November 24, 2017

Financial Results for the Six Months Ended September 30, 2017
Asahi Mutual Life Insurance Company (the “Company”; President: Hiroki Kimura) announces financial
results for the six months ended September 30, 2017

［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) Policies in Force and New Policies(i) Policies in Force
As of March 31, 2017
Number of policies

As of September 30, 2017

Amount(100 millions of Yen)

(Thousands)

Number of policies

Amount (100 millions of Yen)

(Thousands)

Changes(%, Pre-FYE)

Changes(%, Pre-FYE)

Individual insurance

7,173

181,705

7,161

99.8

173,412

95.4

Individual annuities

615

26,820601

97.7

25,94496.7

Group insurance-

13,286--13,141

98.9

Group annuities

-

187

-

-

182

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, 2016
Amount (100 millions of Yen)

Number of policies

New
policies(Thousands)

Net increase by
conversion

Individual insurance

356

733

1,945

(1,211)

Individual annuities

13

434

513

(78)

Group insurance

-

14

14

-

Group annuities

-

-

-

-

Six months ended September 30, 2017
Number of policies(Thousands)

Amount (100 millions of Yen)

Changes(%, YoY)

Changes(%, YoY)

New
policies

Net increase by
conversion

Individual insurance

337

94.7

590

80.5

1,587

(997)

Individual annuities

-

-

(79)

-

-

(79)

Group insurance

-

-

125

894.1

125

-

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, 2017

As of September 30, 2017
Changes(%, Pre-FYE)

Individual insurance

3,764

3,754

99.7

Individual annuities

1,594

1,549

97.1

Total

5,359

5,303

99.0

1,978

2,022

102.2

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

Six months ended
September 30, 2016

Six months ended
September 30, 2017

Individual insurance

150

131

87.1

Individual annuities

15

(1)

-

Total

165

129

78.1

119

109

92.1

Third-sector products

Changes(%, YoY)

Notes:
1. Annualized premiums are calculated by using coefficients based on the premium payment method. (For single
premium contracts, the amount is calculated by dividing the premium by the coverage period.)
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,nursing care benefits).

（3）Selected Financial Data
(Millions of Yen）

Six months ended
September 30, 2016

Six months ended
September 30, 2017

Premium and other income

190,720

188,839

99.0

Investment income

73,09487,450119.6

Claims and other payments

223,750

215,048

96.1

Investment expenses

18,76218,800100.2

Changes(%, YoY)（4）Total Assets(Millions of Yen）

As of March 31, 2017

As of September 30, 2017
Changes(%, Pre-FYE)

Total assets

5,398,207

2

5,546,036

102.7

Asahi Mutual Life Insurance Company

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

As of March 31, 2017
Amount152,480
33,202
4,125,107
2,895,636
282,959
869,024
642,030
226,993
77,487557,761
57,577500,184
401,557
22,72576,821(487)
5,369,169
908,336

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
2.8
0.6
76.8
53.9
5.3
16.2
12.0
4.2
1.4
10.4
1.1
9.3
7.5
0.4
1.4
(0.0)
100.0
16.9

As of September 30, 2017
Amount215,034
31,5644,271,483
2,914,725
317,603
948,551
682,119
266,432
90,603512,233
53,639458,594
399,308
13,70072,494(419)
5,515,400
1,086,623

Percentage
3.9
0.6
77.4
52.8
5.8
17.2
12.4
4.8
1.6
9.3
1.0
8.3
7.2
0.2
1.3
(0.0)
100.0
19.7

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, 2016
Amount(26,981)(5,342)(35,200)(415)(2,758)(31,309)(37,678)
6,369
(718)
(33,663)(6,054)(27,608)(8,965)
2,786
726
58
(106,582)
11,775

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

Six months ended
September 30, 2017
Amount62,554(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

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, 2017

Six months ended
September 30, 2016
Interest, dividends and other income

52,80854,35800Interest and dividends on securities

38,674

41,295Interest on loans

5,332

4,469

Rent revenue from real estate

8,266

8,153

Other interest and dividends

535

439

Gains on trading securities--

Gains on sales of securities

16,567

26,863

Gains on sales of domestic bonds

9,934

25,670Gains on sales of domestic stocks and other securities

2,032

1,014

Gains on sales of foreign securities

4,599

178

-

-

Interest on deposits

OthersGains on derivative financial instruments, net

45-

Foreign exchange gains, net-

423

Reversal of allowance for possible loan losses

59

61

3,613

3,641

73,09485,349Other investment income
Total（4）Investment Expenses(Millions of Yen)
Six months ended
September 30, 2017

Six months ended
September 30, 2016
Interest expenses

1,868

2,223

Losses on trading securities--

Losses on sales of securities

3,604

1,154

-

205

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

0

3

3,604

945

-

-

11

49

Losses on valuation of domestic bonds--

Losses on valuation of domestic stocks and other securities

649

Losses on valuation of foreign securities

5-

Others--

Losses on derivative financial instruments, net

-

7,531

4,791

-

Provision for allowance for possible loan losses--

Write-offs of loans

0

0

2,736

2,799

Foreign exchange losses, net

Depreciation of rental real estate and other assets
Other investment expenses
Total

