【 Presentation Materials 】

Results of Sony Life’s
Market Consistent Embedded Value(MCEV)
as of March 31
31, 2013

Sony Financial Holdings Inc.
May 27,27 2013
1

Contents
 Highlight of MCEV

P.3

 Compliancepwith MCEV PrinciplespP.4

 MCEV Results

P.5

 Reconciliation Analysis from MCEV at the End of the Prior Year

P.9

 SensitivitySi i i Analysis
A l i

P.15

 Appendix

P.18■Opinion of outside specialist
Sony Life requested Milliman, Inc., an external actuarial consulting firm with expert knowledge in the area of MCEV valuations, to review the methodology,
assumptions and calculations and obtained an opinion from Milliman, Inc.
Please refer to the press release (“Disclosure of Market Consistent Embedded Value as of March 31, 2013”) for details.

Disclaimers:
This presentation material contains statements concerning the current plans, expectations, strategies and beliefs of the Sony Financial Group. Anystatements contained herein that pertain to future operating performance and that are not historic facts are forward-looking statements. Forward-looking
statements may include—but are not limited to—words such as “believe,” “anticipate,” “plan,” “strategy,” “expect,” “forecast,” “predict,” and “possibility”
that describe future operating activities, business performance, events or conditions. Forward-looking statements, whether spoken or written, are basedon judgments
j dt maded byb th
the managementt off theth SonyS
FinancialFi
i lG
Group, b
based
d on iinformation
fti ththatt iis currently
tl available
il bl tto itit. A
As such,h theseth
fforwardd
looking statements are subject to various risks and uncertainties, and actual business results may vary substantially from the forecasts expressed or
implied in forward-looking statements. Consequently, investors are cautioned not to place undue reliance on forward-looking statements. The SonyFinancial Group disclaims any obligation to revise forward-looking statements in light of new information, future events or other findings. The
information contained in this presentation does not constitute or form part of any offer for sale or subscription of or solicitation or invitation of any offer tobuyy or subscribe for any
y securities,, nor shall it or anyy partp of it form the basis of or be relied on in connection with anyy contract or commitment
whatsoever.

2

Highlight of MCEV(Billions of yen)

2012.3.31
MCEV

2013.3.31

Change1,041.5

1,064.7

+23.2
23.2

Adjusted net worth

409.2

770.8

+361.7

Value of existing business

632.4

293.9

(338.5)

Of which, new business value

65.2

41.6

(23.6)

 MCEV steadily increased through Sony Life’s efforts to increase policy amount in force and reduce a negative
impact of lower interest rates with its ALM initiatives. This is because an increase in adjusted net worth led by a
rise
i in
i pricei off ultralong-term
lt l
t
JGB h
JGBs
held
ld forf ALM purpose, was enoughh tot offset
ff t a decreasedin
i valuel off existingi tibusiness resulting from lower interest rates in the ultralong term.
 New business value and new business margin* were ¥41.6 billion and 3.5% as of March 31, 2013, down comparedwith ¥65.2 billion and 6.4% as of March 31, 2012, due mainly to lower interest rates in the ultralong term.
* New business margin equals new business value divided by present value of premium income
income.

2012.3.31
The risk amount based on economic value

551.5(Billions of yen)

2013.3.31
661.3

Change+109.8 The risk amount based on economic value increased due to business expansion and lower interest rates in theultralong term, however, it was fully controlled within a low level of MCEV in terms of solvency.
Note1: The risk amount based on economic value refers to the total amount of Sony Life’s risks, comprehensively examined and including
insurance risk and market-related
market related risk
risk.
Note2: The solvency risk capital on an economic value basis is calibrated at VaR (99.5%) over one year and based on the internal model, which is asimilar but modified model based on the EU Solvency II (QIS5) standard method.

