Consolidated Financial Summary (Japanese GAAP) for the Nine Months Ended December 31, 2016

Company name: Sony Financial Holdings Inc.

(URL: http://www.sonyfh.co.jp/ index_en.html) Stock exchange listing: Tokyo Stock Exchange (code number: 8729) Representative: Shigeru Ishii, President and Representative Director

February 14, 2017

Inquiries: Yasuo Hasegawa, General Manager-Corporate Communications & Investor Relations Dept.

(Fractional amounts of less than ¥1 million are discarded.)

  1. Consolidated financial results for the nine months ended December 31, 2016

  2. Operating results

    Ordinary Revenues

    Ordinary Profit

    Profit Attributable to Owners of the Parent

    For the nine months ended December 31, 2016

    Millions of yen % change

    Millions of yen % change

    Millions of yen % change

    1,041,307 0.5

    50,300 (12.4)

    33,716 (11.8)

    For the nine months ended December 31, 2015

    1,036,134 1.4

    57,450 (24.3)

    38,224 (24.3)

    Note: Comprehensive Income: For the nine months ended December 31, 2016: ¥18,238 million: (54.7%)

    For the nine months ended December 31, 2015: ¥40,268 million: (55.3%)

    Net Income per Share

    Net Income per Share

    (Fully Diluted)

    For the nine months ended December 31, 2016

    For the nine months ended December 31, 2015

    Yen

    77.51

    87.87

    Yen

    77.51

    -

  3. Financial conditions

    Total Assets

    Total Net Assets

    Net Asset Ratio

    As of December 31, 2016

    Millions of yen

    Millions of yen

    %

    11,276,096

    597,928

    5.3

    As of March 31, 2016

    10,352,114

    604,377

    5.8

    Note: Net Assets Attributable to Shareholders: As of December 31, 2016: ¥596,498million

    As of March 31, 2016: ¥603,048 million

  4. Dividends

    Dividend per Share

    Record date

    1st quarter

    2nd quarter

    3rd quarter

    Year-end

    Annual Total

    For the year ended March 31, 2016

    Yen

    -

    Yen

    0.00

    Yen

    -

    Yen

    55.00

    Yen

    55.00

    For the year ending March 31, 2017

    -

    0.00

    -

    For the year ending March 31, 2017 (forecast)

    55.00

    55.00

    Note:Changes in dividend forecast since the most recent public announcement: None

  5. Forecast of consolidated financial results for the year ending March 31, 2017

    (Percentage figures represent changes from the results of the previous fiscal year.)

    Ordinary Revenues

    Ordinary Profit

    Profit Attributable to Owners of the Parent

    Net Income per Share

    For the year ending March 31, 2017

    Millions of yen % change

    1,450,000 6.5

    Millions of yen % change

    71,000 (0.1)

    Millions of yen % change

    46,000 6.1

    Yen

    105.75

  6. Notes

  7. Changes in significant subsidiaries during the period (changes in specified subsidiaries accompanying changes in scope of consolidation): None

  8. Application of special accounting methods for preparing quarterly Consolidated Financial Statements: None

  9. Changes in accounting policies, accounting estimates and restatements of the Consolidated Financial Statements

  10. Changes in accounting policies resulting from the revision of the accounting standards and other regulations: Yes

  11. Changes in accounting policies due to other reasons: None

  12. Changes in accounting estimates: None

  13. Restatements of the Consolidated Financial Statements: None

    Note: For details, please refer to the section entitled "2.Changes in accounting policies, accounting estimates and restatements of the Consolidated Financial Statements" under "I. Notes Regarding Summary Information" on page 2 of the attachment.

  14. Number of shares outstanding (common stock)

  15. Number of shares outstanding (including treasury shares)

    As of December 31, 2016: 435,000,000 shares

    As of March 31, 2016: 435,000,000 shares

  16. Number of treasury shares

    As of December 31, 2016: 52,975 shares

    As of March 31, 2016: 75 shares

  17. Weighted-average number of shares

  18. For the nine months ended December 31, 2016: 434,988,191 shares

    For the nine months ended December 31, 2015: 434,999,936 shares

    Status of quarterly review procedures

    Quarterly review procedures are completed in accordance with Article 193-2-1 of the Financial Instruments and Exchange Law of Japan. However, quarterly Consolidated Financial Statements in this document are not subject to such quarterly review procedures.

    Content of Supplemental Materials

    I.

    Notes Regarding Summary Information

    1. Changes in significant subsidiaries during the period under review (changes in specified

    subsidiaries accompanying changes in scope of consolidation) …………………………….

    2

    2. Changes in accounting policies, accounting estimates and restatements of the

    II.

    Consolidated Financial Statements………………………………………………………….

    Consolidated Financial Statements

    1. Consolidated Balance Sheets ……………………………………………………………….

    2

    3

    2. Consolidated Statements of Income and Consolidated Statements of Comprehensive Income

    (Consolidated Statements of Income) ………………………………………………………

    5

    (Consolidated Statements of Comprehensive Income) ……………………………………..

    8

    3. Segment Information ………………………………………...……………………………..

    9

    III.

    4. Subsequent Events ………………………………………………………………………….

    Attachment

    Consolidated Financial Results for the Nine Months Ended December 31, 2016 and Sony Life's

    9

    Market Consistent Embedded Value as of December 31, 2016…………………………………...

    11

    • The conference call for explaining the Sony Financial Group financial results will be held at 15:30 (Tokyo), February 14, 2017. Please note that our conference call will be held only in Japanese.

      We will upload the presentation materials with speech text on February 14, 2017 after 15:00, and its Q&A summary at a later date on Earnings Releases and Presentation Materials page on our website: http://www.sonyfh.co.jp/en/financial_info/results/index.html

    • On February 14, 2017, SFH's significant subsidiaries: Sony Life Insurance Co., Ltd. (Sony Life), Sony Assurance Inc. (Sony Assurance) and Sony Bank Inc. (Sony Bank) will announce their financial results for the nine months ended December 31, 2016. SFH prepared an English-language summary of those Japanese announcements made by the above subsidiaries, solely for convenience of non-Japanese readers.

    1. Notes Regarding Summary Information‌‌

    2. Changes in significant subsidiaries during the period under review (changes in specified subsidiaries accompanying changes in scope of consolidation)

      None.

      Although not specified subsidiaries, Sony Lifecare Inc., a holding company that oversees the Sony Financial Group's operations in the nursing care business, and nursing-care provider Lifecare Design Inc., which were non-consolidated subsidiaries in the previous consolidated fiscal year, have been included in the scope of consolidation, due to a rise in their importance from the first quarter of the fiscal year ending March 31, 2017. The results of both companies are included in the "other" category in the consolidated statements of income.

    3. Changes in accounting policies, accounting estimates and restatements of the Consolidated Financial Statements

      Changes in accounting policies

      (Application of the "Revised Implementation Guidance on Recoverability of Deferred Tax Assets" (ASBJ Guidance No.26, March 28, 2016)(hereinafter, the "Recoverability Implementation Guidance") )

      The Sony Financial Group has applied the Recoverability Implementation Guidance from the first quarter of the fiscal year ending March 31, 2017 and partially revised the accounting method of recoverability of deferred tax assets.

      The Recoverability Implementation Guidance has been applied in accordance with the transitional treatment set forth in Article 49(4) of the Recoverability Implementation Guidance. The differences between (i) the amounts of deferred tax assets

      and deferred tax liabilities when provisions applicable from to of Article 49(3) of the Recoverability Implementation

      Guidance were applied as of April 1, 2016, and (ii) the amounts of deferred tax assets and deferred tax liabilities at the end of the fiscal year ended March 31, 2016, were added to retained earnings as of April 1, 2016.

      As a result, deferred tax assets increased ¥48 million and retained earnings rose ¥105 million, while deferred tax liabilities decreased ¥56 million as of April 1, 2016.

