Presentation Material

Consolidated Financial Results
for the Three Months Ended June 30, 2018
andSony Lifeʼs MCEV as of June 30, 2018

Sony Financial Holdings Inc.
August 9, 2018
Sony Financial Holdings Inc.

All Rights Reserved

Content
 Consolidated Operating Results for the Three Months Ended June 30, 2018
(FY18.1Q)

P.3

 Forecast of Consolidated Financial Results for the Fiscal Year Ending
March 31, 2019 (FY18)

P.25

 Sony Lifeʼs MCEV and ESR as of June 30, 2018

P.27

 Appendix

P.30

Disclaimers:
This presentation material contains statements concerning the current plans, expectations, strategies and beliefs of the SonyFinancial Group. Any statements contained herein that are not historical facts are forward-looking statements or pro forma
information. Forward-looking statements may include̶but are not limited to̶words such as “believe,” “anticipate,” “plan,”“strategy,” “expect,” “assume,” “forecast,” “predict,” “propose,” “intend” and “possibility” that describe future operating activities,business performance, events or conditions. Forward-looking statements, whether spoken or written, may also be included in othermaterials released to the public. These forward-looking statements and pro forma information are based on assumptions, decisions
and judgments made by the management of Sony Financial Group companies, and are based on information that is currently
available to them. As such, they are subject to various risks and uncertainties, and actual business results may vary substantiallyfrom the forecasts expressed or implied in forward-looking statements. Consequently, investors are cautioned not to place undue
reliance on forward-looking statements. Sony Financial Group companies are under no obligation to revise forward-looking
statements or pro forma information in light of new information, future events or other findings. The information contained in thispresentation does not constitute or form part of any offer for sale or subscription of or solicitation or invitation of any offer to buy or
subscribe to any securities, nor shall it or any part of it form the basis of or be relied on in connection with any contract orcommitment whatsoever in Japan or abroad.
*Unless otherwise indicated, in these materials figures less than the indicated unit have been truncated, while ratios and percentage changes have been rounded.
Also, a “–” is used where percentage changes exceed 1,000% and in cases where one or both comparisons are negative.
* “Lifeplanner” is a registered trademark of Sony Life.

Sony Financial Holdings Inc.

All Rights Reserved2Consolidated Operating Results
for the Three Months Ended June 30, 2018
(FY18.1Q)

Sony Financial Holdings Inc.

All Rights Reserved

3

Highlights of Consolidated Operating Performance (1)＜Consolidated＞
Ordinary revenues
Ordinary profit

364.9+15.3%

Life insurance
business

420.6

Non-life
insurancebusiness
Bankingbusiness
Intersegment
adjustments*

28.8+51.7%

Consolidated

18.9(JPY bn)

FY17.1Q

FY18.1Q(JPY bn)

FY17.1Q

FY18.1Q

Ordinary revenues

327.9

379.4

+51.4

+15.7%

Ordinary profit

15.1

22.9

+7.7

+51.4%

ChangeOrdinary revenues

28.0

29.7

+1.6

+5.9%

Ordinary profit

2.3

3.8

+1.4

+60.0%

Ordinary revenues

9.7

10.7

+1.0

+10.8%+31.0%

1.7

2.2

+0.5

Ordinary revenues

(0.7)

0.7

+1.5

－

Ordinary profit

(0.2)

(0.1)

+0.0

－

Ordinary profit

Ordinary revenues

364.9

420.6

+55.6

+15.3%

Ordinary profit

18.9

28.8

+9.8

+51.7%

Profit attributableto owners of theparent

12.5

20.0

+7.5

+59.8%* “Intersegment adjustments” is mainly from SFH and the nursing care business.
Proud Life Inc., a company of nursing care business, has been included in the scope of
consolidation from FY17.2Q.
(Note) Comprehensive income : FY17.1Q: ¥13.9 billion, FY18.1Q: ¥15.7 billion(JPY bn)
Consolidated

Net assets
Total assets

Sony Financial Holdings Inc.

Mar. 18

Jun. 18

Change from
Mar. 18

625.4

615.0

(10.3)(1.7%)

12,401.4

12,772.0+370.5+3.0%

All Rights Reserved

Ordinary revenues increased 15.3% year on year, to ¥420.6 billion,
owing to increases in ordinary revenues from all the businesses:
life insurance, non-life insurance and banking businesses.
Ordinary profit increased 51.7% year on year, to ¥28.8 billion,
owing to increases in ordinary profit from all the businesses
as described above.
Profit attributable to owners of the parent was up 59.8% year on year,to ¥20.0 billion, owing to the increase in ordinary profit.

4

Highlights of Consolidated Operating Performance(2)

 Life Insurance Business︓Ordinary revenues grew year-on-year due to higher
income from insurance premiums due mainly to a steady rise in the policy amount inforce. Ordinary profit increased year on year due to a recording of gains on sale ofsecurities in the general account and to an increase in profit on higher policies in force.
 Non-life Insurance Business︓Ordinary revenues expanded year on year, owing to anincrease in net premiums written for mainstay automobile insurance. Ordinary profit
increased year on year due mainly to declines in the expense ratio and loss ratio.
 Banking Business︓Both ordinary revenues and ordinary profit rose year on year due
to increases in interest income on investment securities and on loans in line with agrowing balance of mortgage loans.
 Ordinary revenues increased 15.3% year on year, to ¥420.6 billion, owing to increases
in ordinary revenues from all the businesses: life insurance, non-life insurance andbanking businesses. Ordinary profit increased 51.7% year on year, to ¥28.8 billion,
owing to increases in ordinary profit from all the businesses mentioned above. Profit
attributable to owners of the parent was up 59.8% year on year, to ¥20.0 billion,
owing to the increase in ordinary profit.

Sony Financial Holdings Inc.

All Rights Reserved

5Highlights of Operating Performance:
Sony Life (Non-consolidated)
Ordinary revenues

Ordinary profit(JPY bn)

FY17.1Q

FY18.1Q

327.9

379.3

+51.4

+15.7%

Income from insurance premiums

241.1

269.5

+28.3

+11.8%

Investment income

83.1

106.9

+23.8

+28.7%

Interest income and dividends

38.8

40.4

+1.6

+4.1%

Gains on sale of securities

0.0

3.2

+3.2

―

Foreign exchange gains, net

0.0

12.2

+12.2

―

Gains on separate accounts, net

43.0

49.8

+6.8

+15.8%+14.1%

Ordinary revenues

327.9+15.7%

379.3

23.2+47.2%

312.1

356.0

+43.9

Insurance claims and other payments

96.7

100.8

+4.0

+4.2%

Provision for policy reserves and others

165.5

202.0

+36.4

+22.0%

8.9

9.3

+0.3

+4.5%

7.0

7.8

+0.8

+12.0%

Ordinary expenses

Investment expenses

15.8

Losses on derivatives, net
Operating expenses(JPY bn)
FY17.1Q

FY18.1Q◆ Both ordinary revenues and ordinary profit increased
year on year.
◆ Income from insurance premiums increased owing to asteady rise in the policy amount in force.
◆ Investment income increased due mainly to an increase ingains on foreign exchange in the general account.
◆ Ordinary profit increased year on year due to a recording ofgains on sale of securities in the general account and to anincrease in profit on higher policies in force.