3Compliance with MCEV Principles
 Sony Life has calculated its MCEV in accordance with the calculation methodologies andassumptions in the MCEV Principles. Notable points regarding compliance with the MCEV
Principles are as follows: The reference rate used in the calculations has been defined as the Japanese Government Bond

(JGB) nominal spot rate curve rather than the swap rate curve as stipulated in the MCEV principles.
 The calculated value of MCEV is the value for Sony Life only, and not the consolidated value ofSony Financial Holdings Inc.
 Group MCEV, as prescribed in the MCEV Principles, is not considered, as the calculation is forSonyy LifeSoe ono a standalonesta da o e basbasis.
s With respect to Sony Life’s subsidiary and its equity-method affiliates, Sony Life has notevaluated their life insurance business but reflected the following values in the calculation ofadjusted net worth:

AEGON Sony Life Insurance Co
Co., Ltd
Ltd. is valued at net asset value minus intangible fixed assets and Insurance
Business Law Article 113 deferred assets, multiplied by the participation rate Other companies are valued at book value under Japanese GAAP
 None of the calculated values of MCEV are presented separately by segment of subsidiary or byaffiliated company.
 Sony Life has calculated adjusted net worth based on Japanese GAAP, not on International
Financial Reporting Standards (IFRS).

4MCEV Results((Breakdown of Adjustedj
Net Worth (1)( ))(Billions of yen)2012 3 31 2013.3.31
2012.3.31
2013 3 31

ChangeAdjusted net worth

409.2

770.8

+361.7

Total net assets

264.8

342.3

+77.5

R
Reserveffor pricei flfluctuations
t ti

25.3

32.3

+6.9

Contingency reserve

55.3

59.6

+4.2

Reserve for possible loan losses

0.0

0.0

(0.0)

Unrealized gains or losses on held-to-maturity
held to maturity securities

155 9
155.9

551 7
551.7

+395 9+395.9Unrealized gains or losses on land and buildings

11.5

19.4

+7.9

Unfunded pension liabilities

(4.9)

(5.0)

(0.1)

Intangible fixed assets(24 3)(24.3)(26 1)(26.1)

(1 8)
(1.8)

Tax effect equivalent of above seven items(66.8)(193.8)(127.1)

Valuation gain or loss on subsidiaries and affiliated companies*

(7.8)

(9.6)

(1.8)

*Valuation gain or loss on subsidiaries and affiliated companies included mainly values of AEGON Sony Life in the calculation of adjusted net worth.

5

MCEV Results((Breakdown of Adjustedj
Net Worth (2)( ))(Billions of yen)

2012.3.31
Adjusted net worth

2013.3.31

Change

409.2

770.8

+361.7

Free surplus

382.9

418.5

+35.7

Required capital

26.3

352.3

+326.0 Sony Life set its required capital as the larger of the amount of capital required for the current solvency

margin ratio of 200% or the amount of capital to cover risks based on the internal model. The latter isllargeras off th
the endd off MMarchh 20132013.
 The large increase in required capital at the end of the current fiscal year is due to an increase in theeconomic value of technical provisions that mainly resulted from the decline in interest rates.
 Free surplus as of the end of March 2013 was fully secured as a result of lengthening asset duration to

mitigate interest rate risk.
 The solvency risk capital on an economic value basis as of the end of March 2013 was ¥661.3 billion(after tax). The effective tax rate used to adjust to the after-tax basis is 30.78%.
Note 1: The amount of capital to cover risks based on the internal model is defined as the total amount of technical provision and solvency risk capitalon an economic value basis in excess of statutory policy reserves (excluding contingency reserves).
Note 2: The solvency risk capital on an economic value basis is calibrated at VaR (99.5%) over one year and based on the internal model, which is asimilar but modified model based on the EU Solvency II (QIS5) standard method.

6

MCEV Results (Value of Existing Business)
Breakdown of value ofexisting business(Billions of yen)

2012.3.31

2013.3.31

ChangeValue of existing business

632.4

293.9

(338.5)A) Present value ofcertainty-equivalentprofit

907.7

633.2

(274.6)B)) Time value of optionspand guarantees(84 5)(84.5)(111 2)(111.2)(26 7)(26.7)C) Frictional costs(5.0)(13.9)(8.9)

D) Cost of nonhedgeable risks(185.9)(214.2)(28.3)(Billions of yen)

633.2

(111.2) (13.9)
293.9(214.2)

A

B

C

D

2013.3.31
Value ofexisting
business

Note: QIS5 of the EU Solvency II has set a cost of capital rate at 6%6%, which is used
for the cost of capital calculation. On the other hand, the CRO (Chief Risk
Officer) Forum comprised of CROs from leading insurance companies in
Europe proposed that 2.5% to 4.5% would be the appropriate level based on
several trial calculations. Following the philosophy of the CRO Forum’s
approach, Sony Life has decided to use 2.5% for the cost of capital rateconsistent with the MCEV framework considering Japanese long-termlong term stock
risk premiums, the beta of Sony Financial Holdings Inc. and the anticipatedimpact of the equity risk exposure of Sony Life on the beta of Sony Financial
Holdings Inc., which is a hedgeable risk.