    4. Consolidated Financial Statements‌

    5. Consolidated Balance Sheets

      (Millions of yen)

      As of March 31, 2016

      As of December 31, 2016

      Assets

      ¥144,364

      ¥290,943

      Cash and due from banks

      Call loans and bills bought

      88,200

      -

      Monetary claims purchased

      884

      651

      Monetary trusts

      303,973

      296,991

      Securities

      8,021,493

      8,677,903

      Loans

      1,515,833

      1,681,277

      Tangible fixed assets

      121,376

      124,197

      Intangible fixed assets

      29,887

      29,943

      Due from reinsurers

      399

      1,101

      Foreign exchanges

      1,139

      4,926

      Other assets

      115,474

      155,987

      Net defined benefit asset

      2,216

      2,400

      Deferred tax assets

      8,181

      11,125

      Reserve for possible loan losses

      (1,308)

      (1,353)

      Total Assets

      ¥10,352,114

      ¥11,276,096

      As of March 31, 2016

      As of December 31, 2016

      Liabilities

      ¥7,504,420

      ¥7,960,873

      Policy reserves and others

      Reserve for outstanding claims

      67,177

      69,144

      Policy reserves

      7,432,237

      7,886,221

      Reserve for policyholders' dividends

      5,006

      5,507

      Due to agencies

      2,455

      1,496

      Due to reinsurers

      626

      2,476

      Deposits

      1,912,592

      2,081,100

      Call money and bills sold

      -

      40,000

      Borrowed money

      40,000

      90,000

      Foreign exchanges

      87

      130

      Bonds payable

      20,000

      10,000

      Other liabilities

      183,835

      412,727

      Reserve for employees' bonuses

      3,557

      1,977

      Net defined benefit liability

      29,263

      30,857

      Reserve for directors' retirement benefits

      351

      353

      Special reserves

      44,410

      45,687

      Reserve for price fluctuations

      44,410

      45,687

      Deferred tax liabilities

      5,647

      -

      Deferred tax liabilities on land revaluation

      488

      488

      Total Liabilities

      9,747,736

      10,678,168

      Net Assets

      19,900

      19,900

      Common stock

      Capital surplus

      195,277

      195,277

      Retained earnings

      238,079

      247,157

      Treasury stock

      (0)

      (81)

      Total shareholders' equity

      453,256

      462,253

      Net unrealized gains (losses) on other securities, net of taxes

      157,364

      140,289

      Net deferred gains (losses) on hedging instruments, net of taxes

      (2,347)

      (1,387)

      Land revaluation, net of taxes

      (1,465)

      (1,465)

      Remeasurements of defined benefit plans, net of taxes

      (3,760)

      (3,190)

      Total accumulated other comprehensive income

      149,791

      134,245

      Subscription rights to shares

      -

      32

      Non-controlling interests

      1,329

      1,396

      Total Net Assets

      604,377

      597,928

      Total Liabilities and Net Assets

      ¥10,352,114

      ¥11,276,096

    6. Consolidated Statements of Income and Consolidated Statements of Comprehensive Income (Consolidated Statements of Income)‌

      (Millions of yen)

      For the nine months ended December 31, 2015

      For the nine months ended December 31, 2016

      Ordinary Revenues

      ¥1,036,134

      ¥1,041,307

      Ordinary Revenues from the Life Insurance Business Income from insurance premiums

      Investment income

      (Interest income and dividends) (Income from monetary trusts, net) (Gains on trading securities, net) (Gains on sale of securities)

      (Gains on separate accounts, net)

      Other ordinary income

      935,374

      753,964

      153,071

      105,180

      10,837

      - 12,193

      24,404

      28,339

      936,806

      704,439

      194,629

      109,689

      3,366

      111

      1,306

      55,932

      37,737

      Ordinary Revenues from the Non-life Insurance Business Underwriting income

      (Net premiums written)

      (Interest and dividends on deposits of premiums)

      Investment income

      (Interest income and dividends) (Gains on sale of securities)

      (Transfer to interest and dividends on deposits of premiums)

      Other ordinary income

      72,776

      71,803

      71,762

      41

      952

      981

      12

      (41)

      20

      75,948

      74,323

      74,273

      50

      1,595

      994

      650

      (50)

      29

      Ordinary Revenues from the Banking Business Interest income

      (Interest income on loans)

      (Interest income and dividends on securities) Fees and commissions

      Other operating income

      Other ordinary income

      27,983

      19,055

      10,955

      8,051

      4,703

      3,941

      283

      28,379

      19,618

      11,904

      7,660

      4,941

      3,651

      168

      Other

      Other ordinary income

      -

      -

      173

      173

      (Continued)

      For the nine months ended December 31, 2015

      For the nine months ended December 31, 2016

      Ordinary Expenses

      ¥978,683

      ¥991,006

      Ordinary Expenses from the Life Insurance Business Insurance claims and other payments

      (Insurance claims) (Annuity payments) (Insurance benefits) (Surrender payments) (Other payments)

      Provision for policy reserves and others Provision for reserve for outstanding claims Provision for policy reserves

      Interest portion of reserve for policyholders' dividends Investment expenses

      (Interest expenses)

      (Losses on trading securities, net) (Losses on derivatives, net)

      Operating expenses

      Other ordinary expenses

      888,087

      279,355

      61,305

      7,725

      60,979

      142,940

      4,920

      480,245

      4,648

      475,595

      1

      4,851

      40

      94

      515

      97,082

      26,552

      896,244

      276,009

      62,524

      8,266

      75,877

      122,713

      2,428

      447,069

      462

      446,605

      0

      38,802

      26

      - 34,275

      101,324

      33,038

      Ordinary Expenses from the Non-life Insurance Business Underwriting expenses

      (Net losses paid)

      (Loss adjustment expenses)

      (Net commission and brokerage fees) (Provision for reserve for outstanding losses) (Provision for underwriting reserves)

      Investment expenses

      (Losses on sale of securities)

      Operating, general and administrative expenses Other ordinary expenses

      68,434

      50,580

      35,513

      5,267

      779

      1,651

      7,368

      4

      4

      17,846

      2

      70,451

      52,231

      36,941

      5,519

      887

      1,503

      7,378

      2

      - 18,212

      4

      (Continued)

      For the nine months ended December 31, 2015

      For the nine months ended December 31, 2016

      Ordinary Expenses from the Banking Business Interest expenses

      (Interest expenses on deposits) Fees and commissions

      Other operating expenses

      General and administrative expenses Other ordinary expenses

      ¥22,161 6,692

      3,532

      1,713

      125

      13,379

      250

      ¥23,603 6,473

      3,842

      2,658

      77

      14,232

      161

      Other

      Other ordinary expenses

      -

      -

      708

      708

      Ordinary Profit

      57,450

      50,300

      Extraordinary Losses

      Losses on disposal of fixed assets Impairment losses

      Provision for special reserves

      Provision for reserve for price fluctuations Others

      Provision for Reserve for Policyholders' Dividends

      1,936

      875

      6

      1,054

      1,054

      - 855

      1,400

      111

      4

      1,277

      1,277

      7

      814

      Income Before Income Taxes

      54,658

      48,085

      Income Taxes - Current Income Taxes - Deferred

      Total Income Taxes

      19,860

      (3,457)

      16,403

      16,653

      (2,349)

      14,303

      Profit

      38,255

      33,781

      Profit Attributable to Non-controlling Interests

      31

      65

      Profit Attributable to Owners of the Parent

      ¥38,224

      ¥33,716

      (Consolidated Statements of Comprehensive Income)

      (Millions of yen)

      For the nine months ended December 31, 2015

      For the nine months ended December 31, 2016

      Profit

      ¥38,255

      ¥33,781

      Other comprehensive income

      Net unrealized gains (losses) on other securities, net of taxes

      1,417

      (17,075)

      Net deferred gains (losses) on hedging instruments, net of taxes

      97

      960

      Foreign currency translation adjustments

      0

      -

      Remeasurements of defined benefit plans, net of taxes

      497

      571

      Total other comprehensive income

      2,012

      (15,543)

      Comprehensive income

      ¥40,268

      ¥18,238

      (Details)

      40,235

      18,170

      Comprehensive income attributable to owners of the parent

      Comprehensive income attributable to non-controlling interests

      32

      67

      3 Segment Information‌‌‌‌

    7. Segment Information by reporting segment

      For the nine months ended December 31, 2015

      Millions of yen

      Life insurance business

      Non-life insurance

      Banking

      business Total

      Ordinary revenues

      business

      External customers

      Intersegment

      ¥935,374

      2,014

      ¥72,776

      1

      ¥27,983

      155

      ¥1,036,134

      2,171

      Total

      937,389

      72,777

      28,139

      1,038,305

      Segment profit

      ¥48,804

      ¥3,824

      ¥4,666

      ¥57,294

      For the nine months ended December 31, 2016

      Millions of yen

      Life insurance business

      Non-life insurance

      Banking

      business Total Other Total

      Ordinary revenues

      business

      External customers

      Intersegment

      ¥936,806

      2,330

      ¥75,948

      0

      ¥28,379

      143

      ¥1,041,133

      2,474

      ¥173

      -

      ¥1,041,307

      2,474

      Total

      939,137

      75,948

      28,522

      1,043,608

      173

      1,043,781

      Segment profit

      ¥42,392

      ¥4,999

      ¥3,310

      ¥50,702

      ¥(535)

      ¥50,167

      (Note) "Other" consists of Sony Lifecare Inc., a holding company that oversees the Sony Financial Group's operations in the nursing care business, and nursing-care provider Lifecare Design Inc., which have been included in the scope of consolidation from the first quarter of the fiscal year ending March 31, 2017.

