Presentation Material

Consolidated Financial Results for theYYear
E d d MarchEnded
M h 31,31 2016
andSony Life’sLife s PreliminaryMarket Consistent Embedded Valueas of March 31,, 2016

Sony Financial Holdings Inc.
M 16
May16, 2016
Sony Financial Holdings Inc. All Rights Reserved

Content
 Consolidated Operating Results for the Year Ended March 31, 2016

P.3



Forecast of Consolidated Financial Results for the Year Ending
g March 31,, 2017 P.29



Dividend Forecast

P.31



Sony Life’s Preliminary MCEV and Risk Amount Based on

P.33

Economic Value as of March 31, 2016
Appendix

P.37

Disclaimers:
This ppresentation material contains statements concerning
g the current pplans, expectations,pstrategiesgand beliefs of the Sonyy Financial Group.
p Anyystatements contained herein that are not historical facts are forward-looking statements or pro forma information. Forward-looking statements may
include—but are not limited to—words 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 other materials released to the public. These forward-looking statements and pro forma information are based onassumptions, decisions and judgments made by the management of Sony Financial Group companies, and are based on information that is currently
available to them.
them As such,
such they are subject to various risks and uncertainties
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.
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 this presentation does not constitute or form part of any offer for sale or subscription of orsolicitation 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 withany contract or commitment 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 Year Ended March 31,
31 2016

Sony Financial Holdings Inc. All Rights Reserved3Management Message


In FY2015, Sony Life’s new policy amount surpassed ¥5 trillion, reaching the highest
level to date. Sony Bank also performed favorably, thanks to the introduction of Sony
Bank WALLET and other new products. As a result, the Group’s business volumecontinued to expand steadilysteadily. However,
However consolidated ordinary profit declined year on
year, owing to a rise in provision of policy reserves for minimum guarantees for variable
life insurance stemming from an increase in new policies and the worsened financial
market conditions at Sony Life.

In FY2016, we expect the business environment to worsen somewhat with negativeinterest rates continuing, but we anticipate that each Group company will continue to
steadilyy expandp
its field of business. Consequently,qy, we forecast a 6.5% increase inconsolidated ordinary revenues year on year, essentially flat consolidated ordinary profit
and a rise in profit attributable to owners of the parent owing to a reduction in thecorporate tax rate.



As of March 31, 2016, Sony Life’s MCEV was down from a year earlier due to a significant
decline in yen interest rates. By responding promptly with measures including premium
revisions, Sony Life is working to improve profitability to ensure steady growth in MCEV
even under low interest rates environment.
environmentFor FY2015, we plan to pay a year-end dividend of ¥55 per share, up ¥15 year on year (forthe 4th consecutive year of dividend increases). For FY2016, we expect to maintain thislevel of dividends (¥55 per share) from FY2015, after taking into account our businessenvironment surrounding the Group and our forecast of consolidated financial results.
Sony Financial Holdings Inc. All Rights Reserved

4Highlights of Consolidated Operating Performance (1)Consolidated ordinary revenues(Billions of yen)

FY2014FY2015

Change1,223.9

1,230.2

+6.3

+0.5%

Consolidated ordinary profit

1,352.3+0.7%

1,362.0

Life
Insurancebusiness

Ordinary revenues
Ordinary profit

78.3

60.2

(18.0)(23.1%)

Non-life
Insurancebusiness

Ordinary revenues

93.0

96.9

+3.8

+4.2%

Ordinary profit

4.2

4.6

+0.4

+11.2%

Ordinary revenues

38.4

37.9

(0.4)

(1.3%)

Ordinary profit

7.3

5.9

(1.3)

(18.3%)

(3.1)

(3.0)

+0.0

－

0.2

0.2

+0.0

+3.7%

1,352.3

1,362.0

+9.7

+0.7%

Ordinary profit

90.0

71.1

(18.9)(21.1%)

Profit attributableto owners of theparent54.4

43.3(11.0)(20.3%)

Bankingbusiness
Intersegment
adjustments*
dj tt *(21.1%)

90.0

71.1

Ordinary revenues
Ordinary profit
Ordinary revenues

Consolidated*Ordinary profit in “Intersegment adjustments” is mainly from SFH.
Comprehensive income: FY2014: ¥90.7billion, FY2015: ¥71.1 billion*Comprehensive

FY2014FY2015(Billions of yen)

Change from
15.3.3115.3.31

16.3.31

Net assets

550.6

604.3

+53.7

+9.8%

Total assets

9,545.8

10,352.1+806.2+8.4%(Billions of yen)

Consolidated

Sony Financial Holdings Inc. All Rights Reserved

5Highlights of Consolidated Operating Performance (2) Life Insurance Business: Ordinary revenues were almost flat year on year. This was due to anincrease in insurance premium revenues reflecting a favorable acquisition of new policies and anincrease in gains on sale of securities in the general account, substantially offset by a deterioration
in investment performance in the separate account,account driven by the worsened financial market
conditions. Ordinary profit decreased year on year. This was due to a significant increase inprovision of policy reserves for minimum guarantees for variable life insurance as a result of anincrease in new policies and the worsened financial market conditions. Moreover, increased
expenses incurredidb
by strongtsales
l off new policies
li i alsol contributedt ib t d tto th
the ddecrease iin profit.
fit Non-life Insurance Business: Ordinary revenues rose year on year, owing to an increase in net

premiums written primarily for mainstay automobile insurance. Ordinary profit increased year on
year This was due to a decline in provision for reserve for outstanding losses led by a lower car
year.
accident ratio, as well as the rise in ordinary revenues.
 Banking Business: Ordinary revenues decreased year on year, mainly due to a decline in gains onsale of bonds despite higher revenues related to mortgage loans. Ordinary profit decreased year on
year due to an increase in operating expenses, as well as the decline in ordinary revenues.
 Consolidated ordinary revenues increased 0.7% year on year, to ¥1,362.0 billion, owing toincreases in ordinary revenues from the life insurance and the non-life insurance businesses,
whereas ordinary revenues from the banking business decreased
decreased. Consolidated ordinary profit
decreased 21.1% year on year, to ¥71.1 billion, owing to decreases in ordinary profit from the life
insurance and the banking businesses, whereas ordinary profit from the non-life insurance
business increased. Profit attributable to owners of the parent was down 20.3% year on year, to¥43 3 billion¥43.3
billi ddue tto th
the ddecrease iin ordinarydiprofit.
fit

Sony Financial Holdings Inc. All Rights Reserved

6

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

Ordinary profit

1,230.1

1,223.8

FY2014FY2015

1,223.8

1,230.1

+6.3

+0.5%

Income from insurance premiums

914.0

1,028.0+114.0+12.5%

Investment income

280 1
280.1

170 5
170.5

(109 6)(109.6)(39 1%)(39.1%)