Change

33.2

35.4

+2.2

+6.7%

Ordinary profit

15.8

23.2

+7.4

+47.2%Net income

10.1

16.3

+6.2

+61.7%

Mar. 18

Jun. 18

Change from Mar. 18

Securities

8,765.9

8,982.9+216.9

Policy reserves

8,566.0

8,767.1+201.0

+2.3%

492.7

479.3

(13.4)(2.7%)(JPY bn)

Net assets
Net unrealized gains on other securities
Total assets
Separate account assets

Sony Financial Holdings Inc.

+2.5%

124.9

121.3

(3.5)

(2.8%)

9,567.6

9,802.6+234.9+2.5%

1,128.8

1,195.7

+66.9

+5.9%

All Rights ReservedSony Lifeʼs ordinary revenues increased 15.7% year on year,to ¥379.3 billion, due to an increase of income from insurance premiums
due mainly to a steady rise in the policy amount in force.
Ordinary profit increased 47.2% year on year, to ¥23.2 billion,
due to a recording of gains on sale of securities in the general accountand to an increase in profit on higher policies in force.
Net income increased 61.7% year on year, to ¥16.3 billion.

6

Overview of Operating Performance:
Sony Life (Non-consolidated)(JPY bn)

FY17.1Q

FY18.1Q

Change＜Reasons for changes＞◆ Increased due to favorable
sales of family income insurance.

1,115.8

1,674.7+50.1%

Lapse and surrender amount

451.5

896.4

+98.5%

Lapse and surrender rate

1.00%

1.90%

+0.90pt

Annualized premiums from new policies

16.1

18.7

+15.7%Of which, third-sector products

3.1

3.3

+8.4%

New policy amount(JPY bn)

FY17.1Q

FY18.1Q

ChangeGains from investment, net (General account)

31.1

47.7

+53.7%

Core profit

24.9

26.7

+7.4%

Positive spread

4.5

4.2

(6.7%)(JPY bn)

Policy amount in force
Annualized premiums from insurance in force
Of which, third-sector products

Non-consolidated solvency margin ratio

ChangeFrom
Mar. 18

Mar. 18

Jun. 18

47,253.4

47,870.8

+1.3%

848.8

856.3

+0.9%

191.8

193.5

+0.9%

2,624.3%

2,648.6%+24.3pt◆ Increased due to cancellationsof existing policies from certain
customers taking out newpolicies such as family income
insurance. This shift resulted
from premium revisions, owing
to the revision of the standard
mortality tables.
◆ Increased due to favorable salesof U.S. dollar-denominatedinsurance and individual
annuities.
◆ Increased due to an increase ofpolicy amount in force.

Note: Figures for new policy amount, lapse and surrender amount, lapse and surrender rate, annualized premiums
from new policies, policy amount in force, and annualized premiums from insurance in force are calculated as
the total of individual life insurance and individual annuities. The lapse and surrender rate shows the ratio
derived by dividing the amount of lapses and surrenders, not adjusted for policy amount decreases, increases,
and reinstatements, by the policy amount in force at the beginning of the fiscal year.

Sony Financial Holdings Inc.

All Rights Reserved

7

Operating Performance :Sony Life (Non-consolidated) (1)
Number and Amount of New Policies

Annualized Premiums from New Policies(Individual Life Insurance + Individual Annuities)
New policy amount（JPY tn）

1.5（Thousands+21.5%

117

1.26

Annualized premiums from new policies

Number of new policies

149

2.0

(Individual Life Insurance + Individual Annuities)

142
142

of policies)（JPY bn）

150

25

20.5

1.67

20

16.1

100

1.11

1.0

Of which, third-sector

18.7
18.7

+15.7%

15+50.1%

10
50

0.5

5

4.1
0.0

0
FY16.1Q

FY17.1Q

FY18.1Q

Sony Financial Holdings Inc.

+8.4%

3.1

3.3

FY17.1Q

FY18.1Q

0
FY16.1Q

All Rights Reserved(Left-hand graph)
New policy amount for the total of individual life insurance andindividual annuities increased 50.1% year on year, to ¥1,674.7 billion,
due to favorable sales of family income insurance.
The number of new policies increased 21.5% year on year,
to 142 thousand policies.
(Right-hand graph)
Annualized premiums from new policies increased 15.7% year on year,to ¥18.7 billion, due to favorable sales of U.S. dollar-denominatedinsurance and individual annuities.
Of which, the figure for third-sector products increased 8.4% year
on year, to ¥3.3 billion.

8

Operating Performance :Sony Life (Non-consolidated) (2)
Number and Amount of Policies in Force

Annualized Premiums from Insurance in Force(Individual Life Insurance + Individual Annuities)
Policy amount in force（JPY tn）

60

45

45.7

7.56
+4.6%

Annualized premiums from insurance in force

Number of policies in force（Millionsof policies) （JPY bn）

+3.7%

7.35

(Individual Life Insurance + Individual Annuities)

+0.8%

7.62
7.62

8

6

600

30

4

400

15

2

200

0

0
Mar. 18

+0.9%

+3.6%

47.8
47.8

47.2
+1.3%

Jun. 17

856.3
856.3

848.8

826.9

800

Of which, third-sector

Jun. 18

Sony Financial Holdings Inc.

+2.6%

188.7

191.8

Jun. 17Mar. 18

+0.9%

193.5

0
Jun. 18

All Rights ReservedSony Lifeʼs policy amount in force which reflects new policy amount andlapse and surrender amount, is shown here.
(Left-hand graph)
Policy amount in force for the total of individual life insurance andindividual annuities increased 1.3% from March 31, 2018,
to ¥47.8 trillion.
The number of policies in force increased 0.8% from March 31, 2018,
to ¥7.62 million polices.
(Right-hand graph)
Annualized premiums from insurance in force increased 0.9% fromMarch 31, 2018, to ¥856.3 billion.
Of which, the figure for third-sector products was up 0.9% fromMarch 31, 2018, to ¥193.5 billion.

9

Operating Performance :Sony Life (Non-consolidated) (3)Lapse and Surrender Rate*(Individual Life Insurance + Individual Annuities)
Lapse and surrender rate (Annual)

Lapse and surrender rate (1Q)

（%）

8

6

4.97
4.27

4

2

+0.90pt

1.11

1.00

FY16

FY17

1.90
1.90

0
FY18

*The lapse and surrender rate shows the ratio derived by dividing the amount oflapses and surrenders, not adjusted for policy amount decreases, increases, andreinstatements, by the policy amount in force at the beginning of the fiscal year.

Sony Financial Holdings Inc.

All Rights Reserved

10

Lapse and surrender rate was up 0.90 percentage points
year on year, to 1.90%.
The increase in the lapse and surrender rate was mainly due to certain
customers cancelling existing policies, taking out new policies such as
family income insurance as premiums were revised in line with revisionsof the standard mortality tables.

Operating Performance :Sony Life (Non-consolidated) (4)Income from Insurance Premiums

Interest Income and Dividends(JPY bn)(JPY bn)

300

269.5
269.5
241.1

241.1

50

40

+11.8%

200

35.9

40.4
40.4

38.8
+4.1%

30

20
100
10

0

0
FY16.1Q

FY17.1Q

FY18.1Q

Sony Financial Holdings Inc.

