Comprehensive Review: Sony Financial Holdings 2020 Report
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AI Summary
This is Sony Financial Holdings Inc.'s 2020 Annual Report, covering the period from April 1, 2019, to March 31, 2020. The report includes a corporate overview with the mission, vision, and values, a company profile detailing its history, and profiles of group companies. It highlights the value creation story, financial and non-financial performance, and stock information. A message from the President & CEO sets the stage for a review of operations, including segments like Sony Financial Group, Sony Life, Sony Assurance, Sony Bank, and the Nursing Care Business. The report also delves into sustainability, corporate governance, human resources, and risk management. Detailed financial statements, segment information, and other financial data are provided, along with a glossary and editorial policy. The document emphasizes Sony Financial Group's commitment to innovation, customer satisfaction, and adapting to significant social and environmental changes.
2020Annual Report
April 1, 2019March 31, 2020
April 1, 2019March 31, 2020
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Introduction
Mission, Vision & Values 1
History 2
Value Creation Story 4
Financial and Non-financial Highlights 8
Message from the President & CEO 10
Strategy and Review
Sony Financial Group 14
Sony Life 18
Sony Assurance 20
Sony Bank 22
Nursing Care Business 24
SFG’s Value Creation
Sustainability, Value Creation and Our
Foundation for Creating Value 26
Initiatives to Strengthen Our Foundation
for Creating Value 28
Corporate Section
Corporate Profile 50
Profiles of Group Companies
(Main subsidiaries) 51
Stock Information 52
Reference Materials
Review of Operations / Organizational Chart
of Business Operations 54
Financial Highlights 55
SFH Consolidated Financial Statements56
Significant Basic Items for the Preparation
of the Consolidated Financial Statements64
Notes to the Consolidated Financial
Statements 68
Segment Information 88
Other Financial Data 90
Relationship with Parent Company, Sony
Corp. 92
Glossary 93
Financial Data Book Contents 96
● The SFG refers to the financial group that comprises SFH, Sony Life,
Sony Assurance, Sony Bank, Sony Lifecare, Sony Financial Ventures, as
well as their subsidiaries and affiliates.
● Unless otherwise indicated, figures less than the indicated unit in this
material have been truncated, while ratios and percentage changes have
been rounded off.
● “Lifeplanner,” “LiPSS” and “Karte” are registered trademarks of Sony Life,
“GOOD DRIVE” is a registered trademark of Sony Assurance. Company
names and product names that appear in this report, other than those
mentioned above, are trademarks or registered trademarks of the
respective company.
● Fiscal 1996–fiscal 2020 represent the fiscal years ended / ending March
31, 1997–2021.
Company Name Abbreviations
The following abbreviations for company names are used in this report.
Sony Financial Group…………………………… SFG
Sony Financial Holdings Inc.…………………… SFH
Sony Life Insurance Co., Ltd. …………………… Sony Life
AEGON Sony Life Insurance Co., Ltd.………… AEGON Sony Life Insurance
SA Reinsurance Ltd. ……………………………… SA Reinsurance
Sony Life With Insurance Co.,Ltd. ……………… Sony Life With Insurance
Sony Life Business Partners Co., Ltd.………… Sony Life Business Partners
Sony Assurance Inc. ……………………………… Sony Assurance
Sony Bank Inc. …………………………………… Sony Bank
Sony Payment Services Inc.……………………… Sony Payment Services
SmartLink Network Hong Kong Limited ………… SmartLink Network Hong Kong
SmartLink Network Europe B.V. ………………… SmartLink Network Europe
Sony Lifecare Inc. ………………………………… Sony Lifecare
Lifecare Design Inc. ……………………………… Lifecare Design
Proud Life Inc.…………………………………… Proud Life
Sony Financial Ventures Inc.…………………… Sony Financial Ventures
Sony Corporation ………………………………… Sony Corp.
Disclaimer
This annual report contains statements concerning the current plans, expecta-
tions, strategies and beliefs of the SFG. Any statements contained herein that
are not historical facts are forward-looking statements or pro forma informa-
tion. Forward-looking statements may include—but are not limited to—words
such as “believe,” “anticipate,” “plan,” “strategy,” “expect,” “assume,” “fore-
cast,” “predict,” “propose,” “intend” and “possibility” that describe future
operating activities, business performance, events or conditions. For-
ward-looking statements, whether spoken or written, may also be included in
other materials released to the public. These forward-looking statements and
pro forma information are based on assumptions, decisions and judgments
made by the management of SFG companies, and are based on information
that is currently available to them. As such, they are subject to various risks
and uncertainties, and actual business results may vary substantially from the
forecasts expressed or implied in forward-looking statements. Consequently,
investors are cautioned not to place undue reliance on forward-looking
statements. SFG companies are under no obligation to revise forward-looking
statements or pro forma information in light of new information, future events
or other findings. The information contained in this annual report does not
constitute or form part of any offer for sale or subscription of or solicitation or
invitation of any offer to buy or subscribe to any securities, nor shall it or any
part of it form the basis of or be relied on in connection with any contract or
commitment whatsoever in Japan or abroad.
SFH refers to “Guidance for Collaborative Value
Creation” published by the Ministry of Economy,
Trade and Industry when organizing and examin-
ing matters to be listed in this report, in order to
make this report a starting point for dialogue with
shareholders and investors.
Editorial Policy
Mission, Vision & Values 1
History 2
Value Creation Story 4
Financial and Non-financial Highlights 8
Message from the President & CEO 10
Strategy and Review
Sony Financial Group 14
Sony Life 18
Sony Assurance 20
Sony Bank 22
Nursing Care Business 24
SFG’s Value Creation
Sustainability, Value Creation and Our
Foundation for Creating Value 26
Initiatives to Strengthen Our Foundation
for Creating Value 28
Corporate Section
Corporate Profile 50
Profiles of Group Companies
(Main subsidiaries) 51
Stock Information 52
Reference Materials
Review of Operations / Organizational Chart
of Business Operations 54
Financial Highlights 55
SFH Consolidated Financial Statements56
Significant Basic Items for the Preparation
of the Consolidated Financial Statements64
Notes to the Consolidated Financial
Statements 68
Segment Information 88
Other Financial Data 90
Relationship with Parent Company, Sony
Corp. 92
Glossary 93
Financial Data Book Contents 96
● The SFG refers to the financial group that comprises SFH, Sony Life,
Sony Assurance, Sony Bank, Sony Lifecare, Sony Financial Ventures, as
well as their subsidiaries and affiliates.
● Unless otherwise indicated, figures less than the indicated unit in this
material have been truncated, while ratios and percentage changes have
been rounded off.
● “Lifeplanner,” “LiPSS” and “Karte” are registered trademarks of Sony Life,
“GOOD DRIVE” is a registered trademark of Sony Assurance. Company
names and product names that appear in this report, other than those
mentioned above, are trademarks or registered trademarks of the
respective company.
● Fiscal 1996–fiscal 2020 represent the fiscal years ended / ending March
31, 1997–2021.
Company Name Abbreviations
The following abbreviations for company names are used in this report.
Sony Financial Group…………………………… SFG
Sony Financial Holdings Inc.…………………… SFH
Sony Life Insurance Co., Ltd. …………………… Sony Life
AEGON Sony Life Insurance Co., Ltd.………… AEGON Sony Life Insurance
SA Reinsurance Ltd. ……………………………… SA Reinsurance
Sony Life With Insurance Co.,Ltd. ……………… Sony Life With Insurance
Sony Life Business Partners Co., Ltd.………… Sony Life Business Partners
Sony Assurance Inc. ……………………………… Sony Assurance
Sony Bank Inc. …………………………………… Sony Bank
Sony Payment Services Inc.……………………… Sony Payment Services
SmartLink Network Hong Kong Limited ………… SmartLink Network Hong Kong
SmartLink Network Europe B.V. ………………… SmartLink Network Europe
Sony Lifecare Inc. ………………………………… Sony Lifecare
Lifecare Design Inc. ……………………………… Lifecare Design
Proud Life Inc.…………………………………… Proud Life
Sony Financial Ventures Inc.…………………… Sony Financial Ventures
Sony Corporation ………………………………… Sony Corp.
Disclaimer
This annual report contains statements concerning the current plans, expecta-
tions, strategies and beliefs of the SFG. Any statements contained herein that
are not historical facts are forward-looking statements or pro forma informa-
tion. Forward-looking statements may include—but are not limited to—words
such as “believe,” “anticipate,” “plan,” “strategy,” “expect,” “assume,” “fore-
cast,” “predict,” “propose,” “intend” and “possibility” that describe future
operating activities, business performance, events or conditions. For-
ward-looking statements, whether spoken or written, may also be included in
other materials released to the public. These forward-looking statements and
pro forma information are based on assumptions, decisions and judgments
made by the management of SFG companies, and are based on information
that is currently available to them. As such, they are subject to various risks
and uncertainties, and actual business results may vary substantially from the
forecasts expressed or implied in forward-looking statements. Consequently,
investors are cautioned not to place undue reliance on forward-looking
statements. SFG companies are under no obligation to revise forward-looking
statements or pro forma information in light of new information, future events
or other findings. The information contained in this annual report does not
constitute or form part of any offer for sale or subscription of or solicitation or
invitation of any offer to buy or subscribe to any securities, nor shall it or any
part of it form the basis of or be relied on in connection with any contract or
commitment whatsoever in Japan or abroad.
SFH refers to “Guidance for Collaborative Value
Creation” published by the Ministry of Economy,
Trade and Industry when organizing and examin-
ing matters to be listed in this report, in order to
make this report a starting point for dialogue with
shareholders and investors.
Editorial Policy
Sony Financial Holdings Inc.Annual Report2020 1
1946
Tokyo Telecommunication
Engineering Corporation
was established (currently
Sony Corp.)
1979
Sony Prudential Life
Insurance Co., Ltd. was
established (currently Sony
Life)
1998
Sony Insurance Planning
Co., Ltd. was established
(currently Sony Assurance)
“Do what has never been
done before”
Note: Akio Morita (left) and Masaru
Ibuka (right), the founders of
Sony Corporation
(photographed in 1967)
1989
■ Nikkei Stock
Average reaches
historic high of
¥38,915
1997
■ Licensed to offer risk-segmented
automobile insurance
Late 1990s–
■ Internet spreads with release of Windows
■ Financial Big Bang occurs in Japan
1998
■ Revision to the Act on Non-life Insurance
Rating Organization of Japan (Introduction
of reference loss cost rates system)
1977
■ Japan achieves
the longest life
expectancy in
the world for both
men and women
Akio Morita, the founder of Sony Corp., visited Chicago in the late 1950s to open a sales office for transistor radios.
He was shocked to discover that the massive skyscraper towering over the streets was owned by the largest life insurance
company in America at that time.
This is said to be the inspiration of his dream for Sony Group to have its own financial institution and to build a magnificent
skyscraper of its own one day.
His entrepreneurial spirit drove him to adapt to the diversifying needs of customers and solve the problems facing society hims
The Sony Spirit to “do what has never been done before” has been passed down from one generation to the next, and the
Sony Group has taken advantage of financial liberalization and deregulation to create a new financial business without bein
constrained by existing frameworks.
Sony Financial Group creates new
financial businesses without being
constrained by existing frameworks
1940 1970 1980
1996
■ Revision to the Insurance
Business Act
・ Ban removed on mutual entry into
life and non-life insurance fields
・ Reviewed accounting calculation
system
・ Introduced product/rate
notification system
1990
History
Sony Financial Holdings Inc.Annual Report20202
Tokyo Telecommunication
Engineering Corporation
was established (currently
Sony Corp.)
1979
Sony Prudential Life
Insurance Co., Ltd. was
established (currently Sony
Life)
1998
Sony Insurance Planning
Co., Ltd. was established
(currently Sony Assurance)
“Do what has never been
done before”
Note: Akio Morita (left) and Masaru
Ibuka (right), the founders of
Sony Corporation
(photographed in 1967)
1989
■ Nikkei Stock
Average reaches
historic high of
¥38,915
1997
■ Licensed to offer risk-segmented
automobile insurance
Late 1990s–
■ Internet spreads with release of Windows
■ Financial Big Bang occurs in Japan
1998
■ Revision to the Act on Non-life Insurance
Rating Organization of Japan (Introduction
of reference loss cost rates system)
1977
■ Japan achieves
the longest life
expectancy in
the world for both
men and women
Akio Morita, the founder of Sony Corp., visited Chicago in the late 1950s to open a sales office for transistor radios.
He was shocked to discover that the massive skyscraper towering over the streets was owned by the largest life insurance
company in America at that time.
This is said to be the inspiration of his dream for Sony Group to have its own financial institution and to build a magnificent
skyscraper of its own one day.
His entrepreneurial spirit drove him to adapt to the diversifying needs of customers and solve the problems facing society hims
The Sony Spirit to “do what has never been done before” has been passed down from one generation to the next, and the
Sony Group has taken advantage of financial liberalization and deregulation to create a new financial business without bein
constrained by existing frameworks.
Sony Financial Group creates new
financial businesses without being
constrained by existing frameworks
1940 1970 1980
1996
■ Revision to the Insurance
Business Act
・ Ban removed on mutual entry into
life and non-life insurance fields
・ Reviewed accounting calculation
system
・ Introduced product/rate
notification system
1990
History
Sony Financial Holdings Inc.Annual Report20202
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2018
Sony Financial Ventures
was established
2014
Sony Lifecare was established
2001
Sony Bank was established
Become the most trusted financial
services group by invoking emotion
through the power of technology
and high-value-added products
and services that meet every
customer’s needs
2004
SFH was established
(2007 SFH was listed on the First Section of
Tokyo Stock Exchange)
2001
■ Removal of ban on sales of insurance
products at banks
■ Revision to the Banking Act (removal of
ban on companies from other industries
entering the banking industry)
2000
■ Enactment of the nursing care
insurance system
■ Removal of ban on companies
from other industries entering
the banking industry
2007
■ Enactment of the Financial
Instruments and Exchange Act
2008
■ Collapse of Lehman Brothers
2010
■ Enactment of the
Insurance Act
2016
■ Introduction of negative interest
rates
■ Full enactment of revisions to
the Insurance Business Act
・ Comparative recommendation
regulations
・ Fulfillment of obligation to
grasp intentions
2011
■ Occurrence of the Great
East Japan Earthquake
2012
■ Economic policies enacted
by the second Abe
administration (Abenomics)
2000 2010
The logo used by the Sony Financial Group, uses the “S” in “Sony” as a motif.
Combining Sony blue 90, the corporate color of Sony Corporation, to represent
our origin, with green, which invokes the image of “safety” required of finance
businesses, the logo expresses:
1. “Innovation” that overturns the image of existing finance businesses;
2. “Intelligence” that invokes new business models; and
3. “Speed” to respond to the digital network society.
The Origin of Our Corporate Logo
Corporate
Logo
Sony Financial Holdings Inc.Annual Report2020 3
Sony Financial Ventures
was established
2014
Sony Lifecare was established
2001
Sony Bank was established
Become the most trusted financial
services group by invoking emotion
through the power of technology
and high-value-added products
and services that meet every
customer’s needs
2004
SFH was established
(2007 SFH was listed on the First Section of
Tokyo Stock Exchange)
2001
■ Removal of ban on sales of insurance
products at banks
■ Revision to the Banking Act (removal of
ban on companies from other industries
entering the banking industry)
2000
■ Enactment of the nursing care
insurance system
■ Removal of ban on companies
from other industries entering
the banking industry
2007
■ Enactment of the Financial
Instruments and Exchange Act
2008
■ Collapse of Lehman Brothers
2010
■ Enactment of the
Insurance Act
2016
■ Introduction of negative interest
rates
■ Full enactment of revisions to
the Insurance Business Act
・ Comparative recommendation
regulations
・ Fulfillment of obligation to
grasp intentions
2011
■ Occurrence of the Great
East Japan Earthquake
2012
■ Economic policies enacted
by the second Abe
administration (Abenomics)
2000 2010
The logo used by the Sony Financial Group, uses the “S” in “Sony” as a motif.
Combining Sony blue 90, the corporate color of Sony Corporation, to represent
our origin, with green, which invokes the image of “safety” required of finance
businesses, the logo expresses:
1. “Innovation” that overturns the image of existing finance businesses;
2. “Intelligence” that invokes new business models; and
3. “Speed” to respond to the digital network society.
The Origin of Our Corporate Logo
Corporate
Logo
Sony Financial Holdings Inc.Annual Report2020 3
SFG’s Corporate
Philosophy SFG’s Businesses
Sony Financial Group aims to enhance its corporate value and contribute to the development of a sustainable society,
under its corporate philosophy, consisting of its “Mission, Vision & Values.”
By making the most of our strengths and possibilities as a group, we will create new value of financial businesses
without being constrained by existing frameworks.
Sony Financial Group’s value creation story
Vision
Become the most
trusted financial
services group by
invoking emotion
through the power of
technology and
high-value-added
products and services
that meet every
customer’s needs
Mission
Create a sustainable
society where people
feel a sense of
enrichment
Values
Customer first
Originality
Integrity & Fairness
Diversity
Sustainability
Sony Financial Group
Sony Financial HoldingsHolding Company
▶P14
Sony LifecareNursing care business
[Strengths]● Capture a wide range of needs by expanding our
lineup
● Propose nursing care service suitable for each
resident
Sony LifeLife insurance business
[Strengths]● Tailor-made insurance product design and sales
approach that match life planning of each individual
customer based on consulting (consulting sales)
● Maintaining optimal coverage through inspections
of and advice on post-contract life plans and
coverage, adjusted to changes in environment
surrounding the customer (consulting follow-up)
● Securing financial soundness through ALM opera-
tion adjusted to long-term liability characteristics
[Strengths]● Reasonable insurance premiums according to
each customer’s risk
● High-quality accident response, customer center,
and website services
Sony AssuranceNon-life insurance business
[Strengths]● Safe, reliable and highly convenient services,
leveraging the advantages of an Internet bank
● Extensive lineup of high-quality products
● Business operation with high customer satisfaction
Sony BankBanking business
Value Creation Story
Sony Financial Holdings Inc.Annual Report20204
Philosophy SFG’s Businesses
Sony Financial Group aims to enhance its corporate value and contribute to the development of a sustainable society,
under its corporate philosophy, consisting of its “Mission, Vision & Values.”
By making the most of our strengths and possibilities as a group, we will create new value of financial businesses
without being constrained by existing frameworks.
Sony Financial Group’s value creation story
Vision
Become the most
trusted financial
services group by
invoking emotion
through the power of
technology and
high-value-added
products and services
that meet every
customer’s needs
Mission
Create a sustainable
society where people
feel a sense of
enrichment
Values
Customer first
Originality
Integrity & Fairness
Diversity
Sustainability
Sony Financial Group
Sony Financial HoldingsHolding Company
▶P14
Sony LifecareNursing care business
[Strengths]● Capture a wide range of needs by expanding our
lineup
● Propose nursing care service suitable for each
resident
Sony LifeLife insurance business
[Strengths]● Tailor-made insurance product design and sales
approach that match life planning of each individual
customer based on consulting (consulting sales)
● Maintaining optimal coverage through inspections
of and advice on post-contract life plans and
coverage, adjusted to changes in environment
surrounding the customer (consulting follow-up)
● Securing financial soundness through ALM opera-
tion adjusted to long-term liability characteristics
[Strengths]● Reasonable insurance premiums according to
each customer’s risk
● High-quality accident response, customer center,
and website services
Sony AssuranceNon-life insurance business
[Strengths]● Safe, reliable and highly convenient services,
leveraging the advantages of an Internet bank
● Extensive lineup of high-quality products
● Business operation with high customer satisfaction
Sony BankBanking business
Value Creation Story
Sony Financial Holdings Inc.Annual Report20204
SFG’s Materiality SFG’s Value Provision
Significant Social and
Environmental Changes
(Significant Business Challenges)
Value Creation
Make lifestyles
more convenient
Offer lifestyles
that feature
safety and peace
of mind
Contribute to
a healthy, long-
lived society
▶P27
Corporate
Governance
Human
Resources
Respecting
Diversity
Important Items for Strengthening
Our Foundation
▶P6
Demographic changes
Globally low interest rates
Rapid progress of
technological innovation
Financial regulatory changes
Sony Financial Holdings Inc.Annual Report2020 5
Significant Social and
Environmental Changes
(Significant Business Challenges)
Value Creation
Make lifestyles
more convenient
Offer lifestyles
that feature
safety and peace
of mind
Contribute to
a healthy, long-
lived society
▶P27
Corporate
Governance
Human
Resources
Respecting
Diversity
Important Items for Strengthening
Our Foundation
▶P6
Demographic changes
Globally low interest rates
Rapid progress of
technological innovation
Financial regulatory changes
Sony Financial Holdings Inc.Annual Report2020 5
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Significant Challenges Risk Opportunity
Demographic changes
(Population decline, aging
population and declining
birthrate, changes in
household structure,
uncertainty about social
security)
● Shrinking markets due to population
decline
● Reduced demand for SFG’s main
products
● Increased in mortality and morbidity rate
● Difficulty in acquiring human resources,
and soaring personnel expenses
● Expand the range of target customers through an
enhanced product lineup
● Expand opportunities to provide products and services
that capture changes in customer needs
● Increase in demand for nursing care-related services
● Enhanced productivity through the use of technology
Globally low interest rates● Reductions in product lineup due to
declining product profitability and revision
and abolition of some products
● Decline in investment income
● Construct product portfolios that are resilient to changes
in interest rates
● Diversify investment options
Rapid progress of
technological innovation
(Advent of the data
economy, widespread
adoption of AI,
advancement of
autonomous driving
technologies)
● Changes in customer needs and behavior
patterns
● Obsolescence of existing businesses with
the rise of new business models
● Higher requirements and increasing costs
for systems development, personal
information protection, and information
security measures
● Increase operational efficiency and enhance capacity to
respond to customer needs through the use of
technology
● Enhance marketing, product development, risk
management and other functions through data utilization
● Emergence of new insurance needs in response to new
risks
● Alliances with other industries and external companies
Financial regulatory
changes
● Increases in required capital and costs to
comply with regulation
● Increased competition due to deregulation
● Further enhance SFG’s existing strength in “customer-
first” service
● Adopt new approaches and business domains
Analysis of social and environmental changes, an
identification of significant business challenges
STEP.2
STEP.3
STEP.1
Evaluation from SFG’s perspective and the perspectives
of stakeholders
Conduct an evaluation from the perspective of SFG and those of its
stakeholders
Identification of significant business challenges
Identify significant business challenges based on the results of the
evaluation, with approval of management
Strengthen initiatives in these areas
Extraction and organizing of candidates for significant
business challenges
Select candidates from among the social and environmental changes
that are highly related to SFG’s businesses
Identification process for significant business challenges
Value Creation Story
Sony Financial Holdings Inc.Annual Report20206
Demographic changes
(Population decline, aging
population and declining
birthrate, changes in
household structure,
uncertainty about social
security)
● Shrinking markets due to population
decline
● Reduced demand for SFG’s main
products
● Increased in mortality and morbidity rate
● Difficulty in acquiring human resources,
and soaring personnel expenses
● Expand the range of target customers through an
enhanced product lineup
● Expand opportunities to provide products and services
that capture changes in customer needs
● Increase in demand for nursing care-related services
● Enhanced productivity through the use of technology
Globally low interest rates● Reductions in product lineup due to
declining product profitability and revision
and abolition of some products
● Decline in investment income
● Construct product portfolios that are resilient to changes
in interest rates
● Diversify investment options
Rapid progress of
technological innovation
(Advent of the data
economy, widespread
adoption of AI,
advancement of
autonomous driving
technologies)
● Changes in customer needs and behavior
patterns
● Obsolescence of existing businesses with
the rise of new business models
● Higher requirements and increasing costs
for systems development, personal
information protection, and information
security measures
● Increase operational efficiency and enhance capacity to
respond to customer needs through the use of
technology
● Enhance marketing, product development, risk
management and other functions through data utilization
● Emergence of new insurance needs in response to new
risks
● Alliances with other industries and external companies
Financial regulatory
changes
● Increases in required capital and costs to
comply with regulation
● Increased competition due to deregulation
● Further enhance SFG’s existing strength in “customer-
first” service
● Adopt new approaches and business domains
Analysis of social and environmental changes, an
identification of significant business challenges
STEP.2
STEP.3
STEP.1
Evaluation from SFG’s perspective and the perspectives
of stakeholders
Conduct an evaluation from the perspective of SFG and those of its
stakeholders
Identification of significant business challenges
Identify significant business challenges based on the results of the
evaluation, with approval of management
Strengthen initiatives in these areas
Extraction and organizing of candidates for significant
business challenges
Select candidates from among the social and environmental changes
that are highly related to SFG’s businesses
Identification process for significant business challenges
Value Creation Story
Sony Financial Holdings Inc.Annual Report20206
Value Creation Main Initiatives
Make lifestyles
more
convenient
Offer lifestyles
that feature
safety and
peace of mind
● We utilize a wide range of information to support the
life of each customer by offering appropriate advice,
products and services.
● We aim to contribute to a safe and secure society
featuring next-generation mobility by providing new
technology-enabled insurance products and services.
● We will provide products and services that anticipate
a long-lived society, providing economic security and
promoting wealth-building.
● We will make life more convenient by improving
access to financial services and promoting
innovation.
Contribute to
a healthy,
long-lived
society
Requests from stakeholders
Significant Social and Environmental
Changes
(Significant Business Challenges)
Demographic changes
● Populationdecline ● Aging populationand decliningbirthrate
● Changesin householdstructure● Uncertaintyaboutsocial security
Globally low interest rates
Rapid progress of technological innovation
● Advent of the data economy● Widespread adoption of AI
● Advancement of autonomous driving technologies
Financial regulatory changes
Impact on SFG
Sony Financial Holdings Inc.Annual Report2020 7
Make lifestyles
more
convenient
Offer lifestyles
that feature
safety and
peace of mind
● We utilize a wide range of information to support the
life of each customer by offering appropriate advice,
products and services.
● We aim to contribute to a safe and secure society
featuring next-generation mobility by providing new
technology-enabled insurance products and services.
● We will provide products and services that anticipate
a long-lived society, providing economic security and
promoting wealth-building.
● We will make life more convenient by improving
access to financial services and promoting
innovation.
