Financial Section

Financial Review
Indicators Showing the Main Results over the Last Five Fiscal Years
Summary of Operations
Accounting Concepts
1. Financial statements
2. Details of assets and liabilities
3. Income and loss details
4. Information about fair values, etc.

34

Japan Earthquake Reinsurance Co., Ltd. Annual Report 2014

Financial review
Business development, results, etc.
During fiscal 2013, the Japanese economy was steady overall, reflecting an increase in exports thanks to theweaker yen linked to the government and the Bank of Japan’s large-scale monetary easing policy to overcome
deflation, the recovery in overseas economies, especially the U.S., as well as a recovery in personal spending due
to an improvement in the employment situation and a spike in demand before the consumption tax hike.
Earthquake insurance premiums increased as in the previous fiscal year. Meanwhile, the amount of earthquake
insurance payouts declined significantly from the previous fiscal year as insurance payouts for the 2011 Great
East Japan Earthquake peaked out.
Regarding asset management, earnings from investments have declined markedly year on year, reflecting theincreasing redemption of bonds with high yields amid the trend of declining interest rates.
In this environment, during fiscal 2013, the second year of our third medium-term business plan, we have steadily implemented measures, primarily measures in response to massive earthquakes and consecutive earthquakes
and the strengthening of our business continuity plan in anticipation of an inland earthquake to strike Tokyo that
may affect the company.
Summary of earthquake insurance results① Net premiums written and net claims paid
In the fiscal year under review, despite an increase inpremiums, net premiums written fell 0.8% year on
year, to 92.2 billion yen, reflecting a 13.9% year-onyear rise in reinsurance premiums ceded associatedwith an increase in the government’s share of reinsurance after a revision to the reinsurance scheme.
Meanwhile, net claims paid came to 15.0 billion yen(down 52.5% year on year), mainly reflecting the effects of the 2011 Great East Japan Earthquake.
② Risk reserves and underwriting reserves
Risk reserves added amounted to 41.3 billion yen(down 14.1% year on year), which is the total of net
premiums written of 38.8 billion yen, given by deducting assumed reinsurance commissions from net
premiums written, and a profit of 2.4 billion yen frominvestments.
Risk reserves at the end of the fiscal year under review were 378.0 billion yen (up 7.1% year on year),reflecting the reversal of the provision for outstanding
claims of 1.3 billion yen to risk reserves and drawing
from risk reserves in the past year of net claims paidof 15.0 billion yen, loss adjustment expenses of 2.2
billion yen, and advertising and publicity expenses of
0.2 billion yen.
Underwriting reserves at the end of the fiscal year under review totaled 499.2 billion yen (up 8.2% year onyear), after adding unearned premium reserves andrepayment reserves to the risk reserves.
③ Risk reserves of direct insurance companies
The risk reserves of direct insurance companies recorded as entrusted reserves were 72.5 billion yen for
the fiscal year under review (up 5.6% year on year), obtained by adding net premiums written and profit frominvestments of 4.6 billion yen (down 29.8% year onyear), reversing publicity expenses of 0.8 billion yen.
Outline of investments
Medium- to long-term domestic interest rates became
unstable due to the effect of the quantitative and qualitative monetary easing policy introduced at the Bankof Japan’s Monetary Policy Meeting in April and rose
sharply in May. Subsequently, however, medium- tolong-term domestic interest rates stabilized and wereon a downward trend toward the end of the fiscal year.
The yen fell noticeably against both the dollar and theeuro, reflecting the deterioration of Japan’s current account balance and the Bank of Japan’s introductionof the significant monetary easing policy. The yen depreciated approximately 9 yen against the dollar andapproximately 21 yen against the euro from its rates atthe end of the previous fiscal year.
In these circumstances, we invested in assets with the
top priority placed on safety and liquidity, followed byprofitability. As a result, pre-tax profits from investments amounted to 2.7 billion yen in the business account and 0.4 billion yen in the entrusted reserves account. Consequently, investment assets at the end of
the year under review stood at 563.7 billion yen.
Profit and loss for the fiscal year under review(Capital account)
We carefully examined the realizability of deferred tax
assets, taking into account the possibility of our inability to secure sufficient taxable profits from investments due to our asset management policy prioritizing
safety and liquidity and super-low interest rates in theasset management environment, and revised all deferred tax assets of 92 million yen and posted that as
an income taxes-deferred.
Reflecting this, a net loss of 82 million yen was posted
in the fiscal year under review.
Challenges to address
As the people’s expectations of earthquake insurance
and their interest in it are increasing, we believe that
our role and responsibility will become increasingly
important. In fiscal 2014, the final year of the third
medium-term business plan, JER will continue to takesteps to promote earthquake insurance, focusing on
massive earthquakes, consecutive earthquakes, andinland earthquakes in the Tokyo metropolitan area, tostrengthen its corporate governance system, including
an integrated risk management system, and to bolster
its IT governance.

Japan Earthquake Reinsurance Co., Ltd. Annual Report 201435

Indicators showing the main resultsover the last five fiscal years(Yen in millions)Fiscal Year

Division

2009

2010

2011

2012

2013

Net premiums written
Percentage change over the previous term

72,225
7.6%

71,532(1.0%)

83,671
17.0%

92,996
11.1%

92,248(0.8%)

Ordinary income
Percentage change over the previous term

99,46417.0%

175,903
76.9%

286,81263.1%

110,370(61.5%)

104,703(5.1%)

Ordinary expenses
Percentage change over the previous term

98,512
16.2%

174,91377.6%

286,723
63.9%

110,176(61.6%)

104,509(5.1%)

Ordinary profit
Percentage change over the previous term

951
374.2%

990
4.1%

89
(91.0%)

193
117.5%

194
0.3%

Net income (loss)
Percentage change over the previous term

5
(58.9%)

3(30.2%)(5)(239.9%)4–(82)(2,045.2)

1,000
2 mil. shares

1,000
2 mil. shares

1,000
2 mil. shares

1,000
2 mil. shares

1,000
2 mil. shares

Common stock
Sum of shares issued
Net assets

1,633

1,634

1,631

1,633

1,544

Total assets

1,092,272

1,154,108

509,498

536,808

577,305

Underwriting reserves
Percentage change over the previous term

585,820
7.4%

515,981(11.9%)

430,700(16.5%)

461,480
7.1%

499,274
8.2%

Of the balance, risk reserves
Percentage change over the previous term

496,708
8.0%

424,401(14.6%)

331,499(21.9%)

352,830
6.4%

378,041
7.1%

Loans
Percentage change over the previous term

–
–

–
–

–
–

–
–

–
–

Securities
Percentage change over the previous term

1,006,947
5.6%

805,223(20.0%)

448,120(44.3%)

476,979
6.4%

525,161
10.1%

Non-consolidated solvency-margin ratio

161.6%

124.7%

120.8%

160.0%

344.9%

Dividend propensity

–

–

–

–

–

No. of employees

26

25

26

27

26

Note:
For a stricter risk measurement, revised laws and regulations concerning the calculation of the non-consolidated solvency-margin ratio have been applied since fiscal 2011. JER’s solvency-margin ratio will not be used as a criterion for the administrative authorities’ order for improvement. For details,
please refer to page 40.