FY16.1Q

All Rights Reserved

FY17.1Q

FY18.1Q

11(Left-hand graph)
Income from insurance premiums increased 11.8% year on year,
amounting to ¥269.5 billion, due to a steady rise in the policy amount inforce.
(Right-hand graph)
Interest income and dividends increased 4.1% year on year,to ¥40.4 billion, reflecting an expansion in investment assets along withbusiness expansion.

Operating Performance :Sony Life (Non-consolidated) (5)Core Profit

Ordinary Profit(JPY bn)(JPY bn)

30

26.7
26.7

24.9

25

+7.4%

23.2
23.2

23.3

20

15.8

20
15

14.0

+47.2%

1010

5
0
FY16.1Q(Reference) Impact on core profit(JPY bn)
Positive spread

FY17.1Q
FY16.1Q

3.2

0

FY18.1Q
FY17.1Q

4.5

FY16.1Q

FY18.1Q

FY17.1Q

FY18.1Q(Reference) Main differences from core profit(JPY bn)

FY16.1Q

FY17.1Q

FY18.1Q

4.2

Capital gains (losses) excluding gains
or losses on hedges (*)

6.1

(3.0)

2.6

4.9

(4.2)

(3.9)

(1.7)

(1.7)

(2.1)

Provision of policy reserves forminimum guarantees for variable
life insurance (*)

(8.9)

(0.1)

(0.8)

Gains (losses) on hedges of variable
life insurance

Others

19.7

20.6

23.3

Provision of contingency reserve (*)*“Provision of policy reserves for minimum guarantees for variable life insurance” and “Provision of contingency reserve” are described as negative amount.
Capital gains (losses) exclude gains or losses on hedges of variable life insurance.

Sony Financial Holdings Inc.

All Rights Reserved(Left-hand graph)Core profit rose 7.4% year on year, to ¥26.7 billion, due mainly to
an increase in profit on higher policies in force.
(Right-hand graph)
Ordinary profit increased 47.2% year on year, to ¥23.2 billion,
due to an increase of core profit, in addition to a recording of gains onsale of securities in the general account.

12

Operating Performance :Sony Life (Non-consolidated) (6)
Number of Lifeplanner Sales Employees
+193

5,142

(Number)

5,000

4,933

4,942

4,974

Mar. 17

Jun. 17

Sep. 17

4,968

Dec. 17

(7)

5,135
5,135

4,500

4,000

3,500

3,000
0

Sony Financial Holdings Inc.

Mar. 18

Jun. 18

All Rights Reserved

13

The number of Lifeplanner sales employees as of June 30, 2018,
was 5,135, down 7 from March 31, 2018 and up 193 from June 30, 2017.
Sony Life decided not to hire new Lifeplanner sales employees in June,in addition to December. Therefore, the number of Lifeplanner sales
employees as of June 30, 2018 decreased from March 31, 2018.

Operating Performance :Sony Life (Non-consolidated) (7)Breakdown of General Account Assets
Mar. 18<Asset management review>Jun. 18

Amount%Amount%Japanese bonds(including JGBs)

7,281.1

86.3%

7,383.9

85.8%

Japanese stocks

38.4

0.5%

34.6

0.4%

Foreign bonds

366.5

4.3%

423.1

4.9%

Foreign stocks

30.3

0.4%

28.1

0.3%

Money held in trust

270.5

3.2%

268.4

3.1%

(JPY bn)

Policy loans

189.4

2.2%

190.8

2.2%

Real estate*

92.3

1.1%

91.9

1.1%

Cash and call loans

40.8

0.5%

49.8

0.6%

Others

129.1

1.5%

135.8

1.6%

8,438.8

100.0%

8,606.9

100.0%

Total*Real estate is the total of land, buildings, and construction in progress.

Sony Financial Holdings Inc.

We have continued to accumulate
ultralong-term bonds to match the liability
characteristics of insurance policies withlong-term maturities with the aim of
reducing interest rate risk.

<Bond duration>
Mar. 17 21.3 years
Mar. 18 21.4 years
Jun. 18 21.4 years■ Investment in the money held in trust is
mainly into Japanese bonds.
■ The holding ratio on the real status ofJapanese bonds including those invested
in money held in trust in the generalaccount : Jun. 18・・・88.9%（Mar. 18・・・89.5%）

All Rights Reserved

14

Here is a breakdown of Sony Lifeʼs general account assets as of June 30,
2018, compared with that as of March 31, 2018.

Highlights of Operating Performance:
Sony Assurance
Ordinary revenues

Ordinary profit
FY17.1Q

FY18.1Q

28.0

29.7

+1.6

Underwriting income

27.5

29.0

+1.4

+5.4%

Investment income

0.4

0.6

+0.1

+37.2%

25.6

25.9

+0.2

+0.9%

Underwriting expenses

19.0

19.3

+0.3

+1.6%

Operating general andadministrative
expenses

6.6

6.5

(0.0)

(1.1%)

Ordinary profit

2.3

3.8

+1.4

+60.0%Net income

1.6

2.7

+1.0

+61.4%(JPY bn)

28.0

+5.9%

29.7

Ordinary revenues

3.8

Ordinary expenses+60.0%

2.3(JPY bn)

FY17.1Q

FY18.1Q◆Both ordinary revenues and ordinary profit
increased year on year.
◆Ordinary revenues expanded owing to anincrease in net premium written for mainstay
automobile insurance.
◆Ordinary profit increased due mainly to a
decline in the expense ratio and loss ratio.

(JPY bn)

Underwriting reserves

Mar. 18
117.0

Jun. 18

Change+5.9%

Change from
Mar. 18

120.8

+3.7

+3.2%

Net assets

33.1

33.1

(0.0)

(0.1%)

Total assets

204.3

205.5

+1.1

+0.6%

Sony Financial Holdings Inc.

All Rights Reserved

15Sony Assuranceʼs ordinary revenues expanded 5.9% year on year,to ¥29.7 billion, owing to an increase in net premium written for mainstay
automobile insurance.
Ordinary profit increased 60.0% year on year, to ¥3.8 billion, due mainly
to a decline in the expense ratio and loss ratio.
Net income increased 61.4% year on year, to ¥2.7 billion.

Overview of Operating Performance:
Sony Assurance(JPY bn)
Direct premiums written

FY17.1Q
27.2

FY18.1Q<Reasons for changes>

Change

28.8

+5.7%
+5.4%

Net premiums written

27.5

29.0

Net losses paid

12.1

13.0

+7.4%

Underwriting profit

1.9

3.1

+65.9%Net loss ratio

50.8%

51.8%

+1.0ptNet expense ratio

25.9%

24.3%

(1.6pt)Combined ratio

76.7%

76.1%

(0.6pt)◆ Increased in its mainstay
automobile insurance.

◆ Declined due mainly to a decreasein system-related expenses.

Notes:Net loss ratio = (Net losses paid + Loss adjustment expenses ) / Net premiums written
Net expense ratio = Expenses related to underwriting / Net premiums written

FY17.1Q

FY18.1Q◆ Declined due to lower insurance
payments per claim which include
provisions for reserve foroutstanding losses and claims.