4

5,043

5,042

18,05518,800Asahi Mutual Life Insurance Company

(5) Net Valuation Gains/Losses on Trading Securities(Millions of Yen)
As of September 30, 2017
Net valuation
gains(losses)
Amountincluded in thestatements of income-

As of March 31, 2017
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, 2017
Book value Fair value

As of September 30, 2017

Gains/losses
Gains

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

416,896

45,61745,7012,161,957 2,494,257

332,299

348,124---

Available-for-sale securities

1,417,128 1,503,956

371,278-

Book value Fair value

Gains/losses

Losses

Gains

(83)

Losses362,367

408,484

46,117

46,179(61)(15,824) 2,124,635

2,428,827

304,191

323,707(19,516)

-

-

-

-

-

(44,316) 1,582,353-

86,828131,145

1,709,954

127,600

166,069(38,468)

Domestic bonds

550,475

551,345

870

8,259

(7,388)610,863

614,620

3,756

8,927

(5,171)

Domestic stocks

152,037

263,893

111,855

117,840(5,984)

157,077

298,524

141,447

148,907(7,460)Foreign securities

636,825

611,229(25,595)

2,440(28,035)

726,301

706,206(20,095)

4,300(24,396)

Foreign bonds

506,871486,287(20,584)

1,744(22,329)544,152

526,785(17,366)

2,901(20,268)

Foreign stocks andother foreign securities

129,953

124,942(5,010)695(5,706)

182,148

179,420(2,728)

1,398(4,127)

77,78977,487

(302)

2,605

(2,907)

88,11090,603

2,492

3,933

(1,440)

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

3,950,364 4,415,109

464,745524,970(60,225) 4,069,356

4,547,266

477,909535,955(58,046)

2,894,765 3,240,626

345,860

369,135(23,274) 2,910,969

3,230,722

319,753

344,482(24,728)

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

152,037

263,893

111,855

117,840(5,984)

157,077

298,524

141,447

148,907(7,460)Foreign securities

792,568

796,222

3,653

31,689(28,035)

881,635

892,471

10,83635,232(24,396)

Foreign bonds

662,615

671,279

8,664

30,993(22,329)

699,486

713,051

13,56533,833(20,268)

Foreign stocks andother foreign securities

129,953

124,942(5,010)695(5,706)

182,148

179,420(2,728)

1,398(4,127)

Other securities

77,78977,487

(302)

2,605

(2,907)

88,11090,603

2,492

3,933

(1,440)

Monetary claims bought
Negotiable certificates ofdeposit
Others33,20236,880

3,677

3,699

(21)

31,56434,943

3,379

3,399

(20)

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

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, 2017

As of September 30, 2017

Held-to-maturity debt securities--

Unlisted foreign bonds--

Others--

Policy-reserve-matching bonds
Stocks of subsidiaries
Available-for-sale securities

-

-

5,093

5,093

116,024

100,998

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

13,972

13,985

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

102,051

87,012--Unlisted foreign bonds
Others
Total

5

-

-

121,117106,091

Asahi 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 gains (losses) on foreign exchange valuation).
(Millions of Yen)
As of March 31, 2017
Book value

Fair value

As of September 30, 2017

Gains/losses
Gains

Held-to-maturity debt
securities
Policy-reserve-matchingbonds

416,896

45,61745,7012,161,957

2,494,257

332,299

348,124

5,093

5,093

-

-

Available-for-sale securities 1,533,152

1,619,979

86,827

131,145

Domestic bonds

550,475

551,345

870

8,259

Domestic stocks

166,010

277,865

111,855

Foreign securities

738,876

713,280(25,596)

Foreign bonds

506,871486,287

Foreign stocks andother foreign securities

232,004

Other securities

Fair value

Gains/losses

Losses371,278

Stocks of subsidiaries

Book value

Gains

(83)

Losses362,367

408,484

46,117

46,179(61)(15,824) 2,124,635

2,428,827

304,191

323,707(19,516)

5,093

5,093

-

-

-

(44,317) 1,683,351

1,810,951

127,600

166,069(38,469)(5,171)-(7,388)610,863

614,620

3,756

8,927

117,840(5,984)

171,062

312,510

141,447

148,907(7,460)2,440(28,036)

813,314793,218(20,096)

4,300(24,396)(20,584)

1,744(22,329)544,152

526,785(17,366)

2,901(20,268)

226,993(5,011)695(5,707)269,161

266,432(2,729)1,398(4,128)77,78977,487

(302)

2,605

(2,907)

88,11090,603

2,492

3,933

(1,440)

Monetary claims bought

-

-

-

-

-

-

-

-

-

-

Negotiable certificates ofdeposit

-

-

-

-

-

-

-

-

-

-

-

Others

-

-

-

-

-

-

-

-

-

4,071,481

4,536,226

464,744524,970(60,226) 4,175,448

4,653,356

477,908

535,955(58,047)