Contribute to
a healthy,
long-lived
society
Requests from stakeholders
Significant Social and Environmental
Changes
(Significant Business Challenges)
Demographic changes
● Populationdecline ● Aging populationand decliningbirthrate
● Changesin householdstructure● Uncertaintyaboutsocial security
Globally low interest rates
Rapid progress of technological innovation
● Advent of the data economy● Widespread adoption of AI
● Advancement of autonomous driving technologies
Financial regulatory changes
Impact on SFG
Sony Financial Holdings Inc.Annual Report2020 7
Solvency margin ratio
2,476.3%
Solvency margin ratio
872.3%
Capital adequacy ratio
(Domestic standard)
8.85%
Financial Soundness Indicators(As of March 31, 2020)
Sony Life
(Non-consolidated)
Sony Assurance Sony Bank
(Non-consolidated)
Profitability Indicators(As of March 31, 2020)
Consolidated adjusted ROE
5.3%
Sony Financial Holdings
(Consolidated)
Adjusted ROE
14.7%
Sony Assurance
ROE
7.8%
Sony Bank
(Consolidated)
Core ROEV
4.9%
Sony Life
(Non-consolidated)
Business Volume KPI
*1 Sum of individual life insurance and individual annuities
*2 Sum of deposits, investment trusts, and personal loans
Since March 31, 2018, also includes financial products intermediary services and mediated discretionary investment contracts
Note: Figures less than the indicated unit have been truncated
Financial Highlights
Sony Life
(Non-consolidated)
Sony Assurance Sony Bank
(Non-consolidated)
2016 2017 2018 2020
43.1 45.3 47.2
51.4
2019
49.5
2016 2017 2018 2020
94.3 99.0 107.0
119.1
2019
112.1
2016 2017 2018 2020
3.2
3.6 3.9
4.5
2019
4.2
Note: As of March 31 Note: As of March 31Note: For the years ended March 31
Policy amount in force*1
(Trillions of yen)
Direct premiums written
(Billions of yen)
Retail balance*2
(Trillions of yen)
Financial and Non-financial Highlights
Sony Financial Holdings Inc.Annual Report20208
2,476.3%
Solvency margin ratio
872.3%
Capital adequacy ratio
(Domestic standard)
8.85%
Financial Soundness Indicators(As of March 31, 2020)
Sony Life
(Non-consolidated)
Sony Assurance Sony Bank
(Non-consolidated)
Profitability Indicators(As of March 31, 2020)
Consolidated adjusted ROE
5.3%
Sony Financial Holdings
(Consolidated)
Adjusted ROE
14.7%
Sony Assurance
ROE
7.8%
Sony Bank
(Consolidated)
Core ROEV
4.9%
Sony Life
(Non-consolidated)
Business Volume KPI
*1 Sum of individual life insurance and individual annuities
*2 Sum of deposits, investment trusts, and personal loans
Since March 31, 2018, also includes financial products intermediary services and mediated discretionary investment contracts
Note: Figures less than the indicated unit have been truncated
Financial Highlights
Sony Life
(Non-consolidated)
Sony Assurance Sony Bank
(Non-consolidated)
2016 2017 2018 2020
43.1 45.3 47.2
51.4
2019
49.5
2016 2017 2018 2020
94.3 99.0 107.0
119.1
2019
112.1
2016 2017 2018 2020
3.2
3.6 3.9
4.5
2019
4.2
Note: As of March 31 Note: As of March 31Note: For the years ended March 31
Policy amount in force*1
(Trillions of yen)
Direct premiums written
(Billions of yen)
Retail balance*2
(Trillions of yen)
Financial and Non-financial Highlights
Sony Financial Holdings Inc.Annual Report20208
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Credit Ratings(As of July 1, 2020)
Credit Rating Agencies Sony Financial Holdings Sony Life Sony Bank
Rating and Investment Information (R&I) Issuer rating
AA-
Insurance claims paying
ability
AA
ー
Japan Credit Rating Agency (JCR) ー ー Long-term issuer rating
AA-
S&P Global Ratings Japan (S&P) ー
Insurer financial strength
rating
A+
Counterparty credit rating
Long-term A
Short-term A-1
Number of employees(As of March 31, 2020)
Non-financial Highlights
Consolidated
11,487
Sony Life
5,146
Number of Lifeplanner sales employees(As of March 31, 2020)
Number of MDRT members
Sony Life
1,191
Life insurance business 8,739
Non-life insurance business1,347
Banking business 644
Others 690
Parent 67
Sony Financial Holdings Inc.Annual Report2020 9
Credit Rating Agencies Sony Financial Holdings Sony Life Sony Bank
Rating and Investment Information (R&I) Issuer rating
AA-
Insurance claims paying
ability
AA
ー
Japan Credit Rating Agency (JCR) ー ー Long-term issuer rating
AA-
S&P Global Ratings Japan (S&P) ー
Insurer financial strength
rating
A+
Counterparty credit rating
Long-term A
Short-term A-1
Number of employees(As of March 31, 2020)
Non-financial Highlights
Consolidated
11,487
Sony Life
5,146
Number of Lifeplanner sales employees(As of March 31, 2020)
Number of MDRT members
Sony Life
1,191
Life insurance business 8,739
Non-life insurance business1,347
Banking business 644
Others 690
Parent 67
Sony Financial Holdings Inc.Annual Report2020 9
Contribute to a sustainable society where
people feel a sense of enrichment
President & CEO, Representative Director
Message from the President & CEO
Sony Financial Holdings Inc.Annual Report202010
people feel a sense of enrichment
President & CEO, Representative Director
Message from the President & CEO
Sony Financial Holdings Inc.Annual Report202010
On behalf of the Sony Financial Group, I wish to express our deep appreciation to all stakeholders for the
support and interest you continue to extend as we navigate today’s dynamic financial landscape.
My name is Masashi Oka, and I assumed the role of President & CEO, Representative Director of Sony
Financial Holdings, in June 2020. I believe that my greatest mission is to leverage the business foundation and
strengths that the Sony Financial Group (SFG) has built over time, to bring about its further growth and devel-
opment. As a deeply trusted financial services group, we will help create a society where people feel a unique
sense of enrichment, by providing high-value-added products and services that closely match the needs of
each individual customer, developing alliances with the Sony Group, and leveraging technology.
Response to changes in the environment due to the spread of COVID-19
First of all, I would like to express our respectful condolences for the victims of the COVID-19 pandemic, an
their families. At the same time, we pray for the early recovery of those who are currently battling the virus
Moreover, I would like to express our deepest respect for healthcare workers and others who are striving to
maintain social systems every day.
COVID-19 spread across the globe in a matter of months, affecting our lives in various ways. Nations imp-
mented distinct entry and exit restrictions, and many closed off borders and locked down cities. In Japan, a
state of emergency was declared, and residents were requested to refrain from leaving home for nonessen
and nonurgent reasons, and from leaving home at night. These measures have inevitably caused a pro-
nounced slowdown in economic activity, and there are fears of a global recession even more serious than t
period after the collapse of Lehman Brothers.
Economic activity is expected to recover gradually, as the pandemic is stamped out due to the untiring
efforts of people around the world. Even then, however, not everything will return to “the way it was.” On t
contrary, people’s lifestyles and values, even the structure of societies themselves, are anticipated to chan
significantly with this experience.
It seems inevitable that the needs of our customers will also change. In this context, it is absolutely nece-
sary for us to respond without delay to avoid being left behind by social and environmental changes.
In the life insurance field, for example, we are witnessing an increase in consciousness of protection,
wealth-building, health improvement and disease prevention needs, in addition to changes in behavior suc
as an increase in non-face-to-face and non-contact processes. The consulting services provided by special-
ized and trustworthy Lifeplanner sales employees, who constitute one of Sony Life’s strengths, are becomin
ever more important. Sony Life has also commenced providing remote consulting services. We must contin
to ensure that these services, provided by customer-focused, highly professional Lifeplanner sales employe
provide peace of mind even via an online forum, with easily accessible consultation and detailed explanatio
Sony Assurance and Sony Bank have also pursued customer convenience through a direct business mode
and enhanced their non-face-to-face services, such as online and telephone services. Now is the time for us
to provide customers with the full value of these enhanced services.
We are responding swiftly and appropriately to these great changes, and will continue to take on the cha-
lenges to achieve the next stage of growth.
Sony Financial Holdings Inc.Annual Report2020 11
support and interest you continue to extend as we navigate today’s dynamic financial landscape.
My name is Masashi Oka, and I assumed the role of President & CEO, Representative Director of Sony
Financial Holdings, in June 2020. I believe that my greatest mission is to leverage the business foundation and
strengths that the Sony Financial Group (SFG) has built over time, to bring about its further growth and devel-
opment. As a deeply trusted financial services group, we will help create a society where people feel a unique
sense of enrichment, by providing high-value-added products and services that closely match the needs of
each individual customer, developing alliances with the Sony Group, and leveraging technology.
Response to changes in the environment due to the spread of COVID-19
First of all, I would like to express our respectful condolences for the victims of the COVID-19 pandemic, an
their families. At the same time, we pray for the early recovery of those who are currently battling the virus
Moreover, I would like to express our deepest respect for healthcare workers and others who are striving to
maintain social systems every day.
COVID-19 spread across the globe in a matter of months, affecting our lives in various ways. Nations imp-
mented distinct entry and exit restrictions, and many closed off borders and locked down cities. In Japan, a
state of emergency was declared, and residents were requested to refrain from leaving home for nonessen
and nonurgent reasons, and from leaving home at night. These measures have inevitably caused a pro-
nounced slowdown in economic activity, and there are fears of a global recession even more serious than t
period after the collapse of Lehman Brothers.
Economic activity is expected to recover gradually, as the pandemic is stamped out due to the untiring
efforts of people around the world. Even then, however, not everything will return to “the way it was.” On t
contrary, people’s lifestyles and values, even the structure of societies themselves, are anticipated to chan
significantly with this experience.
It seems inevitable that the needs of our customers will also change. In this context, it is absolutely nece-
sary for us to respond without delay to avoid being left behind by social and environmental changes.
In the life insurance field, for example, we are witnessing an increase in consciousness of protection,
wealth-building, health improvement and disease prevention needs, in addition to changes in behavior suc
as an increase in non-face-to-face and non-contact processes. The consulting services provided by special-
ized and trustworthy Lifeplanner sales employees, who constitute one of Sony Life’s strengths, are becomin
ever more important. Sony Life has also commenced providing remote consulting services. We must contin
to ensure that these services, provided by customer-focused, highly professional Lifeplanner sales employe
provide peace of mind even via an online forum, with easily accessible consultation and detailed explanatio
Sony Assurance and Sony Bank have also pursued customer convenience through a direct business mode
and enhanced their non-face-to-face services, such as online and telephone services. Now is the time for us
to provide customers with the full value of these enhanced services.
We are responding swiftly and appropriately to these great changes, and will continue to take on the cha-
lenges to achieve the next stage of growth.
Sony Financial Holdings Inc.Annual Report2020 11
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Progress of the medium-term business plan
This fiscal year marks the culmination of the three-year medium-term business plan that commenced in
2018. Under the theme of taking on the challenge of new growth, we have grasped as “opportunities” the
changes visible from a long-term perspective of ten years or more. In addition to organic growth under the
existing business models, we have implemented a range of measures to lay the groundwork for future
growth, aiming to enhance corporate value. The impact of COVID-19, with market declines and the suspen-
sion of economic activities due to the declaration of a state of emergency, has been even greater than
originally anticipated. Although the targets for some of our performance indicators have become unattain-
able in this challenging environment, we are making smooth progress overall in areas such as expanding
the number of policyholders and users, improving customer satisfaction, and developing new products and
services.
Sony Life has promoted customer-first business operations, and increased its policy amount in force by
3.8% year on year, to ¥51.4 trillion yen as of March 31, 2020. In order to offer greater value to our custom-
ers, we are working to amplify the unique strengths of our Lifeplanner sales employees by raising their leve
of service even higher and introducing a system for more deeply assessing their value to customers. We ar
also leveraging life planning tools and information to evolve our services, to provide consulting sales and
follow-up in line with customer needs at any time.
As for Sony Assurance, the number of policies in force for mainstay automobile insurance exceeded 2
million as of March 31, 2019. In terms of sales, it has firmly maintained its status as the number-one direct
automobile insurer in Japan since fiscal 2002. In March 2020, it launched a smartphone-only pay-how-you-
drive (PHYD) automobile insurance product that leverages AI, called “GOOD DRIVE”. This new product was
made possible by applying the Sony Group’s proprietary AI, sensing, and cloud computing technologies, in
addition to the insight into insurance product and service development that Sony Assurance has accumu-
lated over its history. Sony Assurance will continue to pursue enhanced CX (customer experience), and
actively utilize advanced technologies across a broad range of domains, including products, services, and
marketing.
Sony Bank is working to perceive customer needs and enhance customer convenience through a wide
range of services, including launching an alliance with the ANA Group in the foreign currency business,
entrusting intermediary operations of its mortgage loans to JAPAN POST BANK, and introducing commis-
sion-free sales of all investment trust funds, as well as an “English online banking service” targeting foreign
residents in Japan.
Message from the President & CEO
Sony Financial Holdings Inc.Annual Report202012
This fiscal year marks the culmination of the three-year medium-term business plan that commenced in
2018. Under the theme of taking on the challenge of new growth, we have grasped as “opportunities” the
changes visible from a long-term perspective of ten years or more. In addition to organic growth under the
existing business models, we have implemented a range of measures to lay the groundwork for future
growth, aiming to enhance corporate value. The impact of COVID-19, with market declines and the suspen-
sion of economic activities due to the declaration of a state of emergency, has been even greater than
originally anticipated. Although the targets for some of our performance indicators have become unattain-
able in this challenging environment, we are making smooth progress overall in areas such as expanding
the number of policyholders and users, improving customer satisfaction, and developing new products and
services.
Sony Life has promoted customer-first business operations, and increased its policy amount in force by
3.8% year on year, to ¥51.4 trillion yen as of March 31, 2020. In order to offer greater value to our custom-
ers, we are working to amplify the unique strengths of our Lifeplanner sales employees by raising their leve
of service even higher and introducing a system for more deeply assessing their value to customers. We ar
also leveraging life planning tools and information to evolve our services, to provide consulting sales and
follow-up in line with customer needs at any time.
As for Sony Assurance, the number of policies in force for mainstay automobile insurance exceeded 2
million as of March 31, 2019. In terms of sales, it has firmly maintained its status as the number-one direct
automobile insurer in Japan since fiscal 2002. In March 2020, it launched a smartphone-only pay-how-you-
drive (PHYD) automobile insurance product that leverages AI, called “GOOD DRIVE”. This new product was
made possible by applying the Sony Group’s proprietary AI, sensing, and cloud computing technologies, in
addition to the insight into insurance product and service development that Sony Assurance has accumu-
lated over its history. Sony Assurance will continue to pursue enhanced CX (customer experience), and
actively utilize advanced technologies across a broad range of domains, including products, services, and
marketing.
Sony Bank is working to perceive customer needs and enhance customer convenience through a wide
range of services, including launching an alliance with the ANA Group in the foreign currency business,
entrusting intermediary operations of its mortgage loans to JAPAN POST BANK, and introducing commis-
sion-free sales of all investment trust funds, as well as an “English online banking service” targeting foreign
residents in Japan.
Message from the President & CEO
Sony Financial Holdings Inc.Annual Report202012
New initiatives aimed at the next stage of growth from a medium- to
long-term perspective
We are engaged in new initiatives aimed at the next stage in our growth, based on a medium- to long-term
perspective of changes in the social environment, including demographic changes, globally low interest
rates, rapid progress of technological innovation, and financial regulatory changes, as well as extensive
discussion across the Group on the nature and sustainability of the business model in each business do-
main, and an analysis of risks and countermeasures.
Group Collaboration
Sony Corp. recently implemented a tender offer for the shares of SFH. By transitioning to a wholly-owned subsid
of Sony Corp., we believe we will be able to further collaborate within the Sony Group and generate new synerg
We will leverage the service development structure and corporate functions of the Sony Group for the swift and
flexible implementation of bold new management initiatives, and develop financial services that closely match
changing business environment and the increasingly diverse needs of our customers.
We have promoted technological collaboration within the Sony Group through initiatives such as information--
change meetings with Sony Corp.’s R&D Center, aimed at leveraging technology in the finance domain and solv
business issues. The partition separating finance and other sectors has been disappearing in recent years. In this
context, we want to apply advanced tools such as AI to change the finance business with the power of technolo
At the same time, we will explore new collaboration with the Sony Group’s entertainment, electronics, and ot
businesses, and strive to provide even more convenient services.
Sustainability
At SFG, we take care to act fairly with high ethical standards and a sense of purpose, based on our Mission
and Code of Conduct. We give due consideration to the impact of our business activities on the interests of
our stakeholders, including customers, shareholders, employees, business partners, and local communities,
as well as the global environment; we work to build trust through dialogue with all our stakeholders; and we
aim to contribute to the development of a sustainable society.
SFG develops diverse businesses, aiming for sustainable value creation. While the activity domains and
models of our businesses vary greatly, they all share the qualities of leveraging technology and providing
high-value-added products and services that closely match the needs of our individual customers. Through
our businesses, we strive to offer lifestyles that feature safety and peace of mind, contribute to a healthy,
long-lived society, and make lifestyles more convenient. We also recognize the importance of the foundation
that supports value creation. We are working to strengthen this foundation, identifying corporate governanc
and human resources that respect diversity as matters of highest priority.
Contribute to a sustainable society where people feel a sense of enrichment
The speed of change in the business environment is anticipated to accelerate. We will not be left behind. On
contrary, we will act to spearhead change, engaging in management from a long-term perspective to creat
sustainable social and economic value. We will continue to respond to the needs and expectations of all ou
stakeholders, and help create a society where people feel a unique sense of enrichment.
We look forward to your continued support and interest in our efforts.
Sony Financial Holdings Inc.Annual Report2020 13
long-term perspective
We are engaged in new initiatives aimed at the next stage in our growth, based on a medium- to long-term
perspective of changes in the social environment, including demographic changes, globally low interest
rates, rapid progress of technological innovation, and financial regulatory changes, as well as extensive
discussion across the Group on the nature and sustainability of the business model in each business do-
main, and an analysis of risks and countermeasures.
Group Collaboration
Sony Corp. recently implemented a tender offer for the shares of SFH. By transitioning to a wholly-owned subsid
of Sony Corp., we believe we will be able to further collaborate within the Sony Group and generate new synerg
We will leverage the service development structure and corporate functions of the Sony Group for the swift and
flexible implementation of bold new management initiatives, and develop financial services that closely match
changing business environment and the increasingly diverse needs of our customers.
We have promoted technological collaboration within the Sony Group through initiatives such as information--
change meetings with Sony Corp.’s R&D Center, aimed at leveraging technology in the finance domain and solv
business issues. The partition separating finance and other sectors has been disappearing in recent years. In this
context, we want to apply advanced tools such as AI to change the finance business with the power of technolo
At the same time, we will explore new collaboration with the Sony Group’s entertainment, electronics, and ot
businesses, and strive to provide even more convenient services.
Sustainability
At SFG, we take care to act fairly with high ethical standards and a sense of purpose, based on our Mission
and Code of Conduct. We give due consideration to the impact of our business activities on the interests of
our stakeholders, including customers, shareholders, employees, business partners, and local communities,
as well as the global environment; we work to build trust through dialogue with all our stakeholders; and we
aim to contribute to the development of a sustainable society.
SFG develops diverse businesses, aiming for sustainable value creation. While the activity domains and
models of our businesses vary greatly, they all share the qualities of leveraging technology and providing
high-value-added products and services that closely match the needs of our individual customers. Through
our businesses, we strive to offer lifestyles that feature safety and peace of mind, contribute to a healthy,
long-lived society, and make lifestyles more convenient. We also recognize the importance of the foundation
that supports value creation. We are working to strengthen this foundation, identifying corporate governanc
and human resources that respect diversity as matters of highest priority.
Contribute to a sustainable society where people feel a sense of enrichment
The speed of change in the business environment is anticipated to accelerate. We will not be left behind. On
contrary, we will act to spearhead change, engaging in management from a long-term perspective to creat
sustainable social and economic value. We will continue to respond to the needs and expectations of all ou
stakeholders, and help create a society where people feel a unique sense of enrichment.
We look forward to your continued support and interest in our efforts.
Sony Financial Holdings Inc.Annual Report2020 13
Sony Financial Group
Sony Financial Group Medium-term Business Plan: Fiscal 2018 Fiscal 2020
Customer-first
Further promote the customer-first
business operation
Response to Changes
Establish a foundation that allows us to take
full advantage of changes (technological
advancements, social or regulatory changes,
and others.) to secure further growth
Theme
Under the theme oftaking on the challenge of new growth:
- achieve organic growth from existing business models
- make strategic moves from a long-term perspective to secure further growth,
taking full advantage of changes10 years or more from now
Points
Strategy and Review
Sony Financial Holdings Inc.Annual Report202014
Sony Financial Group Medium-term Business Plan: Fiscal 2018 Fiscal 2020
Customer-first
Further promote the customer-first
business operation
Response to Changes
Establish a foundation that allows us to take
full advantage of changes (technological
advancements, social or regulatory changes,
and others.) to secure further growth
Theme
Under the theme oftaking on the challenge of new growth:
- achieve organic growth from existing business models
- make strategic moves from a long-term perspective to secure further growth,
taking full advantage of changes10 years or more from now
Points
Strategy and Review
Sony Financial Holdings Inc.Annual Report202014
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Group’s Growth Strategy
Over the mid-to-long term, market contraction, smaller profit margins and intensify-
ing competition are forecast for Japan’s financial services market due to factors
including low birth rate, aging population, and persistently low interest rates.
Moreover, with technological innovations such as rapid advances in Fintech and
the spread of AI, players from other industries are entering the financial industry. In
addition, greater emphasis is being placed on the proper execution of fiduciary
duty in the management of financial institutions.
Since the time of its establishment, SFG has differentiated itself by pursuing a
business model unlike those of conventional financial institutions, and has
provided high-value-added products and services to meet every customer’s
needs. Going forward, we consider it important to strengthen collaboration
within the Group and respond to the diverse needs of our customers, to create a
safe and secure society.
Key strategies based on “customer-first” business operations are: 1) Further enhance consulting-based sales and follow-up
by Lifeplanner sales employees, and raise customer satisfaction; 2) Achieve sustainable growth in automobile insurance an
diversify non-life insurance portfolio; 3) Strengthen foreign currency deposits and mortgage loans; and 4) Ensure steady
post-startup progress of the nursing care business.
We engaged in collaboration with each of the companies in the Sony Group, sharing technologies and challenges to create
new, high-value-added financial services. As one of our recent initiatives, we have launched a PHYD automobile insurance
leveraging the Sony Group’s technologies, such as AI. By providing incentive by paying back insurance premiums to custom
ers whose driving demonstrates a low risk of accidents, we aim to contribute to reducing customer’s accident risk, and
realizing a society with a low incidence of traffic accidents. We will continue to strengthen Group collaboration, and aspire t
transform the finance business through the power of technology.
Strengthening SFG’s core competence in “providing products and services to meet every customer’s needs” is a key
challenge for our future growth. We will speed up the generation of synergy with other Sony Group companies through
strategies that concentrate on a “customer-first” and “response to changes”. We will support its customers’ total financial
needs with appealing, high-value-added products and services that conventional financial institutions cannot provide.
Masashi Oka
President & CEO, Representative Director
Sony Financial Holdings Inc.
Life insurance business
▶P18 Sony Life
Organic Growth through Stronger Existing Businesses
Group Synergies
Non-life insurance
business
▶P20 Sony Assurance
Banking business
▶P22 Sony Bank
Nursing care business
▶P24 Nursing Care
Business
Sony Financial Holdings Inc.Annual Report2020 15
Over the mid-to-long term, market contraction, smaller profit margins and intensify-
ing competition are forecast for Japan’s financial services market due to factors
including low birth rate, aging population, and persistently low interest rates.
Moreover, with technological innovations such as rapid advances in Fintech and
the spread of AI, players from other industries are entering the financial industry. In
addition, greater emphasis is being placed on the proper execution of fiduciary
duty in the management of financial institutions.
Since the time of its establishment, SFG has differentiated itself by pursuing a
business model unlike those of conventional financial institutions, and has
provided high-value-added products and services to meet every customer’s
needs. Going forward, we consider it important to strengthen collaboration
within the Group and respond to the diverse needs of our customers, to create a
safe and secure society.
Key strategies based on “customer-first” business operations are: 1) Further enhance consulting-based sales and follow-up
by Lifeplanner sales employees, and raise customer satisfaction; 2) Achieve sustainable growth in automobile insurance an
diversify non-life insurance portfolio; 3) Strengthen foreign currency deposits and mortgage loans; and 4) Ensure steady
post-startup progress of the nursing care business.
We engaged in collaboration with each of the companies in the Sony Group, sharing technologies and challenges to create
new, high-value-added financial services. As one of our recent initiatives, we have launched a PHYD automobile insurance
leveraging the Sony Group’s technologies, such as AI. By providing incentive by paying back insurance premiums to custom
ers whose driving demonstrates a low risk of accidents, we aim to contribute to reducing customer’s accident risk, and
realizing a society with a low incidence of traffic accidents. We will continue to strengthen Group collaboration, and aspire t
transform the finance business through the power of technology.
Strengthening SFG’s core competence in “providing products and services to meet every customer’s needs” is a key
challenge for our future growth. We will speed up the generation of synergy with other Sony Group companies through
strategies that concentrate on a “customer-first” and “response to changes”. We will support its customers’ total financial
needs with appealing, high-value-added products and services that conventional financial institutions cannot provide.
Masashi Oka
President & CEO, Representative Director
Sony Financial Holdings Inc.
Life insurance business
▶P18 Sony Life
Organic Growth through Stronger Existing Businesses
Group Synergies
Non-life insurance
business
▶P20 Sony Assurance
Banking business
▶P22 Sony Bank
Nursing care business
▶P24 Nursing Care
Business
Sony Financial Holdings Inc.Annual Report2020 15
A group-oriented ERM (Enterprise Risk Management) framework has been introduced into SFG. It aims to balance and
optimize capital, risk and return by extending comprehensive risk management structures already in place at each compan
throughout the whole organization and to instill the idea of improved capital efficiency in management across the Group. T
ERM framework will help SFG achieve stable growth and maximize medium- to long-term corporate value. The Group is
working to build a PDCA cycle through the formulation, implementation and monitoring of business plans based on risk
appetite. Furthermore, we are trying to raise Group ERM even higher while keeping related regulatory trends in sight.
SFG has designated consolidated Group ESR
under its “Basic Policy on Group ERM,” and
utilizes it as a key indicator to guide manage-
ment judgement based on a balanced consid-
eration of revenues, risks and capital.
Consolidated Group ESR is an indicator of
capital sufficiency with respect to the Group’s
risk amount. Currently the target level of
consolidated Group ESR is between 180% and
250% from the viewpoint of ERM to ensure
financial soundness and capital efficiency.
Group ERM
Consolidated Group ESR
Note: We use consolidated Group ESR (an internal management indicator) to assist in making comprehensive management decisions
The indicator refers to the calculation methods used for European Solvency II and ICS, with some simplification
No third-party verification is conducted with respect to the calculation process or the appropriateness of its results
Capital efficiency (profitability)
indicators
Soundness indicators
● Sony Life: Core ROEV
● Sony Assurance: Adjusted ROE
● Sony Bank: ROE
● Insurance business: Solvency margin ratio
● Banking business: Capital adequacy ratio
● Management on a regulatory basis and
on the basis of economic value
ERM Diagram
Capital efficiency
(profitability)
Soundness
Return
Capital Risk
Capital policy
Dividend policy
Operation Cycle of Group ERM
Set risk-taking policy and
risk tolerance (risk appetite)
Formulate business plan
(measures and strategies,
revenue plan, stress tests,
and others.)
Operate business and
execute measures
Manage progress and track
status through monitoring
Take necessary measures
according to changes in
soundness and profitability
STEP.1
STEP.2
STEP.3
STEP.4
STEP.5
● Invest in growth, take on additional
risk and expand shareholder returns
● Consider investing in growth, taking
on additional risk and adopting a
flexible response to shareholder
returns
● Recover capital levels by reducing
risk and retaining profit
● Consider shoring up capital,
review shareholder returns
Comfortable
zone
250
(%)
180
100
Consolidated
Group ESR
Approx. 220%
Sony Financial Holdings Inc.Annual Report202016
optimize capital, risk and return by extending comprehensive risk management structures already in place at each compan
throughout the whole organization and to instill the idea of improved capital efficiency in management across the Group. T
ERM framework will help SFG achieve stable growth and maximize medium- to long-term corporate value. The Group is
working to build a PDCA cycle through the formulation, implementation and monitoring of business plans based on risk
appetite. Furthermore, we are trying to raise Group ERM even higher while keeping related regulatory trends in sight.
SFG has designated consolidated Group ESR
under its “Basic Policy on Group ERM,” and
utilizes it as a key indicator to guide manage-
ment judgement based on a balanced consid-
eration of revenues, risks and capital.