133.5

141.4

+7.8

+5.9%

Income from monetary trusts, net

5.2

11.9

+6.6

+126.6%

Gains on sale of securities

8.8

12.2

+3.3

+37.1%

126.7－(126.7)(100.0%)1,144.1

1,169.3

+25.1

+2.2%

Insurance claims and other payments

382.9

363.3

(19.5)(5.1%)

Provision for policy reserves and others

604 3
604.3

613 4
613.4

+9 1
+9.1

+1 5%
+1.5%

9.7

23.3

+13.6

+140.6%

－

14.7

+14.7

－

115.6

133.3

+17.7

+15.3%

Ordinary profit

79.6

60.7

(18.8)(23.7%)Net income

42.5

37.0

(5.4)

(12.8%)

15.3.31

16.3.31(Billions of yen)
Ordinary revenues

（億円）

+0.5%
Interest income and dividends

60.7
79.6 (23.7%)

Gains on separate accounts, net
Ordinary expenses

FY2014FY2015

Change(Billions of yen)
Investment expenses◆ Ordinary revenues were almost flat but ordinary profit
decreased year on year.
◆ Income from insurance p
premiums increased yyear on yyear,
reflecting a steady increase in policy amount in force.
◆ Investment income decreased due to a deterioration in
investment performance in the separate account, driven
by the worsened financial market conditions.
◆ Ordinary profit decreased year on year. This was due toa significant increase in provision of policy reserves forminimum guarantees for variable life insurance as aresult of an increase in new policies and the worsened
financial market conditions, partially offset by anincrease on gains on sale of securities in the generalaccount . Moreover, increased expenses incurred bystrongtsales
l off new policies
li i alsol contributedt ib t d tto th
thedecrease in profit.

Losses on separate accounts, net
Operating expenses(Billions of yen)

Change from 15.3.31

Securities

6,543.7

7,273.3+729.6+11.2%

Policy reserves

6,727.2

7,336.5+609.2

+9.1%

432.5

482.1

+49.6

+11.5%

118.1

150.6

+32.5

+27.5%

7,301.3

8,035.4+734.0+10.1%

793.3

850.3

+56.9

+7.2%

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

Sony Financial Holdings Inc. All Rights Reserved

7

Overview of Operating Performance:
Sony Life (Non-consolidated)
FY2014FY2015

New policy amount

4,771.6

5,151.3+8.0%

Lapse and surrender amount

2,088.4

1,931.4(7.5%)

Lapse and surrender rate

5.35%

4.72%

(0.63pt)

Policy amount in force

40,988.7

43,149.8+5.3%

Annualized premiums from new policies

76.6

85.0

+11.0%Of which,which third
third-sector
sector products

15 2
15.2

15 7
15.7

+2 8%
+2.8%

735.7

781.3

+6.2%

172.8

179.7

+4.0%

FY2014FY2015

Ch
ChangeGains from investment, net (General account)

143.6

161.8

+12.7%

Core profit

76.5

43.0

(43.8%)

Positive spread

13 0
13.0

15 3
15.3

+17 7%+17.7%(Billions of yen)

Annualized premiums from insurance in force
Of which, third-sector products(Billions of yen)

Non-consolidated solvency
y margin
g ratio

Change15.3.31

16.3.31

Change from
15.3.312,555.0%,

2,722.8%,+167.8pt
pNotes:
1. Figures for new policy amount, lapse and surrender amount, lapse and surrender rate, policy amount in force,
annualized premiums from new policies and annualized premiums from insurance in force are calculated as
the total of individual life insurance and individual annuities.
2 The lapse and surrender rate shows the ratio derived by dividing the amount of lapses and surrenders
2.
surrenders, notadjusted 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<Reasons for changes>◆ Increased due to higher sales ofvariable life insurance andvariable annuities.

◆ Increased due to higher sales ofvariable life insurance
insurance, lump
lump-sumsum
payment whole life insurance andvariable annuities.

◆ Decreased year on year due toa significant increase inprovision of policy reserves forminimum guarantees forvariable life insurance as aresult of an increase in newpolicies and the worsened
financial market conditions,despite higher positive spread.
M
Moreover,iincreased
d expenses
incurred by strong sales of newpolicies also contributed to thedecrease in profit.

8

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

Annualized Premiums from New Policies(Individual Life Insurance + Individual Annuities)(Individual Life Insurance + Individual Annuities)

New policy amount

Number of new policies

606

+3.8%

629

Annualized premiums from new policies

Of which,which third
third-sector
sector(Thousands ofpolicies)(Billions of yen)

600

533

85.0

(Trillions of yen)

+11.0%

500

6

4.77

5

+8.0%
8.0%

76.6

80

5.15

63 9
63.9
400

60

3.88

4

300
40

3
200
2

+2.8%

20
100

1

13.4
0

0
0

FY2013

FY2014FY201515.2

15.7

FY2014FY20150
FY2013

Sony Financial Holdings Inc. All Rights Reserved

9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)(Individual Life Insurance + Individual Annuities)

Policyy amount in force

Annualized premiums from insurance in force

policies in force
Number of p(Millions of policies)

7.04(Trillions of yen)

6.67

50

+5.6%

6.33
40

39.0

40.9

+5.3 %

7

Of which, third-sector(Billions of yen)

781.3

800

43.1

696.9

735.7

+6 2%
+6.2%

6
5

30

600

4
400
3

20

2
10
1
0

0
14.3.3115.3.31

16.3.31

+4.0%

200
167 0
167.0

172 8
172.8

179 7
179.7

14.3.3115.3.31

16.3.310Sony Financial Holdings Inc. All Rights Reserved

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

(%)

8

5.35

6

4.61

(0.63pt)

4.72

4

2

0
FY2013

FY2014FY2015**The lapse and surrender rate shows the ratio derived by dividing the amount off
lapses 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

11

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

Interest Income and Dividends(Billions of yen)(Billions of yen)

1,028.0
1,000

960.9

150

133.5

914.0

+5.9%

141.4

122.1

+12.5%

800
100
600

400
50
200

0

0
FY2013

FY2014FY2015FY2013

Sony Financial Holdings Inc. All Rights Reserved

FY2014FY2015

12

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

Ordinary Profit(Billions of yen)

80

72.3

(Billions of yen)

76.5

79.6

80

(23.7%)

69.2
60.7(43 8%)(43.8%)

60

60

43.0
40

40

20

20

0

0
FY2013

FY2014FY2013

FY2015(Reference) Impact on core profit(Billions of yen)

FY2014FY2015(Reference) Main differences from Core Profit(Billions of yen)

FY2013

FY2014FY2015FY2013

FY2014FY2015

8.4

13.0

15.3

1.1

10.7

20.4

Provision of policy reserves for minimum guarantees
for variable life insurance (*1)

Capital gains (losses) excluding gains or losses onhedges (*1)

(4.2)

(10.6)(34.7)

Gains (losses) on hedges of variable life insurance

－

(2.3)

3.9

Effects by the revision of policy reserve discount rate
(Interest rate-sensitive whole life insurance) (*2)

(5 7)
(5.7)

－

－

(4 1)
(4.1)

(5 0)
(5.0)

(6 4)
(6.4)

Positive spread

Provision of contingency reserve (*1)( 1)

*1: “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.
*2: The effected amount of a surge of sales of interest rate-sensitive whole life insurance due to a delay in rising insurance premiums (May 2013) against the revision of policy reserve discount rate.