Summary of operations
Item: earthquake

q Indicators relating to insurance underwriting
1. Net premiums written(Yen in millions)

Division

Fiscal Year

2011

2012

2013

Premiums written

171,223

185,568

197,919

Return premiums

2,504

2,642

3,271

Assumed net premiums
written (A)168,676

182,895

194,628

Reinsurance premiums
ceded (B)

85,00589,899102,379

Net premiums written (A-B)

83,671

92,99692,248Notes:
1. R
 eturn premiums: Return premiums of receiving reinsurance.
2. 
Assumed net premiums: Produced by deducting return premiums
from premiums written.
3. Net premiums written: Produced by deducting the reinsurance premiums ceded from the assumed net premiums written.

36

2. Rate of premiums written by domestic and overseas contracts
Division

Fiscal Year

2011

2012

2013

100%

100%

100%

2011

2012

2013

Assumed net claims paid (A) 1,240,600

55,88322,014

Reinsurance claims
recovered (B)1,043,975

24,276

7,003

Net claims paid (A-B)

196,625

31,60715,010

Domestic contract

3. Net claims paid
(Yen in millions)

Division

Fiscal Year

Notes:
1. 
Assumed net claims paid: Produced by deducting surrender value
from ceded insurance claims paid.
2. Net claims paid: Produced by deducting reinsurance claims recoveredby ceded contract from assumed net claims paid.

Japan Earthquake Reinsurance Co., Ltd. Annual Report 2014

4. Net loss ratio, net expense ratio and their combined ratio(Yen in millions)

Division

Fiscal Year

2011

2012

Net loss ratio

282.9%

39.2%

18.7%

Underwriting expenses

35,67738,867

41,134 Insurance related operating,general and administrative
expenses551

725 Commissions and brokeragefees

35,12638,141

8. No. of reinsurers that ceded insurance contracts andtop five reinsurers for ceded reinsurance premiums

2013
Fiscal Year

2011

2012

2013

14

13

11

722

No. of reinsurersthat ceded insurance
contracts

40,411

Rate of top fivereinsurers’ ceded
insurance premiums

81.8%

81.9%

81.9%

Net expense ratio

42.6%

41.8%

44.6%

Combined ratio

325.5%

81.0%

63.3%

Notes:
1. Net loss ratio: (Net claims paid + loss adjustment expenses) / net
premiums written
2. Net expense ratio: (Commissions and brokerage fees + Insurance-related operating and general administrative expenses) / net premiums
written
3.	Combined ratio: Net loss ratio + net expense ratio

5. Rate of damage occurrence, the expenses ratio andrate of sum total before ceded insurance deduction
Not applicable
6. Changes in ordinary income or loss against a risein the loss rate
There are no changes in ordinary income or loss
in earthquake insurance because increases ininsurance payments are set off through the reversalof underwriting reserves in accordance of theprinciple of no loss and no profit.

Division

Note:
The number of reinsurers that ceded insurance contracts is the number
who ceded treaty reinsurance contracts of 10 million or more yen.

9. Ratio of ceded insurance premiums by rating
Not applicable
10. Contractor dividend
Not applicable
11. Conditions at the end of the current fiscal year
(runoff result) of outstanding claims (estimatedamount) at the beginning of the term
Not applicable to earthquake insurance.
12. Amount of estimated final damages associatedwith the elapse of a period from the occurrenceof accidents
Not applicable to earthquake insurance.

7. Underwriting profit(Yen in millions)

Division

Fiscal Year

2011

2012

2013

Underwriting income

272,503106,333

96,358105,420

95,447

Underwriting expenses

271,872

Operating and generaladministrative expenses

551

725

722

Other income and expenses

(79)

(186)

(188)

–

–

–

Underwriting profit

Notes:
1. The above operating, general and administrative expenses are thoserelating to the underwriting of insurances mentioned in the operating, general and administrative expenses in a statement of profits andlosses.
2. Other income and expenses are those equivalent to corporate taxes
mentioned in a statement of earthquake insurance profits and losses.

Japan Earthquake Reinsurance Co., Ltd. Annual Report 201437

w Investments
1. Investments policy	Because we have to pay a substantial amount ofclaims promptly in the event of a natural disastersuch as a major earthquake, we put in principle
the highest priority on safety and liquidity followedby profitability to increase risk reserves. The risk
management division is engaged in monitoring andcontrolling risks of all kinds, independently of thetransactions execution division.

3. 
Amount of interest and dividend received andinvestment assets yield (income yield)(Yen in millions)FiscalYear

2011
Yield (%)

Division

As of the end of
fiscal 2011

As of the end of
fiscal 2012

Percentage
distribution(%)

Division

Percentage
distribution(%)

Yield (%)

83

0.69

32

0.18

23

0.09

46

0.05

8

0.05

7

0.04

Monetaryreceivablesbought

–

–

–

–

–

–

–

–

–

–

–

–

6,983

1.43

4,549

0.96

3,248

0.66

Buildings

As of the end of
fiscal 2013

Yield (%)

Call loans

Securities(Yen in millions)

Year

2013

Deposits

Money trusts

2. Total assets and investments assets

2012

Total

–

–

–

–

–

–

7,113

1.20

4,589

0.90

3,279

0.61

Note:
Investment assets yield (income yield): indicator showing the result of investment assets from a point of income (interest and dividend income)(which has been disclosed)
The numerator is composed of interest and dividend income from investment assets while the denominator is an acquisition cost based assets.

Percentage
distribution(%)

Deposits

17,1903.4

25,9384.8

23,892

4.1

Call loans

30,105

5.9

21,137

3.9

14,634

2.5

Monetaryreceivablebought

–

–

–

–

–

–

Numerator = Interest and dividend income (including the amount equivalent to interest and dividend income of profit (or loss) from monetarytrust operation)
Denominator = Acquisition cost or depreciation based average balance

