Consolidated Financial Results for the First Quarter of Fiscal 2019
Conference Call for Institutional Investors and Analysts Q&A (Executive Summary)

Date: August 8, 2019 3:30-4:30 p.m. (JST)Respondents:
Hiroaki Kiyomiya Managing Director, Member of the Board, Sony Financial Holdings, Inc.
Eigo Nasu, Executive Officer, Sony Life Insurance Co. Ltd.
Toru Hasegawa, Executive Officer, Sony Assurance Inc.
Hiroko Yamamoto, Dept. Head, Financial Planning Dept., Sony Bank Inc.

Note: The questions and answers have been paraphrased, edited, and sorted for ease ofunderstanding.

Q1: [Sony Life] In Q1 of fiscal 2019, performance was strong (on both the Japanesestatutory accounting and U.S.-GAAP bases) compared to the full-year consolidated
earnings forecasts at the beginning of the fiscal year. Would it be accurate to assume
that profits are likely to exceed the consolidated earnings forecasts?
A: Performance was strong compared to the full-year consolidated earnings forecasts on both
the Japanese statutory and U.S.-GAAP bases, but this was due to factors such as the delayedbooking of operating expenses and the lower level of payments of insurance claims and otherfor the three months. We expect these factors to settle in line with the full-year forecasts.
Therefore, we have not revised the full-year earnings forecasts.

Q2: [Sony Life] Ordinary profit increased YoY due to a decline in costs related to theacquisition of new policies, lower payments for insurance claims and other, and anincrease in the policy amount in force. What factors contributed the most?
A: The decrease in the cost of acquiring of new policies.

Q3: [Sony Life] What is the difference between the provision for policy reserves relatedto minimum guarantees for variable life insurance and gains or losses on hedging?
A: The difference arises because of the differing effects of hedging on economic value,
Japanese statutory accounting, and U.S.-GAAP accounting. In the statutory accounts for Q1
FY2019, performance was affected by approximately +¥500 million.

Q4: [Sony Life] On page 31, you stated that the company would continue to purchaseultralong-term bonds. Despite the current decline in interest rates, is there no change in1

the company's policy to purchase ultralong-term bonds? Also, the balance of foreign
bonds is increasing significantly. My understanding is that you purchased these bonds
in line with the liabilities of U.S. dollar-denominated insurance, and that foreign exchange
risk and overseas interest rate risk have not increased. Is this correct?
A: We have not changed our policy of purchasing ultralong-term bonds based on the ALM
concept. While some foreign bonds are purchased in anticipation of future sales, those arepurchased in line with U.S. dollar-denominated insurance liabilities based on the ALM concept.

Q5: [Sony Life] Can you maintain a positive spread even at current interest rates?
A: We have maintained about the same level of positive spread for the past few years. As theassumed interest rates on liabilities are also gradually declining, there is no prospect of asignificant decline in the future.

Q6: [Sony Life] What were the factors behind the ¥69 billion decline in MCEV from theend of the previous fiscal year, and how are fluctuations in U.S. dollar interest rates
affecting the MCEV, as U.S. dollar-denominated insurance rises?
A: Major factors include shareholder dividends of ¥32.0 billion, an increase in new businessvalue of ¥17.0 billion, expected existing business contribution of ¥3.7 billion, assumption change
in the economic variances of negative ¥38.0 billion due to a decline in yen interest rates(parallel shift), yield curve changes of yen interest rates of negative ¥25.0 billion, and the impactof change in mortality and morbidity rates of ¥4.0 billion. The impact of fluctuations in the U.S.
dollar interest rate on the MCEV is limited.

Q7: [Sony Life] Could you explain the factors behind the decline in the new businessvalue by ¥6 billion from the Q4 of fiscal 2018? Should this be explained separately bychanges in sales volume and new business margin?
A: The total sales volume was about 70%, as a result of a decline in sales volume to about twothirds, offset by an increase of about 10% in the new business margin.

Q8: [Sony Life] Page 21 shows that a change in insurance assumptions contributed
positively to the increase in new business margins from 5.0% in Q4 of fiscal 2018 to5.4%. What is the change in insurance assumptions, and what is your current outlook on
new business value for the full year, which was slightly less than ¥80 billion at thebeginning of the fiscal year?
A: The increase in the new business margin was due to the revision of insurance assumptions
and changes in the product mix, despite a decrease due to lower interest rates, and each factor2contributed the same absolute amount. Changes in insurance assumptions are revised future
calculation assumptions based on actual results in the lapse rate, mortality rate, and expense
ratio. The full-year outlook for new business value is not clearly stated, as interest rates havebeen declining significantly in the recent quarter.