7

MCEV Results (New Business Value)(Billions of yen)

Breakdown of
new business value

2012.3.31

2013.3.31

Change65.2

41.6(23.6)E) Present value ofcertainty-equivalentprofit91.5

74.1(17.5)F) Time value of
options andguarantees(8.3)(12.4)(4.1)

G) Frictional costs

(0.2)

(0.2)

+0.0

H) Cost of nonhedgeable risks(17.8)(19.9)(2.1)

New business value(Billions of yen)

74.1

(12.4)

(0.2)
41 6
41.6
(19.9)

New business margin

New business value

E

F

G

H

2013.3.31
New business
value

Present value of premiumincomeNew business margin(Billions of yen)

2012.3.31

2013.3.31

Change
g

65.2

41.6

(23.6)

1,013.7

1,187.5+173.86.4%

3.5%(2.9pt)8

Reconciliation Analysis from MCEV
at the End of the Prior Year (1)( )(Billions of yen)

Opening MCEV (MCEV as of March 31, 2012)

409.2

Value ofexisting
business
632.4

Opening adjustments(11.7)－(11.7)

Adjusted opening MCEV

397.5

632.4

1,029.9

Adjusted
net worth

(1)

MCEV
1,041.5

(2)

N
New
b
business
i
value
l

－

41 6
41.6

41 6
41.6

(3)

Expected existing business contribution (risk-free rate)

0.4

12.3

12.7

(4)

Expected existing business contribution (in excess of risk free rate)

0.8

5.8

6.6

((5))

Transfers from value of existingg business and requiredqcapitalp
to free surplusp((15.0))15.0－

Of which, on new business(37.5)

37.5

－

(6)

Experience variances

3.0

2.1

5.1

(7)

Assumption changes

－

48.6

48.6

(8)

Other operating variance

－

4.1

4.1

(9)

Operating MCEV earnings (2)～(8) total(10.8)

129.5

118.8

384.1

(458.5)(74.4)

－

(9 5)
(9.5)

(9 5)
(9.5)

Total MCEV earnings

373.3(338.5)

34.8(12) Closing adjustments

－

－

－

770.8

293.9

1,064.7(10) Economic variances(11) Other non-operating variance

Closing MCEV (MCEV as of March 31, 2013)9

Reconciliation Analysis from MCEV
at the End of the Prior Year (2)( )(Billions of yen)

+48.6

＜2012 3 31＞＜2012.3.31＞
+41.6

+6.6

+12.7

+4.1

＜2013.3.31＞+5.1

1,064.7(74.4)

1,041.5(9.5)

1,029.9(11.7)

Operating MCEV earnings
MCEV Adjustments Adjusted
MCEV
as of
as of
March 31,
March 31,
2012
2012

FY12
New
businessvalue

Expected
existingest gbusiness
contribution(risk-free rate)

ExpectedExperience
existing
variancesbusiness
contribution(in excess ofrisk-free rate）

Assumptionchanges

Other

Economic Adjustments
variances

MCEV
as of
March 31,2013

10

Reconciliation Analysis from MCEV
at the End of the Prior Year ((3))(Billions of yen)

Opening MCEV (MCEV as of March 31, 2012)

409.2

Value ofexisting
i tibusiness
632.4

Opening adjustments(11.7)－(11.7)

Adjusted opening MCEV

397.5

632.4

1,029.9

－

41.6

41.6

Adjusted
net worth(1)(2)

New business value

MCEV
1,041.5(1) Opening adjustments


These adjustments reflect changes in dividends paid to shareholders and the effect of the transfer of Sony Life Insurance(Philippines) Corporation.

(2) New business valueThis figure reflects increases resulting from the acquisition of new business during the fiscal year ended March 31, 2013.

11

Reconciliation Analysis from MCEV
at the End of the Prior Year (4)( )(Billions of yen)(Continue)(3)

Expected existing business contribution (risk-free rate)

0.4

Value ofexisting
business
12.3(4)

Expected existing business contribution (in excess of risk free rate)

0.8

5.8

6.6

(5)

Transfers from value of existing business and required capital to free surplus(15.0)

15.0－

Of which, on new business(37.5)

37.5－

Adjusted
net worth

MCEV
12.7

(3) Expected existing business contribution (risk-free rate)This figure includes the release of the portion for the fiscal year ended March 31, 2013 of the time value of options and guarantees
and the cost of non-hedgeable risks
risks, in addition to the release of the expected existing business contributions at a risk-free rate fromthe opening MCEV (as of March 31, 2012).

