Content

Consolidated ordinary revenues increased 0.5% year on year, to ¥1,041.3 billion. Thisis because ordinary revenues from the life insurance business were flat year on year,
while ordinary revenues from the non-life insurance and the banking businesses
increased.
Consolidated ordinary profit decreased 12.4% year on year, to ¥50.3 billion.
By business segment, ordinary profit from the life insurance and the banking
businesses decreased, whereas ordinary profit from the non-life insurance businessincreased.
Profit attributable to owners of the parent was down 11.8% year on year,to ¥33.7 billion due to the decrease in consolidated ordinary profit.

Sony Life’s ordinary revenues were essentially flat year on year,to ¥938.9 billion, because an increase in investment income was offset
by a decrease in insurance premium revenues led by a decline in sales of single
premium products.
Ordinary profit decreased 7.8% year on year, to ¥45.1 billion, due mainly to lower
gains on sale of securities in the general account. The provision of policy
reserves for minimum guarantees for variable life insurance declined owing to alower acquisition of new policies and the improvement of the market conditions.
This positive impact on ordinary profit, however, was partially offset by adeterioration in net gains/losses on derivative transactions to hedge marketrelated risks.
Net income decreased 5.0% year on year, to ¥31.2 billion.

(Left-hand graph)
New policy amount for the total of individual life insurance and individual
annuities decreased 13.6% year on year, to ¥3,499.7 billion.
This decrease was due to lower sales of variable life insurance, despite favorable
sales of U.S. dollar-denominated insurance and term life insurance.
The number of new policies decreased 22.5% year on year, to 388 thousandpolicies.
(Right-hand graph)
Annualized premiums from new policies decreased 17.7% year on year,
to ¥54.1 billion, due to lower sales of variable life insurance, despite favorable
sales of term life insurance and U.S. dollar-denominated insurance.
Of which, the figure for the third-sector products was down 7.0% year on year, to¥11.2 billion.

These graphs show Sony Life’s product portfolio of annualized premiums fromnew policies by product.
(Right-hand graph)
Sony Life has been reinforcing its ability to offer U.S. dollar-denominated wholelife insurance and term life insurance under the low interest rate environment. In
FY16.3Q (3M), U.S. dollar-denominated whole life insurance accounts for 12%
and protection-type products including term life insurance accounts for 57% oftotal product portfolio, showing a steady change in product portfolio with a focus
on protection-type products.

Sony Life’s policy amount in force which reflects new policy amount and lapse
and surrender amount, is shown here.
(Left-hand graph)
Policy amount in force for the total of individual life insurance and individual
annuities increased 4.2% year on year, to ¥44.6 trillion.
The number of policies in force increased 3.9% year on year, to 7.25 million
polices.
(Right-hand graph)
Annualized premiums from insurance in force increased 4.6% year on year, to¥807.3 billion. Of which, the figure for the third-sector products was up 3.8% yearon year, to ¥185.1 billion.

The lapse and surrender rate decreased 0.42 percentage points year on year, to3.18%.

(Left-hand graph)
Income from insurance premiums decreased 6.5% year on year,to ¥705.4 billion led by a decline in sales of single premium products.
(Right-hand graph)
Interest income and dividends increased 4.3% year on year,to ¥110.0 billion, reflecting an expansion in investment assets along with thebusiness expansion.

(Left-hand graph)Core profit rose 87.5% year on year, to ¥65.8 billion due mainly to a decrease in theprovision of policy reserves for minimum guarantees for variable life insurance
reflecting a lower acquisition of new policies and the improvement of the market
conditions.
(Right-hand graph)
Ordinary profit decreased 7.8% year on year, to ¥45.1 billion, due to lower gains onsale of securities in the general account and a deterioration in net gains/losses onderivative transactions to hedge market-related risks,
despite a significant increase in core profit.