Domestic bonds

2,894,765

3,240,626

345,860

369,135(23,274) 2,910,969

3,230,722

319,753

344,482(24,728)

Domestic stocks

171,103282,959

111,855

117,840(5,984)

176,155

317,603

141,447

148,907(7,460)Foreign securities

894,620898,273

3,652

31,689(28,036)

968,647

979,483

10,83535,232(24,396)

Foreign bonds

662,615

671,279

8,664

30,993(22,329)

699,486

713,051

13,56533,833(20,268)

Foreign stocks andother foreign securities

232,004

226,993(5,011)695(5,707)269,161

266,432(2,729)1,398(4,128)Other securities

77,78977,487

(302)

2,605

(2,907)

88,11090,603

2,492

3,933

(1,440)

Monetary claims bought

33,20236,880

3,677

3,699

(21)

31,56434,943

3,379

3,399

(20)

Negotiable certificates ofdeposit

-

-

-

-

-

-

-

-

-

-

Others

-

-

-

-

-

-

-

-

-

-

Total

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, 2017
Book valueLand

245,232

As of September 30, 2017

Fair value Gains/losses Book value
244,851(380)

245,012Fair value Gains/losses
244,752(259)

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, 2017
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
Deferred tax assets
Customers’ liabilities under acceptances and guarantees
Allowance for possible loan losses
Total assets

32,100122,000
33,202
4,152,349
1,929,361
55,807916,978
293,841
878,872
557,761
57,577500,184
406,105
33,521
194
38,71922,72514(487)
5,398,207

As of March 31, 2017
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
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, 201733,471
183,000
31,5644,300,337
1,879,205
55,876
986,490329,114959,046
512,233
53,639458,594
403,360
34,694689
33,39013,70012(419)
5,546,036(Millions of Yen)
As of September 30, 2017

4,768,371
27,3644,700,145
40,861
127
40,349138,429
1,435
2,015
240
134,737
37,30736,58018,09114
5,039,270

4,717,538
26,7454,650,845
39,947
122
40,349287,166
5,759
1,579
242
279,585
36,656
37,68018,052
12
5,137,577

126,000
131,000
281
76,313242
76,071
36,0008,718
31,353
333,595

126,000
131,000
281
94,185266
93,91948,6009,678
35,641
351,467

71,104

102,851(45,762)
25,341
358,937
5,398,207(45,861)
56,990408,458
5,546,036

Asahi Mutual Life Insurance Company

４．Unaudited Non-consolidated Statements of Income
Six months ended
September 30, 2016
325,659
190,720
190,667
73,09452,80816,56745
61,844
310,097
223,750
66,551
59,40245,94147,647
4,110
21

Ordinary income:Premium and other income:Insurance premiums
Investment income:Interest, dividends and other income
Gains on sales of securities
Gains on derivative financial instruments
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
Investment losses on separate accounts
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, 2017334,661
188,839
188,12987,45054,35826,863
2,100
58,372
301,583
215,048
62,08461,025
43,62545,408
2,695
2

21

2

18,762
1,868
3,604
11
706
50,314
17,24815,562907
3,201
13,2682,532
2,532
10,73618,800
2,223
1,154
49
7,531
50,927
16,80433,07868
1,387
31,7586,965
6,965
24,793Asahi Mutual Life Insurance Company

5．Unaudited Non-consolidated Statements of Changes in Net Assets
Six months ended September 30, 2016

(Millions of Yen)
Foundation funds and others
Surplus

Beginning balance

Foundation
funds

Reserve forredemption offoundation
funds

Reserve forrevaluation

126,000

120,000

281

Other surplus
Reserve for
future losses

Reserve forfund
redemption

Equalized
reserve fordividends topolicyholders

InterimUnappropriatedsurplus (loss)

219

35,500

10,485

18,163Total
surplus64,368

Total
foundation
funds andothers

310,650

Changes in the period:
Issuance of foundation funds

11,00011,000Additions to reserve for dividends topolicyholders(1,767)

Additions to reserve for future losses

23

Additions to reserve for redemption offoundation funds

11,000(1,767)(23)(11,000)(11,000)

Payment of interest on foundation
funds
Net surplus
Redemption of foundation funds(1,767)(5,787)(5,787)

10,736

10,736(11,000)(5,787)
10,736(11,000)

Additions to reserve for fundredemption

11,500

Reversal of equalized reserve fordividends to policyholders(11,500)(1,767)

Reversal of land revaluation differences

1,767
746

746

746

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

11,000-23

500(1,767)(5,826)(7,071)

3,928

126,000

131,000

281

242

36,0008,718

12,33757,297

314,579

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

62,953Landrevaluationdifferences(44,527)

Total
valuation andtranslation
adjustments

18,426Total
net assets

329,077

Changes in the period:
Issuance of foundation funds

11,000Additions to reserve for dividends topolicyholders(1,767)

Additions to reserve for future losses
Additions to reserve for redemption offoundation funds
Payment of interest on foundation
funds(5,787)

Net surplus

10,736

Redemption of foundation funds(11,000)

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

746(5,031)(746)(5,777)(5,777)

Net changes in the period(5,031)(746)(5,777)(1,848)Ending balance

57,922(45,273)

12,649327,228

9

Asahi Mutual Life Insurance Company

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

242

36,000Equalized
Interimreserve for
Unappropriateddividends tosurplus (loss)
policyholders

8,718

Total
surplus31,35376,313

333,595(1,519)(1,519)(1,519)Changes in the 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 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 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 period

31,747(98)

31,64849,521Ending balance

102,851(45,861)

56,990408,458

10

Asahi Mutual Life Insurance Company

I.