ChangeE. I. loss ratio

58.6%

56.9%

(1.7pt)E. I. loss ratio +Net expense ratio

84.5%

81.2%

(3.3pt)Note: E.I. loss ratio = (Net losses paid + Provision for reserve for outstanding losses + Loss adjustment expenses) / Earned
premiums [Earthquake insurance and compulsory automobile liability insurance are excluded from the above calculation.]Mar. 18

Jun. 18

Number of policies in force

2.07mn2.10mnNon-consolidated
solvency margin ratio

782.1%

828.4%

Change from
Mar. 18+0.03mn+1.5%+46.3pt

Note: The number of policies in force is the total of automobile insurance and medical insurance policies.

Sony Financial Holdings Inc.

All Rights Reserved16Sony Assuranceʼs Underwriting Performanceby Type of Policy
Direct Premiums Written

Net Premiums Written

FY17.1Q

FY18.1Q

Change

Fire

52

54

+4.2%

Marine－－－Personal accident

2,178

2,163

(0.7%)

Voluntary
automobile

25,02926,583

+6.2%

－

－

－

27,26028,802+5.7%(JPY ｍn)

Compulsory
automobile liability
Total

Net losses paid
(JPY ｍn)

Fire
MarinePersonal accident
Voluntary
automobile
Compulsory
automobile liability
Total(JPY ｍn)

Fire

FY17.1Q

FY18.1Q

Change44+16.5%(0)－－

Personal accident

2,229

2,221

(0.4%)

Voluntary
automobile

24,96926,524

+6.2%

352

300

(14.8%)

27,556

29,051+5.4%

MarineCompulsory
automobile liability
Total*Medical insurance is included in personal accident.

FY17.1Q

FY18.1Q

Change01+62.7%

2

1(26.8%)

645

691

+7.1%

11,21912,052

+7.4%

311

329

+5.5%

12,18013,076+7.4%

Sony Financial Holdings Inc.

All Rights Reserved

17

Operating Performance:
Sony Assurance (1)Net Premiums Written andNumber of Policies in Force
Voluntary automobile insurance
Others

Personal accident insurance

Number of policies in force(JPY bn)

1.81
30

1.95

Ordinary Profit andAdjusted Ordinary Profit+7.6%(ｍn ofpolicies)

+5.4%

4.7
4.7

5
+45.5%

3.6

4

1.5

20

Adjusted ordinary profit

Ordinary profit

2

29.0

27.5
25.0

2.1
2.10

(JPY bn)

3.8

3.2

3

2

+60.0%

2.8
2.3

1
1
10

0.5

0
FY16.1Q

FY17.1Q

FY18.1Q*Adjusted ordinary profit = Ordinary profit + Provision for catastrophe reserve

00
FY16.1Q

FY17.1Q

FY18.1Q

The number of policies in force is the total of automobile insurance andmedical insurance policies.
Most of personal accident insurance is medical insurance.

(Reference) Provision for catastrophe reserve(JPY bn)

Provision for catastrophe reserve

FY16.1Q

0.7

FY17.1Q

FY18.1Q

0.8

0.9*Provision for catastrophe reserve is described as positive amount.

Sony Financial Holdings Inc.

All Rights Reserved

18(Left-hand graph)
The number of policies in force for the total of automobile insurance andmedical insurance increased 7.6% year on year, to 2.10 million policies.
Net premiums written increased 5.4% year on year, to ¥29.0 billion
due to stable sales of automobile insurance.
(Right-hand graph)
Ordinary profit increased year on year as described before.
Adjusted ordinary profit is an 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 ¥4.7 billion.

Operating Performance:
Sony Assurance (2)Earned/Incurred Loss Ratio +Net Expense Ratio
Earned/Incurred loss ratio(Reference) Combined Ratio＜参考＞(Net Loss Ratio+ Net Expense Ratio)
Net loss ratio

Net expense ratio

（%）
100

Net expense ratio

（%）

90.6

100

89.2

85.2

84.5

80

85.8

81.2

84.4

80

(3.3pt)

80.3

76.1

76.7
(0.6pt)

60

62.3

60.7

59.0

60
58.6
(1.7pt)

56.9

40

57.5

55.9

54.1

50.8

+1.0pt

51.8

40

20

20

(1.6pt)

28.3

28.5

26.2

25.9

24.3

(1.6pt)

28.3

28.5

26.2

25.9

24.3

FY16

FY17

FY16.1Q

FY17.1Q

FY18.1Q

0

0
FY16
FY17
FY16.1Q
FY17.1Q
FY18.1Q
Notes:
Earned/Incurred loss ratio = (Net losses paid + Provision for reserve foroutstanding losses + Loss adjustment expenses) / Earned premiums[Earthquake insurance and compulsory automobile liability insurance are excluded
from the above calculation.]

Notes:Net loss ratio = (Net losses paid + Loss adjustment expenses) /Net premiums written
Net expense ratio = Expenses related to underwriting / Net premiums writtenSony Financial Holdings Inc.

All Rights Reserved

19(Left-hand graph)
The Earned/Incurred (E.I.) loss ratio was down 1.7 percentage points
year on year, to 56.9%, due to lower insurance payments per claim
which include provisions for reserve for outstanding losses and claims.
The net expense ratio was down 1.6 percentage points year on year,
to 24.3%, due to a decrease in system-related expenses.
Consequently, the sum of the E.I. loss ratio and the net expense ratio
was down 3.3 percentage points year on year, to 81.2%.
(Right-hand graph)
The net loss ratio was up 1.0 percentage points year on year, to 51.8%.
This is different from the E.I. loss ratio, which reflects an increase ora decrease in provision for reserve for outstanding losses.
The combined ratio (the sum of the net loss ratio and the net expense
ratio) was down 0.6 percentage points year on year,
to 76.1%.

Highlights of Operating Performance:
Sony Bank (Consolidated/Non-consolidated)＜Consolidated＞
Ordinary revenues
Ordinary profit

9.7<Consolidated>(JPY bn)+10.8%

10.7
10.7

FY17.1Q

FY18.1Q

Ordinary revenues

9.7

10.7

+1.0

Change+10.8%

Ordinary profit

1.7

2.2

+0.5

+30.9%

Profit attributable to ownersof the parent

1.1

1.4

+0.3

+30.7%<Non-consolidated>(JPY bn)+30.9%(JPY bn)2.2

1.7
FY17.1Q

FY18.1Q＜Consolidated＞◆Both ordinary revenues and ordinary profit rose year on year
due to increases in interest income on investment securities
and on loans in line with a growing balance of mortgage
loans.
＜Non-consolidated＞◆Both gross operating profit and net operating profit
increased.
・Net interest income increased due to increases in interest
income on investment securities and loans.
・Net fees and commissions decreased due mainly to higher
fees associated with mortgage loans.
・Net other operating income decreased due mainly to adecrease in gains on sales of bonds.

FY17.1Q

FY18.1Q

Ordinary revenues

8.8

9.7

+0.8

Gross operating profit

5.3

5.7

+0.4

+7.6%

Net interest income

4.9

5.5

+0.6

+13.6%Net fees and commissions

(0.7)

(0.8)

(0.1)

－

Net other operating income

1.1

1.0

(0.1)

(12.2%)

General and administrative
expenses

3.8

3.7

(0.0)

(2.0%)Net operating profit

1.5

1.9

+0.4

+27.5%

Ordinary profit

1.5

2.0

+0.4

+30.9%Net income

1.0

1.4

+0.3

+31.2%(JPY bn)

Mar. 18

Net assets

Total assets+9.9%

Change from
Mar. 18

85.7

84.2

(1.4)

(1.7%)

6.0

5.4

(0.6)

(10.1%)

2,635.0

2,761.8+126.8+4.8%

Net unrealized gains onother securities, net of taxes

Sony Financial Holdings Inc.

