign exchange losses, net--

Provision for allowance for possible loan losses-

4

Write-offs of loans

00Depreciation of rental real estate and other assets

2,799

2,779

Other investment expenses

5,042

5,388

18,80029,150Losses on derivative financial instruments, net

Total

4

Asahi Mutual Life Insurance Company

(5) Net Valuation Gains/Losses on Trading Securities(Millions of Yen)
As of September 30, 2018
Net valuation
gains(losses)
Amountincluded in thestatements of income-

As of March 31, 2018
Net valuation
gains(losses)
Amountincluded in thestatements of income-

Trading securities(6) Fair Value Information on Securities (with fair value, other than trading securities)(Millions of Yen)
As of March 31, 2018
Book value Fair value

As of September 30, 2018

Gains/losses
Gains

Held-to-maturity debt
securities
Policy-reserve-matchingbonds
Stocks of subsidiaries

397,636

43,87443,9002,094,251 2,397,856

303,605

313,125---

Available-for-sale securities

1,563,573 1,667,178

353,761-

103,604

174,341

Domestic bonds

588,848

583,152(5,696)

8,594

Domestic stocks

151,964

304,117

152,153

Foreign securities

746,635

704,812(41,823)

Foreign bonds

569,387

535,588

Foreign stocks andother foreign securities

177,247

Other securities
Monetary claims bought
Negotiable certificates ofdeposit
Others
Total
Domestic bonds

Book value Fair value

Gains/losses

Losses

Gains

(25)

Losses344,174

383,662

39,48839,534(46)(9,519) 2,081,775

2,308,825

227,050251,095(24,044)

-

-

-

-

-

(70,736) 1,777,847-

1,896,630

118,782

181,247(62,465)(14,290)572,632

565,438(7,193)

7,440(14,633)

159,772(7,618)

159,478

319,392

159,914167,622(7,708)4,446(46,270)969,525

934,911(34,614)

3,879(38,493)(33,799)

3,116(36,915)776,028

747,504(28,523)

2,877(31,401)

169,223(8,024)

1,329(9,354)

193,497

187,406(6,090)1,001(7,091)

76,12575,096(1,028)1,528(2,557)75,61376,283669

2,299(1,630)

-

-

-

-

-

597

603

5

5

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

4,011,587 4,462,671

451,084

531,366(80,282) 4,203,797

4,589,118

385,321471,877(86,556)

2,851,386 3,160,551

309,165

332,986(23,821) 2,813,889

3,043,613

229,723

268,412(38,688)

Domestic stocks

151,964

304,117

152,153

159,772(7,618)

159,478

319,392

159,914167,622(7,708)Foreign securities

901,959

889,570(12,389)

33,880(46,270) 1,124,840

1,117,077(7,763)30,730(38,493)

Foreign bonds

724,711

720,347(4,364)32,551(36,915)

931,343929,670(1,672)

29,728(31,401)

Foreign stocks andother foreign securities

177,247

169,223(8,024)

1,329(9,354)

193,497

187,406(6,090)1,001(7,091)Other securities

76,12575,096(1,028)1,528(2,557)75,61376,283669

2,299(1,630)

Monetary claims bought
Negotiable certificates ofdeposit
Others30,15133,335

3,184

3,198

(14)

29,97532,751

2,776

2,812

(36)

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

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

* Book value of securities without fair value is as follows:(Millions of Yen)
As of March 31, 2018

As of September 30, 2018--

Unlisted foreign bonds--

Others--

Held-to-maturity debt securities

Policy-reserve-matching bonds--

Stocks of subsidiaries

5,063

6,596

Available-for-sale securities

70,95033,869Unlisted domestic stocks (except over-the-counter stocks)

13,937

13,856

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

57,01220,012Unlisted foreign bonds--

Others--76,01340,466Total

5Asahi Mutual Life Insurance Company

(Reference)
The table below shows the sum of securities with fair value and without fair value (in case that securities without fair value are foreign currency-denominated,the fair value is calculated as the sum of book value and net unrealized gains (losses) on foreign exchange valuation).
(Millions of Yen)
As of March 31, 2018
Book value

Fair value

As of September 30, 2018

Gains/losses
Gains

Held-to-maturity debt
securities
Policy-reserve-matching
bonds

Fair value

Gains/losses

Losses353,761

397,636

43,87443,9002,094,251

2,397,856

303,605

313,125

5,063

5,063

-

-

Available-for-sale securities 1,634,524

1,738,127

103,603

174,341

Stocks of subsidiaries

Book value

Gains

(25)

Losses344,174

383,662

39,48839,534(46)(9,519) 2,081,775

2,308,825

227,050251,095(24,044)

6,596

6,596

-

-

-

(70,737) 1,811,717

1,930,498

118,781

181,247(62,466)-

Domestic bonds

588,848

583,152(5,696)8,594(14,290)572,632

565,438(7,193)

7,440(14,633)

Domestic stocks

165,901

318,054

152,153

159,772(7,618)173,334

333,249

159,914167,622(7,708)Foreign securities

803,648

761,823(41,824)

4,446(46,271)989,538

954,923(34,614)

3,879(38,494)

Foreign bonds

569,387

535,588(33,799)

3,116(36,915)776,028

747,504(28,523)

2,877(31,401)

Foreign stocks andother foreign securities

234,260

226,235(8,025)

1,329(9,355)

213,509

207,418(6,091)

1,001(7,092)

76,12575,096(1,028)1,528(2,557)75,61376,283669

2,299(1,630)

Monetary claims bought

-

-

-

-

-

597

603

5

5

-

Negotiable certificates ofdeposit

-

-

-

-

-

-

-

-

-

-

Others

-

-

-

-

-

-

-

-

-

-

Other securities

4,087,600

4,538,684

451,083

531,366(80,283) 4,244,263

4,629,583

385,320

471,877(86,557)

Domestic bonds

Total

2,851,386

3,160,551

309,165

332,986(23,821) 2,813,889

3,043,613

229,723

268,412(38,688)

Domestic stocks

170,964

323,118

152,153

159,772(7,618)

179,931339,846

159,914167,622(7,708)Foreign securities

958,972

946,582(12,390)

33,880(46,271) 1,144,853

1,137,089(7,763)30,730(38,494)

Foreign bonds

724,711

720,347(4,364)32,551(36,915)

931,343929,670(1,672)

29,728(31,401)

Foreign stocks andother foreign securities

234,260

226,235(8,025)

1,329(9,355)

213,509

207,418(6,091)

1,001(7,092)Other securities

76,12575,096(1,028)1,528(2,557)75,61376,283669

2,299(1,630)

Monetary claims bought

30,15133,335

3,184

3,198

(14)

29,97532,751

2,776

2,812

(36)

Negotiable certificates ofdeposit

-

-

-

-

-

-

-

-

-

-

Others

-

-

-

-

-

-

-

-

-

-

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

(7) Fair Value Information on Money Held in Trust
The Company doesn't hold money held in trust.
（8）Fair Value Information on Real estate (land)(Millions of Yen)
As of March 31, 2018
Book valueLand

243,149

As of September 30, 2018

Fair value Gains/losses Book value
261,268

18,118242,834

Fair value Gains/losses
261,208

18,374

Notes:
1. Fair Value is calculated based on appraisal value for property tax and others.
2. The amount above includes leasehold.