(4) Expected existing business contribution (in excess of risk-free rate)This figure reflects the profit expected in excess of the risk-free rate generated by holding assets such as ordinary corporate bonds,
loans, stocks and real estate.

The expected yield used for the fiscal year ended March 31, 2013 was 0.310%, which was developed by reflecting its view of themarket environment and annual investment plans for the year against the asset balance at the end of the previous fiscal year.

(5) Transfer from value of existing business and required capital to free surplus
This fiThi
figure ttracks
k changeshiin ffree surplus
l ththatt emerge over theth course off a fiscalfil year due
d tot transferringt
f i profit
fit earnedd during
d i thethfiscal year from existing business value to free surplus and to changes in required capital.



The transfer of profit includes both the transfer of profit that was anticipated during the current fiscal year under the MCEV calculation
performed at the prior year-end and the transfer of profit that was calculated as a component of new business value for the current
fiscal year.

The value of MCEV itself does not change as a result of this transfer as the transfer merely constitutes an internal shift among MCEV
components.

12

Reconciliation Analysis from MCEV
at the End of the Prior Year ((5))(Billions of yen)(Continue)

Adjusted net
worth

Value of existing
business

MCEV

(6)

Experience variances

3.0

2.1

5.1

(7)

Assumption changes

－

48.6

48.6

(8)

Other operating variance

－

4.1

4.1

(6) Experience variances

These variances show the impact on MCEV of the actual versus assumed differences in non-economic expected profit for the fiscal
year ended March 31, 2013 under the MCEV calculation as of March 31, 2012, and of the differences between actual policies infforce
as off March
M h 31,31 20132013, andd ththose ththatt were projected
j t d tto b
be iin fforce on M
March
h 31
31, 2012 using
i persistency
i tassumptions.
tiThese variances reflect the impact of one-time expenses incurred during the fiscal year ended March 31, 2013, if applicable.

(7) Assumption changes
This figure indicates the impact of changes in the assumptions
assumptions, mainly on mortality and morbidity rates
rates, lapse and surrender rates
and operating expense rates.



The changes in mortality and morbidity rates increased the value of existing business.

(8) Other operating varianceThis represents the impact of improvements and corrections of the model used in calculating MCEV, including the change in thereference of inflation rate from Consumer Price Index (CPI)-indexed Japanese government bonds to inflation swaps as well as the
improvement of the model to calculate the value of existing business.

13

Reconciliation Analysis from MCEV
at the End of the Prior Year ((6))(Continue)(Billions of yen)

Adjusted
net worth

Value of existing
business

MCEV

(9)

O
Operatingti MCEV earningsi(2)(2)～(8)(8) ttotalt l(10 8)(10.8)

129 5
129.5

118 8
118.8

(10)

Economic variances

384.1(458.5)(74.4)(11)

Other non-operating variance

－

(9.5)

(9.5)

Total MCEV earnings
g

373.3

((338.5))

34.8

Closing adjustments

－

－

－

770.8

293.9

1,064.7(12)

Closing MCEV (MCEV as of March 31, 2013)(9) Operating MCEV earnings ・・・・ (2)～(8) total( ) Economic variances(10)

These variances show the impact of actual to assumed differences in economic assumptions, such as market interest rates and implied
volatilities that were reflected in the market environment when calculating MCEV as of March 31, 2012 on future values, and the impact of
the actual to assumed difference in expected asset investment income that were assumed would be realized during the year ended
March 31, 2013 under MCEV as of March 31, 2012.



The major reasons for decreases in the value of existing business include an update of economic scenarios due to the change in the market
environment such as a decrease in JGB yields, an increase in inflation swap rates and a change in the implied volatilities, accounting for adecrease in the present value of certainty-equivalent profit by ¥429.0 billion, as well as increases in the time value of options and guarantees,
the frictional cost and the cost of non-hedgeable risks by ¥(7.9) billion, ¥13.6 billion and ¥23.7 billion, respectively.

The major reason for the increase in the adjusted net worth was the increase in prices of Japanese government bonds caused by the decline
in interest rates.