Consolidated Group ESR is an indicator of
capital sufficiency with respect to the Group’s
risk amount. Currently the target level of
consolidated Group ESR is between 180% and
250% from the viewpoint of ERM to ensure
financial soundness and capital efficiency.
Group ERM
Consolidated Group ESR
Note: We use consolidated Group ESR (an internal management indicator) to assist in making comprehensive management decisions
The indicator refers to the calculation methods used for European Solvency II and ICS, with some simplification
No third-party verification is conducted with respect to the calculation process or the appropriateness of its results
Capital efficiency (profitability)
indicators
Soundness indicators
● Sony Life: Core ROEV
● Sony Assurance: Adjusted ROE
● Sony Bank: ROE
● Insurance business: Solvency margin ratio
● Banking business: Capital adequacy ratio
● Management on a regulatory basis and
on the basis of economic value
ERM Diagram
Capital efficiency
(profitability)
Soundness
Return
Capital Risk
Capital policy
Dividend policy
Operation Cycle of Group ERM
Set risk-taking policy and
risk tolerance (risk appetite)
Formulate business plan
(measures and strategies,
revenue plan, stress tests,
and others.)
Operate business and
execute measures
Manage progress and track
status through monitoring
Take necessary measures
according to changes in
soundness and profitability
STEP.1
STEP.2
STEP.3
STEP.4
STEP.5
● Invest in growth, take on additional
risk and expand shareholder returns
● Consider investing in growth, taking
on additional risk and adopting a
flexible response to shareholder
returns
● Recover capital levels by reducing
risk and retaining profit
● Consider shoring up capital,
review shareholder returns
Comfortable
zone
250
(%)
180
100
Consolidated
Group ESR
Approx. 220%
Sony Financial Holdings Inc.Annual Report202016
SFH focuses on consolidated adjusted ROE as a profit indicator for the whole Group. Since each company differs by industry
such as insurance and banking, we assess profitability and capital efficiency using “Adjusted ROE” based on adjusted profit
and adjusted capital, which takes into account the characteristics of each business.
Consolidated Adjusted ROE
FY2017
Actual
FY2018
Actual
FY2019
Actual
Consolidated adjusted ROE* 6.1% 6.7% 5.3%
(Sony Life) Core ROEV* 5.9% 6.4% 4.9%
(Sony Assurance) Adjusted ROE 16.1% 15.2% 14.7%
(Sony Bank) ROE 5.5% 7.3% 7.8%
Group companies’ adjusted ROE and ROE as well as consolidated adjusted ROE are presented below.
Calculation of Sony Life’s core ROEV:
Calculation of Sony Assurance’s adjusted ROE:
Calculation of Sony Bank’s ROE:
Calculation of Consolidated adjusted ROE for the fiscal year:
Consolidated adjusted ROE = Consolidated adjusted profit divided by consolidated adjusted capital
New business value + Expected existing business contribution
MCEV*1 as of the beginning of the fiscal year less dividends paid
plus MCEV*1 as of the end of the fiscal year, divided by two
Net income (loss) + Provision amount for catastrophe reserve and its provision
amount for reserve for price fluctuations, in each case after taxes
The average amount of net assets plus the sum of catastrophe reserve and
its reserve for price fluctuations during the fiscal year, in each case after taxes
Profit (loss) attributable to owners of the parent
The average amount of net assets during the fiscal year
Sony Life: New business value plus expected existing business contribution + Sony Assurance: Net income (loss) plus provision
amount for catastrophe reserve and its provision amount for reserve for price fluctuations, in each case after taxes +
Sony Bank: Profit (loss) attributable to owners of the parent
Sony Life: MCEV*1 as of the beginning of the fiscal year less dividends paid plus MCEV*1 as of the end of the fiscal year, divided
by two + Sony Assurance: The average amount of net assets plus the sum of catastrophe reserve and its reserve for price
fluctuations during the fiscal year, in each case after taxes + Sony Bank: The average amount of net assets during the fiscal year
Calculation of Consolidated Adjusted ROE
*1 Sony Life discloses Market Consistent Embedded Value (“MCEV”). Sony Life’s MCEV is calculated in compliance with the European Insurance CFO Forum Marke
Consistent Embedded Value Principles©*2(“MCEV Principles”), the international standard in disclosing MCEV published by the CFO Forum comprising CFOs from
major insurance companies in Europe
*2 Copyright© Stichting CFO Forum Foundation 2008
* The figures for fiscal 2017 exclude the impact of a revision in the insurance risk management method and others for Sony Life
Sony Financial Holdings Inc.Annual Report2020 17
such as insurance and banking, we assess profitability and capital efficiency using “Adjusted ROE” based on adjusted profit
and adjusted capital, which takes into account the characteristics of each business.
Consolidated Adjusted ROE
FY2017
Actual
FY2018
Actual
FY2019
Actual
Consolidated adjusted ROE* 6.1% 6.7% 5.3%
(Sony Life) Core ROEV* 5.9% 6.4% 4.9%
(Sony Assurance) Adjusted ROE 16.1% 15.2% 14.7%
(Sony Bank) ROE 5.5% 7.3% 7.8%
Group companies’ adjusted ROE and ROE as well as consolidated adjusted ROE are presented below.
Calculation of Sony Life’s core ROEV:
Calculation of Sony Assurance’s adjusted ROE:
Calculation of Sony Bank’s ROE:
Calculation of Consolidated adjusted ROE for the fiscal year:
Consolidated adjusted ROE = Consolidated adjusted profit divided by consolidated adjusted capital
New business value + Expected existing business contribution
MCEV*1 as of the beginning of the fiscal year less dividends paid
plus MCEV*1 as of the end of the fiscal year, divided by two
Net income (loss) + Provision amount for catastrophe reserve and its provision
amount for reserve for price fluctuations, in each case after taxes
The average amount of net assets plus the sum of catastrophe reserve and
its reserve for price fluctuations during the fiscal year, in each case after taxes
Profit (loss) attributable to owners of the parent
The average amount of net assets during the fiscal year
Sony Life: New business value plus expected existing business contribution + Sony Assurance: Net income (loss) plus provision
amount for catastrophe reserve and its provision amount for reserve for price fluctuations, in each case after taxes +
Sony Bank: Profit (loss) attributable to owners of the parent
Sony Life: MCEV*1 as of the beginning of the fiscal year less dividends paid plus MCEV*1 as of the end of the fiscal year, divided
by two + Sony Assurance: The average amount of net assets plus the sum of catastrophe reserve and its reserve for price
fluctuations during the fiscal year, in each case after taxes + Sony Bank: The average amount of net assets during the fiscal year
Calculation of Consolidated Adjusted ROE
*1 Sony Life discloses Market Consistent Embedded Value (“MCEV”). Sony Life’s MCEV is calculated in compliance with the European Insurance CFO Forum Marke
Consistent Embedded Value Principles©*2(“MCEV Principles”), the international standard in disclosing MCEV published by the CFO Forum comprising CFOs from
major insurance companies in Europe
*2 Copyright© Stichting CFO Forum Foundation 2008
* The figures for fiscal 2017 exclude the impact of a revision in the insurance risk management method and others for Sony Life
Sony Financial Holdings Inc.Annual Report2020 17
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Policy Amount in Force*1
Vision ● We will work for customer’s financial security and stability by offering optimal life insurance products and
high-quality service.
Overview
● Main products: Death protection insurance (term life insurance, U.S. dollar-denominated insurance, variable
life insurance), living benefit insurance, educational endowment insurance, medical insurance
● Main sales channels: Lifeplanner sales employees, partners (independent agencies)
Strengths
● Tailor-made insurance product design and sales approach that match life planning of each individual
customer based on consulting (consulting sales)
● Maintaining optimal coverage through inspections of and advice on post-contract life plans and coverage,
adjusted to changes in environment surrounding the customer (consulting follow-up)
● Securing financial soundness through ALM operation adjusted to long-term liability characteristics
Risk ● Shrinking domestic insurance market; decline
in demand for death protection insurance Opportunity ● Increase in new protection and
wealth-building needs
Value
Creation
Offer lifestyles that feature
safety and peace of mind
● Support customers in achieving their life plans, through high quality consult-
ing sales and consulting follow-up by our Lifeplanner sales employees
Contribute to a healthy,
long-lived society
● Provide a diverse range of insurance products such as annuities, to provide
for a plentiful retirement for our customers
● Support customers’ health by providing healthcare and medical information
and services
*1 Sum of individual life insurance and individual annuities
*2 CAGR: Compound Annual Growth Rate
Sony Life
March 31,
2001
March 31,
2020
5.5%
CAGR*2 4~5%
¥51.4trillion
■: Sony Life ■: Life insurance industry■
: Sony Life’s market share
Since Sony Life started operations, we have continued to grow by designing
and selling tailor-made insurance products to suit the individual life plan of
every customer’s needs, via consulting sales and consulting follow-up, and
providing customers with optimal coverage.
Our policy amount in force in the Japanese life insurance market has
grown to exceed ¥50 trillion, but we are currently confronted with great
changes in the business environment, including low birth rate and an aging
population, as well as increasingly diverse customer needs.
Moving forward, we will continue to conduct business while putting the
customer first through even higher quality service, and achieve steady growth.
Tomoo Hagimoto
President, Representative Director
Sony Life Insurance Co., Ltd.
Sony Financial Holdings Inc.Annual Report202018
Vision ● We will work for customer’s financial security and stability by offering optimal life insurance products and
high-quality service.
Overview
● Main products: Death protection insurance (term life insurance, U.S. dollar-denominated insurance, variable
life insurance), living benefit insurance, educational endowment insurance, medical insurance
● Main sales channels: Lifeplanner sales employees, partners (independent agencies)
Strengths
● Tailor-made insurance product design and sales approach that match life planning of each individual
customer based on consulting (consulting sales)
● Maintaining optimal coverage through inspections of and advice on post-contract life plans and coverage,
adjusted to changes in environment surrounding the customer (consulting follow-up)
● Securing financial soundness through ALM operation adjusted to long-term liability characteristics
Risk ● Shrinking domestic insurance market; decline
in demand for death protection insurance Opportunity ● Increase in new protection and
wealth-building needs
Value
Creation
Offer lifestyles that feature
safety and peace of mind
● Support customers in achieving their life plans, through high quality consult-
ing sales and consulting follow-up by our Lifeplanner sales employees
Contribute to a healthy,
long-lived society
● Provide a diverse range of insurance products such as annuities, to provide
for a plentiful retirement for our customers
● Support customers’ health by providing healthcare and medical information
and services
*1 Sum of individual life insurance and individual annuities
*2 CAGR: Compound Annual Growth Rate
Sony Life
March 31,
2001
March 31,
2020
5.5%
CAGR*2 4~5%
¥51.4trillion
■: Sony Life ■: Life insurance industry■
: Sony Life’s market share
Since Sony Life started operations, we have continued to grow by designing
and selling tailor-made insurance products to suit the individual life plan of
every customer’s needs, via consulting sales and consulting follow-up, and
providing customers with optimal coverage.
Our policy amount in force in the Japanese life insurance market has
grown to exceed ¥50 trillion, but we are currently confronted with great
changes in the business environment, including low birth rate and an aging
population, as well as increasingly diverse customer needs.
Moving forward, we will continue to conduct business while putting the
customer first through even higher quality service, and achieve steady growth.
Tomoo Hagimoto
President, Representative Director
Sony Life Insurance Co., Ltd.
Sony Financial Holdings Inc.Annual Report202018
Further
strengthen
our business
foundation
Pursue quality in the Lifeplanner channel
In addition to implementing a strict recruiting process, Sony Life will set a higher standard of
service and provided value, and evaluate the behavior (processes) of Lifeplanner sales em-
ployees based on that standard from multiple perspectives, in order to improve quality even
further. In addition, we will work to execute deeper consulting sales and follow-up utilizing
tools such as “LiPSS” and “Karte.” We will further enhance the value provided by Lifeplanner
sales employees by pursuing higher quality.
Achieve steady growth in the independent agency channel
In addition to expanding support to fit the characteristics of our partners, we will strengthen
our relationship with high-quality partners by introducing a compensation system that evalu-
ates the quality of partners.
Provide new
value
Expand coverage
We will promote the enhancement of product capabilities and expand coverage, centered on
death protection products. As our medium-term product strategy, we will promote new
product development in anticipation of environmental changes, such as arrival of the era of
the 100-year lifespan.
Evolve customer-first service (Fintech)
We will develop tools that utilize life planning data and AI, and in both the consulting sales and
consulting follow-up phases, we will aim to support objective proposals to the customers and
improve quality of services.
Steadily grow
corporate
value
Realize growth in profit on the basis of economic value
We will aim for medium-term profit growth on an economic value basis, while striving to
conduct customer-first business operations and strengthen our compliance system.
Customer-first
Response to Changes
Initiatives for Fiscal 2020
Trends of Key Indicators
Policy Amount in Force*1
Trillions of yen
Number of Lifeplanner sales
employees*2
MCEV/Core ROEV*3
■: MCEV (trillions of yen)
■
: Core ROEV (%)
Ordinary Profit
(Life Insurance Business)
Billions of yen
March 31,
2018
47
March 31,
2019
49
March 31,
2020
51 5,142 5,164 5,146
March 31,
2018
March 31,
2019
March 31,
2020
1.6 1.7
FY2017 FY2018
5.9 6.4
1.7
FY2019
4.9 54.1
78.2
FY2017 FY2018
94.3
FY2019
*1 Sum of individual life insurance and individual annuities
*2 The figure includes the number of contracted Lifeplanner sales employees and those rehired on a fixed-term contract basis after retirement
*3 Results for fiscal 2017 exclude impact from revisions in the insurance risk measurement method and others
In order to realize our vision to “protect customers all across Japan throughout their lives,” Sony Life has worked to provide
necessary coverage to customers through consulting sales, and inspect and optimize coverage through consulting follow-u
In order to further expand the value we provide, we launched a U.S. dollar-denominated level premium plan term life insu
ance product targeting corporate customers in August 2019, and introduced an guaranteed lapse cancelation provision, to
provide relief from insurance policy lapse due to circumstances such as forgetting to pay insurance premiums, in Septembe
2019. In addition, we began operation of “Hokenseisakusho,” a shop-style insurance agency, in January 2020, in response t
the changing preferences and behavior of customers contemplating life insurance. We also acquired Sony Life With Insuran
which provide variable annuities and SA Reinsurance, both joint ventures, as wholly-owned subsidiaries in January 2020.
Review of Results for Fiscal 2019
* The trade name was changed from AEGON Sony Life Insurance Co., Ltd. to Sony Life With Insurance Co.,Ltd. on April 1, 2020
Sony Financial Holdings Inc.Annual Report2020 19
strengthen
our business
foundation
Pursue quality in the Lifeplanner channel
In addition to implementing a strict recruiting process, Sony Life will set a higher standard of
service and provided value, and evaluate the behavior (processes) of Lifeplanner sales em-
ployees based on that standard from multiple perspectives, in order to improve quality even
further. In addition, we will work to execute deeper consulting sales and follow-up utilizing
tools such as “LiPSS” and “Karte.” We will further enhance the value provided by Lifeplanner
sales employees by pursuing higher quality.
Achieve steady growth in the independent agency channel
In addition to expanding support to fit the characteristics of our partners, we will strengthen
our relationship with high-quality partners by introducing a compensation system that evalu-
ates the quality of partners.
Provide new
value
Expand coverage
We will promote the enhancement of product capabilities and expand coverage, centered on
death protection products. As our medium-term product strategy, we will promote new
product development in anticipation of environmental changes, such as arrival of the era of
the 100-year lifespan.
Evolve customer-first service (Fintech)
We will develop tools that utilize life planning data and AI, and in both the consulting sales and
consulting follow-up phases, we will aim to support objective proposals to the customers and
improve quality of services.
Steadily grow
corporate
value
Realize growth in profit on the basis of economic value
We will aim for medium-term profit growth on an economic value basis, while striving to
conduct customer-first business operations and strengthen our compliance system.
Customer-first
Response to Changes
Initiatives for Fiscal 2020
Trends of Key Indicators
Policy Amount in Force*1
Trillions of yen
Number of Lifeplanner sales
employees*2
MCEV/Core ROEV*3
■: MCEV (trillions of yen)
■
: Core ROEV (%)
Ordinary Profit
(Life Insurance Business)
Billions of yen
March 31,
2018
47
March 31,
2019
49
March 31,
2020
51 5,142 5,164 5,146
March 31,
2018
March 31,
2019
March 31,
2020
1.6 1.7
FY2017 FY2018
5.9 6.4
1.7
FY2019
4.9 54.1
78.2
FY2017 FY2018
94.3
FY2019
*1 Sum of individual life insurance and individual annuities
*2 The figure includes the number of contracted Lifeplanner sales employees and those rehired on a fixed-term contract basis after retirement
*3 Results for fiscal 2017 exclude impact from revisions in the insurance risk measurement method and others
In order to realize our vision to “protect customers all across Japan throughout their lives,” Sony Life has worked to provide
necessary coverage to customers through consulting sales, and inspect and optimize coverage through consulting follow-u
In order to further expand the value we provide, we launched a U.S. dollar-denominated level premium plan term life insu
ance product targeting corporate customers in August 2019, and introduced an guaranteed lapse cancelation provision, to
provide relief from insurance policy lapse due to circumstances such as forgetting to pay insurance premiums, in Septembe
2019. In addition, we began operation of “Hokenseisakusho,” a shop-style insurance agency, in January 2020, in response t
the changing preferences and behavior of customers contemplating life insurance. We also acquired Sony Life With Insuran
which provide variable annuities and SA Reinsurance, both joint ventures, as wholly-owned subsidiaries in January 2020.
Review of Results for Fiscal 2019
* The trade name was changed from AEGON Sony Life Insurance Co., Ltd. to Sony Life With Insurance Co.,Ltd. on April 1, 2020
Sony Financial Holdings Inc.Annual Report2020 19
98
0
1,000
2,000
3,000
4,000
5,000
0.0
2.0
4.0
6.0
8.0
10.0
99 00 08 0906 0704 050201 03 10 11 12 13 14 15 16 17 18 19
Vision ● As a leader from the present into the future, in the Sony spirit of freedom and open-mindedness, we will
constantly aspire to create and innovate, to bring about new lifestyles.
Overview
● Direct insurance company for individuals
● Main products: Automobile insurance, medical insurance, overseas travel insurance, fire insurance
● Main sales channel: Internet
Strengths ● Reasonable insurance premiums according to each customer’s risk
● High-quality accident response, customer center, and website services
Risk
● Rise in loss ratios and reinsurance premiums
due to more frequent and serious natural
disasters
Opportunity ● Increase in insurance needs to protect
against natural disasters
Value
Creation
Offer lifestyles that feature
safety and peace of mind
● Leverage advanced technologies to contribute to realizing a safe society with
a low incidence of traffic accidents
● Contribute to safe and secure homes
Contribute to a healthy,
long-lived society
● Provide protection to match customer needs through our medical insurance
business
Make lifestyles more
convenient
● Develop new products in response to social change, including autonomous
vehicles and Mobility as a Service (MaaS)
Note:The graph was prepared by Sony Assurance from data officially
disclosed by individual non-life insurers
Automobile Insurance Market and Market Share of
Major Direct Non-life Insurers
For the years ended March 31,
■: Direct premiums written (total of all non-life insurers and shown as the
automobile insurance market) (left scale: billions of yen)
■
: Market share of major direct non-life insurers (right scale: %)
Note:The graph was prepared by Sony Assurance from data officially
disclosed by individual non-life insurers
Amounts for fiscal 2019 are based on published data available up to
June 25, 2020
Direct Premiums Written (Automobile Insurance)
by Major Direct Non-life Insurers
For the years ended March 31,
Billions of yen
98
0
20
40
60
80
120
100
99 00 08 0906 0704 050201 03 10 11 12 13 14 15 16 17 18 19 20
A
C
D
G
H
E
FB
Sony Assurance
Sony Assurance
Continued growth is forecast for the direct insurance businesses, with their
features such as online procedures that match the needs of customers seeking
reasonable insurance premiums and convenience. As a leading company in
direct automobile insurance, Sony Assurance will strive to provide products and
services that meet the expectations of our customers. In addition, we will en-
deavor to achieve further growth and embed our stable business foundation by
focusing not only on our mainstay automobile insurance products, but also on
expanding sales of other products such as medical insurance and fire insurance.
We will continue to adapt to changes in the business environment and cus-
tomer value perceptions, and endeavor to maximize customer value through
improvements in customer experience (CX), by leveraging technology and
offering services only people can provide. Atsuo Niwa
President, Representative Director
Sony Assurance Inc.
Sony Financial Holdings Inc.Annual Report202020
0
1,000
2,000
3,000
4,000
5,000
0.0
2.0
4.0
6.0
8.0
10.0
99 00 08 0906 0704 050201 03 10 11 12 13 14 15 16 17 18 19
Vision ● As a leader from the present into the future, in the Sony spirit of freedom and open-mindedness, we will
constantly aspire to create and innovate, to bring about new lifestyles.
Overview
● Direct insurance company for individuals
● Main products: Automobile insurance, medical insurance, overseas travel insurance, fire insurance
● Main sales channel: Internet
Strengths ● Reasonable insurance premiums according to each customer’s risk
● High-quality accident response, customer center, and website services
Risk
● Rise in loss ratios and reinsurance premiums
due to more frequent and serious natural
disasters
Opportunity ● Increase in insurance needs to protect
against natural disasters
Value
Creation
Offer lifestyles that feature
safety and peace of mind
● Leverage advanced technologies to contribute to realizing a safe society with
a low incidence of traffic accidents
● Contribute to safe and secure homes
Contribute to a healthy,
long-lived society
● Provide protection to match customer needs through our medical insurance
business
Make lifestyles more
convenient
● Develop new products in response to social change, including autonomous
vehicles and Mobility as a Service (MaaS)
Note:The graph was prepared by Sony Assurance from data officially
disclosed by individual non-life insurers
Automobile Insurance Market and Market Share of
Major Direct Non-life Insurers
For the years ended March 31,
■: Direct premiums written (total of all non-life insurers and shown as the
automobile insurance market) (left scale: billions of yen)
■
: Market share of major direct non-life insurers (right scale: %)
Note:The graph was prepared by Sony Assurance from data officially
disclosed by individual non-life insurers
Amounts for fiscal 2019 are based on published data available up to
June 25, 2020
Direct Premiums Written (Automobile Insurance)
by Major Direct Non-life Insurers
For the years ended March 31,
Billions of yen
98
0
20
40
60
80
120
100
99 00 08 0906 0704 050201 03 10 11 12 13 14 15 16 17 18 19 20
A
C
D
G
H
E
FB
Sony Assurance
Sony Assurance
Continued growth is forecast for the direct insurance businesses, with their
features such as online procedures that match the needs of customers seeking
reasonable insurance premiums and convenience. As a leading company in
direct automobile insurance, Sony Assurance will strive to provide products and
services that meet the expectations of our customers. In addition, we will en-
deavor to achieve further growth and embed our stable business foundation by
focusing not only on our mainstay automobile insurance products, but also on
expanding sales of other products such as medical insurance and fire insurance.
We will continue to adapt to changes in the business environment and cus-
tomer value perceptions, and endeavor to maximize customer value through
improvements in customer experience (CX), by leveraging technology and
offering services only people can provide. Atsuo Niwa
President, Representative Director
Sony Assurance Inc.
Sony Financial Holdings Inc.Annual Report202020
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We worked on marketing to communicate Sony Assurance’s features in an easily understandable way, in addition to utilizin
tomer feedback to strengthen our product appeal, and enhancing service quality from contract procedures to insurance cla
payment. As a result, we succeeded in growing sales of automobile insurance and each of our other products such as medi
insurance, fire insurance and overseas travel insurance and others.
In automobile insurance, we established a new “Accident-free Discount” in April 2019, and in March 2020 we launched a
how-you-drive (PHYD) automobile insurance called “GOOD DRIVE,” which provides up to 30% cash-back on insurance prem
ums by leveraging AI, for customers whose driving demonstrates a low risk of accidents. In addition, we introduced the “sig
language/conversation-in-writing service,” which provides policy and accident response for customers with hearing or speakin
disabilities, and the “foreign language accident response service,” which provides response in 18 languages other than Jap
Review of Results for Fiscal 2019
Continue to grow, and
expand share of,
automobile insurance
While further improving our product capability and service quality, in order to better
appeal to customers, we will continue our initiatives to build trust and confidence in
automobile insurance through marketing to improve our brand value.
Accelerate growth by
expanding business
categories
In 2018, we strengthened the product capability of medical insurance and launched
overseas travel insurance and fire insurance. In these categories, we will pursue busi-
ness expansion by utilizing marketing expertise accumulated in automobile insurance.
Maximize customer
value
We will maintain our position as No. 1 non-life insurer for customer satisfaction by
promoting CX improvements and providing high quality service. Furthermore, we will
pursue improved CX by combining service only people can provide with leading-edge
technology.
Leverage technology
In the areas of product development, marketing, contract processes, and customer
support, we will continue to actively leverage leading-edge technologies such as
Fintech to improve CX and operation efficiency.
Customer-first
Response to Changes
Initiatives for Fiscal 2020
Trends of Key Indicators
Direct premiums written
Billions of yen
Sum of two ratios*1
%
Ordinary profit/Adjusted
ordinary profit*2
■: Ordinary profit (billions of yen)
■: Adjusted ordinary profit (billions
of yen)
Adjusted ROE*3
%
FY2017
107.0
FY2018
112.1
FY2019
119.1
FY2017
89.2
FY2018
89.1
FY2019
89.3
FY2017 FY2018 FY2019
11.2
8.0
10.0 10.5
6.5 6.8
FY2017
16.1
FY2018 FY2019
15.2 14.7
*1 Sum of two ratios = E.I. loss ratio + Net expense ratio
*2 Adjusted ordinary profit = Ordinary profit + Provision for catastrophe reserve
*3 Calculation of Adjusted ROE =
Net income (loss) + Provision amount for catastrophe reserve and its provision amount for reserve for price fluctuations, in each case after taxes
The average amount of net assets plus the sum of catastrophe reserve and its reserve for price fluctuations during the fiscal year, in each case after taxes
Sony Financial Holdings Inc.Annual Report2020 21
tomer feedback to strengthen our product appeal, and enhancing service quality from contract procedures to insurance cla
payment. As a result, we succeeded in growing sales of automobile insurance and each of our other products such as medi
insurance, fire insurance and overseas travel insurance and others.
In automobile insurance, we established a new “Accident-free Discount” in April 2019, and in March 2020 we launched a
how-you-drive (PHYD) automobile insurance called “GOOD DRIVE,” which provides up to 30% cash-back on insurance prem
ums by leveraging AI, for customers whose driving demonstrates a low risk of accidents. In addition, we introduced the “sig
language/conversation-in-writing service,” which provides policy and accident response for customers with hearing or speakin
disabilities, and the “foreign language accident response service,” which provides response in 18 languages other than Jap
Review of Results for Fiscal 2019
Continue to grow, and
expand share of,
automobile insurance
While further improving our product capability and service quality, in order to better
appeal to customers, we will continue our initiatives to build trust and confidence in
automobile insurance through marketing to improve our brand value.
Accelerate growth by
expanding business
categories
In 2018, we strengthened the product capability of medical insurance and launched
overseas travel insurance and fire insurance. In these categories, we will pursue busi-
ness expansion by utilizing marketing expertise accumulated in automobile insurance.
Maximize customer
value
We will maintain our position as No. 1 non-life insurer for customer satisfaction by
promoting CX improvements and providing high quality service. Furthermore, we will
pursue improved CX by combining service only people can provide with leading-edge
technology.
Leverage technology
In the areas of product development, marketing, contract processes, and customer
support, we will continue to actively leverage leading-edge technologies such as
Fintech to improve CX and operation efficiency.
