Mission. Corporate Philosophy. LIFEPLANNER VALUE: Four Commitments

Transcription

1 Annual Report

2 Mission We will work for customers financial security and stability by offering optimal life insurance products and high-quality services. Corporate Philosophy We will prove worthy of the expectations and confidence of customers through the relentless pursuit of high-quality services that satisfy customers. We will conduct innovative management by anticipating future needs, while boldly staying at the forefront of developments in the business environment. We will create an open-minded workplace while maintaining an energetic organization, by respecting the individuality of employees and bringing out the very best in their talents and aptitudes. LIFEPLANNER VALUE: Four Commitments Planning Co-Creation Professionalism Society We are committed to providing customers with continuous lifelong support, so that they can live positively every day with peace of mind. We will help customers to plan their lives as they seek to realize their dreams. We value the process of co-creation, which is achieved in the course of meeting with customers and steadily earning their trust, as we work closely with each customer to help realize his or her dreams. We are committed to delivering high-quality services with an emphasis on professionalism by constantly enhancing the skills and knowledge of each employee, and bringing together our collective strengths. By fulfilling our commitments, we will help to create a society in which everyone can live with peace of mind in pursuit of their dreams. Lifeplanner and LIFEPLANNER VALUE are registered trademarks of Sony Life Insurance Co., Ltd.

3 CONTENTS Message from the President 002 The Founding of Sony Life 004 The Sony Financial Group 006 Financial Highlights 008 FY2013 Operating Performance 009 Asset Management 011 Income 013 Assets, Liabilities and Net Assets 015 Financial Soundness 016 Market Consistent Embedded Value (MCEV) and Risk Amount Based on Economic Value 019 Protecting Every Dream throughout Each Individual s Life. That s LIFEPLANNER VALUE. 024 Educational Systems, Self-Development and Reciprocal Studies 026 Securing the Future for Our Customers Consulting-Based Sales and Follow-Up Consultations 030 Providing Optimal Protection through the Life Planning Support Service (LiPSS) 032 Sony Life s Proprietary System Supporting Consulting-Based Sales and Follow-up Consultations 034 High-Quality Follow-Up Consultations That Begin with Life Planning 036 System of Claim Payment Operations 037 Service Improvements That Begin with Customer Input 038 Risk Management System 040 Personal Information Protection and Information Security 043 Compliance 046 Environmental Preservation Initiatives 050 Participation in Social Contribution Activities 052 Financial Data 059 Organization 106 Corporate History 107 Directors and Statutory Auditors 108 Corporate Data 109 Global Network 109

4 Message from the President 002 President, Representative Director Katsumi Ihara

5 First, I wish to express my heartfelt gratitude for your continued interest in and support for Sony Life. In FY2013, the Japanese economy saw the Bank of Japan implement an aggressive monetary easing policy under the Japanese government s so-called Abenomics economic policies, following a change of ruling party in December This led to the yen s ongoing depreciation, and a fi rm rally in the Nikkei Stock Average. Combined with signs of improving corporate earnings, FY2013 was a year in which the Japanese economy took its fi rst steps toward recovery. Additionally, Tokyo was selected as the host of the 2020 Summer Olympic Games. All of Japan was fi lled with an upbeat atmosphere not seen in recent times. This renewed optimism is expected to add momentum to the economic recovery going forward. Under these economic conditions, the Japanese government increased the consumption tax rate in April 2014 in order to secure the revenue needed to fund social programs and services such as pensions, nursing care and medical care, as well as policy measures to counter the country s low birthrate. Japan is rapidly becoming an aged society with a low birthrate. Self-reliant efforts will now be needed to prepare for a better quality of life in retirement, along with a social services system supported by society as a whole. That is why life insurers will be expected to play an even more crucial role in society going forward. In this business environment, Sony Life has been taking steps to fulfi ll its obligations as a life insurance company. These efforts include working to achieve steady business growth while maintaining strong fi nancial soundness, as well as reinforcing our internal control systems. Guided by our fundamental mission of working for customers fi nancial security and stability by offering optimal life insurance products and high-quality services, Sony Life will continue to provide services that exceed customer expectations as we continue to drive higher growth. FY2013 Business Results In FY2013, new policy amount* 1 decreased 12.7% year on year to 3,889.3 billion due mainly to the impact of the revision of insurance premium rates. Furthermore, policy amount in force* 1 was 39,095.0 billion as of March 31, 2014, an increase of 3.5% from the previous fi scal year-end. Policy amount in force has grown continuously since Sony Life commenced operations in Sony Life has maintained a high solvency margin ratio* 2 of 2,358.7%. The solvency margin ratio is a major indicator of the fi nancial soundness of an insurance company. We are deeply grateful for the support of everyone concerned as these results would not have been possible without your support. New Initiatives in FY2013 Consistently Serving Diversifying Customer Needs Sony Life seeks to stand closer than ever to customers and to be a partner that helps customers to achieve their life plans. Sony Life has taken a range of initiatives to be the most highly trusted life insurance company in the eyes of customers. In May 2013, Sony Life launched U.S. dollar-denominated whole life, endowment and specialty endowment insurance. These products offer a stronger savings component through U.S. dollar-denominated investments, helping to ensure a better balance of insurance protection and asset formation for customers. In October 2013, Sony Life began conducting customer satisfaction surveys. In these surveys, Sony Life calls customers and asks them directly about the Lifeplanner sales employee assigned to them. Questions include how often an assigned Lifeplanner visits the customer, whether the Lifeplanner provides information about new products, services and so on, and how promptly the customer is supported. Through these surveys, we clarify what customers expect of each Lifeplanner in terms of service and value, and improve operations to refl ect the personal perspectives of customers. In January 2014, Sony Life commenced sales of an educational endowment insurance (non-participating) product with emphasis on the savings component. This product aims to serve the needs of customers seeking the lowest possible premiums, rather than the potential for future dividends. Separately, eyeing the arrival of Japan s super-aging society in the near future, Sony Financial Holdings Inc., the parent company of Sony Life, entered the nursing care business in February 2014 to ensure that customers can lead fulfi lling lifestyles with lifelong peace of mind. To this end, Sony Financial Holdings established Sony Lifecare Inc. in April By having the entire Sony Financial Group address the fi nancial risks and issues faced by seniors in their daily lives, we aim to bring about a society in which people can truly feel that longevity is a source of happiness. LIFEPLANNER VALUE For Our Customers, With Our Customers Staying True to Our Founding Principles Since its founding in 1979, Sony Life has transformed conventional notions of life insurance by introducing a new consulting-based sales approach through its Lifeplanner sales employees. In the process, Sony Life has provided every customer with optimal life insurance products. In our archives, we have a handwritten corporate document prepared before Sony Life s founding, which is considered to be our founding prospectus. It states that the original purpose of life insurance is to ensure fi nancial security for individuals and we aim to serve the true needs of individual consumers by designing customized insurance products by fl exibly combining an extensive range of products. These statements indeed express Sony Life s fundamental mission today, and embody the unchanging principles we have embraced since the time of our founding. Furthermore, we will build trust with our customers as their lifelong partner by offering high-quality Follow-up Consultations and support throughout their lives, thereby turning their dreams into reality. This is the essence of Sony Life s LIFEPLANNER VALUE proposition. Founded in 1979, Sony Life marked its 35th anniversary in August I am truly grateful to the large numbers of customers, who have supported Sony Life over the years, as this anniversary would not have been possible without their trust. To ensure that we provide lifelong insurance protection to each and every customer through our LIFEPLANNER VALUE proposition, Sony Life will reaffi rm its principles of foundation and continue working to deliver even more peace of mind to customers. We kindly ask for your continued support and encouragement as we endeavor to reach our goals. Katsumi Ihara President, Representative Director Sony Life Insurance Co., Ltd. * 1 New policy amount and policy amount in force each represent the sum of individual insurance and individual annuities. * 2 The solvency margin ratio is one measure used by regulatory authorities to determine whether an insurer has the ability to pay in response to the risk of unpredictable events such as major earthquakes. 003

6 The Founding of Sony Life A Life Insurance Company Carrying Forward Akio Morita s Passion for Contributing to Society by Taking on Challenges That Others Do Not 004 Sony Life got its start in August 10, 1979, when the Company was established with the core mission of working for customers fi nancial security and stability by offering optimal life insurance products and high-quality services, aiming to revolutionize the industry. The founder of Sony and Sony Life, Akio Morita, expressed his vision for Sony Life as a life insurance company unlike any other in the world that matches the needs of Japan. Just as every customer s life is different, protection needs to be as individual as the people it is aimed for. The Lifeplanner system was put in place to accurately determine these needs and bring extensive expertise and experience to bear in addressing demand based on a robust philosophy and strong conviction. At the ceremony commemorating Sony Life s inauguration, Akio Morita addressed employees with the following words: What we are trying to do here, what I am asking you to do, is to create a life insurance company the likes of which Japan has never seen before. This statement was in line with Akio Morita s passion for contributing to society by taking on challenges that others do not. Now more than 30 years since that time, the Company s Lifeplanner sales employees have earned strong customer support for the consulting services they provide. As a result, Sony Life s total assets surpassed 6 trillion in FY2012, and in FY2014 the Company celebrated its 35th anniversary of establishment. We look forward to passing forward the passion of our founder in the years to come. Photo of Akio Morita by Kazumi Kurigami/Igfy Corporation

7 Lifeplanner Sales Employees Life insurance will begin changing today. Lifeplanner sales employees will drive this change. The concept of Lifeplanner sales employees is based on the understanding that the people who provide life insurance designed to match the lives of individual customers need to be professionals in the true sense of the word. We created Lifeplanner sales employees to change the face of Japan s life insurance industry. To ensure that they are worthy of customers trust, Sony Life s Lifeplanner sales employees undergo a variety of training programs to accumulate the necessary expertise and skills, turning them into professionals in the areas of life insurance and fi nance. Consulting Accompanying Customers through Life s Milestones Sony Life s insurance is tailored each customer s individual life plan. Accordingly, providing insurance requires us to determine what sort of life the customer plans to lead. We listen carefully to a customer describe his or her dreams for the family s future and then work with the customer to turn those hopes into specifi c plans. We work together on this life plan, calculating the necessary protection and putting in place the protection necessary to meet the customer s goals. To ensure that the life insurance policy is serving its intended role, even after a policy agreement is signed, Lifeplanner sales employees periodically check protection and provide advice. If a customer s circumstances change and some issue arises, the individual in charge of that policyholder, as well as Lifeplanner sales employees throughout Japan, are available to assist. 005 Reciprocal Training and Contribution to Society All for Customers We aim to satisfy our customers and ensure their peace of mind. To augment their expertise and hone their skills, Sony Life s Lifeplanner sales employees have embraced a culture of mutual assistance. To this end, they hold independent training forums around the nation. Evincing the success of this system, Sony Life represents one of the largest groups forming the Japan chapter of the Million Dollar Round Table (MDRT), with 716 people*. Furthermore, MDRT Sony meets several times each year to conduct training. The rallying cry of Sony Life s employees is One Love, One Trust, raised as they take the initiative in social contribution activities. * As of June 1, 2014 Evidence of Trust Fulfilling Long-Term Commitments to Customers Claims paid upon the death of the insured constitute conveying feelings for bereaved family members, and policy amount in force* represents the accumulation of such actions. Sony Life sees policy amount in force as the evidence of the trust customers have placed in it, as well as proof of its long-term commitment to its customers. Sony Life strives toward sound management to ensure its ability to meet these commitments as the need arises. Policy Amount in Force (Individual life insurance + Individual annuities) * Policy amount in force is the total monetary amount of protection a life insurer provides its customers. 39,095.0 billion As of March 31, 2014

8 The Sony Financial Group Aiming to Become One of Japan s Most Trusted and Attractive Financial Services Groups 006 The Sony Financial Group is an integrated fi nancial services group that, in addition to Sony Financial Holdings includes Sony Life, Sony Assurance Inc., Sony Bank Inc. and other companies. Sony Financial Holdings was established in April 2004 as Japan s fi rst fi nancial holding company having insurance and banking under the same umbrella. In October 2007, the company was listed on the First Section of the Tokyo Stock Exchange. The Sony Financial Group combines a host of fi nancial functions to provide high-value-added products and quality services that meet individual customers economic needs in its aim to become the fi nancial services group that is most highly trusted by its customers. In terms of history and scale of business, Sony Life is a core member of the Sony Financial Group. In addition to working on a daily basis to offer optimal life insurance products and high-quality services, we are enhancing collaboration with Sony Assurance and Sony Bank, which receive high levels of customer satisfaction in a variety of fi elds, to provide high-value-added products and fi nancial services. We have been particularly effective in applying Lifeplanner sales employees consulting skills through cross-selling between Group companies. In FY2013, Lifeplanner sales employees wrote approximately 5% of all new Sony Assurance automobile insurance policies and some 17% of Sony Bank mortgage loans. Going forward, the Sony Financial Group aims to continue increasing cross-selling within the Group and reinforcing synergies. (As of October 1, 2014) The Sony Financial Group Structure (Main Subsidiaries) (Sony Corporation) Consolidated subsidiaries Equity-method affiliates Non-consolidated subsidiaries 60% owned Life Insurance Business Non-Life Insurance Business Banking Business Nursing Care Business 100% owned 100% owned 100% owned 100% owned 57% owned 100% owned 50% owned 50% owned AEGON Sony Life Insurance 100% owned

9 AEGON Sony Life Insurance In December 2009, Sony Life and the AEGON Group of the Netherlands set up this company as a joint venture life insurance company specializing in the individual annuity business. The company was established in response to the demand engendered by Japan s falling birthrate and aging population. Sony Life took the establishment of AEGON Sony Life Insurance as an opportunity for mounting a full-fl edged effort targeting over-the-counter bank sales. The company currently has tie-ups in place with 20 fi nancial institutions, including Sony Life. Sales of AEGON Sony Life Insurance s Products by Lifeplanner Sales Employees Sony Life s Lifeplanner sales employees commenced sales of AEGON Sony Life Insurance s individual annuities in December Sony Life will continue to raise the level of protection and increase the service it provides customers throughout their lives. For product details, please see the AEGON Sony Life Insurance website (Japanese only) at SA Reinsurance Ltd. In January 2010, we set up this joint venture reinsurance company with the AEGON Group as one aspect of our cooperative operations. Sony Assurance Established in June 1998, Sony Assurance provides rational, high-quality insurance products and services, primarily via Internet and over the telephone. This direct-selling non-life insurance company concentrates on automobile insurance. Lifeplanner Sales Employees Sell Sony Assurance s Products Lifeplanner sales employees began selling Sony Assurance s automobile insurance in May By extending our offerings beyond life insurance to include automobile insurance, which covers automobile risks, we will continue to provide comprehensive risk management for our customers. 007 Tie-Ups with Sony Bank Established in April 2001, Sony Bank is an Internet bank that provides fi nancial products, services and mortgage loans, centering on convenient, high-quality asset management. Lifeplanner Sales Employees Handle Sony Bank s Mortgage Loans and Set up New Accounts In January 2008, Lifeplanner sales employees began explaining the details of Sony Bank s mortgage loans and delivering applications. As a result, Lifeplanner sales employees are now able to respond to specifi c customer requests and provide consultations about funding related to home purchases. In May 2014, Lifeplanner sales employees also began handling procedures for opening ordinary yen deposit accounts at Sony Bank. Note: Sony Life also handles Sony Bank s mortgage loans and sets up its accounts at Life Planning SQUARE. (See place 33.) Underwriting Group Credit Life Insurance for Sony Bank s Mortgage Loans In March 2002, Sony Life began underwriting group credit life insurance for mortgage loans extended by Sony Bank. In addition, in April 2007 we began offering group credit life insurance with protection riders covering the three major diseases. Establishment of Sony Lifecare Inc. Sony Lifecare Inc. was established in April 2014 as a holding company to oversee operations in the nursing care business. The company will open pay nursing care homes that foster new social value and proactively forge strategic alliances with companies that operate such homes. Other Business Developments at Sony Life In July 2009, we opened a representative offi ce in Taipei. This offi ce gathers information and conducts surveys on the fi nancial and insurance markets in Taiwan and other parts of Greater China.