6

Asahi Mutual Life Insurance Company

３．Unaudited Non-consolidated Balance Sheets
As of March 31, 2018
Assets:Cash and deposits
Call loans
Monetary claims bought
Securities:
National government bonds
Local government bonds
Corporate bonds
Domestic stocks
Foreign securities
Loans:
Policy loans
Industrial and consumer loans
Tangible fixed assets
Intangible fixed assets
Reinsurance receivables
Other assets
Prepaid pension cost
Deferred tax assets
Customers' liabilities under acceptances and guarantees
Allowance for possible loan losses
Total assets

31,635
164,000
30,151
4,188,869
1,866,902
48,785936,856
334,335
926,893484,169
49,637434,532
401,01134,355812
45,62970
16,18710(394)
5,396,507

As of March 31, 2018
Liabilities:
Policy reserves and other reserves:
Reserve for outstanding claims
Policy reserves
Reserve for dividends to policyholders
Reinsurance payables
Bonds payable
Other liabilities:
Income taxes payable
Lease obligations
Asset retirement obligations
OthersReserve for employees’ retirement benefits
Reserve for price fluctuation
Deferred tax liabilities for land revaluation
Acceptances and guarantees
Total liabilities
Net assets:
Foundation funds
Reserve for redemption of foundation funds
Reserve for revaluation
Surplus:Reserve for future losses
Other surplus:
Reserve for fund redemption
Equalized reserve for dividends to policyholders
Interim unappropriated surplus (loss)
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

7(Millions of Yen)
As of September 30, 201836,260190,000
29,9804,361,908
1,841,199
50,486920,689
351,030
1,122,218
454,419
47,133
407,286
398,063
33,774352
45,08042
13,3578(399)
5,562,848(Millions of Yen)
As of September 30, 2018

4,682,246
28,3684,616,919
36,959311
40,349193,656
3,321
3,946
243
186,144
35,36538,71017,762
10
5,008,412

4,651,314
26,785
4,587,834
36,694
133
88,295
320,676
2,909
3,458
245
314,062
34,70639,86017,70885,152,703

126,000
131,000
281
95,901
266
95,63548,6009,678
37,356353,183

126,000
131,000
281
105,676291
105,385
61,2009,258
34,927362,958

81,292

93,640(46,380)
34,912
388,095
5,396,507(46,454)
47,186410,145
5,562,848

Asahi Mutual Life Insurance Company

４．Unaudited Non-consolidated Statements of Income
Six months ended
September 30, 2017334,661
188,839
188,12987,45054,35826,863
2,100
58,372
301,583
215,048
62,08461,025
43,62545,4082,695
2

Ordinary income:Premium and other income:Insurance premiums
Investment income:Interest, dividends and other income
Gains on sales of securities
Investment gains on separate accounts
Other ordinary income
Ordinary expenses:
Claims and other payments:
ClaimsAnnuities
Benefits
Surrender benefits
Other payments
Provision for policy reserves and other reserves:
Provision for interest on policyholders’ dividend
reserves
Investment expenses:
Interest expenses
Losses on sales of securities
Losses on valuation of securities
Losses on derivative financial instruments
Operating expenses
Other ordinary expenses
Ordinary profit
Extraordinary gains
Extraordinary losses
Surplus before income taxes
Income taxes including deferred taxes
Total income taxes
Net surplus

8(Millions of Yen)
Six months ended
September 30, 2018324,545
196,899
195,896
89,971
54,73225,9091,961
37,673300,883
202,125
60,18160,55434,74244,141
2,084
1

2

1

18,800
2,223
1,154
49
7,531
50,927
16,80433,07868
1,387
31,7586,965
6,965
24,79329,150
2,323
6,380
32
12,24052,926
16,67923,661157
1,589
22,2294,298
4,298
17,931

Asahi Mutual Life Insurance Company

5．Unaudited Non-consolidated Statements of Changes in Net Assets
Six months ended September 30, 2017

(Millions of Yen)
Foundation funds and others
Surplus

Beginning balance

Foundation
funds

Reserve forredemption offoundation
funds

Reserve forrevaluation

126,000

131,000

281

Total
foundation
funds andothersOther surplus
Reserve for
future losses

Reserve forfund
redemption

Equalized
reserve fordividends topolicyholders

242

36,000

8,718

Total
surplusInterimunappropriatedsurplus (loss)
31,35376,313

333,595(1,519)(1,519)(1,519)Changes in the interim period:
Additions to reserve for dividends topolicyholders
Additions to reserve for future losses

24

(24)

Payment of interest on foundation
funds(5,499)(5,499)(5,499)Net surplus

24,793

24,793

24,79398

98

98

Additions to reserve for fundredemption

12,600Additions to equalized reserve fordividends to policyholders(12,600)
960

Reversal of land revaluation differences(960)

Net changes, excluding foundation
funds and others
Net changes in the interim periodEnding balance

-

-

-

24

12,600960

4,288

17,872

17,872126,000

131,000

281

266

48,6009,678

35,641

94,185

351,467

Valuation and translation adjustments
Net unrealized
gains (losses)
on availablefor-salesecurities, netof tax
Beginning balance

71,104Land
revaluationdifferences(45,762)

Total
valuation andtranslation
adjustments

25,341Total
net assets

358,937

Changes in the interim period:
Additions to reserve for dividends topolicyholders(1,519)Additions to reserve for future losses
Payment of interest on foundation
funds(5,499)Net surplus

24,793

Additions to reserve for fundredemption
Additions to equalized reserve fordividends to policyholders
Reversal of land revaluation differences
Net changes, excluding foundation
funds and others

98
31,747(98)

31,64831,648Net changes in the interim period

31,747(98)

31,64849,521Ending balance

102,851(45,861)

56,990408,458

9

Asahi Mutual Life Insurance Company

Six months ended September 30, 2018

(Millions of Yen)
Foundation funds and others
Surplus

Beginning balance

Foundation
funds

Reserve forredemption offoundation
funds

Reserve forrevaluation

126,000

131,000

281

Total
foundation
funds andothersOther surplus
Reserve for
future losses

Reserve forfund
redemption

266

48,600Equalized
Interimreserve forunappropriateddividends tosurplus (loss)
policyholders

9,678

Total
surplus37,356

95,901

353,183(1,963)(1,963)(1,963)

Changes in the interim period:
Additions to reserve for dividends topolicyholders
Additions to reserve for future losses

25

(25)

Payment of interest on foundation
funds(6,266)(6,266)(6,266)

Net surplus

17,931

17,931

17,93173

73

73

Additions to reserve for fundredemption

12,600

Reversal of equalized reserve fordividends to policyholders(12,600)(420)

Reversal of land revaluation differences420

Net changes, excluding foundation
funds and others
Net changes in the interim periodEnding balance

126,000

131,000-

25

12,600(420)(2,429)

9,775

9,775

281

291

61,2009,258

34,927

105,676362,958

Valuation and translation adjustments
Net unrealized
gains (losses)
on availablefor-salesecurities, netof tax
Beginning balance

81,292Landrevaluationdifferences(46,380)

Totalvaluation andtranslation
adjustments

34,912Total
net assets

388,095

Changes in the interim period:
Additions to reserve for dividends topolicyholders(1,963)

Additions to reserve for future losses
Payment of interest on foundation
funds(6,266)

Net surplus

17,931

Additions to reserve for fundredemption
Reversal of equalized reserve fordividends to policyholders
Reversal of land revaluation differences
Net changes, excluding foundation
funds and others

73
12,347(73)

12,273

12,273

Net changes in the interim period

12,347(73)

12,27322,049Ending balance

93,640(46,454)

47,186410,145

10

Asahi Mutual Life Insurance Company

I.