Customer-first
Response to Changes
Initiatives for Fiscal 2020
Trends of Key Indicators
Direct premiums written
Billions of yen
Sum of two ratios*1
%
Ordinary profit/Adjusted
ordinary profit*2
■: Ordinary profit (billions of yen)
■: Adjusted ordinary profit (billions
of yen)
Adjusted ROE*3
%
FY2017
107.0
FY2018
112.1
FY2019
119.1
FY2017
89.2
FY2018
89.1
FY2019
89.3
FY2017 FY2018 FY2019
11.2
8.0
10.0 10.5
6.5 6.8
FY2017
16.1
FY2018 FY2019
15.2 14.7
*1 Sum of two ratios = E.I. loss ratio + Net expense ratio
*2 Adjusted ordinary profit = Ordinary profit + Provision for catastrophe reserve
*3 Calculation of Adjusted ROE =
Net income (loss) + Provision amount for catastrophe reserve and its provision amount for reserve for price fluctuations, in each case after taxes
The average amount of net assets plus the sum of catastrophe reserve and its reserve for price fluctuations during the fiscal year, in each case after taxes
Sony Financial Holdings Inc.Annual Report2020 21
Vision ● We aim to be a bank that delivers optimal solutions for “Saving, Investing and Spending” using the latest
technologies, to help customers live their lives with confidence, in this era of the 100-year lifespan.
Overview
● Internet bank for individuals
● Main products: Mortgage loans with the freedom to change interest rate types and make advance repayments
Foreign currency deposits featuring attractive exchange costs
“Sony Bank WALLET” cash card with Visa debit function in 11 currencies
● Main sales channels: Internet, “CONSULTING PLAZA” and banking agencies
Strengths
● Safe, reliable and highly convenient services, leveraging the advantages of an Internet bank
● Extensive lineup of high-quality products
● Business operation with high customer satisfaction
Risk
● Shrinking domestic market for mortgage loans
Opportunity ● Increase in demand for asset
management products and services● Persistence of the low interest rate environment
Value
Creation
Offer lifestyles that feature
safety and peace of mind
● Attentive support for customers purchasing a house, provided by our dedi-
cated loan advisors
Contribute to a healthy,
long-lived society
● Support for customers’ medium- to long-term wealth-building and asset
management, through the provision of asset management seminars and
individual consultation, as well as services leveraging APIs and data
Make lifestyles more
convenient
● Even more convenient financial transactions, such as seamless payments
regardless of currency through the “Sony Bank WALLET,” as well as
contactless and mobile payment capabilities
Sony Bank As an Internet bank, Sony Bank has made the most of technology to continue
growing since its establishment. However, as online financial transactions
have become commonplace and more business operators from various
industries have entered the financial industry, our business environment is
changing rapidly.In these circumstances, we will establish a foundation as a
digital bank that has ideas unique to Sony Bank and the latest technology
only possible in the Sony Group. We aim to achieve sustainable growth by
providing optimal products and services for “Saving, Investing and Spending”
to meet the needs of our increasingly diverse range of customers.
Yuichiro Sumimoto
President, Representative Director
Sony Bank Inc.
Sony Financial Holdings Inc.Annual Report202022
technologies, to help customers live their lives with confidence, in this era of the 100-year lifespan.
Overview
● Internet bank for individuals
● Main products: Mortgage loans with the freedom to change interest rate types and make advance repayments
Foreign currency deposits featuring attractive exchange costs
“Sony Bank WALLET” cash card with Visa debit function in 11 currencies
● Main sales channels: Internet, “CONSULTING PLAZA” and banking agencies
Strengths
● Safe, reliable and highly convenient services, leveraging the advantages of an Internet bank
● Extensive lineup of high-quality products
● Business operation with high customer satisfaction
Risk
● Shrinking domestic market for mortgage loans
Opportunity ● Increase in demand for asset
management products and services● Persistence of the low interest rate environment
Value
Creation
Offer lifestyles that feature
safety and peace of mind
● Attentive support for customers purchasing a house, provided by our dedi-
cated loan advisors
Contribute to a healthy,
long-lived society
● Support for customers’ medium- to long-term wealth-building and asset
management, through the provision of asset management seminars and
individual consultation, as well as services leveraging APIs and data
Make lifestyles more
convenient
● Even more convenient financial transactions, such as seamless payments
regardless of currency through the “Sony Bank WALLET,” as well as
contactless and mobile payment capabilities
Sony Bank As an Internet bank, Sony Bank has made the most of technology to continue
growing since its establishment. However, as online financial transactions
have become commonplace and more business operators from various
industries have entered the financial industry, our business environment is
changing rapidly.In these circumstances, we will establish a foundation as a
digital bank that has ideas unique to Sony Bank and the latest technology
only possible in the Sony Group. We aim to achieve sustainable growth by
providing optimal products and services for “Saving, Investing and Spending”
to meet the needs of our increasingly diverse range of customers.
Yuichiro Sumimoto
President, Representative Director
Sony Bank Inc.
Sony Financial Holdings Inc.Annual Report202022
Review of Results for Fiscal 2019
Trends of Key Indicators
Retail balance*
(Non-consolidated)
Trillions of yen
Gross operating profit
(Consolidated)
Billions of yen
Ordinary profit
(Consolidated)
Billions of yen
ROE (Consolidated)
%
March 31,
2018
3.9
March 31,
2019
4.2
March 31,
2020
4.5
24.6
28.3
FY2017 FY2018
31.3
FY2019
7.1
9.5
FY2017 FY2018
10.6
FY2019 FY2017 FY2018
5.5
7.3
FY2019
7.8
* Sum of deposits, investment trusts, financial products intermediary services, mediated discretionary investment contracts and personal loans
Initiatives for Fiscal 2020
Strengthen
product appeal
and improve
service
Mortgage Loans
We have worked to maintain our interest rate competitiveness, while improving convenience
through features such as fully-online completion of contract procedures, and enhancing our
product lineup and group credit life insurance. We will continue to aim for stable, sustainable
growth through strengthen product appeal and collaboration with banking agencies and
others.
Foreign Currency Deposits
In order to expand our customer base and balance of foreign currency deposits, we will
strengthen alliances by issuing tie-up cards pivoting on the “Sony Bank WALLET” which offers
accessible foreign currency functionality, as well as services targeting foreign residents in Japa
Leverage
Fintech and
improve
business
We will strengthen our foundation as a digital bank by responding to the rapid advance
toward a cashless society, through measures such as improving convenience with touch
payment support for “Sony Bank WALLET” and enhancing collaboration with QR payment
players. In addition, we will engage in operational improvements to enhance productivity,
through the promotion of digitalization and the leveraging RPA.
Improve
proposal-
making
capability
We will propose products that are tailored to individual customers and advertise our conve-
nience, and we will work to provide valuable products and services from both digital and
real perspectives. On the digital side, we aim to provide customer-first financial advice by
developing digital consulting tools. In terms of real contact, we will strengthen our proposal
function in the “CONSULTING PLAZA”.
Customer-first
Response to Changes
In order to respond to our customers’ diverse wealth-building and asset management needs, we launched our “Electronic
Closing Service” for mortgage loans in June 2019, followed by entrusting of intermediary operations on its mortgage loans t
JAPAN POST BANK Co., Ltd. in October 2019, and a mortgage loan product specifically designed for freelance IT profession-
als in February 2020. We also provided a range of other products and services. In September 2019, we commenced issuing
the “ANA Mileage Club / Sony Bank WALLET” through an alliance with All Nippon Airways Co., Ltd., and in November, we
began offering foreign currency-denominated time deposits that earn ANA mileage. In January 2020, we introduced free sa
commission for all investment trust funds offered.
In addition, we worked to enhance customer convenience, through measures such as the introduction of an “AI-powered
Automated Chat Service” on the Sony Bank service site from August 2019, and the issue of “Sony Bank WALLET” featuring
“Visa Contactless Payments” function from September 2019.
Sony Financial Holdings Inc.Annual Report2020 23
Trends of Key Indicators
Retail balance*
(Non-consolidated)
Trillions of yen
Gross operating profit
(Consolidated)
Billions of yen
Ordinary profit
(Consolidated)
Billions of yen
ROE (Consolidated)
%
March 31,
2018
3.9
March 31,
2019
4.2
March 31,
2020
4.5
24.6
28.3
FY2017 FY2018
31.3
FY2019
7.1
9.5
FY2017 FY2018
10.6
FY2019 FY2017 FY2018
5.5
7.3
FY2019
7.8
* Sum of deposits, investment trusts, financial products intermediary services, mediated discretionary investment contracts and personal loans
Initiatives for Fiscal 2020
Strengthen
product appeal
and improve
service
Mortgage Loans
We have worked to maintain our interest rate competitiveness, while improving convenience
through features such as fully-online completion of contract procedures, and enhancing our
product lineup and group credit life insurance. We will continue to aim for stable, sustainable
growth through strengthen product appeal and collaboration with banking agencies and
others.
Foreign Currency Deposits
In order to expand our customer base and balance of foreign currency deposits, we will
strengthen alliances by issuing tie-up cards pivoting on the “Sony Bank WALLET” which offers
accessible foreign currency functionality, as well as services targeting foreign residents in Japa
Leverage
Fintech and
improve
business
We will strengthen our foundation as a digital bank by responding to the rapid advance
toward a cashless society, through measures such as improving convenience with touch
payment support for “Sony Bank WALLET” and enhancing collaboration with QR payment
players. In addition, we will engage in operational improvements to enhance productivity,
through the promotion of digitalization and the leveraging RPA.
Improve
proposal-
making
capability
We will propose products that are tailored to individual customers and advertise our conve-
nience, and we will work to provide valuable products and services from both digital and
real perspectives. On the digital side, we aim to provide customer-first financial advice by
developing digital consulting tools. In terms of real contact, we will strengthen our proposal
function in the “CONSULTING PLAZA”.
Customer-first
Response to Changes
In order to respond to our customers’ diverse wealth-building and asset management needs, we launched our “Electronic
Closing Service” for mortgage loans in June 2019, followed by entrusting of intermediary operations on its mortgage loans t
JAPAN POST BANK Co., Ltd. in October 2019, and a mortgage loan product specifically designed for freelance IT profession-
als in February 2020. We also provided a range of other products and services. In September 2019, we commenced issuing
the “ANA Mileage Club / Sony Bank WALLET” through an alliance with All Nippon Airways Co., Ltd., and in November, we
began offering foreign currency-denominated time deposits that earn ANA mileage. In January 2020, we introduced free sa
commission for all investment trust funds offered.
In addition, we worked to enhance customer convenience, through measures such as the introduction of an “AI-powered
Automated Chat Service” on the Sony Bank service site from August 2019, and the issue of “Sony Bank WALLET” featuring
“Visa Contactless Payments” function from September 2019.
Sony Financial Holdings Inc.Annual Report2020 23
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Market Environment
Vision ● Through our nursing care services we aim to protect the dignity of the elderly, and achieve a society where
people can feel a sense of enrichment for their whole lives.
Overview
● Responding to the diversification of demand by developing nursing care homes under two brands:
“SONARE” for the upper/middle zone and “Hanakotoba” for the volume zone
● Establishing new homes in the Tokyo metropolitan area (Tokyo, Chiba, Saitama, Kanagawa), where further
market expansion is expected
● At “SONARE,” implementing “lifecare plans” tailored to the needs of each individual
Strengths ● Capture a wide range of needs by expanding our lineup
● Propose nursing care service suitable for each resident
Risk
● Difficulty in acquiring human resources
● Reduction in compensation for nursing care
workers due to financial difficulties in social
security
Opportunity ● Increase and diversification in the
needs for nursing care-related services
Value
Creation
Offer lifestyles that feature
safety and peace of mind
● Provide reasonably priced, high quality products and services, from a lineup
matching the increasingly diverse needs of the nursing care homes market
● Provide safe and reliable nursing care services with links to the local
community, through the regional development of in-home care and nursing
services, and services offered in collaboration with the region
Contribute to a healthy,
long-lived society
● Realize life care plans where customers can live with a sense of enrichment in
accordance with their needs, through collaboration between Life Managers
and other various occupations
2015 2020
1,078
Forecast
622
2025 2030 2035 2040
1,383 1,251
874
1,962
1,459
1,038
2,406
Note: Study by Tamura Planning & Operating
Long-term estimates of people in major metro areas
needing nursing care
People 1k
■
: Tokyo metropolitan area (Tokyo, Chiba, Saitama, Kanagawa)
■
: Kansai region
■
: Tokai region
2015 2020
6,036
Forecast
1,967
2025
33
6,793
2,256
33
7,674
2,581
34
* Homes for the elderly include homes for those who are independent
People requiring long-term care and number of homes
for the elderly* (nationwide)
■
: Percentage of homes for the elderly catering to people
requiring long-term care (%)
■
: People requiring long-term care (People 1k)
■: Homes for the elderly (Homes 1k)
Sony Lifecare predicts a mid- to long-term increase in the population in need of nursing care in its main area of developme
the Tokyo metropolitan area. Due to increased needs, the establishment of nursing homes is proceeding steadily, and Sony
Lifecare expects demand to grow steadily for the foreseeable future.
Nursing Care Business
Sony Financial Holdings Inc.Annual Report202024
Vision ● Through our nursing care services we aim to protect the dignity of the elderly, and achieve a society where
people can feel a sense of enrichment for their whole lives.
Overview
● Responding to the diversification of demand by developing nursing care homes under two brands:
“SONARE” for the upper/middle zone and “Hanakotoba” for the volume zone
● Establishing new homes in the Tokyo metropolitan area (Tokyo, Chiba, Saitama, Kanagawa), where further
market expansion is expected
● At “SONARE,” implementing “lifecare plans” tailored to the needs of each individual
Strengths ● Capture a wide range of needs by expanding our lineup
● Propose nursing care service suitable for each resident
Risk
● Difficulty in acquiring human resources
● Reduction in compensation for nursing care
workers due to financial difficulties in social
security
Opportunity ● Increase and diversification in the
needs for nursing care-related services
Value
Creation
Offer lifestyles that feature
safety and peace of mind
● Provide reasonably priced, high quality products and services, from a lineup
matching the increasingly diverse needs of the nursing care homes market
● Provide safe and reliable nursing care services with links to the local
community, through the regional development of in-home care and nursing
services, and services offered in collaboration with the region
Contribute to a healthy,
long-lived society
● Realize life care plans where customers can live with a sense of enrichment in
accordance with their needs, through collaboration between Life Managers
and other various occupations
2015 2020
1,078
Forecast
622
2025 2030 2035 2040
1,383 1,251
874
1,962
1,459
1,038
2,406
Note: Study by Tamura Planning & Operating
Long-term estimates of people in major metro areas
needing nursing care
People 1k
■
: Tokyo metropolitan area (Tokyo, Chiba, Saitama, Kanagawa)
■
: Kansai region
■
: Tokai region
2015 2020
6,036
Forecast
1,967
2025
33
6,793
2,256
33
7,674
2,581
34
* Homes for the elderly include homes for those who are independent
People requiring long-term care and number of homes
for the elderly* (nationwide)
■
: Percentage of homes for the elderly catering to people
requiring long-term care (%)
■
: People requiring long-term care (People 1k)
■: Homes for the elderly (Homes 1k)
Sony Lifecare predicts a mid- to long-term increase in the population in need of nursing care in its main area of developme
the Tokyo metropolitan area. Due to increased needs, the establishment of nursing homes is proceeding steadily, and Sony
Lifecare expects demand to grow steadily for the foreseeable future.
Nursing Care Business
Sony Financial Holdings Inc.Annual Report202024
Our “SONARE” brand opened its first home four years ago, and now operates five homes in total. Using the expertise accu-
mulated at existing homes, we will establish the “SONARE” brand and proceed with opening new homes.
Lifecare Design[“SONARE” and others.]
In order to respond to the expansion and diversification of demand for nursing homes, Sony Lifecare will capture the deman
by developing a lineup around two brands: “SONARE” for the upper/middle zone run by Lifecare Design, and “Hanakotoba”
for the volume zone run by Proud Life. In addition, we will work to further improve the quality of management by creating
synergy including sharing of knowledge between both series, and effectively utilizing Group management resources.
Growth Strategy
With “Hanakotoba” brand, in addition to our business foundation with our 26 existing homes, we aim for new growth by
ramping up our new home construction, which we recommenced last year for the first time in around 5 years.
Proud Life[“Hanakotoba” and others.]
Number of Group-operated homes
■: Lifecare Design (“SONARE,” others)
■: Proud Life (“Hanakotoba,” others)
Note: As of March 31
2018
3
26
29
2020
6
27
33
2019
4
26
30
“Hanakotoba Plus Nishiarai“
(Opened in July 2020)
“Hanakotoba Tsurumi Terao”
(Planning to open in November
2020)
“SONARE Komazawa Park”
(Planning to open in December
2020)
Hanakotoba
Create synergy
Upper
Middle
Volume
Volume zone
Broaden our business foundation with
the establishment of new homes in
addition to existing “Hanakotoba”
series homes
(Operating 1,381 rooms as of March 31,
2020)
“Hanakotoba Plus Nerima Nakamura”
(Opened in December 2019)
Upper/middle zone
Cultivate the expertise we have
accumulated to establish the “SONARE”
brand and step up the pace of building
new homes
(Operating 351 rooms as of March 31, 2020)
“SONARE Hamadayama”
(Opened in November 2019)
Sony Financial Holdings Inc.Annual Report2020 25
mulated at existing homes, we will establish the “SONARE” brand and proceed with opening new homes.
Lifecare Design[“SONARE” and others.]
In order to respond to the expansion and diversification of demand for nursing homes, Sony Lifecare will capture the deman
by developing a lineup around two brands: “SONARE” for the upper/middle zone run by Lifecare Design, and “Hanakotoba”
for the volume zone run by Proud Life. In addition, we will work to further improve the quality of management by creating
synergy including sharing of knowledge between both series, and effectively utilizing Group management resources.
Growth Strategy
With “Hanakotoba” brand, in addition to our business foundation with our 26 existing homes, we aim for new growth by
ramping up our new home construction, which we recommenced last year for the first time in around 5 years.
Proud Life[“Hanakotoba” and others.]
Number of Group-operated homes
■: Lifecare Design (“SONARE,” others)
■: Proud Life (“Hanakotoba,” others)
Note: As of March 31
2018
3
26
29
2020
6
27
33
2019
4
26
30
“Hanakotoba Plus Nishiarai“
(Opened in July 2020)
“Hanakotoba Tsurumi Terao”
(Planning to open in November
2020)
“SONARE Komazawa Park”
(Planning to open in December
2020)
Hanakotoba
Create synergy
Upper
Middle
Volume
Volume zone
Broaden our business foundation with
the establishment of new homes in
addition to existing “Hanakotoba”
series homes
(Operating 1,381 rooms as of March 31,
2020)
“Hanakotoba Plus Nerima Nakamura”
(Opened in December 2019)
Upper/middle zone
Cultivate the expertise we have
accumulated to establish the “SONARE”
brand and step up the pace of building
new homes
(Operating 351 rooms as of March 31, 2020)
“SONARE Hamadayama”
(Opened in November 2019)
Sony Financial Holdings Inc.Annual Report2020 25
The Sony Financial Group’s mission is to “create a sustainable society where people feel a sense of enrichment.” Furthermo
our Code of Conduct outlines “It is the core corporate responsibility of us to society to pursue its corporate value enhance-
ment through our business activities and contribute to developing a sustainable society”.
With the highest level of ethics and a strong sense of purpose, we give due consideration to the impacts of our business
activities on the interests of our stakeholders, including customers, shareholders, employees, business partners and local
communities, as well as the global environment. Through dialogue, we also strive to build trust with our stakeholders.
Based on these principles, we will keep striving to increase corporate value by engaging in business activities that gener
both social and economic value to contribute to developing a sustainable society.
SFG develops diverse businesses, aiming for sustainable value creation. While the domains and business models of these
businesses vary greatly, they share the qualities of providing high-value-added products and services that meet every cus-
tomer’s needs, and leveraging technology. We will continue to create value through our businesses, and strengthen the
foundation that supports our value creation.
Contributing toward the development of a sustainable society
Corporate activities Enhance corporate value
Stakeholders
Customer-first
Response to changes
Social
value
Economic
value
Corporate Governance Human Resources
Respecting Diversity
Important Items for Strengthening Our Foundation
Value Creation
Make lifestyles more convenient
Offer lifestyles that feature safety
and peace of mind
Contribute to a healthy, long-lived society
Sustainability, Value Creation and Our Foundation for Creating Value
Approach to Sustainability
Value Creation and Our Foundation for Creating Value
SFG’s Value Creation
Sony Financial Holdings Inc.Annual Report202026
our Code of Conduct outlines “It is the core corporate responsibility of us to society to pursue its corporate value enhance-
ment through our business activities and contribute to developing a sustainable society”.
With the highest level of ethics and a strong sense of purpose, we give due consideration to the impacts of our business
activities on the interests of our stakeholders, including customers, shareholders, employees, business partners and local
communities, as well as the global environment. Through dialogue, we also strive to build trust with our stakeholders.
Based on these principles, we will keep striving to increase corporate value by engaging in business activities that gener
both social and economic value to contribute to developing a sustainable society.
SFG develops diverse businesses, aiming for sustainable value creation. While the domains and business models of these
businesses vary greatly, they share the qualities of providing high-value-added products and services that meet every cus-
tomer’s needs, and leveraging technology. We will continue to create value through our businesses, and strengthen the
foundation that supports our value creation.
Contributing toward the development of a sustainable society
Corporate activities Enhance corporate value
Stakeholders
Customer-first
Response to changes
Social
value
Economic
value
Corporate Governance Human Resources
Respecting Diversity
Important Items for Strengthening Our Foundation
Value Creation
Make lifestyles more convenient
Offer lifestyles that feature safety
and peace of mind
Contribute to a healthy, long-lived society
Sustainability, Value Creation and Our Foundation for Creating Value
Approach to Sustainability
Value Creation and Our Foundation for Creating Value
SFG’s Value Creation
Sony Financial Holdings Inc.Annual Report202026
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STEP.2 Evaluation of each item from SFG’s perspective and the perspectives of stakeholders
(ordering by level of priority)
● SFG’s perspective: We evaluated importance from standpoints including business continuity, such as legal and regulatory
compliance at SFG, and Group business growth. This was accomplished through debate within an internal, cross-depart-
mental project aimed at sustainability initiatives, and led by the President, Representative Director.
● Stakeholder perspectives: We evaluated importance based on assessment criteria provided by external assessment
agencies, requests by investors, and information published by the media, and others.
STEP.3 Identification of important items for strengthening our foundation
After debate based on the evaluation inSTEP.2 within the internal project, including senior management, we identified two
important items to prioritize for strengthening our foundation.
We will continue to engage in dialogue with our stakeholders regarding these important items for strengthening our founda
tion, and review them as necessary, based on changes in the impact of SFG’s management strategies and business activiti
At the same time, we will proceed with the establishment of long-term targets and action plans, and continue to promote
initiatives aimed at sustainability.
STEP.1 Extraction and organizing of candidates for important items for strengthening our foundation
We selected the items most relevant to SFG as candidates for important items for strengthening our foundation. In selectin
these candidate items, we referred to the GRI Sustainability Reporting Standards, which are global standards for sustainab
reporting, as well as the SDGs (Sustainable Development Goals), worldwide goals for a sustainable society, and the assess-
ment items provided by external agencies such as MSCI and FTSE.
Identification Process
SFG also recognizes the importance of the foundation that supports value creation. We carried out analysis based on the fo
ing process, incorporating not only SFG’s perspective but those of its stakeholders as well, and identified “corporate govern
and “human resources respecting diversity” as the most significant matters in terms of strengthening our foundation.
Identification of Important Items for Strengthening Our Foundation
Requests from stakeholders
Important Items for Strengthening Our Foundation
Corporate Governance
● Corporate governance
● Information security
● Risk management
● Compliance
Human Resources Respecting Diversity
Impact on SFG
Sony Financial Holdings Inc.Annual Report2020 27
(ordering by level of priority)
● SFG’s perspective: We evaluated importance from standpoints including business continuity, such as legal and regulatory
compliance at SFG, and Group business growth. This was accomplished through debate within an internal, cross-depart-
mental project aimed at sustainability initiatives, and led by the President, Representative Director.
● Stakeholder perspectives: We evaluated importance based on assessment criteria provided by external assessment
agencies, requests by investors, and information published by the media, and others.
STEP.3 Identification of important items for strengthening our foundation
After debate based on the evaluation inSTEP.2 within the internal project, including senior management, we identified two
important items to prioritize for strengthening our foundation.
We will continue to engage in dialogue with our stakeholders regarding these important items for strengthening our founda
tion, and review them as necessary, based on changes in the impact of SFG’s management strategies and business activiti
At the same time, we will proceed with the establishment of long-term targets and action plans, and continue to promote
initiatives aimed at sustainability.
STEP.1 Extraction and organizing of candidates for important items for strengthening our foundation
We selected the items most relevant to SFG as candidates for important items for strengthening our foundation. In selectin
these candidate items, we referred to the GRI Sustainability Reporting Standards, which are global standards for sustainab
reporting, as well as the SDGs (Sustainable Development Goals), worldwide goals for a sustainable society, and the assess-
ment items provided by external agencies such as MSCI and FTSE.
Identification Process
SFG also recognizes the importance of the foundation that supports value creation. We carried out analysis based on the fo
ing process, incorporating not only SFG’s perspective but those of its stakeholders as well, and identified “corporate govern
and “human resources respecting diversity” as the most significant matters in terms of strengthening our foundation.
Identification of Important Items for Strengthening Our Foundation
Requests from stakeholders
Important Items for Strengthening Our Foundation
Corporate Governance
● Corporate governance
● Information security
● Risk management
● Compliance
Human Resources Respecting Diversity
Impact on SFG
Sony Financial Holdings Inc.Annual Report2020 27
(Basic Stance on Corporate Governance)
SFH strives to meet the expectations and earn the trust of stakeholders, realize the Group’s sustainable growth and increas
corporate value over the medium to long term by making effective use of the Group’s various management resources and
realizing its corporate philosophy. Furthermore, as a financial holding company, SFH is aware of the highly public nature of
financial business. Accordingly, SFH has in place a governance structure that emphasizes ensuring of soundness and appro
priateness of the Group’s management.
Basic Policy on Corporate Governance
At SFG, we have established our “Mission, Vision & Values,” and engage in fulfilling our Mission through business activities. We
regard strengthening corporate governance as one of the most significant challenges for management in supporting this endea
Corporate Governance Structure Chart(As of July 1, 2020)
: Inside Director/Inside Audit & Supervisory Board Member: Outside Director/Outside Audit & Supervisory Board Member (★★ marks indicate chairpersons)
Serve concurrently as
directors and audit &
supervisory board members
Convey Group policies
Share and confirm
information
Report and
confirm
Discuss in
advance
Manage, advise,
monitor
Subsidiaries and others
SFH
Independent
Auditors*1
Executive Committee
Audit DepartmentBusiness Execution Departments
General Meeting of
Shareholders
Board of
Directors*2
★
Nomination Advisory
Committee*3
★
Compensation
Advisory Committee*4
★
Audit & Supervisory Board*2
Audit & Supervisory Board
Members
★
▶ “The Basic Policy on the Selection of Director and Audit & Supervisory Board Member Candidates” on SFH’s website,
https://www.sonyfh.co.jp/en/company/data/nomination_policy.pdf
*1 Compensation and others for independent auditors: ¥135 million (including ¥29 million for statutory audits)
*2 SFH provides the independence standard for appointment of outside officers and outside audit & supervisory board members in the “Basic Policy on the Selectio
of Director and Audit & Supervisory Board Member Candidates”
*3 The Nomination Advisory Committee members: Shiro Kuniya (Chairperson), Shogo Ikeuchi, Masashi Oka and Shiro Kambe
*4 The Compensation Advisory Committee members: Kaoru Takahashi (Chairperson), Shiro Kuniya and Masashi Oka
Corporate Governance
Initiatives to Strengthen Our Foundation for Creating Value
Sony Financial Holdings Inc.Annual Report202028
SFH strives to meet the expectations and earn the trust of stakeholders, realize the Group’s sustainable growth and increas
corporate value over the medium to long term by making effective use of the Group’s various management resources and
realizing its corporate philosophy. Furthermore, as a financial holding company, SFH is aware of the highly public nature of
financial business. Accordingly, SFH has in place a governance structure that emphasizes ensuring of soundness and appro
priateness of the Group’s management.