10 Financial Highlights Key Performance Indicators for Past Five Years For the years ended March Policy amount in force 34,598,244 35,947,326 37,345,780 39,124,675 40,500,241 Individual life insurance 33,164,100 34,421,831 35,707,301 37,366,333 38,628,089 Individual annuities 306, , , , ,915 Group life insurance 1,127,481 1,198,794 1,268,718 1,345,632 1,405,237 Policy amount in force for group annuities 72,348 58,937 57,811 56,503 55,196 Annualized premiums from insurance in force 573, , , , ,986 Medical protection, living benefi t protection and other products 133, , , , ,075 New policy amount 4,056,495 4,213,996 4,207,045 4,460,210 3,894,484 Individual life insurance 4,017,527 4,166,278 4,145,663 4,396,676 3,814,291 Individual annuities 31,709 32,746 57,664 57,931 75,088 Group life insurance 7,258 14,971 3,717 5,602 5,104 Annualized premiums from new policies 68,780 71,230 70,854 73,263 63,992 Medical protection, living benefi t protection and other products 16,264 16,679 17,101 18,397 13, Ordinary revenues 881, , ,400 1,142,274 1,197,109 Income from insurance premiums 700, , , , ,986 Investment income 175, , , , ,323 Ordinary expenses 801, , ,964 1,067,614 1,127,904 Insurance claims and other payments 274, , , , ,257 Investment expenses 20,584 19,303 14,370 11,686 8,506 Operating expenses 96,860 99, , , ,868 Ordinary profi t 80,099 73,176 69,436 74,659 69,205 Net income 46,138 40,220 31,426 42,444 37,063 Core profi t 64,517 56,295 71,685 80,045 72,365 Common stock 70,000 70,000 70,000 70,000 70,000 Number of shares issued and outstanding (Thousands of shares) 70,000 70,000 70,000 70,000 70,000 Total assets 4,286,540 4,723,332 5,222,846 5,952,750 6,624,903 Separate account assets 373, , , , ,562 Policy reserves 3,985,610 4,371,484 4,843,020 5,472,930 6,123,633 Loans 127, , , , ,219 Securities 3,539,114 4,017,583 4,545,019 5,211,535 5,954,716 Solvency margin ratio 2,637.3% 2,900.1% 1,980.4% 2,281.8% 2,358.7% [1,720.0%] Number of employees 5,835 5,921 6,060 6,323 6,553 Notes: 1. Policy amount in force is the total of individual life insurance, individual annuities and group life insurance. Policy amounts for individual annuities are equal to the sum of (a) the funds to be held at the time annuity payments are to commence for policies for which annuity payments have not yet commenced and (b) the amount of policy reserves for policies for which payments have commenced. 2. Policy amount in force for group annuity products is equal to the amount of outstanding policy reserves. 3. New policy amount is the total of individual life insurance, individual annuities and group life insurance. New policy amounts for individual annuities are equal to the funds to be held at the time annuity payments commence. 4. Annualized premiums, which include individual life insurance and individual annuities, are converted to a per-year premium amount by multiplying individual premiums by a coeffi cient corresponding to the premium payment method. (For lump-sum payment policies, premiums are divided by the number of coverage years.) 5. Medical protection, living benefi t protection and other products is the portion of the annualized premium for medical protection benefi ts (hospitalization benefi ts, surgical benefi ts, etc.) and living benefi t protection (benefi ts for specifi c diseases, nursing care benefi ts, etc.). 6. Cabinet Offi ce Ordinance No. 23 of 2010 and Public Notice of Financial Services Agency No. 48 of 2010 prescribe a revision in the methods of calculating total solvency margin and total risk (increasing the strictness of margin inclusion, and making risk measurement stricter and more sensitive). Therefore, the fi gures for the years ended March 31, 2010 and 2011 and the fi gures for the years ended March 31, 2012 to 2014 are calculated based on different methods. The abovestated fi gure in [1,720.0%] as of March 31, 2011 is calculated on the assumption that these changes were applied as of March 31, The fi gure is also included in disclosures for the fi scal year ended March 31, 2011.

11 FY2013 Operating Performance Policy Amount in Force 39,095.0 billion Policy amount in force is the total monetary amount of protection a life insurer provides its customers. Since operations began, we have maintained consistent growth. At the end of FY2013, total policy amount in force was 39,095.0 billion, up 3.5% from a year earlier and continuing the steady rise that has continued since our start of operations. This rise was due to an increase in new policy amount and a lower lapse and surrender rate. We believe that these fi gures refl ect the high level of trust we received from our policyholders, as well as high acclaim for our follow-up consultations. Group life insurance in force was 1,405.2 billion, up 4.4%. Consequently, the total of individual life insurance, individual annuities and group life insurance in force was 40,500.2 billion, up 3.5% from the previous fi scal year-end. The number of policies in force (the total for individual life insurance and individual annuities) came to 6,330,413, up 4.8%. Policy Amount in Force (Individual life insurance + Individual annuities) (Billions of yen) 40,000 32,000 24,000 16,000 8,000 Individual annuities Individual life insurance ,095.0 billion , , , , , (As of March 31) 009 New Policy Amount 3,889.3 billion Our new policy amount was 3,889.3 billion. New policy amount is the total monetary amount of protection provided through new policies. In FY2013, our new policy amount was down 12.7% compared with the preceding fi scal year, to 3,889.3 billion, owing mainly to the revision in insurance premium rates. Group life insurance fell 8.9%, to 5.1 billion. The total new policy amount of individual life insurance, individual annuities and group life insurance was down 12.7%, to 3,894.4 billion. The number of new individual life insurance policies and individual annuities during the year was 533,665, down 14.0%. New Policy Amount (Individual life insurance + Individual annuities) (Billions of yen) 5,000 4,000 Individual annuities Individual life insurance ,889.3 billion ,000 2,000 4, , , , , , (Years ended March 31)

12 Product Mix Sales centered on death-protection products. Sales centered on death-protection products*, which accounted for approximately 90% of our new policy amount in FY2013, on a policy amount basis. * This fi gure indicates the new policy amount of death-protection products, which excludes the new policy amount of endowment/educational endowment insurance, individual annuities and medical insurance. New Policy Amount by Type of Products (Individual life insurance and individual annuities on a policy amount basis, FY2013) Endowment/ Educational endowment, Individual annuities 11.4% Variable life 6.1% Medical insurance, Other 1.9% Whole life 16.4% Term life 64.2% Lapse and Surrender Rate % The lapse and surrender rate is expressed as a ratio calculated by dividing the amounts of cancellations and lapses, excluding decreases, increases or reinstatements by the total policy amount in force at the beginning of the fi scal year. The lapse and surrender rate fell. In FY2013, our lapse and surrender rate for individual life insurance and individual annuities on a policy amount basis was down 0.70 percentage point, to 4.61%, centered on a decrease in term life insurance. Going forward, we will seek to maintain positive levels for our lapse and surrender rate by providing protection that is tailored to each customer s individual life plan and through enhanced follow-up consultations. Lapse and Surrender Rate (Individual life insurance and individual annuities on a policy amount basis) (%) % (Years ended March 31) Ratio of Operating Expenses to Income from Insurance Premiums 11.9% Selling new policies, maintaining existing policies, making insurance payouts and other tasks incur costs, such as personnel and administrative expenses. We refer to costs necessary to conduct our business as a life insurance company as operating expenses. We continue working to raise management efficiency. In FY2013, our ratio of operating expenses to income from insurance premiums was 11.9%. We will continue striving to raise management effi ciency. (%) Ratio of Operating Expenses to Income from Insurance Premiums % (Years ended March 31)

13 Asset Management Investment Environment In FY2013, the Japanese economy continued to grow. During the fi rst half, government measures to stimulate the economy and ongoing yen depreciation led to major increases in public-sector investments and exports. Personal consumption remained robust, as consumer confi dence improved, refl ecting higher share prices. The second half saw a surge in demand ahead of the April 2014 consumption tax hike, prompting sharply higher durable goods sales and private housing investment. Meanwhile, the rate of expansion waned in public-sector investment and exports, which had driven growth up to that point. Real GDP growth temporarily slowed as a result, although remaining generally robust for the fi scal year as a whole. Year on year, real GDP growth in the April June quarter was 2.9%, 1.3% in the July September quarter and 0.3% in the October December quarter. The fi gure was a positive 6.7% during the January March quarter. The bond markets were affected to a large extent by the Bank of Japan s (BOJ s) quantitative and qualitative monetary easing policy, introduced in April Specifi cally, the BOJ announced intentions to double its monetary base and holdings of long-term bonds/exchange-traded funds over the next two years, as well as to more than double its holding period for purchases of long-term Japanese government bonds (JGBs). Shortly after these measures were introduced, interest rates fl uctuated wildly on concerns of reduced market liquidity. However, once the bank announced its intentions to maintain quantitative and qualitative monetary easing policy as necessary to achieve a stable 2% increase in commodity prices, the increase in yields on short- and medium-term bonds grew more limited over the time axis. This effect rippled outward into long-term bonds, as well, gradually reducing bond market volatility. Toward the end of the fi scal year, interest rates gradually decreased, refl ecting the return to market stability. The yield on 10-year JGBs, a benchmark for long-term interest rates, fell to 0.325% at one point in April 2013, rising to 0.996% at one stage in May. As of March 31, 2014, the yield on 10-year JGBs was 0.642%, up percentage point from one year earlier. The stock markets expanded signifi cantly. In anticipation of the BOJ s April 2013 introduction of quantitative and qualitative monetary easing, coupled with the central government s growth strategies, the Nikkei average jumped from 12, on March 31, 2013, to 15, at one point in mid-may. Thereafter, concerns about the scaling back of quantitative easing in the United States and fears of slowing economic growth in emerging markets caused the Nikkei to drop back below 13,000 at one point as stock prices entered an adjustment phase. Thereafter, robust corporate performance prompted a gradual upturn in share prices. As of March 31, 2014, the Nikkei average was 14,827.83, up 2, from one year earlier. In foreign exchange markets, the yen continued to depreciate. The dollar/yen market reacted favorably to the BOJ s April 2013 introduction of quantitative and qualitative monetary easing. Starting at to the U.S. dollar as of March 31, 2013, the yen depreciated against the dollar to at one point in May. After that point, the market reacted to the scaling back of U.S. monetary easing and an increasingly tense international situation by buying back yen in an effort to offset risk. As a result, the yen again rose into the neighborhood of 94 against the dollar. Moving toward the second half of the fi scal year, a recovering U.S. economy and an agreement between the Liberal Democratic Party (LDP) and the opposition parties on a debt ceiling prompted the buying back of dollars. The yen consequently depreciated to above 100 against the U.S. dollar. As of March 31, 2014, the yen was trading at against the U.S. dollar, amounting to defl ation of 8.97/dollar compared with a year earlier. 011 Investment Performance As of March 31, 2014, general account assets totaled 5,984.3 billion, up 10.8%, or billion, from one year earlier. Within the general account, positions of Japanese government and corporate bond investments came to 5,190.0 billion (accounting for 86.7% of general account assets); foreign bonds, 79.8 (1.3%); Japanese stocks, 33.2 billion (0.6%); monetary trusts, billion (5.1%); policy loans, billion (2.6%); real estate 66.5 billion (1.1%); and cash and deposits, call loans 32.6 billion (0.5%). Investment Yield (%) FY2012 Note: Please refer to page 14 for information on core profi t. FY2013 Investment yield for core profi t Investment yield (general account) General Account Assets (As of March 31, 2014) Policy loans 2.6% Monetary trusts 5.1% Other securities 0.1% Foreign stocks and others 0.4% Japanese stocks 0.6% Foreign bonds 1.3% Cash and deposits, call loans 0.5% Real estate 1.1% Other assets 1.5% Japanese government bonds and others 86.7%

14 Investment Approach Based on the concept of asset liability management (ALM), Sony Life prioritizes investment in assets having characteristics that match those of insurance liabilities. Specifi cally, we concentrate on investment in ultralong-term JGBs with more than 10 years remaining to maturity to match the long-term liabilities that life insurance policies represent. In this manner, we work to appropriately control the interest rate risk associated with insurance liabilities. At the same time, we limit our investments in stocks and other risk assets. <Investment Assumptions: ALM> Life insurance policies are typically long-term, so it is important for life insurance companies to ensure that they maintain the ability to pay their customers insurance claims and other benefi ts well into the future. For this reason, life insurance companies need to select investment assets having characteristics that match those of their life insurance policies, which represent liabilities. This ALM approach serves as our basis for investment. 012 <Life Insurance Policy Liability Characteristics and Investment> Insurance liabilities refers to the amount of money that a life insurer needs to have accumulated at the present in order to pay future insurance claims and other benefi ts. Characteristically, insurance liabilities are highly susceptible to interest rate fl uctuations. This is because insurance liabilities are calculated on the basis of assumptions about future interest income. If interest rates fall, the expected interest income also drops, leading to the need to fund higher levels of insurance liabilities. Conversely, if interest rates rise, expected interest income also increases, so less money is needed to match current interest liabilities. As life insurance policies are long-term, future interest income is likely to fl uctuate broadly as interest rates change, which means that insurance liabilities are also highly variable. These fl uctuations in insurance liabilities are referred to as insurance liabilities interest rate risk. Life insurers invest the insurance premiums paid by customers in marketable securities and other assets. When they do so, however, they must remain duly cautious of the interest rate risks inherent in their insurance liabilities. If interest rates drop, for example, the amount of funding required to cover insurance liabilities increases. By investing in fi xed-coupon bonds, if interest rates fall the value of underlying assets bonds increases, which offsets the interest rate risk of insurance liabilities. By investing in assets with characteristics that match those of insurance liabilities, insurers are able to appropriately control the interest rate risk of insurance liabilities. Controlling Assets and Liabilities Interest rates fall " Assets increase (bond prices rise) Interest rates fall " Insurance liabilities increase Interest rates rise " Assets decrease (bond prices fall) Interest rates rise " Insurance liabilities decrease Assets (yendenominated bonds, etc.) Insurance liabilities Assets (yendenominated bonds, etc.) Insurance liabilities Sony Life Signs up for the Japanese version of the Stewardship Code Basic Policy on the Stewardship Code Sony Life has signed up to the Japanese version of the Stewardship Code, which expresses principles for responsible institutional investors. Sony Life s Exercise of Voting Rights Please see (Japanese only) for details about the Company s policy on exercising voting rights and the basic process for exercising voting rights.

15 Income Income from Insurance Premiums and Insurance Claims and Other Payments billion/ billion Up due to such factors as growth in the policy amount in force Income from insurance premiums and others, which includes such income as premiums paid by customers, is the principal source of income for insurance companies. Insurance claims and other payments, which includes insurance claims, benefi ts, annuities, surrender cash that insurance companies make to customers under their insurance policies. In FY2013, such factors as steady increases in the policy amount in force caused income from insurance premiums to rise to billion, compared with billion in the preceding fi scal year. Meanwhile, insurance claims and Income from Insurance Premiums and Others (Billions of yen) 1, billion other payments in FY2013 amounted to billion (compared with billion in FY2012). Insurance claims, benefi ts and annuities amounted to billion (compared with billion in FY2012). Insurance Claims and Other Payments (Billions of yen) Annuities Benefits Claims billion (Years ended March 31) (Years ended March 31) Investment Income and Investment Expenses billion/ 8.5 billion Investment income, or the income received through the investment in assets, includes interest and dividend income, as well as gains on sale of securities. Investment expenses, or the expenses incurred in order to generate investment income, include such items as losses on sale of securities, devaluation losses on securities and provision for reserve for possible loan losses. Investment income, which expresses income from the investment in assets, came to billion. Investment expenses, which indicates the cost of generating that income, was 8.5 billion. In FY2013, investment income amounted to billion, compared with billion in the preceding year. This increase was attributable mainly to higher interest income and dividends. Investment expenses came to 8.5 billion, down from 11.6 billion in the preceding year, refl ecting an improvement in foreign exchange gains and losses. Ordinary Profit and Net Income 69.2 billion/ 37.0 billion In FY2013, ordinary profi t decreased 7.3%, to 69.2 billion. Although the positive spread increased, ordinary profi t fell as a result of a revision in the standard prospective yield, which prompted an increase in the provision for policy Ordinary profi t the difference between ordinary revenues and ordinary expenses represents income derived from operating activities during the fi scal year. The principal sources of revenue for life insurance companies are income from insurance premiums and investment income. The main expenses are death and other claims, insurance benefi ts, annuity payments, provision for policy reserves and others, investment expenses and operating expenses. Net income is calculated by adding extraordinary gains to ordinary profi t, then subtracting provision for reserve for price fl uctuations and other extraordinary losses, as well as provision and reversal for reserve for policyholders dividends and income taxes. Ordinary profit, which indicates the difference between ordinary revenues and ordinary expenses, was 69.2 billion, and net income came to 37.0 billion. reserves, and a provision for policy reserves related to the minimum guarantee for variable life insurance. Net income fell 12.7%, to 37.0 billion.