Presentation of Unaudited Non-consolidated Financial Statements

Basis of Presentation
The accompanying 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 non-consolidated financial statements include information which
is not required under semi-annual accounting principles generally accepted in Japan but ispresented 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 non-consolidated financial statements, certain reclassifications
have been made to the non-consolidated financial statements issued domestically in order topresent 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 under the straight-line
method, cost being determined by the moving average method.

iii) Policy-reserve-matching bonds are stated at amortized cost under the straight-line
method, cost being determined by the moving average method in accordance with
“Temporary
TreatmentofAccounting
andAuditing
Concerning
Policy-reserve-matching Bonds in Insurance Industry” (Industry Audit Committee

11

Asahi Mutual Life Insurance Company

Report No. 21 issued by the Japanese Institute of Certified Public Accountants(“JICPA”)).
iv) Investments in subsidiaries and affiliates are stated at cost.
v)

Available-for-sale securities with fair market value are stated at fair market value
based on the market prices at the balance sheet date, except for domestic stocks,
domestic exchange-traded funds, domestic listed real estate investment trusts,
foreign exchange-traded funds for which hedge accounting is not applied, foreign
bond exchange-traded funds for which hedge accounting is not applied and foreign
currency-denominated bonds for which hedge accounting is not applied. Suchsecurities are stated based on the average of the market value during the final monthof the reporting period. Costs of sales are determined by the moving average method.
Net unrealized gains or losses on these available-for-sale securities, net of tax, arerecorded as a separate component of net assets.

Available-for-sale securities whose fair values are deemed extremely difficult to determine
are stated at cost, cost being determined by the moving average method, except for publicand corporate bonds including foreign bonds, of which the difference between acquisition
cost and face value is considered to be an adjustment of interest. Such bonds are stated atamortized cost under the straight-line method, cost being determined by the moving
average method.
(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 on November 16, 2000).
(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:

12

Asahi Mutual Life Insurance Company

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.
(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 foreignexchange-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 thereporting 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 borrowers’ balance 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 borrower’s balance as theestimated uncollectible amounts. The amount written-off was ¥206 million as of
September 30, 2017.
(8) Accounting for employees’ retirement benefits and method of amortizing retirement
benefit expenses
Reserve for employees’ retirement benefits is presented for the employees’ 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 from 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 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 to

14

Asahi Mutual Life Insurance Company

foreign exchange rate fluctuation exposures on certain bonds and investment trusts
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 reporting 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 them of major financial
assets and liabilities as of September 30, 2017 were as follows:
Millions of Yen
As of September 30, 2017
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¥

33,471
183,000
31,56431,564
4,194,247
28,853
330,8022,124,635
1,709,954
512,233
53,639458,594
4,954,516
40,34997,000137,349(16,283)(976)(15,306)¥

33,471
183,000
34,94334,9434,541,176
28,853
373,540
2,428,827
1,709,954
524,33153,639470,692
5,316,924
43,35796,444
139,801(16,283)(976)(15,306)

¥

3,379
3,379
346,929
42,737304,191
12,09812,098362,407
3,007
(555)
2,452
-

*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 exchange-traded funds, domestic listed real estate investment trusts,
foreign 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 are stated at the
average of the market value during the final month of the reporting 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.
Unlisted stocks and others 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 isregarded as extremely difficult to determine their fair value.
The amount of the unlisted stocks and others reported in the non-consolidated balance
sheet was ¥106,090 million as of September 30, 2017.

16

Asahi Mutual Life Insurance Company

(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 value, etc. as of September 30,
2017(4) Derivative financial instruments
The fair value of options traded over the counter is based on the quoted prices offered bycounterparty financial institutions.
The fair value of foreign currency forward contracts is stated at theoretical prices based on
the TTM at the balance sheet date.
Regarding the derivative transactions for which designated hedge accounting(“Furiate-shori”) of currency swaps is applied, its fair value is 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 ¥129,145 million as of September
30, 2017.
5.

Loans

The total amount of loans to bankrupt borrowers, delinquent loans, delinquent loans three ormore months past due and restructured loans, which included in loans, was ¥1,045 million as
of September 30, 2017．
i)

Loans to bankrupt borrowers were ¥0 million as of September 30, 2017.

17

Asahi Mutual Life Insurance Company

ii)

Delinquent loans were ¥886 million as of September 30, 2017.

iii) Delinquent loans three or more months past due were ¥121 million as of September 30,
2017.
iv) Restructured loans were ¥37 million as of September 30, 2017.
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 ¥14 million as of September 30, 2017.
In addition, the direct write-offs related to loans decreased delinquent loans described above by¥191 million as of September 30, 2017.
6.