Money trusts

–

–

–

–

–

–

Securities

448,12088.0

476,97988.9

525,161

91.0

Buildings

35

0.0

33

0.0

31

0.0

Total ofinvestments
assets495,45097.3

524,08897.6

563,719

97.6

Total assets

509,498

100.0

536,808

100.0

577,305

100.0

4. Asset management yield (realized yield)(Yen in millions)

Division

Amount ofnumerator

Deposits

83

2011
Amount ofdenominator
12,07432

2012
Amount ofdenominator
17,63623

2013
Amount ofdenominator
24,974

Call loans

46

94,2170.05

818,0670.05

719,385

Monetary receivables bought

–

–

–

–

–

–

–

–

–

Money trusts

–

–

–

–

–

–

–

–

–

Fiscal Year

Securities
Public and corporate bonds
StocksForeign securities
Other securities

Yield onworking
assets (%)
0.69

Amount ofnumerator

Yield onworking
assets (%)
0.18

Amount ofnumerator

Yield onworking
assets (%)
0.09
0.04

9,127

488,267

1.87

4,548

473,767

0.96

3,346

490,629

0.68

3,253

273,696

1.19

1,711

325,550

0.53

1,054

356,649

0.30

–

–

–

–

–

–

–

–

–

5,874

214,570

2.74

2,837

148,217

1.91

2,292

133,980

1.71
–

–

–

–

–

–

–

–

–

Loans

–

–

–

–

–

–

–

–

–

Buildings

–

37

–

–

35

–

–

33

–
–

Derivatives

8,358

–

–

(2,836)––(7,336)–

Others(10,599)

–

–

2,783

–

–

7,691

–

–

Total

7,016

594,596

1.18

4,536

509,507

0.89

3,731

535,023

0.70

Notes:
1. Asset management yield (realized yield): indicator to show the result of managing of assets from the point of contribution to the current profit andloss. The numerator is realized profit and loss while the denominator is an acquisition cost based assets.
Numerator = profit from asset management + investment income on savings premiums – expenses of assets management
Denominator = acquisition cost or writing-off cost based average balance
2. Profit and loss from derivatives principally involve foreign exchange forward contracts with the remainder primarily involving currency exchange of foreign
currency-denominated bonds. JER deals in foreign exchange forward contracts and other transactions for the purpose of hedging risks associated with foreign
currency-denominated bonds.

38

Japan Earthquake Reinsurance Co., Ltd. Annual Report 2014

5. Market-price based overall yield (for reference)(Yen in millions)

Division

Amount ofnumerator

Deposits

83

2011
Amount ofdenominator
12,07432

2012
Amount ofdenominator
17,63623

2013
Amount ofdenominator
24,974

Call loans

46

94,2170.05

818,0670.05

719,3850.04

Monetary receivables bought

–

–

–

–

–

–

–

–

–

Money trusts

–

–

–

–

–

–

–

–

–

5,349

496,699

1.08

4,067

478,421

0.85

2,182

494,802

0.44

1,821

277,057

0.66

1,666

327,4800.51

898

358,533

0.25

–

–

–

–

–

–

–

–

–

3,527

219,641

1.61

2,401

150,940

1.59

1,284

136,268

0.94

Fiscal Year

Securities
Public and corporate bonds
StocksForeign securities
Other securities

Yield onworking
assets (%)
0.69

Amount ofnumerator

Yield onworking
assets (%)
0.18

Amount ofnumerator

Yield onworking
assets (%)
0.09

–

–

–

–

–

–

–

–

–

Loans

–

–

–

–

–

–

–

–

–

Buildings

–

37

–

–

35

–

–

33

–

Derivatives

8,358

–

–

(2,836)––(7,336)––

Others(10,599)

–

–

2,783

–

–

7,691

–

–

Total

3,237

603,029

0.54

4,055

514,160

0.79

2,567

539,196

0.48

Notes:
1. M arket-price based overall yield: indicator showing the efficiency of operation on a market price basis. The numerator reflects realized profit and loss
and fluctuations in market price appraisal while the denominator is market-price based assets.
Numerator = (income from operated assets management + investment income on savings premium – expenses for assets management) + (after-tax
unrealized gain for the year – after-tax unrealized gain for previous year)* + fluctuation in deferred hedge profit and loss
Denominator = acquisition cost or write-off based average balance + after-tax unrealized gain for previous year of other securities + profit and loss
for the previous year related to securities for transaction* Based on the amount before tax effect deduction
2. P rofit and loss from derivatives principally involve foreign exchange forward contracts with the remainder primarily involving currency exchange of foreign
currency-denominated bonds. JER deals in foreign exchange forward contracts and other transactions for the purpose of hedging risks associated with foreign
currency-denominated bonds.

6. B alance, percentage distribution and yield of Foreign Loans & Investments(Yen in millions)

Year

As of the end of fiscal 2011

As of the end of fiscal 2012

As of the end of fiscal 2013

Percentage
distribution(%)

Percentage
distribution(%)

Percentage
distribution(%)

Division
Foreign currency denominatedForeign public and corporate bonds

55,43535.1

36,34728.2

70,35749.7

Yen denominatedForeign public and corporate bonds
Total

102,638

64.9

92,494

71.8

71,16450.3

158,073

100.0

128,842100.0

141,522

100.0

Yield on foreign loans & investments
Investment assets yield (income yield)

2.19%

1.91%

1.71%

Assets management (realized yield)

2.74%

1.91%

1.71%

Market-price based overall yield (for reference)

1.61%

1.59%

0.94%

Note:
Of the yield on foreign loans & investments, the investment assets yield was calculated in the same manner as 3., Amount of interest and dividend
received and yield on investment assets (income yield) in connection with the assets involving foreign investments.

Japan Earthquake Reinsurance Co., Ltd. Annual Report 201439

e Informationonthenon-consolidated
solvency-margin ratio (the ratio that shows
the ability to pay out claims)(Yen in millions)Year
Division
Total amount of non-consolidated solvency-margin

357,917

381,954

1,619

1,536

Price fluctuation reserves

55

Risk reserves––

352,830

378,041

Common stock, etc.

Catastrophe reserves
Reserves for ordinary bad debts

(A)

–

–

3,184

2,370

Unrealized gain and loss included land holdings––

Surplus such as premium reserves––

Funding instruments with a debt-like nature––

Surplus such as premium reserves and funding
instruments with a debt-like nature that are notincluded in the margin––

Unrealized gain / loss on available-for-salesecurities (prior to tax effect deductions)

Items deductible

–

–

277

–

447,267

221,459

General underwriting risk (RI)––

Underwriting risk in third-area insurance (R2)––

Anticipated rate of return risk (R3)––

10,497

11,017

OthersTotal amount of non-consolidated risk√(R1 + R2)2 + (R3 + R4)2 + R5 + R6

(B)

Investment risk (R4)(C)

As of theAs of theend ofend offiscal 2012 fiscal 2013

Management risk (R5)

8,769

4,342

Catastrophe risk (R6)

428,000

206,100

Non-consolidated solvency-margin ratio[(A) / { (B) x 1 / 2 }] x 100

160.0%

344.9%Note:
The amounts and figures above are calculated based on the provisions ofArticle 86 and Article 87 of the Enforcement Rules of the Insurance Business Act and the Ministry of Finance Official Notification No. 50 in 1996.