    8. Reconciliations of the totals of reportable segments' profit to quarterly consolidated statement of income

      Millions of yen

      For the nine months ended December 31, 2015

      For the nine months ended December 31, 2016

      Totals of reporting segments ¥57,294 ¥50,702

      Other - (535)

      Adjustments for intersegment transactions 6 6

      Amount not allocated to reporting segments 149 126

      Ordinary profit in quarterly consolidated

      statement of income ¥57,450¥50,300

    9. Information on impairment loss on fixed assets and goodwill by reporting segment None

    10. 4 Subsequent Events

      There were no applicable subsequent events.

      SFH's consolidated results* are prepared in accordance with Japanese GAAP. As such, these figures differ in significant respects from the financial information reported by Sony Corporation, SFH's parent company, which prepares its financial statements in accordance with U.S. GAAP.

      * SFH's scope of consolidation includes following companies: Sony Financial Holdings Inc.

      Sony Life Insurance Co. Ltd. Sony Assurance Inc.

      Sony Bank Inc.

      Sony Payment Services Inc.

      SmartLink Network Hong Kong Limited. Sony Lifecare Inc*

      Lifecare Design Inc.*

      *Sony Lifecare Inc. and Lifecare Design Inc. are included in the scope of consolidation from the first quarter ended June 30, 2016.

      Affiliated companies accounted for under the equity method: AEGON Sony Life Insurance Co., Ltd.

      SA Reinsurance Ltd.

      Statements made in this press release concerning the current plans, expectations, strategies and beliefs of the Sony Financial Group. Any statements 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 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 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 press release 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 or commitment whatsoever in Japan or abroad.

      For inquiries:

      Corporate Communications & Investor Relations Dept. Sony Financial Holdings Inc.

      Telephone: +81-3-5290-6500 E-mail: press@sonyfh.co.jp

      Website of Sony Financial Holdings Inc. http://www.sonyfh.co.jp/index_en.html

      1. Attachment

        Content of Presentation Material

        Consolidated Financial Results for the Nine Months Ended December 31, 2016 and Sony Life's Market Consistent Embedded Value as of December 31, 2016

        Consolidated Operating Results for the Nine Months Ended December 31, 2016…………… 3

        Consolidated Financial Forecast for the Year Ending March 31, 2017 ……………………… 29

        Sony Life's MCEV and ESR as of December 31, 2016……………………………………… 31

        Appendix ……………………………………………………………………………………… 34

        Attachment

        Presentation Material Consolidated Financial Results for the Nine Months Ended December 31, 2016 and Sony Life's MCEV as of December 31, 2016 Sony Financial Holdings Inc. February 14, 2017

        Sony Financial Holdings Inc. All Rights Reserved

        Content
        • Consolidated Operating Results for the Nine Months Ended December 31, 2016

          P.3
        • Forecast of Consolidated Financial Results for the Year Ending March 31, 2017 (FY16) P.29

        • Sony Life's MCEV and ESR as of December 31, 2016 P.31

        • Appendix P.34

      2. Disclaimers:

        This presentation material contains statements concerning the current plans, expectations, strategies and beliefs of the Sony Financial Group. Any statements 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 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 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 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 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 Reserved 2

        Attachment

        Consolidated Operating Results for the Nine Months Ended December 31, 2016

        Sony Financial Holdings Inc. All Rights Reserved 3

        (Billions of yen)

        FY15.3Q (9M)

        FY16.3Q (9M)

        Change

        Life Insurance business

        Ordinary revenues

        937.3

        939.1

        +1.7

        +0.2%

        Ordinary profit

        48.8

        42.3

        (6.4)

        (13.1%)

        Non-life Insurance business

        Ordinary revenues

        72.7

        75.9

        +3.1

        +4.4%

        Ordinary profit

        3.8

        4.9

        +1.1

        +30.7%

        Banking business

        Ordinary revenues

        28.1

        28.5

        +0.3

        +1.4%

        Ordinary profit

        4.6

        3.3

        (1.3)

        (29.1%)

        Intersegment adjustments*

        Ordinary revenues

        (2.1)

        (2.3)

        (0.1)

        Ordinary profit

        0.1

        (0.4)

        (0.5)

        Consolidated

        Ordinary revenues

        1,036.1

        1,041.3

        +5.1

        +0.5%

        Ordinary profit

        57.4

        50.3

        (7.1)

        (12.4%)

        Profit attributable to owners of the parent

        38.2

        33.7

        (4.5)

        (11.8%)

        Highlights of Consolidated Operating Performance for FY16.3Q (9M) (1)

        Consolidated ordinary revenues Consolidated ordinary profit

        1,036.1

        57.4

        +0.5%

        (12.4%)

        1,041.3

        50.3

        FY15.3Q (9M) FY16.3Q (9M)

        (Billions of yen)

        *Ordinary profit in "Intersegment adjustments" is mainly from SFH. Nursing care business has been included in the scope of consolidation from FY16.1Q.

        *Comprehensive income : FY15.3Q (9M): ¥40.2 billion, FY16.3Q (9M): ¥18.2 billion

        (Billions of yen)

        16.3.31

        16.12.31

        Change from 16.3.31

        Consolidated

        Net assets

        604.3

        597.9

        (6.4)

        (1.1%)

        Total assets

        10,352.1

        11,276.0

        +923.9

        +8.9%

        Sony Financial Holdings Inc. All Rights Reserved 4

        Highlights of Consolidated Operating Performance for FY16.3Q (9M) (2)

        Attachment

        Life Insurance Business: Ordinary revenues were essentially flat year on year, because an increase in investment income was offset by a decrease in insurance premium revenues led by a decline in sales of single premium products. Ordinary profit decreased year on year due mainly to lower gains on sale of securities in the general account. The provision of policy reserves for minimum guarantees for variable life insurance declined owing to a lower acquisition of new policies and the improvement of the market conditions. This positive impact on ordinary profit, however, was partially offset by a deterioration in net gains/losses on derivative transactions to hedge market-related risks

        Non-life Insurance Business: Ordinary revenues expanded year on year, owing mainly to an increase in net premiums written primarily for mainstay automobile insurance. Ordinary profit increased year on year, due mainly to the increase in ordinary revenues, including gains on sale of securities, and a lower expense ratio.

        Banking Business: Ordinary revenues increased year on year due to an increase in interest income on loans in line with a favorably growing balance of mortgage loans and an increase in ordinary revenues from Sony Payment Services (Sony Bank's 57% owned subsidiary), partially offset by a decrease in interest and dividend income on securities. Ordinary profit decreased year on year due to the lower level of interest rates, an increase in initial expenses led by a higher execution of mortgage loans, and decreased volumes of foreign currency and investment trust transactions of customers.

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

        Sony Financial Holdings Inc. All Rights Reserved 5

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

        (Billions of yen)

        FY15.3Q (9M)

        FY16.3Q (9M)

        Change

        Ordinary revenues

        937.2

        938.9

        +1.7

        +0.2%

        Income from insurance premiums

        754.8

        705.4

        (49.4)

        (6.5%)

        Investment income

        153.4

        195.0

        +41.5

        +27.1%

        Interest income and dividends

        105.5

        110.0

        +4.5

        +4.3%

        Income from monetary trusts, net

        10.8

        3.3

        (7.4)

        (68.9%)

        Gains on sale of securities

        12.1

        1.3

        (10.8)

        (89.3%)

        Foreign exchange gains, net

        0.4

        24.2

        +23.7

        Gains on separate accounts, net

        24.4

        55.9

        +31.5

        +129.2%

        Ordinary expenses

        888.2

        893.7

        +5.5

        +0.6%

        Insurance claims and other payments

        279.3

        276.0

        (3.3)

        (1.2%)

        Provision for policy reserves and others

        480.2

        447.0

        (33.1)

        (6.9%)

        Investment expenses

        5.0

        38.9

        +33.9

        +667.9%

        Losses on derivatives, net

        0.5

        34.2

        +33.7

        Operating expenses

        97.4

        101.6

        +4.2

        +4.4%

        Ordinary profit

        49.0

        45.1

        (3.8)

        (7.8%)

        Net income

        32.8

        31.2

        (1.6)

        (5.0%)

        (Billions of yen)

        16.3.31

        16.12.31

        Change from 16.3.31

        Securities

        7,273.3

        7,916.0

        +642.6

        +8.8%

        Policy reserves

        7,336.5

        7,783.1

        +446.6

        +6.1%

        Net assets

        482.1

        483.0

        +0.9

        +0.2%

        Net unrealized gains on other securities

        150.6

        133.5

        (17.0)

        (11.3%)

        Total assets

        8,035.4

        8,721.1

        +685.7

        +8.5%

        Separate account assets

        850.3

        957.9

        +107.5

        +12.7%

        Ordinary revenues Ordinary profit

        938.9

        937.2 +0.2%

        (7.8%)

        49.0

        45.1

        (Billions of yen)

        FY15.3Q (9M) FY16.3Q (9M)

        • Ordinary revenues were flat but ordinary profit decreased year on year.

