Annual Report - Sony · PDF fileAnnual Report For the year ended March 31, 2008. Sony Life...

Annua l Repor t

For the year ended March 31, 2008

Sony Life Insurance Co., Ltd.

Management Message

Kunitake Ando, ChairmanTaro Okuda, President

FY2007 Operating PerformanceIn FY2007, our new policy amount rose 10.9% from the previous fi scal year, to ¥3,802.5 billion. Policy amount in force* has continued to grow since the start of the Company’s operations, totaling ¥31,497.3 billion as of March 31, 2008, up 4.1% from a year earlier. The lapse and surrender rate** (individual life insurance) remained low, at 6.27%. We are convinced that these favorable results refl ect customers’ satis-faction with our method of offering protection based on each customer’s life plan, as well as our thorough after-sale services. For example, even after a policy is issued, we strive to offer continuous support by maintaining customers’ plans on an ongoing basis to meet changes in their needs and environments. However, we refuse to be content with our current performance. We are pursuing even higher quality levels to keep meeting customers’ expectations and fulfi ll the promises we have made to them.

New Initiatives in FY2007Striving to Provide Comprehensive Consulting Services that Match Customers’ Life PlansIn August 2007, we established AEGON Sony Life Planning Co., Ltd., as a 50–50 joint venture with the AEGON Group of the Netherlands. The new company is preparing the way to establish a life insurance company that will concentrate on individual annuity

products. We consider establishing the new entity a new step toward the creation of a support structure that will help people live long and secure lives, free from worry and based on their life plans. Having received permission to handle banking agency business for Sony Bank, in January 2008 our Lifeplanner sales employees began providing expla-nations of Sony Bank’s mortgage loan products and delivering, applications to customers. As a result, they are now able to offer customers more specifi c advice and consulting services on mortgage loans. In the future, we aim to provide comprehensive customer-oriented consulting services that address customers’ life plans in a variety of ways. On the other hand, we were made aware that we had inadvertently underpaid or failed to pay certain claims and, in FY2007, we notifi ed all customers potentially affected and made payment to the claims we had failed to pay. We recognize that the payment of claims is one of the most fundamental operations of a life insurance company, and we apologize sin-cerely for this lapse. To prevent this situation from recurring, we have made the establishment of a claims payment management system a top priority. In addition to introducing preventative measures, we are working to enhance our follow-up services even further. To win back customers’ trust, we will keep striving to raise our service levels.

* The new policy amount and policy amount in force are the total of individual life insurance and individual annuities.** The lapse and surrender rate is expressed as a ratio of the amount of cancellations or lapses that is modifi ed due to the reduction, increase and

reinstatement of the total policy amount in force to the policy amount in force at the beginning of the fi scal year.

1


LIFEPLANNER VALUEHelping Each of Our Customers Realize Their DreamsLife insurance is designed to turn tomorrows into cer-tainties. Accordingly, when we provide life insurance to customers we begin by painting a picture that depicts their future lives. We aim to provide optimal protection for each customer so that their dreams for the future remain intact even when the unfortunate occurs. Through consulting services based on each customer’s life plan, we seek to share with customers their dreams and wishes and their thoughts for their families, as well as their uncertainties and concerns for the future. But rather than simply sharing thoughts, we believe the new challenge for Sony Life lies in providing services as only Sony Life can that help customers realize their dreams and overcome their uncertainties. We see it as our mission as a life insur-ance company to provide the fi nancial security and high-quality services that can help our customers lead secure lives and realize their dreams. Our corporate slogan, LIFEPLANNER VALUE, defi nes our resolve to accompany customers through each life stage and help them realize their dreams and live fulfi lling lives. Through this resolve, which each of its employees pursues, Sony Life aims to be a com-pany that earns the support and trust of its customers. In addition to its customers, Sony Life values all its stakeholders, including employees, their families, local communities and shareholders, and strives continuously to have hope-fi lled tomorrows together with them all . As we work to build positive relation-ships with all the people who surround the company,

we will aim to achieve healthy growth as we strive to raise the level of certainty of the security we provide.

In ClosingBecoming the World Quality Leader in Life InsuranceIn FY2009, Sony Life will celebrate the 30th anniver-sary of its founding. We attribute the fact that we have come this far to the ongoing support and understanding of our customers, for which we thank them sincerely. Since its founding, Sony Life has believed that its Lifeplanner sales employees would change life insurance, and in pursuing our original ideals for life insurance we strive to continue providing value in a way in which only Sony Life can. Moving forward, we will endeavor to raise our level of quality and provide even greater value to a larger number of people. Our ongoing growth goal is to become the world quality leader among life insurance companies. We would like to thank you for your ongoing support and encouragement of Sony Life in these endeavors.

Taro OkudaPresident, Representative DirectorSony Life Insurance Co., Ltd.

Mission

To work for customers’ financial security and stability by

offering optimal life insurance products and high-quality services.

Basic Management Philosophy

Meet customer expectations and earn their trust by consistently providing customers

with satisfactory, high-quality services.

Always meet changes in the environment by proactively taking on new challenges, and stay

ahead of demands through innovative management that anticipates emerging needs.

Respect the individuality of employees and put their skills and aptitudes to the fullest use,

thereby creating an unconstrained workplace and maintaining a dynamic organization.

2


2

Management Message

Financial Highlights. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

FY2007 Operating Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Asset Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

Assets, Liabilities and Net Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

Financial Soundness. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

Embedded Value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

Protecting Every Dream throughout Each Individual’s Life. That’s LIFEPLANNER VALUE. . . . . . . . . . . . . . . . 15

Educational Systems, Self-Development and Reciprocal Studies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

Providing Optimal Protection through the Life Planning Support Service (LiPSS) . . . . . . . . . . . . . . . . . . . . . . 19

Providing a Range of Follow-Up Services to Help Customers Live Fulfi lling Lives . . . . . . . . . . . . . . . . . . . . . 21

Management Improvements That Focus on Customer Satisfaction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

System of Claim Payment Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

Risk Management System . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

Personal Information Protection and Information Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

Environmental Protection Initiatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34

Social Contribution Activities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

The Sony Financial Holdings Group. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41

Non-consolidated Balance Sheets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44

Non-consolidated Statements of Income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46

Notes to Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47

Details of Ordinary Profi t (Core Profi t) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50

Policies and Policy Amount in Force by Product . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51

New Policies and New Policy Amount by Product . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52

Investment Summary of General Account Assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53

Organization. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58

Corporate History. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59

Directors and Statutory Auditors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60

Corporate Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61

CONTENTS

“Lifeplanner” and “LIFEPLANNER VALUE” are registered trademarks of Sony Life Insurance Co., Ltd.

3


(Millions of yen)

2008 2007 2006 2005 2004

Policy amount in force 32,434,587 31,152,672 30,007,828 28,639,488 27,070,067 Individual life insurance in force 31,237,078 30,038,118 28,908,802 27,680,259 26,122,855 Individual annuities in force 260,268 206,374 175,735 143,225 119,783 Group life insurance in force 937,241 908,179 923,289 816,003 827,428Group annuities in force 73,307 72,633 71,400 69,017 67,107Annualized premiums from insurance in force 530,011 504,691 474,296 450,874 — Medical protection, living benefi t protection and other products 122,854 117,466 109,432 102,821 —New policy amount* 3,808,542 3,437,215 3,401,226 3,731,597 3,748,640 Individual life insurance sales 3,744,680 3,396,867 3,361,271 3,699,791 3,713,390 Individual annuity sales 57,908 32,590 30,864 24,421 18,665 Group life insurance sales 5,953 7,757 9,090 7,384 16,584Annualized premiums from new policies* 63,475 65,541 61,791 63,851 — Medical protection, living benefi t protection and other products 13,358 14,479 14,543 16,179 —

Ordinary revenues* 741,250 689,591 696,426 604,093 580,972 Income from insurance premiums 648,406 605,561 580,516 551,610 514,825 Investment income 87,493 78,722 108,438 50,089 64,767Ordinary expenses* 701,959 674,696 672,067 587,023 550,493 Insurance claims and other payments 241,106 219,347 231,881 194,141 191,542 Investment expenses 69,895 8,184 4,561 5,116 3,605 Operating expenses 94,367 87,328 82,040 79,729 78,254Ordinary profi t* 39,290 14,895 24,359 17,070 30,478Net income* 18,514 7,494 9,616 10,102 13,932Core profi t* 23,571 24,366 28,564 24,333 22,821

Common stock 65,000 65,000 65,000 65,000 65,000 (Thousands of shares) 65,000 65,000 65,000 65,000 65,000Total liabilities and net assets 3,659,786 3,445,970 3,103,241 2,617,266 2,375,828 Assets in separate account 321,789 322,672 280,682 200,996 164,461Policy reserve 3,375,090 3,088,888 2,739,264 2,395,060 2,095,565Loans 108,688 96,804 86,918 79,914 71,629Securities 2,388,932 2,217,902 2,132,216 1,704,663 1,563,605Solvency margin ratio 1,747.9% 1,852.0% 1,547.0% 1,317.1% 1,453.3%

Number of employees 5,372 5,253 5,250 5,528 5,538

Notes: 1. Policy amount in force is the total of individual life insurance, individual annuities and group life policy amounts in force. Individual annuities in force is the sum of annuity assets at the time annuity payments commence and policy reserves after annuity payments commence.

2. Group annuities in force is the amount of policy reserves. 3. New policy amount is the total of individual life insurance, individual annuity and group life insurance sales. Individual annuities are funded at the

time of annuity commencement. 4. Annualized premiums, which include individual life insurance and individual annuities, are converted to one year’s premium amount by multiply-

ing individual premiums by a coeffi cient corresponding to the premium payment method. (Lump-sum payment policies are calculated as the premium payment times the policy period.)

5. “Medical protection, living benefi t protection and other products” is the portion of the annualized premium recorded for medical protection benefi ts (hospitalization benefi ts, surgical benefi ts, etc.) and living benefi t protection benefi ts (benefi ts for specifi c diseases, nursing care benefi ts, etc.).

Financial Highlights

Key Performance Indicators for Past Five YearsAs of March 31 ( Items marked with asterisk (*) are for the years ended March 31)

4


Policy Amount in ForceWe have maintained consistent growth since our establishment, with policy amount in force up 4.1% in FY2007.At the end of FY2007, total policy amount in force—including individual life insurance and individual annuities—was ¥31,497.3 billion, up 4.1% from a year earlier. Of this amount, individual life insurance in force expanded 4.0%, to ¥31,237.0 billion, and individual annuities in force grew 26.1%, to ¥260.2 billion. 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 after-sales services. Group life insurance in force was ¥937.2 billion, up 3.2%. Consequently, the total of individual life insur-ance, individual annuities and group life insurance in force was ¥32,434.5 billion, up 4.1% from the previous fi scal year.

FY2007 Operating Performance

New Policy AmountOur new policy amount grew 10.9%, to ¥3,802.5 billion.In FY2007 our new policy amount—the amount of protection we provided through new policies—was up 10.9% compared with the preceding fi scal year, to ¥3,802.5 billion. Contributing to this amount, which is the sum of individual life insurance and individual annui-ties, were robust sales of family income insurance and variable life insurance. Of this total, individual life insur-ance amounted to ¥3,744.6 billion, up 10.2%, and indi-vidual annuities surged 77.7%, to ¥57.9 billion. Group life insurance, on the other hand, declined 23.3%, to ¥5.9 billion. The total new policy amount of individual life insurance, individual annuities and group life insurance was up 10.8%, to ¥3,808.5 billion. The number of new individual life insurance policies and individual annuities during the year was 524,767, up 1.4%.

Ratio of Operating Expenses to Income from Insurance Premiums

20082004 2005 2006 2007

31,497.326,242.6 27,823.4 29,084.5 30,244.4

(Billions of yen)

Policyamountin force

(As of March 31)

¥31,497.3 billion

40,000

32,000

24,000

16,000

8,000

0

2008

3,802.5

2004 2005 2006

3,732.0 3,724.2 3,392.1

2007

3,429.4

5,000

4,000

3,000

2,000

1,000

0

(Billions of yen) (Years ended March 31)

¥3,802.5 billion

Newpolicy

amount

2008

14.6

2004 2005 2006 2007

15.3 14.5 14.2 14.5

(%) (Years ended March 31)

14.6%

25

20

15

10

5

0

Ratio ofoperatingexpenses

We continued working to raise management effi ciency.Selling new policies, maintaining existing policies, making insurance payouts and other tasks incur various costs, such as personnel and administrative expenses. We refer to costs necessary to conduct our business as a life insurance company as operating expenses. In FY2007, our ratio of operating expenses to income from insurance premiums increased 14.6% as a result of the strengthening of internal control systems. However, we will continue striving to raise management effi ciency.

Policy Amount in Force(Individual life insurance + Individual annuities)

Ratio of Operating Expenses to Income from Insurance Premiums

New Policy Amount(Individual life insurance + Individual annuities)

5


Lapse and Surrender Rate and Persistency Rates

Product MixSales of family income insurance and variable life insurance were favorable.More than 80% of our new policy amount in FY2007, on a policy amount basis, was for death-protection products. By type of product, sales were strong for periodic products, such as family life insurance, as well as variable life insurance. The major reason for this situation was our ability to provide products offering reasonable protection for relatively inexpensive premiums.

Going forward, we will seek to maintain positive levels for our lapse and surrender rate and persis-tency rates by providing protection that is tailored to each customer’s individual life plan and through enhanced after-sale follow-up services.

Note: The revised lapse and surrender rate is expressed as a ratio of the amount of cancellations or lapses that is modifi ed due to the reduction, increase or reinstatement of the total policy amount in force to the policy amount in force at the beginning of the fi scal year.

2008

Lapse andsurrender

rate6.27


6.27%

10

8

6

4

2

02004 2005 2006 2007

7.56 6.39 5.88 5.90

2007

95.5


13th month

90.525th month

95.5%90.5%

100

80

60

40

20

02004 2005 2006 2007

93.7 94.6 95.5

86.4 87.6 89.3

95.5

90.7

Whole life10.1%

Endowment/Educational10.0%

Variable life17.4%

Other4.1%

Term life58.4%

We continued to maintain a low lapse and surrender rate and solid persistency rates.In FY2007, our lapse and surrender rate for individual life insurance on a policy amount basis amounted to 6.27%, compared with 5.90% during the preceding term. Persistency rates for individual life insurance pol-icies, on a policy amount basis, remained high. As in the preceding year, the 13-month rate was 95.5%, and the 25-month rate was 90.5%, compared with 90.7% in the previous term.

Persistency Rates(Individual life insurance on a policy amount basis)

Lapse and Surrender Rate(Individual life insurance on a policy amount basis)

New Policy Amount by Type of Products(Policy amount basis, FY2007)

6


Investment PolicySony Life’s fundamental policy on investing assets in the general account is to maintain the soundness of assets and to build an investment portfolio capable of ensuring stable medium- and long-term returns, tak-ing into account expected returns and investment risks and responding deftly to changes in fi nancial conditions and the investment environment. The Company places emphasis on risk management to ensure stable returns.

Investment EnvironmentIn FY2007, the Japanese economy retained its underlying strength. Real GDP grew at 1.5%, con-tinuing to expand albeit at a slower pace than during the preceding term. Personal consumption was fi rm and exports increased, but capital investment slack-ened and housing investment fell off substantially. Interest rates in Japan continued to rise in the fi rst half of the year, then retreated in the second half. Yields on 10-year Japanese government bonds rose (corresponding to declines in prices) to 1.985% in June 2007, as expectations mounted that the Bank of Japan would raise interest rates further. However, from August onwards Japanese government bond yields declined as investors worldwide sought refuge from the U.S. subprime loan crisis in high-quality debt. Worsening economic indicators in Japan also played a role. As of March 31, 2008, the yield on 10-year Japanese government bond yields was 1.275%, down 0.375 percentage point from its level at the end of the preceding fi scal year.

Asset Management

In FY2007, we continued to invest in line with changes in the investment environment. In response to rising interest rates in the fi rst half of the year, we concentrated on active investment in long-term Japanese government bonds. As share prices declined, we shifted our focus to investing in convert-ible bonds issues linked with stocks with declining share prices.

Investment PerformanceAs of March 31, 2008, general account assets totaled ¥3,337.9 billion, up 6.9%, or ¥214.6 billion, from one year earlier. Within the general account, positions of Japanese government and corporate bond investments came to ¥1,722.8 billion, (account-ing for 51.6% of general account assets); Japanese stocks, ¥172.9 billion (5.2%); foreign government and corporate bonds, ¥154.1 billion (4.6%); monetary trusts, ¥893.9 billion (26.8%); policyholder loans, ¥108.6 billion (3.3%); real estate, ¥82.8 billion (2.5%); and cash and call loans ¥82.1 billion (2.5%).

During the year, Japanese stock prices were up ini-tially, with the Nikkei average as high as ¥18,000 in June. After that point, the subprime loan issue threw the fi nancial markets into disarray, and expectations mounted of a decline in Japanese corporate earn-ings, causing stock prices to plummet. As of March 31, 2008, the Nikkei average had fallen to ¥12,525, down ¥4,762 from its position at the end of the preceding fi scal year. Initially, a widening gap between interest rates on yen and U.S. dollar instruments caused the yen to depreciate against the U.S. dollar, but from summer 2007 the yen began appreciating against the dollar on the back of market fears of a decelerating U.S. economy. Consequently, as of March 31, 2008, the rate of exchange was ¥100.19 to the U.S. dollar, ¥17.86 lower than at the end of the preceding fi scal year.

Japanese stocks 5.2%Foreign stocksand others

0.7%

Other securities0.4%

Real estate 2.5%Other assets 2.5%

Cash and call loans2.5%

Foreign government bonds and others4.6%

Japanese government bonds and others51.6%

Monetarytrusts

26.8%

Policy loans3.3%

Investment Yield (%)

FY2006 FY2007

Yield on investment of assets included within core profi t 1.31 1.73

Investment yield (general account) 2.02 2.17

Note: Please refer to page 9 for information on core profi t.

General Account Assets(As of March 31, 2008)

7


Income from Insurance Premiums and Insurance Claims and Other Payments

Income

In FY2007, ordinary profi t jumped 163.8%, to ¥39.2 billion. This increase resulted from the increase in income on the investment of general account assets, as well as the absence of an increase in provisions for policy reserves, as occurred in FY2006. Net income is calculated by adding extraordinary gains to ordinary profi t, then subtracting extraordinary losses, such as provision for reserve for price fl uctua-tions, provision for reserve for policyholders’ dividends and income taxes. In FY2007, net income rose 147.1%, to ¥18.5 billion.

Meanwhile, insurance claims, benefi ts and annui-ties that Sony Life paid to policyholders in FY2007 amounted to ¥60.0 billion (compared with ¥59.0 billion in FY2006), ¥28.4 billion (compared with ¥25.7 billion in FY2006) and ¥6.3 billion (compared with ¥5.1 billion in FY2006), respectively, totaling ¥94.8 billion (compared with ¥89.9 billion in FY2006). Sony Life believes that in FY2007, as in past years, it was able to continue to serve the needs of its policyholders.

Investment Income and Investment Expenses Investment expenses, or the expenses incurred in order to generate investment income, include such items as loss on sales of securities, devaluation losses on securities and provision for doubtful accounts. Investment expenses were ¥69.8 billion in FY2007, up from ¥8.1 billion in FY2006, owing to losses on the investment of assets held in separate accounts and devaluation losses on securities.

Ordinary Profi t and Net IncomeOrdinary profi t was ¥39.2 billion, and net income came to ¥18.5 billion.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, hospitalization and other benefi ts, annuity payments, provision for policy reserves, investment expenses and operating expenses.

2008Income from

insurancepremiums

648.4

2004 2005 2006

514.8 551.6 580.5

2007

605.5


¥648.4 billion750

600

450

300

150

02008

6.3


Annuities

¥60.0 billion

¥28.4 billion

¥6.3 billion

28.4Benefits

60.0

2004 2005 2006

2.4 3.1 4.4

19.8 22.6 23.5

59.2 62.1 86.4

20072007

5.1

25.7

59.0Claims

125

100

75

50

25

0

Income from insurance premiums and others rose, owing 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 compa-nies. In FY2007, such factors as a steady increase in the policy amount in force caused income from insur-ance premiums to rise to ¥648.4 billion, compared with ¥605.5 billion in the preceding fi scal year.