Non-consolidated solvency-margin ratio
The non-life insurance companies deposit reserves incase that they pay insurance money for any insurance
accident that occurred or refund depository insurance
at maturity. It is also necessary for them to maintaina satisfactory ability to make payments or solvency
even in case of unusual, unforeseeable risk, including
a huge disaster or sharp drop in price of such assets
as owned by them.
The rate of “Non-life insurance company’s ability tomake payments by owned assets and reserves (A in theabove table) over any risk unforeseeable (B in the abovetable)” is indicated as the non-consolidated solvencymargin ratio (C in the above table) which is calculated
according to the pertinent rules, including the Insurance Business Law.
For a stricter risk measurement, revised laws andregulations concerning the calculation of the nonconsolidated solvency-margin ratio have been applied
since fiscal 2011.

40[Unforeseeable risk] (Total of risks): Sum of 1–5
1. General underwriting risk: risk associated with aninsurance accident rate that is higher than normallypredictable (other than the risk associated with ahuge disaster).
2. Anticipated ratio of return risk: the risk that may
arise for saving-type insurance if the actual yieldfrom operations is lower than it was when calculating depository insurance premiums.
3. Investment risk: management risk that might arise
when the value of assets owned including securities
changes in an unforeseeable manner.
4. Management risk: risk that might arise on business
management in an unforeseeable manner, otherthan 1–3 and 5.
5. Catastrophe risk: risk that might arise with a hugedisaster (such as the Great Kanto Earthquake)
which is normally unforeseeable.
Capability of payment by non-life insurance company
owned capital and reserves (total amount of non-consolidated solvency-margin) is the total of capital owned
by a non-life insurance company, various reserves (pricefluctuation reserve, catastrophe reserve, etc.), part of latent profit from land, and so on.
The solvency-margin ratio is one of the indicators used
when the administrative authorities check insurancecompanies to determine the soundness of management
for supervisory purposes. When the rate is 200% or
more, the insurance company is deemed satisfactory interms of its ability to make insurance and other payouts.
◎ JER has entered into a reinsurance contract with thegovernment of Japan for earthquake insurance in accordance with Law concerning Earthquake Insurance.
The law stipulates in addition that the government takes
responsibility for support and for lending funds for thepayment of insurance money. Because this is a form ofspecial business, JER’s solvency-margin ratio is not usable as a figure to enable the administrative authorities
to trigger an order for improvement, irrespective of theabove solvency-margin ratio, as provided for in Paragraph 4, Article 3, Order to specify the division statedin Paragraph 2, Article 132, Insurance Business Law.
Note: The article is as follows.
[In the event that an insurance company has entered into a reinsurance
contract with the government as stated in Paragraph 1, Article 3, Law
concerning Earthquake Insurance (law No. 73, 1966), any order to be issued according to the listed division in Section 1 of the Article applicableto the insurance company shall be issued in accordance with the list of
inapplicable division.]

Japan Earthquake Reinsurance Co., Ltd. Annual Report 2014

ACCOUNTING CONCEPTS(NET ASSETS)

q Financial statements(Yen in millions)2012(As of March
31, 2013)

2013(As of March
31, 2014)

Item

AmountAmountCommon stock

1,000

1,000

625

542



Fiscal Year

1. Balance sheets(ASSETS)

(Yen in millions)2012(As of March
31, 2013)

2013(As of March
31, 2014)

Item

AmountAmount Other legal reserve of retained earnings

Cash and deposits
Deposits

25,93825,93823,892
23,892  Special reserves

1717  Special price fluctuation reserves3939  Retained earnings brought forward

567

484



Fiscal Year

Call loans

21,137

14,634

Securities
Government bonds
Corporate bonds
Foreign securities

476,979
328,071
20,065
128,842

525,161
378,735
4,904
141,522

Tangible fixed assets
Buildings Other tangible fixed assets

117
33
84

84
31
52

Intangible fixed assets
Software Other intangible fixed assets

232
231
1

158
156
1

12,316
9,962
223
1,155
50
287
608
28

13,375
11,519
–
1,690
47
61
55
–

Other assets Reinsurance balance receivable
Accounts receivable
Uncollected income
Deposits
Suspense payments
Derivatives
Cash collateral paid for financial instruments
Deferred tax assets
Total assets

86–

536,808

577,305(LIABILITIES)
(Yen in millions)Fiscal Year

Item

2012
(As of March
31, 2013)

2013(As of March
31, 2014)

AmountAmountUnderwriting funds
Outstanding claims
Underwriting reserves

466,407
4,927
461,480

502,8543,579
499,274

Entrusted reserves

55,12759,243

Other liabilities
Reinsurance balance payable
Corporate taxes payable
Deposits payable
Accrued amounts payable
Derivatives

9,325
6,250
175
5
240
2,653

10,502
7,636
214
3
128
2,518

Reserve for retirement benefits

120

116

Reserve for directors’ retirement benefits

14

18

Reserve for bonus payments

21

20

Reserves under the special law
Reserve for price fluctuation

5
5

5
5

4,152

2,996

Net unrealized gains on available-for-salesecurities of earthquake insurance
Deferred tax liabilities
Total liabilities–

3535,175

575,761Retained earnings Legal reserve of retained earnings

Treasury Stock
Total shareholders’ equity
 et unrealized gains on available-for-saleNsecurities Total valuation and translation adjustments
Total net assets
Total liabilities and net assets

1

1

624

541

(5)

(5)

1,619

1,536

13

7

13

7

1,633

1,544

536,808

577,305

Notes for fiscal 2013
1. Appraisal standards and method of securities, andmethod of indication(1) Of available-for-sale securities, those to which
the market price is applicable is appraised according to the market price at term end.
(2) With respect to the unrealized gain of assets
corresponding to the underwriting reserves andentrusted reserves of earthquake insurance, theamount before tax effect deduction is shownas Net unrealized gains on other securities ofearthquake insurance in Liabilities on the form
attached to the Enforcement Rules of Insurance
Business Act. For other unrealized gains, theamount after tax effect deduction is processed
entirely according to the direct capital injection
method and indicated in Shareholders’ Equity.
The calculation of the sales price is based on
the moving average method.
2. The appraisal of derivatives is done on the basis ofmarket price.
3. Although depreciation of tangible fixed assets is calculated using the declining balance method, buildings (excluding equipment attached to buildings)
that were acquired on and after April 1, 1998 weredepreciated using the straight-line method.

Japan Earthquake Reinsurance Co., Ltd. Annual Report 201441

4. Software for in-house use that is recorded as an intangible fixed asset is amortized using the straight-line
method over the estimated usable life (five years).
5. T he conversion of foreign currency assets and liabilities
into Japanese currency is processed according to theaccounting standards for foreign currency transactions.
6. W
 riting standards of reserves(1) Reserve for bad debts
		
Reserve for bad debts is written as follows
against losses from bad debts in accordancewith the self-appraisal standard of assets anddepreciation and reserve standards.
		In connection with claims against debtors who
have gone bankrupt legally and formally, including bankruptcy, special liquidation or disposition by suspension of business at a clearing
house, or debtors who are effectively bankrupt,
the rest of any of the claims deducting an estimated amount of disposable mortgage and adeductible amount by guarantee was appropriated for such reserves.
		In connection with the other claims, the rateof bad debts calculated according to past bad
debts and other factors is multiplied by theamount of claims to appropriate for reserves.
		