        • Income from insurance premiums decreased due to a decline in sales of single premium products.

        • Investment income increased led by higher gains on separate account despite lower gains on sale of securities

          in the general account.

        • Ordinary profit decreased due mainly to lower gains on sale of securities in the general account. The provision of policy

          reserves for minimum guarantees for variable life insurance declined owing to a lower acquisitions of new

          policies and the improvement of the market conditions. The positive impact on ordinary profit, however, was partially offset by a deterioration in net gains/losses on derivative transactions to hedge market-related risks.

          Sony Financial Holdings Inc. All Rights Reserved 6

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

          Attachment

          (Billions of yen)

          FY15.3Q (9M)

          FY16.3Q (9M)

          Change

          New policy amount

          4,052.4

          3,499.7

          (13.6%)

          Lapse and surrender amount

          1,474.9

          1,371.1

          (7.0%)

          Lapse and surrender rate

          3.60%

          3.18%

          (0.42pt)

          Policy amount in force

          42,841.7

          44,633.9

          +4.2%

          Annualized premiums from new policies

          65.8

          54.1

          (17.7%)

          Of which, third-sector products

          12.0

          11.2

          (7.0%)

          Annualized premiums from insurance in force

          771.8

          807.3

          +4.6%

          Of which, third-sector products

          178.3

          185.1

          +3.8%

          • Decreased due to lower sales of variable life insurance despite favorable sales of U.S. dollar- denominated insurance and term life insurance.

          • Decreased due to lower sales of variable life insurance despite favorable sales of term life insurance and U.S. dollar- denominated insurance.

        Notes:

        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, not adjusted for policy amount decreases, increases, and reinstatements, by the policy amount in force at the beginning of the fiscal year.

          (Billions of yen)

          FY15.3Q (9M)

          FY16.3Q (9M)

          Change

          Gains from investment, net (General account)

          123.9

          100.0

          (19.3%)

          Core profit

          35.1

          65.8

          +87.5%

          Positive spread

          11.7

          11.1

          (5.1%)

          16.3.31

          16.12.31

          Change from 16.3.31

          Non-consolidated solvency margin ratio

          2,722.8%

          2,731.1%

          +8.3pt

          • Increased due mainly to a decrease in the provision of policy reserves for minimum guarantees for variable life insurance reflecting a lower acquisition of new policies and the improvement of the market conditions.

        Sony Financial Holdings Inc. All Rights Reserved 7

        Operating Performance : Sony Life (Non-consolidated) (1)

        Number and Amount of New Policies

        (Individual Life Insurance + Individual Annuities)

        Annualized Premiums from New Policies

        (Individual Life Insurance + Individual Annuities)

        New policy amount Number of new policies Annualized premiums from new policies Of which, third-sector

        (Trillions of yen)

        (Thousands of policies)

        (Billions of yen)

        80

        6 463501

        5

        4.05

        4 3.61

        3

        (22.5%)

        (13.6%)

        388

        3.49

        500

        60

        400

        300

        40

        58.0

        65.8

        (17.7%)

        54.1

        200

        2

        20

        1 100

        11.7

        12.0

        (7.0%)

        11.2

        0 0

        FY14.3Q (9M) FY15.3Q (9M) FY16.3Q (9M)

        0

        FY14.3Q (9M) FY15.3Q (9M) FY16.3Q (9M)

        Sony Financial Holdings Inc. All Rights Reserved 8

        Attachment

        Sony Life's Product Portfolio

        Annualized Premiums from New Policies by Product

        FY15 (12M) ¥85.0 billion FY16.3Q (3M) ¥15.3 billion

        FY16.1H(6M) ¥38.7 billion

        Sony Financial Holdings Inc. All Rights Reserved 9

        Operating Performance : Sony Life (Non-consolidated) (2)

        Number and Amount of Policies in Force

        (Individual Life Insurance + Individual Annuities)

        Annualized Premiums from Insurance in Force

        (Individual Life Insurance + Individual Annuities)

        Policy amount in force Number of policies in force Annualized premiums from insurance in force Of which, third-sector

        (Trillions of yen)

        +3.9%

        (Millions of

        policies) (Billions of yen)

        781.3

        807.3

        6.98

        50

        42.8

        40

        +4.2%

        7.04

        43.1

        +2.9%

        +3.4%

        7.25

        44.6

        8800

        6600

        771.8

        +4.6%

        +3.3%

        30 4

        400

        20

        2 200

        10

        178.3

        +3.8%

        179.7

        +3.0%

        185.1

        0 0 0

        15.12.31 16.3.31 16.12.31

        15.12.31 16.3.31 16.12.31

        Sony Financial Holdings Inc. All Rights Reserved 10

        Operating Performance : Sony Life (Non-consolidated) (3)

        Attachment

        Lapse and Surrender Rate*

        (Individual Life Insurance + Individual Annuities)

        Lapse and surrender rate (12Ml)

        Lapse and surrender rate (9M)

        (%)

        10

        8

        6 5.35

        4.72

        4

        4.00 3.60

        2

        (0.42pt)

        3.18

        0

        FY14 FY15 FY16

        *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 11

        Operating Performance : Sony Life (Non-consolidated) (4)

        Income from Insurance Premiums Interest Income and Dividends

        (Billions of yen) (Billions ofyen)

        800

        600

        675.4

        754.8

        (6.5%)

        705.4

        120

        100

        99.5

        105.5

        +4.3%

        110.0

        80

        400 60

        40

        200

        20

        0

        FY14.3Q (9M) FY15.3Q (9M) FY16.3Q (9M)

        0

        FY14.3Q (9M) FY15.3Q (9M) FY16.3Q (9M)

        Sony Financial Holdings Inc. All Rights Reserved 12

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

        Attachment

        Core Profit Ordinary Profit

        (Billions of yen) (Billions ofyen)

        80

        60.6

        60

        40

        35.1

        +87.5%

        65.8

        80

        67.1

        60

        40

        49.0

        (7.8%)

        45.1

        20 20

        0

        FY14.3Q (9M) FY15.3Q (9M) FY16.3Q (9M)

        0

        (Reference) Main differences from core profit

        (Billions of yen)

        FY14.3Q (9M)

        FY15.3Q (9M)

        FY16.3Q (9M)

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

        10.4

        19.7

        0.0

        Gains (losses) on hedges of variable life insurance

        (0.6)

        (14.2)

        Provision of contingency reserve (*)

        (3.8)

        (4.9)

        (6.2)

        FY14.3Q (9M) FY15.3Q (9M) FY16.3Q (9M)

        (Reference) Impact on core profit

        (Billions of yen)

        FY14.3Q (9M)

        FY15.3Q (9M)

        FY16.3Q (9M)

        Positive spread

        9.4

        11.7

        11.1

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

        (3.3)

        (24.2)

        (4.5)

        Others

        54.5

        47.6

        59.2

        "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 13

        Operating Performance : Sony Life (Non-consolidated) (6)

        Number of Lifeplanner Sales Employees

        +354

        (Number)

        5,000

        4,500

        4,3294,352

        4,415 4,376

        4,612

        4,682

        4,751

        (21)

        4,730

        4,000

        3,500

        3,000

        15.3.31 15.6.30 15.9.30 15.12.31 16.3.31 16.6.30 16.9.30 16.12.31

        Sony Financial Holdings Inc. All Rights Reserved 14

        Operating Performance : Sony Life (Non-consolidated) (7)

        Attachment

        Breakdown of General Account Assets

        (Billions of yen)

        16.3.31

        16.12.31

        Amount

        %

        Amount

        %

        Japanese government and corporate bonds

        6,351.1

        88.4%

        6,722.1

        86.6%

        Japanese stocks

        33.3

        0.5%

        34.9

        0.5%

        Foreign bonds

        70.1

        1.0%

        234.1

        3.0%

        Foreign stocks

        23.0

        0.3%

        31.4

        0.4%

        Monetary trusts

        280.9

        3.9%

        273.9

        3.5%

        Policy loans

        171.6

        2.4%

        176.8

        2.3%

        Real estate*

        115.8

        1.6%

        117.7

        1.5%

        Cash and call loans

        52.5

        0.7%

        55.4

        0.7%

        Others

        86.4

        1.2%

        116.6

        1.5%

        Total

        7,185.0

        100.0%

        7,763.2

        100.0%

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

        Mar. 31, 2015: 20.3 years

        Mar. 31, 2016: 21.8 years

        Dec. 31, 2016: 21.5 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 general account assets: As of Dec. 31, 2016: 90.1%

        (As of Mar. 31, 2016: 92.3%)

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

        Sony Financial Holdings Inc. All Rights Reserved 15

        Review of Sony Life's Asset Management

        Diversify asset management under the negative interest rate environment (purchase securities in the general account asset)

        FY14 (12M) Japanese

        stocks 0.4% Other securities

        0.4%

        Foreign bonds 3.9%

        JGBs 95.4%

        Promote diversification of investment assets while

        continue to invest in assets that match the liability characteristics.