Sony Financial Holdings Inc. All Rights Reserved

13

Operating Performance :Sony Life (Non-consolidated) (6)
Number of Lifeplanner Sales Employees
+283

4,612
[206]

(Number)

4 00
4,500

4,216
[138]

4,228
[146]

14.3.3114.6.30

4,248
[150]

4,216
[155]

4,329
4
329
[161]

4,352
4
352
[174]

15.3.3115.6.30

4,415
[183]

4,376
,
[194]
+236

4,000

3,500

3,000
0
14.9.30

14.12.31

15.9.30

15.12.31

16.3.31

Note: Figures in [ ] show the numbers of Lifeplanner sales employees (rehired on a fixed-term contract basis after retirement) included in the overall
numbers, those who have reached retirement age but who continue to work as Lifeplanner sales employees that meet certain sales conditions
and other requirement.

Sony Financial Holdings Inc. All Rights Reserved

14

Operating Performance :Sony Life (Non-consolidated) (7)Breakdown of General Account Assets
15.3.31(Billions of yen)

<Asset management review>

16.3.31

Amount%Amount

%5,606.8

86.2%

6,351.1

88.4%

Japanese stocks

42.4

0.7%

33.3

0.5%

Foreign bonds

105.5

1.6%

70.1

1.0%

Japanese governmentand corporate bonds

We have continued to accumulate ultralongterm bonds to match the liability
characteristics of insurance policies withlong term matlong-term
maturities
rities with
ith the aim of red
reducing
cing
interest rate risk.
<Bond duration>
Mar. 31, 2014: 19.7 years

Foreign stocks

26.0

0.4%

23.0

0.3%

Monetary trusts

313.2

4.8%

280.9

3.9%

Policy loans

162.3

2.5%

171.6

2.4%

Real estate*

117.7

1.8%

115.8

1.6%

Cash and call loans

56.8

0.9%

52.5

0.7%

Others

76.7

1.2%

86.4

1.2%

6 508 06,508.0

100 0%
100.0%

7 185 07,185.0

100 0%
100.0%

Total

Mar. 31, 2015: 20.3 years
Mar. 31, 2016: 21.8 years■ Investment in the monetary trusts is mainly into
Japanese government and corporate bonds.
■ The holding ratio on the real status of Japanese
government and corporate bonds including
those invested in monetary trusts in the generalaccount: As of Mar. 31, 2016: 92.3%(As of Mar. 31, 2015: 91.0%)*Real estate is the total of land, buildings, and construction in progressSony Financial Holdings Inc. All Rights Reserved

15

Operating Performance :Sony Life (Non-consolidated) (8)Average Assumed Interest Rate andInvestment Yield for Core Profit

Positive Spread(%)(Billions of yen)

15.3
15

3.00

Average assumed interest rate

+17.7%

Investment yield for core profit

13.0
2.35
10

8.4
2.00

2.18

2.35

2.12

2 31
2.31
2.06

5

1.00

0
FY2013

FY2014FY2015FY2013

Sony Financial Holdings Inc. All Rights Reserved

FY2014FY201516

Operating Performance :Sony Life (Non-consolidated) (9)Non-consolidated Solvency Margin Ratio

(%)

3,000

2,722.8,
2,555.0
2,500

2,358.7+167.8pt

2,000

1,500

1,000014.3.3115.3.31

16.3.31Sony Financial Holdings Inc. All Rights Reserved

17Highlights of Operating Performance:
Sony Assurance
Ordinary revenues

Ordinary profit

FY2014FY2015

93.0

96.9

+3.8

+4.2%

Underwriting income

91.7

95.6

+3.8

+4.2%

Investment income

1.2

1.2

+0.0

+2.3%

88.8

92.2

+3.4

+3.8%

Underwriting expenses

65.6

67.7

+2.1

+3.2%

Investment expenses

0.0

0.0

+0.0

+372.7%

Operating general andadministrative expenses

23.1

24.4

+1.2

+5.5%

Ordinary profit

4.2

4.6

+0.4

+11.2%Net income

22
2.2

25
2.5

+0 3
+0.3

+15 8%+15.8%

15.3.31

16.3.31

Underwriting reserves

86.5

95.7

+9.1

+10.6%Net assets

24.7

28.3

+3.5

+14.4%

Total assets

157.9

172.3

+14.4

+9.1%

(Billions of yen)

+4.2%

93 0
93.0

Ordinary revenues

96.9

y expensespOrdinary+11.2%

4.6

4.2

FY2014FY2015

Change(Billions of yen)

◆ Ordinary revenues and ordinary profit increased
year on year.
◆ Ordinary revenues rose year on year, owning toan increase in net premiums written primarily formainstay automobile insurance.
◆ Ordinary profit increased year on year, due to a
decline in provision for reserve for outstanding
losses led by a lower car accident ratio
ratio, as well as
the rise in ordinary revenues.

(Billions of yen)Sony Financial Holdings Inc. All Rights Reserved

Change from
15.3.3118

Overview of Operating Performance:
Sony Assurance(Billions of yen)

FY2014FY2015<Reasons for changes>

ChangeDirect premiums written

90.4

94.3

+4.2%

Net premiums written

91.7

95.5

+4.2%

Net losses paid

45.9

48.1

+4.6%

Underwriting profit

3.0

3.4

+14.0%Net loss ratio

57.6%

57.8%

+0.2ptNet expense ratio

26.7%

27.1%

+0.4ptCombined ratio

84.3%

84.8%

+0.5pt◆ Increased mainly in its mainstay
automobile insurance.

◆ Increased mainly due to higher
advertising expenses.