Investment income came to ¥87.4 billion, and investment expenses totaled ¥69.8 billion.Investment income, or the income received through the investment in assets, includes interest and dividend income, as well as gains on the sales of securities. In FY2007, investment income amounted to ¥87.4 billion, compared with ¥78.7 billion in the preceding term. Although investment income on assets held in separate accounts was lower than in FY2006, when the stock markets were more favorable, general account investment income rose during the period under review.

Income from Insurance Premiums and Others Insurance Claims and Other Payments

8


AssetsAs of the end of FY2007, total assets amounted to ¥3,659.7 billion.Total assets, comprising the capital received from stockholders and premiums paid by policyholders, are invested in securities, property and equipment and other assets. These assets are held in prepara-tion for future insurance claims and benefi t payments, as well as to maintain the soundness of the Company’s insurance business. As of March 31, 2008, Sony Life’s total assets reached ¥3,659.7 billion, up 6.2% from a year earlier.

Assets, Liabilities and Net Assets

Net AssetsSony Life’s common stock was ¥70.0 billion.Common stock is the minimum standard amount of shareholders’ equity a company must hold to protect its creditors, and Article 6 of the Insurance Business Law of Japan prescribes a minimum of ¥1.0 billion.

LiabilitiesWe maintained suffi cient policy reserve to cover future insurance claim payments.Policy reserve, which is included within insurance reserves, accounts for the majority of insurance com-pany 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. 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 calcu-late operating expenses assuming a constant, or net level, throughout the premium payment period. Our policy reserve at the end of FY2007 totaled ¥3,375.0 billion, which we consider suffi cient.

Other regulations have also been established to ensure adequate capitalization. As of July 1, 2008, Sony Life had total common stock of ¥70.0 billion (wholly provided by Sony Financial Holdings since April 1, 2004).

2008

3,659.7

2004 2005 2006

2,375.8 2,617.2 3,103.2

2007

3,445.9

(Billions of yen) (As of March 31)

Totalassets

¥3,659.7 billion

4,000

3,200

2,400

1,600

800

0

2008

3,375.0

2004 2005 2006

2,095.5 2,395.0 2,739.2

2007

3,088.8


Policyreserve

¥3,375.0 billion

3,500

2,800

2,100

1,400

700

0

Total Assets

Policy Reserve

9


Unrealized gains on securities in the general account stood at ¥127.8 billion as of March 31, 2008, down from ¥198.2 billion a year earlier. Of this total, unrealized gains on Japanese stocks were ¥50.8 billion (compared with ¥130.0 billion one year earlier); on Japanese government bonds and others, ¥83.4 billion (compared with ¥57.1 billion one year earlier); and on foreign securities, there was an unrealized loss of ¥9.5 billion (compared with an unrealized gain of ¥4.2 billion one year earlier).

(Reference: As of March 31, 2008, Sony Life assumed unrealized gains on shares to be zero when the Nikkei Stock Average is approximately ¥9,489 and the TOPIX index is 919 points.)

Unrealized Gains on SecuritiesUnrealized gains on our securities holdings amounted to ¥127.8 billion.Unrealized gains and losses refer to the differences between the book values and fair values of securities. If fair value exceeds book value, 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 and real estate is included in the total solvency margin—the numerator of the formula for calculating the solvency margin ratio.

Financial Soundness

Core profit of ¥23.5 billion

Net capital gains of ¥16.8 billion

One-time gains and losses of ¥1.1 billion

Ordinary profit of ¥39.2 billion

Yield on investment on core profit *1

General account policy reserves *3

Negative spread

Average assumed interest rate (for calculating policy reserves) *2

Negative SpreadThe negative spread for FY2007 was ¥26.7 billion.Life insurance companies retain a portion of premi-ums 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).” Negative spread arises when, owing to the deterioration of the invest-ment environment or other factors, the actual yield on investment for a portion of the policies falls below the assumed interest rate (for calculating policy reserves). Our negative spread in FY2007 was ¥26.7 billion, down from ¥37.3 billion in the previous fi scal year. The Company has core profi t of ¥23.5 billion, which is adequate to cover its negative spread. (See the discussion of core profi t above.)

Core Profi tCore profi t was ¥23.5 billion.Core profi t is an indicator of the profi t-earning capac-ity of the primary insurance business over a one-year period. The term “primary insurance business” refers to the management of income from insurance premi-ums received from policyholders, along with invest-ment 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. In FY2007, Sony Life’s core profi t decreased 3.3% year on year, to ¥23.5 billion, owing to increased operating expenses.

Formula for Calculating Negative Spread

Note: Like most other life insurers that are organized as joint stock corporations, Sony Life sells life insurance that is non-profi 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, mutualcorporations tend to show higher core profi ts than joint stock corporations that operate on the same scale.

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. “Policy reserve in general account” excludes the con-tingency reserve, calculated as follows: (Policy reserves at beginning of term + Policy reserves at end of term – Expected interest) x 1/2.

10


Solvency Margin RatioWe maintained a high solvency margin ratio, of 1,747.9%.The solvency margin ratio indicates a company’s “ability to pay.” Life insurance companies accumulate policy reserves against the future payment of insur-ance claims so they can respond suffi ciently to ordi-narily 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. As of March 31, 2008, Sony Life had a high solvency margin ratio of 1,747.9%, down 104.1 percentage points from the end of the previous fi scal year.

Real Net WorthReal net worth came to ¥612.0 billion.Real net worth refers to the value of net assets, calculated by subtracting liabilities except policy reserves and other real liabilities that have a high capital component from real assets, such as securi-ties and tangible fi xed assets, based on their market value. If a company’s real net worth is negative, the regulating authorities may order a company to halt operations if it determines an excess of real liabilities. As of March 31, 2008, Sony Life’s real net worth was ¥612.0 billion, down 5.2% from one year earlier.

2008

612.0

2004 2005 2006

381.5 426.9 614.9

2007

645.5


Real networth

¥612.0 billion

750

600

450

300

150

0

Formula for Calculating the Solvency Margin Ratio

The solvency margin ratio is calculated as follows:

Total solvency margin = [ Net assets and others + Reserve for price fl uctuations + Contingency reserve + Reserve for possible loan

losses + Net unrealized gains/losses on other securities x 90%* + Net unrealized gains/losses on real estate x 85%* + Excess of

continued Zillmerized reserve + Subordinated debt + Deductible items + Other ]

*100% in the event of an unrealized loss

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

Assumed interest rate risks (R2) ............... Risk that a downturn in the investment environment will cause a decline in yields on

invested assets

Asset management risks (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 risks (R4) ............. Risk that exceeds the scope of normal business management risk

Minimum guarantee risks (R7) .................. Risk associated with the minimum claim guarantee amount on variable life insurance

and variable annuities

Insurance risks on third-sector fi eld (R8) ... Risk that claims payments on third-sector insurance will rise substantially, owing to a

major disaster or other factor

Real Net Worth

Solvency margin ratio (%)Total solvency margin

Total risk x 1/2x 100

11


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. Please refer to each agency’s website for more details.

Non-Performing AssetsSony Life has no non-performing assets.Life insurance companies make loans as investment assets and earn interest from such loans. These comprise policy loans offered as a service to policy-holders 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 FY2007 was ¥108.6 billion. Because the Company does not engage in commercial lending, its loan balance is derived solely from policy loans, which are limited to the value of recoverable surrender cash. As a consequence, the Company has no risk-monitored loans (loans for which repayment circumstances are not ordinary).

Credit RatingSony Life has been rated highly by credit rating agencies.Sony Life has requested ratings from several institu-tions to help policyholders and potential customers

make objective decisions concerning its ability to fi nance insurance and pay claims and benefi ts.

AAAAAa3A+A+

AAAAAa3A+A+

Rating and Investment Information, Inc.

Japan Credit Rating Agency, Ltd.

Moody’s Investors Service, Inc.

A.M. Best Company, Inc.

Standard & Poor’s

Insurance claims paying ability

Ability to pay insurance claims

Insurance financial strength rating

Financial strength rating

Financial strength rating

A very high capacity to honor the financial commitment on the obligation

A very high capacity for payment of insurance claims

Superior

Strong

Credit Rating (Ratings as of July 1, 2008)

12


(f) Unfunded employees’ retirement benefi ts liability – (g) Deferred tax assets for (b), (c), (d), (e) and (f). Under generally accepted accounting principles in Japan (Japanese GAAP), which apply to life insur-ance 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. For this reason, 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. However, EV covers only existing in-force business 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.

EV as of March 31, 2008EV as of March 31, 2008, and changes in EV compared with one year earlier, are indicated below.

Breakdown of Adjusted Net Worth

The value of in-force business is calculated as follows: Value of in-force business = Present value of future after-tax profi ts on in-force existing business –

Present value of cost of capital. “Cost of capital” is the spread between the investment yield and the discount rate applied to the amounts of capital and surplus that will be required to maintain the assumed level of solvency margin ratio.Adjusted net worth is calculated as follows:

Adjusted net worth = (a) Total net assets in the balance sheets* + (b) Reserve for price fl uctuations + (c) Contingency reserve + (d) Reserve for possible loan losses + (e) Net unrealized gains on land – (f) Unfunded employees’ retirement benefi ts liability – (g) Deferred tax assets for (b), (c), (d), (e) and (f). * Total net assets in the balance sheets excludes net unrealized gain on bonds except for convertible bonds.

“Value of new business in the fi scal year” refers only to that portion of EV derived from new policies concluded during each fi scal year.In calculating “value of in-force business,” the present value of future after-tax profi ts and adjusted net worth use balance sheet and reserve fi gures, based on Japanese GAAP.Assumptions and methods of computing EV differ for March 31, 2006, 2007 and 2008.

(Billions of yen)

March 31 2006 2007 2008 Increase (Decrease)

EV 776.1 900.5 833.8 (66.7)

Value of in-force business 499.8 638.8 638.9 0.1

Adjusted net worth 276.3 261.7 194.8 (66.9)

Value of new business in the fi scal year 34.2 36.7 28.9 (7.8)

(Billions of yen)

As of March 31 2007 2008 Increase (Decrease)

Adjusted net worth 261.7 194.8 (66.9)

Total net assets* 207.6 136.9 (70.7)

Reserve for price fl uctuations 20.9 24.1 3.2

Contingency reserve 59.0 61.8 2.8

Reserve for possible loan losses 0.0 0.0 0.0

Net unrealized gains on land 6.8 8.4 1.6

Unfunded employees’ retirement benefi ts liability (1.9) (3.5) (1.6)

Deferred tax assets corresponding to preceding fi ve items (30.7) (32.9) (2.2)

* Excluding net unrealized gain on bonds except for convertible and certain other bonds.

Embedded Value

Meaning of Embedded ValueEmbedded value (EV) is calculated as the sum of the value of in-force business and adjusted net worth. In Europe and Canada, EV is regarded as one of indices used for assessing the corporate value of a life insurance company. The value of in-force business is the present value of future after-tax profi ts on in-force business minus the present value of cost of capital. Cost of capital is the spread between the investment yield and the discount rate applied to the amounts of capital and surplus that will be required to maintain the assumed level of solvency margin ratio. Adjusted net worth is calculated as the total of (a) Total net assets in the balance sheets, excluding net unrealized gains on bonds except for convertible bonds + (b) Reserve for price fl uctuations + (c) Contingency reserve + (d) Reserve for possible loan losses + (e) Net unrealized gains on land –

2008

833.8

2006 2007

776.1 900.5


EV

¥833.8 billion

1,000

800

600

400

200

0

Embedded Value

13


Major AssumptionsBelow are the major assumptions used to compute EV as of March 31, 2008.

Movement Analysis of EV from March 31, 2007The change in EV from March 31, 2007, to March 31, 2008, is split into the following components:

1. Discount rate The discount rate was set by adding the Company’s assumed risk

premium (4.5%) to the risk-free rate (the yield on 10-year Japanese government bonds: 1.28%), as of the end of the fi scal year.

2. Investment yield(1) Investment yield on new investments: Investment yield on new investments assumption was calculated

based on the implied forward rates computed from the yield curve of Japanese government bonds as of March 31, 2008, and assuming that the Company invests only in Japanese government bonds every year. Sony Life sets the assumed investment yield on new invest-ments using neutral assumptions set in light of the market environ-ment at the end of each fi scal year. Neutral assumptions are made to avoid potential complications arising from the fact that the more Sony Life invests in assets with higher expected rates of return, the higher the calculated EV. Sony Life believes that assets with higher expected rates of return have higher risks and should be adjusted by discount rates when calculating EV.

The implied forward rates that were used are as follows.

(2) Investment yield on existing assets: The investment yield on existing assets assumption was calculated

separately for each asset based on the following assumptions: For existing bonds other than convertible and certain other bonds, Sony Life assumed holdings to maturity.

For convertible and certain other bonds, Sony Life’s calculations assumed that it would conduct rebalancing as of the date of evaluation as follows:

For stocks and other assets (policyholder loans, real estate, private equity funds, etc.), Sony Life assumed that it would maintain a balance at the end of the fi scal year within its own internal limits for holdings of such assets.

Interest, dividends and proceeds from redemptions are calculated with the assumption that Sony Life would reinvest these proceeds into Japanese government bonds.

The weighted average investment yields on new investments and existing assets that were used are as follows.

Fiscal Year Investment Yield2008 0.57%2009 0.61%2010 0.81%2011 0.98%2012 0.98%2017 2.78%2022 3.18%2027 3.50%2032 3.40%2037 3.51%

Fiscal Year Investment Yield2008 1.92%2009 1.88%2010 1.89%2011 1.91%2012 1.88%2017 2.90%2022 3.24%2027 3.66%2032 3.63%2037 3.77%

Category Method of Establishing

1. Discount rate 6.0%2. Investment yield on Investment yield on new investments is based on implied forward rates, assuming new investments Sony Life makes all new investments only in Japanese government bonds3. Mortality and morbidity rates Based on the Company’s experience over the three most recent fi scal years4. Lapse and surrender rate Based on the Company’s experience over the three most recent fi scal years5. Operating expenses Calculated using the cost for the maintenance and administration of policies and for (unit cost) payments of claims based on Sony Life’s experience during the most recent fi scal year6. Effective tax rate Based on the most recent effective tax rate7. Solvency margin ratio For the purpose of calculating cost of capital, maintenance of a solvency margin ratio of 600% was assumed

(Billions of yen)

Item Amount

1. EV as of March 31, 2007 900.52. Shareholder dividends (6.5)3. Release from the value of in force business 38.14. EV of new policies for the year ended March 31, 2008 28.95. Difference between assumptions and actual results for the year ended March 31, 2008 (113.2)6. Differences from changes in assumptions (14.1)7. EV as of March 31, 2008 (Total of items 1 through 6) 833.8

Note: Item (3) corresponds to unwinding of the amount of discount for one year made as of March 31, 2007, on the value of in-force business.

14


GAAP, Sony Life evaluated the future cash fl ow on GMDB for all existing variable life insurance policies using the stochastic method. This evaluation reduced EV by ¥13.4 billion, compared with ¥4.3 billion in FY2006.

NotesRegulations require that certain reserves be set aside for minimum guarantee benefi t features on variable life insurance and annuity contracts issued in FY2005 and thereafter. In calculating EV as of March 31, 2008, while setting aside the reserve for guaranteed minimum death benefi ts (GMDB) based on Japanese

The opinion letter can be found on Sony Life’s website (http://www.sonylife.co.jp/).

Opinion of Outside SpecialistSony Life has obtained an opinion letter from Milliman, Inc., an independent actuarial fi rm that possesses insurance actuarial expertise.

DisclaimerStatements made in this section of the annual report contain calculations based on assumptions regarding future projections that are subject to risks and uncertainties. Actual future results might differ signifi cantly from the assumptions used in the EV calculations. Therefore, readers are advised to be cautious and not place undue reliance on these EV calculations in assessing the corporate value of Sony Life.

(Billions of yen)

Amount of Increase (Decrease) EV Amount

Discount rate 6.0% 5.0% 83.1 916.9 6.0% 7.0% (67.5) 766.3Solvency margin ratio 600% 500% 7.7 841.5 600% 700% (8.6) 825.2Investment yield: +0.25%* On total investments 59.1 892.8 On new investments 34.8 868.6Investment yield: –0.25%* On total investments (61.2) 772.5 On new investments (35.0) 798.7Mortality and morbidity Assumption x 1.1 (65.3) 768.5Lapse and surrender rate Assumption x 1.1 (16.1) 817.7Operating expenses (unit cost) Assumption x 1.1 (6.5) 827.2

* The impact of changes in investment yield assumptions is shown after taking into account the impact on policyholders’ dividends.

Impact of Changing Assumptions (Sensitivities)The impact of changing the underlying assumptions on EV at March 31, 2008, would be as follows:

15


Providing Tailored Protection and Extensive After-Sale Follow-Up ServicesSince its establishment, Sony Life has endeavored to provide life insurance that is optimally tailored for each individual through a consulting approach based on life planning. We begin by conducting life planning simulation to determine the amount of protection that a customer needs to meet his family’s goals and 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 after-sale follow up services, review-ing a customer’s ongoing life plan and protection requirements 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 services to customers.

Lifeplanner Sales Employees and Partners. Always for Customers, Always with Customers

Lifeplanner Sales Employees“Life insurance will begin changing today. Lifeplanner sales employees will drive this change.” This was Sony Life’s declaration at the time of its establishment, and the basis for putting in place its Lifeplanner system. By ensuring that Lifeplanner sales employees are consis-tent leaders of innovation within the industry, we strive to provide customers with ideal life insurance. Lifeplanner sales employees serve as each cus-tomer’s “Own Agent,” understanding their lives as they go through each of life’s milestones. The time that Lifeplanner sales employees share with custom-ers and the strong trust-based relationships they cre-ate are an important part of helping customers meet the dreams that constitute their life plans and defi nes the value that Lifeplanner sales employees provide. Unfortunate circumstances need not be the only time that customers experience such value. During the course of long, full lives, customers typically experi-ence 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 individual Lifeplanner sales employee who cares for a specifi c customer, Lifeplanner sales employees throughout Japan put forth their best effort to support customers on the whole. Lifeplanner sales employees help customers reach their dreams. They remain alongside customers throughout every phase of their lives, providing essential support.

Protecting Every Dream throughout Each Individual’s Life. That’s LIFEPLANNER VALUE.

PartnersIn 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. Empathetic to Sony Life’s commitment of putting customer interests fi rst, Partners are professional agents 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. At present, Sony Life has more than 2,000 Partners throughout Japan. Partners typically possess specifi c and advanced expertise that they apply toward providing protection that meets customers’ needs, providing ongoing after-sale follow up support even after customers have entered into policies. The term “Partners” is apt because, in addition to agencies that act as busi-ness partners for Sony Life, they are lifelong partners to customers.

16


Educational System for Lifeplanner Sales Employees and PartnersSony Life provides a diverse range of educational programs designed to enable Lifeplanner sales employees and Partners to fulfi ll their roles as insur-ance and fi nancial professionals in responding to the confi dence that customers place in them.

Basic Training Program (BTP) for Lifeplanner Sales Employees

This program equips Lifeplanner sales employees with the basic knowledge to become life insurance professionals, attitudes, skills and behavioral habits required to put customers fi rst. BTP is designed as an effective training program to teach employees Sony Life’s needs-based sales process. During their fi rst month on the job, employees participate in BTP 1, the important fi rst level of this training program. Through BTP 1, trainees clarify the attitudes that they are to maintain in their work as Lifeplanner sales employees. They also take part in role playing simula-tions of actual negotiations and equip themselves with the minimum level of expertise and skills that they need to perform as Lifeplanner sales employees. At the same time, they learn appropriate working

practices based on sales and action plans. In their second month with the company, employees undergo BTP 2 training, which involves regular meet-ings with their sales manager to confi rm their action processes. Trainees also conduct joint work, visiting customers together with their sales manager and putting the expertise and skills they gained during BTP 1 training into action in real negotiations.