Overall MCEV decreased by ¥47.9 billion mainly as a result of the decline in JGB yields and by ¥26.5 billion as a result of the increase in the
expenses tied to the increase in inflation swap rates.

(11) Other non operating varianceThis figure shows the effect of the increase in the consumption tax rate(12) Closing adjustments
No items were included in closing adjustments.

14

Sensitivity Analysis<2013. 3.31>(Billions of yen)<2012. 3.31>(Billions of yen)

Change inAmountRate of
Change1 064 7
1,064.7－－

1 041 5
1,041.5－－

100bp decrease

829.6(235.1)

(22%)

912.7

(128.8)(12%)

100bp increase

1,121.4

56.7

5%

1,073.4

31.8

3%

Swap rates

1,231.8

167.1

16%

972.2

(69.3)(7%)

Stock / Real estate market value

10% decrease

1,047.7(16.9)(2%)

1,024.7(16.8)(2%)

Stock / Real estate implied
volatility

25% increase

1,053.0(11.6)(1%)

1,033.7

(7.8)

(1%)

Interest swaption
Impliedpvolatility
y

25% increase

1,049.9(14.8)(1%)

1,030.3(11.3)(1%)

Maintenance expenses

10% decrease

1,082.3

17.6

2%

1,056.0

14.5

1%Lapse and surrender rates

x 0.9

1,070.1

5.5

1%

1,065.6

24.1

2%

Death protection products x 0.95

1,104.7

40.0

4%1,084.1

42.6

4%

Third-sector and annuity products x 0.95

1,059.8

(4.9)

(0%)

1,038.1

(3.5)

(0%)

Morbidity rates

x 0.95

1,100.2

35.5

3%

1,074.3

32.8

3%Required capital

Regulatory minimum

1,074.2

9.5

1%1,041.6

0.1

0%Assumption
Base

Change in Assumption

MCEV

No change

Interest rates

MCEV

Change inAmountRate of
ChangeMortalityy rates■Changes in adjusted net worth and value of existing business within the amount of change in MCEV are shown in the table below.
Assumption
Interest rates

Change in Assumption(Billions of yen)

Change in Amount (adjusted net worth)

Change in Amount (value of existing business)

100bp decrease+867.6(1,102.7)

100bp increase

Stock / Real estate market value

10% decrease(691.8)(691
8)(11.5)+748.5748.5(5.5)

Stock / Real estate implied volatility

25% increase(0.4)(11.3)

15

Sensitivity of New Business Value<2013.3.31>
Assumption

Change in Assumption(Billions of yen)
New Business
Value

Change inAmountRate of
Change<2012.3.31>
New Business
Value(Billions of yen)

Change inAmountRate of Change

41.6

－

－

65.2

－

－

100bp decrease(54.0)(95.6)(230%)

5.9(59.3)

(91%)

100bp
p increase

94.9

53.3

128%

99.1

34.0

52%

Swap rates

54.7

13.1

32%

58.2

(6.9)

(11%)

10% decrease

41.5

(0.0)

(0%)

65.2

(0.0)

(0%)

41.0

(0.6)

(1%)

64.8

(0.3)

(1%)

39.5

(2.0)

(5%)

63.6

(1.6)

(2%)

10% decrease

43.3

1.8

4%

66.6

1.4

2%

x 0.9

45.5

3.9

9%

70.9

5.7

9%

Death protection products
x 0.95
0 95

45.1

3.6

9%

68 3
68.3

31
3.1

5%

Third sector and annuity
products x 0.95

41.3

(0.3)

(1%)

64.9

(0.2)

(0%)

Morbidity rates

x 0.95

43.9

2.4

6%

67.6

2.4

4%

R
Requiredi d capital
it lR
Regulatory
l tminimum
i i

41 6
41.6

00
0.0

0%

65 2
65.2

00
0.0

0%

Base

Interest rates

Stock / Real estatemarket value

No change

Stock / Real estate
implied volatility

25% increase

Interest swaption
Implied volatility

25% increase

Maintenanceexpenses
Lapse and surrender
rates

Mortality rates

16Interest Rates Sensitivity and Others<Interest rates sensibility>This sensitivity represents the impact of an immediate parallel shift of the Japanese and foreign
government bond yield curves as of the end of March 2013, and the impact if the swap rates were usedinstead of Japanese government bond yields.