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

FY2014FY2015

ChangeE.I. loss ratio

64.3%

63.3%

(1.0pt)E.I. loss ratio +Net expense ratio

91.0%

90.4%

(0.6pt)◆ Declined reflecting lower car
accident ratio.

Notes:
Earned/Incurred (E.I.) loss ratio = (Net losses paid + Provision for reserve for outstanding losses + Loss adjustment expenses) /Earned p
premiums [[Earthquakeqinsurance and compulsorypy automobile liability
y insurance are excluded from the above calculation.]]Number of policies in force
Non-consolidated
solvency margin ratio

15.3.31

16.3.31

Change from 15.3.31

1.70 million

1.79 million+0.09 million

629 6%
629.6%

693 5%
693.5%+5.8%+63 9pt+63.9pt

Note: The number of policies in force is the total of automobile insurance and medical and cancer insurance, which accounts for 99% of net premiums written.

Sony Financial Holdings Inc. All Rights Reserved19Sony Assurance’s Underwriting Performanceby Type of Policy
Direct Premiums Written

Net Premiums Written

FY2014FY2015

ChangeFY2014FY2015

Change

Fire

45

44

(2.8%)

Marine11044(59.7%)(Millions of yen)((Millions of yyen))

Fire

332

348

+4.6%

Marine－－－Personal accident

8,576

8,679

+1.2%

Personal accident

8,845

8,953

+1.2%

Voluntary automobile

81,58585,308+4.6%

Voluntary automobile

81,375

85,123

+4.6%

－

－

－

Compulsory
automobile liability

1,335

1,384

+3.6%

90 49590,49594 336
94,336

+4 2%
+4.2%

91 712
91,71295 54995,549

+4 2%
+4.2%

Compulsory
automobile liability
T t l
Total

*Medical and cancer insurance is included in personal accident.

Net losses paid
FY2014FY2015

ChangeFire31(46.1%)

Marine90

46(48.9%)

Personal accident

2,265

2,472

+9.1%

Voluntary automobile

42,41444,320+4.5%

Compulsoryyautomobile liability

1,212

1,270

+4.8%

45,985

48,111+4.6%(Millions of yen)

Total

T t l
Total

Sony Financial Holdings Inc. All Rights Reserved

20

Operating Performance:
Sony Assurance (1)Ordinary Profit andAdjusted Ordinary Profit

Net Premiums Written andNumber of Policies in Force
Voluntary automobile insurance
Personal accident insurance
OthersNumber of policies in force(Billions of yen)
120

1.70

+5.8%

1.79

(Billions of yen)

88.6

7.1

(Millions ofpolicies)

1 61
1.61

100

76
7.6

8

6

91.7

+4.2 %

95.5

1.4

1.5

4.2

8.9

4.6

4.2

4

80

+11 2%+11.2%

3.0
1

60

85.1
2

40
0.5

20

0
FY2013

FY2014FY2015*Adjusted ordinary profit = Ordinary profit + Provision for catastrophe reserve

00

FY2013

FY2014FY2015(Reference) Provision for catastrophe reserve(Billions of yen)

FY2013The numberTh
b off policies
li i iin fforce iis th
the ttotalt l off automobilet
bil iinsurance andd medical
di land cancer insurance policies, which account for 99% of net premiums written.
More than 90% of personal accident insurance is medical and cancer insurance.

P i i ffor catastrophe
Provisiont t h reserve

FY201412
1.2

FY2015
28
2.8

30
3.0

*Provision for catastrophe reserve is described as positive amount.

Sony Financial Holdings Inc. All Rights Reserved

21

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

Net expense ratio

(%)

(%)

100

Net expense
p
ratio

93.8

90.4

91.0

100

84.9
(0.6pt)

68.2

64.3

(1.0 pt)+0.5pt57.6+0.2pt

84.8

80

80

60

84.3

63.3

60

59.3

57.8

40

40

+0.4pt

20

25.6

26.7

+0.4pt

20

27.1

25.6

26.7

FY2013

FY201427.1

00
FY2013

FY2014FY2015

Notes:E
Earned/Incurredd/Id losslratio
ti = (Net(N t losseslpaid
id + P
Provisioni i ffor reserve ffor outstandingt t dilosses + Loss adjustment expenses) / Earned premiums[Earthquake insurance and compulsory automobile liability insurance are excluded
from the above calculation.]

FY2015

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

22

Operating Performance:
Sony Assurance (3)Non-consolidated Solvency Margin Ratio

(%)

800

693.5%
629.6%

600

527.6%+63.9pt

400

200

0
14.3.3115.3.31

16.3.31Sony Financial Holdings Inc. All Rights Reserved

23

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

38.4(1.3%)

7.3<C<Consolidated>
lid t d>FY2014FY2015

Consolidated ordinary revenues

38.4

37.9

(0.4)

(1.3%)

Consolidated ordinary profit

7.3

5.9

(1.3)

(18.3%)

Profit attributable to owners of
the parent

4.5

3.9

(0.6)

(14.8%)FY2014FY2015

Ordinary revenues

35.7

34.8

(0.8)

(2.3%)

Gross operating profit

22.5

21.6

(0.8)

(3.9%)Net interest income

16.6

16.5

(0.1)

(0.8%)

N t feesNetfandd commissions
i i

00
0.0

01
0.1

+0.1
01

+448.7%448 7%Net other operating income

5.8

5.0

(0.8)

(14.6%)

General and administrative
expenses

15.3

15.9

+0.6

+4.2%

Net operating profit

7.2

5.7

(1.4)

(19.6%)

Ordinary profit

7.2

5.8

(1.4)

(19.8%)Net income

4.6

3.9

(0.7)

(15.6%)

15.3.31

16.3.31

77.0

77.4

+0.3

+0.5%

66
6.6

33
3.3

(3 2)
(3.2)

(49 7%)(49.7%)

2,062.5

2,126.5

+64.0

+3.1%

(Billions of yen)

37.9
5.9

(18.3%)

Change<Non-consolidated>(Billions of yen)

FY2014FY2015(Billions of yen)<Consolidated>◆Ordinary revenues decreased year on year, mainly
due to a decline in gains on sale of bonds despite
higher revenues related to mortgage loans
loans. Ordinary
profit decreased year on year due to an increase inoperating expenses, as well as the decline inordinary revenues.
<Non-consolidated＞◆ Both gross operating profit and net operating profit
decreased year on year.
・Net interest income decreased due to lower
interest income and dividends on securities.
・Net fees and commissions improved due to higherffees
on mortgagetloans.
l・Net other operating income decreased due to a
decline in gains on sale of bonds.