16 Core Profit 72.3 billion Core profi t is an indicator of the profi t-earning capacity of the primary insurance business over a one-year period. The term primary insurance business refers to the management of income from insurance premiums received from policyholders, along with investment income to pay insurance claims, benefi ts and annuities and to make policy reserve provisions for future payments. Adding capital gains or losses, such as on sales of securities, and one-time gains and losses to core profi t produces ordinary profi t, which appears on the statements of income. Core profit, an indicator of profit in the mainstay insurance business, amounted to 72.3 billion. In FY2013, core profi t declined 9.6% year on year, to 72.3 billion. Although the positive spread increased, the lower fi gure was the result of a revision in the standard prospective yield, which prompted an increase in the provision for policy reserves, as well as the provision for policy reserves related to the minimum guarantee for variable life insurance. Core profit of 72.3 billion Net capital gains (losses) of 1.1 billion Net other one-time gains (losses) of (4.3) billion Ordinary profit of 69.2 billion 014 Note: Like most other life insurers that are organized as joint stock corporations, Sony Life mainly sells life insurance that is nonprofi t. As no policyholder dividend is added, we are able to offer services to policyholders for lower premiums. Life insurers organized as mutual corporations, on the other hand, typically offer for-profi t policies, their income from insurance premiums includes a portion of fi nancial resources for policyholder dividends and fi nancial resources for these dividends are included in core profi ts. For this reason, mutual corporations tend to show higher core profi ts than joint stock corporations that operate on the same scale. Positive Spread Life insurance companies retain a portion of premiums received from policyholders as policy reserves in anticipation of future payments. These policy reserves are maintained by investing under the assumption that they will yield a certain rate of interest every year. This interest rate is called the assumed interest rate (for calculating policy reserves). A positive spread occurs when the actual yield on investment exceeds the average assumed interest rate. The reverse situation leads to negative spread, which stems from the deterioration of the investment environment or other factors. Positive spread has continued since FY2012. In FY2013, the positive spread rose 6.3 billion year on year, to 8.4 billion, due to a decline in the average assumed interest rate and an increase in the investment yield for core profi t. Formula for Calculating Positive Spread Investment yield for core profit *1 Average assumed interest rate (for calculating policy reserves) *2 General account policy reserves *3 Positive spread Notes: *1. Investment yield for core profi t is the investment income from the general account that is included in core profi t, less the provision for policyholder dividend reserves, divided by policy reserve in general account. *2. The average assumed interest rate (for calculating policy reserve) is the average of the assumed interest rates used to calculate policy reserve in general account. *3. General account policy reserves excludes the contingency reserve, calculated as follows: (Policy reserves at beginning of term + Policy reserves at end of term Expected interest) 1/2.

17 Assets, Liabilities and Net Assets Assets 6,624.9 billion Total assets, comprising the capital received from shareholders and premiums paid by policyholders, are invested in securities, property and equipment and other assets. These assets are held in preparation for future insurance claims and benefi t payments, as well as to maintain the soundness of the Company s insurance business. Total assets, which indicate a company s scale, are growing steadily. As of March 31, 2014, Sony Life s total assets reached 6,624.9 billion, up 11.3% from a year earlier. (Billions of yen) 7,500 Total Assets 6,624.9 billion 6,000 4,500 4, , , , ,000 1, (As of March 31) Liabilities 6,123.6 billion Policy reserve, which is included within insurance reserves, accounts for the majority of insurance company liabilities. Policy reserve is a fund derived from income from insurance premiums and investments, held in reserve to ensure life insurance companies are able to pay future insurance claims. Policy reserve is mandatory under the Insurance Business law of Japan. We maintained sufficient policy reserve to cover future insurance claim payments. 015 Sony Life has attained a standard policy reserve level, and uses the net level premium method to build up its reserves. Under this method, we calculate operating expenses assuming a constant, or net, level throughout the premium payment period. Our policy reserve at the end of FY2013 totaled 6,123.6 billion, which we consider suffi cient. (Billions of yen) 7,500 6,000 4,500 3,985.6 Policy Reserve 6,123.6 billion 5, , , ,000 1, (As of March 31) Net Assets/Common Stock billion/ 70.0 billion Net assets are the amount after deducting liabilities from assets. Common stock is the amount of money paid into a company by its shareholders. Article 6 of the Insurance Business Law of Japan prescribes a minimum of 1.0 billion. Net assets, the amount after deducting liabilities from assets, was billion. Common stock was 70.0 billion. As of March 31, 2014, net assets totaled billion, 7.9% higher than one year earlier. As of March 31, 2014, Sony Life had total common stock of 70.0 billion, which has been wholly provided by Sony Financial Holdings, an interim fi nancial holding company of Sony Corporation, since April 1, 2004.

18 Financial Soundness Real Net Assets (A) 1,346.4 billion/(b) billion We maintain sufficient real net assets to maintain sound business operations. As of March 31, 2014, real net assets (A) amounted to 1,346.4 billion, down 3.6% year on year, while real net assets (B) were billion, up 8.4%. Real net assets are the net value of total assets (the fair value of securities and tangible fi xed assets) minus the value of total liabilities (excluding contingency reserve and other liabilities that are similar to capital). Sony Life employs integrated ALM, determining the liability characteristics represented by long-term insurance policies and marking to market both assets and liabilities. As a result, we invest primarily in JGBs, ensuring that our investments have suffi cient liquidity and categorizing the majority of our investments as held-to-maturity bonds. Real net assets are the standard on which regulatory authorities base orders to halt operations, from the perspective of soundness of operations. These real net assets (shown in the table as real net assets (A) ) include, on the asset side, held-to-maturity securities that are marked to market. However, as liabilities are not marked to market, ALM s effectiveness is not refl ected appropriately. To ensure that ALM is being administered appropriately, regulatory authorities need to evaluate assets that exclude unrealized gains and losses on held-to-maturity bonds and policy reserve matching bonds. For this reason, Sony Life also calculates real net assets according to these standards (shown in the chart as real net assets (B) ). (Billions of yen) 1,500 1, Real Net Assets Real net assets (A) Real net assets (B) , ,346.4 billion billion 2014 (As of March 31) 016 Real Net Assets (Billions of yen) As of March (1) Total amount to be recorded as assets (= ) 4, , , , ,056.2 Total assets on the balance sheet 4, , , , ,624.9 Difference between fair value and balance sheet amount of securities (20.4) (22.1) Unrealized gain or loss on tangible fi xed assets (1.0) 1.0 Unrealized gain or loss other than tangible fi xed assets Deferred tax assets for available-for-sale securities (2) An amount calculated based on total amount to be recorded as liabilities (= ) 3, , , , ,709.8 Total liabilities on the balance sheet 4, , , , ,255.6 Reserve for price fl uctuations Contingency reserve Part of reserves for future insurance claim payment Excess of amount equivalent to surrender values ( (a)) Unallocated amount in reserve for policyholders dividends ( (b)) Deferred tax liabilities for available-for-sale securities Real net assets (A) (1) (2) (including unrealized gains and losses on held-to-maturity securities) , ,346.4 (3) Unrealized gains and losses on held-to-maturity securities (20.4) (22.1) Real net assets (B) (1) (2) (3) (excluding unrealized gains and losses on held-to-maturity securities)

19 Solvency Margin Ratio 2,358.7% The solvency margin ratio indicates a company s ability to pay. Life insurance companies accumulate policy reserves against the future payment of insurance claims so they can respond suffi ciently to ordinarily anticipated events. However, unforeseen events sometimes occur as a result of changes in the environment, such as a major disaster or a cataclysmic fall in the stock market. The solvency margin ratio is one administrative control indicator used to judge if an insurer has the ability to pay in response to such unpredictable events. We retain a high level of ability to pay in response to risks from unpredictable events. The solvency margin ratio is an indicator of soundness for life insurance companies. Sony Life s solvency margin ratio remained high. As of March 31, 2014, this ratio was 2,358.7%, up 76.9 percentage points from one year earlier. Item March 31, 2014 Total solvency margin (A) 954,157 Total risk (B) 80,904 Solvency margin ratio (A) (1/2) (B) 100 2,358.7% The solvency margin ratio is calculated as follows: Formula for Calculating the Solvency Margin Ratio Solvency margin ratio (%) Total solvency margin Total risk 1/2 100 Total solvency margin = [Common stock, etc. + Reserve for price fl uctuations* 1 + Contingency reserve* 2 + Reserve for possible loan losses + Net unrealized gains/losses on other securities 90%* + Net unrealized gains/losses on real estate 85%* Exclusion from deferred tax assets + Unallotted portion of reserves for policyholders dividends + Tax effect equivalent + Excess amount of policy reserves based on Zillmer method + Subordinated debt The portion of the excess amount of policy reserves based on Zillmer method and subordinated debt that is not included in the margin Deductible items] 017 *100% in the event of an unrealized loss * 1 Reserve for price fl uctuations... This reserve is provided to prepare for losses in the event that prices on stocks and other assets fall below expected rates. * 2 Contingency reserve... This reserve is provided to ensure the ability to pay future benefi ts in the event that losses result from the payment of claims and other benefi ts owing to an actual mortality rate that is higher than the assumed mortality rate or in the event that actual yields on investment fall below expected rates of return. Total risk [= (R1 + R8) 2 + (R2 + R3 + R7) 2 + R4] This formula is used to compute all risks that fall outside the scope of normal operating risks. Insurance risk (R1)...Risk that claims payments will rise substantially owing to a major disaster or other factor Third-sector insurance risk (R8)...Risk that claims payments on third-sector insurance will rise substantially, owing to a major disaster or other factor Assumed interest rate risk (R2)...Risk that a downturn in the investment environment will cause a decline in yields on invested assets Minimum guarantee risk (R7)...Risk associated with the minimum claim guarantee amount on variable life insurance and variable annuities Asset management risk (R3)...Risk that asset values will fall or that corporate borrowers will go bankrupt, owing to a plunge in stock prices or abrupt change in exchange rates Business management risk (R4)...Risk that exceeds the scope of normal business management risk

20 Unrealized Gains on Securities billion Unrealized gains and losses refer to the differences between carrying amounts and fair values of securities. If fair value exceeds the carrying amount, a gain on sales of assets would be realized by liquidating them at market prices. For this reason, such unrealized gains act as a provision against various risks. Part of the unrealized gains and losses on securities is included in the total solvency margin the numerator of the formula for calculating the solvency margin ratio. We maintain unrealized gains within our solid asset composition. Unrealized gains on securities in the general account fell, due to a decrease in unrealized gains on JGBs. Note: For securities with fair market values, unrealized gains on securities is the sum of net unrealized gains on held-to-maturity bonds and net unrealized gains on other securities. The totals for securities include fi gures related to securities held within monetary trusts. (Reference: As of March 31, 2014, Sony Life assumed unrealized gains on shares to be zero when the Nikkei Stock Average is 8,582 and the TOPIX index is 696 points.) (Billions of yen) As of March Change Unrealized gains (losses) on securities in the general account (120.3) Unrealized gains (losses) on held-to-maturity securities (121.4) Net unrealized gains (losses) on available-for-sale securities Of which, unrealized gains (losses) on Japanese government and corporate bonds (0.8) Of which, unrealized gains (losses) on Japanese stocks Of which, unrealized gains (losses) on foreign securities (0.7) 018 Non-Performing Loans Sony Life has no non-performing loans. Life insurance companies make two types of loans: policy loans and commercial loans. Policy loans comprise two types, the fi rst of which is policyholder loans, which are limited to the value of recoverable surrender cash. The second type, automatic premium loans, are temporary loans also limited to the value of recoverable surrender cash extended when a policyholder is temporarily unable to pay policy premiums to prevent an insurance policy from lapsing. These loans amount to the total of premiums and interest payments. Commercial loans, which are loans other than policy loans, include loans to companies in Japan and overseas, countries and government institutions, as well as mortgage loans. Life insurance companies make loans as investment assets and earn interest from such loans. These comprise policy loans offered as a service to policyholders and other loans made to third parties. A company s total loan balance represents the sum of these two loan balances. Sony Life s loan balance at the end of FY2013 was billion. Of this amount, policy loans amounted to and commercial loans to 0.0 billion. The majority of this loan balance is derived from policy loans, which are limited to the value of recoverable surrender cash. The Company has no risk-managed loans (loans for which repayment circumstances are not ordinary). Moreover, all fi gures listed in the loans by borrower category are classifi ed as normal loans. Credit Ratings Sony Life has been rated highly by credit rating agencies. Ratings express a rating agency s opinion of an insurance company s ability to make insurance claim payments. Ratings are determined on the basis of a variety of information, including a company s fi nancial, income and expense information, and sales and management strategies. Sony Life has requested ratings from several institutions to help policyholders and potential customers make objective decisions concerning its ability to fi nance insurance and pay claims and benefi ts. Rating and Investment Information, Inc. Japan Credit Rating Agency, Ltd. Moody s Investors Service, Inc. Standard & Poor s Credit Ratings (Ratings as of July 1, 2014) Insurance claims paying ability Ability to pay insurance claims Insurance financial strength rating Financial strength rating AA AA Aa3 AA Note: The above ratings were assigned at Sony Life s request. They are not evaluations of insurance companies overall, nor are they a guarantee of claim payments in the future. The ratings are the opinions of the respective rating agencies, based on the fi gures and information available to them at that time, and are subject to change. Please refer to each agency s website for more details.

21 Market Consistent Embedded Value (MCEV) and Risk Amount Based on Economic Value About Market Consistent Embedded Value (MCEV) Embedded value (EV) is an indicator used to evaluate corporate value in the life insurance industry. In Europe, EV is disclosed by many life insurers as part of their fi nancial reports, and is used as an internal management tool. Under generally accepted accounting principles in Japan (Japanese GAAP), which are applied to life insurance companies in Japan, the balance sheets do not indicate the present value of future profi ts on in-force business, while EV indicates the present value of future profi ts on in-force business together with the company s adjusted net worth. Sony Life believes EV serves as a valuable supplement to the fi nancial information provided under Japanese GAAP and is a helpful indicator used to evaluate corporate value. General Profit Structure of a Life Insurer Profits Policy date Period Losses 019 Life insurers have a profi t structure in which costs are high in the initial period of a new policy, resulting in losses, and profi ts are made by recovering these costs during the period of insurance. Consequently, business management cannot be accurately assessed based solely on results for a single fi scal year. This is particularly the case during years when new policy sales are strong, as fi rst-year policy expenses are high, reducing profi t. Accordingly, EV is widely used overseas, especially in Europe, as a tool for comprehensively evaluating life insurers. As an alternative to traditional EV, Sony Life began disclosing, as of March 31, 2008, Market Consistent Embedded Value (MCEV), based on European Insurance CFO Forum Market Consistent Embedded Value Principles * (MCEV Principles). MCEV is defi ned as the present value of distributable earnings to shareholders generated from assets allocated to the covered business after suffi cient allowance for the aggregate risks in the covered business. MCEV consists of adjusted net worth and the value of existing business. However, MCEV covers only policy amount in force as of the date of valuation, and excludes the potential value of future new business, which is considered a constituent of the economic value of an insurance company. *Copyright Stichting CFO Forum Foundation 2008 Adjusted MCEV = + net worth Value of existing business Adjusted net worth Results of business activities to date The accumulation of profi t determined in the past Value of existing business Expected future profits from existing policies

22 MCEV Value of existing business Use of discount rate to determine present value Adjusted net worth... Previous fiscal year Current fiscal year One year later Two years later... With regard to the trends surrounding MCEV, the CFO Forum, which is formed by the Chief Financial Offi cers (CFOs) of major insurance companies in Europe, has revised MCEV Principles in October 2009 and added issues relating to liquidity premium. Readers are cautioned to be aware that the calculation standards are susceptible to change. MCEV as of March 31, MCEV of Sony Life as of March 31, 2014, is shown in the table below. MCEV increased billion, owing to such factors as new policy acquisitions, changes in the assumptions on mortality rates and lapse and surrender rates, and rising interest rates. Note: Please see for details. (Billions of yen) As of March Change MCEV 1, , Adjusted net worth (48.7) Value of existing business New business value (Billions of yen) 1,250 1, Market Consistent Embedded Value (MCEV) Value of existing business Adjusted net worth 1, ,221.3 billion (As of March 31)

23 Adjusted Net Worth Adjusted net worth is calculated as the market value of assets allocated for the covered business in excess of statutory policy reserve and other liabilities as of the valuation date. It is the total amount of the net assets line on the balance sheets, adding a reserve for price fl uctuations, contingency reserves, reserve for possible loan losses, along with unrealized gains or losses on held-to-maturity securities and unrealized gains or losses on land and buildings, deducting unfunded pension liabilities and intangible fi xed assets, and adjusting for the amount of tax effect equivalent to these seven items, on which valuation gains or losses on subsidiaries and affi liated companies are added. As of March 31, 2014, adjusted net worth was down 48.7 billion compared with one year earlier, as unrealized gains or losses on held-to-maturity securities fell as a result of higher interest rates (see right). (Billions of yen) As of March Change Adjusted net worth (48.7) Total net assets Reserve for price fl uctuations Contingency reserves Reserve for possible loan losses Unrealized gains or losses on held-to-maturity securities (121.4) Unrealized gains or losses on land and buildings Unfunded pension liabilities (5.0) (3.2) 1.8 Intangible fi xed assets (26.1) (23.9) 2.2 Tax effect equivalent of above seven items (193.8) (1,62.5) 31.3 Valuation gains or losses on subsidiaries and affi liated companies (9.6) (12.5) (2.9) Value of Existing Business The value of existing business is calculated as the present value of certainty-equivalent profi t (present value of profi t based on the future cash fl ows generated from the covered business) less the time value of options and guarantees, frictional cost (the present value of investment costs and taxes on assets backing the required capital at each point of time in the future) and the cost of non-hedgeable risks (the present value of costs to hold required capital to cover non-hedgeable risks in the future). As of March 31, 2014, the value of existing business was up billion compared with a year earlier, owing to such factors as an increase in interest rates, new policy acquisitions and changes in the assumptions on mortality rates and lapse and surrender rates. A breakdown of this information is provided below. (Billions of yen) As of March Change Value of existing business Present value of certainty- equivalent profi t Time value of options and guarantees (111.2) (123.1) (11.9) Frictional costs (13.9) (9.2) 4.7 Cost of non-hedgeable risks (214.2) (237.9) (23.7) 021 Reconciliation Analysis from MCEV at the End of the Prior Year Impact of Changing Assumptions (Sensitivities) The table below shows the reconciliation analysis of MCEV as of March 31, 2014, from MCEV as of March 31, (Billions of yen) MCEV Opening MCEV (MCEV as of March 31, 2013) 1,064.7 Opening adjustment (13.3) Adjusted opening MCEV 1,051.4 New business value 55.2 Expected existing business contribution (risk-free rate) 13.5 Expected existing business contribution (in excess of risk free rate) 8.3 Transfers from value of existing business and required capital to free surplus Experience variances 0.5 Assumption changes 35.5 Other operating variance 0.6 Operating MCEV earnings Economic variances 57.0 Other non operating variance (0.7) Total MCEV earnings Closing adjustments Closing MCEV (MCEV as of March 31, 2014) 1,221.3 The impact of changing the underlying assumptions of MCEV is as follows. (Billions of yen) Assumption Change in Assumption MCEV Change in Amount Base No change 1, bp decrease 1,003.4 (217.9) Interest rates 100bp increase 1, Swap rates 1, Stock/Real estate market value 10% decrease 1,204.8 (16.5) Stock/Real estate implied volatility 25% increase 1,209.7 (11.6) Interest swaption implied volatility 25% increase 1,202.7 (18.6) Maintenance expenses 10% decrease 1, Lapse and surrender rates 0.9 1, Death protection Mortality rates products , Third-sector and annuity products ,216.0 (5.3) Morbidity rates , Required capital Regulatory minimum 1, Notes: 1. Frictional costs and the cost of non-hedgeable risks do not change in the sensitivity tests, with the exception of frictional costs, which are changed in terms of required capital. 2. Values of subsidiaries and affi liated companies are not changed except for stock market value sensitivity where the stock value of subsidiaries and affi liated companies are altered. 3. The impact of changing more than one assumption at a time is not congruent with the sum of impacts for each assumption.