Presentation of Unaudited Non-consolidated Financial Statements

Basis of Presentation
The accompanying interim non-consolidated financial statements have been prepared from theaccounts maintained by Asahi Mutual Life Insurance Company (the “Company”) in accordancewith the provisions set forth in the Insurance Business Act of Japan and its related rules andregulations applicable to the mutual life insurance industry and in conformity withsemi-annual accounting principles generally accepted in Japan, which are different in certain
respects from accounting principles generally accepted in countries and jurisdictions otherthan Japan.
In addition, the notes to the interim non-consolidated financial statements include information
which is not required under semi-annual 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 eachcomparative fiscal year in the presented financial statements for use by readers outside Japan.
In preparing the accompanying interim non-consolidated financial statements, certain
reclassifications have been made to the non-consolidated financial statements issued
domestically in order to present them in a format which is more familiar to readers outside
Japan.

II. Notes to Unaudited Non-consolidated Balance Sheet
1.

Significant Accounting Policies(1) Valuation methods of securities
The valuation of securities, including deposits and monetary claims bought which areequivalent to securities 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 Treatmentof Accounting and Auditing Concerning Policy-reserve-matching Bonds in Insurance
Industry” (Industry Audit Committee Report No. 21 issued by the Japanese Institute11

Asahi Mutual Life Insurance Company

of Certified Public Accountants (“JICPA”)), are stated at amortized cost (straight-line
method) determined by the moving average method.
iv) Investments in subsidiaries and affiliates are stated at cost.
v)

Available-for-sale securities with fair market value except for the following are stated
at fair market value based on the market prices at the balance sheet date.
Available-for-sale securities with fair 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 applied andforeign currency-denominated bonds for which hedge accounting is not applied, arestated at fair market value based on the average of the market prices during the final
month of the interim period. Costs of sales are determined by the moving averagemethod. Available-for-sale securities with extreme difficulty of measuring fair market
value, of which public and corporate bonds including foreign bonds with thedifference between acquisition cost and face value recognized as an adjustment ofinterest, are stated at amortized cost (straight-line method) determined by themoving average method. The other securities are stated at cost determined by themoving average method. Net unrealized gains or losses on these available-for-salesecurities, 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 aspolicy-reserve-matching bonds 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 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 ofLand (Act No. 34 promulgated on March 31, 1998). The difference between fair value andbook 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 isrecorded 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

12

Asahi Mutual Life Insurance Company

adjustments set forth in 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 the real-estate appraiser set forth in
Article 2, Item 5 of the said Ordinance with certain reasonable adjustments.
(5) Depreciation of tangible fixed assets
Depreciation of the Company’s tangible fixed assets is calculated by the following
methods.
(For the interim reporting purposes, the amount for the semi-annual period isdetermined.)■

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 bondexchange-traded funds for which hedge accounting is not applied and foreign
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 theinterim period.
(7) Allowance for possible loan losses
Allowance for possible loan losses is provided in accordance with the Company’s standardsof self-assessment and write-offs and reserves on credit quality:i)

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

ii)

For credit to borrowers who are not currently bankrupt but have a high risk ofbankruptcy (hereinafter “not currently bankrupt borrowers”), the Company provides
the amounts deemed as necessary considering the borrowers’ ability to pay, within
the amounts after deductions of the amount expected to be collected through thedisposal of collateral or the execution of guarantees.

13

Asahi Mutual Life Insurance Company

iii) For credit to borrowers other than the above, the Company provides the amounts
calculated by multiplying 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 Company’s
standards of self-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 is provided based on the results of these assessments.
For credit to legally bankrupt borrowers and substantially bankrupt borrowers, theamounts remaining after deductions of collateral value or the amounts collectible throughthe execution of guarantees are written-off directly from the book value as the estimateduncollectible amounts. The amount written-off was ¥58 million as of September 30, 2018.
(8) Accounting for employees’ retirement benefits and method of amortizing retirement
benefit expenses
Reserve for employees’ retirement benefits and prepaid pension cost are presented for theemployees’ 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 ofseven 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 (“Tokurei-shori”) for interest rate swaps used to hedge the cash flow volatility ofcertain loans.

14

Asahi Mutual Life Insurance Company

The Company also applies fair value hedge accounting for hedging activities related toforeign exchange rate fluctuation exposures on certain bonds, investment trusts andothers denominated in foreign 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
currency-denominated transactions other than the above.
The effectiveness of a hedge is mostly assessed by a ratio analysis, comparing thefluctuations in the fair value or cash flows of hedged items and hedging instruments.
(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 other assets and amortized equally over five
years.
Consumption taxes other than deferred consumption taxes are recognized as an expense
for the current interim period.
(12) Policy reserves
Policy reserves are based on Article 116 of the Insurance Business Act and the premium
reserve at the end of the interim period is calculated by the following method:
In regard to the policies subject to the standard policy reserves, the method as prescribedby the Commissioner 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 is applied.
(13) Software
Capitalized software for internal use owned by the Company is amortized using thestraight-line method over the estimated useful lives.

15

Asahi Mutual Life Insurance Company

2.

Financial Instruments

The balance sheet amounts, fair values and the differences between those of major financial
assets and liabilities as of September 30, 2018 were as follows:
Millions of Yen
As of September 30, 2018
Balance Sheet
Fair Value
Difference
AmountCash 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 paybable
Loans payable
Total liabilities
Derivative financial instruments
Hedge accounting not applied
Hedge accounting applied¥

36,260190,000
29,98029,377603
4,321,442
28,844
314,797
2,081,775
1,896,026
454,419
47,133
407,286
5,032,104
88,29594,000182,295(15,058)(1,766)(13,292)¥

36,260190,000
32,75132,147603
4,585,211
28,844
351,5142,308,825
1,896,026
462,679
47,133
415,546
5,306,903
90,504
92,064
182,568(15,058)(1,766)(13,292)

¥

2,770
2,770
263,768
36,717227,0508,259
8,259
274,798
2,209(1,935)273-*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 exchange-traded funds for which hedge accounting is not applied,foreign bond exchange-traded funds for which hedge accounting is not applied and foreign
currency-denominated bonds for which hedge accounting is not applied are stated at the
average of the market value during the final month of the interim period.
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 atthe balance sheet date.
Unlisted stocks and others, including investments in subsidiaries and affiliates, of whichmarket 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

16

Asahi Mutual Life Insurance Company

determine their fair value.
The amount of the unlisted stocks and others, including investments in subsidiaries andaffiliates, reported in the interim non-consolidated balance sheets was ¥40,465 million as
of September 30, 2018.
(2) Loans and loans payableAs credit exposure for policy loans without specific repayment periods is limited to theamount of the cash surrender value, the Company considers book value as fair value withthe assumption 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 theoretical prices calculated by discounting the future cash flows to thepresent value. The fair value of loans to legally bankrupt borrowers, substantiallybankrupt borrowers and not currently bankrupt borrowers is stated at the amounts bydeducting estimated losses from the book value before direct write-offs.
(3) Bonds payable
The fair value of bonds payable is based on the market values, etc. as of September 30,
2018.
(4) Derivative financial instruments
The fair values of stock options and currency options traded over the counter are based on
the quoted prices offered by counterparty financial institutions.
The fair values of foreign currency forward contracts are stated at theoretical prices basedon the TTM at the balance sheet date.
Regarding the derivative transactions for which designated hedge accounting(“Furiate-shori”) of currency swaps is applied, these fair values are included in bonds
payable since they are treated together with hedged bonds payable.
3.