(Billions of yen)

Net assets
Net unrealized g
gains onother securities, net of taxes
Total assets

Sony Financial Holdings Inc. All Rights Reserved

ChangeChange from
15.3.3124

Overview of Operating Performance:
Sony Bank (Non-consolidated) (1)<Reasons for changes>
15.3.31

16.3.31

Customer assets

2,007.9

2,034.4

+26.5

+1.3%

Deposits

1,878.2

1,923.5

+45.2

+2.4%

Yen

1,551.0

1,587.9

+36.9

+2.4%

327.2

335.5

+8.3

+2.5%

Investment trusts

129.6

110.9

(18.7)(14.4%)

Loans outstandingg

1,187.1

1,344.1+156.9+13.2%

Mortgage loans

1,074.3

1,237.1+162.7+15.1%

112.8

107.0

(5.7)

(5.1%)

1.05
million

1.13
million+0.07
million

+7 3%
+7.3%

0.28%

0.23%

(0.05pt)

10.66%

9.90%(0.76pt)(Billions of yen)

Foreign currency

OthersNumber of accounts
Non-performing assets ratio*2(Based on Financial Reconstruction Law)

Capital adequacy ratio*3(domestic criteria)*1Change◆ Yen deposit balance increased
reflecting special interest rates
offerings for yen time deposits in thesecond half.
◆The yen-denominated balance ofo e g cu
currency
e cy depos
depositss increasedc easedforeigndue to higher foreign currency
purchases, driven by rising market
sentiment that yen depreciation had
nearly stopped.
◆ Loan balance expanded reflecting a
growing balance of mortgage loans.

◆ Number of accounts increased due toa launch of Sony Bank WALLET
service in Jan. 2016.
◆ Sony Bank maintained an extremely
low non-performing assets ratio.

*1 Loans in others include corporate loans of ¥96.4billion*2 Non-performing loans (loans based on the Financial Reconstruction Act) /Total loan exposure*3 Please refer to the graph of the non-consolidated capital adequacy ratio (domestic criteria) on P28.

Sony Financial Holdings Inc. All Rights Reserved25Overview of Operating Performance:
Sony Bank (Non-consolidated) (2)<Reference> On Managerial Accounting Basis
FY2014FY2015

22 4
22.4

21 6
21.6

(0 8)
(0.8)

(3 8%)(3.8%)

18.2

18.8

+0.5

+3.0%

Net fees and commissions*2 ②

0.9

0.9

(0.0)

(1.6%)Net other operatingpg income*3

3.2

1.8

((1.3))((43.0%))Gross operating profit (coreprofit) (A) ＝①＋②

19.2

19.7

+0.5

+2.7%

Operating expenses and otherexpensesepe ses ③

15.2

15.9

+0.6

+4.5%

(Billions of yen)

Gross operating profit
Net interest income*1①

Net operating profit (core profit)＝(A)－③<Reference> Interest Spread(Managerial Accounting Basis)

ChangeYield on investment

Yield on financing

Interest spread
(%)

1.5

1.0

1.20

1.20

0.92

0.93
0.93
+0.01pt

4.0

3.8

(0.1)

(3.8%)■Managerial accounting basis

0.5

The following adjustments are made to the figures on a financial account for profits and

0.28

0.27

FY2014FY2015losses 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), consists of profits andlosses for bond and derivative dealing transactions.
■Core profit

0.0
Note: Interest spread=(Yield on investment)-(Yield on financing)

Profits and losses exclude net other operating income, which includes those on bond andderivative dealing transactions, and stands for Sony Bank’s basic profits.

Sony Financial Holdings Inc. All Rights Reserved

26

Operating Performance:
Sony Bank (Non-consolidated) (1)Loans

Deposits
Yen depositspg currency
y depositspForeign

Mortgageg g loans

Others(Billions of yen)

1,500(Billions of yen)

1,344.1
2,000

1,890.0

1,878.2

363.5

327.2

1,923.5+45.2

1,057.4

335.5

1 000
1,000

1,500

107.0

1,187.1
112.8*corporate loansof ¥96.4billion+156.9

108 1
108.1

1,237.1
1,074.3

1 000
1,000

949.3
1,526.4

1,551.0

1,587.9

500

500

0

0
14 3 3114.3.31

15 3 3115.3.31

16 3 31
16.3.31

14 3 3114.3.31Sony Financial Holdings Inc. All Rights Reserved

15 3 3115.3.31

16 3 31
16.3.31

27

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

Balance of Securities by Credit Rating
AAA
BBB

AA
A
Others(%)(Billions of yen)

800

773.8

(Domestic Criteria)

15

730.0

11 72
11.72
10.66 (0.76pt)

620.9
600

9.90

10

(109.0)

400
5

200

0
14.3.310
14.3.3115.3.31

16.3.3115.3.31

16.3.31*Calculated based on the standard FSA Notification No. 19 (2006), which establishes
standards
t d d bbased
d on A
Articleti l 1414-2
2 off theth Banking
B ki ActA t off JapanJforf determiningd t
i i thethcapital adequacy of a bank in light of the assets held by the bank.

Sony Financial Holdings Inc. All Rights Reserved28Forecast of Consolidated Financial Results
for the Year Ending
g March 31,, 2017

Sony Financial Holdings Inc. All Rights Reserved29Forecast of Consolidated Financial Results for FY2016
C
Consolidated
lid t d ordinarydirevenues are expectedt d tot increase,i
consolidated
lid t d ordinarydiprofitfit isi expectedt d tot beb almostlt flat,fl t
and profit attributable to owners of the parent is expected to increase.
(Billions of yen)

FY2015 (Actual)

FY2016 (Forecast)

Change1,362.0,

1,450.0,+6.5%

1,230.2
96.9
37.9

1,309.8
101.6
37.9

+6.5%
+4.8%
(0.1%)

C
Consolidated
lid t d ordinarydiprofit
fit

71 1
71.1

71 0
71.0

(0 1%)(0.1%)

Life insurance business

60.2
4.6
5.9

62.5
4.4
4.5

+3.8%
(6.0%)(24.9%)

43.3

46.0

+6.1%

Consolidated ordinary
y revenues
Life insurance business
Non-life insurance businessBanking business

Non-life insurance businessBanking businessProfit attributable to owners of the parent