In addition, all claims are written after the finance department appraises the assets, and theresult is audited by the planning and controller
department independent of the finance department to appropriate the appraisal for reserves.
		There are no assets in the current term that are
to be appropriated for reserves and no reserveis required.
(2) Reserve for retirement benefits		For employees’ retirement and severance benefits, reserve is appropriated according to estimated retirement allowance liabilities at theend of the term.
		Retirement allowance liabilities are calculatedusing a simple method on the basis of the allowance to be supplied at the end of the term for any
employee who retires for his/her own reasons.
	 (3) Reserve for directors’ retirement benefits		For reserve for directors’ retirement benefits, thebenefits to be paid at the end of the term arerecorded according to the relevant in-house rules.
(4) Reserve for bonus payments
		Reserve for bonus payments is calculated according to the standards for the estimated bonuses payable as of the end of the fiscal year

42

under review.
(5) Reserve for price fluctuation		
To prepare for a loss from price changes ofshares and others, reserve is appropriated according to Article 115, Insurance Business Law.
7. 
Financial instruments and fair values of financial
instruments(1) S ituation of financial instruments
We carry out asset management in preparation forthe payment of reinsurance claims, primarily considering soundness—namely, low price fluctuation
risks, credit risks, and liquidity risks—and also
taking profitability into account.
As a result, our financial assets consist primarilyof domestic and foreign, high-rated, medium-termbonds. We regularly obtain and manage information on fair values and credit information in association with each risk.
Trading in derivatives principally involves foreignexchange forward contracts used to hedge therisks arising from possible changes in exchange
rates for bonds in foreign currencies and is kept
within the scope of actual demand.
(2) F air values of financial instruments
The table below shows the balance sheet amounts
and fair values of financial instruments and thedifferences between them as of March 31, 2014.
(Yen in millions)

Balancesheet
amountFair value

Difference(i) Cash and deposits

23,892

23,892–(ii) Call loans

14,634

14,634–(iii) Securities
Available-for-sale securities

525,161

525,161–

Total assets

563,688563,688–(iv) Derivatives* to which
hedge accounting is notapplied(2,463)(2,463)–

Derivatives total(2,463)(2,463)–* Derivatives recorded in other assets and other liabilities.
Net claims and debts derived from derivatives represent the net amounts, and items
whose net balance becomes debts are stated in brackets.

Note: Methods for calculating the fair values of financial instruments(i) Cash and deposits
Cash and deposits are settled in the short term and their fair values
are based on their carrying values as their fair values and carrying
values are similar.
(ii) Call loans
Call loans are settled in the short term and their fair values are
based on their carrying values as their fair values and carrying values are similar.
(iii) Securities
The fair values of securities are based on their market prices atterm end, which are reference prices in the trading statistics of theJapan Securities Dealers Association or market prices obtained
from outside vendors or brokers.
(iv) Derivatives
The fair values of derivatives are determined by prices offered bycorrespondent financial institutions.

Japan Earthquake Reinsurance Co., Ltd. Annual Report 2014

8. Taxes are included when preparing accounts for consumption tax and other items.
9. 
Risk reserves contained in Underwriting reserves
have been deposited based on instructions for the
calculation of underwriting reserves by accumulating the amounts that result from subtracting anamount equivalent to corporate taxes from the net
premiums written and profit from operating the assets.
10. The accumulated depreciation of tangible fixed assets is 132 million yen.
11. S ee below for a breakdown of outstanding claims.
(Yen in millions)

Outstanding claims (before the deduction ofoutstanding reinsurance claims)

5,144

Outstanding reinsurance claims related to theabove claims

1,565

Net outstanding claims

3,579

12. Total deferred tax assets amount to 87 million yen,while total deferred tax liabilities come to 3 million
yen. Deferred tax assets are all deducted from thetotal amount for a valuation reserve. A breakdownof deferred tax assets reveals a reserve for retirement benefits of 35 million yen, unpaid businesstaxes of 21 million yen, and unpaid special local
corporate tax of 15 million yen. The deferred tax
liabilities result primarily from unrealized gains of
3 million yen on securities.
13. Net assets per share are 776.66 yen. The basis forthis calculation is that net assets are 1,544 million yen, net assets accrued from ordinary sharesare 1,544 million yen and the number of ordinary
shares at the end of the term is 1.988 million.
14. No events that could significantly affect assets orincome or loss for the next fiscal years and beyond
have taken place since the last day of the fiscal
year under review.
15. Each amount is rounded down to the nearest wholeunit.

Japan Earthquake Reinsurance Co., Ltd. Annual Report 201443

2. Statements of income(Yen in millions)

Fiscal Year

2012

2013

(from April 1, 2012
to March 31, 2013)(from April 1, 2013
to March 31, 2014)

Item

AmountOrdinary income

Notes for fiscal 2013
1. See below for a breakdown of net premiums written.
(Yen in millions)

Premiums written:

194,628

AmountReinsurance premiums ceded:

102,379

110,370

104,703

Net premiums written:

92,248Underwriting income

106,333

96,358   Net premiums written

92,99692,248  Investment income on savings
premiums

3,369

2,761

  Reversal of outstanding claims

9,967

1,348

Investment income

4,031

8,339

   Interest and dividend income

4,589

3,279

   Gains on sales of securities

–

100

2,809

7,712

1

8

(3,369)(2,761)

5

6   Foreign exchange gains   Other investment income  Transfer of profit from Investment
income on savings premiums
Other ordinary income
Ordinary expenses

2. S
 ee below for a breakdown of net claims paid.
(Yen in millions)

Claims paid:

22,014

Reinsurance claims recovered:

7,003

Net claims paid:

15,0103. See below for a breakdown of the provision of outstanding claims (figures in parentheses are the reversal of outstanding claims).
(Yen in millions)

Provision of outstanding claims(before the deduction of outstanding
reinsurance claims)(2,527)110,176

104,509

105,420

95,447   Net claims paid

31,60715,010   Loss adjustment expenses

4,892

2,230

Provision of outstanding reinsurance claims
related to the above claims(1,179)  Commissions and brokerage fees

38,14140,411

Net provision of outstanding claims(1,348)   Provision of underwriting reserves

30,77937,794

2,865

7,368

0

2

2,836

7,336

27

29

1,273

1,289

617

404

  Interest paid

617

404

Ordinary profit

193

194

0

–

Underwriting expenses

Investment expenses   Losses on sales of securities  Losses on derivatives   Other investment expenses Operating, general and administrative
expenses
Other ordinary expenses