        Expand investments in ultralong-term Japanese corporate bonds (including FILP agency bonds)

        Significantly increase investments in U.S. government bonds, responding to higher sales of U.S. dollar denominated insurance policies.

        FY15 (12M) Japanese stocks 0.5%

        FY16.3Q (9M)

        Japanese stocks 0.4%

        Foreign bonds

        Japanese 2.3%

        corporate

        bonds 11.9%

        JGBs 85.3%

        Foreign bonds 28.3%

        Japanese corporate

        JGBs 40.3%

        bonds 31.0%

        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 Reserved 16

        Operating Performance : Sony Life (Non-consolidated) (8)

        Attachment

        Non-consolidated Solvency Margin Ratio

        (%)

        3,000

        2,500

        2,555.0

        2,722.8

        +8.3pt

        2,731.1

        2,000

        1,500

        1,000

        0

        15.3.31 16.3.31 16.12.31

        Sony Financial Holdings Inc. All Rights Reserved 17

        Highlights of Operating Performance: Sony Assurance

        (Billions of yen)

        FY15.3Q (9M)

        FY16.3Q (9M)

        Change

        Ordinary revenues

        72.7

        75.9

        +3.1

        +4.4%

        Underwriting income

        71.8

        74.3

        +2.5

        +3.5%

        Investment income

        0.9

        1.5

        +0.6

        +67.5%

        Ordinary expenses

        68.9

        70.9

        +1.9

        +2.9%

        Underwriting expenses

        50.9

        52.5

        +1.6

        +3.2%

        Investment expenses

        0.0

        (0.0)

        (100.0%)

        Operating general and administrative expenses

        18.0

        18.3

        +0.3

        +2.0%

        Ordinary profit

        3.8

        4.9

        +1.1

        +30.6%

        Extraordinary Losses

        0.8

        0.0

        (0.8)

        (97.7%)

        Net income

        2.1

        3.6

        +1.4

        +70.5%

        Ordinary revenues Ordinary profit

        72.7 +4.4%

        75.9

        +30.6%

        4.9

        3.8

        FY15.3Q (9M) FY16.3Q (9M)

        (Billions of yen)

        (Billions of yen)

        16.3.31

        16.12.31

        Change from 16.3.31

        Underwriting reserves

        95.7

        103.0

        +7.3

        +7.7%

        Net assets

        28.3

        29.6

        +1.3

        +4.6%

        Total assets

        172.3

        179.4

        +7.0

        +4.1%

        • Both ordinary revenues and ordinary profit increased year on year.

        • Ordinary revenues expanded owing to an increase in net premiums written primarily for

          mainstay automobile insurance.

        • Ordinary profit increased due mainly to the increase in ordinary revenues, including gains on sale of securities, and a lower expense ratio.

          Sony Financial Holdings Inc. All Rights Reserved 18

          Overview of Operating Performance: Sony Assurance

          Attachment

          (Billions of yen)

          FY15.3Q (9M)

          FY16.3Q (9M)

          Change

          Direct premiums written

          70.8

          73.3

          +3.5%

          Net premiums written

          71.7

          74.2

          +3.5%

          Net losses paid

          35.5

          36.9

          +4.0%

          Underwriting profit

          2.9

          3.4

          +17.5%

          Net loss ratio

          56.8%

          57.2%

          +0.4pt

          Net expense ratio

          26.6%

          26.3%

          (0.3pt)

          Combined ratio

          83.4%

          83.5%

          +0.1pt

          • Increased mainly in its mainstay automobile insurance.

          • Declined due to a proper control on overall operating expenses.

        Note:

        FY15.3Q (9M)

        FY16.3Q (9M)

        Change

        E. I. loss ratio

        63.1%

        62.9%

        (0.2pt)

        E. I. loss ratio + Net expense ratio

        89.7%

        89.2%

        (0.5pt)

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

        Notes:

        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.]

        • Declined slightly due to a decrease in provision for reserve for outstanding losses in automobile insurance.

          16.3.31

          16.12.31

          Change from 16.3.31

          Number of policies in force

          1.79 million

          1.84 million

          +0.04 million

          +2.5%

          Non-consolidated solvency margin ratio

          693.5%

          771.1%

          +77.6pt

          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 Reserved 19

          Sony Assurance's Underwriting Performance by Type of Policy

          Direct Premiums Written Net PremiumsWritten

          (Millions of yen)

          FY15.3Q (9M)

          FY16.3Q (9M)

          Change

          Fire

          259

          170

          (34.4%)

          Marine

          Personal accident

          6,496

          6,583

          +1.3%

          Voluntary automobile

          64,053

          66,563

          +3.9%

          Compulsory automobile liability

          Total

          70,810

          73,317

          +3.5%

          (Millions of yen)

          FY15.3Q (9M)

          FY16.3Q (9M)

          Change

          Fire

          35

          18

          (48.9%)

          Marine

          36

          (2)

          Personal accident

          6,721

          6,811

          +1.3%

          Voluntary automobile

          63,913

          66,371

          +3.8%

          Compulsory automobile liability

          1,055

          1,074

          +1.9%

          Total

          71,762

          74,273

          +3.5%

          Net losses paid

          *Medical and cancer insurance is included in personal accident.

          (Millions of yen)

          FY15.3Q (9M)

          FY16.3Q (9M)

          Change

          Fire

          1

          5

          +335.4%

          Marine

          122

          (9)

          Personal accident

          1,838

          1,919

          +4.4%

          Voluntary automobile

          32,587

          34,034

          +4.4%

          Compulsory automobile liability

          963

          991

          +2.9%

          Total

          35,513

          36,941

          +4.0%

          Sony Financial Holdings Inc. All Rights Reserved 20

          Operating Performance: Sony Assurance (1)

          Attachment

          Net Premiums Written and Number of Policies in Force

          Ordinary Profit and Adjusted Ordinary Profit

          Voluntary automobile insurance

          Personal accident insurance

          (Billions of yen)

          Ordinary profit Adjusted ordinary profit

          Others

          Number of policies in force

          8

          (Millions of

          6.6

          +20.7%

          7.3

          (Billions of yen)

          100

          80

          1.67

          1.77 +3.8%

          1.84

          74.2

          policies)

          6

          1.5

          4.4

          6.0

          4.9

          68.9

          60

          71.7

          +3.5%

          6.8

          66.3

          4

          1.0 3.8

          1

          +30.6%

          40 2

          0.5

          20

          0

          FY14.3Q (9M) FY15.3Q (9M) FY16.3Q (9M)

          0 0

          FY14.3Q (9M) FY15.3Q (9M) FY16.3Q (9M)

          (Reference) Provision for catastrophe reserve

          (Billions of yen)

          FY14.3Q (9M)

          FY15.3Q (9M)

          FY16.3Q (9M)

          Provision for catastrophe reserve

          2.1

          2.2

          2.3

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

          The number of policies in force is the total of automobile insurance and medical and cancer insurance policies, which account for 99% of net premiums written. More than 90% of personal accident insurance is medical and cancer insurance.

          *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

          (Reference) Combined Ratio

          (Net Loss Ratio+ Net Expense Ratio)

          Earned/Incurred loss ratio

          Net expense ratio

          Net loss ratio

          Net expense ratio

          (%)

          100

          80

          91.0

          90.4

          88.8

          89.7

          (0.5pt)

          89.2

          (%)

          100

          80

          84.3

          84.8

          81.5

          83.4

          +0.1pt

          83.5

          60

          64.3

          40

          63.3

          63.5 63.1 62.9

          (0.2pt)

          60

          57.6 57.8

          40

          56.2 56.8 57.2

          +0.4pt

          20 26.7 27.1

          (0.3pt)

          25.3 26.626.3

          20 26.7 27.1

          25.3 26.6

          (0.3pt)

          26.3

          0

          FY14 FY15 FY14.3Q FY15.3Q FY16.3Q

          0

          FY14 FY15 FY14.3Q FY15.3Q FY16.3Q

          Notes:

          (9M) (9M)

          Notes:

          Earned/Incurred 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.]