24 Major Assumptions We have used JGB and U.S. government bond yields as of March 31, 2014, as a risk-free rate for the certaintyequivalent projections. For JGBs, it is assumed that forward rates in the 41st year and beyond were equal to those in the 40th year. For U.S. treasuries, we have assumed that forward rates in the 31st year and beyond were equal to those in the 30th year. We have used Bloomberg s JGB yields as our data source. The spot yields of the JGB rate for key terms are as follows: Yen U.S. dollar Term March 31, 2014 March 31, year years years years years years years 3.54 (%) As of March 31 (%) Yen U.S. dollar Term year years years years years years The swap rate for key terms that are used for the sensitivity result with swap rates in impact of changing assumptions (sensitivities) are as follows. The yen swap rate for the 41st year and beyond has been set at the same level as for the 40th year, and the U.S. dollar swap rate has been set at the same rate for the 51st year and beyond as for the 50th year. We have not added liquidity premium on the risk free rate as there are no products which are considered appropriate to apply liquidity premium as they have reasonably predictable cash fl ows and are considered illiquid. Assumptions including mortality and morbidity rates, lapse and surrender rates, and operating expense rates, were developed based on product best estimates as of March 31, Best-estimate assumptions are developed to refl ect past and current experiences as well as expected experiences in the future. Expected future changes in assumptions should be refl ected only when they are supported by suffi cient reasons. Except a deteriorating trend in morbidity rates, no other expected future changes are assumed in the best-estimate assumptions applied. 022 Opinion of Third-Party Organization Sony Life has obtained an opinion on the disclosure of MECV results as of March 31, 2014, from Milliman, Inc., which is an external actuarial consulting fi rm with expertise concerning MCEV valuations, based on the Company s requests that Milliman review its MCEV calculation methods, assumptions and calculation results. * Full information about MCEV including the opinion from Milliman, Inc., is available on Sony Life s website at Note: The above-stated MCEV information is extracted from the information that the Company disclosed regarding MCEV as of March 31, For detailed information on this disclosure, please refer to Sony Life s website, at Risk Amount Based on Economic Value Sony Life began disclosing risk amount based on economic value at the end of FY2011 to foster a deeper understanding of the Company s fi nancial soundness on the basis of economic value. As of March 31, 2014, Sony Life s risk amount based on economic value (after tax) was billion. A breakdown of the risk amount is provided below. (Billions of yen) As of March Insurance risk Market-related risk Operational risk 26.3 Counterparty risk 1.3 Diversifi cation effect (257.8) The risk amount based on economic value Note: Of market-related risks, interest rate risk was billion. (This fi gure is before taking into consideration diversifi cation effects within marketrelated risks.) The risk amount based on economic value* refers to the total amount of Sony Life s risks, comprehensively examined and including insurance risk and market-related risk. Sony Life ensures fi nancial soundness by keeping these risks within a proper level of MCEV, which is capital based on economic value. * Measurement of risk based on economic value takes one-year VaR to be 99.5% and is measured using an internal model that refers to the EU Solvency II (QIS5) standard model. Sony Life s Basic Policy on Risk Preferences We aim for stable and sustainable business growth in corporate value by aggressively increasing policies in force and underwriting insurance risk while maintaining suffi cient solvency based on economic value. We prioritize investment in assets having characteristics that match insurance liabilities to reduce interest rate risk related to long-term insurance policies, with the goal of enhancing the corporate value of the life insurance business.

25 023

26 Protecting Every Dream throughout Each Individual s Life. That s LIFEPLANNER VALUE. Providing Tailored Protection and Extensive Follow-Up Consultations Our corporate slogan, LIFEPLANNER VALUE, expresses our commitment to accompanying customers through each life stage and helping them realize their dreams. To turn these concepts into reality, since our commencement of operations we have sought to provide each customer with life insurance that is optimally tailored to their individual needs, through consultations based on life planning. Even after they have taken out life insurance, we provide lifelong support to our customers, helping them to realize their dreams. We begin by conducting life planning simulation. This determines the amount of protection that a customer needs to meet his or her family s dreams even if the unexpected occurs by calculating the protection amount, plotted on a timeline. Even after the customer has entered into a policy, we conduct detailed follow-up consultations, reviewing a customer s ongoing life plan and insurance coverage as circumstances change. Sony Life s Lifeplanner sales employees and Partners (independent agencies) are responsible for providing such tailor-made protection and extensive follow-up consultations to customers. 024 LIFEPLANNER VALUE: Four Commitments We established the The Four Commitments of LIFEPLANNER VALUE, which define the behavioral principles that we expect all employees to follow. These principles define the path for achieving LIFEPLANNER VALUE, expressed through the words planning, co-creation, professionalism and society. Serving as one team to help customers realize their dreams, armed with LIFEPLANNER VALUE Sony Life expects each of its employees to take these behavioral principles to heart, taking them as the basis for each of the roles they fulfill. Planning We are committed to providing customers with continuous lifelong support, so that they can live positively every day with peace of mind. We will help customers to plan their lives as they seek to realize their dreams. Co-Creation We value the process of co-creation, which is achieved in the course of meeting with customers and steadily earning their trust, as we work closely with each customer to help realize his or her dreams. Professionalism We are committed to delivering high-quality services with an emphasis on professionalism by constantly enhancing the skills and knowledge of each employee, and bringing together our collective strengths. Society By fulfi lling our commitments, we will help to create a society in which everyone can live with peace of mind in pursuit of their dreams.

27 Lifeplanner Sales Employees and Partners. Always for Customers, Always with Customers Lifeplanner Sales Employees We believe it is important to fi rst consider your dreams what you want to do in the future and what you want to do for your family, for instance and then shape these into reality by choosing the life insurance that is the best for you. Lifeplanner sales employees help you turn dreams into reality. Life insurance will begin changing today. Lifeplanner sales employees will drive this change. This was Sony Life s declaration at the time it commenced operations, and the basis for putting in place its Lifeplanner system. By ensuring that Lifeplanner sales employees are consistent leaders of innovation within the industry, we provide customers with ideal life insurance. Lifeplanner sales employees accompany their customers, understanding their lives as they go through each of life s milestones. The time that Lifeplanner sales employees share with customers and the strong trust-based relationships they create are an important part of helping customers meet the dreams that constitute their life plans and providing value. Unfortunate circumstances are not the only time that customers experience such value. During the course of long, full lives, customers typically experience various concerns or problems. Lifeplanner sales employees stand by to guide customers at these times and keep them from losing sight of their goals. As well as the customer representative, Lifeplanner sales employees throughout Japan offer their cooperation. Lifeplanner sales employees help customers reach their dreams. They remain alongside customers throughout every phase of their lives, providing essential support. Premier Agency Sony Life Evolves in a New Direction The Premier Agency is a new consulting model that Sony Life has established to deepen its involvement in customer life planning. Under this model, highly regarded people with experience as Lifeplanner sales employees and managers who have become independent establish these agencies, taking advantage of the extensive expertise and knowledge they have cultivated to meet customers needs by providing a host of services with life insurance at their core. We believe that the chaotic environment in which we operate calls for professionals that have the ability to make broad-based proposals, leverage their specialized expertise to address problems and respond promptly to customers needs. These are the missions of a Premier Agency. Premier Agencies work with alliance partners in numerous fi elds to offer support services in such areas as wealth management, life design, business consulting, business succession and healthcare. These agencies capitalize on wide-ranging knowledge and abundant skills to deliver robust consulting-based sales that accurately meet customers life and business needs. Partners In 1989, the 10th anniversary of the Company s founding, alongside its Lifeplanner channel Sony Life launched the Partner consulting channel as an independent agency system. In keeping with our mission to work for customers fi nancial security and stability by offering optimal life insurance products and high-quality services, Partners are professional independent agencies who solicit insurance in partnership with Sony Life. The idea behind this channel is for Partners to offer high-quality services to customers based on their close ties with the communities in which they operate. The term Partners is apt because, in addition to agencies that act as business partners for Sony Life, they are lifelong partners to customers. Sony Life s many Partners throughout Japan currently work as life insurance professionals that consult with customers and apply specifi c and advanced expertise through needs-based sales that truly fulfi ll their role as customers partners. 025

28 Educational Systems, Self-Development and Reciprocal Studies Educational Systems for Lifeplanner Sales Employees and Partners 026 Sony Life provides a diverse range of educational programs designed to enable Lifeplanner sales employees and Partners to fulfi ll their roles as insurance and fi nancial professionals in responding to the confi dence that customers place in them. Lifeplanner Sales Employees Training Program Basic Training Program (BTP) Through this training, Lifeplanner sales employees learn the attitudes required to put customers fi rst and the skills, techniques and habits they need to perform as professionals. Lifeplanner sales employees take part in this training program during their fi rst 36 months after joining the Company. At fi rst, employees learn the basics of and need for life insurance. Then, as well as learning how to handle new policies, through training they learn generally about followup consultations, such as checking and maintaining postsigning life plans and protection, paying insurance claims and protecting these payments in an appropriate manner. BTP for new employees and BTP follow-up training are held at the head offi ce. BTP 1 for employees in their fi rst month after joining the company, BTP 6 centering on the training covering knowledge and skills for employees after their second month, BTP 12 focusing on life planning and BTP 24 concentrating on knowledge, skills and compliance training, are all held at branch offi ces according to the branch training process. In parallel, employees undergo BTP 36, which emphasizes the corporate market and follow-up consultations. Employees also undergo on-the-job training (OJT), meeting regularly with their unit managers to confi rm their action progresses. Before graduating to the next level, employees take tests to ensure that they have learned the things they have studied. Employees need to pass graduation tests before taking tests to qualify for non-life insurance sales, or to conduct banking agency business. The entire program is designed to ensure that employees have gained the basic skills required of a Lifeplanner sales employee and that they are ready to move on to the next level. Lifeplanner Sales Employee Training System (As of July 1, 2014) Graduation test Branch study sessions, group study sessions, sales office study sessions, etc. Ongoing training, up to 36 months Lifeplanner sales employees Branch training process Before joining CIP Eight hours, four times BTP 1 One month after joining BTP 6 2nd to 6th month after joining BTP 12 2nd to 12th month after joining BTP 24 2nd to 24th month after joining BTP 36 2nd to 36th month after joining OJT (process meetings, role playing, joint work) Graduation test Graduation test Head office training BTP (New employee training) Start of sales BTP (follow-up training) BTP (follow-up training) Assurance certification testing (more than one year of employment) Certification testing Life Association of Japan testing Financial planner certification testing General process exam Special course exams Variable insurance sales certification exam Kinzai Institute for Financial Affairs, Inc. Japan Association for Financial Planners Advanced course exam General Specialty Variable Advanced Life Insurance University AFP Certification training Life Insurance University course exams (Six fields) Total life consultant (Financial planner certified by the Life Insurance Association of Japan) 2nd Grade Certified Skilled Worker of Financial Planning (national qualification) AFP 1st Grade Certified Skilled Worker of Financial Planning (national qualification) CFP Financial Planner

29 Partner Training Program Partner Training Program (PTP) for Partners This program is designed to help Partners succeed in the life insurance business. In the program, Partners learn about our products and needs-based sales approaches derived from expertise we have accumulated over the years. Professional Agent System Sony Life introduced this solicitation certifi cation program in 2006 to help cultivate high-quality sales personnel who understand the true value of life insurance, namely to work closely with customers, draw up their life plans and provide rational assurances that match those life plans. This system involves various assessments to judge objectively that a person has the capabilities that life insurance businesses require. Only agents who have passed all assessment levels and surpassed predefi ned levels for performance and qualifi cation are awarded the title of Professional Agent. Professional Agents must have ability to listen to customers and determine their needs. They must be consummate salespeople, with a high level of expertise in explaining the content and advantages of policies, and they require a level of knowledge and a track record suffi cient to assure customers of their capabilities. Agents who at the culmination of long years of training have acquired the Professional Agent sobriquet work with our customers throughout Japan, providing life planning on a daily basis. Partner Training System (As of July 1, 2014) 027 Partners Initial training Takeoff plan, six months Flight plan, seven months Partner Training Program Sales process meetings, joint work, role playing, etc. Sony Life Business College Certification testing Life Association of Japan testing Financial planner certification testing Special course exams Life Insurance University Variable insurance sales course exams General process exam certification exam Advanced course exam (Six fields) Total life consultant General Specialty Variable Advanced Life Insurance University (Financial planner certified by the Life Insurance Association of Japan) Kinzai Institute for Financial Affairs, Inc. Japan Association for Financial Planners AFP Certification training 2nd Grade Certified Skilled Worker of Financial Planning (national qualification) AFP 1st Grade Certified Skilled Worker of Financial Planning (national qualification) CFP Financial Planner Professional Agent Certifi cation Entry Knowledge assessment Written test to confirm knowledge of life insurance sales Pass System skills assessment Practical test to confirm PC skills needed to write and maintain new contracts Capability prerequisites Sales skills assessment Role-playing test to confirm hands-on skills in conducting needs-based sales through life planning Pass Performance prerequisites Required qualifications Achievement Professional Agent certification Approximately five months

30 Enhancing Education for Managers Our branch general managers, unit managers and other managers who oversee sales staff have an important responsibility to carefully nurture selected individuals into Lifeplanner sales employees. To help managers fulfi ll this responsibility, Sony Life continues to upgrade its educational system, which includes training to deepen understanding of the essence of life insurance, develop character and acquire leadership skills. Sony Life Academy (SLA) The Company opened its Sony Life Academy in fi scal 2003 to train its branch general managers, the heads of its independent Agency Sales Division and head offi ce general managers. In April 2007, we also launched a course called Life Insurance Basics for unit managers, Independent Agency Sales Group offi ce managers and head offi ce managers. As of March 31, 2014, 347 people had undergone SLA training. Course instructors include university professors who specialize in the topic. Teaching people who have ample real-world experience the theoretical basis for life insurance and related areas helps them grow into higherquality insurance professionals and helps managers hone their guidance and leadership skills. Even after course completion, ongoing training is provided to assist the lifelong learning process. Spirit Behind Creating Sony Life Academy SLA enables Sony Life s managers independently learn to grow into higher quality insurance professionals. SLA helps Sony Life s managers brush up their own guidance, leadership and personal skills. In addition to Sony Life s managers, through autonomous learning SLA fosters the growth of personnel who hold the key to the future of the entire Japanese life insurance industry. Four Pillars of Sony Life Academy Education Acquire knowledge, beliefs and convictions worthy of life insurance professionals Help people convey the business and sales philosophies of Sony Life to others Train people to acquire management skills Help people hone their sensitivities as human beings 028 Nurturing Financial Planners Our socioeconomic environment is undergoing major changes, owing to the advent of the information-oriented society, reforms to the social security system, diversifi cation of fi nancial products and a demographic shift to an older population. In these circumstances, it is vital for individuals to conduct comprehensive asset planning and risk management or fi nancial planning geared to their specifi c life plans. Financial planners are professionals qualifi ed to meet the fi nancial planning needs of customers. A large number of Lifeplanner sales employees study fi nancial planning to achieve higher levels of needs-based sales capabilities. CERTIFIED SKILLED WORKER OF FINANCIAL PLANNING People with 1st Grade Credential: 116 People with 2nd Grade Credential: 2,824 (As of June 1, 2014) Through the Human Resources Development Promotion Law, the Japanese government has introduced a profi ciency certifi cation system to certify levels of expertise in various fi elds, including 1st, 2nd and 3rd grade Certifi ed Skilled Worker of Financial Planning Credentials. AFFILIATED FINANCIAL PLANNER (AFP) People with AFP credential: 831 (As of June 1, 2014) The Japan Association for Financial Planners is the sole issuing authority for the AFP license. This qualifi cation certifi es that the licensee possesses the knowledge required of a fi nancial planner and is competent to offer advice and make proposals in response to client needs. CERTIFIED FINANCIAL PLANNER (CFP ) People with CFP credential: 76 (As of June 1, 2014) The CFP license is an international qualifi cation conferred by the CFP Board of Standards, Inc., of the United States. This is an authoritative qualifi cation given only to fi nancial planners who demonstrate advanced fi nancial planning abilities and sound work ethics.