Separate Accounts

Total assets in separate accounts provided for in Article 118 of the Insurance Business Act were¥30,727 million as of September 30, 2017. The amount of separate account liabilities was thesame as separate account assets.

18

Asahi Mutual Life Insurance Company

7.

Reserve for Dividends to Policyholders

The change in reserve for dividends to policyholders for the reporting period ended September
30, 2017 was as follows:

Millions of Yen
Six months ended
September 30, 2017
Balance at the beginning of the reporting period
Transfer to reserve from surplus in the previous fiscal year
Dividends to policyholders paid out during the reporting period
Increase in interest
Balance at the end of the reporting period
8.

¥

¥

40,861
1,519
2,435
2
39,947

Stocks of Subsidiaries and Affiliates

The amount of stocks of subsidiaries and affiliates the Company held was ¥5,093 million as of
September 30, 2017.
9.

Pledged Assets

Assets pledged as collateral were securities in the amount of ¥18,488 million as of September
30, 2017.
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 ¥110 million as of September 30, 2017.
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 mortgaged was ¥34,932
million as of September 30, 2017. No assets were mortgaged as of September 30, 2017.
12. Commitment LineAs of September 30, 2017, there were unused commitment line agreements under which theCompany is the lender of ¥3,500 million.
13. Subordinated Bonds
As of September 30, 2017, bonds payable are subordinated bonds, for which the repayments
are subordinated to other obligations.

19

Asahi Mutual Life Insurance Company

14. Subordinated Loans
As of September 30, 2017, other liabilities included subordinated loans of ¥97,000 million, forwhich 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 ¥9,750 million as of September
30, 2017. 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, 2017
Domestic bonds
Domestic stocks and other securities
Foreign securities¥

25,6701,014
178

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

Millions of Yen
Six months ended
September 30, 2017
Domestic bonds
Domestic stocks and other securities
Foreign securities

¥

205
3
945

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

Millions of Yen
Six months ended
September 30, 2017
Domestic stocks and other securities

¥

20

49

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 reporting period ended September 30, 2017 was ¥20 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, 2017
Interest on deposits
Interest and dividends from securities
Interest on loans
Rental revenues from properties
Other interest and dividends
Total

4.

¥

¥

0
41,295
4,469
8,153
439
54,358

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)

Fundamental profit

Ａ

Capital gains
Gains on money held in trust

Six months ended
September 30, 2016

Six months ended
September 30, 2017

7,699

14,764

16,612

27,287--

Gains on trading securities--

Gains on sales of securities

16,567

26,863

Gains on derivative financial instruments

45-

Foreign exchange gains-

423

Other capital gains

-

-

8,407

8,734

Losses on money held in trust--

Losses on trading securities--

Losses on sales of securities

3,604

1,154

Capital losses

Losses on valuation of securities

11

49

Losses on derivative financial instruments

-

7,531

4,791

-

-

-

Ｂ

8,204

18,553

Ａ＋Ｂ

15,90433,317

58

60

Reinsurance revenue--

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

-

-

58

60

-

-

Other one-time losses

400

300

Reinsurance premiums

-

-

400

300

-

-

-

-

Write-offs of loans00Others

-

-

Ｃ

(341)

(239)

Ａ＋Ｂ＋Ｃ

15,56233,078Foreign exchange losses
Other capital losses
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

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, 2017

As of September 30, 2017

Claims against bankrupt and quasi-bankrupt
obligors

733

651

Claims with collection risk

307

257

Claims for special attention

155

163

Subtotal

1,196

1,071

（Percentage of total）(0.21)(0.17)

Claims against normal obligors

558,825

642,355

Total

560,022

643,427

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 difficulities.
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, 2017

Loans to bankrupt borrowers

As of September 30, 2017

0

0

1,015

886

Delinquent loans three or more months past due

112

121

Restructured loans

38

37

Total

1,166

1,045

（Percentage of total loans）(0.21)(0.20)

Delinquent loans

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 borrower's balance as the estimated uncollectible amounts.
The amounts written-off related to loans to bankrupt borrowers were \14 million as of Septmber 30, 2017and \22 million as of March 31, 2017. The amounts written-off related to delinquent loans were \191 million
as of Septmber 30, 2017 and \193 million as of March 31, 2017.
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 supproting 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, 2017

As of September 30, 2017

700,120

773,007

Foundation funds and surplus

326,576

347,647

Reserve for price fluctuation

36,58037,680Contingency reserve

30,08230,382

14

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

78,144

114,840

Net unrealized gains on land × 85%(in case of losses： × 100%)(28,052)(28,067)

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

111,415

117,447

Qualifying subordinated debt

137,349

136,949

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

Deduction

-

-

8,011

16,116

188,516

205,071

Total solvency margin（Ａ）

General allowance for possible loan losses

OthersTotal amount of risk

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

（Ｂ）

Insurance risk

R1

15,177

14,788

Third sector insurance risk

R8

9,176

9,311

Risk of assumed yield

R2

82,03480,509Minimum guarantee risk

R7

1,096

1,090

Investment risk

R399,628

117,554

Operational risk

R4

4,142

4,465

742.7%

753.8%

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 Service 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, 2017