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

          Sony Financial Holdings Inc. All Rights Reserved 22

          Operating Performance: Sony Assurance (3)

          Attachment

          Non-consolidated Solvency Margin Ratio

          (%)

          800

          600

          629.6%

          693.5%

          +77.6pt

          771.1%

          400

          200

          0

          15.3.31 16.3.31 16.12.31

          Sony Financial Holdings Inc. All Rights Reserved 23

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

          Consolidated ordinary revenues Consolidated ordinary profit

          +1.3%

          28.5

          (Billions of yen)

          FY15.3Q (9M)

          FY16.3Q (9M)

          Change

          Consolidated ordinary revenues

          28.1

          28.5

          +0.3

          +1.3%

          Consolidated ordinary profit

          4.6

          3.3

          (1.3)

          (29.1%)

          Profit attributable to owners of the parent

          3.0

          2.1

          (0.8)

          (29.4%)

          28.1

          (29.1%)

          4.6

          3.3

          (Billions of yen)

          FY15.3Q (9M)

          FY16.3Q (9M)

          Change

          Ordinary revenues

          25.9

          25.9

          +0.0

          +0.2%

          Gross operating profit

          16.2

          15.5

          (0.6)

          (4.2%)

          Net interest income

          12.3

          13.0

          +0.7

          +6.4%

          Net fees and commissions

          0.1

          (1.1)

          (1.2)

          Net other operating income

          3.8

          3.5

          (0.2)

          (6.4%)

          General and administrative expenses

          11.6

          12.4

          +0.8

          +7.4%

          Net operating profit

          4.6

          3.0

          (1.5)

          (33.3%)

          Ordinary profit

          4.6

          3.0

          (1.5)

          (34.1%)

          Net income

          3.0

          2.0

          (0.9)

          (32.0%)

          (Billions of yen)

          16.3.31

          16.12.31

          Change from 16.3.31

          Net assets

          77.4

          79.5

          +2.1

          +2.8%

          Net unrealized gains on other securities, net of taxes

          3.3

          4.3

          +1.0

          +30.9%

          Total assets

          2,126.5

          2,392.9

          +266.3

          +12.5%

          (Billions of yen)

          FY15.3Q (9M) FY16.3Q (9M)

        • Ordinary revenues increased due to an increase in interest income on loans in line with a favorably growing balance of mortgage loans and an increase in ordinary revenues from Sony Payment Services (Sony Bank's 57% owned subsidiary), partially offset by a decrease in interest and dividend income on securities.

        • Ordinary profit decreased due to the lower level of interest

          rates, an increase in initial expenses led by a higher execution of mortgage loans, and decreased volumes of foreign

          currency and investment trust transactions of customers.

        • Both gross operating profit and net operating profit decreased.

          Net interest income increased due to a rise in interest income on loans despite a decrease in interest and dividend income

          on securities.

          Net fees and commissions decreased due to an increase in initial expenses led by a higher execution of mortgage loans and lower volumes of investment trust transactions.

          Net other operating income decreased due to lower fees and

          commissions from foreign currency transactions of customers.

          Sony Financial Holdings Inc. All Rights Reserved 24

          Overview of Operating Performance: Sony Bank (Non-consolidated) (1)

          Attachment

          (Billions of yen)

          15.12.31

          16.3.31

          16.12.31

          Change from 16.3.31

          Customer assets

          1,980.5

          2,034.4

          2,227.3

          +192.9

          +9.5%

          Deposits

          1,866.4

          1,923.5

          2,117.3

          +193.8

          +10.1%

          Yen

          1,538.5

          1,587.9

          1,772.1

          +184.2

          +11.6%

          Foreign currency

          327.9

          335.5

          345.1

          +9.6

          +2.9%

          Investment trusts

          114.1

          110.9

          110.0

          (0.9)

          (0.8%)

          Loans outstanding

          1,293.6

          1,344.1

          1,504.4

          +160.2

          +11.9%

          Mortgage loans

          1,181.8

          1,237.1

          1,409.0

          +171.8

          +13.9%

          Card loans

          8.0

          10.5

          17.0

          +6.4

          +61.6%

          Others

          103.6

          96.5

          *1

          78.3

          (18.1)

          (18.8%)

          Capital adequacy ratio *2

          (domestic criteria)

          10.50%

          9.89%

          9.00%

          (0.89pt)

          • Yen deposit balance increased due to an increase in yen time deposit reflecting the special interest offering, as well as a rise in yen ordinary deposits converted from foreign currencies backed by yen depreciation.

          • Yen-denominated balance of foreign currency deposit increased due to a favorable exchange rate even after the negative impact of the conversion

            from foreign currencies into yen led by yen depreciation.

          • Loan balance expanded reflecting higher demand for refinancing mortgage loans.

        *1 Loans in others include corporate loans of ¥78.3 billion

        *2 Please refer to the graph of the non-consolidated capital adequacy ratio (Domestic criteria) on P28.

        Sony Financial Holdings Inc. All Rights Reserved 25

        Overview of Operating Performance: Sony Bank (Non-consolidated) (2) On Managerial Accounting Basis

        (Billions of yen)

        FY15.3Q (9M)

        FY16.3Q (9M)

        Change

        Gross operating profit

        16.1

        15.5

        (0.6)

        (4.2%)

        Net interest income*1

        13.9

        15.0

        +1.0

        +7.8%

        Net fees and commissions*2

        0.7

        (0.6)

        (1.4)

        Net other operating income*3

        1.4

        1.0

        (0.3)

        (24.3%)

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

        14.7

        14.4

        (0.3)

        (2.3%)

        Operating expenses and other expenses

        11.6

        12.4

        +0.8

        +7.2%

        Net operating profit (core profit)

        (A)-③

        3.1

        1.9

        (1.1)

        (37.6%)

        Interest Spread (Managerial Accounting Basis)

        (%)

        1.50

        Yield on investment Interest spread

        Yield on financing

        1.19 1.20

        +0.01pt

        1.00 0.93 0.94

        Managerial accounting basis

        The following adjustments are made to the figures on a financial account for profits and losses 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 consists of profits and losses for bond and derivative dealing transactions.

        0.50

        0.00

        0.26 0.26

        FY15.3Q (9M) FY16.3Q (9M)

        Core profit

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

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

        Sony Financial Holdings Inc. All Rights Reserved 26

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

        Attachment

        Deposits Loans

        Yen deposits Foreign currency deposits Mortgage loans Others

        (Billions of yen)

        +193.8

        2,117.3

        (Billions of yen)

        2,000

        2,000

        1,878.2

        327.2

        1,923.5

        335.5

        345.1

        1,500

        +160.2

        1,504.4

        1,500

        1,000

        1,551.0

        1,587.9

        1,772.1

        1,000

        1,187.1

        112.8

        1,074.3

        1,344.1

        107.0

        1,237.1

        95.3

        1,409.0

        *Corporate loans of ¥78.3 billion Card loans of

        ¥17.0 billion

        500

        500

        0

        15.3.31 16.3.31 16.12.31

        0

        15.3.31 16.3.31 16.12.31

        Sony Financial Holdings Inc. All Rights Reserved 27

        Operating Performance: Sony Bank (Non-consolidated) (2)

        Balance of Securities by Credit Rating Non-Consolidated Capital Adequacy Ratio

        (Domestic Criteria)

        AAA

        AA A

        BBB Others

        (Billions of yen)

        730.0

        620.9 631.1

        +10.1

        800

        (%)

        15

        600

        10

        10.65

        9.89

        9.00

        (0.89pt)

        400

        5

        200

        0

        15.3.31 16.3.31 16.12.31

        0

        15.3.31 16.3.31 16.12.31

        *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 28

        Attachment

        Forecast of Consolidated Financial Results for the Year Ending March 31, 2017 (FY16)

        Sony Financial Holdings Inc. All Rights Reserved 29

        Forecast of Consolidated Financial Results for FY16

        Forecast of consolidated financial results for FY16 is unchanged from the forecast announced on April 28, 2016

        (Billions of yen)

        FY15

        (Actual)

        FY16

        (Forecast)

        Change

        Consolidated ordinary revenues

        1,362.0

        1,450.0

        +6.5%

        Life insurance business

        1,230.2

        1,309.8

        +6.5%

        Non-life insurance business

        96.9

        101.6

        +4.8%

        Banking business

        37.9

        37.9

        (0.1%)

        Consolidated ordinary profit

        71.1

        71.0

        (0.1%)

        Life insurance business

        60.2

        62.5

        +3.8%

        Non-life insurance business

        4.6

        4.4

        (6.0%)

        Banking business

        5.9

        4.5

        (24.9%)

        Profit attributable to owners of the parent

        43.3

        46.0

        +6.1%

        FY16.3Q

        (9M Actual)

        Progress rate

        1,041.3

        71.8%

        939.1

        71.7%

        75.9

        74.8%

        28.5

        75.3%

        50.3

        70.8%

        42.3

        67.8%

        4.9

        113.6%

        3.3

        73.6%

        33.7

        73.3%

        Life insurance business

        In FY16.3Q (9M), ordinary revenues were below our initial expectations due to a decline in insurance premium revenues although investment income exceeded our initial expectations. Ordinary profit was nearly in line with our initial forecast. Therefore, we maintain our full year forecast of ordinary revenues and ordinary profit.