Partner Training ProgramPartner Training Program (PTP) for PartnersThis 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 accumu-lated over the years.Professional Agent SystemSony Life introduced this solicitation certifi cation pro-gram in FY2006 to help cultivate high-quality sales personnel. People who meet prescribed performance and certifi cation targets are assessed in various ways to confi rm their abilities as life insurance sales profes-sionals. Only agents who have passed all assess-ment levels are awarded the coveted title of “professional agent.”

Educational Systems, Self-Development and Reciprocal Studies

Training System (As of July 1, 2008)

BTP(New Lifeplanner sales employee training)Three days

Sony Life Business College (first level, individual)

General process exam

General

Kinzai Institute for Financial Affairs, Inc.

Japan Association for Financial Planners

2nd Grade Certified Skilled Workers in Financial Planning (domestic certification) AFP

(Affiliated)

Special course examsVariable insurance sales certification testing

General course exam

General

Financial Planner

Flight plan, seven months

OJT, joint work, individual instruction (role playing, etc.)

BTP(Two-month follow-up training)

BTP(Four-month follow-up training)

BTP 3–7Three to seven months after joiningFive months

Branch study sessions, group study sessions, etc.

AFPCertification

training

Life Insurance University course exams(Six fields)

Life Insurance University

CFP®

(Certified)

1st Grade Financial Planner (domestic certification)

Assurance certification testing (more than two years of employment)

Total life consultant(Financial planner certified by the Life Insurance Association of Japan)

Takeoff plan, six months

Partner Training Program

Sales process meetings, joint work, role playing, etc.

Start of salesLi

fepl

anne

r sal

es e

mpl

oyee

sPa

rtne

rsCe

rtifi

catio

n te

stin

g

Bran

ch tr

aining

Head

offi

ce tr

aining

Before joiningCIPEight hours, four days

BTP 1One month

BTP 2Two months after joiningOne month

Initia

l tra

ining

Life

Asso

ciatio

n of

Japa

n te

sting

Finan

cial p

lanne

r ce

rtific

atio

n te

sting

SpecialtyVariable

products, real estate)

protection

17


Nurturing Financial PlannersOur socioeconomic environment is undergoing major changes, owing to the advent of the information-ori-ented society, reforms to the social security system, diversifi cation of fi nancial products and a demo-graphic shift to an older population. In these circum-stances, 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.

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

Enhancing Education for ManagersOur branch managers, sales offi ce 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 and the heads of its independent Agency Sales Division. In April 2007, we also launched a course called “Life Insurance Basics” for Independent Agency Sales Group offi ce managers and head offi ce managers. As of March 31, 2008, 158 people had undergone SLA training. Course instructors include university profes-sors 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 higher quality insurance professionals and helps managers polish their guidance and leadership skills. Even after course completion, ongoing training is provided to assist the lifelong learning process.

Affi liated Financial Planners (AFPs)

Affi liated Financial Planners: 1,895(As of June 1, 2008)

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.

Certifi ed Financial Planners® (CFPs®)

Certifi ed Financial Planners®: 130(As of June 1, 2008)

The CFP® license is an international qualifi cation conferred by the Certifi ed Financial Planner®

Board of Standards, Inc., of the United States. This is an authoritative qualifi cation given only to fi nancial planners who demonstrate sophisticated fi nancial planning abilities and sound work ethics.

Certifi ed Skilled Workers of Financial Planning

1st Grade Certifi ed Skilled Workers in Financial Planning: 108

2nd Grade Certifi ed Skilled Workers in Financial Planning: 1,897

(As of June 1, 2008)

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, includ-ing fi nancial planning. 1st, 2nd and 3rd grade Certifi ed Skilled Workers in Financial Planning.

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.

18


Reciprocal StudiesAdvanced consulting services and after-sale follow-up services 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 knowl-edge and skill training. Sony Life’s employees have embraced a culture of mutual assistance in their quest to serve customers. To this end, they have taken the initiative of hosting independent training forums around the nation.

Million Dollar Round Table (MDRT)MDRT is an international association of the world’s best life insurance and fi nance professionals. The organization has 35,662 members in 78 countries (as of August 2007). 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 have superior skills, achieve superior ethical standards and provide superior cus-tomer service. These business and regional commu-nity leaders are recognized worldwide as life insurance and fi nancial service specialists. As of July 1, 2008, 628 Lifeplanner sales employ-ees and Partners of Sony Life were among the largest groups forming the MDRT’s chapter in Japan.

MDRT Sony ChapterThe MDRT Sony Chapter 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, also promote various volunteer activities, demonstrating their passion as conveyors of the MDRT spirit. JAIFA All Sony training session

(Ishikawa, April 2008)

MDRT Sony training session(Tokyo, April 2008)

Japan Association of Insurance and Financial Advisors (JAIFA)

JAIFA was established in 1962 with the purpose of enhancing the status of life insurance salespeople through the reciprocal education of members. As a forum for mutual training, the association hosts a variety of proactive initiatives.

JAIFA Sony ChapterOur Lifeplanner sales employees, sales offi ce manag-ers and branch managers participate in JAIFA events, and as of July 2008, 30 JAIFA Sony Life regional chapters have been set up in regional areas to spear-head various activities. JAIFA All Sony, which com-prises all the Sony JAIFA members throughout Japan typically meets twice each year to hold executive board meetings and workshops. These meetings aim to achieve a nationwide exchange of information.

19


Providing Optimal Protection through the Life Planning Support Service (LiPSS)

Life Plan Chart Considerations

Income and Expenses on an Annual Basis Balance of Financial Assets

When proposing protection products, Sony Life fi rst asks customers about their lifestyles and future life plans. As each member of a family paints a picture of the life that he or she envisions for several years in the future, an image of the customer’s life and way of thinking begins to form. On the basis of the picture that a customer paints of his or her future, the best way to ongoing future protection also grows clearer. However, life is long and ever-changing, and people require solid insurance coverage throughout their entire lives. Helping to bridge the gap between specifi c coverage and an uncertain future is our Life Planning Support Service (LiPSS) software. 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 lifestyle. In short, LiPSS helps ensure high-quality products that offer peace of mind.

Eliciting Customers’ Dreams and Goals through Life Planning

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

L i f e P l a n P r e v i e w

Simulation of a Family’s 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

L i f e P l a n S i m u l a t i o nwhether the life plan is viable fi nancially. By consider-ing the balance between income and expenses and prioritizing expenditures, we prepare plans to set aside cash for school fees, advise customers of their leeway for purchasing a home and suggest the possible acceleration of mortgage payments.

look at this picture as seen by every member of a family. In light of the goals for the future that a cus-tomer projects, we create a Life Plan Chart that maps out these dreams and goals on a time axis.

• The relationship between the period of a child’s progression through school (pre-school, elemen-tary school, junior high school, high school and university) and the customer’s own age is visible at a glance.

• If the child has siblings, the chart highlights periods when their school expenses will overlap.

• The chart provides an opportunity to consider parents who may live with the customer in their senior years, and to think specifi cally about the customer’s own plans for his or her senior years.

• We consider the level of coverage that the customer will need for such events as changing jobs, striking out on his or her own or fulfi lling planned dreams.

20


Simulation of Household Finances if the Unexpected Occurs

Next, we run a trial calculation of a family’s hypotheti-cal income and expenses in the event of the unex-pected. We take an overall look at such considerations

Income and Expenses on an Annual Basis Balance of Financial Assets

as whether the family could maintain its life plan if it needed to rely on the income of the other spouse and determine potential cash excesses or shortfalls.

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 plan-ning with customers fi rsthand. Furthermore, in January 2008 we began conducting banking agency business on behalf of Sony Bank, setting up Sony Bank accounts and delivering applications for Sony Bank’s mortgage loan products.

Life Planning SQUARE, Our Life Planning Showroom

Note: This facility does not write new life insurance polices or perform policy content change procedures.

Consulting Services Based on Life PlansFactors that must be considered are whether, in the case of untimely death, the bereaved family would be able to live comfortably according to their life plan or whether 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

I n s u r a n c e P l a n n i n g

Necessary Amount of Coverage

• To determine the necessary amount of coverage, we consider the amount that would be needed each year to cover the potential gap between expenses and income in the event of an untimely death.

• This data provides the basis for determining a reasonable amount of life insurance.

*Eleven Categories of Financial Needs throughout Life

Reserve for education Reserve for marriage Funds for home purchases Rent or loans Living

expenses after retirement Reserve for emergencies Reserve for long-term healthcare Living expenses

for bereaved family members Reserve for funeral and subsequent arrangements Reserve to reconfi gure life

Funds for inheritance measures

11 fi nancial needs* from various angles before offering advice to the customer. If any upcoming economic risks are evident, we propose protection that is optimally tailored for each individual customer.

21


Tie-Up with Watami Co., Ltd., in the Nursing Care Business

We have a tie-up in place with Watami Co., Ltd., in the nursing care business. Through this col-laboration, we aim to provide high-quality nurs-ing care services to enable as many people as possible to maintain happy lives as they age. Under this agreement, Watami provides prefer-ential treatment to customers that Sony Life introduces, offering priority in entering facilities and discounts on lump-sum move-in payments for customers with whole-life residential con-tracts. In addition, the two companies have set up a deliberation committee and conducted questionnaires for the heads of nursing care facilities. Sony Life expects to incorporate its better understanding of actual conditions at nursing care facilities into the provision of higher quality nursing care services.

Sony Life’s Lifeplanner sales employees stand beside their customers as they move along the paths of their lives to help them lead fulfi lling lives. During the course of a long life, people typically undergo such experi-ences as child-rearing, purchasing a home, changing jobs or striking out on their own, becoming ill and requir-ing nursing. We continue to monitor a customer’s evolving coverage needs as their lifestyles change. Drawing on their wealth of experience of looking closely at people’s lives and a broad-ranging knowledge base, Lifeplanner sales employees provide appropriate information to their customers as particular concerns arise. If the unexpected occurs, Lifeplanner sales employees help ensure that claim payments are delivered swiftly. However, delivering claim payments is not the job of Lifeplanner sales employees. Rather, Sony Life sees it as their responsibility to be the person who takes the family’s needs into consideration, serves as a consultation partner as a family moves into a new phase of their life and helps the family achieve future happiness. This is one mission of Lifeplanner sales employees.

Life Plans and Maintaining CoverageChanges in social circumstances or economic condi-tions can affect the future dreams of a customer and his or her family. By regularly checking for obstacles along the path to achieving a customer’s life plans, we help customers be secure in their plans and work with them to update their plans as necessary. Such major life changes as the birth of a child or a change of employment can alter coverage needs. We consistently monitor the content of our customers’ protection to ensure that their life insurance coverage meets their needs to the fullest extent possible.

Providing Advice Based on Specialized Knowledge and Appropriate Information

Sony Life’s Lifeplanner sales employees possess a wealth of economic and fi nancial knowledge and expertise, which they provide to customers as appropriate information and useful advice.

Lifeplanner sales employees help customers meet their goals and answer their questions. These include:

Providing a Range of Follow-Up Services to Help Customers Live Fulfi lling Lives

Home Purchases “We want to set aside funds to buy a home.” “We want to put together an intelligent mortgage loan.” “We are thinking of accelerating our mortgage payments or refi nancing our mortgage.”

Child-Rearing and Education “How much will an education cost?” “We would like to set aside a regular amount as a reserve for education.”

Retirement “We want to start setting aside funds for our senior years.” “We want to make investments to tide us over in our senior years.”

Other assets “We would like you to introduce us to an accountant or an attorney.” “We would like to know more about the social insurance (medical care, pension, nursing care) system.” “We are looking for information about changes in tax laws and the legal code.”

And so on….

22


PImprovement

planning

C

Resultverification

AFurther

improvement

DImprovement implementation

Customer input

Contacts Customer input

Customer center

Website

Agency offices

Complaints

Opinions, requestsMCC Committee* Business Administration

Control DivisionReporting

Implementation,reporting

Assignment

Requests forimprovement

Proposal system

Special committees

Customer opinion surveys

Lifeplanner sales employee questionnairesHeadquarters division

Supervisory body, Life Insurance Association of

Japan, other

Life Planning SQUARE

Executive Officers Board

All headquarters office divisions

Customer Relation Planning Division

Collect and assimilate customer input

Verification via PDCA cycle

Product Committee New Policy Operations Committee Maintenance Operations Committee

Cust

omer

inpu

t

Disc

lose

im

prov

emen

t st

atus

Pro

vide

hig

h-qu

alit

y se

rvic

es

Rais

e cu

stom

er s

atis

fact

ion

*See page 30.

Improvement planningImprovement implementationResult verificationFurther improvement

Making Use of Customer Input (As of July 1, 2008)

Management Improvements That Focus on Customer Satisfaction

Making Use of Customer Input in ManagementSony Life makes it a practice to take customer input seriously, paying careful attention to customer satis-faction and using the information it receives to improve management. By gathering and accumulat-ing the customer input it receives on a daily bases 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 all customers. We will continue these efforts as part of our compa-nywide initiative to improve management and provide optimum life insurance products and services of the highest quality.

Initiatives to Incorporate Customer Input into Management

Companywide Business Improvement Initiatives

In FY2007, we launched an initiative to improve oper-ations in departments throughout headquarters divi-sions of the company, based primarily on customer complaints. Each division was required to analyze the reason for the complaints it received, determine areas of business that should be improved and draft mea-sures and plans for making those improvements. Each quarter, departments are required to report to the Executive Offi cers Board the status of progress

toward their improvement plans. This process ensures a timely understanding of the current situation and encourages speedy improvements. In the future, we will continue this process by using the Plan-Do-Check-Act cycle, which involves verifying the effectiveness of improvements. In this manner, we are making a companywide effort toward operational improvement.

Overall Satisfaction with Sony Life Overall Satisfaction with Salesperson

Customer Opinion Survey ResultsSurvey of policyholders taken August 2007, 1,840 valid responses

Efforts to Gather Customer InputEach year, Sony Life conducts a customer opinion survey of its policyholders. In FY2007, 1,840 custom-ers cooperated in responding to this survey, sharing their opinions concerning the Company’s products,

the salespeople they interact with on a daily basis and the Company’s attitude. We received numerous opinions, which we consider seriously as we work to improve our operations and eliminate points of dissatisfaction.

Total satisfied: 69.9%Total dissatisfied: 6.6%

Satisfied27.2%

Neither23.0%

Very dissatisfied 0.5%

Very satisfied 3.8%Somewhat dissatisfied 4.6%Dissatisfied 1.5%

No response 0.6%

Somewhat satisfied38.9%

Sony Life achieved a 69.9% satisfaction rating from its customers. Unsatisfi ed customers came to 6.6%.

Of the respondents, 76.3% replied that they were satisfi ed with the salespeople they interacted with directly on a daily basis. Approximately one person in fi ve, or 19.9%, indi-cated that they were very satisfi ed. The overall evaluation level was extremely high.

Satisfied35.4%

Neither15.3%

Very dissatisfied 1.2%

Very satisfied19.9%

Somewhat dissatisfied 4.4%Dissatisfied 2.4% No response 0.5%

Somewhatsatisfied

21.0%

Total satisfied: 76.3%Total dissatisfied: 8.0%

23


Sony Life Strives to Improve Management, Based on Complaints It Receives from Customers.Sony Life takes seriously any complaints it receives from customers and works to make operational improvements to resolve such complaints and elimi-nate potential areas of dissatisfaction. We also hold internal training sessions covering customer mentali-ties and develop customer education tools as part of our proactive efforts to eliminate complaints.

Defi nition of a Customer “Complaint” Any expression from a policyholder or related party to Sony Life indicating dissatisfaction with their life insurance Any statement or notice that calls into question the appropriateness of any party related to Sony Life

Complaints Brought to the Company

Preempting ComplaintsOne way to raise the level of satisfaction concerning the services we provide our customers is to eliminate potential sources of dissatisfaction before they sur-face as complaints. To this end, we have prepared a training video outlining certain aspects of customers’ mentali-ties and distributed this video to all sales offi ces. In FY2006, we launched the in-house training tool One-Point Information, which highlights points of caution based on trend analysis. We regularly distribute this tool to sales offi ces, as well.

(No. of complaints, %)FY2005 FY2006 FY2007

Content Number Percentage Number Percentage Number Percentage

Subscribing to insurance policy 1,384 26.3 1,753 28.7 2,464 28.7Premium payments 524 9.9 590 9.7 895 10.4Processes and dividends after joining policy 1,787 33.9 1,942 31.8 2,857 33.3Payment of claims and benefi ts 470 8.9 564 9.2 888 10.3Other 1,102 20.9 1,264 20.7 1,489 17.3Total 5,267 100.0 6,113 100.0 8,593 100.0

Introduction of Lifeplanner Sales Employee QuestionnaireEach year, we conduct a Lifeplanner Sales Employee Questionnaire targeting those employees who inter-act with customers on a daily basis. Lifeplanner sales employees become attuned to certain issues as part of their everyday roles. Uncovering such issues is one objective of the questionnaire, as is determining their level of customer awareness and confi rming the status of their activities.

Proposal System/Creation of Special CommitteesSony Life has created a site on its corporate intranet that companies can easily access to propose sug-gestions. Employees use the site frequently, offering suggestions for improvements on topics ranging from customer use of the operations ledger to proposals on product development. Several times a year, we also hold meetings of special committees, such as the Product Committee, the New Policy Operations Committee and the Maintenance Operations Committee. At these committee meetings, we seek to accumulate requests made from a customer viewpoint. Proposals arising through the proposal system and opinions gathered by the various committees are dis-closed throughout the Company. Such information helps departments in charge of the various topics raised propose new measures to improve operations for the benefi t of customers.

Issuance of Notice Concerning ProtectionOnce a year, Sony Life sends customers a Notice Concerning Protection, encouraging them to confi rm the content of their policies. In FY2007, we enclosed with these documents a postcard that we ask they return to us indicating requested changes in recipient information, accounts from which premiums are auto-matically withdrawn or requests that the person in charge of their policy contact them to discuss changes in their life plan or to verify protection.

Customer Center InitiativesWe have created a Customer Center, accessible via a toll-free number within Japan, that customers can contact to discuss new policies and procedures after entering into policies, as well as for consultations and various requests. Requests made via the customer center are transmitted in a timely manner to the salesperson or section in charge of that customer’s policy. To ensure swift responses, the center manages the communications it receives through to their conclusion.

Consultations and Notices to the Customer Center(Instances, %)

FY2005 FY2006 FY2007 Category Number Percentage Number Percentage Number Percentage

New policies, requests for materials 108,678 43.8 112,524 49.9 117,688 45.4Loans, surrender cash referrals 24,363 9.8 23,212 10.3 31,891 12.3Receipt-related 14,274 5.8 5,683 2.5 3,267 1.3Claims and benefi ts 7,383 3.0 7,025 3.1 9,222 3.6Other maintenance 78,469 31.6 61,491 27.3 73,489 28.4Taxes, exemption certifi cation 5,406 2.2 1,645 0.7 1,684 0.6Other 8,554 3.5 13,998 6.2 21,978 8.5Investment trusts 809 0.3 — — — —Total 247,936 100.0 225,578 100.0 259,219 100.0

Some Results of the FY2007 Lifeplanner Sales Employee Questionnaire

Conducted in August 2007; Target: Lifeplanner sales employees; Valid responses: 1,983

Everyday points of focus for Lifeplanner sales employees:No. 1 Responding quickly and politely to customers’ requestsNo. 2 Seeking to remain together with customers throughout

their livesNo. 3 Answering customers’ queries and questions in an

easily understandable and convincing manner

Informal Meetings of PolicyholdersSony Life does not conduct informal meetings of poli-cyholders. However, we do refl ect customer input in our management through the various methods described above, and we strive to gather a broad range of customer input.

24


System of Claim Payment Operations

Status of PaymentsThe following information represents the status of payments made against requests for payment received in FY2007.

Fundamental Policy on Payment OperationsRecognizing 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 agree-ment 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.

Payment Operations StructureTo 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 highlighting points for caution when making payment assessments, created an operations manual and formed the Administrative Mistake Recurrence Prevention Study Council. 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 New Product Development Department and the Claims Payment Management Department cooperate to ensure the appropriateness of claims and other payments, and sharing product overviews and policy stipulations.