Extraordinary income
Reversal of price fluctuation reserves
Extraordinary losses
Losses on disposal fixed assets
Provision of price fluctuation reserves

0

–

0

0

0

0

–

0

Income before taxes

194

194

Income taxes – current

199

184

Income taxes – deferred

(9)

92

Total income taxes

189

277

Net income (loss)

4

(82)

4. The interest and dividend income are given below
by category:(Yen in millions)

Deposits:

23

Call loans:

7Interest on cash collateral andother financial instruments submitted:

0

Securities:

3,248

Total:

3,279

5. Paper profit/loss involved in the losses on derivatives
is a loss of 2,463 million yen.
6. Netloss per share is 41.63 yen.
The basis for this calculation is such that net loss
is 82 million yen, net loss accrued from ordinary
shares is 82 million yen and the term average No.
of ordinary shares amount to 1.988 million.
7. The legal effective tax rate at the end of the termis 33.33%, and the corporate tax burden after applying the tax effect is 142.60%. The difference is
explained by the following breakdown: valuation
reserve 42.53%, the non-deductible amount of thetaxable provision of risk reserves 101.58%, theamount of the write-off carried from publicity expenses related to risk reserves (37.05%).
8. Each amount is rounded down to the nearest whole
unit.

44

Japan Earthquake Reinsurance Co., Ltd. Annual Report 2014

3. Statements of cash flow
(Yen in millions)

Fiscal Year

Item

2012

2013

(from April 1, 2012
to March 31, 2013)(from April 1, 2013
to March 31, 2014)

AmountAmountNotes for fiscal 2013
1. 
Relationship of cash and cash equivalents at theend of the year with the amounts mentioned in therelevant balance sheet item.
(Yen in millions)

Cash flow from operating activities
Net income before income taxes
Depreciation

194

194

(As of March
31, 2013)(As of March
31, 2014)
23,892

104

134

Increase (decrease) in outstanding
claims(9,967)(1,348)

Increase (decrease) in underwriting
reserves

30,77937,794

Deposits of a depository periodof three months or longer(11,000)(11,000)

Increase (decrease) in entrusted
reserves

6,061

4,115

Securities other than cash equivalent(476,979)(525,161)

Increase (decrease) in reserve forretirement benefits

15

(4)

36,07527,526

Increase (decrease) in reserve fordirectors’ retirement benefits(1)

4Increase (decrease) in reserve forbonus payments

1(0)Increase (decrease) in reserve forprice fluctuation
Interest and dividend income(0)0(4,589)(3,279)Losses (gains) on investment insecurities

0

(98)

Foreign exchange losses (gains)(8,518)(6,790)Losses (gains) on tangible fixed
assets00Decrease (increase) in other assets(other than investment and financial
activities related)(380)(1,104)

Increase (decrease) in other liabilities(other than investment and financial
activities related)

(673)

1,272

Others2,974

404   Subtotal

16,001

31,294

Interest and dividends received

5,342

4,088

Income taxes paid

(160)

(130)

21,18235,252

Net cash provided by operating activities

Cash and deposits

25,938Call loans

21,137

14,634

Securities

476,979

525,161

Cash and cash equivalents

2. Cash flow in investing activities includes cash flowfrom the investment assets operations in the insurance business.

Cash flow from investing activities
Net decrease (increase) in deposits

4,500

–

Purchase of securities(559,847)(628,856)

Proceeds from sales and redemptionof securities

538,680

585,053

Others    Total investment assets activities    Total operating activities and   investment assets activities–28(16,666)(43,774)

4,516(8,522)Acquisition of tangible fixed assets

(87)

(0)

Others

(148)

(25)

(16,902)(43,801)

Cash flow in financing activities

Net cash provided by investing activities–– ffect of exchange rate changes on cashEand cash equivalents––

 et increase (decrease) in cash andNcash equivalents

4,280(8,548)Cash and cash equivalents at the
beginning of the year

31,79536,075

Cash and cash equivalents at the endof the year

36,07527,526

Japan Earthquake Reinsurance Co., Ltd. Annual Report 201445

4. Statement of Changes in Shareholders’ Equity
Fiscal 2012 (from April 1, 2012 to March 31, 2013)(Yen in millions)

Valuation andtranslation adjustments

Shareholder’s equity
Retained earnings
Commonstock

Legalreserve ofretainedearnings

1,000

1Balance at the
beginning of theperiodOther legal reserve of retained earnings
Specialreserves

Specialprice
fluctuation
reserves

Retainedearnings
brought
forwardTotal
retainedearnings

17

39

563

620

4

4

Treasury
stock

Total
shareholders’equity

(5)

Net
Total
unrealized
valuation
gains onandavailabletranslation
for-saleadjustments
securities

1,615

16

16

Total net
assets1,631

Changes during
the period
Net income

44

Net changes
other thanshareholders’equityTotal changes
Balance at theend of the period

1,000

1

17

39

4

4

567

625

(5)

(2)

(2)

(2)

4

(2)

(2)

1

1,619

13

13

1,633

Fiscal 2013 (from April 1, 2013 to March 31, 2014)(Yen in millions)

Valuation andtranslation adjustments

Shareholder’s equity
Retained earnings
Commonstock

Legalreserve ofretainedearnings

1,000

1Balance at the
beginning of theperiodOther legal reserve of retained earnings
Total
retainedearnings

Specialreserves

Specialprice
fluctuation
reserves

Retainedearnings
brought
forward

17

39

567

625

(82)

(82)

Treasury
stock

Total
shareholders’equity

(5)

Net
Total
unrealized
valuation
gains onandavailabletranslation
for-saleadjustments
securities

1,619

13

13

Total net
assets1,633

Changes during
the period
Net income(loss)(82)(82)

Net changes
other thanshareholders’equityTotal changes
Balance at theend of the period

1,000

1

17

39

(82)

(82)

484

542

Notes for fiscal 2013
1. Matters related to the types and total number ofstocks outstanding and the types and number oftreasury stock(Stock)Issuedstock
Treasury
stock

(5)

(5)

(82)

(5)

(5)

(88)

1,536

7

7

1,544

5. Dividend per stock and total assets per employee(Yen in millions)
Division

Fiscal Year

Dividend per stock
Net income (loss) per stock

2011

2012

2013

–

–

–

(2.52 yen)

2.14 yen(41.63 yen)

Balance asof the endof fiscal
2012

Increase in
fiscal 2013

Decrease in
fiscal 2013

Balance asof the endof fiscal
2013

Dividend propensity

–

–

–

Net assets per stock

820.30 yen

821.18 yen

776.66 yen

19,596

19,881

22,204

Ordinary stock

2,000,000––

2,000,000

Total

2,000,000––

2,000,000

Ordinary stock

11,400––11,400Notes:
1. Net income per share comes from net income / term average No. of stocks
2. The number of treasury stock is deducted from producing information per stock
3. The total assets per employee come from the total assets at the end of
the term / No. of employees at the end of the term.