Jun. 18

ChangeAll Rights Reserved

20

On a consolidated basis, Sony Bankʼs ordinary revenues increased 10.8%
year on year, to ¥10.7 billion, due to increases in interest income on
investment securities and on loans in line with a growing balance ofmortgage loans.
On a consolidated basis, ordinary profit increased 30.9% year on year,to ¥2.2 billion, for the same reasons as ordinary revenues.
On a non-consolidated basis, Sony Bankʼs ordinary revenues and ordinary
profit increased year on year for the same reasons as in the consolidated
results.

Overview of Operating Performance:
Sony Bank (Non-consolidated) (1)<Reasons for changes>
Jun. 17Mar. 18

Jun. 18

Change from
Mar. 18

Customer assets

2,263.0

2,343.0

2,389.5

+46.4

+2.0%

Deposits

2,147.8

2,219.3

2,265.0

+45.7

+2.1%

Yen

1,794.3

1,814.7

1,863.6

+48.8

+2.7%

(JPY bn)

353.5

404.6

401.4

(3.1)

(0.8%)

Investment trusts

Foreign currencies

115.1

123.7

124.4

+0.6

+0.6%

Loans outstanding

1,552.0

1,596.3

1,620.1

+23.7

+1.5%

Mortgage loans

1,467.0

1,525.5

1,551.7

+26.1

+1.7%

Card loans

18.5

18.8

18.5

(0.3)

(1.8%)

Others

66.4

51.8

49.8

(2.0)

(4.0%)

9.37%

10.45%

10.42%

Non-consolidated Capital
adequacy ratio*2(domestic criteria)*1◆ Increased due mainly to anincrease in newly accumulated
funds via the increased numberof accounts, as well as aconversion from foreign
currencies backed by yen
depreciation.
◆ Decreased due to a conversion
and a transfer from foreign
ordinary deposits into yen
deposits led by yen depreciation.
◆ Rose due to a steady increase inmortgage loans.

(0.03pt)*1 Loans in others include corporate loans of ¥49.8 billion*2 Please refer to the graph of the non-consolidated capital adequacy ratio (domestic criteria) on page 24.

Sony Financial Holdings Inc.

All Rights Reserved

21

Overview of Operating Performance:
Sony Bank (Non-consolidated) (2)<Reference> On Managerial Accounting Basis(JPY bn)<Reference> Interest Spread

FY17.1Q

FY18.1Q(Managerial Accounting Basis)

Change

5.3

5.7

+0.4

+7.6%

Yield on investment

①

5.5

6.2

+0.6

+11.8%

Interest spreadNet fees and commissions*2 ②

(0.6)

(0.7)

(0.1)

Gross operating profit
Net interest income*1

― （%）

0.4

0.2

(0.1)

(28.9%)

Gross operating profit(core profit) (A)＝①＋②

4.9

5.4

+0.5

+10.7%

Operating expenses and other
Expenses
③

3.8

3.8

(0.0)

(0.3%)Net operating profit(core profit) ＝(A)－③

1.0

1.6

+0.5

+49.3%Net other operating income*3■Managerial accounting basis
The following adjustments are made to the figures on a financial account for profits andlosses more appropriately.
*1: Net interest income: Includes profits and losses associated with fund investment
recorded in net other operating income, including gains or losses from currency swap
transactions.
*2: Net fees and commissions: Includes profits and losses for customer dealings in foreign
currency transactions recorded in net other operating income.
*3: Net other operating income: After the above adjustments (*1 and *2), mainly consistsof profits and losses for bond and derivative dealing transactions.
■Core profit
Profits and losses exclude net other operating income, which includes those on bond andderivative dealing transactions, and stands for Sony Bankʼs basic profits.

1

Yield on financing

1.17

1.14
0.93

+0.00pt

0.93

0.5

0.22

0.23

FY17.1Q

FY18.1Q

0
Note: Interest spread=(Yield on investment)-(Yield on financing)Sony Financial Holdings Inc.

All Rights Reserved

22

We break down gross operating profit on a managerial accounting basis
to facilitate an understanding of operational sources of revenues andprofits.
(Left-hand table)
Net interest income increased 11.8% year on year, to ¥6.2 billion,
led by a growing balance of loans and investment securities.
Net fees and commissions was a loss of ¥0.7 billion, due mainly tohigher fees associated with mortgage loans.
Consequently, gross operating profit on a core profit basis increased
10.7% year on year, to ¥5.4 billion. Net operating profit on a core profit
basis increased 49.3% year on year, to ¥1.6 billion.
(Right-hand graph)
The yield on investment for FY18.1Q was 1.17%.
The yield on financing for FY18.1Q was 0.23%.
Consequently, interest spread for FY18.1Q was 0.93%.

Operating Performance:
Sony Bank (Non-consolidated) (1)
Deposits
Yen Deposits

Foreign currency deposits(JPY bn)

2,112.9
2,000

Loans

348.0

Mortgage loans

2,265.0

2,219.3
404.6

+45.7

401.4

Others(JPY bn)

1,539.6
1,500

87.1

1,620.1

1,596.3
70.7

68.3*

+23.7

1,500
1,000
1,000
1,764.9

1,814.7

1,452.4

1,863.6

1,525.5

1,551.7

Mar. 18

Jun. 18500
500

0Mar. 17Mar. 18

Jun. 180Mar. 17*Corporate loans of ¥49.8 billion. Card loans of ¥18.5 billion.

Sony Financial Holdings Inc.

All Rights Reserved

23(Left-hand graph)
As of June 30, 2018, deposits (the sum of Japanese yen and foreign
currency deposits) amounted to ¥2,265.0 billion, up ¥45.7 billion fromMarch 31, 2018.
Of this amount, the yen deposit balance amounted to ¥1,863.6 billion,up ¥48.8 billion from March 31, 2018, as yen ordinary deposits increased
due mainly to an increase in newly accumulated funds via the increased
number of accounts, as well as a conversion from foreign currencies
backed by yen depreciation.
The yen-denominated balance of foreign currency deposits amounted
to ¥401.4 billion, down ¥3.1 billion from March 31, 2018, reflecting
a conversion and a transfer from foreign ordinary deposits into yen
deposits led by yen depreciation.
(Right-hand graph)
The loan balance as of June 30, 2018 expanded ¥23.7 billion fromMarch 31, 2018, to ¥1,620.1 billion, due to a steady increase inmortgage loans.

Operating Performance:
Sony Bank (Non-consolidated) (2)Non-Consolidated Capital Adequacy Ratio

Balance of Securities by Credit Rating
AAA

AA

BBB

Others(Domestic Criteria)

A（%）(JPY bn)

674.2

631.2

+45.8

720.1

15

14.8

18.1
26.1

600

317.8

10

306.8

9.75

10.45

10.42
10.42
(0.03pt)

303.0
400
98.4

5

109.8
200

135.3

160.2

232.4

281.8

0
Mar. 17Mar. 18

Jun. 180Mar. 17Mar. 18

Jun. 18

Note: Calculated based on the standard FSA Notification No. 19 (2006), which
establishes standards based on Article 14-2 of the Banking Act of Japan for
determining the capital adequacy of a bank in light of the assets held by the bank.