        Non-life insurance business

        Ordinary revenues for FY16.3Q (9M) were nearly the same as our initial forecast. Ordinary profit outpaced our initial expectations due mainly to higher gains on sale of securities recorded in FY16.1Q. As we expect higher expenses related to new policy acquisitions in FY16.4Q, we maintain our full year forecast of ordinary revenues and ordinary profit.

        Banking business

        We maintain our full year forecast of ordinary revenues and ordinary profit because the operating results in FY16.3Q (9M) were nearly the same as our initial forecast, and we expect this trend to continue in FY16.4Q.

        Sony Financial Holdings Inc. All Rights Reserved 30

        Attachment

        Sony Life's MCEV and ESR as of December 31, 2016

        MCEV as of March 31, 2016 is restated by using ultimate forward rates (UFR).

        Please keep in mind that the validity of these calculations has not been verified by outside specialists. A part of the calculations of MCEV adopted simplified method except for that as of March 31, 2016.

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

        Sony Financial Holdings Inc. All Rights Reserved 31

        Sony Life's MCEV as of December 31, 2016

        (Billions of yen)

        16.3.31

        16.9.30

        16.12.31

        Change from 16.3.31

        Change from 16.9.30

        MCEV

        1,330.1

        1,229.3

        1,282.7

        (47.4)

        +53.4

        Adjusted net worth

        2,074.4

        2,187.8

        1,831.1

        (243.3)

        (356.7)

        Value of existing business

        (744.4)

        (958.5)

        (548.4)

        +196.0

        +410.1

        (Billions of yen)

        FY15.4Q

        (3M)

        FY16.1Q

        (3M)

        FY16.2Q

        (3M)

        FY16.3Q

        (3M)

        New business value

        3.9

        (0.2)

        5.0

        10.2

        New business margin

        1.2%

        (0.0%)

        1.6%

        4.0%

        FY16.3Q

        (9M)

        14.9

        1.6%

        Notes:

        1. Calculated MCEV as of September 30, 2016 and December 31, 2016 by using updated economic assumptions and lapse and surrender rate from March 31, 2016.

        2. New business value for FY16 is calculated accumulating new business value for each month based on economic assumptions at the end of each month.

          New business value for FY15.4Q is calculated accumulating new business value for each quarter based on economic assumptions at the end of each quarter.

          • Reasons for changes in MCEV

            MCEV as of December 31, 2016 increased ¥53.4 billion from September 30, 2016 due mainly to a rise in interest rates, decreased ¥47.4 billion from March 31, 2016 due mainly to a decrease in lapse and surrender rate and a rise in inflation rate despite a rise in interest rates.

          • New business value / New business margin

            New business value for FY16.3Q (3M) was ¥10.2 billion.

            New business margin was up 2.5pt from FY16.2Q (3M), due mainly to a rise in interest rates and an effect of premium revisions.

            *Please refer to the appendix page 46 for trend on JGB yield.

            Sony Financial Holdings Inc. All Rights Reserved 32

            Attachment

            Sony Life's ESR as of December 31, 2016

            (Billions of yen)

            16.3.31

            16.9.30

            16.12.31

            Insurance risk*

            989.3

            1,042.7

            980.2

            Market-related risk

            324.2

            341.6

            369.5

            Of which, interest rate risk**

            255.2

            264.1

            288.5

            Operational risk

            31.4

            31.3

            31.1

            Counter party risk

            2.0

            1.9

            2.4

            Variance effect

            (374.4)

            (394.5)

            (390.4)

            The risk amount based on economic value

            972.4

            1,023.0

            992.9

            (* ) Risk amount excluding the variance effect within Life module and Health module. (**) Risk amount excluding the variance effect within market-related risk.

            (Billions of yen)

            16.3.31

            16.9.30

            16.12.31

            MCEV + Frictional costs

            1,366.5

            1,266.2

            1,325.5

            ESR

            141%

            124%

            134%

            Notes:

          • 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.

          • 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.

          • ESR=(MCEV + Frictional costs) / Risk amount based on economic value.

          • ESR as of December 31, 2016 was up 10pt from September 30, 2016 due mainly to a rise in interest rates and new business value accumulated during FY16.3Q.

          • Sony Life will continue to improve ESR levels by accumulating new business value through reinforcing its sales capabilities as well as ensuring profitability.

          Sony Financial Holdings Inc. All Rights Reserved 33

          Attachment

          Appendix

          Sony Financial Holdings Inc. All Rights Reserved 34

          Recent Topics 1

          AEGON Sony Life Insurance Launch of sales: December 1, 2009 Common stock: ¥14 billion

          Equity ownership: Sony Life insurance Co Ltd 50%, AEGON international B.V. 50% Marketing products: Individual Variable Annuities

          Sales Channels: Lifeplanner sales employees and partner Banks (30*) *As of Feb 14, 2017

          SA Reinsurance Ltd Established October 29, 2009 Common stock: ¥13.4 billion

          Equity ownership: Sony Life insurance Co., Ltd. 50%, AEGON international B.V. 50% Business Reinsurance business

          *AEGON Sony Life Insurance and SA Reinsurance are equity method companies, 50-50 joint ventures established by Sony Life and AEGON Group.

          Sony Bank's Mortgage Loans through Sony Life

          Sony Life accounts for 21% of the balance of mortgage loans as of December 31, 2016 Sony Life accounts for 21% of the amount of new mortgage loans for FY16.3Q (9M)

          *Sony Life started handling banking agency business in January 2008.

          Sony Assurance's Auto Insurance Sold by Sony Life

          Sony Life accounts for approx. 4% of new automobile policies for FY16.3Q (9M)

          *Sony Life started handling automobile insurance in May 2001.

          Sony Financial Holdings Inc. All Rights Reserved 35

          Attachment

          Recent Topics 2

          2016-10-01

          Sony Life commenced sale of new product: "Non-participating Group Welfare Term Life Insurance"

          2016-10-03

          Sony Life adopted paperless insurance procedures for its policyholders

          2016-10-25

          Sony Life acquired an entity stake in ClearView Wealth Limited (Australia) and announced business alliance

          2016-10-31

          Sony Bank began offering U.S. dollar-denominated active funds on investment trusts and revised the service site

          2016-11-01

          Sony Lifecare Group started advertisement for residents for a newly build nursing care home "SONARE URAWA", scheduled to open in May 2017

          2016-11-07

          Sony Bank began offering foreign currency settlement services for teenage customers

          2016-11-14

          Sony Life introduced a new system to quickly pay insurance claims and benefits

          2016-12-01

          Sony Assurance began offering new discounted premiums for new customers who contracted automobile insurance via Internet (increased discount rate from ¥8,000 to ¥10,000)

          2017-01-04

          Sony Bank began offering new preferential services called "Club S"

          2017-01-04

          Sony Life enhanced its investment product lineups for defined contribution pension plan (individual-type)

          2017-01-10

          Sony Assurance commenced sale of new product: "ZiPPi" medical insurance to indemnify hospital inpatient expenses and revised "SURE" medical and cancer insurance

          2017-02-01

          Sony Assurance and Yahoo! JAPAN announced to begin joint research with a view to developing telematics insurance products and services for individuals using driving behavior data from car navigation systems

          Sony Financial Holdings Inc. All Rights Reserved 36

          Sony Life's Product Revisions
          • FY16 Product Revisions

          (Sales suspension)

          May: Single premium whole life insurance (non-notification type), Semi-participating individual annuities, Semi-participating endowment insurance (short-term payment), and Non-participating endowment insurance (short-term payment)

          Jul.: Single premium semi-participating whole life nursing-care insurance

          Oct.: Interest rate-sensitive whole life insurance

          (Premium revisions)

          Apr.: Single premium whole life insurance (non-notification type)

          Jul.: Semi-participating endowment insurance, Non-participating endowment insurance

          Oct.: Variable life insurance (whole life type), Limited payment whole life insurance, Living benefit whole life insurance (living standard type), Living benefit insurance (whole life type), Whole life nursing-care insurance (reduced surrender value),

          Semi-participating whole life nursing-care insurance, Specialty endowment insurance, Whole-life cancer insurance

          • FY17 Premium Revisions (plan)

          Apr.: Long-term level premium plan term life insurance (with disability benefit), Cancer hospitalization insurance and other products