Basic Policy on Corporate Governance
At SFG, we have established our “Mission, Vision & Values,” and engage in fulfilling our Mission through business activities. We
regard strengthening corporate governance as one of the most significant challenges for management in supporting this endea
Corporate Governance Structure Chart(As of July 1, 2020)
: Inside Director/Inside Audit & Supervisory Board Member: Outside Director/Outside Audit & Supervisory Board Member (★★ marks indicate chairpersons)
Serve concurrently as
directors and audit &
supervisory board members
Convey Group policies
Share and confirm
information
Report and
confirm
Discuss in
advance
Manage, advise,
monitor
Subsidiaries and others
SFH
Independent
Auditors*1
Executive Committee
Audit DepartmentBusiness Execution Departments
General Meeting of
Shareholders
Board of
Directors*2
★
Nomination Advisory
Committee*3
★
Compensation
Advisory Committee*4
★
Audit & Supervisory Board*2
Audit & Supervisory Board
Members
★
▶ “The Basic Policy on the Selection of Director and Audit & Supervisory Board Member Candidates” on SFH’s website,
https://www.sonyfh.co.jp/en/company/data/nomination_policy.pdf
*1 Compensation and others for independent auditors: ¥135 million (including ¥29 million for statutory audits)
*2 SFH provides the independence standard for appointment of outside officers and outside audit & supervisory board members in the “Basic Policy on the Selectio
of Director and Audit & Supervisory Board Member Candidates”
*3 The Nomination Advisory Committee members: Shiro Kuniya (Chairperson), Shogo Ikeuchi, Masashi Oka and Shiro Kambe
*4 The Compensation Advisory Committee members: Kaoru Takahashi (Chairperson), Shiro Kuniya and Masashi Oka
Corporate Governance
Initiatives to Strengthen Our Foundation for Creating Value
Sony Financial Holdings Inc.Annual Report202028
Board of Directors
Chairperson Masashi Oka
Composition The ratio of outside directors: 40%
Main roles
The Board of Directors recognizes the responsibility it has been entrusted with and strives to realize sustainable growth of
SFG and increase corporate value over the medium to long term. In addition to items stipulated in laws and regulations
and the Articles of Incorporation, the Board of Directors makes important decisions regarding management of SFG such
as formulation of SFG’s management policies and management plans; appointment and dismissal of directors and Audit
& Supervisory Board members of subsidiaries in which SFH holds shares directly; entry into new businesses and
withdrawal from businesses; and organizational restructuring. The Board of Directors also supervises overall manage-
ment of the Group.
Operational status, topics
(FY2019)
The Board of Directors continued to conduct deep deliberations centering on overall Group governance, Group growth
strategies, business plans, sustainability and important matters related to Group subsidiaries. The board also received
periodic reports concerning the state of progress of SFH’s non-consolidated and consolidated business plans, as well as
the status of compliance activities, risk management and internal audits. In these ways, the board conducted appropri-
ate supervision of overall Group management.
Meetings held and the
average attendance rate
(FY2019)
17 times
92%
Nomination Advisory Committee
Members Chairperson: Shiro Kuniya (Outside Director); Shogo Ikeuchi (Outside Director); Masashi Oka; Shiro Kambe
Composition Half are outside directors
Main roles
The Nomination Advisory Committee deliberates and reports on the appointment and dismissal of SFH’s directors, audit
& supervisory board members and the Group companies’ presidents, as well as the succession planning of SFH and the
Group companies’ presidents.
Operational status, topics
(FY2019)
The Nomination Advisory Committee decided on director candidates for SFH and made reports regarding the appoint-
ment of directors and the selection of representative directors for the SFH’s three main subsidiaries.
Meetings held and the
average attendance rate
(FY2019)
Five times
95%
Compensation Advisory Committee
Members Chairperson: Kaoru Takahashi (Outside Director); Shiro Kuniya (Outside Director); Masashi Oka
Composition Majority are outside directors
Main roles
The Compensation Advisory Committee deliberates the policy and total amount of compensation for SFH’s directors and
the Group companies’ representative directors who are to be proposed at a General Meeting of Shareholders. The
committee also deliberates the amount of compensation for individual directors and the Group companies’ representative
directors, within the limits set by a resolution at a General Meeting of Shareholders. It reports the results of its deliberations
to the Board of Directors. Members of this committee do not participate in deliberations on their own compensation.
Operational status, topics
(FY2019)
The Compensation Advisory Committee decided on individual levels of compensation for SFH’s directors and executive
officers, and approved the levels of individual compensation for SFH’s three main subsidiaries’ representative directors. It
also engaged in considering a review of the indicators for the results-linked portion.
Meetings held and the
average attendance rate
(FY2019)
Five times
93%
Audit & Supervisory Board
Chairperson Yasuyuki Hayase (Outside Audit & Supervisory Board Member)
Composition Majority are outside audit & supervisory board members
Main roles
The Audit & Supervisory Board, an organization independent from the Board of Directors, audits the suitability and
appropriateness of directors’ performance of their duties by calling for business reports of the Group companies based
on laws and regulations, surveying their operational and financial status, and exercising their right to appoint and dismiss
the independent auditors.
Operational status, topics
(FY2019)
The Audit & Supervisory Board received reports on directors’ performance of their duties, including their business
management of the Group companies. Primarily, they confirmed the status of development and operation of the Group’s
internal control structure and made suggestions, as appropriate.
Meetings held and the
average attendance rate
(FY2019)
17 times
98%
Status of Initiatives by the Board of Directors, Committees and Audit &
Supervisory Board
Sony Financial Holdings Inc.Annual Report2020 29
Chairperson Masashi Oka
Composition The ratio of outside directors: 40%
Main roles
The Board of Directors recognizes the responsibility it has been entrusted with and strives to realize sustainable growth of
SFG and increase corporate value over the medium to long term. In addition to items stipulated in laws and regulations
and the Articles of Incorporation, the Board of Directors makes important decisions regarding management of SFG such
as formulation of SFG’s management policies and management plans; appointment and dismissal of directors and Audit
& Supervisory Board members of subsidiaries in which SFH holds shares directly; entry into new businesses and
withdrawal from businesses; and organizational restructuring. The Board of Directors also supervises overall manage-
ment of the Group.
Operational status, topics
(FY2019)
The Board of Directors continued to conduct deep deliberations centering on overall Group governance, Group growth
strategies, business plans, sustainability and important matters related to Group subsidiaries. The board also received
periodic reports concerning the state of progress of SFH’s non-consolidated and consolidated business plans, as well as
the status of compliance activities, risk management and internal audits. In these ways, the board conducted appropri-
ate supervision of overall Group management.
Meetings held and the
average attendance rate
(FY2019)
17 times
92%
Nomination Advisory Committee
Members Chairperson: Shiro Kuniya (Outside Director); Shogo Ikeuchi (Outside Director); Masashi Oka; Shiro Kambe
Composition Half are outside directors
Main roles
The Nomination Advisory Committee deliberates and reports on the appointment and dismissal of SFH’s directors, audit
& supervisory board members and the Group companies’ presidents, as well as the succession planning of SFH and the
Group companies’ presidents.
Operational status, topics
(FY2019)
The Nomination Advisory Committee decided on director candidates for SFH and made reports regarding the appoint-
ment of directors and the selection of representative directors for the SFH’s three main subsidiaries.
Meetings held and the
average attendance rate
(FY2019)
Five times
95%
Compensation Advisory Committee
Members Chairperson: Kaoru Takahashi (Outside Director); Shiro Kuniya (Outside Director); Masashi Oka
Composition Majority are outside directors
Main roles
The Compensation Advisory Committee deliberates the policy and total amount of compensation for SFH’s directors and
the Group companies’ representative directors who are to be proposed at a General Meeting of Shareholders. The
committee also deliberates the amount of compensation for individual directors and the Group companies’ representative
directors, within the limits set by a resolution at a General Meeting of Shareholders. It reports the results of its deliberations
to the Board of Directors. Members of this committee do not participate in deliberations on their own compensation.
Operational status, topics
(FY2019)
The Compensation Advisory Committee decided on individual levels of compensation for SFH’s directors and executive
officers, and approved the levels of individual compensation for SFH’s three main subsidiaries’ representative directors. It
also engaged in considering a review of the indicators for the results-linked portion.
Meetings held and the
average attendance rate
(FY2019)
Five times
93%
Audit & Supervisory Board
Chairperson Yasuyuki Hayase (Outside Audit & Supervisory Board Member)
Composition Majority are outside audit & supervisory board members
Main roles
The Audit & Supervisory Board, an organization independent from the Board of Directors, audits the suitability and
appropriateness of directors’ performance of their duties by calling for business reports of the Group companies based
on laws and regulations, surveying their operational and financial status, and exercising their right to appoint and dismiss
the independent auditors.
Operational status, topics
(FY2019)
The Audit & Supervisory Board received reports on directors’ performance of their duties, including their business
management of the Group companies. Primarily, they confirmed the status of development and operation of the Group’s
internal control structure and made suggestions, as appropriate.
Meetings held and the
average attendance rate
(FY2019)
17 times
98%
Status of Initiatives by the Board of Directors, Committees and Audit &
Supervisory Board
Sony Financial Holdings Inc.Annual Report2020 29
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Masashi Oka
President & CEO, Representative Director
Status of attendance Status of attendance
Status of attendance
Status of attendance
Status of attendance
Attended all 13 meetings of the Board of Directors and all 5
meetings of the Compensation Advisory Committee
Length of service in office
Length of service in office
Length of service in office
Length of service in office
Length of service in office
One year
Executive Duties
Executive Duties
Executive Duties
He has many years of business experience at a major financial institution, and
also has a high level of insight on corporate management gained through serving
as CEO for the Americas of that institution and CFO of a global technology
company. He had served as Outside Director of SFH since June 2019.
Biography
Attended 10 out of 13 meetings of the Board of Directors
One year
Hiroki Totoki
Director
He has experience in executing the development and launch of ne
businesses as a founding member of Sony Bank and extensive
expertise in finance. He has been involved in management serving
as Corporate Executive Officer of Sony Corp. since April 2016.
Biography
Hiroaki Kiyomiya
Managing Director
Main concurrent positions
Main concurrent positions
Main concurrent positions
Main concurrent positions
・ Director, Sony Life Insurance Co., Ltd.
・ Director, Sony Assurance Inc.
・ Director, Sony Bank Inc.
・ President, Representative Director,
Sony Financial Ventures Inc.
・ Director, Sony Life Insurance Co., Ltd.
・ Director, Sony Assurance Inc.
・ Director, Sony Bank Inc.
Attended all 17 meetings of the Board of Directors
Five years
He was in charge of actuarial affairs, accounting and invest-
ment management, and others at Sony Life Insurance Co., Ltd
for many years. He has been involved in management as
Managing Director of SFH since June 2015.
Biography
Shiro Kambe
Director
Main concurrent positions
・ Senior Executive Vice President,
Corporate Executive Officer, Sony
Corporation
Attended 13 out of 17 meetings of the Board of Directors and
all 5 meetings of the Nomination Advisory Committee
Five years
He was in charge of legal, compliance, corporate communica-
tions and CSR, and others of Sony Corp. for many years. He has
been involved in management as Corporate Executive Officer of
Sony Corp. since June 2014.
Biography
Attended 11 out of 13 meetings of the Board of Directors
One year
Naomi Matsuoka
Director
Main concurrent positions
・Senior Vice President, Sony
Corporation
She has extensive expertise and business experience at financial
institutions cultivated through serving as Chief Transformation Officer o
major insurance holding company, and has been involved in manageme
as Senior Vice President of Sony Corp. since November 2018.
Biography
Hiroyuki Tsubota
Director
・ Director, Executive Deputy President,
CFO, Representative Corporate
Executive Officer, Sony Corporation
・ Director, Recruit Holdings Co., Ltd.
・ Director, Sony Life Insurance Co., Ltd.
・ Director, Sony Assurance Inc.
・ Director, Sony Lifecare Inc.
・ Director, Sony Financial Ventures Inc.
−
−
He was in charge of human resources, corporate strategy, and
others of Sony Corp. and Sony Group companies in Japan and
overseas for many years. He has been involved in management
as Executive Officer of SFH since January 2020.
Biography
Status of attendance
Length of service in office
Profiles of Directors and Audit & Supervisory Board Members(As of July 1, 2020)
Directors
Initiatives to Strengthen Our Foundation for Creating Value
Sony Financial Holdings Inc.Annual Report202030
President & CEO, Representative Director
Status of attendance Status of attendance
Status of attendance
Status of attendance
Status of attendance
Attended all 13 meetings of the Board of Directors and all 5
meetings of the Compensation Advisory Committee
Length of service in office
Length of service in office
Length of service in office
Length of service in office
Length of service in office
One year
Executive Duties
Executive Duties
Executive Duties
He has many years of business experience at a major financial institution, and
also has a high level of insight on corporate management gained through serving
as CEO for the Americas of that institution and CFO of a global technology
company. He had served as Outside Director of SFH since June 2019.
Biography
Attended 10 out of 13 meetings of the Board of Directors
One year
Hiroki Totoki
Director
He has experience in executing the development and launch of ne
businesses as a founding member of Sony Bank and extensive
expertise in finance. He has been involved in management serving
as Corporate Executive Officer of Sony Corp. since April 2016.
Biography
Hiroaki Kiyomiya
Managing Director
Main concurrent positions
Main concurrent positions
Main concurrent positions
Main concurrent positions
・ Director, Sony Life Insurance Co., Ltd.
・ Director, Sony Assurance Inc.
・ Director, Sony Bank Inc.
・ President, Representative Director,
Sony Financial Ventures Inc.
・ Director, Sony Life Insurance Co., Ltd.
・ Director, Sony Assurance Inc.
・ Director, Sony Bank Inc.
Attended all 17 meetings of the Board of Directors
Five years
He was in charge of actuarial affairs, accounting and invest-
ment management, and others at Sony Life Insurance Co., Ltd
for many years. He has been involved in management as
Managing Director of SFH since June 2015.
Biography
Shiro Kambe
Director
Main concurrent positions
・ Senior Executive Vice President,
Corporate Executive Officer, Sony
Corporation
Attended 13 out of 17 meetings of the Board of Directors and
all 5 meetings of the Nomination Advisory Committee
Five years
He was in charge of legal, compliance, corporate communica-
tions and CSR, and others of Sony Corp. for many years. He has
been involved in management as Corporate Executive Officer of
Sony Corp. since June 2014.
Biography
Attended 11 out of 13 meetings of the Board of Directors
One year
Naomi Matsuoka
Director
Main concurrent positions
・Senior Vice President, Sony
Corporation
She has extensive expertise and business experience at financial
institutions cultivated through serving as Chief Transformation Officer o
major insurance holding company, and has been involved in manageme
as Senior Vice President of Sony Corp. since November 2018.
Biography
Hiroyuki Tsubota
Director
・ Director, Executive Deputy President,
CFO, Representative Corporate
Executive Officer, Sony Corporation
・ Director, Recruit Holdings Co., Ltd.
・ Director, Sony Life Insurance Co., Ltd.
・ Director, Sony Assurance Inc.
・ Director, Sony Lifecare Inc.
・ Director, Sony Financial Ventures Inc.
−
−
He was in charge of human resources, corporate strategy, and
others of Sony Corp. and Sony Group companies in Japan and
overseas for many years. He has been involved in management
as Executive Officer of SFH since January 2020.
Biography
Status of attendance
Length of service in office
Profiles of Directors and Audit & Supervisory Board Members(As of July 1, 2020)
Directors
Initiatives to Strengthen Our Foundation for Creating Value
Sony Financial Holdings Inc.Annual Report202030
・ Managing Partner, Oh-Ebashi LPC &
Partners
・ Director, NEXON Co., Ltd.
・ Director, Takeda Pharmaceutical
Company Ltd.
Shiro Kuniya*
Director
Outside OfficerIndependent Officer Outside OfficerIndependent Officer
Outside OfficerIndependent Officer
He has specialized knowledge and experience as a lawyer
and an attorney licensed in the U.S. state of New York.
Reason for
appointment
He possesses extensive knowledge and experience as an
expert on subjects including macroeconomics, financial
policy, international finance and Japanese economic theory.
Takatoshi Ito*
Director
・Professor, School of International and
Public Affairs, Columbia University
・Senior Professor, National Graduate
Institute for Policy Studies
・Director, Chi-X Japan Limited
Attended all 17 meetings of the Board of Directors
Two years
He has many years of experience in promoting new business
development and overseas expansion at a global company, and has a
high level of insight on corporate management gained through serving
as head in charge of corporate planning and human resources.
He has many years of business experience in a major P&C
insurance group, and has a high level of insight on corporate
management gained through serving as President and Chief
Executive Officer of the group’s life insurance company.
Kaoru Takahashi*
Director
・Director, Hulic Co., Ltd.
−
−
Shogo Ikeuchi*
Director
・ Advisor, Recruit Holdings Co., Ltd.
Outside OfficerIndependent Officer
Attended all 13 meetings of the Board of Directors and 3 out
of 4 meetings of the Nomination Advisory Committee
One year
Status of attendance
Status of attendance
Status of attendance
Length of service in office
Length of service in office
Length of service in office
Main concurrent positions Main concurrent positions
Main concurrent positions Main concurrent positions
Attended 16 out of 17 meetings of the Board of Directors, all
5 meetings of the Nomination Advisory Committee, and 4 out
of 5 meetings of the Compensation Advisory Committee
Seven years
Status of attendance
Length of service in office
Reason for
appointment
Reason for
appointment
Reason for
appointment
Directors
Sony Financial Holdings Inc.Annual Report2020 31
Partners
・ Director, NEXON Co., Ltd.
・ Director, Takeda Pharmaceutical
Company Ltd.
Shiro Kuniya*
Director
Outside OfficerIndependent Officer Outside OfficerIndependent Officer
Outside OfficerIndependent Officer
He has specialized knowledge and experience as a lawyer
and an attorney licensed in the U.S. state of New York.
Reason for
appointment
He possesses extensive knowledge and experience as an
expert on subjects including macroeconomics, financial
policy, international finance and Japanese economic theory.
Takatoshi Ito*
Director
・Professor, School of International and
Public Affairs, Columbia University
・Senior Professor, National Graduate
Institute for Policy Studies
・Director, Chi-X Japan Limited
Attended all 17 meetings of the Board of Directors
Two years
He has many years of experience in promoting new business
development and overseas expansion at a global company, and has a
high level of insight on corporate management gained through serving
as head in charge of corporate planning and human resources.
He has many years of business experience in a major P&C
insurance group, and has a high level of insight on corporate
management gained through serving as President and Chief
Executive Officer of the group’s life insurance company.
Kaoru Takahashi*
Director
・Director, Hulic Co., Ltd.
−
−
Shogo Ikeuchi*
Director
・ Advisor, Recruit Holdings Co., Ltd.
Outside OfficerIndependent Officer
Attended all 13 meetings of the Board of Directors and 3 out
of 4 meetings of the Nomination Advisory Committee
One year
Status of attendance
Status of attendance
Status of attendance
Length of service in office
Length of service in office
Length of service in office
Main concurrent positions Main concurrent positions
Main concurrent positions Main concurrent positions
Attended 16 out of 17 meetings of the Board of Directors, all
5 meetings of the Nomination Advisory Committee, and 4 out
of 5 meetings of the Compensation Advisory Committee
Seven years
Status of attendance
Length of service in office
Reason for
appointment
Reason for
appointment
Reason for
appointment
Directors
Sony Financial Holdings Inc.Annual Report2020 31
* Independent officers as set forth in Article 436-2 of the Securities Listing Regulations of the Tokyo Stock Exchange
・Directors appointed as of June 23, 2020: Hiroyuki Tsubota and Kaoru Takahashi
・Directors who retired as of June 23, 2020: Shigeru Ishii and Yutaka Ito
・The status of attendance at the meetings of the Board of Directors, the Audit & Supervisory Board, the Nomination Advisory Committee and the Compensation
Advisory Committee are the results for fiscal 2019
・The status of attendance of Hiroki Totoki, Naomi Matsuoka, Masashi Oka and Shogo Ikeuchi are for the meetings of the Board of Directors held after their appoin-
ment as Directors of SFH in June 2019
・The length of service in office is as of the General Meeting of Shareholders held on June 23, 2020
・ Audit & Supervisory Board Member,
Sony Life Insurance Co., Ltd.
・ Audit & Supervisory Board Member,
Sony Assurance Inc.
・ Audit & Supervisory Board Member,
Sony Bank Inc.
Yasuyuki Hayase*
Standing Audit & Supervisory Board
Member
・Senior Vice President, Sony
Corporation
Hirotoshi Korenaga
Audit & Supervisory Board Member
Outside OfficerIndependent Officer
Main concurrent positions
Attended all 17 meetings of the Board of Directors and all 17
meetings of the Audit & Supervisory Board
Five years
He has many years of business experience at a financial
institution.
Attended 13 out of 17 meetings of the Board of Directors and
16 out of 17 meetings of the Audit & Supervisory Board
Seven years
He has been working in accounting for many years within the
Sony Group. He has concurrently served as SFH’s Audit &
Supervisory Board Member since June 2013.
Biography
・ Partner, Ripple Partners (law office)
・ Director, Filmination Co., Ltd.
Yoshimichi Makiyama*
Audit & Supervisory Board Member
Attended 16 out of 17 meetings of the Board of Directors and
all 17 meetings of the Audit & Supervisory Board
Five years
He has specialized knowledge and experience as a lawyer
and an attorney licensed in the U.S. state of New York.
Outside OfficerIndependent Officer
Main concurrent positions
Main concurrent positions
Status of attendance
Status of attendance
Status of attendance
Length of service in office
Length of service in office
Length of service in office
Reason for
appointment
Reason for
appointment
Audit & Supervisory Board Members
Initiatives to Strengthen Our Foundation for Creating Value
Sony Financial Holdings Inc.Annual Report202032
・Directors appointed as of June 23, 2020: Hiroyuki Tsubota and Kaoru Takahashi
・Directors who retired as of June 23, 2020: Shigeru Ishii and Yutaka Ito
・The status of attendance at the meetings of the Board of Directors, the Audit & Supervisory Board, the Nomination Advisory Committee and the Compensation
Advisory Committee are the results for fiscal 2019
・The status of attendance of Hiroki Totoki, Naomi Matsuoka, Masashi Oka and Shogo Ikeuchi are for the meetings of the Board of Directors held after their appoin-
ment as Directors of SFH in June 2019
・The length of service in office is as of the General Meeting of Shareholders held on June 23, 2020
・ Audit & Supervisory Board Member,
Sony Life Insurance Co., Ltd.
・ Audit & Supervisory Board Member,
Sony Assurance Inc.
・ Audit & Supervisory Board Member,
Sony Bank Inc.
Yasuyuki Hayase*
Standing Audit & Supervisory Board
Member
・Senior Vice President, Sony
Corporation
Hirotoshi Korenaga
Audit & Supervisory Board Member
Outside OfficerIndependent Officer
Main concurrent positions
Attended all 17 meetings of the Board of Directors and all 17
meetings of the Audit & Supervisory Board
Five years
He has many years of business experience at a financial
institution.
Attended 13 out of 17 meetings of the Board of Directors and
16 out of 17 meetings of the Audit & Supervisory Board
Seven years
He has been working in accounting for many years within the
Sony Group. He has concurrently served as SFH’s Audit &
Supervisory Board Member since June 2013.
Biography
・ Partner, Ripple Partners (law office)
・ Director, Filmination Co., Ltd.
Yoshimichi Makiyama*
Audit & Supervisory Board Member
Attended 16 out of 17 meetings of the Board of Directors and
all 17 meetings of the Audit & Supervisory Board
Five years
He has specialized knowledge and experience as a lawyer
and an attorney licensed in the U.S. state of New York.
Outside OfficerIndependent Officer
Main concurrent positions
Main concurrent positions
Status of attendance
Status of attendance
Status of attendance
Length of service in office
Length of service in office
Length of service in office
Reason for
appointment
Reason for
appointment
Audit & Supervisory Board Members
Initiatives to Strengthen Our Foundation for Creating Value
Sony Financial Holdings Inc.Annual Report202032
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Aiming for sustainable enhancement of SFG’s corporate value, SFH has welcomed a new management leader, with in-depth
understanding of the global finance business and extensive management experience across industry borders, to strengthe
the management structure.
Under this new leader, SFH’s Board of Directors, composed of SFH’s senior management, outside directors, and senior
management from Sony Corp., will continue to promote the further growth of each business, as well as aiming to strengthe
governance of SFG as a whole, and realize further synergies.
We have four independent outside directors* (one-third or more of the Board of Directors) and have appointed a female
director, thereby increasing the diversity of the Board of Directors and enhancing its effectiveness, in order to strengthen it
supervisory function and gain comprehensive advice on SFG’s management.
Regarding the Boards of Directors of the Group’s subsidiaries, SFH’s President & CEO, Representative Director, executive
directors and executive officers serve concurrently as directors of the Group’s subsidiaries, with the aim of increasing the
effectiveness of the Group’s governance and ensuring the sound business management of each company.
* SFH designates outside directors as independent officers, whose placements are required by the Tokyo Stock Exchange, for the protection of
general shareholders
▶P92 Relationship with Parent Company, Sony Corp.
(Appointment and Dismissal of Directors)
SFH has formulated the “Basic Policy on the Selection of Director and Audit & Supervisory Board Member Candidates.” Refl
ing this policy, SFH selects as director and audit & supervisory board member candidates who have suitable knowledge, ex
ence, capacity for judgment and other characteristics suiting them to conduct decision-making and perform management
oversight in relation to the overall Group management. To reinforce the transparency and objectivity of the process of sele
director and audit & supervisory board member candidates, the Nomination Advisory Committee deliberates on candidates
response to inquiries by the Board of Directors. After receiving the committee’s reports, the Board of Directors decides on c-
dates to propose at the General Meeting of Shareholders. The Nomination Advisory Committee deliberates on the appointm
and dismissal of the president and other executive directors based on the aforementioned policy, an assessment of corpora
operating performance and other items. The committee then reports to the Board of Directors, which makes a decision.
Appointment of the President & CEO, Representative Director
Regarding the appointment of a successor to lead management, SFH resolved internally to select Masashi Oka as the next President & CEO,
Representative Director as a result of consideration by the Board of Directors, after receiving a report concerning deliberations on the candi
dates by the Nomination Advisory Committee in response to inquiriesby the Board of Directors. Masashi Oka possesses the three elements
necessary for SFG’s future: “finance,” “customer perspective” and “technology.” He combines these with extensive experience and insight
corporate transformation. For these reasons, he has been judged an appropriate person to lead management of SFG’s diverse businesses.
(Director and Audit & Supervisory Board Member Training)
Upon their appointment, SFH provides opportunities for directors and audit & supervisory board members to acquire knowl
edge related to laws and regulations, corporate governance and other areas necessary for appropriately fulfilling their roles
and responsibilities. In particular, when outside officers and audit &
supervisory board members are newly appointed, SFH creates opportu-
nities to provide the information necessary to promote an understanding
of SFG’s businesses, management strategy, management issues and
other areas. SFH also creates such opportunities as necessary following
their appointment.