Notes: 1. The numbers indicated above are the number of individual life insurance policies on which a non-payment decision was made. 2. The numbers indicated above include such factors as requests for benefi t payments made although the number of days of hospital-

ization were insuffi cient, or payment request documentation (medical certifi cates, etc.) indicated a claim a was clearly outside the scope of payment.

(Instances)

Claims Severe

Death Disaster Injury Other Total

Number paid 3,550 60 161 6,302 10,073

Policies on Which Payments Were Made in FY2007 (Individual Life Insurance)

Number of Policies (Individual Life Insurance) on Which Non-Payment Decisions Were Reached

Note: The numbers indicated above are the number of payments that were made on individual life insurance policies, by type of benefi t payment. Payment by type of benefi t counts the number of payments made in each payment category. For example, one medical treatment insurancepolicy on which one hospitalization benefi t claim and one surgical procedure benefi t claim was made would be counted as two payments.

(Instances)

Claims Severe

Death Disaster Injury Other Total

Invalid, as fraudulent 1 0 0 0 1

Invalid, as acquired for illegal purchases 0 0 0 0 0

Cancelled for nondisclosure reasons 6 0 0 4 10

Cancelled for grave reason 0 0 0 0 0

Justifi ed exclusion 49 5 0 0 54

Outside scope of reasons for payment 0 2 49 82 133

Other 1 0 0 0 1

Instances outside payment scope 57 7 49 86 199

(Instances)

Benefi ts Hospital- Severe

Death ization Surgery Injury Other Total

Invalid, as fraudulent 1 4 0 0 0 5

Invalid, as acquired for illegal purchases 0 0 0 0 0 0

Cancelled for nondisclosure reasons 3 258 0 0 0 261

Cancelled for grave reason 0 0 0 0 0 0

Justifi ed exclusion 31 20 0 0 0 51

Outside scope of reasons for payment 1 843 256 25 22 1,147

Other 4 27 0 0 6 37

Instances outside payment scope 40 1,152 256 25 28 1,501

(Instances)

Benefi ts Hospital- Severe

Death ization Surgery Injury Other Total

Number paid 1,790 77,079 54,175 58 37,920 171,022

25


Strengthening Our Insurance Claim Payment Management Structure

Sony Life investigated its claims payments from FY2001 through FY2005, publicized the results of its fi ndings, notifi ed customers of all cases in which a valid payment could have been missed and made restitutions for any inadvertent non-payments. To prevent such a situation from recurring, Sony Life has made raising its level of service to customers a top management priority. The Company has established a “special project for introduc-tion of countermeasures to strengthen the insurance claim payment structure,” which reports directly to Sony Life’s President and Representative Director. We have also increased the amount of information we provide to customers and made large-scale system developments to enhance the fl ow of payment operations. Through these and the initiatives described below, we are working to strengthen our payment management structure.

Efforts to Strengthen the Payment Management Structure Implemented in FY2007Increasing the Amount of Information Provided to Customers

To foster a deeper customer understanding about the payments of claims and other benefi ts, in June 2007 Sony Life published a guidebook on this topic, Requesting Payments of Claims and Benefi ts when the Unexpected Occurs, and distributed the booklet to policy-holders. The content of this guidebook is included on Sony Life’s website (Japanese only).

We have updated the Life Insurance Handbook, which we send to customers each year along with the Notice Concerning Protection. These documents are designed to make the process of requesting claims and payments easy to understand. To the Notice Concerning Protection, we have added a page with a checklist for customers to fi ll out them-selves to help them understand reasons whether potential payments that they seek may or may not be made.

In August 2007, Sony Life began disclosing on its website (Japanese only) information concern-ing the status of claims and benefi t payments and the number of complaints received by cus-tomers. This information is updated quarterly.

Strengthening the Internal Control Structure To prevent requests for payments of claims and other benefi ts from being inadvertently missed at the time of receipt and notifi cation, we have introduced a Claim and Benefi t Request Interview Sheet mainly for use by the salesperson in charge of the policy in question. This confi rmation tool is part of our efforts to enhance the systemization of claims processing.

We are striving to strengthen organizationally our departments in charge of managing the payment of claims and other benefi ts, as well as enhancing our operational structure. We are also introducing large-scale system developments as part of our thorough-going efforts to enhance the fl ow of payment appraisal operations.

26


Amid the rapid liberalization and internationalization of fi nancial markets, the activities of life insurance companies are becoming increasingly diverse and complex. For such companies, the optimal manage-ment of various risks—such as investment risk, insurance underwriting risk, operational risk and legal risk—becomes more important every year. The vari-ous transactions that life insurance companies under-take carry inherent risks that cannot be completely avoided. Moreover, simply minimizing such risks is insuffi cient. Instead, it is necessary to grasp the nature of each type of risk, implement suitable con-trols and make preparations to ensure appropriate returns that are commensurate to the related risks, while also responding fl exibly to the evolution of risk management techniques. Sony Life works continuously to enhance its risk management organization. In FY2007, we reviewed our risk management policies and evaluated risks related to new activities involving the handling of banking agency business. We have also established the claims payment management system as a top management priority, and continued our endeavors in this regard. Furthermore, when necessary the Risk Management Committee, which is composed of gen-eral managers of the several divisions responsible for the company’s risk management, met to discuss various companywide risk management issues.

Sony Life also conducts stress tests and reports the results of those tests to its Executive Offi cers Board in order to evaluate the possible impact on its fi nancial soundness of future unprofi tability, and con-ducts additional management and/or fi nancial mea-sures as necessary. As one aspect of its investment risk management activities, the Company conducts stress tests based on a worst-case scenario that exceeds normal market fl uctuations, whereby interest rates, share prices and currency exchange rates all drop to historic lows. As one aspect of our insurance underwriting risk management activities, we perform stress tests during new product development that assume fl uctuations in income and expenses. In its Risk Management Manual, Sony Life sets forth its fundamental approach to risk management and the methods for applying its risk management policies, with full consideration of the specifi c characteristics of each type of risk.

Risk Management System

Risk Management Structure (As of July 1, 2008)

Sony Life’s Basic Risk Management Policy

By strengthening its risk management capabilities and executing optimal risk controls, Sony Life aims to ensure the soundness and appropriateness of its operations and to protect the interests of policyholders. In this way, we will improve our reputation as a trustworthy and credible life insurance company and thus fulfi ll our responsibility to society.

General Meeting of Shareholders

Board of Directors Board of Auditors

Internal Audit Division


Risk Management Committee

Chief Actuary

Risk ManagementCorporate Planning Division

Other management risksOperational riskInsurance underwriting riskALM Division

Office riskGeneral Affairs Division

Personnel riskPersonnel Division

Sales Administration Division

Legal riskCompliance Division

Reputational riskCorporate Communications

Division

Management riskCorporate Planning Division

Insurance subsidiary andaffiliated company risksInternational & BusinessDevelopment Division

Insurance subsidiary andaffiliated company

Administrative riskOperations Administration

Division

Systems riskOperations Administration

Division

Liquidity riskALM Division

Reinsurance riskMarket-related risk

Credit risk

Real estateinvestment risk

Investment riskALM Division

Business Offices

27


Specifi c Risk Management Defi nitions and Procedures

Investment risksInvestment risk refers to the risk of suffering losses due to fl uctuations in the values of investment assets, the risk of liquidating investment assets in adverse conditions to comply with asset-liability management requirements and/or the risk of failing to ensure target investment performance. With respect to investment risks, Sony Life manages its asset allocation in accor-dance with internal regulations established in light of the importance of managing balance between assets and liabilities comprehensively, the specifi c character-istics of its liabilities and the need to maintain appro-priate levels of capital. Sony Life involves its front-offi ce and middle-offi ce personnel in its risk monitoring activities and revises its risk management policies and procedures in light of evolving risk management practices in the life insurance industry.

Market-related riskMarket-related risk refers to the risk of suffering losses due to changes in the values of investment assets as a result of fl uctuations in interest rates, securities values, exchange rates and/or various other risk factors. Sony Life strives to maintain an investment portfolio that will provide stable medium- to long-term returns in light of the specifi c characteristics of its investment assets, including stability, liquidity, profi tability and other factors. In addition, Sony Life establishes limits, as it deems necessary, as a means of controlling the magnitude of potential market-related losses.

Credit riskCredit 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 issuers. Sony Life exercises care in evaluating the credit quality of issuers when investing in debt obligations and strives to diversify its portfolio to avoid risks associated with concentrating its investments in the debt obligations of a small number of issuers or within particular industries. In addition, Sony Life strives to ensure the stability of its investments through self assessment of the credit quality of its assets in accor-dance with internal regulations, establishing reserves and recording write-offs as appropriate.

Real estate investment riskReal estate investment risk refers to the risk of suffer-ing 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 commit-ments that characterize real estate investments, Sony Life establishes objective standards to evaluate real estate investments and takes care to diversify its real estate investments in terms of timing and geographi-cal location. In addition, in an effort to ensure the quality of its real estate investment portfolio, Sony Life manages each property individually and sells off prop-erties that produce investment returns below mini-mum pre-determined levels or for which unrealized losses exceed pre-determined “alarm points.”

Insurance underwriting riskInsurance underwriting risk refers to the risk of suffer-ing 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 man-agement, 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 main-tains 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.

Operational riskAdministrative riskAdministrative 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 adminis-trative 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 third-party service provid-ers as part of its efforts to control administrative risks relating to such providers.

28


Systems riskSystem risk refers to the risk of suffering losses due to critical trouble with computer systems. System risk also includes the risk of losses due to the illegal use of computer systems. Sony Life separately manages 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 analyzes recent failures, threats and vulnerabilities affecting its existing systems infrastructure when determining its future systems needs. Sony Life also undertakes periodic testing of its systems to ensure appropriate risk management. 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. Sony Life has also developed a contingency plan to govern its response to potential disasters that may affect its ability to continue its operations.

Liquidity riskLiquidity risks are classifi ed into “fund fl ow risks” and “market liquidity risks.” 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 exchange market instability. Sony Life aims to minimize its holding of low liquid-ity assets and to adopt, and periodically review, inter-nal regulations clarifying the methods for managing, reporting and settling cash payments in light of its immediate liquidity needs.

Other risksOther risks include legal risks, such as the risk of loss resulting from Sony Life conducting its operations in a manner that violates applicable laws, rules or regu-lations, and the risk of loss resulting from Sony Life’s inability to exercise certain rights as a result of it con-ducting its operations in an inappropriate manner, even without any violation of law. Other risks also include reputational risks, including the risk of loss resulting from negative media coverage, rumors, defamation and other forms of criticism. Sony Life strives to establish risk management policies relating to these and other risks in order to ensure its ability to conduct its operations in a sound and appropriate manner.

Accumulating Policy Reserves for Third-Sector InsuranceSony Life conducts stress tests and liability ade-quacy tests to determine the appropriate amount of policy reserves it needs to accumulate for third-sector insurance.

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. The contingency reserve is cal-culated for the amount of future benefi ts (10 years), based the difference between the amount calculated using the insured accident occurrence rate (hazard rate A) to cover risk that exceeds the normally expected scope and the insured accident incidence rate (hazard rate B), which covers the normally expected scope of risk. 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 hazard rate B. If there exists a fi scal year when the fi nancial resources, including additional sources of income and profi t, are insuffi cient to cover the benefi t, that amount cor-responding 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. 231. 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

In preparation for uncertainty related to future worsening of the insured accident occurrence rate, Sony Life conducts the stress test and the liability adequacy test and ensures the appropriateness of its policy reserves related to third-sector insurance are suffi cient according to these test results. Stress test and liability adequacy test results as of March 31, 2008, are given below.

As of March 31, 2008

Stress test (accumulated contingency reserve) ¥127 million

Liability adequacy test (accumulated premium reserve) Not insuffi cient

Note: Policy reserves are segmented into accumulated premium reserve, prepaid insurance premiums and contingency reserves.

29


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 sophisti-cated 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 pol-icy 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 InformationInitiatives to Protect Personal Information

Sony Life’s Information Security Policies is a docu-ment 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 a Privacy Policy, as well as a Committee to Promote the Security of Personal Information. Together, these address the gathering and use of personal informa-tion, as well as methods of assembling and managing it. The Company will strive more rigorously than ever to protect all personal information in its possession.

Information Management SystemSony Life has appointed information managers and security managers to each department that handles personal customer information. We have also estab-lished protocols to ensure effective protection of personal information and upgrade regularly our

training system for employees. In addition, we have formulated a set of Customer Data Protection Rules to ensure that personal customer information is handled appropriately, as well as a Compliance Manual and Market Conduct Compliance (MCC) Guidelines. In these ways, we are taking a compre-hensive approach to protecting personal information and guaranteeing customer privacy.

Security Measures for Protecting Personal Information

Standards for the Safe Management of Personal InformationSony Life has established standards for the safe management 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.

Lifeplanner SalesGroup agency

offices

Information Manager(Branch Manager)

Security Administrator

Independent AgencySales Group

sales divisions

Information Manager(Sales General Manager)Security Administrator

Headquarterdivisions

Information Manager(General Manager)

Security Administrator

Board of Directors


Protection of Personal Information Promotion Committee

System for Protecting Personal Information

Personal Information Protection and Information Security

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 pro-tection explain that such information may be provided to reinsurance companies. Customers agree to this condition when signing insurance agreements.

Policy Content Storage System

To ensure the sound operation of the life insurance system and guarantee the appropriate payments of benefi ts for death (severe injury) protection insurance, accidental death (accidental severe injury) protection insurance, and hospi-talization benefi ts, life insurance companies are required to record information pertaining to insurance policies or riders concerning payments of death or other benefi ts with the Life Insurance Association of Japan. This information, which is kept for all life insurance com-panies is used for no other purpose than for referring to the payment of claims and hospitalization benefi ts on poli-cies to which life insurance companies are party. Neither the Life Insurance Association of Japan nor other life insurers disclose this information.

Payment Screening Inquiry System

Upon receipt of requests for the payment of claims, pen-sion and annuity payments or hospitalization and other benefi ts, after determining that an insured event did indeed occur Sony Life and other life insurers share this informa-tion with the Life Insurance Association of Japan as part of the information on the insurance policies they hold. This information is used only to make payment through the Claims and Benefi ts Division, to cancel insurance poli-cies or for inquiries determining that such policies are void. Neither the Life Insurance Association of Japan nor individ-ual life insurers use such information for any other purpose.

30


Measures to Counter the Theft of Notebook Personal Computers (PCs) and Other PropertyTo prevent notebook PCs containing personal cus-tomer 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. Password-protected integrated circuit (IC) cards double this security.Offi ce Security MeasuresOnly 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 insurance business departments, which handle large amounts of personal customer information.

Information Security InitiativesFirst Company in Industry to Obtain Information Security Management System (ISMS) Certifi cation

On June 27, 2003, Sony Life became the fi rst company in Japan’s life insurance industry to obtain BS7799–Part 2: 2002 and ISMS (Ver. 2.0)—two ISMS certifi cations conferred by the Japan Audit and Certifi cation Association for Information Security. The certifi cations were bestowed on the Company’sdepartments related to insurance business administra-tion. As BS7799–Part 2 certifi cation content was

adopted by ISO certifi cations and Japanese ISMS standards were enhanced on a par with ISO stan-dards, 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.

Maintaining and Improving Information Security

Our administrative departments constantly assess the danger of leaks and breakdowns affecting all of our information assets, including customer informa-tion, 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 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 destruction of all information assets and take measures to minimize such dangers.

Constantly improve our information systems based on regular system audits by external specialists.

Information Security Management System

ISMS certifi cation indicates the reliability of a company’s information security systems. This certifi cation is provided to companies that have systems to determine the appro-priate level of security based on risk self-assessments, and that have concrete plans and resources allocated to ensure the effective management of such systems. 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 information-processing methods are accurate and complete

Accessibility: The guarantee that authorized people can have timely access to required information and related assets

ISMS Cycle

ISMS targets improvements in information security through repeated implementation of the cycle described below:

Plan: Formulate specifi c plans and policies for information security

Do: Implement measures outlined in the security plansCheck: Monitor the results of implementationAct: Undertake regular reassessments and

improvements

Plan

Ongoingimprovements

Check

DoAct

31


Note: The information above is excerpted and summarized from Sony Life’s Privacy Policy.

Privacy PolicySony Life makes every effort to protect the personal information of its customers. Our privacy policy outlines our compliance efforts.

1. ComplianceIn handling personal information, Sony Life will comply with the applicable laws and regulations including the “Act on the Protection of Personal Information,” obligations under the applicable ministerial guidelines and this privacy policy in handling personal information.

2. Purpose of Using Personal InformationSony 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 InformationSony 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 InformationSony 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 OldSony Life will take special consideration in handling the personal information of customers under 15 years of age, e.g., to provide clear advance notice asking such a customer to provide personal Information only upon a guardian’s consent.

6. Security Control MeasuresSony 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 SubcontractorsSony 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 PartiesWithout 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. Requests for Review or ConsultationSony 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 review, correct, stop receiving further product or service information from Sony Life, or to delete personal information on their own after confi rming their identity.

10. Continuous Improvement of Internal SystemsSony Life has received certifi cation under the ISO 27001 international standard of information security manage-ment systems for its insurance-related departments. Going forward, the Company will continue to strengthen and improve its internal systems.

11. Authorized Personal Information Protective AssociationSony 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, at http://www.seiho.or.jp/english/.

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 outlinessome of Sony Life’s thoroughgoing efforts to maintain its customers’ personal information.

Privacy Policy

32


Compliance means conformity with relevant laws, regulations and rules. This is a crucial issue for companies seeking to fulfi ll their social responsibili-ties. 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.

Compliance FrameworkSony Life has established a Compliance Committee, which reports to the Executive Offi cers Board, to spearhead companywide compliance programs. In addition, our compliance offi cers and supervisors conduct routine checks of compliance status and create plans and systems for improving overall compliance. In May 2005, we also established the Market Conduct Compliance (MCC) Committee to strengthen the compliance of sales activities. In these ways, we are striving to build a more effective compliance framework.

Board of Directors


Compliance Committee/Market Conduct Compliance (MCC) Committee

Lifeplanner SalesGroup agency

offices

Independent AgencySales Group

sales divisions

Headquarterdivisions

Compliance Officers

Compliance Manager(Branch Manager)

Compliance Administrator

Compliance Manager(Sales General Manager)Compliance Administrator

Compliance Manager(General Manager)

Compliance Administrator

Compliance Framework

Compliance

Compliance Programs Every fi scal year, we compile a Compliance Program that serves as an action plan for implementing compli-ance initiatives. Based on the program, we adopt various measures. We work to ensure all members of the Company are familiar with our Compliance Manual. We modify the manual as necessitated by changes to our compliance system, as well as enactment or revision of relevant laws. We publish a booklet, called MCC Guidelines, which contains 15 principles and serves as a Compliance Manual covering our sales activities. We use the booklet for continuous training at agency offi ces and indepen-dent agency sales divisions. We are also improving the MCC training curriculum for Partners. We conduct regular checks of each head offi ce and sales division to confi rm legal compliance status, and routinely reassess and augment checking and confi rmation procedures. The effi cacy of our compliance programs is verifi ed through a number of means, including internal audits, surveys of employee awareness and practices and con-fi rmation of the status of compliance of each division. As required, we take concrete measures to improve and strengthen compliance programs. If violations or suspected violations of laws or regulations are discovered, they are investigated and reported. We swiftly devise appropriate processes to prevent the reoc-currence of violations; these are added to the Compliance Manual and circulated throughout the Company.