For FY2016, stable and sustainable business growth is expected in all the businesses.
Consolidated ordinary revenues are expected to increase because we anticipate higher revenues in the life insurance business. Consolidated ordinary profit is expected
to be almost flat because we anticipate an increase in profit in the life insurance business, offset by a decrease in profit in the banking business. Profit attributable toowners off theth parentt is
i expectedt d tot increase
i
due
d to
t the
th impactit off a reduction
d ti ini theth effective
ff ti corporatet incomeitax
t ratet for
f FY2016,
FY2016 comparedd withith FY2015’
FY2015’s negativeti
impact of the reversal of deferred tax assets, accompanied by the cut in corporate income tax.
<Segment information for ordinary revenues and ordinary profit＞■Life insurance business
Ordinary revenues are expected to increase year on year because we anticipate stable increases in insurance premium revenues and investment income.
Ordinary profit is expected to increase year on year because we expect a positive impact of a decline in provision of policy reserves for minimum guarantees forvariablei bl lif
life insurance
i
to
t be
b offset
ff t byb lowerlgains
i on salel off securities.
iti■Non-life insurance business
Ordinary revenues are expected to increase year on year in line with growth in net premiums written primarily for automobile insurance.
Ordinary profit is expected to decrease year on year because we expect the loss ratio to be higher than the ratio in FY2015.
■Banking businessAlthough we anticipate stable growth in business scale, ordinary revenues are expected to be flat year on year due to lower interest rates associated with the BOJ’s
introduction of negative interest rates.
Ordinary profit is expected to decrease year on year due to an increase in up-front expenses incurred by investment on measures to expand the customer base overthe medium term, in addition to an expected lower interest spread.
*Please see page 40 for the detail of Life insurance business forecast.

Sony Financial Holdings Inc. All Rights Reserved30

Dividend Forecast

Sony Financial Holdings Inc. All Rights Reserved

31

Dividend Forecast for FY2016
The dividend forecast for FY2016 is ¥55 per share, unchanged from
FY2015, after taking into account our business environment and ourforecast of consolidated financial results.
results<Medium-term Dividend Policy>
 O
Our basicb i didividend
id d policy
li iis tto steadilyt dil iincrease didividends
id d iin liline with
ith earningsigrowthth over ththemedium and long terms.
 Our target for the dividend payout ratio is 40% to 50% of profit attributable to owners of the parent.
Note: We will determine specific dividend amounts for each fiscal year by taking into account a comprehensive range of factors,
including capital adequacy, investment opportunities, business forecasts and legal and regulatory developments.

■ Profit attributable to owners of the parent and dividend results/forecast
FY2012FY2013

FY2014FY2015FY2016(Forecast)Profit attributable to owners of the parent

Net income per share
Dividend per share
Dividend payout ratio (consolidated)¥45.0 billion¥40.5 billion¥54.4 billion¥43.3 billion¥46.0 billion¥103 60¥103.60¥93 11¥93.11¥125 10¥125.10¥99 67¥99.67¥105 75¥105.75

¥25

¥30

¥40

¥55(Expected)

¥55

24.1%

32.2%

32.0%

55.2%

52.0%

Sony Financial Holdings Inc. All Rights Reserved32Sony Life
Life’ss Preliminary MCEV and
Risk Amount Based on Economic Valueas of March 31, 2016

Please keep in mind that the validity of the calculation of MCEV as of March 31, 2016 has not been verified by outside specialists.
The calculation of MCEV as of March 31, 2016, in accordance with the MCEV principles and verified by outside specialists, is scheduled
to be announced on May 23, 2016.
A part of the calculation of MCEV as of December 31, 2015 adopted simplified method and has not been verified by outside specialists.

*In this part, figures, ratios and percentages changes have been rounded.

Sony Financial Holdings Inc. All Rights Reserved33Sony Life’s MCEV(Billions of yen)

MCEV
Adj t d nett worth
Adjustedth
Value of existing business(Billions of yen)

New business value
New business margin15.3.3115.12.31

16.3.31

Change from
15.3.31

Change from
15.12.31

1,322.9

1,386.9

1,063.7(259.2)(323.3)

1 119 2
1,119.2

1 229 5
1,229.5

2 074 4
2,074.4

955 2
955.2

844 9
844.9

203.7

157.4

(1,010.7)(1,214.4)(1,168.2)

Previous method

New method

New method

FY14
(12M)
48.6

FY15.3Q
(9M)
37.0

FY15
(12M)
35.2

3 8%
3.8%

3 2%
3.2%

2 4%
2.4%

Notes:
1. Calculated MCEV as of December 31, 2015 by using updated economic assumptions and lapse and surrender rate from March 31, 2015.
2. The method of calculating new business value and new business margin for FY15.3Q (9M) and FY15 (12M) has been changed from the previous method based on
economic assumptions as of the valuation date to a method of accumulating new business value for each quarter.

 Reasons for changes
g in MCEV

・MCEV as of March 31, 2016 decreased ¥323.3 billion from December 31, 2015 and decreased ¥259.2 billion from March
31, 2015 due to a significant decline in interest rates in Japanese yen. While the value of existing business decreased
significantly, most of the decrease was offset by an increase in the adjusted net worth with the benefit of ALM.
 New business value / new business marging・For new business value, the method was changed to one of accumulating new business value for each quarter (3M).
・For FY15.4Q (3M), the new business value was negative ¥1.7 billion, and the new business margin was negative 0.5%.
・For FY15 (12M), the new business value was ¥35.2 billion, including ¥37.0 billion for FY15.3Q (9M) and negative ¥1.7
billion for FY15.4Q (3M).
 By responding promptly with measures including premium revisions, Sony Life is working to improve profitability
to ensure steady growth in MCEV even under low interest rates environment.
*Please see page 48 for trend on JGB yield.

Sony Financial Holdings Inc. All Rights Reserved34Changes on Sony Life’s Calculation Method
for New Business Value
Difference between previous
and new method+9.7(Billions of yen)

(1.7)*[ (0.5%)]**

15.2*[3.9%]**

37.0*[3.2%]**

9.3*[2.5%]**[2.5%]

35.2*[(2.4%)][(2.4%)]**

27.3[2.4%]**

12.5*[3.2%]**[3
2%]**

FY15.3Q(9M)

FY15.1Q( )(3M)

FY15.2Q(3M)

FY15.3Q( )(3M)

FY15.3Q(9M)

FY15.4Q
(3M)

FY15
(12M)

New method

Previous method
40 year JGB yield

40 year JGB yield

40 year JGB yield

40 year JGB yield

40 year JGB yield

1.39%

1.57%

1.51%

1.39%

0.63%

* New business value for each of the quarter is calculated using economic assumptions at the end of that quarter.
** Figures in [ ] shows new business margin.