From November 2019 to February 2020, we arranged opportunities
for SFH’s directors and audit & supervisory board members to carry
out on-site inspections of the business facilities of each company in
the Sony Financial Group.
Example of an Initiative in Fiscal 2019
About the Board of Directors Board of Directors Nomination Advisory Committee
▶ “Basic Policy on Corporate Governance,” and “Basic Policy on Establishing an Internal Control System” on SFH’s website,
https://www.sonyfh.co.jp/en/sustainability/governance.html
▶ P1 Sony Financial Group Mission, Vision & Values
▶ P92 Relationship with Parent Company, Sony Corporation
Inspection of provisional screening for
mortgage loans using AI at Sony Bank
Sony Financial Holdings Inc.Annual Report2020 33
understanding of the global finance business and extensive management experience across industry borders, to strengthe
the management structure.
Under this new leader, SFH’s Board of Directors, composed of SFH’s senior management, outside directors, and senior
management from Sony Corp., will continue to promote the further growth of each business, as well as aiming to strengthe
governance of SFG as a whole, and realize further synergies.
We have four independent outside directors* (one-third or more of the Board of Directors) and have appointed a female
director, thereby increasing the diversity of the Board of Directors and enhancing its effectiveness, in order to strengthen it
supervisory function and gain comprehensive advice on SFG’s management.
Regarding the Boards of Directors of the Group’s subsidiaries, SFH’s President & CEO, Representative Director, executive
directors and executive officers serve concurrently as directors of the Group’s subsidiaries, with the aim of increasing the
effectiveness of the Group’s governance and ensuring the sound business management of each company.
* SFH designates outside directors as independent officers, whose placements are required by the Tokyo Stock Exchange, for the protection of
general shareholders
▶P92 Relationship with Parent Company, Sony Corp.
(Appointment and Dismissal of Directors)
SFH has formulated the “Basic Policy on the Selection of Director and Audit & Supervisory Board Member Candidates.” Refl
ing this policy, SFH selects as director and audit & supervisory board member candidates who have suitable knowledge, ex
ence, capacity for judgment and other characteristics suiting them to conduct decision-making and perform management
oversight in relation to the overall Group management. To reinforce the transparency and objectivity of the process of sele
director and audit & supervisory board member candidates, the Nomination Advisory Committee deliberates on candidates
response to inquiries by the Board of Directors. After receiving the committee’s reports, the Board of Directors decides on c-
dates to propose at the General Meeting of Shareholders. The Nomination Advisory Committee deliberates on the appointm
and dismissal of the president and other executive directors based on the aforementioned policy, an assessment of corpora
operating performance and other items. The committee then reports to the Board of Directors, which makes a decision.
Appointment of the President & CEO, Representative Director
Regarding the appointment of a successor to lead management, SFH resolved internally to select Masashi Oka as the next President & CEO,
Representative Director as a result of consideration by the Board of Directors, after receiving a report concerning deliberations on the candi
dates by the Nomination Advisory Committee in response to inquiriesby the Board of Directors. Masashi Oka possesses the three elements
necessary for SFG’s future: “finance,” “customer perspective” and “technology.” He combines these with extensive experience and insight
corporate transformation. For these reasons, he has been judged an appropriate person to lead management of SFG’s diverse businesses.
(Director and Audit & Supervisory Board Member Training)
Upon their appointment, SFH provides opportunities for directors and audit & supervisory board members to acquire knowl
edge related to laws and regulations, corporate governance and other areas necessary for appropriately fulfilling their roles
and responsibilities. In particular, when outside officers and audit &
supervisory board members are newly appointed, SFH creates opportu-
nities to provide the information necessary to promote an understanding
of SFG’s businesses, management strategy, management issues and
other areas. SFH also creates such opportunities as necessary following
their appointment.
From November 2019 to February 2020, we arranged opportunities
for SFH’s directors and audit & supervisory board members to carry
out on-site inspections of the business facilities of each company in
the Sony Financial Group.
Example of an Initiative in Fiscal 2019
About the Board of Directors Board of Directors Nomination Advisory Committee
▶ “Basic Policy on Corporate Governance,” and “Basic Policy on Establishing an Internal Control System” on SFH’s website,
https://www.sonyfh.co.jp/en/sustainability/governance.html
▶ P1 Sony Financial Group Mission, Vision & Values
▶ P92 Relationship with Parent Company, Sony Corporation
Inspection of provisional screening for
mortgage loans using AI at Sony Bank
Sony Financial Holdings Inc.Annual Report2020 33
SFH’s Board of Directors conducts self-evaluations, evaluating the effectiveness of its own decision-making and oversight, a
well as its operation of meetings at least once a year.
Evaluation outline and process
● Outline: An independent third-party evaluation company assessed the effectiveness of the Board of Directors with a que
tionnaire given to all directors and audit & supervisory board members.
● Question items:
“Composition and operation of the Board of Directors,” “Management and business strategies,” “Corporate ethics and risk
management,” “Evaluation and compensation of management,” “Matters related organizational and business restructuri
“Dialogue with shareholders and others,” and “Self-evaluations.” In addition, an evaluation was conducted regarding re-
sponses to items that were raised as issues in the previous year’s evaluation of effectiveness.
● Evaluation results:
・ As in fiscal 2018, a high level of effectiveness has been achieved.
・ The governance structure has been further strengthened by measures implemented last year, such as the separation of
“supervision and execution,” increasing the proportion of outside directors (attaining a proportion of one third or more), a
the appointment of a female director.
・ As SFH is a listed subsidiary, the Board of Directors recognizes minority shareholder protection and arm’s-length rules. I
decision-making and information management, the board has continued to ensure management independence from
Parent Company and conduct sufficient management with a high degree of fairness and transparency.
・ The Board of Directors endeavors to obtain and understand the details of its meeting agenda and other information in
advance. The Board of Directors strives to contribute to its own decision-making and supervision. Furthermore, the Boar
of Directors has sufficient knowledge regarding the various laws, regulations and rules related to SFG, SFH responsibilitie
and duties as a listed company, and corporate governance.
Evaluation of Effectiveness of the Board of Directors(FY 2019) Board of Directors
SFH sets the “Policy for Determining the Compensation of Directors” and the “Policy for Determining the Compensation of
Audit & Supervisory Board Members.” SFH has also created the “Compensation Advisory Committee Regulations” and
established the Compensation Advisory Committee (please see page 29) as its deliberative body.
Basic policy
● Compensation of executive directors is determined according to the position, in consideration of the balance between a
fixed portion and a portion linked to short-term and medium- to long-term results, to ensure that compensation serves as
an effective incentive for improving the business performance of the entire Group.
● In principle, directors with no executive duties, excluding outside directors, are paid no compensation.
● Outside directors are paid fixed compensation according to their roles. Audit & supervisory board members are paid fixed
compensation according to their respective roles of standing audit & supervisory board members and non-standing audit
supervisory board members.
Policy for Determining Compensation Board of Directors Compensation Advisory Committee
Status of major improvements based on the evaluation of effectiveness of the Board of Directors
Main issues in FY 2018 Main initiatives in FY 2019 Future responses
● Continuing discussions on the Group’s
growth strategies, considering the
Group’s overall optimization and
lessons learned from the past
● More opportunities for study or training
related to the Group’s management
and businesses
● Continuing consideration concerning
incentive compensation plans for
management
● Further improvements in the operation
of the Board of Directors
● Strengthening of the governance
structure through measures such as
the separation of “supervision and
execution,” increasing the proportion of
outside directors (attaining a proportion
of one third or more), and the appoint-
ment of a female director
● More opportunities for study or training
related to the Group’s management
and businesses, such as on-site
inspections of the business facilities of
three major subsidiaries and nursing
care business companies
● Earlier advance distribution of meeting
materials, to improve the operation of
the Board of Directors
● Continuing consideration of medium-
to long-term challenges and strategy,
including digital transformation and
sustainability response
● Consideration of a review of the
methods for sharing discussions by the
Nomination Advisory Committee and
the Compensation Advisory Commit-
tee, and the mechanism of incentive
compensation
● Further improvements in the operation
of the Board of Directors
● Further improvements in contingency
management response at SFH and its
subsidiaries, including response to
COVID-19
Initiatives to Strengthen Our Foundation for Creating Value
Sony Financial Holdings Inc.Annual Report202034
well as its operation of meetings at least once a year.
Evaluation outline and process
● Outline: An independent third-party evaluation company assessed the effectiveness of the Board of Directors with a que
tionnaire given to all directors and audit & supervisory board members.
● Question items:
“Composition and operation of the Board of Directors,” “Management and business strategies,” “Corporate ethics and risk
management,” “Evaluation and compensation of management,” “Matters related organizational and business restructuri
“Dialogue with shareholders and others,” and “Self-evaluations.” In addition, an evaluation was conducted regarding re-
sponses to items that were raised as issues in the previous year’s evaluation of effectiveness.
● Evaluation results:
・ As in fiscal 2018, a high level of effectiveness has been achieved.
・ The governance structure has been further strengthened by measures implemented last year, such as the separation of
“supervision and execution,” increasing the proportion of outside directors (attaining a proportion of one third or more), a
the appointment of a female director.
・ As SFH is a listed subsidiary, the Board of Directors recognizes minority shareholder protection and arm’s-length rules. I
decision-making and information management, the board has continued to ensure management independence from
Parent Company and conduct sufficient management with a high degree of fairness and transparency.
・ The Board of Directors endeavors to obtain and understand the details of its meeting agenda and other information in
advance. The Board of Directors strives to contribute to its own decision-making and supervision. Furthermore, the Boar
of Directors has sufficient knowledge regarding the various laws, regulations and rules related to SFG, SFH responsibilitie
and duties as a listed company, and corporate governance.
Evaluation of Effectiveness of the Board of Directors(FY 2019) Board of Directors
SFH sets the “Policy for Determining the Compensation of Directors” and the “Policy for Determining the Compensation of
Audit & Supervisory Board Members.” SFH has also created the “Compensation Advisory Committee Regulations” and
established the Compensation Advisory Committee (please see page 29) as its deliberative body.
Basic policy
● Compensation of executive directors is determined according to the position, in consideration of the balance between a
fixed portion and a portion linked to short-term and medium- to long-term results, to ensure that compensation serves as
an effective incentive for improving the business performance of the entire Group.
● In principle, directors with no executive duties, excluding outside directors, are paid no compensation.
● Outside directors are paid fixed compensation according to their roles. Audit & supervisory board members are paid fixed
compensation according to their respective roles of standing audit & supervisory board members and non-standing audit
supervisory board members.
Policy for Determining Compensation Board of Directors Compensation Advisory Committee
Status of major improvements based on the evaluation of effectiveness of the Board of Directors
Main issues in FY 2018 Main initiatives in FY 2019 Future responses
● Continuing discussions on the Group’s
growth strategies, considering the
Group’s overall optimization and
lessons learned from the past
● More opportunities for study or training
related to the Group’s management
and businesses
● Continuing consideration concerning
incentive compensation plans for
management
● Further improvements in the operation
of the Board of Directors
● Strengthening of the governance
structure through measures such as
the separation of “supervision and
execution,” increasing the proportion of
outside directors (attaining a proportion
of one third or more), and the appoint-
ment of a female director
● More opportunities for study or training
related to the Group’s management
and businesses, such as on-site
inspections of the business facilities of
three major subsidiaries and nursing
care business companies
● Earlier advance distribution of meeting
materials, to improve the operation of
the Board of Directors
● Continuing consideration of medium-
to long-term challenges and strategy,
including digital transformation and
sustainability response
● Consideration of a review of the
methods for sharing discussions by the
Nomination Advisory Committee and
the Compensation Advisory Commit-
tee, and the mechanism of incentive
compensation
● Further improvements in the operation
of the Board of Directors
● Further improvements in contingency
management response at SFH and its
subsidiaries, including response to
COVID-19
Initiatives to Strengthen Our Foundation for Creating Value
Sony Financial Holdings Inc.Annual Report202034
Process
● For the amount of compensation of individual executive directors and outside directors, the Compensation Advisory Com
mittee, composed of a majority of outside directors and chaired by an outside director, carries out deliberations in respon
to the Board of Directors, and directors who are entrusted by the Board of Directors decide the amount based on a report
from the Compensation Advisory Committee.
● The amount of compensation for individual audit & supervisory board members is determined by deliberation of audit &
supervisory board members.
Compensation structure
● Executive directors: Compensation comprises a fixed portion depending on the position, a results-linked portion dependin
on the entire SFG’s performance and individual responsibilities, and a medium- to long-term incentive portion in the form
a stock compensation.
〈 Fixed portion 〉 As an executive’s level of seniority increases, the fixed portion decreases as a percentage of annual compens
while the results-linked portion makes up a growing percentage (Fixed portion: 62%-71%; Results-linked portion: 38%-29%).
〈 Results-linked portion 〉 The results-linked portion can range from 0% to 200% of the standard amount (100%) (The resul
fiscal 2019: 116%). Indicators for the results-linked portion include meeting expectations and earning the trust of all stak
ers by realizing sustainable growth of SFG and increasing corporate value over the medium to long term, as measured by
quantitative indicators (consolidated performance results and key performance results at the Group companies compared
planned levels) and qualitative indicators (strengthening of the internal control and the Group’s foundation and medium-
long-term growth strategy). The Compensation Advisory Committee confirms the calculation results of the results-linked
portion based on indicators, and reports the amount of compensation for individual executive directors to the Board of Di
tors.
Indicators for the results-linked portion
Indicator Weight Plan Actual
Quantitative
Consolidated ordinary profit vs. plan 30% ¥98.4 billion ¥111.8 billion
Consolidated adjusted ROE vs. plan 20% 5.8%(~6.0%) 5.3%
Business volume at main three subsidiaries*vs. plan 20% — —
Qualitative Internal control / strengthening of the foundation
Medium- to long-term growth strategy 30% — —
* Business volume at main three subsidiaries
Company Indicator Weight Plan Actual
Sony Life Policy amount in force vs. plan 70% ¥52 trillion ¥51.4 trillion
Sony Assurance Net premiums written vs. plan 15% ¥119.5 billion ¥119.3 billion
Sony Bank Retail balance vs. plan 15% ¥4.5 trillion ¥4.5 trillion
〈 Medium- to long-term incentive portion 〉 The medium- to long-term incentive portion, which accounts for approximately
of total annual compensation, comprises restricted stock compensation, which has a restriction on transfer for a certain p
following acquisition, and stock-type compensation stock options, which can be exercised following retirement.
● Outside directors: A fixed amount is paid according to the role.
● Audit & supervisory board members: A fixed amount is paid according to the role of standing audit & supervisory board
members and non-standing audit & supervisory board members.
Total amount of
compensation
(Millions of yen)
Total amount by compensation category(Millions of yen)*2 Number
of
payees
Fixed
compensation
Results-linked
compensation
Stock
options
Restricted stock
compensation
Directors(internal) 187 95 53 31 7 3
Directors(outside) 37 37 ー ー ー 5
Audit & Supervisory
Board Members(internal) ー ー ー ー ー ー
Audit & Supervisory
Board Members(outside) 31 31 ー ー ー 2
Total 256 163 53 31 7 10
*1 Compensation refers to compensation, bonuses and other financial benefits received from SFH in
consideration of execution of duties
*2 Compensation categories refer to fixed compensation, results-linked compensation, stock options,
restricted stock compensation, and bonuses and others. SFH has not payed bonuses as compensation
for directors and audit & supervisory board members prior to and including fiscal 2019
Compensation for SFH’s Directors and Audit & Supervisory Board Members for
Fiscal 2019*1
■: Fixed portion ■ : Results-linked portion
■: Medium- to long-term incentive portion
Graphs representing the compensation
structure
President, Representative Director
Directors (excluding Representative Director)
Directors (outside)
5 3 2
5.5 2.5 2
10
Sony Financial Holdings Inc.Annual Report2020 35
● For the amount of compensation of individual executive directors and outside directors, the Compensation Advisory Com
mittee, composed of a majority of outside directors and chaired by an outside director, carries out deliberations in respon
to the Board of Directors, and directors who are entrusted by the Board of Directors decide the amount based on a report
from the Compensation Advisory Committee.
● The amount of compensation for individual audit & supervisory board members is determined by deliberation of audit &
supervisory board members.
Compensation structure
● Executive directors: Compensation comprises a fixed portion depending on the position, a results-linked portion dependin
on the entire SFG’s performance and individual responsibilities, and a medium- to long-term incentive portion in the form
a stock compensation.
〈 Fixed portion 〉 As an executive’s level of seniority increases, the fixed portion decreases as a percentage of annual compens
while the results-linked portion makes up a growing percentage (Fixed portion: 62%-71%; Results-linked portion: 38%-29%).
〈 Results-linked portion 〉 The results-linked portion can range from 0% to 200% of the standard amount (100%) (The resul
fiscal 2019: 116%). Indicators for the results-linked portion include meeting expectations and earning the trust of all stak
ers by realizing sustainable growth of SFG and increasing corporate value over the medium to long term, as measured by
quantitative indicators (consolidated performance results and key performance results at the Group companies compared
planned levels) and qualitative indicators (strengthening of the internal control and the Group’s foundation and medium-
long-term growth strategy). The Compensation Advisory Committee confirms the calculation results of the results-linked
portion based on indicators, and reports the amount of compensation for individual executive directors to the Board of Di
tors.
Indicators for the results-linked portion
Indicator Weight Plan Actual
Quantitative
Consolidated ordinary profit vs. plan 30% ¥98.4 billion ¥111.8 billion
Consolidated adjusted ROE vs. plan 20% 5.8%(~6.0%) 5.3%
Business volume at main three subsidiaries*vs. plan 20% — —
Qualitative Internal control / strengthening of the foundation
Medium- to long-term growth strategy 30% — —
* Business volume at main three subsidiaries
Company Indicator Weight Plan Actual
Sony Life Policy amount in force vs. plan 70% ¥52 trillion ¥51.4 trillion
Sony Assurance Net premiums written vs. plan 15% ¥119.5 billion ¥119.3 billion
Sony Bank Retail balance vs. plan 15% ¥4.5 trillion ¥4.5 trillion
〈 Medium- to long-term incentive portion 〉 The medium- to long-term incentive portion, which accounts for approximately
of total annual compensation, comprises restricted stock compensation, which has a restriction on transfer for a certain p
following acquisition, and stock-type compensation stock options, which can be exercised following retirement.
● Outside directors: A fixed amount is paid according to the role.
● Audit & supervisory board members: A fixed amount is paid according to the role of standing audit & supervisory board
members and non-standing audit & supervisory board members.
Total amount of
compensation
(Millions of yen)
Total amount by compensation category(Millions of yen)*2 Number
of
payees
Fixed
compensation
Results-linked
compensation
Stock
options
Restricted stock
compensation
Directors(internal) 187 95 53 31 7 3
Directors(outside) 37 37 ー ー ー 5
Audit & Supervisory
Board Members(internal) ー ー ー ー ー ー
Audit & Supervisory
Board Members(outside) 31 31 ー ー ー 2
Total 256 163 53 31 7 10
*1 Compensation refers to compensation, bonuses and other financial benefits received from SFH in
consideration of execution of duties
*2 Compensation categories refer to fixed compensation, results-linked compensation, stock options,
restricted stock compensation, and bonuses and others. SFH has not payed bonuses as compensation
for directors and audit & supervisory board members prior to and including fiscal 2019
Compensation for SFH’s Directors and Audit & Supervisory Board Members for
Fiscal 2019*1
■: Fixed portion ■ : Results-linked portion
■: Medium- to long-term incentive portion
Graphs representing the compensation
structure
President, Representative Director
Directors (excluding Representative Director)
Directors (outside)
5 3 2
5.5 2.5 2
10
Sony Financial Holdings Inc.Annual Report2020 35
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Shogo Ikeuchi
Outside Director
New Initiatives Aimed at
SFG’s Next Stage of Growth
We interviewed Director Ikeuchi, who has
experience in new business development and
overseas expansion, about the challenges
that SFG faces in promoting new initiatives
for the next stage of its growth, and the nature of
overseas expansionand M&A activity
in response to these challenges.
A movement towards overseas expansion is continuing, in the finance industry as elsewhere, in
response to the shrinking domestic markets in Japan, caused by an aging population and
declining birthrates, and a decreasing population. SFG has attempted several overseas expan-
sions in the past. What do you consider to be the factors that define success or failure of over-
seas expansion in the finance industry?
In order to accomplish overseas expansion, it is necessary to clarify what it is that SFG really wants to achieve: its
purpose and goals. I think that the lack of clear objectives may be the reason why many Japanese companies have
produced lackluster results from overseas expansion. First of all, it is necessary for us, as managements, to have a
clear idea of the kind of company we want to be 10 or 20 years down the road, and why. Without clarifying this, I don’
A
Q
You have many years of experience in corporate planning and overseas business development in
the Recruit Group. How do you view the finance industry in the current challenging environment,
in the context of various factors such as the economic environment and demographic changes?
The finance industry is experiencing structural change, such as population decline, aging population and declining
birthrate, in the context of persistently low interest rates. While the market itself continues to shrink, I think that tech
ogies such as Fintech, including digitalization and the evolution of AI, will bring about great change in the finance
business. The magnitude of this change is enormous, when considered over the space of a decade, and I feel that it
will necessitate full-scale collaboration with industries we have not worked with before as well as venture companies
and others. I think that it may be necessary to incorporate, far beyond such initiatives as implemented in Dejima, Nag
saki, businesses from totally different ecosystems into the SFG.
A
Q
Messages from an Outside Director
Initiatives to Strengthen Our Foundation for Creating Value
Sony Financial Holdings Inc.Annual Report202036
Outside Director
New Initiatives Aimed at
SFG’s Next Stage of Growth
We interviewed Director Ikeuchi, who has
experience in new business development and
overseas expansion, about the challenges
that SFG faces in promoting new initiatives
for the next stage of its growth, and the nature of
overseas expansionand M&A activity
in response to these challenges.
A movement towards overseas expansion is continuing, in the finance industry as elsewhere, in
response to the shrinking domestic markets in Japan, caused by an aging population and
declining birthrates, and a decreasing population. SFG has attempted several overseas expan-
sions in the past. What do you consider to be the factors that define success or failure of over-
seas expansion in the finance industry?
In order to accomplish overseas expansion, it is necessary to clarify what it is that SFG really wants to achieve: its
purpose and goals. I think that the lack of clear objectives may be the reason why many Japanese companies have
produced lackluster results from overseas expansion. First of all, it is necessary for us, as managements, to have a
clear idea of the kind of company we want to be 10 or 20 years down the road, and why. Without clarifying this, I don’
A
Q
You have many years of experience in corporate planning and overseas business development in
the Recruit Group. How do you view the finance industry in the current challenging environment,
in the context of various factors such as the economic environment and demographic changes?
The finance industry is experiencing structural change, such as population decline, aging population and declining
birthrate, in the context of persistently low interest rates. While the market itself continues to shrink, I think that tech
ogies such as Fintech, including digitalization and the evolution of AI, will bring about great change in the finance
business. The magnitude of this change is enormous, when considered over the space of a decade, and I feel that it
will necessitate full-scale collaboration with industries we have not worked with before as well as venture companies
and others. I think that it may be necessary to incorporate, far beyond such initiatives as implemented in Dejima, Nag
saki, businesses from totally different ecosystems into the SFG.
A
Q
Messages from an Outside Director
Initiatives to Strengthen Our Foundation for Creating Value
Sony Financial Holdings Inc.Annual Report202036
Seeking means to grow through M&A activities in Japan and overseas is an important option in
terms of management strategy. However, due to issues such as the selection of acquisition
targets and the acquisition process, the chance of success is quite low, and it is said that only
20–30% of such acquisitions succeed. On the other hand, there is a growing awareness of the
importance of PMI*1 after acquisition rather than before acquisition. Please tell us if there was
anything in particular you aimed for through the M&A process.
I myself have experienced quite a number of failures, and there are several things that I have learned from them. 1) I
have utilized a “two-step approach,” where a small, minority investment is initially made in the M&A target, allowing
acquirer to evaluate value improvement in the context of the M&A target’s business operations, and proceed to a 100
acquisition only where specific, quantitative results can be observed. This stepped investment enables the acquirer to
confirm the accuracy of value improvement, and reduce its impairment risk. 2) Another effective method is to first cre
CVC,*2 invest in a venture company with advanced technology and a new business model, work together with the
management team until you are completely confident in the investment, before acquiring 100% stake in the company
This method, however, depends on the overwhelming autonomy and involvement of existing business divisions in ord
to succeed. 3) I regard it as vital that the person envisaging the M&A strategy and planning the acquisition must be th
same person responsible for PMI after acquisition. In other words, it is not possible to overcome the various conflict
that arise after acquisition if the officer in charge does not have an overwhelming sense of purpose and a strong com-
mitment to see the matter through from beginning to end.
*1 Post-merger integration
*2 Corporate venture capital
A
Q
Director Ikeuchi, you oversaw the successful acquisition by the Recruit Group of a technolo-
gy-focused job information company in the U.S. What are the important aspects of implement-
ing governance for the acquired company? Also, what are the important issues in SFG’s con-
sideration of growth strategies, such as overseas expansion?
I think that the most important issue is whether or not consensus has actually been achieved with the acquisition target
regarding the long-term vision. We engage in thorough discussions with the target’s management team regarding what w
aim to achieve, and what values are important to us. If these aspects are left ambiguous, then there is a risk that we will
discover after the event that we have each been working towards different objectives. If we are able to share the same cle
vision, then all that is left is to establish and monitor a small number of KPIs. As a rule, I do not interfere with business
operations or personnel authority. If the company continually falls short of the KPIs, then it is time for a management chan
I feel that the establishment of priority-driven, long-term growth scenarios is the first task for SFG’s management. It
necessary to determine one or two substantial management agenda that we really want to achieve during the next de
cade. I also think it is important to evolve into a management structure and executory structure that enable concrete
achievement of these growth scenarios. I have a strong impression of “Sony as a trailblazer of innovation.” I believe t
SFG has the will and the ability to innovate itself significantly during the next decade. I would like to use my own abili
an outside director to participate in this innovation.
A
Q
think that we can really expect to gain any great benefit from taking the challenge to expand overseas. For example,
think that we need a clear and definite vision of who we want to target, what new value we will create, and what kind
services and products we will provide in the global market for life insurance in 2040. If we want to build an overwhelm
ing competitive advantage in technology-driven products and services, we will require world-class engineers, to imple
ment product development methods that may differ completely from our present methods. In this case, the whole
nature of management itself may be transformed into something new.
Sony Financial Holdings Inc.Annual Report2020 37
terms of management strategy. However, due to issues such as the selection of acquisition
targets and the acquisition process, the chance of success is quite low, and it is said that only
20–30% of such acquisitions succeed. On the other hand, there is a growing awareness of the
importance of PMI*1 after acquisition rather than before acquisition. Please tell us if there was
anything in particular you aimed for through the M&A process.
I myself have experienced quite a number of failures, and there are several things that I have learned from them. 1) I
have utilized a “two-step approach,” where a small, minority investment is initially made in the M&A target, allowing
acquirer to evaluate value improvement in the context of the M&A target’s business operations, and proceed to a 100
acquisition only where specific, quantitative results can be observed. This stepped investment enables the acquirer to
confirm the accuracy of value improvement, and reduce its impairment risk. 2) Another effective method is to first cre
CVC,*2 invest in a venture company with advanced technology and a new business model, work together with the
management team until you are completely confident in the investment, before acquiring 100% stake in the company
This method, however, depends on the overwhelming autonomy and involvement of existing business divisions in ord
to succeed. 3) I regard it as vital that the person envisaging the M&A strategy and planning the acquisition must be th
same person responsible for PMI after acquisition. In other words, it is not possible to overcome the various conflict
that arise after acquisition if the officer in charge does not have an overwhelming sense of purpose and a strong com-
mitment to see the matter through from beginning to end.