31 Reciprocal Studies Advanced consulting-based sales and follow-up consultations are linked with the satisfaction and peace of mind that Sony Life delivers to its customers. To achieve these aims, we offer a broad range of knowledge and skill training. Sony Life s employees have embraced a spirit and culture of mutual assistance. In addition to holding independent training forums around the nation, they conduct mentoring activities on an everyday basis. Million Dollar Round Table (MDRT) MDRT is an international association of the world s leading life insurance and fi nance professionals. The organization has 38,000 members in 74 countries and regions (as of August 2013). Each year, leading insurance and fi nancial service professionals from around the world are selected as MDRT members. These members work to develop the whole person, based on the concepts of reciprocal training and contribution to society. MDRT members demonstrate superior skills, ethical standards and customer service. These business and regional community leaders are recognized worldwide as life insurance and fi nancial service specialists. As of June 1, 2014, 716 Lifeplanner sales employees and Partners of Sony Life were among the largest groups forming the MDRT s chapter in Japan. MDRT Sony assembly and training session (Miyazaki, October 2013) MDRT Sony MDRT Sony comprises Lifeplanner sales employees and Partners of Sony Life who have become MDRT members. The chapter holds training sessions several times a year to exchange the latest information and build their skills, with the aim of providing top-quality consulting and other services to customers. Chapter members, representing our most successful Lifeplanner sales employees and Partners, demonstrate their passion by serving customers in keeping with the MDRT spirit and through reciprocal studies. Members also take the initiative by participating in various volunteer activities. 029 Japan Association of Insurance and Financial Advisors (JAIFA) Established in 1962 as the All Japan Association for Life Insurance Sales Representatives to enhance the status of life insurance salespeople through the self-development of members, the organization s name was changed to JAIFA in Certifi ed in April 2012 by the Cabinet Offi ce as a public interest incorporated association, JAIFA s activities are aimed at serving the public interest by encouraging the sound development of the life insurance industry and contributing to society in a broad sense. JAIFA All Sony liaison meetings and workshops (Tokyo, April 2014) JAIFA in Sony Life Our Lifeplanner sales employees, unit managers and branch general managers participate in JAIFA events, and as of April 1, 2014, 34 JAIFA Sony Life regional chapters have been organized in regional areas to spearhead various activities. JAIFA All Sony, which comprises all the JAIFA members in Sony Life throughout Japan, typically meets twice each year to hold board meetings, liaison meetings and workshops. These meetings aim to achieve a nationwide exchange of information.

32 Securing the Future for Our Customers Consulting-Based Sales and Follow-Up Consultations Sony Life proposes insurance that is tailored to the individual life plans of its customers. Accordingly, providing insurance requires us to determine what sort of life the customer plans to lead. We listen carefully to a customer describe his or her dreams for the family s future and then work with the customer to turn those hopes into specifi c plans. We work together on this life plan, calculating the necessary protection and putting in place the protection necessary to meet the customer s goals. Sony Life refers to this process as providing consulting-based sales, and we have followed this approach diligently since the time of our establishment. We provide tailored protection to change lurking uncertainty into a sense of well-being. Consulting-Based Sales 030 Life Planning Life is constantly changing, and life insurance needs to continue offering protection throughout. Our starting point is to determine a potential customer s plans, dreams and timeline, to paint a picture of the future for their families and to help them envision the milestones. Calculating Income and Expenses, Designing Protection During this process, we determine a family s income and expenses, assuming they live according to the life plan we drawn up. We look at whether the family would be able to live in comfort if the unexpected occurred. After clarifying future economic risks, Lifeplanner sales employees and Partners design the protection that most rationally fi ts that customer s needs. Giving birth Child-rearing Purchasing a home Health Medical care Retirement Nursing care, long life Sony Life sees life planning as a way of making visible the future life plan of the customers it is working to protect. The life planning process enables Lifeplanner sales employees and Partners to accompany customers on their journeys through life.

33 We recognize that the environments in which our customers live and work are always changing. To ensure that the life insurance policy is serving its intended role, even after a policy agreement is signed, we periodically check protection and provide advice. If a customer s circumstances change and some issue arises, the individual in charge of that policyholder, as well as Lifeplanner sales employees and Partners throughout Japan, are available to help customers realize their life plans. Our work goes beyond simply delivering benefi t payments if the unexpected occurs. We also believe that an important part of our mission is to communicate to the bereaved family the feelings inherent in the life insurance and provide support to the family. Sony Life refers to the services it provides after concluding a policy as follow-up consultations. We aim to provide high-quality services and earn the trust of our customers as we accompany them through life s milestones. We search for measures that will resolve the issues customers face as they go through life s milestones. If the unexpected should occur, we are standing by to communicate policyholders feelings and support their families. Follow-Up Consultations Periodic Checks and Advice on the Life Plan and Protection People encounter a variety of changes over the course of a long life, undergoing such experiences as child-rearing, purchasing a home, becoming sick and requiring nursing care. To ensure that the proposed life insurance is playing its properly intended role as conditions change, even after a policy is signed we periodically check protection, offer advice and provide information. Delivering Feelings for Bereaved Family Members If the unexpected occurs, we support the bereaved family by responding quickly. We consider it our mission to communicate to the family the feelings inherent in the life insurance and provide support for their future happiness. 031 Meeting Changes in Society and Life Regularly Checking Life Plans and Offering Advice Changes in social conditions and the economic environment can influence the future a customer envisions. We periodically confirm that appropriate protection is in place to facilitate a successful life plan. We also work with customers to update their life plan in line with changing dreams and goals for the future. Periodic Checks and Advice on Protection Such major life events as the birth of a child or a change in employment can alter coverage needs. We consistently monitor the content of our customers protection and provide advice to ensure that their life insurance coverage meets their needs to the fullest extent possible. Sony Life Letter The Sony Life Letter, available on the Web, outlines coverage in easy-to-understand terms. Customer Web Service Various life insurance procedures and confirmation of content can be handled over the Internet. Providing Appropriate Information and Resolving Issues at Times Such as These: Home We want to set aside funds to buy a home. We want to put together an appropriate mortgage loan. We are thinking of accelerating our mortgage payments or refinancing our mortgage. We want to learn more about housing loans. And so on Child-Rearing and Education How much will an education cost? We would like to set aside a regular amount as a reserve for education. And so on Retirement We would like to start setting aside funds for our senior years. We want to make investments to tide us over in our senior years. And so on Other Assets We would like to know more about the social insurance (medical care, pension, nursing care) system. We want to learn more about automobile insurance. And so on Health, Medical Treatment and Nursing Care Health, Medical Treatment and Nursing Care Consultation Desk Inquire by phone about treatment for illness and nursing care. We have a health-related question we would like to ask a health nurse or clinical nurse. I would like to consult with a specialist physician. I would like an introduction to a hospital. And so on Note: Customers need to register for Web service before using the consultation desk. Magazine We deliver an magazine containing the latest information in medical treatment and nursing care.

34 Consulting-Based Sales Providing Optimal Protection through the Life Planning Support Service (LiPSS) Life Planning and Designing Protection Our LiPPS software connects specific coverage and an uncertain future. This software plan allowances for contingencies so that the life plan of a customer s family does not go awry even if the unexpected occurs, and clearly estimates the amount of coverage needed to offset economic risks given a customer s future life plan. Even after protection begins, we use LiPSS to support customers at different life stages and in line with changing risks. STEP 1 Life Planning 032 Eliciting Customers Dreams and Goals The fi rst step is to learn the life paths a customer and his or her family intend to follow, as well as their dreams and goals. When forecasting the future, we look at this picture as seen by every member of a family. This process allows us to forecast how much money will be needed, as well as when and for what purposes. Simulation of a Life Plan Chart Life Plan Chart Considerations We look at the ways in which a family s life will change over the next few decades. The chart looks at the period during which children will be attending school from kindergarten to university and estimates expenses, including the times when siblings educational costs will overlap. The timing of life events that involve major expenditures, such as purchasing or renovating a house Caring for senior parents living together and the customer s own plans for his or her senior years The timing for pursuing a customer s future dreams, such as career plans that involve changing jobs or striking out on his or her own.

35 STEP 2 Simulation Simulation of Future Income and Expenses Next, we look at the potential changes in a family s income and expenses as they progress according to the life plan they have created. By comparing projected income and expenses on a yearly basis, we confi rm whether the life plan is viable fi nancially. By considering the balance between income and expenses and prioritizing expenditures, we propose realistic ways to make improvements. Next we run simulations to factor in the unexpected. We clarify the shortfall in the amount of money that would be suffi cient to allow the bereaved family to live comfortably in the case of untimely death. <LiPSS> Income and Expenses on an Annual Basis for Each Year of Survival Balance of Financial Assets <LiPSS> Simulation of Income and Expenses on an Annual Basis if the Unexpected Occurs Balance of Financial Assets 033 STEP 3 Insurance Planning Considering Life Plan Risks and Countermeasures One factor that must be considered is whether, in the case of untimely death, the bereaved family would be able to live comfortably according to their life plan. We look at what additional money would be needed. Based on the results of the customer s life plan and these simulations, our insurance professionals Lifeplanner sales employees and Partners analyze and consider needs from various angles before making proposals to the customer. <LiPSS> Necessary Amount of Coverage Necessary Amount of Coverage To calculate the necessary amount of coverage, we run a simulation to determine the potential gap between expenses and income in the event of an untimely death. (This is the amount that needs to be covered after allowing for a survivorship pension or other public support.) Life Planning SQUARE, Our Life Planning Showroom At Life Planning SQUARE, the showroom Sony Life operates in the Sony Building in Ginza, Tokyo, the Company aims to share the importance of the life planning process with as many people as possible in an enjoyable manner. A wealth of content is available at Life Planning SQUARE to help customers experience the life planning process. Sony Life s Lifeplanner sales employees are also on hand to perform life planning with customers fi rsthand. Furthermore, we conduct banking agency business on behalf of Sony Bank, setting up ordinary yen deposit accounts and delivering applications for Sony Bank s mortgage loan products. Note: This facility does not write new life insurance policies or perform policy content change procedures.

36 Consulting-Based Sales Sony Life s Proprietary System Supporting Consulting-Based Sales and Follow-up Consultations Sony Life introduced the C-SAAF* follow-up consulting system in FY2012. In addition to serving as a renovated sales support system that centers on our pioneering LiPPS simulation system (see page 30) for life planning, the new customer management system eliminates the need for paper in life insurance application procedures. This system greatly reduces the burden to customers of the application process. The system also allows for the consolidated management of such information as the life plan set forth when a policy was initially taken out, along with any adjustments made to accommodate later changes in conditions. This system allows Sony Life to conduct long-term follow-up consultations in a timely manner. * C-SAAF is an acronym for Consulting-Sales and Follow-up system. 034 Paperless Application Process A paperless application process allows customers to confi rm policy content on-screen and conclude the procedure by providing an electronic signature. This paperless process can facilitate customer understanding, as well. For example, we can indicate important items for emphasis, depending on the customer, and respond to any questions that customers may have about accidents and illnesses on which notifi cation is needed. Customers can register a bank account online from which to make insurance premium payments, completing the paperless process. Smartphone Connections to the Customer Database We have developed a specialized app that allows customer representatives to use a smartphone to photograph health reports and other documents that customers provide during their application, and send this information to the Company s system. While the information is being sent to the system, the app simultaneously erases the document images from the phone. The result is enhanced security of sensitive data. Linking a customer representative s smartphone with the customer database allows the representative to call up and refer to a customer s policy information simply by tapping on the customer s communication records. This approach allows us to respond to telephone requests in real time and store that information in our database. We can thus respond securely and swiftly to customers at any time and from any location. Filling in a paperless application Photographing medical documents Smartphone system link

37 Follow-up Consultations CSM System The CSM system allows for the consolidated management of such information as the life plan set forth when a policy was initially taken out, along with any adjustments made to accommodate later changes in conditions. This system allows Sony Life to conduct long-term follow-up consultations in a timely manner. Customer Household Management We track changes in policies and life plans by household. Consolidated Management and Use of Customer Information In addition to the life plan drawn up when a policy is initially taken out, the system enables detailed follow-up through the consolidated management of customer communications and procedures after that time as well. The system also enables long-term follow-up over multiple generations, such as from parent to child. Timely Follow-up Consultations via a Robust Search Function and Abundant Information When customers fi rst enter into a policy, we record information about their life plans and requests in a database. This approach enables us to accurately track important life events and insurance coverage, so that we can provide them with new information specifi c to their current needs and conduct more closely tailored follow-up activities. 035 SLIM, a Policy Maintenance System SLIM enables Lifeplanner sales employees and Partners to quickly offer accurate information in response to customer inquiries and on policy maintenance procedures. SLIM allows us to search customers by name, defi ne specifi c customer attributes such as their communications provider, refer to policy content and conduct various trial calculations, refer to the Sony Life Letter (see page 36) and conduct a host of other processes. The system also automatically drafts necessary documentation for changes in coverage, policyholder loans and the payment of insurance claims and benefi ts. SLIM Winner of the 2013 Asia Insurance Technology Awards Sony Life s C-SAAF was a winner of Best Mobile Application at the 2013 Asia Insurance Technology Awards. These awards are presented jointly by Celent, a global consulting fi rm that concentrates on fi nancial institutions business and technology strategies, and Asia Insurance Review, an insurance-industry periodical. The Best Mobile Application award recognizes the insurer who has exhibited true innovation in the use of mobile technology and has developed a unique and compelling application not seen elsewhere in the industry. C-SAAF earned high marks for its contributions to technological innovation and business process effi ciency, as well as to the benefi ts it provides customers. Award reception ceremony

38 Follow-Up Consultations High-Quality Follow-Up Consultations That Begin with Life Planning The policy is only the fi rst step. As customers lifestyles and the environment that surrounds them is in constant fl ux, it is important to provide information and review protection in line with changes in the life plan. During these follow-up consultations, as Sony Life calls them, we continue to provide checks and offer advice even after concluding a contract to ensure that preparations are optimal. Sony Life Letter The risks inherent in a life plan change according to the age. Adjustments also need to be made, taking into account lifestyle shifts or fl uctuations in the social environment. Each year we send out the Sony Life Letter to help customers confi rm the content of their protection. Customers who have registered for our Customer Web Service can also check their information on the Web at any time. Every three years, we issue a special edition, the Regular Review Sheet. In addition to the information provided in each year s report, this edition encourages periodic review to ensure that protection content and other insurance aspects are optimal. Sony Life Letter 036 Customer Web Service Remaining healthy is an extremely important element of achieving a customer s life plan. Registering with our Customer Web Service gives customers access to helpful information on illness prevention, treatment and nursing care. Providing Information via We regularly send out s to customers containing helpful information on current trends on health, medical care, money and other lifestyle aspects. magazine Offering Information on Our Website Our website contains a variety of specialized information related to health, medical care and nursing care, covering such topics as how to read or respond to diagnostic results and providing rankings of hospitals by the number of operations they conduct on three major diseases. The site also provides detailed explanations about procedures for insurance claims and benefi ts. Confirming Policy Content, Handling Various Procedures Customers can use personal computers, smartphones and other mobile phones to confi rm policy content and handle various procedures. Consultation in the Event of Illness, Nursing Care or Other Difficulty Health, Medical Treatment and Nursing Care Consultation Desk Policyholders who register with our Customer Web Service can access our Health, Medical Treatment and Nursing Care Consultation Desk, giving them telephone access to specialist physicians, health nurses and clinical nurses. Good hospitals handling large numbers of operations The Health, Medical Treatment and Nursing Care Consultation Desk