Adapting to Changing Laws

The Law on Sales of Financial Products and the Consumer Contract Act came into force in April 2001. In response, Sony Life established its MCC Guidelines, a booklet that sets forth the Company’s solicitation policy in the form of 15 principles. Customers are kept informed of changes to compliance laws through posters, the Company website and other means, and employees through education and training. In March 2007, we modifi ed the guidelines to refl ect revisions of relevant laws and recent changes in the environment pertaining to compliance. (Implemented May 2007) To fulfi ll our social and public service responsibilities as a life insurance company and conduct our business in a fair manner, we have formulated a set of behavioral guidelines to serve as basic rules for directors and employees to observe. In February 2004, we compiled an upgraded version called the Sony Life Activity Charter. Full-scale enforcement of the Law Concerning the Protection of Personal Information began in April 2005. This law places obligations on private-sector enterprises handling personal information. We have established the Committee to Promote the Protection of Personal Information, which spearheads companywide measures to address the new legislation. In compliance with the Financial Products Exchange Law, which was introduced in September 2007, Sony Life has prepared product pamphlets for its variable life insurance and variable individual annuities. We have also updated or, in some cases created, the Explanation of Important Policy Information (Policy summary and Important Notes) or the Certifi cate of Appropriateness portion our policy documents. We have also strength-ened customer protection in our sales system through training of Lifeplanner sales employees and Partners. To prevent the money laundering of funds to support terrorist activities, an extensively revised Law for the Prevention of Transfer of Criminal Proceeds went into effect in March 2008. In conformance with this law, Sony Life has instated thorough checks to confi rm individual identities and prepared a Notifi cation of Suspicious Transactions. We have incorporated responses to this law into our internal guidelines and confi gured our customer management system appropriately.

33


Market Conduct Compliance (MCC) GuidelinesSony Life has formulated the MCC Guidelines to indicate its policy on marketing activities and ensure thorough compliance when performing these activi-ties. 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.

1. Respecting the CustomerI will perform marketing activities impartially, based on respect for the customer and in a spirit of love and trust. I will endeavor to take the customer’s viewpoint, and when selling life insurance products, I will provide con-sulting-based services tailored to the individual needs of each customer. Furthermore, after concluding a life insurance policy agreement, I will provide follow-up consulting to that customer throughout their life. I will perform my actions rigorously and appropriately, in line with the methods established by the Company. I will strive to become a professional with wide-ranging knowledge and experience in economics, finance, taxa-tion and other areas. To this end, I will endeavor to enhance my knowledge on a daily basis.

2. Handling of Customers’ Personal InformationI will collect from customers only that personal informa-tion that is necessary within the scope of my opera-tions. I will manage this information appropriately and protect the privacy of my customers.

3. Appropriate SolicitationI will not call upon customers at times that will distract them from their jobs or lives. I will not communicate or solicit customers through telephone contact against their will, nor will I contact them in an manner that would disturb their dignity. I will only call upon or com-municate by telephone with customers between the hours of 8:00 a.m. and 9:00 p.m., unless the customer has agreed otherwise or there is an appropriate reason.

4. Principle of AppropriatenessWhen marketing variable insurance, variable annuities or other products that involve risk to the customer, I will solicit such products only after confirming the custom-er’s level of investment sophistication, experience and financial status, as well as the purpose of entering into a contract (purpose of application).

5. Explanatory ObligationI will explain to customers such important items con-tained in the Contract Overview and Explanation of Important Policy Information as those concerning insur-ance products, the cooling-off system, credit risk and market risk, and I will provide appropriate and adequate information. Also, in the event of any changes in the content of convertible or paid-up policies or extended-term insurance, I will put the customer’s needs foremost in explaining how such changes could create a loss of or be disadvantageous to the customer’s interest.

6. Preventing MisidentificationI will clearly delineate life insurance products to avoid their confusion with non-life insurance products, invest-ment trusts, deposits or other financial products, or with products or services provided by third parties.

7. Handling of Solicitation DocumentsI will prepare solicitation documents in accordance with the Guidelines for Preparing Solicitation Documents prescribed by the Company, and I will use those

documents only after they have been screened and registered by the Company.

8. Interviewing and IdentificationWhen interviewing a policyholder or insured party, I will confirm their identity as well as their intent to apply and the intent of the insured party. I will also confirm that the policyholder application is in accordance with the will of the individual.

9. First-Round SelectionI recognize that life insurance solicitors are responsible for performing a first-round selection. I will interview, ask questions or observe the policyholder or insured party in accordance with the handling criteria prescribed by the Company, and I will provide accurate notification of anything I have learned from the person.

10. Appropriate NotificationI will explain to the customer the duty of disclosure and that nonconformance with this obligation may result in the cancellation of the insurance policy. I will strive to provide such explanation accurately and without omis-sion. I will not interfere with such notification to the customer, nor shall I neglect to notify or misnotify.

11. Appropriate Handling of Policy MaintenanceI will not fail or neglect to communicate with or obtain required information from a customer, and will I handle the process swiftly and appropriately.

12. Handling of Premiums I will handle premiums strictly separately from personal money. I will not offer customers any promises of pre-mium discounts, repayments, reimbursements or other special interest, nor will I provide any such interest.

13. PaymentIn the event of queries or claims regarding claims and benefits, I will respond quickly and appropriately, taking into consideration the customer’s situation and the policy content, without creating any misconceptions regarding payment, nonpayment or financial amount.

14. Proper Relationships with CustomersI will remain devoted to providing the customer with rea-sonable life insurance and high-quality services, and I will maintain an appropriate relationship with the cus-tomer. I will not behave in a manner that is detrimental to the trust and courtesy the customer has shown me.

15. Handling of Other Financial ProductsI will handle financial products other than life insurance that the Company has received permission to handle through its operations strictly and appropriately in accordance with handling regulations prescribed by the Company. I will satisfy my duty of disclosure to the cus-tomer to prevent such products from being confused with or misconstrued as life insurance products, and I will endeavor to prevent misidentification. As when han-dling life insurance products, when handling other finan-cial products I will give foremost consideration to ensuring the interest of the customer.

I, as a member of Sony Life, agree to fulfi ll the Company’s corporate responsibilities and public mission. Aiming to ensure that Company’s top-quality management in Japan, I will conform with all laws, regulations, rules and social norms. To these ends, I will consistently ensure my market conduct compliance in accordance with the 15 items outlined below.

MCC Guidelines (Policies on Marketing Activities)

34


Green PowerGreen 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.

Green Power Certifi cation SystemTrading the sustainable electric power generated from natural energy sources as a form of certifi cation allows companies to use green power even when distance to a green generation facility makes direct consumption of green power unfeasible. The fi rst of its kind, this system was jointly developed by Sony Corporation and the Tokyo Electric Power Company. Certifi cation is performed third-party green energy certifi cation centers, such as Japan Natural Energy Co., Ltd., which issue certifi cation of the amount of green power purchased.

Environmental Management SystemSony 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.

Acquisition of ISO 14001 Certifi cation and Implementation of the Green Power Certifi cation SystemIn March 2001, Sony Life acquired ISO 14001 certifi -cation, the international standard for environmental management systems, for its head offi ce, and has since kept its certifi cation up to date. In FY2005, as part of plans to reduce our con-sumption of fuels that emit carbon dioxide and accel-erate global warming, we set up a Green Power Certifi cation system, whereby the purchase of electri-cal power originating from wind-powered generators is certifi ed. This system facilitates electric-power swaps, ensuring that our electrical power is wind generated, even if the power originates at locations far from where it is used. In FY2007, we began purchasing power generated from wood-based biomass rather than wind power. In FY2008, we will purchase 250,000 kilowatts of “green-certifi ed” electric power, thereby reducing our CO2 consumption by the equivalent of 97.5 tons per year. Protection of the global environment is a top- priorityissue for the Company. Through our environmental management system, we are working constantly to protect the environment in all of our daily activities.

Environmental Protection Initiatives

Renewable energy generationDemand

generation

Environmental value

[Certification]

Handle electricity

certification

far from renewable

of green energy difficult.

Environmental Policy

Core PhilosophySony 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.

Performance Indicators1. Based on the Sony Group’s Global Environmental

Management System (GEMS), we enact thorough environmental compliance, seek to enhance our environ-mental performance and minimize environmental risk.

2. In line with our core philosophy of providing effi cient life insurance and high-quality services, we evaluate the impact of our activities, products and services, and set and implement programs to achieve our environmental goals and objectives. We aim to ensure ongoing improvements in environmental preservation and reductions in pollution.

3. We employ the following environmental preservation activities companywide and at every stage of our activities, products and services:

Use documents effectively and take paper quality into consideration. Recycle paper documents and offi ce supplies. Reduce electric power consumption. Prioritize the purchase of goods and products that have a low environmental impact. (Employ green purchasing.) Consider the development of environmentally conscious products and services.

4. We continue to improve our environmental management system by conducting internal environmental audits.

5. We conduct environmental training and other activities that raise the environmental awareness of all employees.

6. This environmental policy is for publication inside and outside the Company.

What is ISO 14001?

ISO 14001 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.

35


Social Contribution Activities

Clean-up volunteers

“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. In FY2003, we established a Social Contributions Department to spearhead our social benefi t initiatives. We also set up a Volunteer Activity Coordination Committee, with the aim of promoting the sharing of information from various sources, enhancing our support for volunteerism and broaden-ing the scope of volunteer activities. As part of our efforts to be a good corporate citizen, we encourage each Sony Life employee to be active in their social contribution efforts, which we believe are instrumen-tal in building up society’s confi dence and trust of Sony Life.

Volunteer Day ActivitiesIn fi scal 2003, Sony Life designated 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 the activity. August has also been declared Volunteer Enrichment Month, in which all employees throughout Japan implement original social benefi t activities in their respective communities. Principal Volunteer Day activities include regional cleaning activities and blood donation drives. Consis-tently performing such activities each year helps build community awareness, and over time our volunteer

Employee’s child experiences walking with a guide dog

Blood donation drive volunteers in front of a donation bus

activities have increased. At this time of year, the Company also sponsors volunteer lectures at head-quarters. These talks are designed to raise employee awareness of volunteer activities in a variety of fi elds.

Eye Mate FundSony Life has contributed to the Eye Mate Fund since 1997, with the aim of helping visually chal-lenged people participate in society. The Company donates an amount each year that matches the total raised by employees during the year. In FY2007, ¥10.94 million in employee donations and matching funds were given to Eye Mate, Inc. (formerly the Tokyo Guide Dog Association). Since 1997, Sony Life has donated ¥121.37 million in contributions to Eye Mate, the largest class of amount of any corporate sponsor. Sony Life will continue providing Eye Mate with support to help more visually impaired people participate in society.

Eye Mate, Inc.http://www.eyemate.org/

Since its introduction of the fi rst guide dogs to Japan, this organization has been responsible for training numerous guide dogs. The assistance of properly trained Eye Mate guide dogs helps people with visual impairment participate in society by enabling them to walk about on their own.

36


At the Yamagata Games, volunteers shared both the disappointment of athletes who fell short of their goals and the excitement of the medal-winners. In both cases, however, Sony Life volunteers were impressed by the will of the athletes to persevere toward their goals.

Special Olympics Nipponhttp://www.son.or.jp/ (Japanese only)

Special Olympics Nippon is a specifi ed non-profi t organiza-tion 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.

Special Olympics Nippon Support Activities

Creating a Circle of Support that Expands with Each EventSony 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 February 2005, Nagano Prefecture hosted the Special Olympics World Winter Games, which drew 2,500 athletes from 84 countries. Approximately 400 Sony Life employees volunteered their time to work at these games. Interest throughout the Company increased as word of the inspiration volunteers gained from this experience spread to other employ-ees. As a result, some 700 employees volunteered to help with the National Summer Games Kumamoto, held in November 2006. In March 2008, again around 700 employees from Hokkaido in the north of Japan to Kyushu in the south volunteered to help with the National Winter Games Yamagata, making ours the largest single company voluntary group. These volunteers served as team assistants and fi ll-in competitors, among other roles. In addition to helping with Olympic events, Sony Life volunteers take part in numerous other activities. Employees support the establishment of organiza-tions throughout Japan, serve as coaches, volunteer for regular sports training activities and help with movie screenings and charity events, to name a few. In these ways, Sony Life employees actively search out times and places where they can share any special skills they may have.

Special Olympics ActivitiesSony Life employees have commented that at their fi rst encounter with people who have intellectual dis-abilities, they are unsure how to interact. As they spend more time together, however, they fi nd them-selves laughing together, sharing enjoyable time together, and their interactions grow more natural.

Sony Life volunteers at the Special Olympics Nippon National Winter Games Yamagata

Volunteers help manage facilities at the Zao ski slope

37


Sony Life Volunteers’ Club

The Sony Life Volunteers’ Club was established by employees at the time of the Kobe earthquake in 1995, and has continued its activities to the pres-ent day. The club operates using funds collected from employee donations, and is managed by individual employees.

Ongoing Support for Earthquake VictimsSony Life volunteers provide wide-ranging support for earthquake victims, centering on support for the senior citizens who were affected by the Kobe earthquake. At the time of the disaster, employee volunteers provided meals for earthquake victims. Afterward, they provided other types of support as needed, such as helping victims fi nd refuge in tempo-rary housing and restoring their homes. Now more than 10 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.

Youth Educational SupportThe Sony Life Volunteers’ Club conducts a number of activities around Japan to support the children to whom we entrust the future. For example, each year the club plans beach trips and barbecues for the chil-dren who for a variety of reasons, are unable to live with their parents. Over the course of several years, the change in some children participating in these events has been noticeable. Children who were ini-tially reticent and standoffi sh now clearly enjoy the outings. In 2007, the club began offering some chil-dren the opportunity to joint volunteer workers in beach cleanup activities. Activities such as these, held in different parts of Japan, give children who otherwise have little opportunity to interact with adults a new chance to participate in society. As a result, we have seen these children become more cheerful and develop a more optimistic outlook.

Relay for LifeIn the Relay for Life, cancer patients and their fami-lies, 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 19 countries. In September 2007, a Sony Life team of some 140 employees including customers took part in a relay held in the city of Ashiya, Hyogo Prefecture. 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. Attesting to their growing popularity, Relay for Life events are scheduled to take place in six locations throughout Japan in FY2008. Sony Life will proac-tively support these activities, as part of its efforts to realize a harmonious society that is free from worries of cancer.

A hot springs bus tour for some of the people affected by the Kobe earthquake.

Employees participating in the 24-hour team relay

Oita International Wheelchair MarathonEach year, Sony Life employee volunteers in sur-rounding areas provide operational support for the Oita International Wheelchair Marathon. This major event was held for the 27th time in 2007 and attracted 282 contestants from around the world. Employees provide end-to-end support for the event, ensuring the safety of the racers as well as cheering them on. Rising cheers from the sidelines spur on the runners, and between their vigor and the enthusiasm from the sidelines, all feeling of being “different” van-ishes. One volunteer commented, “This event pro-vided a fresh reminder of the volunteer spirit; it demonstrated the success that results from the accumulation of small individual contributions.” We plan to continue supporting the marathon.

38


Life Planning Courses by Real Lifeplanner Sales EmployeesSince 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 ObjectivesTo provide the protection products that optimally match customers’ lives, when proposing such prod-ucts Sony Life fi rst asks customers about their dreams and future goals. Based on this information, we map out a specifi c life plan for each customer. We refer to this process as “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 young students who have long lives in front of them.

Monetary Simulations to Help Students Plan Their Lives as They Spread Their WingsAs life-planning professionals, Lifeplanner sales employees instruct and support students in the life-planning process. The simulation begins by creating 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 to achieve the simulated life plan. Lifeplanner sales employees offer advice, using Sony Life’s proprietary software, LiPPS (see pages 33–23). Consulting from an economic perspective, we examine the income, expenses and savings that will be needed. This real-istic approach gives students a better understanding of what is needed to achieve their goals and dreams. Although high school students are the focus of our life-planning course, we also offer courses for junior high school and university students. We plan to continue such efforts as part of our active contribution to society.

Consulting by Lifeplanner sales employees to help realize those dreams

39


Sony Life Cup All Japan Ladies Tennis TournamentSince 2002, Sony Life has provided support to the Sony Life Cup All Japan Ladies Tennis Tournament, one of the largest amateur events for women tennis players in Japan, through sponsorship and volunteer activities. 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 30th staging of this traditional event, which has attracted a cumulative total of more than 300,000 players. To commemorate the 30th anniversary of the Sony Life Cup, we have added three special team slots. These slots, in addition to teams winning the tournament qualifi ers in each of Japan’s 47 prefectures, will raise the total number of participating teams to 50. At tournament qualifi ers held in each prefecture, Sony Life employees, including Lifeplanner sales employ-ees, participate in volunteer activities that support the tournament. Through its participation in such events, Sony Life increases its community interaction and actively contributes to society.

Lifeplanner sales employees volunteer at the event, working alongside players to ensure its smooth operation and to cheer the athletes. The branches in charge of each prefecture-level tournament qualifi er lead teams of volunteers to support the events. The following activities were conducted as part of the 29th tournament. For the Wakayama Prefecture qualifi er, which was held in the summer heat of

September, volunteers handed out free cones of crushed ice treats and distributed promotional hand fans, ran for-fun lotteries between qualifying rounds and otherwise helped create a sense of festivity. For the quali-fi ers in Hokkaido and Nagano Prefecture, volunteers manned the facilities and provided coats. In addition, volunteers shared ideas with their colleagues, such as distributing free drinking water and taking commemo-rative photographs. Such activities were well received by the family members who had came to cheer on their participants.

Sony Life Cup All Japan Ladies Tennis Tournament Websitehttp://www.zenkokuladies.jp/ (Japanese only)

Sony Life’s principal volunteer activities at prefecture-level

tournament qualifi ers

40


Volunteer Leave ProgramIn fi scal 2003, Sony Life introduced a volunteer leave program, designed to facilitate the efforts of employ-ees to participate actively in volunteer activities. We also offer a volunteer insurance so that employees can feel safe on the job front as they volunteer their time. The program applies to the following activities:

Leave Program for Bone Marrow Donors

On April 1, 2002, Sony Life became the fi rst life insurance company to introduce a special leave program for bone marrow donors, offering employees compensated time off, independent of their regular holidays, for the period necessary to donate bone marrow for transplants.

Sony Life has been recognized by the Tokyo Labour Bureau as a “Company That Actively Supports the Children Responsible for Future Generations.” We will continue our proactive efforts to create an environment that supports healthy childbirth and child-raising by creating an environment in which parents can balance work and raising children.

Sony Life’s Child-Oriented Activities (Overview)

1. Paid time off for child nursing care

2. Partial remuneration during maternity leave

3. Extended maternity leave period4. Flexible working hours to support child-rearing5. Preparation and publication of employment

handbook outlining public and in-house systems related to childbirth and child-rearing

6. Encouragement to fathers to take paternity leave

7. Support of babysitter training

Sony Life Recognized as a “Company That Actively Supports the Children Responsible for Future Generations”

Social welfare Environmental protection Community activities Disaster relief International exchange and aid

41


Vision

One Team, One DreamAiming to Become One of Japan’s Most Trusted Financial Services GroupsThe Sony Financial Holdings Group (SFH Group) is an integrated fi nancial services group that, in addition to Sony Life, includes Sony Assurance Inc., Sony Bank Inc. and our subsidiaries and affi liated companies. On October 11, 2007, Sony Financial Holdings Inc., Sony Life’s holding company, listed its shares on the First Section of the Tokyo Stock Exchange. We believe that our listing was the result of the support of numerous customers that each SFH Group company has offered since the times they were established. As a member of the SFH Group, we will continue work-ing to enhance the level of trust our customers place in us. In terms of history and scale of business, Sony Life is a core member of the SFH Group. In addition to striving to meet customer demand for reasonably priced life insurance products and services on a daily

The Sony Financial Holdings Group

basis, we are enhancing collaboration with Sony Assurance and Sony Bank to ensure high levels of customer satisfaction for high-value-added fi nancial services in a variety of fi elds (see page 42). In December 2007, we received permission from the relevant authorities to conduct banking agency business on behalf of Sony Bank. In addition to intro-ducing Sony Bank’s mortgage loans through the Lifeplanner sales channel as it had done in the past, Sony Life’s permission to conduct banking agency business allowed Lifeplanner sales employees to explain product details to customers directly, as well as to deliver applications. In addition to raising the level of group synergy, this addition enables us to meet customers’ needs for a wider range of fi nancial services. Going forward, the SFH Group will continue work-ing to provide customers with higher levels of service as we aim to become the fi nancial services group that customers trust most.