Sony Financial Holdings Inc.

All Rights Reserved

24(Left-hand graph)
As of June 30, 2018, the balance of securities amounted to ¥720.1 billion,up ¥45.8 billion from March 31, 2018. Sony Bank continuously invests
in highly rated bonds.
(Right-hand graph)
As of June 30, 2018, Sony Bankʼs non-consolidated capital adequacy ratio(domestic criteria) was 10.42%, down 0.03 percentage points fromMarch 31, 2018. Sony Bank maintains financial soundness.

Forecast of Consolidated Financial
Results for FY18

Sony Financial Holdings Inc.

All Rights Reserved25Forecast of Consolidated Financial Results for FY18
Forecast of consolidated financial results for FY18 is unchanged from the forecast announced on April 27, 2018
（JPY bn）

FY17（Actual）

FY18（Forecast）

Changes

FY18.1Q（3M Actual）

Progress rate

1,503.6

1,578.0

+4.9%

420.6

26.7%

1,351.2

1,416.1

+4.8%

379.4

26.8%

Non-life insurance business

110.0

112.3

+2.0%

29.7

26.4%

Banking business

39.9

42.8

+7.2%

10.7

25.2%

66.8

83.0

+24.2%

28.8

34.7%
32.3%

Ordinary revenues
Life insurance business

Ordinary profit
Life insurance business

54.1

70.9

+30.9%

22.9

Non-life insurance business

6.5

6.5

(1.1%)

3.8

58.5%

Banking business

7.1

7.0

(2.0%)

2.2

31.9%

+6.0%

20.0

36.5%

Profit attributable to owners of the parent

51.8

55.0

<Segment information for ordinary revenues and ordinary profit>■Life insurance business
In FY18.1Q (3M), both ordinary revenues and ordinary profit exceeded our initial expectations. We maintain our full-year
forecasts, taking into consideration the business environment from FY18.2Q onward.
■Non-life insurance business
In FY18.1Q (3M), both ordinary revenues and ordinary profit exceeded our initial expectations. We maintain our full-year
forecasts, taking into consideration the trend on overall operating performance including natural disaster from FY18.2Q onward.
■Banking business
In FY18.1Q (3M), both ordinary revenues and ordinary profit exceeded our initial expectations. We maintain our full-year
forecasts, taking into consideration the business environment from FY18.2Q onward.
Sony Financial Holdings Inc.

All Rights Reserved

Forecast of consolidated financial results for FY18 is unchanged fromthe forecast announced on April 27, 2018.

26

Sony Lifeʼs MCEV and ESR
as of June 30, 2018

Some parts of the calculations of MCEV adopted simplified method for that as of June 30, 2018.
Please keep in mind that the validity of these calculations has not been verified by outside specialists.
*In this part, figures, ratios and percentages changes have been rounded.

Sony Financial Holdings Inc.

All Rights Reserved27Sony Lifeʼs MCEV(JPY bn)

Mar. 18

Jun. 18

Change from
Mar. 18

1,633.2

1,593.5(39.7)

Adjusted net worth

1,786.1

1,804.3+18.2

Value of existing business(152.9)(210.8)(57.9)MCEV(JPY bn)

FY17.4Q(3M)

FY18.1Q(3M)

New business value

21.2

21.9

New business margin

6.1%

7.1%

 Reasons for changes in MCEV
・MCEV as of June 30, 2018 decreased ¥39.7 billion from March 31, 2018, due mainly to a decline in interest rates inJapanese yen.
 New business value / New business margin
・New business value for FY18.1Q (3M) was ¥21.9 billion, due to a favorable acquisition of new policies.
・New business margin for FY18.1Q (3M) was up 1.0pt from FY17.4Q (3M), due mainly to the revision of insurance risk
measurement method and others.
Notes:

1. Calculated MCEV as of June 30, 2018 by using updated economic assumptions and lapse and surrender rate from March 31, 2018.
2. New business value and new business margin are calculated accumulating new business value for each month based on economic assumptions at the end of each month.
The figures for FY18 onward reflect the revision in the insurance risk measurement method and others which revised in March 31, 2018. For details of the revision in
the insurance risk measurement method and others, please refer to the Presentation Materials “Consolidated Financial Results for the Fiscal Year Ended March 31, 2018
and Sony Lifeʼs Preliminary MCEV as of March 31, 2018.”*Please refer to the appendix page 41-44 for trend on bond yields and yield curves.

Sony Financial Holdings Inc.

All Rights Reserved

28Sony Lifeʼs MCEV as of June 30, 2018 was ¥1,593.5 billion,
down ¥39.7 billion from March 31, 2018, due mainly to a decline ininterest rates in Japanese yen.
New business value for FY18.1Q (3M) was ¥21.9 billion,
due to a favorable acquisition of new policies.
New business margin for FY18.1Q (3M) was up 1.0 percentage points
from FY17.4Q (3M), to 7.1%, due mainly to the revision of insurance
risk measurement method and others in March 31, 2018.

Sony Lifeʼs ESR(JPY bn)
Insurance risk

Jun. 18

497.5

Market-related risk
Of which, interest rate risk
Operational risk
Counter party risk
Variance effect
The risk amount based on
economic value(JPY bn)
MCEV + Frictional costs
ESR

Mar. 18506.8

Change from
Mar. 18

+9.3

380.6

379.6

(1.0)

275.3

270.4

(5.0)

31.0

32.1

+1.1

2.6

2.6

+0.0

(182.0)(183.1)

(1.1)

729.7

738.0

+8.3

Mar. 18

Jun. 18

Change from
Mar. 18

1,655.8

1,619.2(36.6)

227%

219%

(8pt)

 The risk amount based on economic value as of June 30, 2018 amounted to ¥738.0 billion, up ¥8.3 billion fromMarch 31, 2018, due mainly to an increase in insurance risk associated with accumulated policies in force.
 ESR as of June 30, 2018 was 219%, down 8pt from March 31, 2018, due to an increase in risk amount based on
economic value and a decrease in MCEV.

Notes:
1. The risk amount based on economic value refers to the total amount of Sony Lifeʼs risks comprehensively examined by a market consistent approach, including
insurance risk and market-related risk and others.
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.
3. Risk amount excluding the variance effect within market-related risk.
4. ESR=(MCEV + Frictional costs) / Risk amount based on economic value.

Sony Financial Holdings Inc.

All Rights Reserved

The risk amount based on economic value as of June 30, 2018
amounted to ¥738.0 billion, up ¥8.3 billion form March 31, 2018,
due mainly to an increase in insurance risk associated withaccumulated policies in force.
ESR as of June 30, 2018 was 219%, down 8 percentage points
from March 31, 2018.
Consolidated adjusted ROE for FY18.1Q was 1.7%.
We expect the consolidated adjusted ROE for FY18 (12M) to bearound 6% as we have explained at Corporate Strategy Meeting
held on May 31, 2018. For details, please see page 45 and 46 on
appendix.

29

Appendix

Sony Financial Holdings Inc.