39 System of Claim Payment Operations Fundamental Policy on Payment Operations Recognizing that the payment of insurance claims is the most important function of an insurance company, Sony Life provides insurance products that promise policyholders the security of economic protection. The commitment to pay claims is a long-term agreement between the Company and its customers. We therefore regard it as our responsibility to pay claims unfailingly to customers when needed. Sony Life strives to strengthen its payment operations, reinforcing its operating systems and structures on a daily basis. Provision of Information Related to the Payment of Insurance and Other Claims Guidebook on the Payment of Insurance and Other Claims when the Unexpected Occurs We prepared this guidebook to help customers better understand insurance or other benefi t payment requests, as well as these payments. The guidebook contains information on the procedures for making a claim and includes specifi c examples of cases in which claim payments can and cannot be made. Payment Operations Structure To ensure that payments to customers are assured and swift, Sony Life assigns multiple personnel to check payment approval decisions. We have also prepared reference documents and operating manuals highlighting points for caution when making payment assessments. To ensure the appropriateness of payments, in addition to internal checks by the Claims Payment Management Department, the Compliance Department runs checks of appropriateness, which are verifi ed by knowledgeable external advisors. We also have made organizational upgrades, such as increasing the number of personnel in the Claims Payment Management Department and enhancing their education and training. When developing new products, the Product Development Department and the Claims Payment Management Department cooperate to ensure the appropriateness of claims and other payments, and share product overviews and policy stipulations. 037 Status of Payments The following information represents the status of payments made against requests for payment received in FY2013. The cases described below were recorded in accordance with standards drawn up by the Life Insurance Association of Japan. Policies on Which Payments Were Made in FY2013 (Individual Life Insurance) (Instances) Claims Death Disaster Severe Injury Other Total Number paid 4, ,799 6,720 (Instances) Benefi ts Death Hospitalization Surgery Severe Injury Other Total Number paid 2, ,418 79, , ,601 Number of Policies (Individual Life Insurance) on Which Non-Payment Decisions Were Reached (Instances) Claims Death Disaster Severe Injury Other Total Invalid, as fraudulent Invalid, as acquired for illegal purchases Cancelled for nondisclosure reasons Cancelled for grave reason Justifi ed exclusion Outside scope of reasons for payment Other Total Benefi ts Hospitalization Death Surgery (Instances) Severe Injury Other Total Invalid, as fraudulent Invalid, as acquired for illegal purchases Cancelled for nondisclosure reasons Cancelled for grave reason Justifi ed exclusion Outside scope of reasons for payment , ,165 Other Total , ,818

40 Service Improvements That Begin with Customer Input Making Use of Customer Input in Management Sony Life takes customer input seriously, paying careful attention to customer satisfaction and using customer input as a starting point for improving services. By gathering and accumulating the customer input we receive on a daily basis via numerous routes, we strive to improve our business. We also make extensive use of this information when planning new products and setting service policies. Our focus on customer input is an important step toward meeting the expectations of customers. We will continue these efforts as part of our companywide initiative to improve services. Initiatives to Refl ect Customer Input (VOC*) in Management (As of July 1, 2014) Contacts Supervisory departments Executive Officers Board Customer center Reporting, assignment Reporting, assignment Customer center Website MCC Committee VOC Committee 038 Business Administration Control Division Reporting, assignment Reporting, assignment Customer input [Agency offices] Branches, independent agents and clerical offices Life Planning SQUARE Customer satisfaction surveys Supervisory body, Life Insurance Association of Japan, other Legal Division Agency Office Sales Planning Division Agency Office Planning & Promotion Division, Independent Agents Planning Division, Operations Planning Division Sales Administration Division Lifeplanner Promotion Division Co-Creation Planning Division Corporate Planning Division Implementation, reporting VOC Division Gather, analyze, evaluate, propose improvements and determine progress on customer feedback (VOC) Headquarters divisions Requests for improvement Disclose improvement status Improvement planning Improvement implementation Result verification *Voice Of Customer = many different types of customer feedback Provide high-quality services Raise customer satisfaction

41 Customer Feedback to Sony Life Customer Feedback to the Customer Center (number) The Customer Center handles some 80% of the cases of customer feedback. Consultations and Notices to the Customer Center (Instances, %) FY2011 FY2012 FY2013 Category Number Percentage Number Percentage Number Percentage New policies, requests for materials 80, , , Loans, surrender cash referrals 61, , , Receipt-related 11, , , Claims and benefi ts 17, , , Other maintenance 190, , , Taxes, exemption certifi cation 5, , , Other 28, , , Total 395, , , Customer Center Initiatives In addition to handling new inquiries, our Customer Center is available for customers to contact to discuss procedures after entering into policies, as well as for a wide range of consultations and various requests. Requests made via the customer center are transmitted in a timely manner to the customer representatives or section in charge of that customer s policy. To ensure swift responses, the center manages the communications it receives through to their conclusion. Of Input from Policyholders, Those Counting as Complaints (No. of complaints, %) FY2011 FY2012 FY2013 Content Number Percentage Number Percentage Number Percentage Subscribing to insurance policy 3, , , Premium payments 2, , , Processes and dividends after joining policy 8, , , Payment of claims and benefi ts 2, , , Other 3, , , Total 20, , , Note: Numbers of complaints and percentages are as of the annual report publication date for each fi scal year. Definition of a Customer Complaint Any expression from a policyholder to Sony Life indicating dissatisfaction Any statement or notice that calls into question the appropriateness of any party related to Sony Life Preventing Complaints from Resurfacing We strive to resolve the policyholder complaints quickly. We analyze the sources of complaints, consider improvement measures and work to prevent recurrence. 039 Financial Alternative Dispute Resolution (ADR) System A fi nancial ADR system employs a designated third-party institution (a designated ADR institution ) to act as a fair and neutral arbiter of disputes that arise between a customer and a fi nancial institution with the aim of reaching an amicable resolution without going through the courts. This system of resolving issues simply and quickly outside the courts is designed to provide additional protection to customers and seeks to enhance the level of trust that the customers place in fi nancial products and services. The Life Insurance Association of Japan serves as the designated ADR institution for life insurers. Designated ADR Institution Contact URL Life Insurance Counseling Desk, The Life Insurance Association of Japan (Japanese only) (9:00 17:00, weekdays, except holidays) (Japanese only)

42 Risk Management System 040 The environment in which life insurance companies operate is growing increasingly diverse and complex, owing to such factors as fi nancial market fl uctuations, changes in the population structure and advances in healthcare and information technologies. Against this backdrop, managing the various types of risk that we face such as market-related risk, insurance underwriting risk, operational risks and legal risk as well as appraising the overall risk situation and managing accordingly, has become an increasingly important part of our efforts to grow and remain true to our mission. We must also ensure appropriate returns that are commensurate to the related risks, while putting in place systems to ensure that we respond appropriately if risks materialize. Sony Life recognizes that measures to enhance its risk management organization are an important way to ensure its fi nancial soundness and enhance corporate value, as well as to manage risk, profi ts and capital in an integrated fashion, and pursues such initiatives to this end. As part of these efforts, Sony Life formulated Enterprise Risk Management (ERM) Guidelines that clarify risk preferences based on its management direction and strategic objectives. We are also working to reinforce our risk management through ongoing initiatives to manage risks on the basis of economic value. Specifi cally, we manage risk on an economic basis, seek to appropriately control risk amounts based on economic value and are enhancing our risk management. We have also assigned divisions to each of the risks the Company faces, and the Risk Management Committee, which includes the general managers of the divisions responsible for the Company s risk management, meets to discuss various companywide risk management issues. Furthermore, Sony Life performs stress tests in order to evaluate the possible impact on its fi nancial soundness of future unprofi tability and conducts additional management and/or fi nancial measures. The Company conducts stress tests based on a worst-case scenario whereby interest rates, share prices and currency exchange rates all fall substantially and at the same time. We perform stress tests involving a sudden rise in mortality rates owing to a major earthquake or outbreak of infectious disease, as well as stress tests that assume these events in combination. In its fundamental regulations on risk management, Sony Life sets forth its fundamental risk management approach and methods. Sony Life s Basic Risk Management Policy Based on its ERM Guidelines, Sony Life aims to control risks to within the Company s allowable scope, raise corporate value and ensure fi nancial soundness. In this way, we aim to meet stakeholders expectations, earn their trust and satisfy our corporate social responsibilities as a life insurer. Risk Management Structure (As of July 1, 2014) General Meeting of Shareholders Board of Directors Board of Auditors Chief Actuary Executive Officers Board Risk Management Committee Internal Audit Division Integrated Risk Management Corporate Planning Division Market-related risks ALM Division Insurance underwriting risk ALM Division Operational risks Going concern risk Other managerial risks Operations Administration Division Office risk General Affairs Division Sales Administration Division Personnel risk Human Resources Division Sales Administration Division Market risk Reinsurance risk Administrative risk Operations Administration Division Systems risk Operations Administration Division Compliance Division Credit risk Real estate investment risk Liquidity risks ALM Division Legal risks Legal Division Reputational risks Corporate Communications Division Management risk Corporate Planning Division Subsidiary and affiliated company risks New Business Development Division Subsidiaries and affiliates Business Offices

43 Specific Risk Management Definitions and Procedures Market-related risks Market-related risks refer to the risk of suffering losses due to fl uctuations in the values of assets and liabilities. Specifi cally, market risk, credit risk and real estate investment risk make up the majority of the risks the Company faces. Sony Life manages market-related risks in an appropriate manner, based on internal regulations and taking into account asset and liability risk characteristics, as well as adequate levels of capital. Market risk Market risk refers to the risk of suffering losses due to changes in the economic values of investment assets and liabilities as a result of fl uctuations in interest rates, share prices, exchange rates and/or various other risk factors. Sony Life strives to determine the amount of market risk to its assets and liabilities, taking into account the risk characteristics of interest rate risk, share risk and exchange rate risks. In addition, Sony Life establishes risk and other limits, as it deems necessary, as a means of controlling the magnitude of potential market-related losses. We recognize that managing interest rate risks on assets and liabilities is of particular importance, given the substantial impact that interest rate risks on long-term insurance agreements have on management. Credit risk Credit risk refers to the risk of suffering losses due to the decrease or loss in value of an investment asset as a result of the deterioration in the fi nancial conditions of parties providing credit facilities. When investing overseas, investments are subject to country risk, which refers to the potential diffi culty in collecting invested capital due to instability or disruptions in investee countries governments, economies, societies or economic conditions, as well as the possibility of incurring losses stemming from fl uctuations in asset prices. Counterparty risk is the risk of incurring losses in the event that a transaction counterparty defaults on debt or becomes unable to fulfi ll specifi ed contract obligations due to factors such as a worsening of credit. To manage credit risk, Sony Life selects potential investees with care, prioritizing stability and employing a variety of investment ceilings. In addition, Sony Life strives to ensure the stability of its investments through self-assessment of the credit quality of its assets in accordance with internal regulations, establishing reserves and recording write-offs as appropriate. Real estate investment risk Real estate investment risk refers to the risk of suffering losses due to reduced gains on real estate as the result of fl uctuations in rental income or decreases in the value of underlying real estate assets owing to changes in market conditions. In light of the low liquidity and large capital commitments that characterize real estate investments, Sony Life has established real estate investment standards that it uses to ensure the quality of its real estate investment portfolio. Sony Life manages each property individually and sells off properties that produce investment returns that fall below these standards or for which unrealized losses exceed these levels. Insurance underwriting risk Insurance underwriting risk refers to the risk of suffering losses due to unexpected changes in economic conditions and/or insurance benefi t rates. With regard to insurance underwriting risk, Sony Life conducts appropriate insurance portfolio management, such as establishing policy limits as necessary on each type of insurance in line with accumulated policy reserves and capital levels. In addition, for each product it sells, the Company maintains underwriting standards, reinsurance standards and reinsurance company selection standards, as well as criteria for the improvement or elimination of these standards. These internal regulations are clearly established and periodically reviewed. Concerning reinsurance risk, Sony Life s policies on insurance in force and reinsurance provide controls intended to ensure that, in cases where underwritten risks exceed limits on insurance in force, excess risk is adequately managed through the appropriate use of reinsurance. We do not, however, underwrite reinsurance ourselves. Operational risks Administrative risk Administrative risk refers to the risk of suffering losses due to either the bankruptcy of external contractors or improper operations, or as a result of corruption or other inappropriate action by company offi cers, employees, insurance agents or external contractors. Sony Life strives to continually improve its internal administrative processes to reduce risk by carefully analyzing the underlying causes of failures in administrative processes, undertaking evaluations of existing risk management procedures, and developing and communicating to its employees detailed internal regulations and providing manuals governing risk management procedures. Furthermore, as part of its efforts to prevent the recurrence of past failures in administrative processes, Sony Life has implemented a self-assessment program for its internal departments and undertakes periodic audits of its administrative risk management activities. Sony Life has also developed internal regulations regarding the monitoring of service providers as part of its efforts to reduce administrative risk related to such third-party providers. 041

44 042 Systems risk Systems risk refers to the risk of suffering losses due to system crashes and malfunctions with computer systems. Systems risk also includes the risk of losses due to the inappropriate use of computer systems. Sony Life created a suitable framework to manage separately the systems risk associated with its operation of existing information technology and other systems from those associated with the development of new information technology and other systems. Sony Life improves and reexamines the system development framework by assessing the systems risk to analyze past system faults, recent threats and vulnerabilities affecting its existing systems infrastructure when determining its future systems needs. With regard to systems risks relating to third-party service providers, Sony Life has developed internal regulations regarding the monitoring of third-party service providers to reduce such risk. Sony Life has also developed a business continuity plan (BCP) to govern its response to potential disasters that may affect its ability to continue its operations. Liquidity risk Liquidity risk stems from the worsening of cash fl ow in the event that deteriorating fi nancial conditions cause a decrease in new policies, resulting in lower premium income; an increase in surrender payments due to cancellations in a large number of or a large-scale cancellation; or cash outfl ows resulting from a massive disaster. Liquidity risk is classifi ed into fund fl ow risk and market liquidity risk. Fund fl ow risk refers to the risk of suffering losses if assets must be sold in adverse conditions to secure funds. Market liquidity risk refers to the risk of suffering losses if assets must be sold in adverse conditions owing to market instability. Sony Life aims to minimize its holding of low liquidity assets and to adopt, and periodically review, internal regulations clarifying the methods for managing, reporting and settling cash payments in light of its immediate liquidity needs. Other managerial risks Other managerial risks include legal risk, such as the risk of loss resulting from Sony Life conducting its operations in a manner that violates applicable laws, rules or regulations, and the risk of loss resulting from Sony Life s inability to exercise certain rights as a result of it conducting its operations in an inappropriate manner. Other managerial risks also include reputational risk, including the risk of loss resulting from negative media coverage, and rumors, defamation and other forms of criticism related to anti-social infl uences. Sony Life strives to establish risk management policies relating to these and other managerial risks in order to ensure its ability to conduct its operations in a sound and appropriate manner. Accumulating Policy Reserves for Third-Sector Insurance One characteristic of third-sector insurance is its susceptibility to future fl uctuations in the insured accident rate. Therefore, policy reserves must be accumulated to hedge the uncertainty that the insured accident rate will worsen. Sony Life conducts stress tests and liability adequacy tests and confi rms the certainty of their results to ensure that its policy reserves are adequate. Furthermore, in recent years we have added to our accumulation of policy reserves after taking into consideration recent changes in the expected accident rate related to certain types of thirdsector insurance, and this reserve stood at 4,577 million as of March 31, Stress Test and Liability Adequacy Test for Third-Sector Insurance Using various settings for each product, the stress test confi rms risk coverage given the expected rate of accident occurrence and computes the contingency reserve on this basis. We confi rm that the level of the expected rate of accident occurrence covers the amount of future benefi ts (10 years) calculated using the insured accident rate (hazard rate A), which is equivalent to the risk that exceeds the normally expected scope. A contingency reserve is accumulated to partially or entirely cover the shortfall. The liability adequacy test, on the other hand, is used to verify whether other sources of income and profi t are suffi - cient to cover the amount of future benefi ts in the event that the results of the stress test indicate insuffi cient coverage of the amount of future benefi ts (10 years) using the insured accident rate (hazard rate B), which is equivalent to the risk that exceeds the normally expected scope. If fi nancial resources, including additional sources of income and profi t, are insuffi cient to cover the benefi t, that amount corresponding to that shortfall need be accumulated as policy reserves. The methods for the stress test and liability test are stipulated by law, but the hazard rate and other factors used in these tests are based on Ministry of Finance Offi cial Notifi cation No Liability adequacy test assumptions are based on Financial Supervisory Agency, Ministry of Finance Offi cial Notifi cation No. 22. Stress Test and Liability Adequacy Test Results The stress test and liability adequacy test results as of March 31, 2014, are given below. Stress test (accumulated contingency reserve) Liability adequacy test (accumulated premium reserve) 16 million Not insuffi cient Note: Policy reserves are segmented into accumulated premium reserve, prepaid insurance premiums and contingency reserves.