The number of Lifeplanner sales employees as of December 31, 2016,
was down 21 from September 30, 2016.
Since Sony Life does not hire new Lifeplanner sales employees in December, inaddition to promoting Lifeplanner sales employees to unit manager in October, thenumber of Lifeplanner sales employees as of the end of December tends to belower than that as of the end of September every year.
However, the number of Lifeplanner sales employees steadily increased,up 354 from a year earlier, to 4,730, reflecting Sony Life’s initiative to promoteskilled personnel to unit managers.

Here is a breakdown of Sony Life’s general account assets as ofDecember 31, 2016, compared with those as of March 31, 2016.

These graphs show Sony Life’s new purchases of securities in the generalaccount assets.
(Right-hand graph)
Based on ALM perspective, Sony Life has promoted diversification of investment
assets while investing in assets that match the liability characteristics.
In FY16.3Q (9M), Sony Life invested 40.3% in Japanese government bonds(JGBs), 31.0% in Japanese corporate bonds and 28.3% in foreign bonds,
showing that investment in securities other than JGBs has increased.

As of December 31, 2016, Sony Life’s non-consolidated solvency margin ratiowas 2,731.1%, up 8.3 percentage points from March 31, 2016, remaining at ahigh level.

Sony Assurance’s ordinary revenues increased 4.4% year on year,to ¥75.9 billion, owing mainly to an increase in net premiums written primarily formainstay automobile insurance.
Ordinary profit increased 30.6% year on year, to ¥4.9 billion due mainly tothe increase in ordinary revenues, including gains on sale of securities, anda lower expense ratio.
Net income increased 70.5% year on year, to ¥3.6 billion.

(Left-hand graph)
The number of policies in force for the total of automobile insurance and medicaland cancer insurance increased 3.8% year on year, to 1.84 million policies.
Net premiums written increased 3.5% year on year, to ¥74.2 billion, due to stablesales of automobile insurance.
(Right-hand graph)
Ordinary profit increased year on year as described before.
Adjusted ordinary profit is a profit indicator on a managerial accounting basis. The
figure is calculated by adjusting the amount of provision (reversal) for catastrophe
reserve to ordinary profit.
Adjusted ordinary profit was ¥7.3 billion.

(Left-hand graph)
The Earned/Incurred (E.I.) loss ratio was down 0.2 percentage points year onyear, to 62.9%, due to a decrease in provision for reserve for outstanding losses
in automobile insurance.
The net expense ratio declined 0.3 percentage points year on year, to 26.3%, due
to a proper control on overall operating expenses.
Consequently, the sum of the E.I. loss ratio and the net expense ratio was down
0.5 percentage points year on year, to 89.2%.
(Right-hand graph)
The net loss ratio was up 0.4 percentage points year on year, to 57.2%.
This is different from the E.I. loss ratio, which reflects an increase or a decreasein provision for reserve for outstanding losses.
The combined ratio (the sum of the net loss ratio and the net expense ratio) wasup 0.1 percentage points year on year, to 83.5%.

As of December 31, 2016, Sony Assurance’s non-consolidated solvency margin
ratio was 771.1%, up 77.6 percentage points from March 31, 2016,
showing that Sony Assurance has maintained a financial soundness.Sony Bank’s consolidated ordinary revenues increased 1.3% year on year,to ¥28.5 billion, due to an increase in interest income on loans in line witha favorably growing balance of mortgage loans and an increase in ordinary
revenues from Sony Payment Services (Sony Bank’s 57% owned subsidiary),
partially offset by a decrease in interest and dividend income on securities.
Consolidated ordinary profit decreased 29.1% year on year, to ¥3.3 billion,
due to the lower level of interest rates, an increase in initial expenses led bya higher execution of mortgage loans, and decreased volumes of foreign currency
and investment trust transactions of customers.
On a non-consolidated basis, Sony Bank’s ordinary revenues were flat and ordinary
profit decreased year on year.
Gross operating profit decreased 4.2% year on year, to ¥15.5 billion as the same
reasons as described in the consolidated results.
Net operating profit decreased 33.3% year on year, to ¥3.0 billion due toan increase in general and administrative expenses.