          Sony Financial Holdings Inc. All Rights Reserved 37

          Sony Life: Fair Value Information on Securities (General Account Assets)

          Attachment

          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

          3. 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 amount: None

            As of Dec. 31, 2016; Carrying amount: None

            Valuation gains (losses) on trading-purpose securities (Billions ofyen)

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

            Sony Financial Holdings Inc. All Rights Reserved 38

            Sony Life's Interest Income and Dividends (Details)

            (Millions of yen)

            FY15.3Q (9M)

            FY16.3Q (9M)

            Change

            Cash and deposits

            0

            0

            +166.1%

            Japanese government and corporate bonds

            85,907

            90,445

            +5.3%

            Japanese stocks

            356

            345

            (3.0%)

            Foreign securities

            5,653

            6,017

            +6.4%

            Other securities

            1,260

            177

            (85.9%)

            Loans

            4,616

            4,784

            +3.6%

            Real estate

            7,681

            8,148

            +6.1%

            Others

            47

            144

            +202.0%

            Total

            105,524

            110,064

            +4.3%

            Sony Financial Holdings Inc. All Rights Reserved 39

            Attachment

            Sony Life's Capital Gains/Losses

            (Millions of yen)

            FY15.3Q (9M)

            FY16.3Q (9M)

            Capital gains

            19,762

            25,628

            Income from monetary trusts, net

            7,119

            Income from trading securities, net

            103

            Gains on sale of securities

            12,193

            1,306

            Gains on derivatives, net

            Foreign exchange gains, net

            435

            24,218

            Gains (losses) on sale of foreign bonds

            (64)

            2,375

            Other capital gains

            13

            Capital losses

            758

            39,882

            Losses on monetary trusts, net

            Losses on trading securities, net

            143

            Losses on sale of securities

            Devaluation losses on securities

            Losses on derivatives, net

            515

            34,275

            Losses on hedges of variable life insurance

            699

            14,292

            Losses on hedges of available-for-sale securities

            2,265

            Foreign exchange losses, net

            Other capital losses

            99

            5,606

            Net capital gains (losses)

            19,003

            (14,253)

            In FY16.3Q (9M),

            recorded ¥3,681 million as a total of gains on sale of securities and foreign exchange gains on sale of foreign bonds.

            Notes:

            1. Foreign exchange gains, net for FY16.3Q (9M) include foreign exchange gains of ¥21,805 million relating to U.S. dollar-denominated insurance. Losses on derivatives, net include foreign exchange losses relating to U.S. dollar-denominated insurance of ¥ 17,445 million. Moreover, other capital losses include the provision of policy reserves for U.S. dollar-denominated insurance of ¥4,941 million relating to foreign exchange fluctuation.

            2. Foreign exchange gains, net for FY15.3Q (9M) include foreign exchange gains of ¥19 million relating to U.S. dollar-denominated insurance. Moreover, other capital gains include the reversal of policy reserves for U.S. dollar-denominated insurance of ¥13 million relating to foreign exchange fluctuation.

            3. The figures of income (losses) from monetary trust, net, income (losses) from trading securities, net, gains (losses) on derivatives and foreign exchange gains (losses), net were recorded after offsetting gains and losses of each item.

              Sony Financial Holdings Inc. All Rights Reserved 40

              Sony Life's Quarterly Trend on New Policy Amount

              Quarterly Trend on New Policy Amount

              (Billions of yen)

              1,500

              1,250

              1,000

              1,135.8

              991.5

              1,491.6

              1,152.5

              1,324.2 1,290.7

              1,437.4

              1,098.9

              1,260.0

              11,890

              1,050.7

              750

              500

              250

              0

              FY14.1Q FY14.2Q FY14.3Q FY14.4Q FY15.1Q FY15.2Q FY15.3Q FY15.4Q FY16.1Q FY16.2Q FY16.3Q

              Sony Financial Holdings Inc. All Rights Reserved 41

              Sony Life's Quarterly Trend on Annualized Premiums from New Policies

              Attachment

              Quarterly Trend on Annualized Premiums from New Policies

              Annualized premiums from new policies Of which, third-sector

              (Billions of yen)

              25

              20 18.9

              15

              17.2

              21.8

              18.5

              22.3

              20.6

              22.7

              19.1

              20.5

              18.2

              15.3

              10

              5

              3.7

              0

              2.8

              5.1

              3.5 3.9 3.4 4.6 3.6 4.1 3.9

              3.1

              FY14.1Q FY14.2Q FY14.3Q FY14.4Q FY15.1Q FY15.2Q FY15.3Q FY15.4Q FY16.1Q FY16.2Q FY16.3Q

              Sony Financial Holdings Inc. All Rights Reserved 42

              Operating Performance : AEGON Sony Life Insurance

              *AEGON Sony Life Insurance sells individual variable annuities.

              Number and Amount of New Policies

              Number and Amount of Policies in Force

              New policy amount Number of new polices []

              Policy amount in force Number of policies in force [ ]

              (Billions of yen)

              120

              100

              80

              107.5

              [18.1]

              53.2

              (Thousands of policies)

              24

              20

              16

              53.3

              (Billions of yen)

              600

              430.4

              [70.8]

              500

              400

              444.2

              [73.4]

              489.1

              [82.7]

              (Thousands of policies)

              80

              60

              60[8.9]

              [10.5] 12

              300 40

              40 8

              20 4

              200

              20

              100

              0 0

              FY14.3Q (9M) FY15.3Q (9M) FY16.3Q (9M)

              0 0

              15.12.31 16.3.31 16.12.31

              (Billions of yen)

              FY15.3Q (9M)

              FY16.3Q (9M)

              Change

              AEGON Sony Life Insurance

              (1.5)

              (3.1)

              (1.6)

              SA Reinsurance

              0.8

              (2.7)

              (3.6)

              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 and SA Reinsurance are recognized as investment profit (losses) on equity method in the SFH's consolidated net income.

              Sony Financial Holdings Inc. All Rights Reserved 43

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

              Attachment

              Sony Life

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

              Interest rate risk

              Percentage increases or decreases differ for each currency and term.

              Different percentage changes in interest rates are set for each term, from one year to 20 years.

              Fluctuations in net asset

              As for measuring interest rate risk in Japanese yen,

              For terms longer than 20 years and through 90

              value based on economic value in response to the shocks in the right columns.

              introduced principal component analysis, where yield curve changes are disaggregated into three

              years, percentage changes are set using linear interpolation, with negative 29% as the percentage

              The same applies below.

              components, parallel shift, twist and butterfly, and the

              change for 20 years and negative 20% as the

              yield curve is shocked by each component.

              percentage change for 90 years.

              (Example)

              For Yen 30-year, 33% decrease (parallel shift),

              28% decrease (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

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

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

              (Example)

              Rating A: Risk coefficient (1.4%), cap (23), floor (1)

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

              (Example)

              Rating A: Duration (Dur): 5-10 years

              Risk coefficient=7.0% + 0.7% x (Dur - 5 )

              Currency risk

              35% downside fluctuation

              25% downside fluctuation

              Notes

            4. Principal items as of December 31, 2016.

            5. 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 44

              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 left

              Longevity risk

              Mortality rate decreases by 20% for each year elapsed

              Same as on the left

              Lapse risk

              The largest amount of these; *2

              Lapse rate increases by 50% for each year elapsed

              The largest amount of these;

              Decreases by 50% in the assumed rates of lapsation for Life module, 50% for Health module

              Expense risk

              Operating expenses increase by 10% for each year elapsed

              Rate of inflation rises by 1%

              Same as on the left

              Disability risk

              Rate of occurrence increases by 35% in the first fiscal year, rising by 25% for each year thereafter

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

              • Lapse rate decreases by 50% for each year elapsed

              • 30% of policies on which surrender value is in excess of best estimate liability are immediately surrendered

              • Increases by 50% in the assumed rates of lapsation for Life module, 50% for Health module

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

              Notes

            6. Principal items as of December 31, 2016.

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

            8. Sony Financial Holdings Inc. All Rights Reserved 45

              Attachment

              Trend on JGB Yields (Par rate)

              As of the end of each month

              Sony Financial Holdings Inc. All Rights Reserved 46

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

              Convergence period: 20 year

              Last 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. All Rights Reserved 47

              Attachment

              Contact:

              Communications & Investor Relations Department Sony Financial Holdings Inc.

              TEL +81-3-5290-6500

              Sony Financial Holdings Inc. All Rights Reserved 48

        Sony Financial Holdings Inc. published this content on 14 February 2017 and is solely responsible for the information contained herein.
        Distributed by Public, unedited and unaltered, on 14 February 2017 06:08:10 UTC.

        Original documenthttp://www.sonyfh.co.jp/en/financial_info/results/sfh_fy2016_3q_01.pdf

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