45 Personal Information Protection and Information Security Amid rapid innovations in information technology in recent years, computer networks have become more advanced and complex, while services are growing more diversifi ed. Companies can now use sophisticated networks to store and handle important data. Protecting private information is thus becoming more important than ever. To conduct their business properly, life insurance companies need confi dential information about their individual customers. To enhance convenience for customers, Sony Life uses networks as part of its policy of delivering the most advanced services. The Company places high priority on effectively managing customer information and implementing measures to ensure information security. Protecting Personal Information Initiatives to Protect Personal Information Sony Life s Information Security Policies is a document outlining the Company s stance with respect to personal information, centering on its customers. Based on these policies, we seek to ensure proper management, usage and protection of information. Following the enactment of the Law Concerning the Protection of Personal Information, we established Regulations on the Protection of Personal Information defi ning appropriate actions with regard to personal information. We also conduct internal information security training to ensure thorough efforts to preserve the protection of customers personal information and preserve privacy. The Company will strive more rigorously than ever to protect all personal information in its possession. Information Management System Sony Life has appointed information managers and security managers to each department that handles personal customer information. We have also created a fl ow of operations that ensures effective protection of personal information and upgrade regularly our training system for employees. In addition, we have established the Committee to Promote the Security of Personal Information as a subcommittee to the Executive Offi cers Board to consider and implement information security promotion measures. System for Protecting Personal Information Board of Directors Executive Officers Board Protection of Personal Information Promotion Committee Providing Information to Reinsurance Companies As part of its reinsurance contracts, Sony Life provides personal information on its policyholders to reinsurers. This information may also be as part of reinsurance payment invoicing procedures. Reinsurance is a process whereby insurance companies share a portion of the risk of the policies they underwrite with other insurance companies. This procedure allows the diversifi cation of risk inherent to insurance underwriting. Sony Life s statements of important notes to policy agreements and documents related to the provision of protection explain that such information may be provided to reinsurance companies. Customers agree to this condition when signing insurance agreements. Policy Content Registration and Reference Systems Sony Life and other life insurers share policy and other information pertaining to policy underwriting decisions, as well as information related to decisions on claims and other payments. When it receives insurance and other benefi t claims, Sony Life must register with the Life Insurance Association of Japan certain information regarding the policyholder or insured party, as well as information about the policy. When an application is made by one insurer, information registered with the Life Insurance Association of Japan may be provided to other life insurers. Life insurers refer to this information to make decisions on underwriting, as well as on policy claim and other payments. This information, which is maintained for all life insurance companies, is used for no purpose other than undertaking insurance policies and referring to the payment of claims and other benefi ts on policies to which life insurance companies are party. Furthermore, life insurance companies do not provide that information to any other parties. Payment Screening Inquiry System Sony Life and other life insurers share certain information related to insured parties and policies for reference when making payment decisions. This information is used for mutual reference items involving insurance policies. When a request for the payments of insurance or other benefi ts is received, and an insured event is determined to have occurred, some or all consultation items are shared among other life insurers via the Life Insurance Association of Japan. Based on this sharing of information, other life insurers may use payment and other decisions for reference, but information is used for no other purpose. Furthermore, information that is provided under this system is not disclosed in any other way. 043 Lifeplanner Sales Group agency offices Information Manager (Branch General Manager) Security Administrator Independent Agency Sales Group sales divisions Information Manager (Sales General Manager) Security Administrator Headquarter divisions Information Manager (General Manager) Security Administrator Note: For details, refer to the website of Life Insurance Association of Japan ( or Sony Life ( sonylife.co.jp/) (Japanese only).

46 Security Measures for Protecting Personal Information Standards for Security Control Measures of Personal Information Sony Life has established standards for security control measures of personal information at each stage, including the gathering, use, storage and disposal of this information. The Company thoroughly trains all executives and employees, including temporary staff, on these standards. Measures to Counter the Theft of Notebook Personal Computers (PCs) and Other Property To prevent notebook PCs containing personal customer information from being stolen in a car break-in or other type of theft, employees who take these PCs outside the Company are required to keep them nearby at all times. Customer data that is copied onto electronic storage media is protected with a special electronic encryption key. Office Security Measures Only authorized employees are allowed access to offi ce areas where personal information is handled, and counterfeit-resistant IC cards are used to monitor entries and exits. As a further countermeasure, the Company restricts personal items that can be brought into administrative departments, which handle large amounts of personal customer information. Privacy Policy Sony Life makes every effort to protect the personal information of its customers. Our privacy policy outlines our compliance efforts. Privacy Policy Sony Life Insurance Co., Ltd., retains personal information about its customers as part of its efforts to provide excellent products and services. Sony Life considers maintaining this information an important responsibility. Accordingly, the Company manages this information carefully, and uses the information only in line with customers wishes. The declaration below outlines some of Sony Life s thoroughgoing efforts to maintain its customers personal information Compliance In handling personal information, Sony Life will comply with the applicable laws and regulations including the Act on the Protection of Personal Information and obligations under the applicable ministerial guidelines and this privacy policy in handling personal information. 2. Purpose of Using Personal Information Sony Life will acquire and use customers personal information only for the purposes described below. (1) To underwrite various types of insurance policies, to sustain and manage benefi ciaries of insurance policies, and to pay claims and other benefi ts (2) To enable Sony Life and its affi liated and related companies to introduce, provide and maintain various products and services (3) To enable the provision of information, manage operations related to Sony Life, and to enhance its products and services (4) For other business related or ancillary to insurance 3. Obtaining Personal Information Sony Life will endeavor to clearly notify customers about necessary information, such as purpose(s) of use, names of user(s) as well as contact details and to obtain consent when asking for personal information. Sony Life may record in writing or in voice the contents of transactions and inquiries. 4. Handling Sensitive Information Sony Life will, to ensure the appropriateness of its operations, with customer consent and within the necessary scope of operational necessity, acquire and use information on the customer s state of health or physical disorder, past medical records and other sensitive information. 5. Personal Information on Customers Under 15 Years Old Sony Life will take special consideration in handling the personal information of customers under 15 years of age to provide clear advance notice asking such a customer to provide personal Information only upon a guardian s consent. 6. Security Control Measures Sony Life will endeavor to maintain entrusted personal information that is accurate and updated to the extent necessary for the purpose(s) of its use. Sony Life will take necessary and appropriate security control measures in line with existing technical standards and will implement corrective actions as needed to protect entrusted personal information from unauthorized access, leakage, modifi cation, loss or destruction. 7. Supervision of Subcontractors Sony Life may subcontract the processing of entrusted personal information to a third party within the scope necessary for the achievement of the purpose(s) of use. Such third party will be selected after confi rming suffi cient level of information security, and Sony Life will exercise necessary and adequate supervision to the party by such means as making contracts. 8. Provision to Third Parties Without the consent of the individual, Sony Life will not provide personal information to any third party, except for cases permitted under the related laws or regulations. Sony Life will not provide personal Information to any third party, based on the Opt-Out System (Article 23.2 of the Act on the Protection of Personal Information). 9. Responding to Opinions and Consultation Sony Life will, based on the provisions of the related laws or regulations, properly respond to comments and requests from the individual regarding the handling of personal information such as to disclose, correct, stop receiving further product or service information from Sony Life, or to delete personal information on their own. 10. Continuous Improvement of Internal Systems Sony Life has received certifi cation under the ISO international standard of information security management systems for its administrative departments. Going forward, the Company will continue to strengthen and improve its internal systems. 11. Authorized Personal Information Protective Association Sony Life is a member of the Life Insurance Association of Japan, an authorized personal information protective association. This association accepts complaints and consults with individuals regarding the handling of personal information by their member companies. For details, please refer to the Life Insurance Association of Japan s website: Note: The information above is excerpted and summarized from Sony Life s Privacy Policy.

47 Information Security Initiatives First Company in Industry to Obtain Information Security Management System (ISMS) Certification On June 27, 2003, Sony Life became the fi rst company in Japan s life insurance industry to obtain BS7799 Part 2 and ISMS certifi cations. The certifi cations were bestowed on the Company s administrative departments. As BS7799 Part 2 certifi cation content was adopted by ISO certifi cations and Japanese ISMS standards were enhanced on a par with ISO standards, on June 22, 2006, we shifted our certifi cation to ISO/IEC 27001: 2005 (JIS Q 2007: 2006). Going forward, we will continue to maintain and improve our information security systems and upgrade protection of our information assets, including the personal information of our customers. Information Security Management System ISMS indicates an operating system that determines the appropriate level of security based on risk self-assessments, and that has concrete plans and resources allocated to ensure its effective management. The principal concept of ISMS is for a company to maintain and improve the secrecy, completeness and accessibility of its information assets in a well-balanced manner. Secrecy: The guarantee that information can only be accessed by authorized people Completeness: The guarantee that information and informationprocessing methods are accurate and complete Accessibility: The guarantee that authorized people can have access to required information and related assets when needed Maintaining and Improving Information Security Our administrative departments constantly assess the danger of leaks and falsifi cation affecting all of our information assets, including customer information, and formulate and take measures designed to minimize such dangers. To earn certifi cation, we implemented those measures on schedule, regularly confi rmed that the measures had the desired effect and built and operate frameworks for enforcing all of the improvements required for certifi cation. Main Initiatives Ensure understanding among all employees, including temporary staff, about the importance of the Company s information security policies and provide training to ensure widespread acceptance of such policies. Assess the dangers of leakage and falsifi cation of all information assets and take measures to minimize such dangers. ISMS Cycle ISMS targets improvements in information security through repeated implementation of the cycle described below: Plan: Formulate specifi c information security response plans and policies Do: Implement measures outlined in the security plans Check: Monitor the results of implementation Act: Undertake regular reassessments and improvements Plan 045 Act Ongoing improvements Do Check

48 Compliance We believe compliance means conformity with relevant laws and regulations and conducting business ethically and in good faith. This is one crucial issue for companies seeking to fulfi ll their social responsibilities. Life insurance companies need to reinforce their compliance systems to maintain the long-term trust of customers. Sony Life has positioned compliance as a central management priority to protect customers and earn their confi dence. 046 Compliance Structure Sony Life has established the Compliance Committee, which reports to the Executive Offi cers Board and is chaired by the president. This committee is tasked with fostering a compliance-focused corporate culture at Sony Life and contributing to its public nature as a life insurance company by putting compliance into practice. We have also created the Compliance Division to integrate companywide compliance programs and draft measures needed to address individual issues and conduct operations. In each division, we have placed compliance supervisors, who conduct routine checks of compliance status and create compliance systems, and compliance offi cers, who offer advice on creating compliance systems and check the status of their creation. We also have established the Market Conduct Compliance (MCC) Committee to strengthen the compliance of sales activities. Based on Sony Life s policy on marketing activities, the MCC Committee deliberates and makes decisions to ensure that Sony Life fulfi lls its social responsibilities and public mission, achieving these aims by thoroughly managing solicitation and internal activities in line with sales operations that follow appropriate market conduct and compliance. The Business Administration Control Division serves as a planning department to ensure the thoroughness of internal management, particularly solicitation management. This division drafts measures to confi rm the status of solicitation and internal management and expand these activities, conducting and promoting these efforts in cooperation with related departments. Board of Directors Executive Officers Board Compliance Committee (Secretariat: Compliance Division) Market Conduct Compliance (MCC) Committee (Secretariat: Business Administration Control Division) Basic Stance on Compliance and Code of Conduct To fulfi ll our social responsibilities and public mission as a life insurance company, we have formulated a Compliance Declaration (outlining our basic stance on compliance) and Sony Life s Code of Conduct. Compliance Declaration (Basic Stance on Compliance) This declaration defi nes our basic stance for ensuring appropriate compliance. In addition to laws and regulations, this declaration defi nes Sony Life s respect of social mores, management philosophy, code of conduct and objective of being a world leader in quality. Sony Life s Code of Conduct This charter sets forth basic principles to be respected by all offi cers and employees, ensuring the fairness of its operations as a life insurance company. Below are some excerpts. Basic Principles Respect for Human Rights Business Operations Conducted Fairly and in Good Faith Ethical Conduct Compliance with laws, internal policies and regulations, business operations conducted ethically and in good faith; appropriate risk management, customer-fi rst orientation, internal reporting, eschewing relations with anti-social forces, etc. Equal-opportunity employment, working environment, etc. Products and services that provide peace of mind, environmental conservation, disclosure of corporate information, personal information protection, etc. Prevention of insider trading, confl icts of interest, etc. Each fi scal year, we formulate a compliance program containing specifi c action plans for achieving compliance. We also create a Compliance Manual as a reference for realizing compliance, and distribute the document to all executives and employees. Furthermore, Sony Life creates and distributes to all sales employees a complianceoriented manual specifi c to their tasks. Compliance Officers Lifeplanner Sales Group agency offices Independent Agency Sales Group sales divisions Headquarters divisions

49 Market Conduct Compliance (MCC) Guidelines Sony Life has formulated the MCC Guidelines to indicate its policy on sales activities and ensure thorough compliance when performing these activities. The MCC Guidelines outline basic items for attention to protect customers interests when Sony Life s Lifeplanner sales employees and Partners (independent agencies) conduct marketing activities, including insurance solicitation and maintenance. Note: The MCC Guidelines (policy on marketing activities) are based on Sony Life s Solicitation Policy, which is compliant with the Law on Sales of Financial Products. MCC Guidelines (Policies on Marketing Activities) Sony Life conducts market compliance steadily in accordance with these guidelines, ensuring that each customer receives appropriate consulting-based products and services according to their life plan and provides ongoing follow-up services with the aim of delivering financial security throughout the customer s life. In these ways, we endeavor to fulfill our social responsibilities and public mission as a financial institution. Our Stance toward All Customers 1. As a Professional As life insurance professionals, we provide thoroughly high-quality service that includes compliance with laws and regulations, broad-ranging expertise that covers economics, fi nance, taxation and other topics, honing our skills on a daily basis. 2. Protection of privacy Our actions take customer privacy into careful consideration, and we handle customers personal information in strict accordance with laws, regulations and internal rules. 3. Visits and communications When visiting or telephoning customers, we take pains to avoid inconveniencing them in their work or private lives. Unless with their consent, we do not visit or initiate communications with customers early in the morning or late at night. For Customers Considering Policies 4. Confirming appropriateness When marketing variable life insurance, variable individual annuities or other products that involve risk to the customer, we solicit such products only after confi rming the purpose of application, the customer s level of understanding of and experience with fi nancial products, and fi nancial status, and then propose products that optimally suit the customer. 5. Explaining important items When accepting policy applications, in accordance with laws and regulations we provide customers with a Contact Overview, Explanation of Important Notes and Explanation of Policy Terms and Conditions, explain the content of this information to ensure that it is understood, including any items that could be disadvantageous to the customer s interest. 6. Preventing misidentification of financial products We clearly explain life insurance products to avoid their confusion with non-life insurance products, investment trusts, deposits or other fi nancial products, or with products or services provided by third parties. Furthermore, when handling non-life insurance or mortgage loans, we prevent their confusion or misidentifi cation with life insurance products. 7. Handling of notification We endeavor to explain clearly to customers that maintaining fair policy premiums and the soundness of the insurance system involves the duty of disclosure, and that failure of a customer to completely fulfi ll this duty can result in policy cancellation or be disadvantageous to the customer s interest. 8. Customer identification When interviewing a policyholder or insured party, we confi rm their identify as well as their right to apply and the intent of the insured party. Particularly on life insurance agreements for customers who have not reached legal adulthood, we carefully check the purpose of enrollment and policy amount to ensure that sales are appropriate. For Policyholders 9. Responding appropriately to requests We strive to respond to customer requests promptly and appropriately, providing ongoing follow-up after a policy is concluded and checking, confi rming and reviewing the content of coverage. 10. Payment of claims and other items We respond quickly and appropriately to customers request for the payment of claims, benefi ts and other items. Furthermore, we take customers situations and policy content into consideration when responding to inquiries about decision on whether to pay claims, benefi ts and other items, as well as their amounts. 047