【Reference】 Product revisions and sales suspensions in FY2015
May 2015：Discontinued sales of Educational Endowment Insurance (Non-participating)A
Aug.
2015：Funding
2015 F di lilimits
i on V
Variablei bl lif
life insurancei(Wh(Wholel liflife type))
Jan. 2016：Premium revision on Variable life insurance (Whole life type) and premium revision andrecommenced sales of Educational Endowment Insurance (Non-participating)Sony Financial Holdings Inc. All Rights Reserved35Sony Life’s Risk Amount Based on Economic Value(after tax)
(Billions of yen)

15.3.3115.12.31

16.3.31

Insurance risk*

724.2

782.6

1,097.6

Market-related risk

287.0

301.1

256.3

Of which, interest rate risk**

218.5

232.0

183.6

Operational risk

25.9

26.7

31.4

Counter party risk

1.8

2.8

2.0

Variance effect(293.4)(313.3)(368.1)

The risk amount based on economic value

745.5

799.9

1,019.2(* ) Insurance risk excluding the variance effect within Life module and Health module.
(**) Interest rate risk excluding the variance effect within market-related risk.
(Billi(Billions
off yen))15 3 3115.3.31

15 12 3115.12.31

16 3 31
16.3.31

MCEV

1,322.9

1,386.9

1,063.7

ESR

177%

173%

104%

Notes:
1. The risk amount based on economic value refers to the total amount of Sony Life’s risks comprehensively examined by a market consistent approach, including
insurance risk and market-related risk.
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 a similar but
modified model based on the EU Solvency II standard method.
3. ESR=MCEV / Risk amount based on economic value.

 ESR fell sharply, but going forward Sony Life will monitor interest rate fluctuations and consider response
measures aimed at improving soundness.
Sony Financial Holdings Inc. All Rights Reserved

36Appendix

Sony Financial Holdings Inc. All Rights Reserved37

Recent Topics 1
AEGON Sony Life Insurance
Launch of sales: December 1, 2009
Common stock: ¥14 billion
q y ownership:p Sonyy Life insurance Co Ltd 50%,, AEGON international B.V. 50%
EquityMarketing products: Individual Variable Annuities
Sales Channels: Lifeplanner sales employees and partner Banks (26*) *As of May 16, 2016
SA Reinsurance Ltd
Established： October 29
29, 2009
Common stock: ¥13.4 billion
Equity ownership: Sony Life insurance Co., Ltd. 50%, AEGON international B.V. 50%
Business： Reinsurance businessNote) AEGON Sony Life Insurance and SA Reinsurance are equity method companies, 50
50-50
50 joint ventures established by Sony Life and AEGON Group.

Sony Bank’s Mortgage Loans through Sony Life
■Sonyy Life accounts for 21% of the balance of mortgage
g g loans as of March 31,, 2016
Sony Life accounts for 14% of the amount of new mortgage loans for FY2015*Sony Life started handling banking agency business in January 2008.

Sony Assurance’s Auto Insurance Sold by Sony Life
■Sony Life accounts for 4% of new automobile policies for FY2015*Sony Life started handling automobile insurance in May 2001.

Sony Financial Holdings Inc. All Rights Reserved38

Recent Topics 2<Highlights for FY2015>

2015-04-01

Sony Life changed its President, Representative Director.

2015-04-01

Sony Life opened its new sales office in Fukui prefecture.

2015-04-01

SmartLink Network, Sony Bank’s subsidiary, changed its corporate name to Sony Payment Services Inc.

2015-04-30

Sony Lifecare entered into an agreement to enter capital participation in Yuuai Holdings Co., Ltd.
Sony Life commenced sale of a new product: “Lump-sum Payment Whole Life Insurance (No-notification Type) “

2015-05-02*Discontinued sales from March 20162015-06-01

Sony Bank began offering “Yen Time Deposits plus+ ”

2015-06-24

Sony Bank changed its President, Representative Director.

2015-07-01

Sony Assurance commenced operations at “Kumamoto Contact Center”

2015-07-13

Sony Bank began handling a new type of card loans.

2015-10-01
2015
10 01

Sony Assurance introduced a system for the direct payment to medical institutions of advance medical insurance claims.

2015-11-02

Sony Life commenced sale of a new product: “Living Benefit Term Life Insurance (living Standard Type)"

2016-01-04

Sony Bank commenced service of “Sony Bank WALLET,” a cash card with a Visa debit function.

2016-03-16

Sony Life began immediate underwriting of new policies, the first in the Japan’s Life insurance industry.

2016-04-01

Sony Life opened its new sales office in Akita and Yamaguchi prefecture.

2016-04-01

Sony Lifecare Group opened its first newly built nursing care home “SONARE Soshigaya-Okura” in Tokyo

2016-04-28

Sony Life announced an opening of a Representative Office in Singapore in July 1, 20162016-05-02

Sony Life commenced sale of a new product: “Level Premium Plan Term Life Insurance with Reduced Surrender Value(Disability/Nursing Care Type)” and “Level Premium Plan Term Life Insurance with No Surrender Value (Disability/Nursing
Care Type)”

2016-05-12

Sony Lifecare Group announced an opening of the second SONARE newly built nursing care home in Saitama prefecture inp g 2017.
SpringSony Financial Holdings Inc. All Rights Reserved

39Analysis on Ordinary Profit for Life Insurance Business(Billions of yen)

+12.0

(12.0)
+6.0

(3.0)
(0.5)

62.5

60.2
OthersDecrease in intterest income
and dividends in lower
interest rates

Increase in pro
ofit owing to
growing policy amount in forceeLower gains on
n sale of securities

Positive impact from lower salesof variable life insurance andothers (*)

FY15

FY16 (Forecast)*Including changes in provision of policy reserves for minimum guarantees for valuable life insurance and gains (losses) on hedges of variable
life insurance, and changes in product mix for new policies and others.

Sony Financial Holdings Inc. All Rights Reserved40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)(Billions of yen)

Notes:
1. The above table includes monetary trusts other than trading-purpose securities.
2. Derivative financial products such as principal protected 30 year notes with Nikkei 225 index-linked coupons are included in the “Held-to-maturity-securities” above.
Principal protected 30 year notes with Nikkei 225 index-linked coupons
As of Mar. 31, 2014; Carrying amount: ¥43.8 billion, Fair market value: ¥56.0 billion, Net unrealized gain (losses): ¥12.2 billion
As of Mar. 31, 2015; Carrying amount: ¥44.2 billion, Fair market value: ¥57.5 billion, Net unrealized gain (losses): ¥13.2 billion
As of Mar. 31,, 2016;; Carrying
y g amount: None

Valuation gains (losses) on trading-purpose securities(Billions of yen)

Note: The above chart includes trading-purpose securities included in “monetary trusts,” etc

Sony Financial Holdings Inc. All Rights Reserved41Sony Life’s Interest Income and Dividends (Details)(Millions of yen)

FY2014FY2015

Change00+219.0%107,383

115,655

+7.7%

464

522

+12.5%

Foreign securities

8,998

7,246

(19.5%)