*1 Post-merger integration
*2 Corporate venture capital
A
Q
Director Ikeuchi, you oversaw the successful acquisition by the Recruit Group of a technolo-
gy-focused job information company in the U.S. What are the important aspects of implement-
ing governance for the acquired company? Also, what are the important issues in SFG’s con-
sideration of growth strategies, such as overseas expansion?
I think that the most important issue is whether or not consensus has actually been achieved with the acquisition target
regarding the long-term vision. We engage in thorough discussions with the target’s management team regarding what w
aim to achieve, and what values are important to us. If these aspects are left ambiguous, then there is a risk that we will
discover after the event that we have each been working towards different objectives. If we are able to share the same cle
vision, then all that is left is to establish and monitor a small number of KPIs. As a rule, I do not interfere with business
operations or personnel authority. If the company continually falls short of the KPIs, then it is time for a management chan
I feel that the establishment of priority-driven, long-term growth scenarios is the first task for SFG’s management. It
necessary to determine one or two substantial management agenda that we really want to achieve during the next de
cade. I also think it is important to evolve into a management structure and executory structure that enable concrete
achievement of these growth scenarios. I have a strong impression of “Sony as a trailblazer of innovation.” I believe t
SFG has the will and the ability to innovate itself significantly during the next decade. I would like to use my own abili
an outside director to participate in this innovation.
A
Q
think that we can really expect to gain any great benefit from taking the challenge to expand overseas. For example,
think that we need a clear and definite vision of who we want to target, what new value we will create, and what kind
services and products we will provide in the global market for life insurance in 2040. If we want to build an overwhelm
ing competitive advantage in technology-driven products and services, we will require world-class engineers, to imple
ment product development methods that may differ completely from our present methods. In this case, the whole
nature of management itself may be transformed into something new.
Sony Financial Holdings Inc.Annual Report2020 37
▶ Please see “Basic Stance on Japan’s Stewardship Code” and “Exercise of Voting Rights by Sony Life” on Sony Life’s website.
(Japanese only): https://www.sonylife.co.jp/company/management/jsc/
Customer-first Business Operation Policy (Summary)
Based on its vision and philosophy, SFG pursues business operations from a customer-first perspective.
SFH has clarified this initiative as its “customer-first business operation policy,” and Sony Life, Sony Assurance and Sony
Bank will each go further to establish business operation policies fine-tuned to respective activities.
The policy that SFH has set as well as the policies in place at Group companies will be reviewed periodically, taking into accou
such factors as changes in the operating environment. In addition, SFH, as a financial holding company, will confirm that the
content of the “customer-first business operation policy” is appropriate, and will monitor the activities at Group companies, bas
on their policies, to ensure proper business operations. SFH will offer whatever support and guidance is necessary, as required.
At the same time, Group companies will verify the status of their own initiatives on customer-first business operations an
regularly report to the Board of Directors or other oversight structures and will also provide status updates on a regular bas
As an institutional investor, Sony Life has announced its adoption of Japan’s Stewardship Code: a set of principles
guiding the responsibilities of institutional investors. Sony Life discloses the basic policy and process for the exercise
of voting rights of domestic listed shares, as well as final shareholder voting results and others.
Adoption of Japan’s Stewardship Code Sony Life
Initiatives to Strengthen Our Foundation for Creating Value
Sony Financial Holdings Inc.Annual Report202038
(Japanese only): https://www.sonylife.co.jp/company/management/jsc/
Customer-first Business Operation Policy (Summary)
Based on its vision and philosophy, SFG pursues business operations from a customer-first perspective.
SFH has clarified this initiative as its “customer-first business operation policy,” and Sony Life, Sony Assurance and Sony
Bank will each go further to establish business operation policies fine-tuned to respective activities.
The policy that SFH has set as well as the policies in place at Group companies will be reviewed periodically, taking into accou
such factors as changes in the operating environment. In addition, SFH, as a financial holding company, will confirm that the
content of the “customer-first business operation policy” is appropriate, and will monitor the activities at Group companies, bas
on their policies, to ensure proper business operations. SFH will offer whatever support and guidance is necessary, as required.
At the same time, Group companies will verify the status of their own initiatives on customer-first business operations an
regularly report to the Board of Directors or other oversight structures and will also provide status updates on a regular bas
As an institutional investor, Sony Life has announced its adoption of Japan’s Stewardship Code: a set of principles
guiding the responsibilities of institutional investors. Sony Life discloses the basic policy and process for the exercise
of voting rights of domestic listed shares, as well as final shareholder voting results and others.
Adoption of Japan’s Stewardship Code Sony Life
Initiatives to Strengthen Our Foundation for Creating Value
Sony Financial Holdings Inc.Annual Report202038
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Approach to Risk Management by SFH and Group Companies
SFH has formulated the “Fundamental Principles for Risk Management” and communicates them to directors, employees,
and throughout the SFG. It also identifies the scope and types of risks of the Group companies, and establishes structures
designed to manage such risks effectively. SFH’s department in charge of risk management controls risks through monitori
and holding Risk Management Meetings with the subsidiaries’ risk management divisions. It also reports its findings on the
state of risk management regularly to SFH’s Board of Directors and Executive Committee.
The Group companies optimize types and definitions of their risks according to scale, characteristics and business model. The
have established risk management frameworks, with the aim of autonomously assessing, monitoring, and managing these risks
One of SFH’s roles as a financial holding company is to further enhance and integrate Groupwide risk management by cen-
tralizing the Group’s management resources. SFH has formulated the “Basic Policy on Group Risk Management” and devel-
ops a risk management structure by aligning it with Groupwide strategic objectives and management policies. In addition,
SFH seeks to enhance the corporate value of the Group by tailoring operating subsidiaries’ risk management to the types o
risks inherent in their respective lines of business.
▶ “Risk Management” on SFH’s website,https://www.sonyfh.co.jp/en/sustainability/risk_management.html
Risk Management Structure of SFG(As of July 1, 2020)
Audit
Department
Executive Committee
Risk Management Department
(Centralized Risk Management)
Audit & Supervisory
Board
Board of Directors
Investment Risks
● Market-related
Risk
● Credit Risk
● Real Estate
Investment Risk
Supervisory Department: Risk Management Department Supervisory Department:
Legal & Compliance
Department
Supervisory Department:
Corporate Communications
DepartmentLiquidity Risk Operational Risks
● Administrative
Risk
● Systems Risk
Legal Risk Reputational Risk
Business
Continuity Risk
Insurance
Underwriting Risk
Audit
Audit
Report
Report
SFH
Risk Management Meetings Present risk
management policies
Manage, advise, monitorReportConfirm
Each company autonomously puts risk management into practice
Subsidiaries and others
Risk Governance
Sony Financial Holdings Inc.Annual Report2020 39
SFH has formulated the “Fundamental Principles for Risk Management” and communicates them to directors, employees,
and throughout the SFG. It also identifies the scope and types of risks of the Group companies, and establishes structures
designed to manage such risks effectively. SFH’s department in charge of risk management controls risks through monitori
and holding Risk Management Meetings with the subsidiaries’ risk management divisions. It also reports its findings on the
state of risk management regularly to SFH’s Board of Directors and Executive Committee.
The Group companies optimize types and definitions of their risks according to scale, characteristics and business model. The
have established risk management frameworks, with the aim of autonomously assessing, monitoring, and managing these risks
One of SFH’s roles as a financial holding company is to further enhance and integrate Groupwide risk management by cen-
tralizing the Group’s management resources. SFH has formulated the “Basic Policy on Group Risk Management” and devel-
ops a risk management structure by aligning it with Groupwide strategic objectives and management policies. In addition,
SFH seeks to enhance the corporate value of the Group by tailoring operating subsidiaries’ risk management to the types o
risks inherent in their respective lines of business.
▶ “Risk Management” on SFH’s website,https://www.sonyfh.co.jp/en/sustainability/risk_management.html
Risk Management Structure of SFG(As of July 1, 2020)
Audit
Department
Executive Committee
Risk Management Department
(Centralized Risk Management)
Audit & Supervisory
Board
Board of Directors
Investment Risks
● Market-related
Risk
● Credit Risk
● Real Estate
Investment Risk
Supervisory Department: Risk Management Department Supervisory Department:
Legal & Compliance
Department
Supervisory Department:
Corporate Communications
DepartmentLiquidity Risk Operational Risks
● Administrative
Risk
● Systems Risk
Legal Risk Reputational Risk
Business
Continuity Risk
Insurance
Underwriting Risk
Audit
Audit
Report
Report
SFH
Risk Management Meetings Present risk
management policies
Manage, advise, monitorReportConfirm
Each company autonomously puts risk management into practice
Subsidiaries and others
Risk Governance
Sony Financial Holdings Inc.Annual Report2020 39
Overview of Types and Definitions of Risks
Type Definition
Market-related
Risk
Risks associated with losses due to changes in the value of assets and liabilities, including off-balance-sheet items, a
a result of unfavorable fluctuations in interest rates, the value of securities held, exchange rates and other factors.
Credit Risk Risks associated with losses due to declines or losses in the value of assets, including off-balance-sheet items,
resulting from deterioration in the financial position of retail and corporate customers and other contracts entered in
Real Estate
Investment Risk
Risks associated with losses due to declines in the market value of owned real estate or in the profitability of real
estate holdings on account of unfavorable trends in prices and rents, respectively.
Liquidity Risk Risks associated with losses are as follows:
● Cash Flow Risk: Risks associated with losses due to our inability to make cash payments because of failure to
maintain sufficient cash reserves at settlement, as well as risks associated with losses if SFH and Group compa-
nies are forced to raise funds under unfavorable conditions in order to fulfill cashpayment obligations.
● Market Liquidity Risk: Risks associated with losses due to the Group’s inability to conduct market transactions, in
particular from an inability to unwind the Group’s market position at a given time, as well as risks associated with
losses if the Group is forced to complete transactions under unfavorable market conditions, in each case due to
market turmoil or other factors.
Insurance
Underwriting Risk
Risks affecting the Group due to significant differences between the assumptions SFH and Group companies use
to establish appropriate insurance premium levels, including assumptions regarding the expected frequency and
scale of insured events and future economic conditions.
Administrative RiskMaterial and immaterial risks affecting the Group due to errors, misconduct, malfunction and other factors related
to problems with the Group’s internal administrative processes.
Systems Risk Material and immaterial risks affecting the Group due to IT-system malfunction or breakdown, and improper use or
leakage of confidential information stemming from IT-system problems.
Legal Risk Risks affecting the Group due to violations of applicable laws, rules and regulations occurring during the course of
business operations, as well as the risk of loss due to litigation or infringements of rights.
Reputational Risk Material and immaterial risks associated with losses resulting from harm to the Group’s reputation in the market an
among customers as a result of unethical behavior, unfair business practices, improper disclosure or other factors.
Business
Continuity Risk
The risk that SFH and Group companies will be unable to continue operations as a result of a deterioration in
financial position, liquidity problems, system failures, scandals, disaster, accidents or other crises.
Note:As the operating and business environment changes, the Group companies’ risk management departments review the risk types and definitions, amending the
as appropriate for new conditions
Contingency Management System
Group ERM
SFH has established a contingency plan as part of the Group’s comprehensive policy on business continuity for times when
ordinary business operations of SFH or Group companies are at risk due to accidents, system failures or other factors. Grou
companies have developed regulations, manuals and other guidelines reflecting their respective business volume and natu
of business activities. SFH has a system in place whereby Group companies report to SFH when they are unable to continue
ordinary business operations. If SFH determines that a reported situation is difficult to address under the risk management
system set forth in the Fundamental Principles for Risk Management, among other guidelines, SFH shall establish a contin-
gency response headquarters led by the President, Representative Director of SFH and execute business continuity mea-
sures aimed at the full restoration of all operations.
SFG has introduced its ERM framework.
▶ P14 Strategy and Review, Sony Financial Group
Initiatives to Strengthen Our Foundation for Creating Value
Sony Financial Holdings Inc.Annual Report202040
Type Definition
Market-related
Risk
Risks associated with losses due to changes in the value of assets and liabilities, including off-balance-sheet items, a
a result of unfavorable fluctuations in interest rates, the value of securities held, exchange rates and other factors.
Credit Risk Risks associated with losses due to declines or losses in the value of assets, including off-balance-sheet items,
resulting from deterioration in the financial position of retail and corporate customers and other contracts entered in
Real Estate
Investment Risk
Risks associated with losses due to declines in the market value of owned real estate or in the profitability of real
estate holdings on account of unfavorable trends in prices and rents, respectively.
Liquidity Risk Risks associated with losses are as follows:
● Cash Flow Risk: Risks associated with losses due to our inability to make cash payments because of failure to
maintain sufficient cash reserves at settlement, as well as risks associated with losses if SFH and Group compa-
nies are forced to raise funds under unfavorable conditions in order to fulfill cashpayment obligations.
● Market Liquidity Risk: Risks associated with losses due to the Group’s inability to conduct market transactions, in
particular from an inability to unwind the Group’s market position at a given time, as well as risks associated with
losses if the Group is forced to complete transactions under unfavorable market conditions, in each case due to
market turmoil or other factors.
Insurance
Underwriting Risk
Risks affecting the Group due to significant differences between the assumptions SFH and Group companies use
to establish appropriate insurance premium levels, including assumptions regarding the expected frequency and
scale of insured events and future economic conditions.
Administrative RiskMaterial and immaterial risks affecting the Group due to errors, misconduct, malfunction and other factors related
to problems with the Group’s internal administrative processes.
Systems Risk Material and immaterial risks affecting the Group due to IT-system malfunction or breakdown, and improper use or
leakage of confidential information stemming from IT-system problems.
Legal Risk Risks affecting the Group due to violations of applicable laws, rules and regulations occurring during the course of
business operations, as well as the risk of loss due to litigation or infringements of rights.
Reputational Risk Material and immaterial risks associated with losses resulting from harm to the Group’s reputation in the market an
among customers as a result of unethical behavior, unfair business practices, improper disclosure or other factors.
Business
Continuity Risk
The risk that SFH and Group companies will be unable to continue operations as a result of a deterioration in
financial position, liquidity problems, system failures, scandals, disaster, accidents or other crises.
Note:As the operating and business environment changes, the Group companies’ risk management departments review the risk types and definitions, amending the
as appropriate for new conditions
Contingency Management System
Group ERM
SFH has established a contingency plan as part of the Group’s comprehensive policy on business continuity for times when
ordinary business operations of SFH or Group companies are at risk due to accidents, system failures or other factors. Grou
companies have developed regulations, manuals and other guidelines reflecting their respective business volume and natu
of business activities. SFH has a system in place whereby Group companies report to SFH when they are unable to continue
ordinary business operations. If SFH determines that a reported situation is difficult to address under the risk management
system set forth in the Fundamental Principles for Risk Management, among other guidelines, SFH shall establish a contin-
gency response headquarters led by the President, Representative Director of SFH and execute business continuity mea-
sures aimed at the full restoration of all operations.
SFG has introduced its ERM framework.
▶ P14 Strategy and Review, Sony Financial Group
Initiatives to Strengthen Our Foundation for Creating Value
Sony Financial Holdings Inc.Annual Report202040
Initiatives on Cyber Security
SFG regards an IT-system as critical infrastructure and resources to achieve its corporate vision, to provide high-value-adde
products and services. It is thus essential to stably maintain and provide this IT-system at all times. SFG has positioned
dealing with the threat of cyber-attacks and appropriately managing information assets as a priority issue that top manage
ment should take the lead in addressing, and the entire Group has been working on information security measures.
The policy and details of information security measures are periodically reported at meetings of the Executive Committee
and the Board of Directors of SFH or each of its subsidiaries, and SFH monitors the status of responses to information
security threats and development of personal information management system and others of each company and confirms
appropriateness of such measures.
SFG has established an information security policy and various related regulations according to each company’s business
es, and makes necessary revisions according to changes in the operating environment and other factors. SFG also provides
necessary training on information security matters that all executives and employees should be aware of to ensure a thoro
dissemination of such matters.
Characteristics of the IT Environment
SFG has diverse functions, and each Group company has a different business model according to its business category. The
IT-system of each Group company has established an independent optimal environment, in accordance with its business m
This ensures that even if a Group company experienced a website attack, unauthorized login, or virus or malware infectio
the IT-systems of other Group companies would not be affected.
* Computer Security Incident Response Team
Development of Cyber Security System –CSIRT*
CSIRT members of Sony Life, Sony Assur-
ance, and Sony Bank, which are SFG’s
primary companies, are working to imple-
ment various measures to tackle cyber-at-
tacks, and the entire Group, centering on
SFH, is actively sharing information. In
addition, the Group has continuously been
developing systems to counter threats
through collaboration with an external
information security organization.
Privacy Policy
SFH has formulated a “Privacy Policy” governing the handling of personal information. It sets out SFH’s policies on the acqu
sition and use of personal information for specific purposes. SFH has also established “Rules Concerning Protection of
Personal Information,” which set out specific security control protocols. SFH monitors the effectiveness of each Group com-
panies’ security control protocols.
▶ “Privacy Policy” on SFH’s website, https://www.sonyfh.co.jp/en/privacy_policy/public.html
External information
security organization
● Information provision
● Implementation of joint training and others
SFH ● Monitoring
● Information sharing and others
SFG companies
● Proactive involvement of top management
● Establishment of a cyber security
framework
● Establishment of a multi-layered protection
● Responses to security incidents
● Security assessment
● Establishment of regulations, training and
others
Sony Financial Holdings Inc.Annual Report2020 41
SFG regards an IT-system as critical infrastructure and resources to achieve its corporate vision, to provide high-value-adde
products and services. It is thus essential to stably maintain and provide this IT-system at all times. SFG has positioned
dealing with the threat of cyber-attacks and appropriately managing information assets as a priority issue that top manage
ment should take the lead in addressing, and the entire Group has been working on information security measures.
The policy and details of information security measures are periodically reported at meetings of the Executive Committee
and the Board of Directors of SFH or each of its subsidiaries, and SFH monitors the status of responses to information
security threats and development of personal information management system and others of each company and confirms
appropriateness of such measures.
SFG has established an information security policy and various related regulations according to each company’s business
es, and makes necessary revisions according to changes in the operating environment and other factors. SFG also provides
necessary training on information security matters that all executives and employees should be aware of to ensure a thoro
dissemination of such matters.
Characteristics of the IT Environment
SFG has diverse functions, and each Group company has a different business model according to its business category. The
IT-system of each Group company has established an independent optimal environment, in accordance with its business m
This ensures that even if a Group company experienced a website attack, unauthorized login, or virus or malware infectio
the IT-systems of other Group companies would not be affected.
* Computer Security Incident Response Team
Development of Cyber Security System –CSIRT*
CSIRT members of Sony Life, Sony Assur-
ance, and Sony Bank, which are SFG’s
primary companies, are working to imple-
ment various measures to tackle cyber-at-
tacks, and the entire Group, centering on
SFH, is actively sharing information. In
addition, the Group has continuously been
developing systems to counter threats
through collaboration with an external
information security organization.
Privacy Policy
SFH has formulated a “Privacy Policy” governing the handling of personal information. It sets out SFH’s policies on the acqu
sition and use of personal information for specific purposes. SFH has also established “Rules Concerning Protection of
Personal Information,” which set out specific security control protocols. SFH monitors the effectiveness of each Group com-
panies’ security control protocols.
▶ “Privacy Policy” on SFH’s website, https://www.sonyfh.co.jp/en/privacy_policy/public.html
External information
security organization
● Information provision
● Implementation of joint training and others
SFH ● Monitoring
● Information sharing and others
SFG companies
● Proactive involvement of top management
● Establishment of a cyber security
framework
● Establishment of a multi-layered protection
● Responses to security incidents
● Security assessment
● Establishment of regulations, training and
others
Sony Financial Holdings Inc.Annual Report2020 41
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Basic Stance on Compliance
SFH’s broad definition of compliance is that it enforces compliance with the laws, regulations and social norms and manage
business operations transparently and properly based on a strong sense of ethics. SFH considers compliance one of its top
management priorities and, accordingly, it has systems in place to ensure that all executives and employees are fully awar
their duties and responsibilities.
While Group companies are responsible for establishing systems to enhance the effectiveness of compliance according to
specific industry and scale of business operations, SFH, as a financial holding company, undertakes the ongoing monitoring
promotion of the Group companies’ compliance by providing advice, as needed, from the viewpoint of Group management.
▶ “Compliance” on SFH’s website, https://www.sonyfh.co.jp/en/sustainability/compliance.html
Compliance Activities at SFG
SFH has established “the Sony Financial Group Code of Conduct” (hereinafter referred to as the “SFG Code of Conduct”) th
all executives and employees must observe. In addition, SFH’s Board of Directors is responsible for establishing and mainta
ing SFH’s compliance system by formulating a Compliance Manual*1 and a Compliance Program*2, as well as working proac-
tively to ensure its proper operation.
Group companies have also adopted their Code of Conducts based on the SFG Code of Conduct, while putting in place
and developing their compliance systems on their own. SFH provides guidance and support to ensure proper operation of
the compliance systems at Group companies.
▶ “Sony Financial Group Code of Conduct” on SFH’s website, https://www.sonyfh.co.jp/en/company/data/code_of_conduct.pdf
*1 The Compliance Manual outlines SFH’s compliance system, as well as the Group’s corporate philosophy, which executives and employees must understand
The manual also establishes measures for handling behavior that conflicts with laws and regulations or behavior that raises compliance issues, and for confirmin
compliance status
*2 The Compliance Program is drafted annually, in principle, and defines a specific action plan for confirming compliance status, conducting training and for other related
Compliance System of SFG(As of July 1, 2020)
* Held biannually for the purpose of confirming the status of compliance promotion at SFG companies
It is composed of directors and general managers, etc. in charge of compliance at each SFG company, and reports on the results of important discussions to the
Board of Directors
SFH
Audit Department
Executive Committee
Director in Charge
Legal & Compliance Department
Audit & Supervisory
Board Board of Directors
Internal
audit
Audit
Report
Report
Control over the planning and implementation of
compliance measures
Direct and
advise
Direct and
advise
Report
Compliance Meetings*Report Advise and monitor
Subsidiaries and others
Compliance
Initiatives to Strengthen Our Foundation for Creating Value
Sony Financial Holdings Inc.Annual Report202042
SFH’s broad definition of compliance is that it enforces compliance with the laws, regulations and social norms and manage
business operations transparently and properly based on a strong sense of ethics. SFH considers compliance one of its top
management priorities and, accordingly, it has systems in place to ensure that all executives and employees are fully awar
their duties and responsibilities.
While Group companies are responsible for establishing systems to enhance the effectiveness of compliance according to
specific industry and scale of business operations, SFH, as a financial holding company, undertakes the ongoing monitoring
promotion of the Group companies’ compliance by providing advice, as needed, from the viewpoint of Group management.
▶ “Compliance” on SFH’s website, https://www.sonyfh.co.jp/en/sustainability/compliance.html
Compliance Activities at SFG
SFH has established “the Sony Financial Group Code of Conduct” (hereinafter referred to as the “SFG Code of Conduct”) th
all executives and employees must observe. In addition, SFH’s Board of Directors is responsible for establishing and mainta
ing SFH’s compliance system by formulating a Compliance Manual*1 and a Compliance Program*2, as well as working proac-
tively to ensure its proper operation.
Group companies have also adopted their Code of Conducts based on the SFG Code of Conduct, while putting in place
and developing their compliance systems on their own. SFH provides guidance and support to ensure proper operation of
the compliance systems at Group companies.
▶ “Sony Financial Group Code of Conduct” on SFH’s website, https://www.sonyfh.co.jp/en/company/data/code_of_conduct.pdf
*1 The Compliance Manual outlines SFH’s compliance system, as well as the Group’s corporate philosophy, which executives and employees must understand
The manual also establishes measures for handling behavior that conflicts with laws and regulations or behavior that raises compliance issues, and for confirmin
compliance status
*2 The Compliance Program is drafted annually, in principle, and defines a specific action plan for confirming compliance status, conducting training and for other related
Compliance System of SFG(As of July 1, 2020)
* Held biannually for the purpose of confirming the status of compliance promotion at SFG companies
It is composed of directors and general managers, etc. in charge of compliance at each SFG company, and reports on the results of important discussions to the
Board of Directors
SFH
Audit Department
Executive Committee
Director in Charge
Legal & Compliance Department
Audit & Supervisory
Board Board of Directors
Internal
audit
Audit
Report
Report
Control over the planning and implementation of
compliance measures
Direct and
advise
Direct and
advise
Report
Compliance Meetings*Report Advise and monitor
Subsidiaries and others
Compliance
Initiatives to Strengthen Our Foundation for Creating Value
Sony Financial Holdings Inc.Annual Report202042
Specific Initiatives for Thorough Compliance
Internal Hotline System
If executives and employees of SFG, as well as temporary employees and the employees of business partners, think that
business policies, operating activities or other activities of the companies breach (or could breach) applicable laws and
regulations, they can report their concerns by choosing and notifying either hotline desk at SFH or at their own Sony Financ
Group company, or the Sony Group hotline desk. A total of 64 reports were received by the hotline desk at SFH and Group
companies in fiscal 2019, the majority of them related to the workplace environment, the organization’s management and
course of business operations. SFH implements appropriate measures to protect those who contact these desks, while
strictly managing and responding to the information provided.
Anti-money Laundering and Countering Financing of Terrorism
SFG gives high priority to anti-money laundering and countering financing of terrorism as an important management, and h
formulated the “Basic Group Policy on Anti-money Laundering and Countering Financing of Terrorism.” SFG gives the neces
sary authorization and allocates resources in a top-down manner, and proactively instills an awareness regarding anti-mon
laundering and countering financing of terrorism among all executives and employees.
Basic Group Policy on Eradicating Anti-social Forces
SFH has formulated the “Basic Group Policy on Eradicating Anti-social Forces,” whereby SFH and Group companies include
setting up an organizational unit responsible for dealing with anti-social forces, appointing a person responsible for refusing
unreasonable demands and gathering information on anti-social forces in collaboration with external specialized agencies.
The Group works uniformly in its effort to eradicate anti-social forces.
▶ “Basic Group Policy on Eradicating Anti-social Forces” on SFH’s website, https://www.sonyfh.co.jp/en/sustainability/compliance.html
Prevention of Insider Trading
SFH has established the “Basic Group Policy on the Prevention of Insider Trading,” whereby a structure for the prevention o
insider trading has been developed at SFH and Group companies. SFH monitors whether such a framework is adequately in
place and working effectively in the prevention of insider trading at Group companies, and takes actions as necessary.
SFG strives to ensure thorough implementation of compliance measures through regular dissemination of messages from t
management, and works on various measures to promote compliance, including training for all executives and employees.
Primary domains of focus of compliance initiatives
・ Fostering an ethical corporate culture
・ Internal hotline system
・ Information security
・ Personal information protection
・ Fair competition
・ Prevention of bribery and corruption
・ Proper conduct in the workplace
(Prevention of harassment, respect for
human rights, and others.)
・ Anti-money laundering and countering financing
of terrorism
・ Eradication of anti-social forces
・ Prevention of insider trading
・ Appropriate management of conflicts of interest
with customers
Conflicts of Interest Policy (Summary)
SFH formulated the “Conflicts of Interest Policy” to ensure that customers’ interests are not harmed by Group companies. The
director in charge of the Legal & Compliance Department, as the manager responsible for managing conflicts of interest, shall
require Group companies to take the following actions when he/she deems them necessary based on reports from Group
companies, customer complaints or other sources.