50 Policy on Managing Conflicts of Interest In accordance with the Insurance Business Law and the Financial Instruments and Exchange Law, the Company has established a Policy on Managing Confl icts of Interest to ensure that transactions by Sony Life Group companies with regard to business by the Company or its subsidiary fi nancial institutions do not cause unjustifi able harm to their customers. The policy outlines the appropriate management of information related to these operations and calls for the establishment of a system to ensure the appropriate supervision of the status of execution of the Company s business. An outline of Sony Life s Policy on Managing Confl icts of Interest is provided below. Overview of Policy on Managing Conflicts of Interest Sony Life Group Companies Conflicts of interest are managed for the companies indicated below. In the following list, (2) and (3) are subsidiary financial institutions of Sony Life, while (4) and (5) belong to Sony Life s parent financial institutions. (1) Sony Life Insurance Co., Ltd. (2) AEGON Sony Life Insurance Co., Ltd. (3) SA Reinsurance Ltd. (4) Sony Assurance Inc. (5) Sony Bank Inc. 2. Transactions involving potential conflicts of interest Transactions involving potential conflicts of interest are transactions among those conducted by Group companies that could involve unjustifiable harm to customers (hereinafter, Subject Transactions ). Customers, as referred to below, refers to customers of the Company or the Company s subsidiary financial institutions that are the targets of protection by the Company s conflict of interest management. 3. Types of transactions involving potential conflicts of interest Subject Transactions are divided into the following types. (1) Transactions that, when customers interests and Group companies interests differ, prioritize Group companies interests (2) Transactions that involve the use of customer information to benefit a Group company (3) Transactions that benefit a Group company by taking advantage of opposing interests among customers (4) Other transactions with Group companies that are deemed to harm customers interests 4. System for managing conflicts of interest To ensure that conflicts of interest are managed appropriately, the director in charge of the Compliance Division has been given overall responsibility for managing conflicts of interest. The Compliance Division, which has overall responsibility for managing conflicts of interest, manages specific Subject Transactions, centrally and independently from other divisions. Subject Transactions are managed using the following methods, other measures that have been selected appropriately, or in some combination of these. (1) Separating of the department conducting the Subject Transactions from the customer (isolating information) (2) Changing the Subject Transaction or customer conditions or methods (changing conditions or methods) (3) Discontinuing Subject Transactions with the customer (discontinuing transactions) (4) Providing appropriate notice to the customer in the event that Subject Transactions have the potential to harm the customer s interests (notifying the customer) 5. Recording The division that has the overall responsibility for managing conflicts of interest records the items indicated below and stores this information for a five-year period. (1) Records pertaining to specific Subject Transactions (2) Records pertaining to measures to ensure appropriate customer protection Basic Policy on Eliminating Anti-Social Forces Companies are to maintain a high regard for compliance and manage themselves in a manner that includes no involvement with anti-social forces. At the same time, if a company receives an inappropriate demand from such forces, the company must reject that demand unequivocally. Sony Life s Basic Policy on Internal Control System Structure establishes a basic policy for eliminating anti-social forces, as well as for putting in place preventive measures to isolate itself from relationships with anti-social forces. We are strengthening our preparations accordingly. Basic Policy on Eliminating Anti-Social Forces We are duly aware of the importance of isolating ourselves from relationships with anti-social forces from the perspectives of social responsibility, compliance and corporate defense. We have in place systems to isolate ourselves from relationships with anti-social forces, and we reject all inappropriate demands from anti-social forces. We have strengthened our communications with police and other outside organizations to ensure that we are able to coordinate our actions and cooperate appropriately should we receive an inappropriate demand from anti-social forces. In such ways, we maintain a firm organizational resolve to extirpate inappropriate demands.

51 049

52 Environmental Preservation Initiatives Sony Life s Environmental Conservation Activities Environmental Management System Sony Life has mounted a number of initiatives to reduce the burden it places on the environment. We have established environmental goals and objectives, and put programs in place to lead us toward these aims, and will continue with such environmentally conscious activities and initiatives. 050 Environmental Policy Core Philosophy Sony Life works toward the realization of a sustainable society in accordance with the Sony Group Environmental Vision. As a member of the Sony Group, we adhere to this vision and make every effort to preserve the environment in all aspects of our operations. Refl ecting our role as a life insurer in providing long-term security, in addition to providing economic assurance to policyholders we aim to contribute to a prosperous and stable environment in which to live. Accordingly, we practice environmental protection on an ongoing, everyday basis. Policy 1. We strive to reduce our environmental impact by promoting the recycling of resources and conservation of the energy that is essential to our business, and work to ensure that all employees maintain a high level of environmental awareness. 2. In the course of our business activities, we conform appropriately with all laws, regulations and other requirements related to environmental protection. 3. We evaluate the environmental impact of our business and the insurance products and services that we provide and set environmental objectives, targets and implementation programs. Through these approaches, aim for ongoing improvements in our environmental preservation activities, as well as preventing pollution. 4. Sony Life ensures that all employees are aware of its environmental policies and environmental preservation activities. Through this awareness, we aim to raise employees environmental consciousness from a variety of vantage points, through business and their personal lives. ISO Certification In March 2001, Sony Life acquired ISO certifi cation, the international standard for environmental management systems, for its head offi ce, and has since kept its certifi cation up to date. Green Power Certification Systems In FY2005, Sony Life introduced a green power certifi cation system for power originating from wind-powered generators. This system facilitates electric-power swaps, certifying the environmental value of green power generation, even if the power originates at locations far from where it is used. Since FY2007, Sony Life has been purchasing certifi - cates for energy generated from wood-chip biomass, rather than wind-powered generation. What is ISO 14001? ISO is an international standard for environmental management systems created by the International Organization for Standardization (ISO). Certifi cation is given to entities that review their environmental management systems annually, take action to address diffi cult and unprecedented issues and work continually to improve their environmental performance. FY2013 Green Power Certificate Green Power Green power refers to electricity generated from wind, solar, biomass (such as wood chips) and other renewable energy sources. In addition to using sustainable resources, no CO2 is emitted in producing this energy. Even in cases where wood chips are burned to generate electricity, the CO2 emitted during combustion is offset by the amount the trees absorb during maturation, resulting in a net carbon effect of zero. This certifi cate verifi es Sony Life s purchase of 250,000 kwh of electricity generated from Noshiro Biomass Power Plant

53 Environmental Preservation Activities with Customers Donating to the Sorabear Foundation In March 2010, Sony Life began providing customers with CD-ROM versions of policy clauses. For each customer who opts for the CD-ROM, the Company donates a portion of its savings on printing costs to the Sorabear Foundation, a non-profi t organization engaged in global warming prevention. The Sorabear Foundation uses the donations from Sony Life to install solar power generation equipment at nursery schools and preschools throughout Japan. In FY2013, our third such installation went into place at a nursery school in Shiga Prefecture. Sony Life will continue to participate in environmental conservation activities and support the Sorabear Smile Project. Ceremony to commemorate the donation of a Sorabear power generator at the Shiun Nursery School in Shiga Prefecture The brothers Sora (left) and Bear (right) are the Sorabear Foundation s characters. Designer Shinzi Katoh modeled them on polar bears, which are gradually losing their habitat as the northern polar cap recedes. 051 Making New Policy Procedures Paperless Sony Life introduced the C-SAAF follow-up consultation system in FY2012. By eliminating the need for paper in new policy application procedures, this system is helping to reduce our paper consumption. Going forward, we plan to make our policy maintenance procedures paperless, as well.

54 Participation in Social Contribution Activities One Love, One Trust Our rallying cry is the phrase one love, one trust, reminding us that for each voluntary contribution, or act of love, our standing within the community increases. As part of our efforts to be a good corporate citizen, we encourage each Sony Life employee to be active in his or her social contribution efforts, which we believe are instrumental in expanding the circle of love and trust. Sony Life s Social Contribution Activities (Japanese only) This site describes our social contribution efforts in an easy-to-understand manner. Sony Life Volunteer Club The Sony Life Volunteer Club was established by employees at the time of the Great Hanshin/Awaji Earthquake in 1995, and has continued its activities to the present day. The club operates using funds collected from employee donations, and is managed by individual employees. Homepage describing Sony Life s social contribution activities 052 Results by Region of Principal Sony Life Volunteer Club Activities during the Year Hokkaido Relay for Life, one location Koshinetsu/ Hokuriku Tohoku Chugoku Relay for Life, one location Kinki Relay for Life, two locations Relay for Life, four locations Emotional support for victims of the Great Hanshin/Awaji Earthquake Kobe Fureai spring festival Kobe Fureai onsen tour Relay for Life, three locations Great East Japan Earthquake reconstruction support Otsuchi-cho festival Yamada-cho festival Summer festival at temporary housing in Kessennnuma Summer festival at Midorigaoka/ Tomita-cho Debris removal and fi eld preparation in Onagawa-cho Year-end soba noodles at temporary housing in Kessennuma Aquamarine Fukushima aquarium tour Kanto Kyushu Relay for Life, fi ve locations Oita International Wheelchair Marathon Shikoku Relay for Life, three locations Support for Matsuyama care facilities Tokai Relay for Life, fi ve locations Kinjo Rokkaen support Relay for Life, eight locations Rooting for J-League in sign language Clean-up volunteers, blood donation Kobo Aijien/Shunko Gakuen barbecue Social event at St. Francis children s dormitory A Yokohama tennis competition for people with disabilities

55 Volunteer Day Activities Sony Life designates August 10, the anniversary of its founding, as Volunteer Day. This is a special day when all employees are encouraged to consider and implement activities that benefi t their communities, such as area cleanups and blood donations. August has been declared Volunteer Enrichment Month, in which all employees throughout Japan implement social benefi t activities in their respective communities. Clean-up volunteers Ongoing Support for Earthquake Victims Sony Life volunteers provide wide-ranging support for earthquake victims, centering on support for the senior citizens who were affected by the Great Hanshin/Awaji Earthquake. At the time of the disaster, employee volunteers provided meals for earthquake victims. Afterward, they provided other types of support as needed, depending on when victims stayed in temporary housing or moved to dwellings built for reconstruction. Now more than 19 years on, Sony Life volunteers continue to support these earthquake victims by planning and inviting them to bus tours to visit hot springs and holding Christmas parties to deepen mutual relations. Relay for Life In the Relay for Life, cancer patients and their families, as well as bereaved families, participate in a 24-hour track relay. Funds generated through the relay are donated to charity. Such relays are held at more than 5,000 locations in 20 countries. In FY2013, more than 2,400 people took part in the relay, mainly branch employees at 32 locations throughout Japan, as well as family members and customers. They ran and walked throughout the relay s 24-hour duration with current cancer patients and their families, while conducting volunteer activities to support the event. Sony Life will proactively support these activities, as part of its efforts to realize a harmonious society that is free from worries of cancer. Kobe Fureai spring festival Employees participating in the 24-hour Relay for Life 053 Youth Educational Support We conduct a number of activities around Japan to support the children to whom we entrust the future. For example, each year the club plans beach and pool trips and barbecues for the children who for a variety of reasons are unable to live with their parents. Activities such as these, held in different parts of Japan, give children who otherwise have little opportunity to interact with adults a chance to participate in society. As a result, we have seen these children become increasingly cheerful and develop a more optimistic outlook. Children participating in a beach clean-up and barbecue

56 Providing Support for People with Disabilities Each year, Sony Life employee volunteers in surrounding areas provide operational support for the Oita International Wheelchair Marathon. Employees provide start-to-fi nish support for the event, from initial preparations through to cleanups. Participating in events and competitions alongside people with disabilities gives people without disabilities a chance to join in the fun, as well as providing opportunities for interaction. To this end, volunteers participate in the J-League Sign Language Support and a Yokohama tennis competition for people with disabilities. A Yokohama tennis competition for people with disabilities Providing Support in the Area Affected by the Great East Japan Earthquake Reconstruction Support Council Just after the Great East Japan Earthquake, the Sony Life Volunteer Club, MRDT Sony, JAIFA All Sony and Sony Life joined to form the Reconstruction Support Council. Employee donations fund the council s activities, which are undertaken by individual employees. Principal Volunteer Activities Aimed at Providing Support for the Areas Affected by the Great East Japan Earthquake 054 Volunteering to Prepare Meals We have continued to prepare meals on a voluntary basis since May Volunteers also clean windows at temporary housing locations and distribute message-bearing cards from employees. Volunteering for Summer Festivals Since July 2011, every year employees have voluntarily taken part in the summer festivals. Participation during these events ranges from Sony Group employees manning food stalls to concerts by the Sony Brass Band, hula dances by local hula girls, and massage services offered by Sony Life employees called health keepers, who have technical qualifi cations. Preparing meals Summer festival Distributing Planters with Flowers Volunteers distributed fl ower-fi lled planters including support messages from Sony Life branches and headquarters offi ces to temporary housing locations. Cleaning windows Distributing planters

57 Regional and Community Contributions Support Activities for Special Olympics Nippon Sony Life believes that it contributes to society and promotes diversity each time it helps a single person with disabilities gain independence and participate in society. Our support of Special Olympics Nippon is based on this conviction. In 2014, numerous employee volunteers participated in the Special Olympics Nippon Summer National Games Fukuoka. In addition to competitions such as these, volunteers are active in helping to establish regional organizations and serving as coaches during daily sports training sessions. Volunteers help manage the games. Special Olympics Nippon (Japanese only) Special Olympics Nippon is a public-interest incorporated foundation that provides people with intellectual disabilities with ongoing year-round sports training opportunities and holds athletic competitions to demonstrate their accomplishments and give them an opportunity to participate in society. Eye Mate Fund Sony Life contributes to the Eye Mate Fund with the aim of helping visually challenged people participate in society. The Company donates an amount each year that matches the total raised by employees during the year. In FY2013, million in employee donations and matching funds was given to Eye Mate, Inc. This fi gure brings cumulative donations to Eye Mate to million ( million including other organizations), making Sony Life one of the largest among corporate and other organizations. This year s donation provides the equivalent of 28 Eye Mate seeing-eye dogs. Employee s child experiences walking with a seeing-eye dog. Teaching a seeing-eye dog to open and close doors. 055 Eye Mate, Inc. (Japanese only) Since its introduction of the fi rst seeing-eye dogs to Japan, this organization has been responsible for training numerous seeing-eye dogs. The assistance of formally trained Eye Mate seeing-eye dogs helps people with visual impairment participate in society by enabling them to walk about on their own. Seeing-eye dogs learning to wait at his master s feet.

58 Contributing to Arts and Culture Introduction of Paralym Art Sony Life helps people with physical and mental challenges overcome their obstacles by displaying Paralym Art, which is created by people with disabilities. Part of the contract fees received for allowing the art to be placed on display go to the individual artists. We have two Paralym Art works on display at our headquarters, as well as at each of the 80 lodging rooms at Academy Forest, a training facility. Painter and her family with the members of our Social Contributions Department. 056 Promoting Better Health Sony Life Cup All Japan Ladies Tennis Tournament Since 2002, Sony Life has sponsored and supported the Sony Life Cup All Japan Ladies Tennis Tournament, one of the largest amateur events for women tennis players in Japan. The tournament has been held since 1979 to promote the development of tennis as a sport with mass appeal that also helps improve women s health. This year marks the 36th staging of this traditional event, which has attracted a cumulative total of more than 370,000 players. At tournament qualifi ers held in each prefecture, Sony Life employees, including Lifeplanner sales employees, participate in a variety of activities that support the tournament. By supporting this tournament, Sony Life helps people to realize their dreams and forge stronger interpersonal ties. Opening ceremony Website: (Japanese only) Facebook page: (Japanese only) The national fi nals

59 Contributing to the growth of students and youth Life-Planning Courses by Lifeplanner Sales Employees Since FY2005, Sony Life has offered life-planning courses for students who are preparing to make their own way in society. Lifeplanner sales employees, who serve as instructors, emphasize the importance of having dreams for the future. Life-Planning Course Objectives To provide the protection products that optimally match customers lives, when proposing such products Sony Life fi rst asks customers about their dreams and future goals. Based on this information, we work with each customer to map out a specifi c life plan, emphasizing the importance of life planning. Through the process of life planning, we aim to convey the importance of planning their lives and persevering to achieve their dreams to students who have long lives in front of them. Students dreaming up their futures as they participate in life planning Monetary Simulations to Help Students Plan Their Lives as They Spread Their Wings As life-planning professionals, Lifeplanner sales employees instruct and support students in the life-planning process. The simulation begins with a family. Childbirth necessitates plans for education, buying a house and helps them imagine other future events that might require planning. Next, the course takes on an economic focus, looking at the fi nancial resources that are needed. Lifeplanner sales employees offer advice, using Sony Life s proprietary Consulting by Lifeplanner sales employees to help realize those dreams software, LiPSS (see pages 32 33). Consulting from an economic perspective, we examine the income, expenses and savings that will be needed. This realistic approach gives students a better understanding of what is needed to achieve their goals and dreams. 057 TOPICS Award for Excellence in the Fourth Career Education Awards Sony Life won a Top Award for Excellence (Minister of Economy, Trade and Industry Award) at the FY2013 Fourth Career Education Awards*, sponsored by the Ministry of Economy, Trade and Industry, in the large company division for its courses about life planning. As one aspect of its social contribution activities, the Company proactively promotes ongoing education about life planning. * The Career Education Awards are an award system that the Ministry of Economy, Trade and Industry introduced in 2010 to encourage and promote educational support efforts by companies and economic organizations. Life-Planning Courses to Date As of July 1, 2014, Sony Life had held life-planning courses at 614 schools throughout Japan. (Schools) Private Public Total Junior High Schools High Schools Colleges and Vocational Schools Universities Others Total As of July 1, 2014 (Schools) Activities by Fiscal Year Schools (Continuing) FY FY FY FY FY FY FY FY FY2014 (As of July 1) 10 5 Schools 614 Students attending 58,500