Adjusted net worth would change as the market value of bonds and other assets held were to change,
while this is not applicablepp
to the case if the swap
p rates were used. At the same time,, the value ofexisting business would also change as interest rates, the discount rate, yields of new bonds to bepurchased in the future as the existing bonds mature, and the investment return on stocks, real estate,
and other assets were to change.

The sensitivity scenarios were made so that the parameters related to interest rate volatility were equal
to those derived for the base case. Only the parameters related to the interest rate term structure werealtered when scenarios were developed using the interest rate model. The floor for downward changes
in interest rates was set at 0%.

<Other>

Frictional costs and the cost of non-hedgeable risks do not change in the sensitivity tests, with the
exception of frictional costs, which are changed in terms of required capital.



Values of subsidiaries and affiliated companies are not changed except for stock market value
sensitivity, where the stock value of subsidiaries and affiliated companies are altered.



The impact of changing more than one assumption at a time is not congruent with the sum of impacts
for each assumption.

17

Appendix

18

Assumptions (1)Assumptions are described in the press release on and after P15. Of the assumptions, a part of economic assumptions are shown below.

<Risk-free rate*>
JGB yields

Swap rates

Term

2012.3.31

2013.3.31

Term

2012.3.31

2013.3.31

1 year

0.11%

0.06%

1 year

0.34%

0.24%

5 year

0.32%

0.13%

5 year

0.49%

0.30%

10 year

0.99%
%

0.55%
%

10 y
year

1 04%
1.04%

0 69%
0.69%

20 year

1.76%

1.40%

20 year

1.75%

1.47%

30 year

1.95%

1.54%

30 year

1.91%

1.71%

40 year

2 11%
2.11%

1 64%
1.64%

40 year

2 00%
2.00%

1 84%
1.84%

*The JGB yields are used as a risk-free rate.

19

Assumptions (2)Assumptions are described in the press release on and after P15. Of the assumptions, consumption tax rate and inflation rate in “Other
assumptions” are shown below.

< Consumption tax rate and Inflation rate > “The“Th Bill tto A
Amend
d th
the C
Consumption
ti T
Tax L
Law ffor R
Reforming
f
i T
Tax S
Systemt
tto S
Secure R
Revenue tto F
Funddthe Cost of Social Security” was promulgated on August 22, 2012, which increases the consumption
tax rate subject to the economic condition. To reflect this, the future expenses increased assuming
the increase in consumption tax rate to 8.0% at April 1, 2014 and 10.0% at October 1, 2015.
 Inflation rates were set by referring to inflation swap rates and removing the effect of the increase in

the consumption tax rate.

 MCEV as of March 31, 2013 decreased ¥9.5 billion due to the assumed increase in consumption tax

rate and decreased ¥26.5 billion due to the assumed increase in inflation rate, which excludes theeffect of the assumed increase in consumption tax rate. If the inflation rate, excluding the effect ofth assumed
thed iincrease iin consumption
ti ttax rate,
t h
had
db
been sett att 0%0%, MCEV would
ld havehiincreaseddbby¥39.7 billion.

20

Year on Year Comparison of JGB Yields(%)

2.52013 3 31
2013.3.31
2012.3.31

2

1.5

1

0.5

0

(Data Source: Bloomberg)

21

Method of Measuring Risk Amount
Based on Economic Value ((1))
 Market-related Risk
S
Sony
Lif
Life

(R f
(Reference)) EU Solvency
S l
II (QIS5)

Interest rate up 1.54x–18.26x (differs each year)
Interest rate down 0.08x–0.65x but no lower
than 1%

Interest rate up 1.25x–1.70xInterest rate down 0.25x–0.73x but no lower
than 1%Equity risk

Listed equities 45% decline
Unlisted equities 55%
Other securities 70%

Global 30%
Others 40% (Note 2)

Real estate risk

Actual real estate 25%
REIT 45%

Credit risk

Credit risk = (market value) x (risk coefficient for each credit
rating) x duration
Note that durations have caps and floors, depending on credit
ratings.
(Example)
Rating A: Risk coefficient (1.4%), cap (23), floor (1)Same as on the left

Currency risk

30% downside fluctuation

25% downside fluctuation

Interest rate risk
Fluctuations in net asset
value based on economic
value
al e in response to theshocks in the right columns.
The same applies below.

Real estate 25%

Note 1: Principal items as of March 31, 2013
Note 2: Standard risk coefficients are global: 39%/other: 49%. Symmetric adjustment (an adjustment of ±10% of the average value of the stock price index during a defined period
in the past) is applied; as of the QIS5 trial introduction (December 31, 2009), these were 30%/40%.