As of September 30, 2017

AmountAmountIndividual variable insurance

29,19930,727

Individual variable annuities--

Group annuity products--

29,19930,727Total(2) Policies in Force
As of September 30, 2017

As of March 31,2017
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

9

0

5

14

102,134

14

100,38814

102,14314

100,393

As of September 30, 2017

As of March 31,2017
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, 2016

Six months ended
September 30, 2017

Ordinary income

327,218

336,542

Ordinary profit

15,52032,993

Net surplus attributable to the Parent Company

10,63524,709Comprehensive income

6,074

56,752(Millions of Yen)

As of March 31, 2017
Total assets
Solvency margin ratio

27

As of September 30, 2017

5,398,884

5,547,280

748.0%

759.1%

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, 2017

(Millions of Yen)
As of September 30, 201735,511122,000
33,202
4,148,686
557,761
406,159
33,285
194
39,595
11
22,94714(487)
5,398,884

37,029183,000
31,564
4,296,575
512,233
403,41334,540689
34,61721
14,00212(419)
5,547,280

4,768,371
27,3644,700,145
40,861
127
40,349139,189
37,75736,58018,091145,040,479

4,717,538
26,7454,650,845
39,947
122
40,349288,582
36,836
37,68018,052
12
5,139,174

126,000
131,000
281
76,065
333,347

126,000
131,000
281
93,854351,136

71,105

102,852(45,762)(358)
24,983
73358,404
5,398,884(45,861)(82)
56,90960
408,106
5,547,280

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, 2017

Six months ended
September 30, 2016
Ordinary income:

327,218

336,542

Premium and other income

190,720

188,839

Investment income:

72,85587,210Interest, dividends and other income

52,581

54,131

Gains on sales of securities

16,567

26,86445-

Gains on derivative financial instruments
Investment gains on separate accounts

-

2,100

63,64260,491

311,697

303,548

223,750

215,048

Claims

66,551

62,084

Annuities

59,402

61,025

Benefits

45,941

43,625

Surrender benefits

47,64745,408Other payments

4,110

2,695

21

2

21

2

Investment expenses:

18,76118,800Interest expenses

1,868

2,223

Losses on sales of securities

3,604

1,154

Other ordinary income
Ordinary expenses:
Claims and other payments:

Provision for policy reserves and other reserves:
Provision for interest on policyholders’ dividend reserves

Losses on valuation of securities
Losses on derivative financial instruments
Investment losses on separate accounts

11

49

-

7,531

706

-

Operating expenses

52,01852,927

Other ordinary expenses

17,145

16,76915,52032,993907

68

Ordinary profit
Extraordinary gains
Extraordinary losses

3,202

1,387

Surplus before income taxes

13,22531,674

Income taxes including deferred taxes

2,574

6,945

Total income taxes

2,574

6,945

Net surplus

10,651

24,728Net surplus attributable to non-controlling interests
Net surplus attributable to the Parent Company

29

15

19

10,63524,709Asahi Mutual Life Insurance Company

（Unaudited Consolidated Statements of Comprehensive Income）(Millions of Yen)
Six months ended
September 30, 2016

Six months ended
September 30, 2017

Net surplus

10,651

24,728Other comprehensive income:(4,576)32,023(5,032)

31,747

455

276

6,074

56,752

6,059

56,73315

19

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, 2016
I. Cash flo ws fr o m o p er atin g 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 flo ws fr o m in vestin g activities
Purchases of monetary claims bought
Proceeds from sales and redemptions of monetary claims bought
Proceeds from deceases in money held in trust
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 flo ws fr o m fin an cin g activities
Proceeds from issuance of foundation funds
Redemption of foundation funds
Payment of interest on foundation funds
Dividends paid to non-controlling interests
Others, net
Net cash provided by (used in) financing activities
IV.Net in cr ease (d ecr ease) in cash an d cash eq u ivalen ts
V.Cash an d cash eq u ivalen ts at th e b egin n in g o f th e p er io d
VI. Cash an d cash eq u ivalen ts at th e en d o f th e p er io d(Millions of Yen)
Six months ended
September 30, 201713,225
2,736
4,941
1,155
(196)
(51,655)
21
(59)
(519)
980
(52,581)(12,244)
(45)
1,868
4,790
(359)
2,641
(85,298)
57,360(2,258)(2,782)(1,226)(34,206)

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)

(500)
5,839
9
(554,453)
514,739(32,080)
58,86675,497(53,610)
14,308(19,898)(3,451)
7,089(4,067)
13,878(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

11,000(11,000)(5,787)(37)(427)(6,252)(26,579)
217,133
190,553(5,499)(31)(458)(5,989)62,518
157,511220,029