The SFH Group aims to integrate the diverse functions that are inherent to such fi nancial services as savings, investment, borrowing and protection; offer high-value added products and quality services that meet individual customers’ economic needs; and become one of the most trusted fi nancial services groups

42


Lifeplanner Sales Employees Handle Sony Bank’s Mortgage Loans

In December 2004, Sony Life’s Lifeplanner sales employees began introducing Sony Bank’s mortgage loans, but any questions from potential clients had to be passed on to Sony Bank. In FY2007, we received permission from the relevant authorities to conduct banking agency business on behalf of Sony Bank, and in January 2008, Lifeplanner sales employees began explaining the details of Sony Bank’s mort-gage loans and delivering applications. As a result, Lifeplanner sales employees are now able to respond to specifi c customer requests and provide consulta-tions about these mortgage loans. At Life Planning SQUARE (see page 20) Sony Life may handle Sony Bank’s mortgage loans as well as set up new accounts at Sony Bank for customers. In FY2007, the volume of new mortgage loans handled by our Lifeplanner sales employees accounted for approximately 15% of Sony Bank’s new mortgage loans.

Tie-Ups with Sony AssuranceLifeplanner Sales Employees Sell Sony Assurance’s Products

In March 2001, Sony Life obtained authorization to act as an agent for Sony Assurance, and in May 2001 our Lifeplanner sales employees started selling non-life insurance products. Sales of non-life insurance products are handled by Lifeplanner sales employees with relevant qualifi -cations. In FY2007, the number of policies sold by our Lifeplanner sales employees accounted for approximately 10% of the total number of new auto-mobile insurance policies issued by Sony Assurance. By extending our offerings beyond life insurance to include non-life insurance products that cover various risks in our daily lives, Sony Life will continue to provide comprehensive risk management for its customers.

Tie-Ups with Sony BankUnderwriting 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. This insurance applies to customers tak-ing out mortgage loans, and claims on this insurance are used to repay mortgage loans when unforeseen events prevent customers from making mortgage repayments. In addition, in April 2007 we began offering group credit life insurance with protection riders covering the three major diseases.

Sony Life’s Individual Annuities Sold by Sony Bank

In June 2004, Sony Bank started selling single- premium individual annuities developed by Sony Life. In November 2006, the bank added monthly, biannual and annual level payment plans to its annuity offerings. With this launch, Sony Bank expanded its product lineup beyond those of a bank primarily focused on asset management, consequently responding to diverse customer needs in a more effective manner. At the same time, Sony Life has also benefi ted in terms of expanded sales channels, which further enhanced customer convenience.

Product handled

Semi-participating individual annuities (lump-sum, level-payment)Variable individual annuities (non-profi t) (lump-sum, level-payment)

We have begun handling Sony Bank mortgage loans at Life Planning SQUARE.

43


Sony Life Insurance (Philippines) CorporationSony Life Insurance (Philippines) Corporation was established in the Philippines in 1998 and com-menced operations in November 1999. To reinforce its business foundation, the company’s capital was increased in December 2003, before it was trans-formed into a wholly owned subsidiary of Sony Life in March 2004. Similar to the marketing channels used in Japan, Sony Life Insurance (Philippines) Corporation employs consulting-based marketing using Lifeplanner sales agents. The company is steadily building up its marketing organization, particularly in the Manila met-ropolitan area. The company also responds continu-ously to diverse local needs as indicated by the start of its sales of dollar-denominated products and its efforts involving group life insurance for enterprise customers. Fulfi lling its social responsibilities as a life insurance company, Sony Life Insurance (Philippines) Corporation places importance on compliance with all regulations and is upgrading its control systems to minimize business risk.

AEGON Sony Life Planning Co., Ltd.In August 2007, we established AEGON Sony Life Planning Co., Ltd., as a 50–50 joint venture with the AEGON Group of the Netherlands. The new com-pany is preparing the way for us to establish a life insurance company that will concentrate on individual annuity products for sale at the counters of banks and other fi nancial institutions, as well as through the Lifeplanner sales channel. Currently, the start of sales is planned for FY2008.

44


Non-consolidated Balance SheetsAs of March 31,

Millions of yen

Assets 2008 2007 2006 2005 2004Cash and deposits Cash on hand ¥ 19 ¥ 53 ¥ 63 ¥ 167 ¥ 104 Cash in banks 22,979 28,448 31,370 51,443 66,276

22,999 28,502 31,433 51,611 66,381

Call loans 72,300 228,000 55,900 176,100 175,000

Monetary trusts 893,952 718,492 658,351 515,229 419,224

Securities Japanese government bonds 1,425,010 1,180,722 1,054,410 712,158 397,522 Municipal bonds 35,869 41,342 53,252 54,504 167,941 Japanese corporate bonds 371,852 411,162 487,933 629,561 660,699 Japanese stocks 198,233 276,239 278,860 74,249 57,939 Foreign securities 271,423 205,241 164,092 179,239 235,443 Other securities 86,542 103,194 93,665 54,949 44,058

2,388,932 2,217,902 2,132,216 1,704,663 1,563,605

Loans Policy loans 108,688 96,804 86,918 79,914 71,629

108,688 96,804 86,918 79,914 71,629

Tangible fi xed assets Land 32,996 32,996 — — — Buildings 49,787 54,028 — — — Construction in progress 84 1 — — — Other tangible fi xed assets 783 857 — — —

83,651 87,883 — — —

Intangible fi xed assets Software 8,045 5,212 — — — Other intangible fi xed assets 49 50 — — —

8,095 5,263 — — —

Property and equipment (net of accumulated depreciation) Land — — 32,855 32,855 32,855 Buildings — — 11,869 12,159 12,281 Furniture and equipment — — 160 161 161 Construction in progress — — 30,853 5,586 1,145

— — 75,739 50,763 46,444

Due from agencies — 0 0 5 0

Due from reinsurers 144 311 335 184 960

Other assets Other receivables 40,402 26,125 23,910 19,746 18,354 Prepaid expenses 845 783 703 749 730 Accrued income 29,724 23,788 22,244 13,225 8,823 Money on deposits 5,336 10,900 11,938 2,835 3,122 Collateral pledged on forward transactions 2,183 500 — — — Derivative assets — 0 39 — — Advance payments 1,288 224 1,484 351 334 Others 1,316 554 2,067 2,028 1,323

81,096 62,877 62,389 38,936 32,688

Allowance for doubtful accounts (74) (68) (44) (142) (107)

Total assets ¥3,659,786 ¥3,445,970 ¥3,103,241 ¥2,617,266 ¥2,375,828

45


Millions of yen

Liabilities and stockholder’s equity 2008 2007 2006 2005 2004Policy reserve and others Reserve for outstanding claims ¥ 17,405 ¥ 17,683 ¥ 18,415 ¥ 17,705 ¥ 17,913 Policy reserve 3,375,090 3,088,888 2,739,264 2,395,060 2,095,565 Reserve for policyholders’ dividends 4,506 2,597 1,584 735 783

3,397,003 3,109,169 2,759,264 2,413,501 2,114,262Due to agencies 1,308 1,415 1,415 1,155 1,038Due to reinsurers 740 759 782 625 524Other liabilities Accrued income taxes 3,925 1,896 1,586 1,272 2,168 Other payables 11,290 32,988 30,279 14,504 81,287 Accrued expenses 11,754 12,174 9,170 8,751 8,658 Unearned income 971 954 250 244 158 Deposits received 361 502 308 323 334 Deposits received for guarantees 5,803 5,780 2,252 2,153 2,018 Borrowed securities 1,812 7,394 9,764 — — Derivative liabilities 63 130 — 0 — Policy suspense and other suspense 1,721 2,894 2,089 4,824 1,327

37,704 64,715 55,702 32,075 95,953Reserve for employees’ retirement benefi ts 11,324 10,743 10,632 10,204 8,366Reserve for directors’ and auditors’ retirement benefi ts 71 104 109 77 46Reserves under special laws 24,099 20,882 20,109 12,666 12,225 Reserve for price fl uctuations 24,099 20,882 20,109 12,666 12,225Deferred tax liabilities 4,155 20,903 36,685 5,817 10,933Deferred tax liabilities for land revaluation 706 706 706 — —

Total liabilities 3,477,115 3,229,401 2,885,408 2,476,124 2,243,350

Common stock — — 65,000 65,000 65,000Capital surplus — — 865 865 865 Capital reserve — — 865 865 865Retained earnings Earned reserve — — 4,478 3,178 1,878 General reserves — — — 40 3 Special depreciation reserve — — — 40 3 Unappropriated retained earnings — — 18,055 16,197 13,932 Net income — — 9,616 10,102 13,932

— — 22,533 19,417 15,814Land revaluation — (1,475) (768) (768)Net unrealized gains on other securities, net of taxes — — 130,909 56,629 51,567

Total stockholder’s equity — — 217,833 141,142 132,478Total liabilities and stockholder’s equity — — 3,103,241 2,617,266 2,375,828

Common stock 65,000 65,000 — — —Capital surplus 865 865 — — —

Capital reserve 865 865 — — —Retained earnings 35,542 23,528 — — — Earned reserve 7,078 5,778 — — — Other retained earnings 28,464 17,749 — — — Unappropriated retained earnings for the period 28,464 17,749 — — —Total stockholder’s equity 101,407 89,393 — — —Net unrealized gains on other securities, net of taxes 82,739 128,650 — — —Land revaluation, net of taxes (1,475) (1,475) — — —

Total valuation and translation adjustments 81,263 127,175 — — —

Total net assets 182,671 216,568 — — —

Total liabilities and net assets ¥3,659,786 ¥3,445,970 — — —

46


Non-consolidated Statements of IncomeFor the years ended March 31,

Millions of yen

2008 2007 2006 2005 2004Ordinary revenues:Income from insurance premiums and others Insurance premiums ¥646,976 ¥603,611 ¥579,267 ¥550,304 ¥512,700 Reinsurance income 1,430 1,949 1,249 1,306 2,125

648,406 605,561 580,516 551,610 514,825Investment income Interest and dividends 47,913 34,267 26,581 25,595 24,377 Interest on bank deposits 476 250 10 9 16 Interest and dividends on securities 31,346 24,232 19,640 19,349 17,202 Interest on loans 4,319 3,940 3,607 3,357 3,141 Rental income from real estate 11,609 5,768 3,313 2,828 3,966 Other interest and dividends 161 76 8 51 50 Income from monetary trusts, net 14,776 12,169 19,558 7,170 7,951 Income from trading securities, net 324 1,708 — 3,962 154 Gains on sale of securities 24,023 11,887 6,546 3,339 2,343 Gains on redemption of securities 145 542 5,342 2,393 3,991 Gains from derivatives, net — 3,061 825 — 2,245 Foreign exchange gain, net 310 99 59 — — Other investment income 0 0 0 4 0 Gains on separate accounts, net — 14,985 49,524 7,623 23,702 87,493 78,722 108,438 50,089 64,767Other ordinary income Income for annuity riders 2,485 2,934 5,466 1,037 251 Income for deferred payment of claims 1,605 1,124 1,401 729 878 Reversal of reserves for outstanding claims 277 732 — 207 — Others 982 517 602 418 249 5,350 5,307 7,471 2,392 1,379 Total ordinary revenues 741,250 689,591 696,426 604,093 580,972Ordinary expenses:Insurance claims and other payments Insurance claims 60,052 59,014 86,477 62,136 59,210 Annuity payments 6,350 5,112 4,437 3,173 2,435 Insurance benefi ts 28,457 25,784 23,582 22,698 19,836 Surrender payments 141,842 125,262 113,637 101,649 105,227 Refund to policyholders 2,054 2,005 1,663 2,046 2,370 Reinsurance premiums 2,349 2,168 2,083 2,436 2,462 241,106 219,347 231,881 194,141 191,542Provision for policy reserve and others Provision for reserve for outstanding claims — — 709 — 4,652 Provision for policy reserve 286,202 349,624 344,204 299,494 264,464 Interest on policyholders’ dividend reserves 13 4 1 0 0 286,215 349,629 344,915 299,494 269,117Investment expenses Interest expenses 15 7 9 133 4 Losses on trading securities, net — — 647 — — Losses on sale of securities 1,563 148 267 330 928 Devaluation losses on securities 6,697 66 — 217 — Losses on redemption of securities 21 601 212 1,146 704 Losses from derivatives, net 4,858 — — 342 — Foreign exchange losses, net — — — 59 21 Provision for doubtful accounts 10 24 6 118 24 Depreciation of real estate for rent and others 3,149 1,974 523 558 612 Other investment expenses 5,262 5,360 2,895 2,208 1,308 Losses on separate accounts, net 48,315 — — — — 69,895 8,184 4,561 5,116 3,605Operating expenses 94,367 87,328 82,040 79,729 78,254Other ordinary expenses Payments of deferred claims 1,286 1,155 647 486 399 Taxes other than income taxes 6,257 5,871 5,517 5,425 5,199 Depreciation 1,097 954 789 704 672 Provision for retirement benefi ts 1,696 1,898 1,681 1,837 1,646 Provision for directors’ retirement benefi ts — — 31 31 46 Others 37 327 0 55 10 10,375 10,206 8,668 8,541 7,973 Total ordinary expenses 701,959 674,696 672,067 587,023 550,493Ordinary profi t 39,290 14,895 24,359 17,070 30,478Extraordinary gains: Gain on sales of properties — — — 0 2 Gain on sales of fi xed assets 0 0 — — — Others — 334 — — — 0 334 — 0 2Extraordinary losses: Loss on disposal of properties — — 72 74 67 Loss on disposal of fi xed assets 63 31 — — — Impairment loss 125 0 5 — — Provision for reserves under special laws 3,216 773 7,442 441 6,264 Provision for reserve for price fl uctuations 3,216 773 7,442 441 6,264 Loss on reduction of real estate — 329 — — — Others — — — — 1 3,406 1,135 7,520 515 6,332Provision for reserve for policyholders’ dividends 3,159 2,057 1,491 519 644Income before income taxes 32,725 12,036 15,347 16,035 23,504Income taxes—current 4,897 19,042 17,027 13,922 14,966Income taxes—deferred 9,313 (14,499) (11,296) (7,989) (5,394)Net income 18,514 7,494 9,616 10,102 13,932Earning (Defi cit) at beginning of the year 8,438 6,095 —Unappropriated retained earnings at the end of the year (Accumulated defi cit at the end of the year) ¥ 18,055 ¥ 16,197 ¥ 13,932

47


Notes to Financial StatementsAs of March 31

Signifi cant Accounting Policies—As of March 31, 2008

1. Basis of Presentation of Financial Statements The accompanying fi nancial statements have been prepared

based on the accounts maintained by Sony Life Insurance Co., Ltd. (“the Company”), in accordance with the provisions set forth in the Insurance Business Law of Japan, and in conformity with accounting principles and practices generally accepted in Japan, which are different in certain respects as to the application and disclosure requirements of International Accounting Standards.

2. Valuation of Securities (Including Securities Managed as Trust Assets of Monetary Trusts)

Trading securities are stated at market value, and sales cost is determined by the moving-average method. Shares of subsidiaries (shares issued by subsidiaries or affi liated companies that fall under Article 2–12 of the Insurance Business Law of Japan, shares issued either by companies except subsidiaries that fall under Article 2–3–2 of the Insurance Business Law of Japan Enforcement Regulations or by affi liated companies) are stated at cost deter-mined by the moving-average method. Other securities for which market prices are available are stated at market value based on market prices as of the closing date of the fi scal year under review, and sales cost is determined by the moving-average method. Other securities for which market prices are unavailable, such as public and corporate bonds (including foreign bonds) for which the difference between acquisition cost and face amount is due to adjustment of interest to maturity, are stated at amortized cost (straight-line method) determined by the moving-average method. Remaining other securities are stated at cost determined by the moving-average method. Unrealized gains or losses on other securities are reported as a separate component of net assets.

3. Standards of Valuation of Derivatives Derivatives are stated at market value.

4. Depreciation of Tangible Fixed Assets Methods of depreciating tangible fi xed assets are as follows. Buildings (1) Assets acquired on or before March 31, 1998 Computed by the former declining balance method (2) Assets acquired from April 1, 1998, to March 31, 2007 Computed by the former straight-line method (3) Assets acquired on or after April 1, 2007 Computed by the straight line method

Others (1) Assets acquired on or before March 31, 2007 Computed by the former declining balance method (2) Assets acquired on or before April 1, 2007 Computed by the declining balance method

Principal years of service life are as follows. For buildings, equipment attached to buildings, and structures:

2 to 45 years Equipment and fi xtures: 2 to 20 years

5. Translation of Foreign Currencies Assets and liabilities denominated in foreign currency (excluding

shares of subsidiaries) are translated into Japanese yen using exchange rates at the balance sheet date. Shares of subsidiaries are translated into Japanese yen using exchange rates at the time of acquisition.

6. Basis for Recording Allowances (1) Allowance for doubtful accounts As preparation for losses on doubtful accounts, allowance

for doubtful accounts is calculated as follows based on the self-assessment rule for assets and the rules for write-off and allowance.

For debt in which the debtors are legally and formally bank-rupt by such measures as fi ling under the Civil Rehabilitation Law or the Bankruptcy Law and are substantially bankrupt in terms of their business operations, for debt in which the debtors are actually bankrupt and for such debt as deposited money, of which the collectible amount has remarkably decreased, the allowance amount is calculated as the principal balance less the amounts collectible from foreclosing collateral and from the loan’s third-party guarantors.

For other kinds of debt, the reserve amount is calculated in accordance with historical credit loss ratios and other factors.

For debt in which debtors are currently not bankrupt in terms of their business operations but have been determined to have a high likelihood of going into bankruptcy (hereinafter, “debtors in danger of bankruptcy”), the amount remaining after deduct-ing the amount of collateral that is expected to be recoverable and guarantee amounts that are determined to be recoverable, the necessary allowance amount is calculated by taking into consideration overall ability of the debtor to pay. For debt other than that described above, the reserve amount is calculated in accordance with historical credit loss ratios over a specifi c period of time.

For all debt, the allowance amount is calculated in accor-dance with the self-assessment rule for assets and rules for write-off and allowance conducted by the appropriate division and audited by an independent audit division.

(2) Reserve for Employees’ Retirement Benefi ts Based on the accounting standards for retirement benefi ts

(Opinion Concerning the Establishment of Accounting Standard for Retirement Benefi ts, Business Accounting Council, June 16, 1998), reserve for employees’ and executive offi cers’ retirement benefi ts is provided based on the estimated amount of retire-ment benefi t liabilities and plan assets at the balance sheet date and is recorded as if this amount was payable as of the balance sheet date.

(3) Reserve for Directors’ and Auditors’ Retirement Benefi ts The Company provides a reserve for directors’ and auditors’

retirement benefi ts, in preparation for the payment of directors’ and auditors’ retirement benefi ts, based on amounts necessary at the end of the year according to internal rules

7. Finance Lease Transactions Other than Those That Transfer Ownership to the Lessee

Finance lease transactions other than those that transfer ownership to the lessee are treated as standard lease transactions.

8. Basis for Reserve for Price Fluctuations Reserve for price fl uctuations is provided for according to Article

115 of the Insurance Business Law of Japan as a reserve for price fl uctuations on stocks and others.

9. Others (1) Accounting for consumption taxes and regional consumption tax Consumption taxes are excluded from expenses. Regarding

consumption taxes relative to assets, deferred consumption taxes under Japanese income tax regulations are included in prepaid expenses and amortized over fi ve years based on the straight-line method, and others are charged to expenses during the fi scal year during in which they are incurred.

(2) Method for calculating policy reserve Policy reserve is provided for according to Article 116 of the

Insurance Business Law of Japan and calculated as follows. a. Reserves for policies subject to standard policy reserves

are calculated in accordance with the method determined by the Financial Services Agency (Ministry of Finance Directive 48, 1996).

b. Other reserves are calculated in accordance with the net level premium method.

48


(3) Amortization of software Amortization of software for internal use, which is included in

intangible fi xed assets, is calculated by the straight-line method over the useful lives (mainly, fi ve years).

Balance Sheets—As of March 31, 2008

1. Loans Loans do not include any loans to borrowers under bankruptcy

proceedings, loans past due, loans past due for three months or more, or restructured loans.

Loans to borrowers under bankruptcy proceedings are loans on which payments of principal or interest have been delinquent for a relatively large time and on which for this or for some other reason the resumption of payment of principle or interest or reimburse-ment cannot be expected, for which unpaid interest has not been recorded (excluding the portion that has been written off as bad debt, (hereinafter, “loans for which accrued interest has not been recorded”) for reasons described in Article 96–1–3 (i) through (iv) of the Corporate Tax Law Enforcement Regulations (Regulation No. 97 of 1965) or Article 4 of that same regulation.