Total

11,400––11,400Total assets per employee

2. Matters related to stock options or own stock options
Not applicable
3. Matters related to dividends
Not applicable

46

(5)

(5)

Japan Earthquake Reinsurance Co., Ltd. Annual Report 2014

5. Balance Current Maturity of securities by categoryw Details of assets and liabilities

As of the end of fiscal 2012
1.	Deposits(Yen in millions)Year
Division

As of the endof fiscal 2011

As of the endof fiscal 2012

As of the endof fiscal 201317,19025,93823,892

Ordinary deposits

1,690

8,908

3,832

Time deposits

15,50017,03020,060

Deposits

2.	Average balance and trading amount of commodity
securities
Not applicable
3.	Balance of securities by category and percentage
distribution(Yen in millions)

Year

As of the end of
fiscal 2011
Percentage
distribution(%)

Division
Government
bonds

As of the end of
fiscal 2012

248,634

As of the end of
fiscal 2013

Percentage
distribution(%)

55.5 328,071

Percentage
distribution(%)

68.8 378,735


5 over
up to
7
years

(Yen in millions)

7 over
up to
10
years

Division

Up to
1 year

1 overup to
3 years

3 overup to
5 years

Government
bonds

210,396

26,39245,992 27,203 18,085

Municipal
bonds

–

–

Corporatebonds

17,655

2,410

–

–

–

–

–

–

Foreignsecurities

39,581

48,224

28,613 12,422–– 128,842

Othersecurities

–

–

–

–

–

–

–

Loan
receivablein securities

–

–

–

–

–

–

–

267,633

77,02774,605 39,626 18,085–

476,979

Stocks

Total

–

–

As of the end of fiscal 2013

72.1
Division–

Up to
1 year

1 overup to
3 years

3 overup to
5 years

246,622

31,74450,414 41,312

Total– 328,071
–

–

–

–

20,065–––
5 over
up to
7
years

Over
10
years

(Yen in millions)

7 over
up to
10
years

Over
10
years

Total

Municipal
bonds

–

–

–

–

–

–

Corporatebonds

41,411

9.2

20,065

4.2

4,904

0.9

–

–

–

–

–

–

27.0 141,522

26.9

Municipal
bonds

–

–

–

–

–

–

–

Corporate
bonds

2,302

2,601

–

–

–

–

4,904
–

StocksForeignsecurities

158,07335.3 128,842

Government
bonds

1,052 7,587 378,735

Othersecurities

–

–

–

–

–

–

Loan
receivable insecurities

–

–

–

–

–

–

–

–

–

–

–

–

Foreignsecurities

31,13889,794

20,589––– 141,522

448,120100.0

476,979100.0

525,161

100.0

Other
securities

–

–

–

–

–

–

–

Loan
receivablein securities

–

–

–

–

–

–

–

1,052 7,587

525,161

Total

Stocks

4. Yield on securities held(%)


Division

Fiscal Year

2011

2012

2013

0.83

0.53

0.27

–

–

–

2.19

1.91

1.71

–

–

–

1.43

0.96

0.66

1.19

0.53

0.30

–

–

–

2.74

1.91

1.71

Total

280,063 124,141

71,004 41,312

Investment assets yield (income yield)
Public & corporate bonds
StocksForeign securities
Other securities
Total

Assets management yield (realized yield)
Public & corporate bonds
StocksForeign securities
Other securities
Total

–

–

–

1.87

0.96

0.68

0.66

0.51

0.25

–

–

–

1.61

1.59

0.94

Market-price based overall yield (for reference)
Public & corporate bonds
StocksForeign securities
Other securities
Total

–

–

–

1.08

0.85

0.44

6.	Amount of stocks held by type of business
There are no stocks.
7.	Loans
There are no notes with the following items; amountof stocks held by type of business, balance current
maturity of loan by remaining life, balance ofloans by type of collateral secured, balance andpercentage distribution of loan by designated use,balance of loan by industry and its ratio to the total,and balance of amortization of loans.
8.	Risk management credits
Not applicable

Note:
Public & corporate bonds include government bonds, municipal bonds, andcorporate bonds.

Japan Earthquake Reinsurance Co., Ltd. Annual Report 2014

47

9.	
Present conditions of loans involving trust withcontact for replacement of losses
Not applicable

17. Detailed listing of liability reserves

10. Credits classified in accordance with debtor
classification
Not applicable

Balance asof the end of
fiscal 2011

11. Self-appraisal of assets
We categorize assets in accordance with the level ofrisk associated with collection and the level of riskof a loss in the value by carrying out self-appraisal
and individually examining holding assets. There
were no category assets (II through IV categories)
as of March 31, 2014.
12. Tangible fixed assets by category(Yen in millions)Year
Division

As of the endof fiscal 2011Land

As of the endof fiscal 2012

As of the endof fiscal 2013

–

–

–

for underwriting

–

–

–

for investment

–

–

–

35

33

31

for underwriting

35

33

31

for investment

–

–

–

Buildings

Construction in progress

–

–

–

for underwriting

–

–

–

for investment

–

–

–

Total of property

35

33

31

for underwriting

35

33

31

for investment

–

–

–

Other tangible fixed assets

8

84

52

Total

43

117

84

13. Unearned claims paid
Not applicable

As of the end of fiscal 2012
(Yen in millions)
Division

Reserve for ordinary
bad debts

–

–

–

–

Reserve for individual bad debts

–

–

–

–

Reserve for specificforeign securities

–

–

–

–

Reserve for retirement benefits

104

20

4

120

Reserve for directors’ retirement
benefits

15

4

5

14

Reserve for bonus
payments

19

21

19

21

Reserve for pricefluctuation
Total

0

5

30

161

(Yen in millions)
Division

Balance asof the end of
fiscal 2012

Balance
Decrease
as of the end of
in fiscal 2013
fiscal 2013

Increase in
fiscal 2013

Reserve for ordinary
bad debts

–

–

–

–

Reserve for individual bad debts

–

–

–

–

Reserve for specificforeign securities

–

–

–

–

Reserve for retirement benefits

120

19

23

116

Reserve for directors’ retirement
benefits

14

4

0

18

Reserve for bonus
payments

21

20

21

20

Reserve for pricefluctuation

5

0

–

5

161

44

45

161

(Yen in millions)Year As of the end
Divisionof fiscal 2011

As of the endof fiscal 2012

As of the endof fiscal 2013

Outstanding claims

14,895

4,927

3,579

Underwriting reserves

430,700

461,480499,274

Risk reserves

331,499352,830

378,041

Unearned premium
reserves

97,686

107,140

119,727

Repayment reserves

1,514

1,509

1,505

445,595

466,407502,854

16. Level of underwriting reserves
There is no target contact.

48

–
45

18. Detailed listing of shareholders’ equity
Please refer to the statement of changes in shareholders’ equity on page 46.