Q9: [Sony Life] How do you evaluate ESR despite a decline in interest rates? How do you
think about capital adequacy in the event of a further decline in interest rates? You
disclose ESR with UFR figures, but does your management policy remain unchanged?
A: ESR is used as an indicator of capital adequacy, reflecting developments in international
regulatory capital. Even in the current economic environment where interest rates are declining,
there is no change in the investment policy of purchasing ultralong-term bonds to meet liabilities
based on the ALM concept. By matching assets and liabilities over time, we hope to minimize
the sensitivity of interest rate fluctuations.

Q10: [Sony Life] As interest rates decline, there will be some products with negative
margins for new policies without UFR. What are the criteria for revising premiums andsuspending sales? Also, how is SFH involved in this judgment?
A: Sony Life uses the new business margin without UFR as an internal management indicator,
and its basic rule is to consider revising the insurance premium rate and suspending sales if thisbecomes negative for three consecutive quarters. This indicator is reported to the Board ofDirectors of SFH on a quarterly basis, and information is shared.

Q11: [Sony Life] How many Lifeplanners left their jobs compared to the same period of
the previous year? Your outlook for the number of employees at the end of this fiscal
year is around 5,300, and how do you evaluate the progress toward that?
A: In fiscal 2019, the number of people leaving the company in Q1 was 102, up slightly from 96
in the same period of the previous year, but the turnover rate has remained almost unchanged.
In Q1, some Lifeplanners are appointed to unit manager in April, and Sony Life does not recruit
Lifeplanners in June. Such seasonal factors made it difficult to increase the number ofLifeplanners. We intend to expand recruitment activities toward the end of the fiscal year, withthe aim of increasing the number of Lifeplanners by 100 per year.

Q12: [Sony Life] Has the compensation system for Lifeplanners changed amid tightening
fiduciary duties?
A: We will strive to improve our compensation system to appropriately reflect our customeroriented approach.

3

Q13: [Sony Life] Does Sony Life have any problems similar to those of the rewritten
insurance policies that occurred at Japan Post Insurance?
A: Regarding the issue of Japan Post Insurance, Sony Life is closely watching the situation,
including the content of its announcement. We provide thorough employee education oncompliance, and in fiscal 2010 we introduced a system for canceling old policies on aconditional suspension basis. Taking a customer-first approach to our operations, under thissystem previous policies are cancelled only after new ones are in place, thereby preventing
periods in which policyholders are uninsured.

Q14: [Sony Life] Looking at the product mix on page 29, the share of savings-type
products is increasing. How is the company thinking about this situation and how areyou planning to change the product mix? How will the product mix change from Q2
onward following the resumption of sales of products for corporate clients on August26? Is there any change in the outlook for the new policy amount and profit levels forFY2019?
A: Regarding the product mix in Q1, the weight of protection-type products decreased due tothe suspension of sales of corporate contracts, and the weight of savings-type products
increased due to the increase in sales of variable annuities. Going forward, Sony Life's policy is
to continue selling products that meet customer needs, and there is no prospect of a productmix that can be clearly indicated. In the FY2019 full-year outlook, the company had initiallyassumed a shift in demand from corporate products to individual insurance. However, because
we resumed sales of corporate products, we no longer expect a shift away from these products.
Accordingly, there will be no major changes to the outlook for the new policy amount and profit
levels for FY2019.

Q15: [SFH] Consolidated adjusted ROE is decreasing from Q1 of the previous fiscal year,
but what is your annual outlook considering the resumption of sales of products forcorporate clients?
A: Currently, the business climate remains challenging due to a decline in interest rates andother factors, and it is slightly below the initial forecast. However, by promoting initiatives toacquire new policies from Q2 onward, Sony Life is aiming to achieve the initial forecast ofconsolidated adjusted ROE for fiscal 2019 of about 6%.

Q16: [SFH] I understand that a dividend increase is unlikely to exceed ¥2.5 because—
given the Q1 consolidated adjusted ROE level—the consolidated adjusted ROE will notreach the 7% level. Also, if the consolidated adjusted ROE declines significantly, is it

4possible you will cancel the ¥2.5 dividend increase?
A: Currently, if the consolidated adjusted ROE is expected to be stable at 5% or higher over themedium term, SFH’s policy is to continue increasing the dividend by ¥2.5 based on acomprehensive judgment. If this year’s consolidated adjusted ROE is slightly below 5%, wewould not necessarily rule out a dividend increase altogether.

Q17: [SFH] What kinds of discussion have been held since the change of themanagement board? Are discussions based on the corporate strategy meeting that youannounced?
A: As we have received opinions from the newly appointed directors, we have just begun
discussions in the direction of promoting the strategies that we announced at the corporate
strategy meeting.

5