All Rights Reserved30Recent Topics
 Sony Bankʼs Mortgage Loans through Sony Life
Sony Life accounts for 13% of the amount of new mortgage loans for FY18.1Q (3M)
Sony Life accounts for 18% of the balance of mortgage loans as of June 30, 2018
*Sony Life started handling banking agency business in January 2008.

 Sony Assuranceʼs Automobile Insurance sold by Sony Life
Sony Life accounts for 5% of new automobile policies for FY18.1Q (3M)
*Sony Life started handling automobile insurance in May 2001.

 Highlights on and after FY18.1Q
2018-05-10

Sony Bank began using artificial intelligence (AI) to automate the preliminary screening for mortgage loans

2018-05-31

Sony Payment Services, together with seven taxi companies and Sony Corporation, established a joint venture“Minnano Taxi Corporation” (preparatory company)

2018-06-21

Sony Assurance began selling internet-only oversea travel insurance

2018-07-02

Sony Life commenced sale of new products: “Medical Benefit (comprehensive medical insurance (no surrender
value) 18, non-participating)” and “Medical Benefit Return (comprehensive medical insurance with special provision
for health refund benefit (no surrender value) 18, non-participating)”

2018-07-10

SFH established an investment subsidiary, Sony Financial Ventures Inc.

Sony Financial Holdings Inc.

All Rights Reserved31Sony Lifeʼs Product Portfolio
Annualized Premiums from New Policies by Product
FY17.1Q（3M）¥16.1billion

Yen whole
life 8%Endowment/
円建終⾝
U.S. dollar円建終⾝
Annuities
14%
denominated19%
27%
whole life 11%
Protection-type（term-life）
54％

FY17（12M）¥73.0 billion

Yen whole
life 6%

Endowment/
Annuities
29%
Protection-type（term-life）
47％

FY18.1Q（3M）¥18.7 billion
Yen wholeLife 3%

U.S. dollardenominatedwhole life 14%

Endowment/
Annuities
30%
U.S. dollardenominatedwhole life 13%

円建終⾝
14%

Protection-type（term-life）
45％

U.S. dollardenominatedsinglepremium
whole life
6%

Sony Financial Holdings Inc.

All Rights Reserved

U.S. dollardenominatedsingle-premium
whole life8%32

Sony Lifeʼs Asset Management
Purchase Securities in the General AccountFY18.1Q（3M）

FY17.1Q（3M）
Foreign
bonds
20.2%

JGBs
35.2%

Japanese
corporate
bonds
44.6%

FY17（12M）

Foreign
bonds
18.5%
社債
11.9%
Japanese
corporatebonds
25.9% 国債
85.3%

Japanese stocks
1.0%

Foreignbonds
26.2%
Japanese stocks
0.5%

JGBs
55.1%

JGBs
43.9%

社債
25.9%
Japanese
corporate
bonds
28.9%

Notes:
1. Japanese corporate bonds include FILP agency bonds and Government-guaranteed bonds.
2. The graphs above are asset allocation for the relevant period. Total invested amount for the relevant period as 100%.
(excluding, investment in subsidiaries and affiliates, and strategic investments)

Sony Financial Holdings Inc.

All Rights Reserved33Sony Life: Fair Value Information on Securities(General Account Assets)
Fair Value Information on Securities
Fair value information on securities with market value (except trading-purpose securities)（JPY bn）

Note: The above table includes money held in trust other than trading-purpose securities.

Valuation gains (losses) on trading-purpose securities

Sony Financial Holdings Inc.

All Rights Reserved（JPY bn）

34

Sony Lifeʼs Interest Income and Dividends (Details)（JPY mn）

FY17.1Q

FY18.1Q

ChangeJapanese bonds(including JGBs)

30,86532,010+3.7%

Japanese stocks

66

100

+51.4%

Foreign securities

3,434

4,053

+18.0%

7

277

―

Loans

1,627

1,685

+3.5%

Real estate

2,719

2,151

(20.9%)

96139+44.4%

38,81740,419+4.1%

Other securities

Others
Total

Sony Financial Holdings Inc.

All Rights Reserved35Sony Lifeʼs Capital Gains/Losses
FY17.1Q

FY18.1Q

7,441

16,850Losses on trading securities, net－

42

Income from trading securities, net

11－

Losses on sale of securities…(3)－34

Gains on sale of securities…(3)

0

3,265

（JPY mn）
Capital losses

Losses on derivatives, net（JPY mn）
Capital gains

FY17.1Q

FY18.1Q

124

15,552

7,015

7,855

Gains on derivatives, net－－

Losses on hedges of variable life insurance…(1)

4,247

3,901

Foreign exchange gains, net

49

12,287

Losses on hedges of available-for-sale securities…(2)

1,713

874

515

2,974

(242)

12,203

63

－

63

－

(7,316)(1,297)

Losses on dollar-denominated insurance…(4)Foreign exchange losses, net
Other capital losses
Losses on dollar-denominated insurance（the provision of policy reserves for foreign exchange
fluctuations）…(4)

－

－

426

8,917

－

8,917

Gains on dollar-denominated insurance(foreign exchange gains in separate
accounting）…(4)Other capital gains
Gains on dollar-denominated insurance（the reversal of policy reserves forforeign exchange fluctuations）

Net capital gains (losses)

Note: The figures of income (losses) from trading securities, net, gains (losses) on derivatives andforeign exchange gains (losses), net were recorded after offsetting gains and losses of each item.

FY17.1Q

FY18.1Q(1) Gains (Losses）on hedges of variable life insurance(4,247)(3,901)(2) Gains (losses）on hedges of available-for-salesecurities(1,713)

(874)

0

3,230

(694)

311

（JPY mn）(3) Gains (losses) on sale of securities(4) Gains (losses) on dollar-denominated insuranceSony Financial Holdings Inc.

All Rights Reserved36Sony Lifeʼs Quarterly Trend on New Policy Amount
Quarterly Trend on New Policy Amount(JPY bn)

2,000

1,842.4
1,674.7

1,500

1,457.7
1,260.0

1,189.0

1,050.7

1,115.8

1,114.8

FY17.1Q

FY17.2Q

1,214.7

1,000

500

0
FY16.1Q

FY16.2Q

FY16.3Q

FY16.4Q

Sony Financial Holdings Inc.

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FY17.3Q

FY17.4Q

FY18.1Q

37

Sony Lifeʼs Quarterly Trend on
Annualized Premiums from New Policies
Quarterly Trend on Annualized Premiums from New Policies
Of which, third-sector

Annualized premiums from new policies(JPY bn)

25

23.9

21.1

20.5
20

19.5

18.2
15.3

15

18.7

16.1

16.2

3.1

2.8

3.3

3.6

3.3

FY17.1Q

FY17.2Q

FY17.3Q

FY17.4Q

FY18.1Q

10

5
4.1

3.9

FY16.1Q

FY16.2Q

0

3.1

FY16.3Q

4.4

FY16.4Q

Sony Financial Holdings Inc.