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, 2016

(Millions of Yen)
Foundation funds and others

Beginning balance

Foundation
funds

Reserve forredemption offoundation
funds

126,000

120,000

Reserve forrevaluation

Consolidated
surplus281

64,102

Total
foundation
funds andothers
310,384

Changes in the period:
Issuance of foundation funds

11,000Additions to reserve for dividends topolicyholders
Additions to reserve for redemption offoundation funds
Payment of interest on foundation
funds
Net surplus attributable to the Parent
Company
Redemption of foundation funds

11,000(1,767)
11,000(1,767)(11,000)(5,787)(5,787)

10,635

10,635(11,000)(11,000)

Reversal of land revaluation differences

746

746

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

11,000-(7,172)

3,827

126,000

131,000

281

56,929314,211

Total
Accumulated
accumulated
remeasurements
otherof definedcomprehensive
benefit plansincomeNoncontrollinginterests

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

62,954Land
revaluationdifferences(44,527)(2,420)16,00679

Total
net assets

326,470

Changes in the period:
Issuance of foundation funds

11,000Additions to reserve for dividends topolicyholders
Additions to reserve for redemption offoundation funds
Payment of interest on foundation
funds
Net surplus attributable to the Parent
Company(1,767)(5,787)
10,635

Redemption of foundation funds(11,000)

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

746(5,032)

(746)

455

(5,322)(22)(5,345)

Net changes in the period(5,032)

(746)

455

(5,322)(22)(1,517)

Ending balance

57,922(45,273)(1,964)

10,68457

324,953

32

Asahi Mutual Life Insurance Company

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 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 periodEnding balance

-

-

-

17,78817,788126,000

131,000

281

93,854351,136

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

71,105Landrevaluationdifferences(45,762)

Total
Accumulated
accumulated
remeasurements
otherof definedcomprehensive
benefit plansincome(358)

24,983

Noncontrollinginterests

73

Total
net assets

358,404

Changes in the 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 period

31,747(98)

276

31,925(12)

49,701Ending balance

102,852(45,861)(82)

56,90960

408,106

33

Asahi Mutual Life Insurance Company

I.

Presentation of Unaudited Consolidated Financial Statements

1.

Basis of Presentation

The accompanying consolidated financial statements have been prepared from the accounts
maintained by Asahi Mutual Life Insurance Company (the “Company”) and its consolidated
subsidiaries in accordance with the provisions set forth in the Insurance Business Act of Japanand its related rules and regulations applicable to the mutual life insurance industry and in
conformity with semi-annual 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 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 consolidated financial statements, certain reclassifications
have been made to the consolidated financial statements issued domestically in order topresent 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, 2017 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.
Unconsolidated subsidiaries are excluded from the scope of consolidation, as each one ofthem is small in terms of its total assets, amount of sales, net income for the period andsurplus and is sufficiently immaterial to reasonable judgment with regards to its impact
on the financial position and results of operation of the Company’s group.
(2) Application of equity method
Unconsolidated subsidiaries and affiliates (such as Asahi Real Estate Management Co.,
Ltd, etc.) are immaterial in terms of their impact on consolidated net income and surplus,

34

Asahi Mutual Life Insurance Company

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 under the straight-line
method, cost being determined by the moving average method.

iii) Policy-reserve-matching bonds are stated at amortized cost under the straight-line
method, cost being determined by the moving average method in accordance with
“Temporary
TreatmentofAccounting
andAuditing
Concerning
Policy-reserve-matching Bonds in Insurance Industry” (Industry Audit Committee
Report No. 21 issued by the Japanese Institute of Certified Public Accountants(“JICPA”)).
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 are stated at fair market value
based on the market prices at the balance sheet date, except for domestic stocks,
domestic exchange-traded funds, domestic listed real estate investment trusts,
foreign exchange-traded funds for which hedge accounting is not applied, foreign
bond exchange-traded funds for which hedge accounting is not applied and foreign
currency-denominated bonds for which hedge accounting is not applied. Suchsecurities are stated based on the average of the market value during the final monthof the reporting period. Costs of sales are determined by the moving average method.
Net unrealized gains or losses on these available-for-sale securities, net of tax, arerecorded as a separate component of net assets.

Available-for-sale securities whose fair values are deemed extremely difficult to determine
are stated at cost, cost being determined by the moving average method, except for publicand corporate bonds including foreign bonds, of which the difference between acquisition
cost and face value is considered to be an adjustment of interest. Such bonds are stated atamortized cost under the straight-line method, cost being determined by the moving

35

Asahi Mutual Life Insurance Company

average method.
(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 on November 16, 2000).
(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 foreignexchange-traded funds for which hedge accounting is not applied, foreign bond

36

Asahi Mutual Life Insurance Company

exchange-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 thereporting 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 borrowers’ balance 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 borrower’s balance as theestimated uncollectible amounts. The amount written-off was ¥206 million as of
September 30, 2017.
(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

37

Asahi Mutual Life Insurance Company

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 ofseven years starting from 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 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 and investment trusts
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