Investments and Rental Properties

The fair value of investment and rental properties is omitted because there have been no
significant changes compared with the corresponding fair values at the end of the previous
fiscal year.
4.

Securities Lent under Lending Agreements

The amount of securities lent under lending agreements was ¥231,476 million as of September
30, 2018.

17

Asahi Mutual Life Insurance Company

5.

Loans

The total amount of loans to bankrupt borrowers, delinquent loans, delinquent loans three ormore months past due and restructured loans, which were included in loans, was ¥777 million
as of September 30, 2018．
i)

Loans to bankrupt borrowers were ¥0 million as of September 30, 2018.

ii)

Delinquent loans were ¥647 million as of September 30, 2018.

iii) Delinquent loans three or more months past due were ¥101 million as of September 30,
2018.
iv) Restructured loans were ¥27 million as of September 30, 2018.
Loans to bankrupt borrowers represent loans, excluding the balances already written-off,which meet the conditions 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 determining that principal of or interest on these loans isunlikely to be collected due to the significant delay in repayment 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 whichinterest payments have been suspended 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 of principal are delinquent for three months or more from the due dates under theterms of the related loan agreements, excluding those loans classified as loans to bankrupt
borrowers and delinquent loans.
Restructured loans are loans for which certain concessions favorable to borrowers, such as
interest reduction or exemptions, rescheduling of due dates of principal or interest payments,
waivers of claim or other terms, have been negotiated for the purpose of assisting andsupporting the borrowers in the restructuring of their businesses. This category excludes loansclassified as loans to bankrupt borrowers, delinquent loans and delinquent loans three or moremonths past due.
The direct write-offs related to loans decreased the amount of loans to bankrupt borrowers
described above by ¥13 million as of September 30, 2018.
In addition, the direct write-offs related to loans decreased the amount of delinquent loans
described above by ¥44 million as of September 30, 2018.

18

Asahi Mutual Life Insurance Company

6.

Separate Accounts

Total assets in separate accounts provided for in Article 118 of the Insurance Business Act were¥30,136 million as of September 30, 2018. The amount of separate account liabilities was thesame as separate account assets.
7.

Reserve for Dividends to Policyholders

The change in reserve for dividends to policyholders for the interim period ended September 30,
2018 was as follows:

Millions of Yen
Six months ended
September 30, 2018
Balance at the beginning of the interim period
Transfer to reserve from surplus in the previous fiscal year
Dividends to policyholders paid out during the interim period
Increase in interest
Balance at the end of the interim period
8.

¥

¥

36,959
1,963
2,229
1
36,694

Stocks of Subsidiaries and Affiliates

The amount of stocks of subsidiaries and affiliates the Company held was ¥6,596 million as of
September 30, 2018.
9.

Pledged Assets

Assets pledged as collateral were securities in the amount of ¥23,559 million as of September
30, 2018.
10. Policy Reserves for the Reinsurance Contracts
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 forceded reinsurance”) were ¥137 million as of September 30, 2018.
11. Assets with Rights to Sell
The Company has the legal right to sell or collateralize securities borrowed under loan
agreements. The market value of these assets that were not sold or pledged as collateral was¥67,879 million as of September 30, 2018. No assets were pledged as collateral as of September
30, 2018.
12. Commitment LineAs of September 30, 2018, there were unused commitment line agreements under which theCompany is the lender of ¥4,101 million.

19

Asahi Mutual Life Insurance Company

13. Subordinated Bonds Payable
As of September 30, 2018, bonds payable are subordinated bonds payable, for which therepayments are subordinated to other obligations.
14. Subordinated Loans Payable
As of September 30, 2018, other liabilities included subordinated loans payable of ¥94,000
million, for which the repayments are subordinated to other obligations.
15. Contributions to Policyholders Protection Corporation
The estimated future contributions to the Life Insurance Policyholders Protection Corporationof Japan under Article 259 of the Insurance Business Act were ¥8,899 million as of September
30, 2018. These contributions are charged as operating expenses in the reporting period inwhich they are paid.

III. Notes to Unaudited Non-consolidated Statement of Income
1.

Investment Income and Expenses

The major components of gains on sales of securities were as follows:

Millions of Yen
Six months ended
September 30, 2018¥25,451455
3Domestic bonds
Domestic stocks and other securities
Foreign securities

The major components of losses on sales of securities were as follows:

Millions of Yen
Six months ended
September 30, 2018
¥
1,599
500
4,279

Domestic bonds
Domestic stocks and other securities
Foreign securities

The major components of losses on valuation of securities were as follows:

Millions of Yen
Six months ended
September 30, 2018¥32

Domestic stocks and other securities

20

Asahi Mutual Life Insurance Company

2.

Policy Reserves for the Reinsurance Contracts

Reversal of policy reserves for ceded reinsurance considered in calculating reversal of policy
reserves for the interim periods ended September 30, 2018 was ¥39 million.
3.

Interest and Dividend Income

The breakdown of interest, dividends and other income was as follows:

Millions of Yen
Six months ended
September 30, 2018
Interest on deposits
Interest and dividends on securities
Interest on loans
Rental revenue from real estate
Other interest and dividends
Total

4.

¥

¥

0
42,261
3,711
8,266
493
54,732

Income Tax Expense

The simplified method is applied for tax effect accounting to calculate income tax expense forthe interim period ended September 30. Therefore, deferred taxes are included in income taxes.

21

Asahi Mutual Life Insurance Company

6．Breakdown of Ordinary Profit (Fundamental Profit)(Millions of Yen)
Six months ended
September 30, 2017

Six months ended
September 30, 2018

14,764

12,96627,28729,572

Gains on money held in trust--

Gains on trading securities--

Gains on sales of securities

26,86325,909

-

-

423

3,662

-

-

8,734

18,653Losses on money held in trust--

Losses on trading securities--

Losses on sales of securities

1,154

6,380

49

32

Fundamental profit

Ａ

Capital gains

Gains on derivative financial instruments
Foreign exchange gains
Other capital gains
Capital losses

Losses on valuation of securities
Losses on derivative financial instruments

7,531

12,240Foreign exchange losses--

Other capital losses

-

-

Ｂ

18,553

10,918Ａ＋Ｂ

33,31723,885

60

26

Reinsurance revenue--

Reversal of contingency reserve
Reversal of specific allowance for possible loan
lossesOthers

-

-

60

26

-

-

Other one-time losses

300

250

Reinsurance premiums

-

-

300

250

-

-

-

-

Write-offs of loans00Others

-

-

Ｃ

(239)

(223)

Ａ＋Ｂ＋Ｃ

33,07823,661

Net capital gains (losses)
Fundamental profit plus net capital gains(losses)
Other one-time gains

Provision for contingency reserve
Provision for specific allowance for possible loan
lossesProvision for allowance for specified overseas loans

Net other one-time gains (losses)
Ordinary profit

22

Asahi Mutual Life Insurance Company

7．Disclosed Claims Based on Categories of Obligors(Millions of Yen, ％)As of March 31, 2018

As of September 30, 2018

Claims against bankrupt and quasi-bankrupt
obligors

529

446

Claims with collection risk

237

217

Claims for special attention

161

133

Subtotal

928

796（Percentage of total）(0.15)(0.12)

Claims against normal obligors

606,280

686,832

Total

607,208

687,628

Notes:
1.Claims against bankrupt and quasi-bankrupt obligors are claims to obligors who are subject tobankruptcy, corporate reorganization or rehabilitation or other similar proceedings and other obligors
in serious financial difficulties.
2.Claims with collection risk are claims to obligors (other than bankrupt and quasi-bankrupt obligors) withdeteriorated financial condition and results of operations from which it is unlikely that the principal andinterest on the claims will be recovered.
3.Claims for special attention are claims on which principal and/or interest are past due for three months ormore and claims with a concessionary interest rate, as well as claims with renegotiated conditions in favor of
the borrower, including renegotiated schedule and/or waivers, in each case, other than the claims describedin note 1. or 2. above.
4.Claims against normal obligors are all other claims.