All Rights Reserved38Sony Lifeʼs Quarterly Trend on New Business Value
Quarterly Trend on New Business Value(JPY bn)

25
19.9

20

21.2

21.9

17.2
14.1

15
10.2

10

12.2

5.0

5
0
(0.2)
(5)
FY16.1Q

FY16.2Q

FY16.3Q

FY16.4Q

FY17.1Q

FY17.2Q

FY17.3Q

FY17.4Q

FY18.1Q

Note: New business value is calculated accumulating new business value for each month based on economic assumptions at the end of each month.
The figures for FY18 onward reflect the revision in the insurance risk measurement method and others which revised on March 31, 2018.

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39

Operating Performance : AEGON Sony Life Insurance◆AEGON Sony Life Insurance sells individual variable annuities.

Number and Amount of Policies in Force

Number and Amount of New Policies
New policy amount

Number of new polices [ ](JPY bn)

25

22.4
[3.9]

20
15

Policy amount in force(Thousandsof policies)(JPY bn)

5

600

509.7
[87.8]

Number of policies in force [ ]520.6[92.5]

521.9[93.2](Thousandsof policies)

120

4
11.4
[2.5]

3
7.1
[1.5]

10

400

80

200

40

2

5

1

0

0

FY16.1Q
FY17.1Q
FY18.1Q
Net income (losses) for AEGON Sony Life Insurance and SA Reinsurance(JPY bn)

FY17.1Q

FY18.1Q

00Jun. 17Mar. 18

Jun. 18

ChangeAEGON Sony Life Insurance

(1.0)

(0.8)

+0.1

SA Reinsurance

(0.3)

0.3

+0.6

AEGON Sony Life Insurance and SA Reinsurance are equity method companies, 50-50 joint venture established by Sony Life and AEGON Group.
SA Reinsurance prepares its financial statements in accordance with U.S. GAAP. 50% of the net income (losses) for AEGON Sony Life Insurance andSA Reinsurance are recognized as investment profit (losses) on equity method in the SFHʼs consolidated net income.

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40Trend on JGB Yields (Par rate)

As of the end of each monthSony Financial Holdings Inc.

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41Trend on Risk-free Rate (Japanese yen/Par rate)

Convergence
period:20 yearLast liquid point:
40 year*For above risk-free rate, we employ the Smith-Wilson method for extrapolation so that the 60-year forward rate will coverage on the UFR (3.5%).

Sony Financial Holdings Inc.

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42Trend on U.S. Dollar Bonds Yields (Par rate)

As of the end of each monthSony Financial Holdings Inc.

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43Trend on Risk-free Rate (U.S. Dollar /Par rate)

Convergence
period:30 yearLast liquid point:
30 year*For above risk-free rate, we employ the Smith-Wilson method for extrapolation so that the 60-year forward rate will coverage on the UFR (3.5%).

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44

Detail of Consolidated Adjusted ROE

FY17
(12M)

FY17.1Q(3M)

FY18.1Q
(3M)

6.1％

1.3%

1.7%

5.9％

1.1％

1.6％

(Sony Assurance) Adjusted ROE

16.1％

5.5％

7.0％

(Sony Bank) ROE

5.5％

1.4%

1.7%

Consolidated Adjusted ROE(Sony Life) Core ROEV**The figures for FY17 and FY17.1Q excluded the impact of the revision in the insurance risk measurement method and others
for Sony Life.

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Detail of Consolidated Adjusted Profit andConsolidated Adjusted Capital
Adjusted capital (Denominator）

Adjusted profit（Numerator)
Sony Financial Group（consolidated）(JPY bn）

Adjusted profit (consolidated)

FY17
98.8

Sony Life (non-consolidated) (JPY bn）

FY17
70.4

New business value *1
Expected existing business
contribution *1

16.3

Adjusted profit

86.7

Sony Assurance

19.9

30.3

FY17.1Q

FY18.1Q

12.2

21.9

①MCEV as of the beginning of the
fiscal year

3.5

②Dividends paid

4.2
16.4

25.5

FY17.1Q

FY18.1Q

4.8

1.6

2.7

Provision amount for catastrophe
reserve (after tax)

2.4

0.6

0.6

Provision amount for reserve forprice fluctuations (after tax)

0.0

0.0

0.0

Adjusted profit

7.3

2.3

3.3

Sony Bank (consolidated)(JPY bn）

Profit attributable to owners of theparentFY17

FY18.1Q

Net income (loss)(JPY bn）

FY17
4.7

Sony Financial Group（consolidated）

FY17.1Q

FY17.1Q

FY18.1Q

1.1

1.4(JPY bn）

Adjusted capital (consolidated)
Sony Life (non-consolidated)

FY17

FY17.1Q

FY18.1Q

1,607.6

1,573.0

1,735.8

FY17

FY17.1Q

FY18.1Q

1,441.0

1,441.0

1,633.1

23.1

23.1

26.2

③MCEV as of the end of the fiscal year*2*3

1,536.5

1,478.2

1,593.4

Adjusted capital

1,477.2

1,448.01,600.2

FY17(JPY bn）（①－②＋③）/２

FY17.1Q

FY18.1Q①The average amount of net assets
during the fiscal year

Sony Assurance

33.1

29.2

33.1

②The average amount of catastrophe
reserve (after tax) during the fiscal year

15.0

13.2

15.7

③The average amount of reserve forprice fluctuations (after tax) during the
fiscal year

0.1

0.1

0.1

Adjusted capital （①＋②＋③）

45.2

42.3

48.7

FY17.1Q

FY18.1Q

82.6

86.9

Sony Bank (consolidated)(JPY bn）(JPY bn）

Adjusted capital（The average amountof net assets during the fiscal year）

FY17
85.1

*1. Please keep in mind that the validity of these calculations has not been verified by outside specialists for the figures for FY17.1Q and FY18.1Q .
*2. Please keep in mind that the validity of these calculations has not been verified by outside specialists.
*3. The figures for FY17 and FY17.1Q excluded the impact of the revision in the insurance risk measurement method and others.
Note: The figures on this page unit have been truncated. Therefore, some figures may differ from other pages.

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46

46

Definition of Consolidated Adjusted ROE
Calculation of Consolidated Adjusted ROE
Since each company of Sony Financial Group differs by industry such as insurance and banking,each group company calculate its “Adjusted ROE” based on adjusted profit and adjusted capital
to realize its corporate value and capital efficiency.
Sony Financial Group *Sony Life
Core ROEVSony Assurance
Adjusted ROE

Numerator(Adjusted
profit)New business value +Expected existing business
contribution

Net income (loss) + Provision
amount for catastrophe
reserve and its provision
amount for reserve for pricefluctuations, in each case②
after taxes＋

Denominator(Adjusted
capital)MCEV as of the beginning of
the fiscal year less dividends
paid plus MCEV as of the endof the fiscal year, divided bytwo.

The average amount of net
assets plus the sum ofcatastrophe reserve and its
reserve for price fluctuations
during the fiscal year, ineach case after taxes
⑤

＋

＋

①

④

＋

Sony Bank
ROE
Profit (loss) attributable toowners of the parent③③

The average amount of net
assets during the fiscal year⑥⑥

* Consolidated Adjusted ROE = Consolidated Adjusted Profit divided by Consolidated Adjusted Capital
Consolidated Adjusted Profit ＝ ①＋②＋③
Consolidated Adjusted Capital ＝ ④＋⑤＋⑥

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47

Contact︓
Investor Relations Department
Sony Financial Holdings Inc.
TEL︓+81-3-5290-6500

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48