22

Method of Measuring Risk Amount
Based on Economic Value ((2))
 Insurance Risk
Sony Life(Reference) EU Solvency II (QIS5)

Mortality risk

Mortality rate increases by 15% for each year
elapsedLongevity risk

Mortality rate decreases by 20% for each year Same as on the left
elapsed

Lapse risk

The largest amount of these*;・Lapse rate increases by 50% for each year
elapsed・Lapse rate decreases by 50% for each year
elapsed・30% of policies on which surrender value isin excess of best estimate liabilityy are
immediately surrendered

Same as on the left

The largest amount of these;
・Increase by 50% in the assumed rates oflapsation for Life module, 20% for Healthmodule・Decrease by 50% in the assumed rates oflapsation for Life module, 20% for Healthmodule・30%
30% of policies (70% for group annuities,etc.) on which surrender value is in excess
of best estimate liability are immediately
surrendered

Expense risk

Operatingpg expensespincrease by
y 10% for eachyear elapsed
Same as on the left
Rate of inflation rises by 1%

Disabilityy risk

Rate of occurrence increases by 35% in thefirst fiscal yyear, risingg by
y 25% for each yyear
thereafter

Rate of occurrence increases by 35% in thefirst fiscal yyear, risingg by
y 25% for each yyear
thereafter. Recovery rate decreases by 20%.

* At Sony Life, lapse risk is calculated by computing and adding together the largest amount of three options for each insurance policy.

23

Stable Growth in MCEV
Build asset portfolio which tolerates the impact of lower interest rates via
ALM initiatives, and achieve stable growth in MCEV through the steadyacquisitionacqus t o ofo newe policies
po c es
Change from 2012.3.31 to 2013.3.31
Impact of a change ofinterest rates, etc.

Change from 2008.3.31 to 2009.3.31

816.5

1,041.5,(Billions of yen)

Impact of a change ofinterest rates, etc.

(Billions of yen)

(41.3)

+54.3

+10 2
+10.2

1,064.7(426.2)(410.0)+384.9(334.6)(75.4)(38bp)(45bp)

1.88%
1.89%

2012 3 31
2012.3.31

MCEV

＋23.2

MCEV
30YR
40YR

1.95%
2.11%

O
Others

09 3 31
09.3.31

NNew
businessvalue , etc.

(415.6)A
Adjusted
net
worth
w

V
Value
of
exxistingbuusiness

2.26%
2.34%

400.9

Others

30YR
40YR

New businessvalue, etc.

MCEV

Adjusted net
worth

Value ofexisting
business

08 3 3108.3.31+34.4 (40.1)

13 3 3113.3.31
MCEV(41bp)(47bp)

1.54%
1.64%

Note 1: “Impact of a change of interest rates, etc.” is calculated as the total amount of “Economic variances” and “Expected existing business contribution (in excess of risk free rate)”of the “Reconciliation Analysis from MCEV at the End of the Prior Year”.
The future increase in the operating expenses tied to the increase in the inflation rate is excluded from the above calculations.
Note 2: “New business value, etc.” is calculated as the total amount of “New business value” and “Expected existing business contribution (in excess of risk free rate)”.

24

Sony Life’s Asset Management Policy
No change in asset management policy, even after monetary easing～Investing
Investing most of new money in ultralong-term
ultralong term JGBs
JGBs～

Sony Life’s Basic Policy on Risk Preferences

Aims for stable and sustainable business growth in corporate value by
aggressively increasing policies in force and underwriting insurance risk, while
maintaining sufficient solvency based on economic value.



Prioritizes investment in assets that match insurance liabilityy characteristics to
reduce interest rate risk pertaining to liabilities of insurance policies with longterm maturities, with the aim of securing corporate value of life insurance
business.

Impact of and Response to Monetary Easing

Maintains a sufficient level of solvency based on economic value, though interest
rate sensitivityy has risen and the amount of interest rate risk has increased due
to a decline in ultralong-term interest rates.

Continues to invest in ultralong-term JGBs while monitoring market trends, withthe aim of reducing interest rate risk along with an acquisition of new policies
though interest rates are expected to be persistently low.
25

Contact:
Corporate Communications & Investor Relations Department
Sony Financial Holdings Inc.
TEL：+81-3-5785-1074

26