23

Asahi Mutual Life Insurance Company

8．Risk-monitored Loans(Millions of Yen, ％)As of March 31, 2018

Loans to bankrupt borrowers

As of September 30, 2018

00

Delinquent loans

748

647

Delinquent loans three or more months past due

120

101

Restructured loans

36

27

Total

906

777

（Percentage of total loans）(0.19)(0.17)

Notes:
1.For credit to legally bankrupt borrowers and substantially bankrupt borrowers, the amounts remaining after
the deductions of amount expected to be collected through the disposal of collateral or the execution ofguarantees are written-off directly from the book value as the estimated uncollectible amounts.
The amounts written-off related to loans to bankrupt borrowers were \13 million as of September 30, 2018
and \13 million as of March 31, 2018. The amounts written-off related to delinquent loans were \44 million
as of September 30, 2018 and \46 million as of March 31, 2018.
2.Loans to bankrupt borrowers represent non-accrual loans to borrowers which are subject to bankruptcy,
corporate reorganization or rehabilitation or other similar, including but not limited to foreign, proceedings.
Accruing interest on these loans is not recorded as income after determining that principal of or interest on
these loans is unlikely to be collected due to the significant delay in repayment of principal or interest
repayments or for other reasons.
3.Delinquent loans are loans whose accruing interest is not recorded as income and exclude loans tobankrupt borrowers and loans for which interest payments have been suspended and rescheduled to assist
and support the borrowers in the restructuring of their business.
4.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 or delinquent loans.
5.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 theirbusinesses. This category excludes loans classified as loans to bankrupt borrowers, delinquent loans anddelinquent loans three or more months past due.

24

Asahi Mutual Life Insurance Company

9．Solvency Margin Ratio(Millions of Yen)

As of March 31, 2018

As of September 30, 2018787,114872,544

Foundation funds and surplus

344,953

359,918

Reserve for price fluctuation

38,71039,860Contingency reserve

50,68250,932

17

49(Net unrealized gains on available-for-sale securities (before tax effect) anddeferred hedge gains (before tax effect)) × 90% (in case of losses： × 100%)

93,243106,903

Net unrealized gains on land × 85%(in case of losses： × 100%)(10,499)(10,371)

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

122,802

127,642

Qualifying subordinated debt

Total solvency margin（Ａ）

General allowance for possible loan losses

136,949

181,495

Excess amount of policy reserves based on full-time Zillmer method and qualifying subordinateddebt excluded from the calculation of solvency margin--

Deduction--

10,256

16,114

194,693

200,182

OthersTotal amount of risk

( R1  R8 ) 2  ( R2  R3  R7 ) 2  R4

（Ｂ）

Insurance risk

R1

14,415

14,122

Third sector insurance risk

R8

9,450

9,530

Risk of assumed yield

R2

78,49077,170

Minimum guarantee risk

R7

1,076

1,076

Investment risk

R3

109,368

116,141

Operational risk

R4

4,256

4,360

808.5%

871.7%

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

Notes:
1. The figures above are calculated based on Articles 86 and 87 of the Ordinance for Enforcement of the Insurance Business Act and the Public Notice
No. 50 of the Ministry of Finance of 1996.
2. "Excess amount of policy reserves based on full-time Zillmer method", "Qualifying subordinated debt" and "Excess amount of policy reserves basedon full-time Zillmer method and qualifying subordinated debt excluded from the calculation of solvency margin" are calculated based on the Public
Notice No.25 of the Financial Services Agency of 2011.
3. "Minimum guarantee risk" is calculated by standard method.

25

Asahi Mutual Life Insurance Company

10．Status of Separate Account(1) Separate Account Assets by Products(Millions of Yen)

As of March 31, 2018

As of September 30, 2018

AmountAmountIndividual variable insurance

29,38230,136

Individual variable annuities--

Group annuity products--

29,38230,136Total(2) Sum Insured of Policies in Force
As of September 30, 2018

As of March 31,2018
Number of policies(Thousands)

Individual variable insurance(fixed term)
Individual variable insurance(whole life)
Total

AmountNumber of policies(Thousands)(Millions of Yen)

Amount(Millions of Yen)

0

5

-

-

14

98,38314

97,01814

98,38814

97,018

As of September 30, 2018

As of March 31,2018
Number of policies(Thousands)

AmountNumber of policies(Thousands)(Millions of Yen)

Amount(Millions of Yen)

Individual variable annuities

-

-

-

-

Total

-

-

-

-

26

Asahi Mutual Life Insurance Company

11．Status of the Company, Subsidiaries and Affiliates(1) Selected Financial Data
(Millions of Yen)

Six months ended
September 30, 2017

Six months ended
September 30, 2018

Ordinary income

336,542

326,406

Ordinary profit

32,99323,300Net surplus attributable to the Parent Company

24,70917,675Comprehensive income

56,75230,314(Millions of Yen)

As of March 31, 2018
Total assets
Solvency margin ratio

27

As of September 30, 2018

5,397,841

5,563,545

815.4%

879.8%

Asahi Mutual Life Insurance Company

（2）Unaudited Consolidated Balance Sheets

Assets:Cash and deposits
Call loans
Monetary claims bought
Securities
Loans
Tangible fixed assets
Intangible fixed assets
Reinsurance receivables
Other assets
Net defined benefit assets
Deferred tax assets
Customers’ liabilities under acceptances and guarantees

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

28

As of March 31, 2018

(Millions of Yen)
As of September 30, 201836,143164,000
30,151
4,185,104
484,169
401,061
33,735812
46,632351
16,06210(394)
5,397,841

40,284
190,000
29,9804,357,842
454,419
398,122
33,173352
46,066286
13,4078(399)
5,563,545

4,682,246
28,3684,616,919
36,959311
40,349194,908
35,056
38,71017,76210
5,009,355

4,651,314
26,785
4,587,834
36,694
133
88,295
321,604
34,08839,86017,70885,153,013

126,000
131,000
281
95,832353,114126,000
131,000
281
105,351
362,633

81,29393,642(46,380)377
35,29081
388,486
5,397,841(46,454)646
47,834
63
410,532
5,563,545

Asahi Mutual Life Insurance Company

（3）Unaudited Consolidated Statements of Income and Statements of Comprehensive Income（Unaudited Consolidated Statements of Income）(Millions of Yen)
Six months ended
September 30, 2018

Six months ended
September 30, 2017
Ordinary income:

336,542

326,406

Premium and other income

188,839

196,899

Investment income:

87,21089,430Interest, dividends and other income

54,131

54,204

Gains on sales of securities

26,86425,909Investment gains on separate accounts

2,100

1,961

60,491

40,076

303,548

303,106

215,048

202,125

Claims62,08460,181

Annuities

61,02560,554

Benefits

43,62534,742

Surrender benefits

45,40844,141Other payments

2,695

2,084

2

1

Other ordinary income
Ordinary expenses:
Claims and other payments:

Provision for policy reserves and other reserves:

2

1

Investment expenses:

Provision for interest on policyholders’ dividend reserves

18,80029,150Interest expenses

2,223

2,323

Losses on sales of securities

1,154

6,380

49

32

Losses on valuation of securities

7,531

12,240Operating expenses

Losses on derivative financial instruments

52,92755,217

Other ordinary expenses

16,76916,611

32,99323,300Ordinary profit
Extraordinary gains

68

157

Extraordinary losses

1,387

1,589

Surplus before income taxes

31,674

21,868

Income taxes including deferred taxes

6,945

4,171

Total income taxes

6,945

4,171

Net surplus

24,728

17,696

Net surplus attributable to non-controlling interests
Net surplus attributable to the Parent Company

29

19

21

24,70917,675

Asahi Mutual Life Insurance Company

（Unaudited Consolidated Statements of Comprehensive Income）(Millions of Yen)
Six months ended
September 30, 2017

Six months ended
September 30, 2018

Net surplus

24,728

17,696

Other comprehensive income:

32,023

12,61831,747

12,348276

269

56,75230,31456,73330,29319

21

Net unrealized gains (losses) on available-for-sale securities, net of tax
Remeasurements of defined benefit plans
Comprehensive income:Comprehensive income attributable to the Parent Company
Comprehensive income attributable to non-controlling interests

30

Asahi Mutual Life Insurance Company

（4）Unaudited Consolidated Statements of Cash FlowsSix months ended
September 30, 2017
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
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 monetary claims bought
Purchases of securities
Proceeds from sales and redemptions of securities
Disbursements for loans
Proceeds from collections of loans
Proceeds from derivative financial instruments
Increase (decrease) in payables under securities borrowing transactions①Total of investing activities[I+①]
Purchases of tangible fixed assets
Proceeds from sales of tangible fixed assets
Others, net
Net cash provided by (used in) investing activities
III. Cash flows from financing activities
Redemption of debt borrowing
Proceeds from issuance of bonds
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 interim period
VI. Cash and cash equivalents at the end of the interim period(Millions of Yen)
Six months ended
September 30, 2018

31,674
2,799
4,854
157
(619)
(49,300)
2
(61)
(651)
1,100
(54,131)(27,761)
7,531
2,223
(423)
(63)
(3,724)(86,394)
56,747(2,531)(2,435)(2,690)(37,304)

21,868
2,779
5,631
328
(1,583)(29,084)
1
4
(659)
1,150
(54,204)(21,458)
12,2402,323(3,661)(116)(12,747)(77,187)
56,172(2,532)(2,229)(5,015)(30,792)

(500)
2,135
(352,898)
328,920(26,094)
70,643
3,005
88,803
114,015
76,711(2,494)161(5,870)105,812(1,099)1,272(492,159)
383,383(18,528)
51,023(23,324)
126,085
26,653(4,138)(2,378)249(2,407)
22,116(5,499)(31)(458)(5,989)62,518
157,511220,029(3,000)47,946(5,551)(39)(537)
38,81730,141200,143
230,284

Note:
Cash and cash equivalents in consolidated cash flow statements includes cash in hand, cash at bank and short-term investments with redemption period of three months and lessthan three months, which can be withdrawn anytime and can be converted to cash with ease.

31

Asahi Mutual Life Insurance Company

（5）Unaudited Consolidated Statements of Changes in Net Assets
Six months ended September 30, 2017

(Millions of Yen)
Foundation funds and others

Beginning balance

Foundation
funds

Reserve forredemption offoundation
funds

126,000

131,000

Reserve forrevaluation

Consolidated
surplus281

Total
foundation
funds andothers

76,065

333,347(1,519)(1,519)(5,499)(5,499)24,70924,70998

98

Changes in the interim period:
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 interim periodEnding balance

-

-

-

17,78817,788126,000

131,000

281

93,854351,136

Total
Accumulated
accumulated
remeasurements
otherof definedcomprehensive
benefit plansincomeNoncontrollinginterests

Accumulated other comprehensive income
Net unrealized
gains (losses)
on availablefor-salesecurities,
net of tax
Beginning balance

71,105Landrevaluationdifferences(45,762)(358)

24,98373

Total
net assets

358,404

Changes in the interim period:
Additions to reserve for dividends topolicyholders
Payment of interest on foundation
funds
Net surplus attributable to the Parent
Company(1,519)(5,499)24,709

Reversal of land revaluation differences
Net changes, excluding foundation
funds and others

98
31,747(98)

276

31,925(12)

31,912

Net changes in the interim period

31,747(98)

276

31,925(12)

49,701Ending balance

102,852(45,861)(82)

56,90960

408,106

32

Asahi Mutual Life Insurance Company

Six months ended September 30, 2018

(Millions of Yen)
Foundation funds and others

Beginning balance

Foundation
funds

Reserve forredemption offoundation
funds

126,000

131,000

Reserve forrevaluation

Consolidated
surplus281

Total
foundation
funds andothers

95,832353,114(1,963)(1,963)(6,266)(6,266)

17,675

17,67573

73

Changes in the interim period:
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 interim periodEnding balance

-

-

-

9,519

9,519

126,000

131,000

281

105,351

362,633

Accumulated other comprehensive income
Net unrealized
gains (losses)
on availablefor-salesecurities, netof tax
Beginning balanceLandrevaluationdifferences

81,293(46,380)

Total
Accumulated
accumulated
remeasurements
otherof definedcomprehensive
benefit plansincome377

35,290Noncontrollinginterests

81

Total
net assets

388,486

Changes in the interim period:
Additions to reserve for dividends topolicyholders
Payment of interest on foundation
funds
Net surplus attributable to the Parent
Company(1,963)(6,266)
17,675

Reversal of land revaluation differences
Net changes, excluding foundation
funds and others

73
12,348(73)

269

12,544(17)

12,526

Net changes in the interim period

12,348(73)

269

12,544(17)

22,046

Ending balance

93,642(46,454)646

47,834

63

410,532

33

Asahi Mutual Life Insurance Company

I.

Presentation of Unaudited Consolidated Financial Statements

1.

Basis of Presentation

The accompanying interim consolidated financial statements have been prepared from theaccounts maintained by Asahi Mutual Life Insurance Company (the “Company”) and its
consolidated subsidiaries in accordance with the provisions set forth in the Insurance BusinessAct of Japan and its related rules and regulations applicable to the mutual life insurance
industry and in conformity with semi-annual accounting principles generally accepted inJapan, which are different in certain respects from accounting principles generally accepted incountries and jurisdictions other than Japan.
In addition, the notes to the interim consolidated financial statements include information
which is not required under semi-annual 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 eachcomparative fiscal year in the presented financial statements for use by readers outside Japan.
In preparing the accompanying interim consolidated financial statements, certain
reclassifications have been made to the consolidated financial statements issued domesticallyin order to present them in a format which is more familiar to readers outside Japan.
2.

Principles of Consolidation(1) Scope of consolidation
The consolidated subsidiaries as of September 30, 2018 are listed below:
Info Techno Asahi Co., Ltd.
Asahi Life Asset Management Co., Ltd.
Asahi Nvest Investment Advisory Co., Ltd.
The major unconsolidated subsidiary is Asahi Real Estate Management Co., Ltd.
Each non-consolidated subsidiary is small in scale in terms of total assets, amount of sales,
net income and surplus for the interim period. As such non-consolidated subsidiaries are
not considered to materially affect any reasonable determination as to the financial
position and results of operation of the Company’s group, these companies are excluded
from the consolidation.
(2) Application of equity method
Unconsolidated subsidiaries and affiliates (such as Asahi Real Estate Management Co.,

34

Asahi Mutual Life Insurance Company

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) Interim period-end of consolidated subsidiaries
The interim period-end of the consolidated subsidiaries is September 30.