Past due loans are loans for which accrued interest has not been recorded, but because of loans to borrowers under bank-ruptcy proceedings or to support the management restructuring of the borrower , interest payments have been waived or loans have been treated as something other than loans.

Loans past due for three months of more are loans on which three months or more has passed during which payments of principal or interest has not been made, but that have not been treated as loans to borrowers under bankruptcy proceedings or loans past due.

Restructured loans are loans on which a decision has been made to reduce interest rates , waive interest payments, waive payment of principal, extinguish the loan or provide some other favorable treatment in order to support the borrower’s recovery from fi nancial diffi culties, and for such reason have not been treated as loans to borrowers under bankruptcy proceedings, loans past due or loans past due for three months or more.

2. Land Revaluation Based on the Land Revaluation Law (Law No. 34, promulgated on

March 31, 1998—the “Law”), the Company revalued its business use land. Regarding valuation differences, in the event of revalua-tion losses the tax-equivalent portion is recognized in the valuation reserve. In the event of revaluation gains, the tax-equivalent portion of the revaluation is recorded in the “deferred tax liabilities for land revaluation” in liabilities. After excluding these amounts, the net revaluation difference is reported as “land revaluation” in net assets.

The date of the revaluation was March 31, 2002, and the revaluation method as stipulated by Article 3, Clause 3 of the Law was based on an appraisal as stipulated by Article 2, Clause 5 of the Law Enforcement Order related to the Law (Government Ordinance No. 119, effective from March 31, 1998).

3. Accumulated Depreciation of Tangible Fixed Assets Accumulated depreciation of tangible fi xed assets amounted to

¥9,365 million.

4. Excluding acquisitions through government subsidies, the cumulative book value of fi xed assets written down was ¥329 million for buildings.

5. Separate Accounts The amount of total assets for separate accounts in accordance

with the provisions set forth in Article 118-1 of the Insurance Business Law of Japan was ¥321,789 million. The amount of total liabilities was the same.

6. Receivables and Payables Due to/from Affi liated Companies Total receivables due to affi liated companies amounted to ¥9

million. Total payables due from affi liated companies amounted to ¥4,837 million.

7. Leased Computer Equipment The Company has computer equipment taken on lease contracts

that is not included in other tangible fi xed assets on the balance sheets.

8. Reserve for Policyholders’ Dividends The movement of reserve for policyholders’ dividends was as

follows: Balance at beginning of the fi scal year ¥ 2,597 million Payments made in the fi scal year ¥ 1,264 million Increase by interest earned ¥ 13 million Provision for reserves made in the fi scal year ¥ 3,159 million Balance at end of the fi scal year ¥ 4,506 million

9. Assets Pledged as Collateral The amount of assets pledged as collateral was securities (includ-

ing securities managed as trust assets of monetary trusts) of ¥21,280 million. These include pledges on stock margin transac-tions and pledged items approved for life insurance policyholder protection under the provisions of Article 259 of the Insurance Business Law of Japan.

10. The Company’s estimated future contribution to the Life Insurance Policy holder Protection Corporation, as provided in Article 259 of the Insurance Business Law of Japan, was ¥6,920 million at March 31, 2008. The contribution will be recorded in operating expenses in the fi scal year in which it is paid.

11. Retirement Benefi t Obligation (1) Breakdown of retirement benefi t obligation Retirement benefi t obligation ¥ (18,308) million Pension assets ¥ 4,270 million Funded status ¥ (14,038) million Unrecognized transition obligation ¥ 2,900 million Unrecognized actuarial gain ¥ 1,543 million Unrecognized prior service obligations ¥ (903) million Net amount recognized on balance sheet ¥ (10,498) million Prepaid pension expenses ¥ 826 million Reserve for employees’ retirement benefi ts ¥ (11,324) million (2) Basis for calculation of retirement benefi t obligation Allocation of projected retirement benefi ts Point standard for internal employees Period defi nition standard for sales employees Discount rate 1.5% Expected rate of investment return 3.3% Amortization period of transition obligation 15 years Amortization period of actuarial differences: Sales employees 7 years Internal employees 10 years The processing period for prior service obligations is 10 years

for internal employees.

12. Shares of Subsidiaries Shares of subsidiaries amounted to ¥4,047 million.

13. Taxes (1) Deferred tax assets totaled ¥45,789 million and deferred tax

liabilities were ¥47,716 million. Valuation allowance totaling ¥2,228 million was excluded from deferred tax assets. Deferred tax assets consisted mainly of insurance reserves of ¥25,631 million, reserve for price fl uctuations of ¥8,726 million and reserve for employees’ retirement benefi ts of ¥3,801 million. Deferred tax liabilities arose mainly due to unrealized gain on other securities of ¥46,966 million.

49


(2) The effective tax rate for the year under review was 36.21%. The difference between the legal effective tax rate and the actual tax burden after the application of tax effect accounting was primarily a result of a 6.8% valuation reserve.

(3) As a result of the public share listing of Sony Financial Holdings Inc., Sony Life’s parent company, Sony Financial Holdings is now longer a wholly-owned subsidiary of Sony Corporation. Therefore, as a consolidated subsidiary of Sony Financial Holdings, Sony Life was excluded from the consolidated tax provision for for Sony Corporation on October 9, 2007.

14. The amount of ¥8 million is set forth as a reinsurance provision against a corresponding portion of claims for outstanding reserves, as set forth in Item 3, Provision 73 of the Insurance Business Law of Japan and as set forth in Item 1, Provision 71. Furthermore, the corresponding policy reserve is ¥1,019 million, as set forth in Item 1, Provision 71 of this same law.

15. Net assets per share amounted to ¥2,810.33.

16. (1) From the fi scal year ended March 31, 2008, in accordance with revisions to the corporate tax code (Act on Partial Revision, etc. of the Income Tax Act, etc., March 30, 2007, No. 6, and Decree Law on Partial Revision, etc. of the Corporate Tax Code Enforcement Ordinance, March 30, 2007, No. 83.), tangible fi xed assets acquired on and after April 1, 2007, are accounted for the straight-line method and the declining-balance method, as stipulated by the revised corporate tax code. Compared to the previous method, the impact of this revision was to reduce ordinary profi t and income before income taxes each ¥9 million.

(2) The residual book value of tangible fi xed assets acquired on or before March 31, 2007, that have been depreciated down to their fi nal depreciation limit is depreciated in equal amounts over a fi ve-year period from the fi scal year after the fi scal year in which their depreciation limit reached zero. Compared with the previous method, the impact of this revision was to reduce ordinary profi t and income before income taxes ¥6 million.

17. Other securities for which market prices In the past, impairment losses were recorded on Japanese stocks

and foreign stocks within other securities for which market values are available if the market value fell 50% or more from the acquisi-tion price or if the market value fell 30% or more but less than 50% of the acquisition price except that it was considered possible that the securities would recover to their acquisition price. However, from the fi scal year under review impairment losses are recorded on these securities when their market value falls 30% or more from their acquisition price. During the fi scal year under review, the impact of this change was to reduce income from monetary trusts, net, ¥1,688 million, increase valuation loss on securities 4,276 mil-lion, and reduce ordinary profi t and income before income taxes ¥5,964 million.

18. Units smaller than those stated herein have been rounded off.

Statements of Income—From April 1, 2007 to March 31, 2008

1. Income from transactions with affi liated companies totaled ¥8,253 million, while expenses amounted to ¥4,758 million.

2. Gain on sales of securities consisted of ¥7,959 million from Japanese government bonds and other securities and ¥16,043 million from stocks and others, and ¥20 million from foreign securities.

3. Loss on sales of securities consisted of ¥674 million from Japanese government bonds and other securities and ¥888 million from stocks and others.

4. Devaluation losses on securities of ¥6,697 million is broken out within stocks.

5. When calculating the provision for outstanding claims, the amount deducted as the ceded provision for outstanding claims was ¥177 million, and when calculating the provision for policy reserves, the reduced amount of the returned portion of ceded policy reserves was ¥17 million.

6. Gains on trading securities, net, was the net result of gain on sales of ¥688 million and valuation loss of ¥363 million.

7. Income from monetary trusts, net included ¥5,980 million in valuation losses.

8. Losses from derivatives, net, includes a valuation gain of ¥4 million.

9. Other investment expenses mainly consisted of ¥4,243 million in expenses related to real estate for investment purposes.

10. Depreciation and amortization assessed Tangible fi xed assets ¥3,310 million Intangible fi xed assets ¥ 876 million

11. Net income per share was ¥284.84. The basis for this calculation is net income of ¥18,514 million, of which the entire portion is applicable to shares of common stock, and an average of 65,000,000 shares of common stock outstanding during the period. Diluted net income per share is not presented because no residual shares exist.

12. Retirement benefi t cost totaled ¥2,019 million, and consisted of the following:

Service cost ¥ 1,706 million Interest cost ¥ 249 million Expected investment income ¥ (113) million Amortization of transition obligation ¥ 414 million Amortization of actuarial gain ¥ (108) million Amortization of prior service obligations ¥ (129) million

13. Units smaller than those stated herein have been rounded off.

Subsequent Events—From April 1, 2007 to March 31, 2008

In accordance with a May 2, 2008, resolution of its Board of Directors, 100% shareholder Sony Financial Holdings Inc. increased Sony Life’s capital through an allocation of new shares on May 23, 2008. The increase in capital is slated for use as investment in AEGON Sony Life Planning Co., Ltd., a joint venture between Sony Life Insurance Co., Ltd., and the AEGON Group.

i. Type of new shares Common stockii. Number of shares issued 5,000,000 sharesiii. Issue price ¥2,000 per shareiv. Total issue price ¥10,000,000,000v. Amount applied to common stock ¥1,000 per sharevi. Total increase in common stock ¥5,000,000,000

50


Details of Ordinary Profi t (Core Profi t)For the years ended March 31,

Millions of yen

2008 2007

Core profi t [A] 23,571 24,366

Capital gains 29,963 22,571

Gains on monetary trusts 5,304 5,814

Gains on investments in trading securities 324 1,708

Gains on sales of securities 24,023 11,887

Gains from derivatives — 3,061

Foreign exchange gains 310 99

Other capital gains — —

Capital losses 13,119 215

Losses on monetary trusts — —

Losses on investments in trading securities — —

Losses on sales of securities 1,563 148

Devaluation losses on securities 6,697 66

Losses from derivatives 4,858 —

Foreign exchange losses — —

Other capital losses — —

Net capital gains [B] 16,844 22,356

Core profi t plus net capital gains [A]+[B] 40,416 46,722

Other one-time gains 1,662 1,849

Gain from reinsurance — —

Reversal of contingency reserve — —

Other 1,662 1,849

Other one-time losses 2,787 33,676

Losses from reinsurance — —

Provision for contingency reserves 2,776 2,488

Provision for reserve for specifi c problem loans 10 24

Provision for reserve for specifi c overseas receivable assets — —

Loans amortization — —

Other — 31,162

Total other one-time losses [C] (1,125) (31,827)

Ordinary profi t [A]+[B]+[C] 39,290 14,895

Notes: 1. Core profi t for the fi scal year ended March 31, 2008, includes gains on monetary trusts resulting from income gains equal to ¥9,471 million. Other in other one-time gains for the fi scal year ended March 31, 2008, consists of a ¥1,662 million reversal of policy reserve with respect to reserves previously established for future liabilities with respect to certain insurance policies.

2. Core profi t for the fi scal year ended March 31, 2007, includes gains on monetary trusts resulting from income gains equal to ¥6,355 million. Other in other one-time gains for the fi scal year ended March 31, 2007, consists of a ¥1,849 million reversal of policy reserve with respect to reserves previously established for future liabilities with respect to certain insurance policies. Other in other one-time losses for the fi scal years ended March 31, 2007, consists of a one-time ¥31,162 million provision for policy reserve. This one-time provision for policy reserve relates to certain insurance policies for which Sony Life had identifi ed a risk that policyholder premiums, as calculated based on then-applicable assumed rates of return and assumed mortality rates, could be insuffi cient to cover future payments. This one-time provision for policy reserve relates to all future liabilities for payment under the relevant policies.

51


Policies and Policy Amount in Force by Product As of March 31,

Policies, Millions of yen

Number of Policy amount Number of Policy amount policies in force in force policies in force in force

Category 2008 2007

Individual insurance products: Pure death-protection insurance: 3,518,724 29,200,551 3,348,853 28,186,554 Variable life insurance (whole life type) 439,536 2,676,664 375,485 2,401,057 Modifi ed payment whole life insurance 18,935 195,705 19,850 210,663 Limited payment whole life insurance 379,324 3,283,197 392,351 3,421,896 Family insurance 1,463 13,784 1,504 14,179 Interest rate-sensitive whole life insurance 383,156 2,321,783 362,574 2,232,768 Whole life insurance (no selection type) 6,043 11,800 5,973 11,655 Living benefi t insurance (whole life type) 195,059 622,043 186,678 599,740 Variable life insurance (term type) 1,637 58,037 1,190 37,194 Family income insurance 100,082 2,502,290 92,010 2,330,577 Living standard insurance 6,280 135,298 6,825 154,646 Level premium plan term life insurance 134,679 3,025,559 140,402 3,247,398 Decreasing term life insurance 54,161 1,135,066 52,119 1,160,784 Living benefi t insurance (term type) 15,121 125,898 12,494 100,353 Level premium plan term life insurance (non-smoker preferred risk) 23,926 1,025,575 23,024 1,011,544 Decreasing term life insurance (non-smoker preferred risk) 29,859 914,151 26,760 859,392 Family income insurance (non-smoker preferred risk) 48,287 1,817,702 41,274 1,566,775 Increasing term life insurance 634 35,216 819 45,639 Long-term level premium plan term life insurance (with disability benefi t) 10,971 520,162 5,897 272,353 Increasing term life insurance (reduced surrender value) 4,343 151,776 4,368 152,801 Income protection insurance to cover three major diseases 1,834 1,772 956 944 Semi-participating whole life nursing-care insurance 14,807 59,970 6,218 24,334 Cancer insurance 263,880 40,421 262,765 41,479 Comprehensive medical insurance 1,367,047 772,695 1,308,781 756,682 Long-term comprehensive medical insurance 17,580 6,962 18,453 7,260 Semi-participating living standard insurance (joint type) 80 1,712 83 1,916 Term riders and others (399,102) 7,745,300 377,745 7,522,513 Mixed insurance: 300,383 1,111,545 287,034 1,080,848 Variable life insurance (limited term type) 34,579 111,047 17,332 64,954 Endowment insurance (without dividend) 222,620 864,458 227,071 882,094 Semi-participating endowment insurance 43,184 136,039 42,631 133,798 Pure endowment insurance: 573,731 924,980 474,051 770,716 Semi-participating educational endowment insurance 573,731 924,980 474,051 770,716 Living benefi t rider — — — — Total individual insurance products 4,392,838 31,237,078 4,109,938 30,038,118

Individual annuity products: Semi-participating individual annuity 16,253 82,670 15,083 77,187 Variable individual annuity 25,136 137,531 17,471 93,934 Others 4,179 40,065 3,383 35,251 Total individual annuity products 45,568 260,268 35,937 206,374

Group insurance products: Group term life insurance 101,028 237,813 98,350 237,699 Group welfare term life insurance 130,083 93,789 127,639 92,699 Group credit life insurance 2,930,154 605,492 3,139,548 577,602 Annuity payment rider 169 144 182 178 Total group insurance products 3,161,434 937,241 3,365,719 908,179

Group annuity products: New-type corporate annuities 39,209 6,225 32,376 6,391 Defi ned contribution corporate annuities 354,177 67,081 355,665 66,242 Total group annuity products 393,386 73,307 388,041 72,633

Medical protection insurance (group-type) 130 0 126 0

Reinsurance recipients — — 13,159 23,022

Notes: 1. This category includes, in addition to term riders, living benefi t whole life policy riders and semi-participating lump sum nursing-care riders every fi ve years. 2. Total number of policies in force for pure endowment insurance does not include number of policies listed under living benefi t riders. 3. Total policy amount in force for individual annuity products and annuity payment riders is 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 reserve for policies for which payments have commenced. 4. Others under individual annuity products include semi-participating lump-sum nursing-care riders, semi-participating fi xed individual annuity riders, and the amount of

policy reserve for policies for which payments have commenced. 5. The number of policies for group insurance products, group annuity products, medical protection insurance (group-type) and reinsurance recipients refl ect the total

number of insured parties. 6. For group annuity products, total policy amounts in force are equal to the amount of policy reserve under the relevant policies. 7. The amount of medical protection insurance (group-type) is equal to the daily claims for hospitalization.

52


Policies, Millions of yen

Number of New policy Number of New policy new policies amount new policies amount

Category 2008 2007

Individual insurance products: Pure death-protection insurance: 360,931 3,409,641 375,185 3,106,503 Variable life insurance (whole life type) 77,834 414,304 61,401 319,567 Modifi ed payment whole life insurance 136 1,919 206 3,283 Limited payment whole life insurance 2 7 (6) (65) Family insurance 9 59 8 60 Interest rate-sensitive whole life insurance 39,882 233,913 49,188 286,385 Whole life insurance (no selection type) 832 1,668 920 1,851 Living benefi t insurance (whole life type) 15,206 47,874 13,171 40,422 Variable life insurance (term type) 533 24,018 226 8,592 Family income insurance 14,609 432,944 12,366 351,713 Living standard insurance — — — — Level premium plan term life insurance 9,278 158,777 9,570 152,738 Decreasing term life insurance 6,217 140,035 6,024 140,239 Living benefi t insurance (term type) 3,676 34,233 2,528 22,189 Level premium plan term life insurance (non-smoker preferred risk) 2,376 93,979 2,241 78,897 Decreasing term life insurance (non-smoker preferred risk) 4,251 143,453 3,918 137,239 Family income insurance (non-smoker preferred risk) 8,583 372,796 7,608 321,091 Increasing term life insurance — — — — Long-term level premium plan term life insurance (with disability benefi t) 5,467 263,328 3,887 177,328 Increasing term life insurance (reduced surrender value) 185 5,150 4,053 141,092 Income protection insurance to cover three major diseases 944 890 959 947 Semi-participating whole life nursing-care insurance 8,982 37,752 6,250 24,486 Cancer insurance 16,690 2,664 24,221 3,513 Comprehensive medical insurance 144,536 69,953 165,810 81,086 Long-term comprehensive medical insurance 699 300 629 291 Semi-participating living standard insurance (joint type) 4 87 7 183 Term riders and others (43,502) 929,528 39,020 813,366 Mixed insurance: 45,198 166,828 33,800 125,320 Variable life insurance (limited term type) 18,308 52,699 9,302 27,494 Endowment insurance (without dividend) 22,232 97,738 21,085 85,187 Semi-participating endowment insurance 4,658 16,391 3,413 12,638 Pure endowment insurance: 108,157 168,210 102,004 165,043 Semi-participating educational endowment insurance 108,157 168,210 102,004 165,043 Living benefi t rider — — — — Total individual insurance products 514,286 3,744,680 510,989 3,396,867

Individual annuity products: Semi-participating individual annuity 2,069 10,144 1,555 7,534 Variable individual annuity 8,412 47,763 4,768 25,056 Others — — — — Total individual annuity products 10,481 57,908 6,323 32,590

Group insurance products: Group term life insurance — — — — Group welfare term life insurance 3,470 5,953 14,492 7,757 Group credit life insurance — — — — Annuity payment rider — — — — Total group insurance products 3,470 5,953 14,492 7,757

Group annuity products: New-type corporate annuities — — 196 44 Defi ned contribution corporate annuities — — — — Total group annuity products — — 196 44

Medical protection insurance (group-type) — — — —

Reinsurance recipients — — — —

Notes: 1. This category includes, in addition to term riders, living benefi t whole life policy riders and semi-participating lump sum nursing-care riders every fi ve years. 2. The number of new policies for term riders and others is excluded from total individual insurance products. 3. The new policy amount for individual annuity insurance indicates pension resources at the time annuity payments begin. 4. The number of new policies for group insurance products, group annuity products, medical protection insurance (group-type) and reinsurance recipients refl ect the

total number of insured parties. 5. For group annuity products, new policy amounts are equal to the sum of the initial premium payments under the relevant policies. 6. The amount of medical protection insurance (group-type) is equal to the daily claims for hospitalization.