38

Asahi Mutual Life Insurance Company

by the tax-exclusion method. The consumption taxes on certain assets, which are notdeductible 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 reporting 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 them of major financial
assets and liabilities as of September 30, 2017 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, 2017
Balance Sheet
Fair Value
Difference
Amount¥37,02937,029¥183,000
183,000
31,56434,943
3,379
31,56434,943
3,379
4,194,974
4,541,906
346,932
28,85328,853
331,509374,250
42,741
2,124,635
2,428,827
304,191
1,709,974
1,709,974
512,233
524,331
12,09853,63953,639458,594
470,692
12,098
4,958,801
5,321,211
362,410
40,34943,357
3,007
97,00096,444(555)
137,349
139,801
2,452(16,283)(16,283)
(976)
(976)
(15,306)(15,306)-* 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 exchange-traded funds, domestic listed real estate investment trusts,
foreign 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 are stated at the
average of the market value during the final month of the reporting 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.
Unlisted stocks and others 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 isregarded as extremely difficult to determine their fair value.

40

Asahi Mutual Life Insurance Company

The amount of the unlisted stocks and others reported in the consolidated balance sheet
was ¥101,601 million as of September 30, 2017.
(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,
2017.
(4) Derivative financial instruments
The fair value of options traded over the counter is based on the quoted prices offered bycounterparty financial institutions.
The fair value of foreign currency forward contracts is stated at theoretical prices based on
the TTM at the balance sheet date.
Regarding the derivative transactions for which designated hedge accounting(“Furiate-shori”) of currency swaps is applied, its fair value is 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.

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 ¥1,045
million as of September 30, 2017.
i)

Loans to bankrupt borrowers were ¥0 million as of September 30, 2017.

ii)

Delinquent loans were ¥886 million as of September 30, 2017.

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Asahi Mutual Life Insurance Company

iii) Delinquent loans three or more months past due were ¥121 million as of September 30,
2017.
iv) Restructured loans were ¥37 million as of September 30, 2017.
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 ¥14 million as of September 30, 2017.
In addition, the direct write-offs related to loans decreased delinquent loans described above by¥191 million as of September 30, 2017.
5.

Separate Accounts

Total assets in separate accounts provided for in Article 118 of the Insurance Business Act were¥30,727 million as of September 30, 2017. The amount of separate account liabilities was thesame as separate account assets.

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Asahi Mutual Life Insurance Company

6.

Reserve for Dividends to Policyholders

The change in reserve for dividends to policyholders for the reporting period ended September
30, 2017 was as follows:

Millions of Yen
Six months ended
September 30, 2017
Balance at the beginning of the reporting period
Transfer to reserve from surplus in the previous fiscal year
Dividends to policyholders paid out during the reporting period
Increase in interest
Balance at the end of the reporting period
7.

¥

¥

40,861
1,519
2,435
2
39,947

Pledged Assets

Assets pledged as collateral were securities in the amount of ¥18,488 million as of September
30, 2017.
8.

Securities Lent under Lending Agreements

The amount of securities lent under lending agreements was ¥129,145 million as of September
30, 2017.
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 mortgaged was ¥34,932
million as of September 30, 2017. No assets were mortgaged as of September 30, 2017.
10. Commitment LineAs of September 30, 2017, there were unused commitment line agreements under which theCompany is the lender of ¥3,500 million.
11. Subordinated Bonds
As of September 30, 2017, bonds payable are subordinated bonds, for which the repayments
are subordinated to other obligations.
12. Subordinated Loans
As of September 30, 2017, other liabilities included subordinated loans of ¥97,000 million, forwhich the repayments are subordinated to other obligations.

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Asahi Mutual Life Insurance Company

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 ¥9,750 million as of September
30, 2017. 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, 2017
Domestic bonds
Domestic stocks and other securities
Foreign securities¥

25,6701,014
178

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

Millions of Yen
Six months ended
September 30, 2017
Domestic bonds
Domestic stocks and other securities
Foreign securities

¥

205
3
945

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

Millions of Yen
Six months ended
September 30, 2017
Domestic stocks and other securities
2.

¥

49

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, 2017

Total solvency margin（Ａ）

As of September 30, 2017

699,823

773,002

Foundation funds and surplus

326,828

347,914

Reserve for price fluctuation

36,58037,680Contingency reserve

30,08230,382--

Catastrophe loss reserve
General allowance for possible loan losses

15

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

78,145

114,841

Net unrealized gains on land × 85%(28,052)(28,067)

(501)

(225)

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

111,415

117,447

Qualifying subordinated debt

137,349

136,949

-

-

(50)

(50)

8,011

16,116

187,100

203,653(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(

R R R R ) ( R R R ) R R
2

2

1

5

2

8

9

2

2

3

7

4

6

（Ｂ）

Insurance risk

R1

15,177

14,788

Ordinary insurance risk

R5

-

-

Disaster insurance risk

R6

-

-

Third sector insurance risk

R8

9,176

9,311

Small amount short-term insurance provider insurance risk

R9

-

-

Risk of assumed yield

R2

82,03480,509Minimum guarantee risk

R7

1,096

1,090

Investment risk

R3

98,227116,154

Operational risk

R4

4,114

4,437

748.0%

759.1%

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 Service 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 Service 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.

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Asahi Mutual Life Insurance Company