II. Notes to Unaudited Consolidated Balance Sheet
1.

Significant Accounting Policies(1) Valuation methods of securities
The valuation of securities, including deposits and monetary claims bought which areequivalent to securities 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 Treatmentof Accounting and Auditing Concerning Policy-reserve-matching Bonds in Insurance
Industry” (Industry Audit Committee Report No. 21 issued by the Japanese Instituteof Certified Public Accountants (“JICPA”)), are stated at amortized cost (straight-line
method) determined by the moving average method.
iv) Investments in unconsolidated subsidiaries and affiliates not accounted for under theequity 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 balance sheet date.
Available-for-sale securities with fair 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 applied andforeign currency-denominated bonds for which hedge accounting is not applied, arestated at fair market value based on the average of the market prices during the final
month of the interim period. Costs of sales are determined by the moving averagemethod. Available-for-sale securities with extreme difficulty of measuring fair market
value, of which public and corporate bonds including foreign bonds with thedifference between acquisition cost and face value recognized as an adjustment ofinterest, are stated at amortized cost (straight-line method) determined by themoving average method. The other securities are stated at cost determined by themoving average method. Net unrealized gains or losses on these available-for-salesecurities, net of tax, are recorded as a separate component of net assets.

35

Asahi Mutual Life Insurance Company

(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 aspolicy-reserve-matching bonds 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 JICPA).
(3) Revaluation of land
The Company revalued the land for business purposes based on the Act on Revaluation ofLand (Act No. 34 promulgated on March 31, 1998). The difference between fair value andbook 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 isrecorded 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 forth in 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 the real-estate appraiser set forth in
Article 2, Item 5 of the said Ordinance with certain reasonable adjustments.

(4) Depreciation of tangible fixed assets
Depreciation of the Company’s tangible fixed assets is calculated by the following
methods.
(For the interim reporting purposes, the amount for the semi-annual period isdetermined.)■

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(5) Foreign currency translation
Foreign currency-denominated assets and liabilities (excluding the shares of
unconsolidated subsidiaries and affiliates) are translated into Japanese yen at theeffective exchange rate prevailing at the balance sheet date, except for foreign stock
exchange-traded funds for which hedge accounting is not applied, foreign bondexchange-traded funds for which hedge accounting is not applied and foreign
currency-denominated bonds for which hedge accounting is not applied categorized as

36

Asahi Mutual Life Insurance Company

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 theinterim period.
(6) Allowance for possible loan losses
Allowance for possible loan losses is provided in accordance with the Company’s standardsof self-assessment and write-offs and reserves on credit quality:i)

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

ii)

For credit to borrowers who are not currently bankrupt but have a high risk ofbankruptcy (hereinafter “not currently bankrupt borrowers”), the Company provides
the amounts deemed as necessary considering the borrowers’ ability to pay, within
the amounts after deductions of the amount expected to be collected through thedisposal of collateral or the execution of guarantees.

iii) For credit to borrowers other than the above, the Company provides the amounts
calculated by multiplying 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 Company’s
standards of self-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 is provided based on the results of these assessments.
For consolidated subsidiaries, the Company records the allowance amounts deemednecessary in accordance mainly with the Company’s standards of self-assessment andwrite-offs and reserves on credit quality.
For credit to legally bankrupt borrowers and substantially bankrupt borrowers, theamounts remaining after deductions of collateral value or the amounts collectible throughthe execution of guarantees are written-off directly from the book value as the estimateduncollectible amounts. The amount written-off was ¥58 million as of September 30, 2018.
(7) Accounting for employees’ retirement benefits and method of amortizing retirement
benefit expenses
Net defined benefit liabilities and assets are presented for the employees’ retirement
benefits after deducting pension plan assets from retirement benefit obligations, based on
estimated amounts as of the balance sheet date.

37

Asahi Mutual Life Insurance Company

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 ofseven years starting the following year.

■

Prior service cost is charged to income when incurred.

(8) 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 (“Tokurei-shori”) for interest rate swaps used to hedge the cash flow volatility ofcertain loans.
The Company also applies fair value hedge accounting for hedging activities related toforeign exchange rate fluctuation exposures on certain bonds, investment trusts andothers denominated in foreign 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
currency-denominated transactions other than the above.
The effectiveness of a hedge is mostly assessed by a ratio analysis, comparing thefluctuations in the fair value or cash flows of hedged items and hedging instruments.
(9) Valuation methods of derivative financial instruments
Derivative financial instruments are stated at fair market value.
(10) Reserve for price fluctuation
Reserve for price fluctuation is calculated in accordance with Article 115 of the Insurance
Business Act.
(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

38

Asahi Mutual Life Insurance Company

deductible from consumption taxes withheld and that are stipulated to be deferred under
the Corporation Tax Act of Japan, are deferred as other assets and amortized equally over
five years.
Consumption taxes other than deferred consumption taxes are recognized as an expense
for the current interim period.
(12) Policy reserves
Policy reserves are based on Article 116 of the Insurance Business Act and the premium
reserve at the end of the interim period is calculated by the following method:
In regard to the policies subject to the standard policy reserves, the method as prescribedby the Commissioner 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 is applied.
(13) Software
Capitalized software for internal use owned by the Company and its subsidiaries (included
in intangible fixed assets in the consolidated balance sheet) is amortized using thestraight-line method over the estimated useful lives.

39

Asahi Mutual Life Insurance Company

2. Financial Instruments
The balance sheet amounts, fair values and the differences between those of major financial
assets and liabilities as of September 30, 2018 were as follows:

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

Millions of Yen
As of September 30, 2018
Balance Sheet
Fair Value
Difference
Amount¥40,284¥40,284¥
190,000
190,000
29,98032,751
2,770
29,37732,147
2,770
603
603
4,321,865
4,585,634
263,768
28,844
28,844315,199
351,91736,7182,081,775
2,308,825
227,050
1,896,047
1,896,047
454,419462,679
8,259
47,13347,133
407,286
415,546
8,259
5,036,551
5,311,351
274,799
88,29590,5042,209
94,00092,064(1,935)
182,295
182,568273(15,058)(15,058)(1,766)(1,766)(13,292)(13,292)-* 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 exchange-traded funds for which hedge accounting is not applied,foreign bond exchange-traded funds for which hedge accounting is not applied and foreign
currency-denominated bonds for which hedge accounting is not applied are stated at the
average of the market value during the final month of the interim period.
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 atthe balance sheet date.
Unlisted stocks and others, including investments in subsidiaries and affiliates, of which

40

Asahi Mutual Life Insurance Company

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 todetermine their fair value.
The amount of the unlisted stocks and others, including investments in subsidiaries andaffiliates, reported in the interim consolidated balance sheets was ¥35,976 million as of
September 30, 2018.
(2) Loans and loans payableAs credit exposure for policy loans without specific repayment periods is limited to theamount of the cash surrender value, the Company and its subsidiaries consider book value
as fair value with the assumption that fair value approximates book value in light offactors 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 theoretical prices calculated by discounting the future cash flows to thepresent value. The fair value of loans to legally bankrupt borrowers, substantiallybankrupt borrowers and not currently bankrupt borrowers is stated at the amounts bydeducting estimated losses from the book value before direct write-offs.
(3) Bonds payable
The fair value of bonds payable is based on the market value, etc. as of September 30,
2018.
(4) Derivative financial instruments
The fair values of stock options and currency options traded over the counter are based on
the quoted prices offered by counterparty financial institutions.
The fair values of foreign currency forward contracts are stated at theoretical prices basedon the TTM at the balance sheet date.
Regarding the derivative transactions for which designated hedge accounting(“Furiate-shori”) of currency swaps is applied, these fair values are included in bonds
payable since they are treated together with hedged bonds payable.
3.