New Policies and New Policy Amount by Product For the years ended March 31,

53


Investment Summary of General Account Assets

Millions of yen/%

Amount % of total

As of March 31, 2008 2007 2008 2007

Cash, deposits and call loans ¥ 82,106 ¥ 237,496 2.5 7.6

Monetary trusts 893,952 718,492 26.8 23.0

Securities 2,086,557 1,917,154 62.5 61.4

Japanese government bonds and others 1,722,804 1,535,634 51.6 49.2

Equity securities 172,911 244,379 5.2 7.8

Foreign securities 178,795 121,617 5.4 3.9

Foreign government bonds and others 154,195 100,730 4.6 3.2

Foreign stocks 24,599 20,887 0.7 0.7

Other securities 12,046 15,522 0.4 0.5

Loans 108,688 96,804 3.3 3.1

Policyholder loans 108,688 96,804 3.3 3.1

Other loans — — — —

Real estate 82,867 87,025 2.5 2.8

Deferred tax assets — — — —

Other 83,898 66,392 2.5 2.1

Allowance for doubtful accounts (74) (68) (0.0) (0.0)

Total ¥3,337,997 ¥3,123,298 100.0 100.0

(Foreign currency-denominated assets) 106,361 51,486 3.2 1.6

1. General Account Assets

Millions of yen

For the years ended March 31, 2008 2007

Cash, deposits and call loans ¥(155,389) ¥165,897

Monetary trusts 175,459 60,141

Securities 169,402 46,866

Japanese government bonds and others 187,169 36,043

Equity securities (71,468) (6,339)

Foreign securities 57,177 18,897

Foreign government bonds and others 53,465 11,634

Foreign stocks 3,711 7,263

Other securities (3,475) (1,735)

Loans 11,884 9,885

Policyholder loans 11,884 9,885

Other loans — —

Real estate (4,158) 11,446

Deferred tax assets — —

Other 17,506 6,526

Allowance for doubtful accounts (5) (24)

Total ¥ 214,699 ¥300,739

(Foreign currency-denominated assets) 54,874 4,512

2. Increase (Decrease) of General Account Assets

54


Millions of yen


Interest expenses ¥ 15 ¥ 7

Losses on trading securities, net — —

Losses on sale of securities 1,563 148

Devaluation losses on securities 6,697 66

Losses on redemption of securities 21 601

Losses from derivatives, net 4,858 —

Provision for doubtful accounts 10 24

Depreciation of real estate for rent and others 3,149 1,974

Other investment expenses 5,262 5,360

Total ¥21,579 ¥8,184

5. Investment Expenses (General Account)

Millions of yen


Interest and dividends ¥47,913 ¥34,267

Income from monetary trusts, net 14,776 12,169

Income from investments in trading securities, net 324 1,708

Gains on sale of securities 24,023 11,887

Gains on redemption of securities 145 542

Gains from derivatives, net — 3,061

Foreign exchange gains, net 310 99

Other investment income 0 0

Total ¥87,493 ¥63,736

4. Investment Income (General Account)

3. Yield by Asset Class (General Account) Percentage


Cash, deposits and call loans 0.47 0.21

Monetary trusts 1.93 1.92

Securities 2.43 2.03

Japanese government and others 1.90 1.18

Equity securities 6.66 9.49

Foreign securities 4.33 3.66

Loans 4.25 4.32

Real estate 5.09 (1.10)

Total general account assets 2.17 2.02Notes: 1. The denominator of yield calculations is the daily average balance on a book value basis. The numerator is the yield calculated by subtracting investment

expenses from investment income in ordinary profi t. 2. The above yield calculations do not include valuation gains in accordance with Article 112 of the Insurance Business Law of Japan. 3. Real estate in the year ended in March 31, 2007 includes one-time factors such as tax expenses in relation to acquisition of real estate, the new building

completed in October 2006 (Sony City).

55


9. Yield on Overseas Investments (General Account) Percentage


Yield on overseas investments 4.33 3.66Note: Overseas investments is the sum of foreign-currency and yen-denominated assets.

10. Valuation Gain (Loss) on Securities Held for Trading PurposesMillions of yen

Valuation gain (loss)Amount in balance sheets included in statements of income

For the years ended March 31, 2008 2007 2008 2007

Securities held for trading purposes ¥43,864 ¥37,528 ¥(3,062) ¥(3,458)Note: “Securities held for trading purposes” includes monetary trusts and other items.

Millions of yen


Japanese government bonds and others ¥ 7,959 ¥ 60

Equity securities and others 16,043 11,827

Foreign securities 20 —

Total ¥24,023 ¥11,887

7. Breakdown of Gains on Sales of Securities (General Account)

Millions of yen


Japanese government bonds and others ¥ 674 ¥ 9

Equity securities and others 888 139

Foreign securities — —

Total ¥1,563 ¥148

8. Breakdown of Losses on Sales of Securities (General Account)

Millions of yen


Interest on bank deposits ¥ 476 ¥ 250

Interest and dividends on securities 31,346 24,232

Interest on Japanese government and corporate bonds 20,616 16,944

Dividends on securities 3,165 2,515

Interest and dividends on foreign securities 7,242 4,447

Interest on loans 4,319 3,940

Rental income from real estate 11,609 5,768

Total ¥47,913 ¥34,267

6. Breakdown of Interest and Dividend Income (General Account)

56


11. Market Value Information for Listed Marketable Securities

a. Market value of securities other than those held for trading purposesMillions of yen

Book Market Net gain Gain or loss Book Market Net gain Gain or loss value value or loss Gain Loss value value or loss Gain Loss

As of March 31, 2008 and 2007 2008 2007

Bonds to be held until

maturity — — — — — — — — — —

Bonds corresponding to

policy reserves — — — — — — — — — —

Shares of subsidiaries and

affi liated companies — — — — — — — — — —

Other securities ¥2,724,973 ¥2,852,831 ¥127,858 ¥153,987 ¥26,129 ¥2,256,402 ¥2,454,661 ¥198,259 ¥205,859 ¥7,599

Japanese government

bonds and others 2,379,927 2,463,423 83,495 92,887 9,391 1,983,123 2,040,238 57,114 62,275 5,160

Equity securities 152,955 203,830 50,874 55,765 4,890 167,468 297,486 130,017 132,152 2,135

Foreign securities 184,945 175,407 (9,538) 2,309 11,847 98,664 102,897 4,233 4,537 304

Foreign government

and corporate bonds 184,872 175,107 (9,764) 2,082 11,847 98,591 102,616 4,024 4,329 304

Foreign stocks 72 299 226 226 — 72 281 208 208 —

Other securities 7,145 10,170 3,025 3,025 — 7,145 14,039 6,893 6,893 —

Total ¥2,724,973 ¥2,852,831 ¥127,858 ¥153,987 ¥26,129 ¥2,256,402 ¥2,454,661 ¥198,259 ¥205,859 ¥7,599

Japanese government

bonds and others 2,379,927 2,463,423 83,495 92,887 9,391 1,983,123 2,040,238 57,114 62,275 5,160



Foreign government


Foreign stocks 72 299 226 226 — 72 281 208 208 —

Other securities 7,145 10,170 3,025 3,025 — 7,145 14,039 6,893 6,893 —Notes: 1. The above table includes securities such as CDs which are regarded appropriate to treat as securities defi ned by Securities and Exchange Law. 2. The above table includes monetary trusts except securities held for trading purposes. Its book value for the fi scal year ended March 31, 2008 was ¥766,512 million

and net gain was ¥28,067 million. 3. The book value represents the value after accounting for depreciation and impairment losses, but before determining the fair market value.

Millions of yen

As of March 31, 2008 and 2007 2008 2007

Bonds to be held until maturity — —

Unlisted foreign bonds — —

Other — —

Bonds corresponding to policy reserves — —

Shares of subsidiaries and affi liated companies ¥ 4,047 ¥ 3,047

Other securities 22,406 16,752

Unlisted domestic stock, excluding over-the-counter stocks 4 5

Unlisted foreign stock, excluding over-the-counter stocks 573 330

Unlisted foreign bonds 1,125 1,125

Others 20,703 15,292

Total ¥26,453 ¥19,800

b. The following table shows book value of securities without market value at March 31, 2008 and 2007:

57


c. The sum of the valuation of currency exchange and other information in b. above and the market value of a. above is indicated below. Millions of yen

Book Market Net gain Gain or loss Book Market Net gain Gain or loss value value or loss Gain Loss value value or loss Gain Loss

As of March 31, 2008 and 2007 2008 2007

Bonds to be held until

maturity — — — — — — — — — —

Bonds corresponding to

policy reserves — — — — — — — — — —

Shares of subsidiaries and

affi liated companies 4,047 4,047 — — — 3,047 3,047 — — —

Other securities ¥2,747,379 ¥2,877,089 ¥129,709 ¥156,874 ¥27,164 ¥2,273,154 ¥2,474,833 ¥201,678 ¥209,287 ¥7,608

Japanese government

bonds and others 2,379,927 2,463,423 83,495 92,887 9,391 1,983,123 2,040,238 57,114 62,275 5,160



Foreign government


Foreign stocks 645 828 183 226 43 402 623 220 220 —

Other securities 27,848 32,769 4,920 5,911 991 22,437 32,738 10,301 10,310 9

Total ¥2,751,427 ¥2,881,137 ¥129,709 ¥156,874 ¥27,164 ¥2,276,202 ¥2,477,881 ¥201,678 ¥209,287 ¥7,608

Japanese government

bonds and others 2,379,927 2,463,423 83,495 92,887 9,391 1,983,123 2,040,238 57,114 62,275 5,160



Foreign government


Foreign stocks 3,693 3,876 183 226 43 3,450 3,671 220 220 —

Other securities 27,848 32,769 4,920 5,911 991 22,437 32,738 10,301 10,310 9

58


OrganizationAs of July 1, 2008

Compliance CommitteeMarket Conduct Compliance (MCC) CommitteeProtection of Personal Information Promotion CommitteeRisk Management CommitteeDisciplinary CommitteeEnvironment CommitteePersonnel Development CommitteeSLQ CommitteeInvestment CommitteeProduct Development CommitteeInformation System Committee

Lifeplanner Sales Group

Independent Agency Sales Group

Sales Administration Group

Investment Group

Business Process Reengineering Group

Total Administration Control Group

General Meeting of Shareholders

Executive Management Board Executive Officers Board

Board of Auditors

Chief ActuaryCompensation Advisory Committee

Board of Directors

Agency Office

Independent Agency Sales DivisionIndependent Agents Planning DivisionIndependent Agents Sales Promotion DivisionMarket Development Division

Sales Administration DivisionSales Education & Training Administration DivisionProduct Development DivisionOffice Administration Division

Business Administration Control DivisionCompliance DivisionOperations Administration Division

Investment Division

Information System Planning Division Operations Development & Planning Division 1 Operations Development & Planning Division 2 Information System & General Operation Division

Lifeplanner Planning & Promotion Division

Career Promotion & Development Division

Lifeplanner Education & Training Division

Marketing Division

Knowledge Management Division

Underwriting Division

Policyholders’ Service Division

Claims & Benefits Division

Real Estate Division

Chief Medical Officer

Medical Division

Corporate Communications Division

International & Business Development Division

Actuarial Division

ALM Division

Corporate Planning Division

Customer Relation Planning Division

Accounting Division

Investment Administration Division

Customer Center

Internal Audit Division

Personnel Division

General Affairs Division

Health Promotion Center Division

Finance Administration Department

Advanced Marketing Planning Department

59


Corporate History

1979 June Preliminary authorization obtained from the Ministry of Finance

Aug Sony Prudential Life Insurance Co., Ltd., established with capital of ¥400 million as a joint venture between Sony Corporation and Prudential Insurance Company of America

Sept Head offi ce established at 1-1, Minami Aoyama 1-chome, Minato-ku, Tokyo Dec Capital increased to ¥1.2 billion1980 Sept Capital increased to ¥3.0 billion1981 Feb Business license obtained from the Ministry of

Finance1982 Feb Capital increased to ¥4.5 billion1986 Sept Capital increased to ¥5.5 billion Oct Variable life insurance launched1987 July Agreement reached with Prudential to terminate joint

venture contract Sept Corporate name changed to Sony Pruco Life

Insurance Co., Ltd. Equity interest: Sony Corporation 50%; Pruco Inc.

30%; Career Development International Co., Ltd. 10%; Mitsui Bank, Ltd. 5%; The Mitsui Trust & Banking Co., Ltd. 5%

1988 Oct Capital increased to ¥11.0 billion1989 Apr Cancer insurance launched June Individual life insurance in force exceeded ¥1 trillion Aug Tenth anniversary of founding Oct Independent agency system introduced1990 Dec Capital increased to ¥18.0 billion1991 Apr Corporate name changed to Sony Life Insurance

Co., Ltd. June Individual life insurance in force exceeded ¥2 trillion July Began handling group annuity insurance Nov Capital increased to ¥22.0 billion1992 Apr Comprehensive medical insurance launched1993 Feb Individual life insurance in force exceeded ¥3 trillion Sept Equity interest: Sony Corporation 50%; Sony

Corporation of America 30%; Career Development International Co., Ltd. 10%; The Sakura Bank, Ltd. 5%; The Mitsui Trust & Banking Co., Ltd. 5%

1994 Sept Equity interest: Sony Corporation 60%; Sony Corporation of America 30%; Career Development International Co., Ltd. 10%

Dec Individual life insurance in force exceeded ¥5 trillion1995 Dec All sales employees provided with personal

computers1996 Mar Individual life insurance in force exceeded ¥8 trillion Equity interest: Sony Corporation 100% Dec Individual life insurance in force exceeded ¥10 trillion1997 Feb Total assets exceeded ¥500.0 billion July Capital increased to ¥50.0 billion1998 Jan Individual life insurance in force exceeded ¥13 trillion Aug Sony Life Insurance (Philippines) Corporation

established Nov Total assets exceeded ¥800 billion1999 Mar Individual life insurance in force exceeded ¥16 trillion Apr Mutual fund launched Aug Twentieth anniversary of founding Sept Cumulative defi cit cleared Capital decreased to ¥40.0 billion Nov Variable annuity insurance launched Non-smoker preferred risk insurance launched Dec Total assets exceeded ¥1 trillion2000 Jan Individual life insurance in force exceeded ¥18 trillion Feb Sales of Global Wrap mutual fund launched through

Lifeplanner® marketing channel Sept Whole-Life Insurance launched Cancer rider launched Oct Individual life insurance in force exceeded ¥20 trillion2001 Mar Standard policy reserves achieved by increasing

capital by ¥50.0 billion Capital increased to ¥65.0 billion ISO 14001 certifi cation acquired

Apr Long-term comprehensive medical insurance launched

May Sales of Sony Assurance’s products started through Lifeplanner® sales employees

June Sales structure for mutual funds expanded through Lifeplanner®

July Individual life insurance in force exceeded ¥22 trillion Sept Comprehensive long-term medical insurance

coverage launched, including features for hospitalization and surgical procedures

2002 Mar Commenced group credit life insurance service for mortgage loan borrowers from Sony Bank Inc.

Apr Nursing needs rider launched May Registration of legal entity for management of

defi ned contribution plans completed July Variable life term insurance product launched Separate accounts associated with variable life

insurance product, proliferated with Japan Equity Growth Fund and World Core Equity Fund

Sept Individual life insurance in force exceeded ¥24 trillion Oct Began selling insurance products through bank

channels2003 Jan Increasing term life insurance product Excellent

Value Plan launched May Sony Life Academy for executive training opened Total assets exceeded ¥2 trillion The Book 1 completed June ISMS certifi cation obtained July Rider to cover initial period of hospitalization

launched Individual life insurance in force exceeded ¥25 trillion Nov The Book 2 completed2004 Mar Individual life insurance in force exceeded ¥26 trillion Apr Sony Corporation established Sony Financial

Holdings Inc. Sony Life became 100% subsidiary of Sony

Financial Holdings Inc. May Insurance with special exemption from payment of

premiums launched June Sony Bank began selling Sony Life’s individual

annuities Dec Individual life insurance in force exceeded ¥27 trillion Commenced introduction of Sony Bank mortgage

loans through Lifeplanner® sales channel 2005 June Individual life insurance in force exceeded ¥28 trillion July “Lifeplanner Value®” registered as a trademark Nov Commenced sales of Long-Term, Level Term Life

Insurance (Disability Compensation, Non-Profi t) 2006 Jan Total assets exceeded ¥3 trillion Feb Commenced sales of Increasing Term Life Insurance

(Low Surrender Payments, Non-Profi t) Aug Introduction of cashless system for fi rst policy

premium installment Sept Opened Life Planning SQUARE Commenced tie-up with Watami Co., Ltd., in nursing

care business Oct Completed construction on Sony City, Sony

Corporation’s head offi ce building Nov Began selling semi-participating whole life

nursing-care insurance Commenced sales of semi-participating lump-sum

nursing care policy rider Began selling income protection insurance to cover

three major diseases 2007 Mar Individual life insurance in force exceeds ¥30 trillion Apr Insurance rates revised Aug AEGON Sony Life Planning Co., Ltd., established as

50–50 joint venture with the AEGON Group of the Netherlands

Dec Received permission to conduct banking agency business on behalf of Sony Bank

2008 Apr Whole-life cancer insurance (08) offered May Capital increased to ¥70.0 billion

60


Directors and Statutory AuditorsAs of July 1, 2008

Directors and Statutory Auditors

Title Name Other Concurrent Responsibilities

Chairman, Director Kunitake Ando Director of AEGON Sonylife Planning Co.,Ltd

President, Representative Director Taro Okuda Director of Sony Financial Holdings Inc.

Director Masamitsu Shimaoka

Director Mitsuhiro Koizumi

Director Hiromichi Fujikata Executive Vice President and Representative Director of

Sony Financial Holdings Inc.

Director of Sony Assurance Inc.

Standing Statutory Auditor So Sato Statutory Auditor of Sony Financial Holdings Inc.

Statutory Auditor Hiroshi Sano Standing Statutory Auditor of Sony Financial Holdings Inc.

Standing Auditor of Sony Assurance Inc.

Statutory Auditor Takatoshi Yajima Standing Statutory Auditor of Sony Assurance Inc.

Statutory Auditor of Sony Financial Holdings Inc.

Offi cers

Taro Okuda

President

Hisakazu Takeuchi

Senior Executive Vice President

Mitsuhiro Koizumi


Masamitsu Shimaoka


Tohru Hanatsuya

Executive Vice President

Hideki Yamada


Taketoshi Nonaka


Hirotoshi Watanabe


Toshirou Maeda

Senior Vice President

Kazuhiro Wakayama


Masao Hagiwara


Mafumi Hashimoto


Yoshihiko Kaiya


Yuichiro Sumimoto


Kiyoshi Watanabe


Jun Shirai


Tomohito Tsuchiya


Tsunenori Sawaki


Hiroaki Kiyomiya


Yuji Iwasaki


Iwao Nakanouchi


61


Corporate DataAs of March 31, 2008


Head Offi ce

1-1-1, Minami Aoyama, Minato-ku, Tokyo 107-8585, Japan

E-mail: [email protected]

Established: August 1979

Common Stock: ¥70,000 million

(As of July 1, 2008)

Employees: 5,372 (including 3,779 Lifeplanner)

Total Assets: ¥3,659,786 million

Fiscal Year: April 1 to March 31

Sony Life Insurance (Philippines) Corporation

Chairman of the Board: Tsunenori Sawaki

President and Chief Executive Offi cer: Hiromitsu Onodera

35th Floor, PB Com Tower

6795 Ayala Avenue corner V.A. Rufi no Street, 1226

Makati City, Philippines

Tel: +63-2-819-6001

Annual Report - Sony · PDF fileAnnual Report For the year ended March 31, 2008. Sony Life...

Documents

Transcript of Annual Report - Sony · PDF fileAnnual Report For the year ended March 31, 2008. Sony Life...