15.	Underwriting funds

Total

6
146

As of the end of fiscal 2013Total

14. Special accountNot applicable

Balance
Decrease
as of the end of
in fiscal 2012fiscal 2012

Increase in
fiscal 2012

Japan Earthquake Reinsurance Co., Ltd. Annual Report 2014

7. D
 epreciation expenses by category

e Income and loss details

As of the end of fiscal 2012

1. Gains on sales of securities by category(Yen in millions)(Yen in millions)

Division

Fiscal Year

2011

2012

2013

Type of asset

Government bonds

1,116

–

Foreign securities

1,247

–

–

Total

2,364

–

100

100

2. Losses on sales of securities by category(Yen in millions)

Division

Fiscal Year

2011

2012

Acquisition
cost

2013

Tangible fixed assets
Buildings

101

2

68

33

66.9

for
underwriting

101

2

68

33

66.9

for
investment

–

–

–

–

–

Other tangible
fixed assets

179

10

94

84

52.9

280

12

162

117

58.0

Government bonds

145

–

2

Total

Foreign securities

75

0

–

Intangible fixed assets

Total

220

0

2

3. Losses on valuation of securities
Not applicable
4. Gains on disposal of fixed assets
Not applicable

Software

558

91

327

231

58.7

Other
intangible
fixed assets

1

0

0

1

12.2

Total

560

91

328

232

58.5

Grand total

841

104

490

350

58.3

As of the end of fiscal 2013
(Yen in millions)

5. Losses on disposal of fixed assets

Type of asset(Yen in millions)

Division

Fiscal Year

2011

2012

2013

–

–

–

Buildings–––

Other tangible fixed assets

0

0

0

Total

0

0

0

6. Business expenses (inclusive of loss adjustment)(Yen in millions)Fiscal Year

2011

2012

2013

Personnel expenses

11,636

1,031

496

Non personnel expenses

29,330

4,881

2,773

Taxes

Acquisition
cost

Rate of
Deprecia- Aggregated Balance as
aggregatedtion indeprecia- the end ofdepreciafiscal 2013
tions
fiscal 2013
tions %

Tangible fixed assets

Land

Division

Rate of
Deprecia- Aggregated Balance as
aggregatedtion indeprecia- the end ofdepreciafiscal 2012tions
fiscal 2012
tions %

228

252

249

Commissions and brokeragefees

35,12638,14140,411

Total

76,32244,30743,931

Buildings

101

2

70

31

68.9

for
underwriting

101

2

70

31

68.9

for
investment

–

–

–

–

–

Other tangible
fixed assets

115

32

62

52

54.1

Total

217

34

132

84

61.1

Intangible fixed assets
Software

562

100

405

156

72.1

Other
intangible
fixed assets

1

0

0

1

12.7

Total

563

100

405

158

72.0

Grand total

780

134

538

242

68.9

Note:
Business expenses are the total of loss adjustment expense, operating,general and administrative expenses, commissions and brokerage fees
as shown in the income statement.

Japan Earthquake Reinsurance Co., Ltd. Annual Report 201449

3. Money trust
Not applicabler Information about fair values, etc.
1. Matters related to financial instruments
For matters related to the status of financial instruments and matters related to the fair values of financial instruments, please refer to Note 7 on thebalance sheet (page 42).

4. Derivative transactions(i) Derivative transactions to which hedge accounting is
not applied(a) Currency related
At the end of fiscal 2012
(Yen in millions)

2. Securities(i) Securities held for trading purposes
Not applicable

Contract amount

Over-the-counter transactions(ii) Securities to be held to maturity
Not applicable Forward foreign exchange contracts  Short positions(iii) Available-for-sale securities
At the end of fiscal 2012
Division

Type
Public &corporate
bonds

Securities whosecarrying amountexceeds their cost

Acquisition
cost
199,878

Book value
201,819–

98,536

101,028

2,492

–

–

–

Subtotal

298,414302,848

4,433

Public &corporatebonds

146,373

146,317

(56)

–

–

–

30,46327,813(2,649)StocksForeignsecurities
Others

Total

–

–

–

176,837

174,131(2,705)475,251476,979

1,727

At the end of fiscal 2013
Type
Public &corporate
bonds
Securities whosecarrying amountexceeds their cost

Book value

190,481

192,232

1,750

–

–

–

121,335

127,001

5,665

OthersSecurities whosecarrying amount
does not exceed
their cost

(Yen in millions)

Acquisition
cost

StocksForeignsecurities–

Subtotal

311,817319,233

7,415

Public &corporatebonds

191,429

191,407(21)

Stocks(328)(1,687)(2,016)(2,016)Total

At the end of fiscal 2013

(Yen in millions)Contract amount

Appraisal
profit andloss

Marketprice

1 year or
longerones

Over-the-counter transactions Forward foreign exchange contracts  Short positions   US dollar

28,819

–

(564)

(564)

   Euro36,703–(1,899)(1,899)(2,463)(2,463)

Total

Notes:
1. Currency related derivative transactions other than the above areomitted as there is no applicable item.
2. Calculating a market price: Foreign exchange rates depend on futuresquotations.

(b) Credit related
At the end of fiscal 2012

(Yen in millions)Contract amount1 year or
longerones

Marketprice

Appraisal
profit and
loss

(28)

(28)

(28)

(28)

Over-the-counter transactions
Long position in credit
derivative transactions

4,346

–

Total

At the end of fiscal 2013

(Yen in millions)Contract amount1 year or
longer
ones

Type

–

–

–

14,561

14,520(40)Over-the-counter transactions

–

–

–

205,990

205,928(62)

Long position in credit
derivative transactions

517,808

525,161

7,353

OthersTotal(328)(1,687)

Type–

Subtotal–921

Difference–

Foreignsecurities

1,644
30,272

1,941–

Subtotal

Division

Difference–

OthersSecurities whosecarrying amount
does not exceed
their cost

(Yen in millions)   US dollar   Euro

Type

StocksForeignsecurities

Appraisal
profit andloss

Marketprice

1 year or
longer
ones

Type

Total

–

–

Appraisal
profit andloss

Market
price

–

–

–

–

Note:
Calculating a market price: Based on values presented by relationshipfinancial institution.

(iv) Available-for-sale securities sold at the term
(Yen in millions)Fiscal 201250

Fiscal 2013

Type

Sales
price

Total ofprofit on
sale

Total ofloss on
sale

Sales
price

Total ofprofit on
sale

Total ofloss on
sale

Total

100

–

0

7,541

100

2

(ii) Derivative transactions to which hedge accounting
is applied
Not applicable

Japan Earthquake Reinsurance Co., Ltd. Annual Report 2014