Investments and Rental Properties

The fair value of investment and rental properties is omitted because there have been no
significant changes compared with the corresponding fair values at the end of the previous
fiscal year.

41

Asahi Mutual Life Insurance Company

4.

Loans

The total amount of loans to bankrupt borrowers, delinquent loans, delinquent loans three ormore months past due and restructured loans, which were included in loans, was ¥777 million
as of September 30, 2018.
i)

Loans to bankrupt borrowers were ¥0 million as of September 30, 2018.

ii)

Delinquent loans were ¥647 million as of September 30, 2018.

iii) Delinquent loans three or more months past due were ¥101 million as of September 30,
2018.
iv) Restructured loans were ¥27 million as of September 30, 2018.
Loans to bankrupt borrowers represent loans, excluding the balances already written-off,which meet the conditions 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 determining that principal of or interest on these loans isunlikely to be collected due to the significant delay in repayment 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 whichinterest payments have been suspended 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 of principal are delinquent for three months or more from the due dates under theterms of the related loan agreements, excluding those loans classified as loans to bankrupt
borrowers and delinquent loans.
Restructured loans are loans for which certain concessions favorable to borrowers, such as
interest reduction or exemptions, rescheduling of due dates of principal or interest payments,
waivers of claim or other terms, have been negotiated for the purpose of assisting andsupporting the borrowers in the restructuring of their businesses. This category excludes loansclassified as loans to bankrupt borrowers, delinquent loans and delinquent loans three or moremonths past due.
The direct write-offs related to loans decreased the amount of loans to bankrupt borrowers
described above by ¥13 million as of September 30, 2018.
In addition, the direct write-offs related to loans decreased the amount of delinquent loans
described above by ¥44 million as of September 30, 2018.

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Asahi Mutual Life Insurance Company

5.

Separate Accounts

Total assets in separate accounts provided for in Article 118 of the Insurance Business Act were¥30,136 million as of September 30, 2018. The amount of separate account liabilities was thesame as separate account assets.
6.

Reserve for Dividends to Policyholders

The change in reserve for dividends to policyholders for the interim period ended September 30,
2018 was as follows:

Millions of Yen
Six months ended
September 30, 2018
Balance at the beginning of the interim period
Transfer to reserve from surplus in the previous fiscal year
Dividends to policyholders paid out during the interim period
Increase in interest
Balance at the end of the interim period
7.

¥

¥

36,959
1,963
2,229
1
36,694

Pledged Assets

Assets pledged as collateral were securities in the amount of ¥23,559 million as of September
30, 2018.
8.

Securities Lent under Lending Agreements

The amount of securities lent under lending agreements was ¥231,476 million as of September
30, 2018.
9.

Assets with Rights to Sell

The Company has the legal right to sell or collateralize securities borrowed under loan
agreements. The market value of these assets that were not sold or pledged as collateral was¥67,879 million as of September 30, 2018. No assets were pledged as collateral as of September
30, 2018.
10. Commitment LineAs of September 30, 2018, there were unused commitment line agreements under which theCompany is the lender of ¥4,101 million.
11. Subordinated Bonds Payable
As of September 30, 2018, bonds payable are subordinated bonds payable, for which therepayments are subordinated to other obligations.

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Asahi Mutual Life Insurance Company

12. Subordinated Loans Payable
As of September 30, 2018, other liabilities included subordinated loans payable of ¥94,000
million, for which the repayments are subordinated to other obligations.
13. Contributions to Policyholders Protection Corporation
The estimated future contributions to the Life Insurance Policyholders Protection Corporationof Japan under Article 259 of the Insurance Business Act were ¥8,899 million as of September
30, 2018. These contributions are charged as operating expenses in the reporting period inwhich they are paid.

III. Notes to Unaudited Consolidated Statement of Income
1.

Investment Income and Expenses

The major components of gains on sales of securities were as follows:

Millions of Yen
Six months ended
September 30, 2018¥25,451455
3Domestic bonds
Domestic stocks and other securities
Foreign securities

The major components of losses on sales of securities were as follows:

Millions of Yen
Six months ended
September 30, 2018
¥
1,599
500
4,279

Domestic bonds
Domestic stocks and other securities
Foreign securities

The major components of losses on valuation of securities were as follows:

Millions of Yen
Six months ended
September 30, 2018¥32

Domestic stocks and other securities
2.

Income Tax Expense

The simplified method is applied for tax effect accounting to calculate income tax expense forthe interim period ended September 30. Therefore, deferred taxes are included in income taxes.

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Asahi Mutual Life Insurance Company

(6) Consolidated Solvency Margin Ratio(Millions of yen)

As of March 31, 2018

Total solvency margin（Ａ）

As of September 30, 2018

788,037

872,401

Foundation funds and surplus

345,401

358,981Reserve for price fluctuation

38,71039,860Contingency reserve

50,68250,932

Catastrophe loss reserve--

General allowance for possible loan losses

19

51(Net unrealized gains on available-for-sale securities (before tax effect) and deferredhedge gains (before tax effect)) × 90% (in case of losses： × 100%)

93,244

106,905

Net unrealized gains on land × 85%(10,499)(10,371)

521

790

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

122,802

127,642

Qualifying subordinated debt

136,949

181,495

-

-

(50)

-

10,256

16,114

193,282

198,307(in case of losses： × 100%)

Sum of unrealized actuarial differences and unrealized past service cost

Excess amount of policy reserves based on full-time Zillmer method and qualifying
subordinated debt excluded from the calculation of solvency margin
Deduction
OthersTotal amount of risk

(

2

2

1

5

R R R R ) ( R R R ) R R
2

8

9

2

2

3

7

4

6

（Ｂ）

Insurance risk

R1

14,415

14,122

Ordinary insurance risk

R5

-

-

Disaster insurance risk

R6

-

-

Third sector insurance risk

R8

9,450

9,530

Small amount short-term insurance provider insurance risk

R9

-

-

Risk of assumed yield

R2

78,49077,170

Minimum guarantee risk

R7

1,076

1,076

Investment risk

R3

107,974

114,289

Operational risk

R4

4,228

4,323

815.4%

879.8%

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

Notes:
1. The figures above are calculated based on Articles 86-2 and 88 of the Ordinance for Enforcement of the Insurance Business Act and the Public Notice No.23
of the Financial Services Agency of 2011.
2. "Excess amount of policy reserves based on full-time Zillmer method", "Qualifying subordinated debt" and "Excess amount of policy reserves based on
full-time Zillmer method and qualifying subordinated debt excluded from the calculation of solvency margin" are calculated based on the Public Notice No.25
of the Financial Services Agency of 2011.
3. "Minimum guarantee risk" is calculated by standard method.

(7) Segment information
The Company and its consolidated subsidiaries operate investment advisory business, etc., in addition to life insurance businessin Japan. However, information on these segments and related information are omitted because they represent such a minor proportionof total segments.

45

Asahi Mutual Life Insurance Company