We break down gross operating profit on a managerial accounting basis tofacilitate an understanding of operational sources of revenue and profits.
(Left-hand table)
Net interest income increased 7.8% year on year, to ¥15.0 billion, led by
the growing balance of mortgage loans and an increase in investment income on
foreign currencies.
Net fees and commissions was negative ¥0.6 billion while that for FY15.3Q waspositive ¥0.7 billion. This is because of an increase in initial expenses led by ahigher execution of mortgage loans, and a lower fees and commissions
associated with decreased volumes of foreign currency and investment trusttransactions of customers.
Consequently, gross operating profit on a core profit basis decreased 2.3% year
on year, to ¥14.4 billion. Net operating profit on a core profit basis also decreased
37.6% year on year, to ¥1.9 billion.
(Right-hand graph)
The yield on investment was 1.20%.
The yield on financing was 0.26%.
Consequently, interest spread was 0.94%.

(Left-hand graph)
As of December 31, 2016, deposits (the sum of Japanese yen and foreign
currency deposits) amounted to ¥2,117.3 billion, up ¥193.8 billion fromMarch 31, 2016. Of this amount, the yen deposit balance amounted to ¥1,772.1billion, up ¥184.2 billion from March 31, 2016, due to an increase in yen time
deposit reflecting the special interest offering, as well as a rise in yen ordinary
deposits converted from foreign currencies backed by yen depreciation.
The yen-denominated balance of foreign currency deposits amounted to ¥345.1
billion, up ¥9.6 billion from March 31, 2016 due to a favorable exchange rate,even after the negative impact of the conversion from foreign currencies into yen
led by yen depreciation.
(Right-hand graph)
The loan balance as of December 31, 2016 expanded ¥160.2 billion from March31, 2016, to ¥1,504.4 billion, reflecting higher demand for refinancing mortgageloans.

(Left-hand graph)
As of December 31, 2016, the balance of securities amounted to¥631.1 billion, up ¥10.1 billion from March 31, 2016.
Sony Bank continuously invests in highly rated bonds.
(Right-hand graph)
As of December 31, 2016, Sony Bank’s non-consolidated capital adequacy ratio(domestic criteria) was 9.00%, down 0.89 percentage points fromMarch 31, 2016. Sony bank has maintained a financial soundness.

Forecast of consolidated financial results for FY16 is unchanged from theforecast announced on April 28, 2016 since the FY16.3Q (9M) results werein line with our initial forecast.

Sony Life’s MCEV as of December 31, 2016 increased ¥53.4 billion from
September 30, 2016, to ¥1,282.7 billion due mainly to a rise in interest rates.
MCEV as of December 31, 2016 decreased ¥47.4 billion from March 31, 2016
due mainly to a decrease in lapse and surrender rate and a rise in inflation ratedespite a rise in interest rates.
New business value for FY16.3Q (3M) was ¥10.2 billion.
New business margin for FY16.3Q (3M) was 4.0%, up 2.5 percentage points fromFY16.2Q (3M), due mainly to a rise in interest rates and an effect ofpremium revisions on whole life insurance in October 2016.

The risk amount based on economic value as of December 31, 2016 amounted to¥992.9 billion, down ¥30.1 billion from September 30, 2016,
due mainly to a decrease in insurance risk reflecting a rise in interest rates.
ESR as of December 31, 2016 was 134%, up 10 percentage points from
September 30, 2016 due mainly to a rise in interest rates and new business value
accumulated during FY16.3Q.
Going forward, Sony Life will continue to improve ESR levels by accumulating
new business value through reinforcing its sales capabilities
as well as ensuring profitability.
＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊In FY16, Sony Life has worked expeditiously to discontinue sales of saving-type
products and revise insurance premiums on whole life insurance,
aiming to improve profitability in response to the plunge in interest rates.
(Please see page 37)
Moreover, Sony Life plans to revise insurance premiums on Long-term level
premium plan term life insurance (with disability benefit), Cancer hospitalization
insurance and other products.
Sony Life will continue to work on stable growth in corporate value while
controlling profitability on an economic value basis.