Other securities

430

1,519

+253.1%

Loans

5 921
5,921

6 174
6,174

+4 3%
+4.3%

Real estate

10,327

10,261(0.6%)

66

71

+7.5%

133,592

141,450+5.9%

Cash and deposits
Japanese governmentand corporate bonds
Japanese stocks

Others
Total

Sony Financial Holdings Inc. All Rights Reserved42Sony Life’s Quarterly Trend on New Policy Amount
Quarterly Trend on New Policy Amount(Billions of yen)

1 491 6
1,491.6

1,500

1,437.4
1,324.2

1,250

1,152.5

1,135.8

1,128.3
1,033.3

1,290.7
1,098.9

991.5

1,000
841.4

886.2

750
500
250
0
FY13 1Q FY13.2Q
FY13.1Q
FY13 2Q FY13.3Q
FY13 3Q FY13.4Q
FY13 4Q FY14.1Q
FY14 1Q FY14.2Q
FY14 2Q FY14.3Q
FY14 3Q FY14.4Q
FY14 4Q FY15.1Q
FY15 1Q FY15.2Q
FY15 2Q FY15.3Q
FY15 3Q FY15.4Q
FY15 4Q

Sony Financial Holdings Inc. All Rights Reserved43Sony Life’s Quarterly Trend on
Annualized Premiums from New Policies
Quarterly Trend on Annualized Premiums from New Policies
A
Annualized
li d premiumsiffrom new policies
li i

Of which, third-sector(Billions of yen)

25
22 7
22.7

22.3

21.8

20.6
20

18.9

18.5

19.1

18.5
17.2

16 8
16.8
15.2
15

13.2

10

5

5.1
3.9

3.0

3.6

2.9

3.7

2.8

3.5

3.9

3.4

4.6

3.6

0
FY13.1Q
Q FY13.2Q
Q FY13.3Q
Q FY13.4Q
Q FY14.1Q
Q FY14.2Q
Q FY14.3Q
Q FY14.4Q
Q FY15.1Q
Q FY15.2Q
Q FY15.3Q
Q FY15.4Q
Q

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Operating Performance :AEGON Sony Life Insurance*AEGON SonyS
Life
Lif InsuranceIsells
ll individual
i di id l variable
i bl annuities.
iti

Number and Amount of Policies in Force

Number and Amount of New Policies
New policy amount

Number of new polices [ ]Policy amount in force(Billions of yen)(Thousands ofpolicies)(Billions of yen)

200

167.5
[28.8]

Number of policies in force [ ](Thousands of
444.2 policies)

500[73.4]

80

390.4[63.5]

163.2[[26.8]]

400
00

30

60

150
300

71.5
[[11.8]]

100

20

236.4
[38.2]

40

200
10

50

20
100

0

0

0
FY2013

FY20140
14.3.31

FY201515.3.31

16.3.31

Net income ((losses)) for AEGON Sonyy Life Insurance and SA Reinsurance(Billions of yen)

FY2014FY2015

ChangeAEGON Sony Life Insurance

(5.4)

(3.2)

+2.2

SA Reinsurance

2.4

1.8

(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 SFH’s consolidated net income.

Sony Financial Holdings Inc. All Rights Reserved

45

Method of Measuring Risk Amount
Based on Economic Value (1) Market-related Risk*1

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

Sony Life(Reference) EU Solvency II Implementing
Measures (Delegated Regulation)

P
Percentagetincreasesior ddecreases diffdiffer ffor eachhcurrency and term.
As for measuring interest rate risk in Japanese yen,introduced principal component analysis, where yield
curve changes are disaggregated into threecomponents parallel shiftcomponents,
shift, twist and butterfly
butterfly, and theyield curve is shocked by each component.

Diff
Differentt percentagetchangeshin
i interesti t
t ratest are
set for each term, from one year to 20 years.
For terms longer than 20 years and through 90
years, percentage changes are set using linear
interpolation, with negative 29% as the percentagechange for 20 years and negative 20% as thepercentage change for 90 years.

(Example)
For Yen 30-year, 33% decrease (parallel shift),
28% decrease (twist)(twist), 8% decrease (butterfly)

Equity risk

Listed equities 45%, Other securities 70%

Global 39%, Others 49%*2

Real estate risk

Actual real estate 25%

Same as on the left

Credit risk = (market value) x (risk coefficient for eachcredit rating) x duration

Credit risk = (market value) x (risk coefficient foreach credit rating and duration)

Credit risk

Currency risk

Note that durations have caps and floors, depending
on credit ratings.

(Example)
Rating A: Duration (Dur): 5-10 years((Example)p )Rating A: Risk coefficient (1.4%), cap (23), floor (1)Risk coefficient=7.0% + 0.7% x (Dur – 5 )35% downside fluctuation

25% downside fluctuation

Notes
1. Principal
p items as of Mar. 31, 2016.
2. Symmetric adjustment (an adjustment of±10% of the average value of the stock price index during a defined period in the past) is applied.

Sony Financial Holdings Inc. All Rights Reserved

46

Method of Measuring Risk Amount
Based on Economic Value (2) Insurance Risk*1

Sony Life(Reference) EU Solvency II Implementing
Measures (Delegated Regulation)

Mortality risk

Mortality rate increases by 15% for each year elapsed Same as on the leftLongevity risk

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

Lapse risk

The largest amount of these; *2

The largest amount of these;•Lapse rate increases by 50% for each year elapsed• Increases by 50% in the assumed rates of• Lapse rate decreases by 50% for each year elapsed

lapsation for Life module, 50% for Health module• 30% of policies on which surrender value is in•Decreases by 50%% in the assumed rates off

excess of best estimate liability are immediately
surrendered• 40% of policies (70% for group annuities, etc.) on

lapsation for Life module, 50% for Health module
which surrender value is in excess of best
estimate liability are immediately surrendered

Expense risk

Operating expenses increase by 10% for each year
elapsedRate of inflation rises by 1%

Same as on the left

Disability risk

Rate of occurrence increases by 35% in the first fiscal Rate of occurrence increases by 35% in the firstyear, rising by 25% for each year thereafter
fiscal year, rising by 25% for each year thereafter.
Recovery rate decreases by 20%.

Notes
1. Principal items as of Mar. 31, 2016.
2 At Sony Life,
2.
Life lapse risk is calculated by computing and adding together the largest amount of three options for each insurance policy

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47

JGB Yields

As of the end of each monthSony Financial Holdings Inc. All Rights Reserved

48

Contact:
Communications & Investor Relations Department
Sony Financial Holdings Inc.
Inc
TEL： +81-3-5785-1070

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49