・ Sever the flow of information between divisions that have
potential conflicts of interest
・ Disclose the fact or the possibilities of a conflict of interest
to customers
・ Suspend the transaction concerned, or change the terms
and conditions or method of the transaction
・ Take other actions deemed necessary
SFH shall retain records that specify transactions to be managed and that are associated with actions taken to properly protect
customers, for five years.
▶ “Conflicts of Interest Policy” on SFH’s website, https://www.sonyfh.co.jp/en/company/data/conflicts_of_interest_policy.pdf
Sony Financial Holdings Inc.Annual Report2020 43
Internal Hotline System
If executives and employees of SFG, as well as temporary employees and the employees of business partners, think that
business policies, operating activities or other activities of the companies breach (or could breach) applicable laws and
regulations, they can report their concerns by choosing and notifying either hotline desk at SFH or at their own Sony Financ
Group company, or the Sony Group hotline desk. A total of 64 reports were received by the hotline desk at SFH and Group
companies in fiscal 2019, the majority of them related to the workplace environment, the organization’s management and
course of business operations. SFH implements appropriate measures to protect those who contact these desks, while
strictly managing and responding to the information provided.
Anti-money Laundering and Countering Financing of Terrorism
SFG gives high priority to anti-money laundering and countering financing of terrorism as an important management, and h
formulated the “Basic Group Policy on Anti-money Laundering and Countering Financing of Terrorism.” SFG gives the neces
sary authorization and allocates resources in a top-down manner, and proactively instills an awareness regarding anti-mon
laundering and countering financing of terrorism among all executives and employees.
Basic Group Policy on Eradicating Anti-social Forces
SFH has formulated the “Basic Group Policy on Eradicating Anti-social Forces,” whereby SFH and Group companies include
setting up an organizational unit responsible for dealing with anti-social forces, appointing a person responsible for refusing
unreasonable demands and gathering information on anti-social forces in collaboration with external specialized agencies.
The Group works uniformly in its effort to eradicate anti-social forces.
▶ “Basic Group Policy on Eradicating Anti-social Forces” on SFH’s website, https://www.sonyfh.co.jp/en/sustainability/compliance.html
Prevention of Insider Trading
SFH has established the “Basic Group Policy on the Prevention of Insider Trading,” whereby a structure for the prevention o
insider trading has been developed at SFH and Group companies. SFH monitors whether such a framework is adequately in
place and working effectively in the prevention of insider trading at Group companies, and takes actions as necessary.
SFG strives to ensure thorough implementation of compliance measures through regular dissemination of messages from t
management, and works on various measures to promote compliance, including training for all executives and employees.
Primary domains of focus of compliance initiatives
・ Fostering an ethical corporate culture
・ Internal hotline system
・ Information security
・ Personal information protection
・ Fair competition
・ Prevention of bribery and corruption
・ Proper conduct in the workplace
(Prevention of harassment, respect for
human rights, and others.)
・ Anti-money laundering and countering financing
of terrorism
・ Eradication of anti-social forces
・ Prevention of insider trading
・ Appropriate management of conflicts of interest
with customers
Conflicts of Interest Policy (Summary)
SFH formulated the “Conflicts of Interest Policy” to ensure that customers’ interests are not harmed by Group companies. The
director in charge of the Legal & Compliance Department, as the manager responsible for managing conflicts of interest, shall
require Group companies to take the following actions when he/she deems them necessary based on reports from Group
companies, customer complaints or other sources.
・ Sever the flow of information between divisions that have
potential conflicts of interest
・ Disclose the fact or the possibilities of a conflict of interest
to customers
・ Suspend the transaction concerned, or change the terms
and conditions or method of the transaction
・ Take other actions deemed necessary
SFH shall retain records that specify transactions to be managed and that are associated with actions taken to properly protect
customers, for five years.
▶ “Conflicts of Interest Policy” on SFH’s website, https://www.sonyfh.co.jp/en/company/data/conflicts_of_interest_policy.pdf
Sony Financial Holdings Inc.Annual Report2020 43
SFG has more than 11,000 employees who are actively working in various business domains such as life insurance, non-life insurance, banking, a
nursing care and others. Each Group company has established an education and training system from a medium- to long-term perspective, in ord
to support employee personal growth and career development, and provides compulsory training programs according to job type and position lev
as well as elective training programs for skills enhancement and personal development, and others. In addition, SFG focuses efforts on the trainin
management-level employees, who play the primary role in the cultivation of employees, and is continuously strengthening human resource deve-
ment through the expansion of training programs and others. In addition, SFG participates in the leader training programs, female leader training
programs and technical exchange meetings provided for the Sony Group’s employees by Sony Corp. In this manner, SFG works on human resourc
development, including expanding perspectives, self-transformation and personal network building, through collaboration with Sony Corp.
Initiatives for Human Resource DevelopmentInitiative1
Example of Initiatives at Sony Life
Lifeplanner sales employees at Sony Life, who account for nearly half of the employees of SFG, take a three-year B.T.P. (Basic
Training Program) to develop the customer-first attitude and knowledge, skills and conduct required of a professional Lifeplanner
sales employee. This B.T.P. is designed to nurture Lifeplanner sales employees to listen to their customers’ cherished thoughts,
propose reasonable life insurance to safely protect them at all times, and provide life-long support through high-quality services,
even after the contract has been executed. Going forward, we will work to increase the quality of our new employees through
strict selection of recruits by strengthening the recruitment process. We will also endeavor to strengthen and enhance education
and training, including initial training, through the provision of environments for continual learning such as the introduction of online
education, and the monitoring of education and training environments at branch offices.
Example of Initiatives at Sony Assurance
At Sony Assurance, we have established an inter-workplace exchange program, where employees limited to specific areas can apply
in response to internal job application, to be transferred to another area temporarily, and an in-house job challenge program, where
employees can apply to be transferred to another division. By providing employees with experience at new workplaces, we aim to
increase their career awareness and motivation, and to revitalize the divisions that receive them through personnel exchange.
Example of Initiatives at Sony Bank
At Sony Bank, we have implemented a Data Science Boot Camp, where new recruits participate together with senior employees, in order
to foster a data-driven corporate culture, and respond to diverse customer needs. We are working to develop human resources who can
leverage data science, through study meetings, group work, and
presentations held all through the year. We also hold monthly study
meetings for all employees, aimed at building opportunities for fellow-
ship and sharing knowledge, where employees share their diverse
knowledge and skills, and exchange opinions on products and services.Data Science Boot Camp Study meeting for all employees
Approach to Human Resources Management
SFG regards human resources management as one of the most significant challenges for management, in order to accomplish sust
able corporate growth in this dramatically-changing business environment, with demographic changes and the rapid progress of
technological innovation. SFG strives to foster an organizational culture that supports a spirit of freedom and open-mindedness, an
create an organizational structure where diverse, self-disciplined employees can actively work with motivation. It believes that the
personal growth of each employee enables the development and provision of products and services that meet the increasingly div
needs of society, and will contribute to stakeholders and lead to sustainable growth for SFG. In addition, SFG facilitates personnel
exchanges and joint training among Group companies to create synergies for the Group. To this end, SFG conducts annual Employ
Opinion Surveys to gauge the awareness and opinions of employees, and grasp the characteristics of each company, disparities in
employees’ awareness, and issues of the entire Group. The causes are analyzed, and improvement measures implemented.
Initiatives to Strengthen Our Foundation for Creating Value
Human Resources Respecting Diversity
Sony Financial Holdings Inc.Annual Report202044
nursing care and others. Each Group company has established an education and training system from a medium- to long-term perspective, in ord
to support employee personal growth and career development, and provides compulsory training programs according to job type and position lev
as well as elective training programs for skills enhancement and personal development, and others. In addition, SFG focuses efforts on the trainin
management-level employees, who play the primary role in the cultivation of employees, and is continuously strengthening human resource deve-
ment through the expansion of training programs and others. In addition, SFG participates in the leader training programs, female leader training
programs and technical exchange meetings provided for the Sony Group’s employees by Sony Corp. In this manner, SFG works on human resourc
development, including expanding perspectives, self-transformation and personal network building, through collaboration with Sony Corp.
Initiatives for Human Resource DevelopmentInitiative1
Example of Initiatives at Sony Life
Lifeplanner sales employees at Sony Life, who account for nearly half of the employees of SFG, take a three-year B.T.P. (Basic
Training Program) to develop the customer-first attitude and knowledge, skills and conduct required of a professional Lifeplanner
sales employee. This B.T.P. is designed to nurture Lifeplanner sales employees to listen to their customers’ cherished thoughts,
propose reasonable life insurance to safely protect them at all times, and provide life-long support through high-quality services,
even after the contract has been executed. Going forward, we will work to increase the quality of our new employees through
strict selection of recruits by strengthening the recruitment process. We will also endeavor to strengthen and enhance education
and training, including initial training, through the provision of environments for continual learning such as the introduction of online
education, and the monitoring of education and training environments at branch offices.
Example of Initiatives at Sony Assurance
At Sony Assurance, we have established an inter-workplace exchange program, where employees limited to specific areas can apply
in response to internal job application, to be transferred to another area temporarily, and an in-house job challenge program, where
employees can apply to be transferred to another division. By providing employees with experience at new workplaces, we aim to
increase their career awareness and motivation, and to revitalize the divisions that receive them through personnel exchange.
Example of Initiatives at Sony Bank
At Sony Bank, we have implemented a Data Science Boot Camp, where new recruits participate together with senior employees, in order
to foster a data-driven corporate culture, and respond to diverse customer needs. We are working to develop human resources who can
leverage data science, through study meetings, group work, and
presentations held all through the year. We also hold monthly study
meetings for all employees, aimed at building opportunities for fellow-
ship and sharing knowledge, where employees share their diverse
knowledge and skills, and exchange opinions on products and services.Data Science Boot Camp Study meeting for all employees
Approach to Human Resources Management
SFG regards human resources management as one of the most significant challenges for management, in order to accomplish sust
able corporate growth in this dramatically-changing business environment, with demographic changes and the rapid progress of
technological innovation. SFG strives to foster an organizational culture that supports a spirit of freedom and open-mindedness, an
create an organizational structure where diverse, self-disciplined employees can actively work with motivation. It believes that the
personal growth of each employee enables the development and provision of products and services that meet the increasingly div
needs of society, and will contribute to stakeholders and lead to sustainable growth for SFG. In addition, SFG facilitates personnel
exchanges and joint training among Group companies to create synergies for the Group. To this end, SFG conducts annual Employ
Opinion Surveys to gauge the awareness and opinions of employees, and grasp the characteristics of each company, disparities in
employees’ awareness, and issues of the entire Group. The causes are analyzed, and improvement measures implemented.
Initiatives to Strengthen Our Foundation for Creating Value
Human Resources Respecting Diversity
Sony Financial Holdings Inc.Annual Report202044
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SFG places significant emphasis on a spirit of diversity, to better address diverse customer value perceptions and needs as
well as various changes in the environment, and to generate new value. Based on this approach, SFG strives to develop a
workplace environments in which diversity is respected and every employee can actively work with motivation, as well as t
create opportunities for employees’ personal growth.
SFG provides career-design training for young female employees, discussion
sessions on returning to work and orientation sessions for employees
returning from childcare leave, and leadership training for female leaders/
managers. We also provide management training for the superiors of female
employees, with the aim of improving awareness and enhancing their
understanding regarding the career development of female employees.
SFG implements various initiatives to allow diverse human resources, including female and employees with disabilities and
employees who are dealing with a range of situations, including childcare and nursing care, to work actively and demonstrate
their individual abilities.
Diversity
1. Promotion of women’s empowerment
Initiative2
Example of Initiatives at Sony Bank
At Sony Bank, we have held Unconscious Bias Seminars for all employees, where they could learn about the meaning of uncon-
scious bias, the harmful effects of bias on communication, and basic rules of conduct, through lectures by experts as well as
group work. Many employees have expressed their empathy with the issue.
Example of Initiatives at Sony Life
At Sony Life, we have implemented roundtable discussions for returning employees,
where employees who are returning to work after childcare leave can gather to share
information, as well as their anxieties and strategies for balancing work and childcare,
together with other employees who have already been through the same experience. The
roundtable discussions provide a new forum for exchange between returning employees.
Roundtable discussion for returning
employees from child-care leave
Policy on Diversity
Specific Measures
Percentage of females in management
positions*
FY2018 FY2019
12.4% 12.7%➡
* The average figures for SFH, its three main subsidiar-
ies and three nursing care business companies
For Sony Life, only head office employees are included
Sony Financial Holdings Inc.Annual Report2020 45
well as various changes in the environment, and to generate new value. Based on this approach, SFG strives to develop a
workplace environments in which diversity is respected and every employee can actively work with motivation, as well as t
create opportunities for employees’ personal growth.
SFG provides career-design training for young female employees, discussion
sessions on returning to work and orientation sessions for employees
returning from childcare leave, and leadership training for female leaders/
managers. We also provide management training for the superiors of female
employees, with the aim of improving awareness and enhancing their
understanding regarding the career development of female employees.
SFG implements various initiatives to allow diverse human resources, including female and employees with disabilities and
employees who are dealing with a range of situations, including childcare and nursing care, to work actively and demonstrate
their individual abilities.
Diversity
1. Promotion of women’s empowerment
Initiative2
Example of Initiatives at Sony Bank
At Sony Bank, we have held Unconscious Bias Seminars for all employees, where they could learn about the meaning of uncon-
scious bias, the harmful effects of bias on communication, and basic rules of conduct, through lectures by experts as well as
group work. Many employees have expressed their empathy with the issue.
Example of Initiatives at Sony Life
At Sony Life, we have implemented roundtable discussions for returning employees,
where employees who are returning to work after childcare leave can gather to share
information, as well as their anxieties and strategies for balancing work and childcare,
together with other employees who have already been through the same experience. The
roundtable discussions provide a new forum for exchange between returning employees.
Roundtable discussion for returning
employees from child-care leave
Policy on Diversity
Specific Measures
Percentage of females in management
positions*
FY2018 FY2019
12.4% 12.7%➡
* The average figures for SFH, its three main subsidiar-
ies and three nursing care business companies
For Sony Life, only head office employees are included
Sony Financial Holdings Inc.Annual Report2020 45
Example of Initiatives at Sony Assurance
At Sony Assurance, we have introduced a re-employment system, to re-employ former employees who have retired due to
marriage, childbirth, childcare, nursing care, or a spouse’s job relocation, and a workplace transfer system, where employees
limited to a specific area can apply to change job positions to another area. We support employees with the desire and ability to
continue to work for even longer.
Example of Initiatives at Sony Life
At Sony Life, we have established a special subsidiary, Sony Life Business Partners.
Based on the vision “for a future where people with disabilities can shine in their own
way,” this subsidiary aims to ensure that employees always experience growth and
fulfilment through work, by encouraging them to respect each others’ individuality,
make full use of and extend their abilities, and be imaginative and creative. Sony Life
Business Partners is steadily taking on new operations in addition to existing
operations, which consists primarily of printing, filing, and data entry contracted out
by each department of Sony Life, and is contributing to the productivity improve-
ment of the entire company. It also stimulates communication between people with
disabilities and employees at each workplace, promoting understanding.
2. Support for employees to continue working
SFG has established in-house systems designed to support employees who are raising children to continue working, such a
childcare leave, special leave, and reduced work hour system. We provide various types of support to employees, such as
working primarily by telecommuting, depending on the job characteristics and individual situations of each employee, and
allowing employees to take a leave of absence when it becomes difficult to continue working due to the need to provide
nursing care for a family member, or transfer of their spouse to a remote location. In addition, even in cases where employ
leave work due to uncontrollable circumstances, SFG has a re-employment system in place to support a career restart,
according to a change of life plans.
3. Employment of people with disabilities
SFG has been actively promoting the employment of people with disabilities, and such employees are actively working in
various fields.
Sony Life Business Partners:
Employees engaged in data entry at a
communal working desk
Initiatives to Strengthen Our Foundation for Creating Value
Sony Financial Holdings Inc.Annual Report202046
At Sony Assurance, we have introduced a re-employment system, to re-employ former employees who have retired due to
marriage, childbirth, childcare, nursing care, or a spouse’s job relocation, and a workplace transfer system, where employees
limited to a specific area can apply to change job positions to another area. We support employees with the desire and ability to
continue to work for even longer.
Example of Initiatives at Sony Life
At Sony Life, we have established a special subsidiary, Sony Life Business Partners.
Based on the vision “for a future where people with disabilities can shine in their own
way,” this subsidiary aims to ensure that employees always experience growth and
fulfilment through work, by encouraging them to respect each others’ individuality,
make full use of and extend their abilities, and be imaginative and creative. Sony Life
Business Partners is steadily taking on new operations in addition to existing
operations, which consists primarily of printing, filing, and data entry contracted out
by each department of Sony Life, and is contributing to the productivity improve-
ment of the entire company. It also stimulates communication between people with
disabilities and employees at each workplace, promoting understanding.
2. Support for employees to continue working
SFG has established in-house systems designed to support employees who are raising children to continue working, such a
childcare leave, special leave, and reduced work hour system. We provide various types of support to employees, such as
working primarily by telecommuting, depending on the job characteristics and individual situations of each employee, and
allowing employees to take a leave of absence when it becomes difficult to continue working due to the need to provide
nursing care for a family member, or transfer of their spouse to a remote location. In addition, even in cases where employ
leave work due to uncontrollable circumstances, SFG has a re-employment system in place to support a career restart,
according to a change of life plans.
3. Employment of people with disabilities
SFG has been actively promoting the employment of people with disabilities, and such employees are actively working in
various fields.
Sony Life Business Partners:
Employees engaged in data entry at a
communal working desk
Initiatives to Strengthen Our Foundation for Creating Value
Sony Financial Holdings Inc.Annual Report202046
Work-life BalanceInitiative3
With an eye toward promoting corporate growth, as well as developing workplace environments in which employees can fe
job satisfaction and experience personal growth through their work, while also leading fulfilling lives, SFG promotes produc
ty and efficiency improvement through the active promotion of workstyle reform.
Policy on Work-life Balance
Specific Measures
1. Expanding flexible workstyles and vacation leaves,
and promoting the acquisition of vacation leaves
SFG has introduced flexible working hours whereby employees set their
own start and finish times according to busy and slow times at work, and
several Group companies have abolished core time (times of day when
employees must be at work) and are actively promoting a flexible working
style, according to their circumstances. We have expanded vacation leave
programs by providing accumulated vacation leave and special vacation
leave programs, in addition to an annual vacation leave program, and are
encouraging the acquisition of annual vacation leave for a five-day continu-
ous period, in order to enhance employees’ work-life balance.
Percentage of annual vacation leave
acquired*
FY2018 FY2019
64.2% 70.0%➡
* The average figures for SFH, its three main subsidiar-
ies and three nursing care business companies
For Sony Life, only head office employees are included
2. Telecommuting and mobile work
SFG is promoting the introduction and expansion of telecommuting and mobile work systems, and supporting all of its
employees to secure the time to enrich their lives while improving their work productivity, by expanding the range of eligib
employees, diversifying work locations, and facilitating more efficient allocation of time through flexible working hours.
3. Initiatives for reducing overtime work
SFG strives to ensure appropriate working times, initiating regular commu-
nication from human resources divisions to departments with high work-
loads, confirming appropriate numbers of employees and requesting
reviews of work allocation.
Average monthly overtime per employee*
FY2018 FY2019
21.12hours 19.64hours➡
* The average figures for SFH, its three main subsidiar-
ies and three nursing care business companies
For Sony Life, only head office employees are included
Example of Initiatives at Sony Life
Sony Life has designated every Wednesday as a work-life balance day, ensuring that employees leave work on time through
announcements from an executive to encourage them to go home, and turning off floor lights to make it customary to finish work
on time. Approximately 90% of employees go home by 6:30 pm on work-life balance days.
Sony Financial Holdings Inc.Annual Report2020 47
With an eye toward promoting corporate growth, as well as developing workplace environments in which employees can fe
job satisfaction and experience personal growth through their work, while also leading fulfilling lives, SFG promotes produc
ty and efficiency improvement through the active promotion of workstyle reform.
Policy on Work-life Balance
Specific Measures
1. Expanding flexible workstyles and vacation leaves,
and promoting the acquisition of vacation leaves
SFG has introduced flexible working hours whereby employees set their
own start and finish times according to busy and slow times at work, and
several Group companies have abolished core time (times of day when
employees must be at work) and are actively promoting a flexible working
style, according to their circumstances. We have expanded vacation leave
programs by providing accumulated vacation leave and special vacation
leave programs, in addition to an annual vacation leave program, and are
encouraging the acquisition of annual vacation leave for a five-day continu-
ous period, in order to enhance employees’ work-life balance.
Percentage of annual vacation leave
acquired*
FY2018 FY2019
64.2% 70.0%➡
* The average figures for SFH, its three main subsidiar-
ies and three nursing care business companies
For Sony Life, only head office employees are included
2. Telecommuting and mobile work
SFG is promoting the introduction and expansion of telecommuting and mobile work systems, and supporting all of its
employees to secure the time to enrich their lives while improving their work productivity, by expanding the range of eligib
employees, diversifying work locations, and facilitating more efficient allocation of time through flexible working hours.
3. Initiatives for reducing overtime work
SFG strives to ensure appropriate working times, initiating regular commu-
nication from human resources divisions to departments with high work-
loads, confirming appropriate numbers of employees and requesting
reviews of work allocation.
Average monthly overtime per employee*
FY2018 FY2019
21.12hours 19.64hours➡
* The average figures for SFH, its three main subsidiar-
ies and three nursing care business companies
For Sony Life, only head office employees are included
Example of Initiatives at Sony Life
Sony Life has designated every Wednesday as a work-life balance day, ensuring that employees leave work on time through
announcements from an executive to encourage them to go home, and turning off floor lights to make it customary to finish work
on time. Approximately 90% of employees go home by 6:30 pm on work-life balance days.
Sony Financial Holdings Inc.Annual Report2020 47
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Customers
At SFG, feedback received from its customers in various situations is compiled and analyzed by divisions in
charge of promoting customer satisfaction and raising quality. This feedback is shared with each division
within the Group and reported to management, and used to make recommendations on operational im-
provements and product and service enhancements.
▶ “Responsibility to Customers” on SFH’s website,
https://www.sonyfh.co.jp/en/sustainability/stakeholder/customer.html
▶P38 Customer-first Business Operation Policy (Summary)
Shareholders and
investors
We share opinions obtained through dialogue with shareholders and other investors with top management
and utilize them in developing management strategies. Top management also participates actively in dialogue
with shareholders and other investors in an effort to further enhance corporate value.
▶P48 Dialogue with Shareholders and Investors
Employees
By creating workplaces that allow diverse employees to work comfortably, through measures such as the
implementation of Employee Opinion Surveys (EOS) and providing personnel training from a medium- to long-
term perspective, we generate new value from diverse perspectives and aim to enhance of corporate value.
▶ “Human Resources Development” on SFH’s website,
https://www.sonyfh.co.jp/en/sustainability/stakeholder/employee.html
▶P44 Human Resources Respecting Diversity
Business partners
We seek to promote fair and equitable transactions with business partners, including insurance agencies and
alliance partners. We also provide education programs. Through these activities, we aim to achieve corporate
value enhancement for both SFG and its business partners.
▶ “Activities with Business Partners” on SFH’s website,
https://www.sonyfh.co.jp/en/sustainability/stakeholder/business_partner.html
Local communities/
Environment
We strive to contribute to realizing a sustainable society and environment through our business activities and
social contribution activities.
▶ “Activities with Local Communities” on SFH’s website,
https://www.sonyfh.co.jp/en/sustainability/stakeholder/community.html
▶ “Environmental Initiatives” on SFH’s website,
https://www.sonyfh.co.jp/en/sustainability/stakeholder/eco.html
▶P49 Environmental Protection
With the highest level of ethics and a strong sense of purpose, SFG seeks to become the most trusted financial services
group by invoking emotion through the power of technology and high-value-added products and services that meet every
customer’s needs. SFG reflects opinions obtained through communication with stakeholders in operational improvement an
quality enhancement of products and services to achieve sustainable growth and corporate value improvement.
Initiatives for Stakeholder Engagement
For constructive dialogue with shareholders and other investors, SFH has formulated the “Investor Relations (IR) Policy,”
established the department in charge of IR activities and assigned a corporate executive to oversee IR activities. The depa
ment in charge of IR strives to disclose corporate information in a timely, accurate and fair manner to shareholders and oth
investors, as well as to facilitate sufficient dialogue with them, while sharing information appropriately with SFH’s business
execution departments and Group companies.
・ Earnings briefings (teleconferences with institutional investors
and analysts) �������������������� Four times
・ Corporate strategy meeting ��������������� One time
・ Individual meetings with institutional investors and analysts��Approx. 130
(ESG meetings������������������� Two times)
・ Overseas IR meetings (UK, USA, Hong Kong, Singapore)
������������������������Total Three times
・ Briefings for individual investors ������������� Six times
・ Small meetings for institutional investors and analysts ��� Three times
Investor Relations (IR) Initiatives in Fiscal 2019
・ Early dispatch of the Notice of Convocation for the
General Meeting of Shareholders
・ Setting the date of the General Meeting of Shareholders
to avoid dates on which other companies’ General
Meetings of Shareholders are concentrated
・ Use of an electronic voting platform
・ Providing a partial translation of the Notice of
Convocation in English
・ Utilizing the SFH website to disclose the Notice of
Convocation for General Meeting of Shareholders and
final shareholder voting results
Facilitating the Exercise of Voting Rights
▶ “Approach to Sustainability” on SFH’s website, https://www.sonyfh.co.jp/en/sustainability/approach.html
Dialogue with Shareholders and Investors
Communication with Stakeholders
Initiatives to Strengthen Our Foundation for Creating Value
Sony Financial Holdings Inc.Annual Report202048
At SFG, feedback received from its customers in various situations is compiled and analyzed by divisions in
charge of promoting customer satisfaction and raising quality. This feedback is shared with each division
within the Group and reported to management, and used to make recommendations on operational im-
provements and product and service enhancements.
▶ “Responsibility to Customers” on SFH’s website,
https://www.sonyfh.co.jp/en/sustainability/stakeholder/customer.html
▶P38 Customer-first Business Operation Policy (Summary)
Shareholders and
investors
We share opinions obtained through dialogue with shareholders and other investors with top management
and utilize them in developing management strategies. Top management also participates actively in dialogue
with shareholders and other investors in an effort to further enhance corporate value.
▶P48 Dialogue with Shareholders and Investors
Employees
By creating workplaces that allow diverse employees to work comfortably, through measures such as the
implementation of Employee Opinion Surveys (EOS) and providing personnel training from a medium- to long-
term perspective, we generate new value from diverse perspectives and aim to enhance of corporate value.
▶ “Human Resources Development” on SFH’s website,
https://www.sonyfh.co.jp/en/sustainability/stakeholder/employee.html
▶P44 Human Resources Respecting Diversity
Business partners
We seek to promote fair and equitable transactions with business partners, including insurance agencies and
alliance partners. We also provide education programs. Through these activities, we aim to achieve corporate
value enhancement for both SFG and its business partners.
▶ “Activities with Business Partners” on SFH’s website,
https://www.sonyfh.co.jp/en/sustainability/stakeholder/business_partner.html
Local communities/
Environment
We strive to contribute to realizing a sustainable society and environment through our business activities and
social contribution activities.
▶ “Activities with Local Communities” on SFH’s website,
https://www.sonyfh.co.jp/en/sustainability/stakeholder/community.html
▶ “Environmental Initiatives” on SFH’s website,
https://www.sonyfh.co.jp/en/sustainability/stakeholder/eco.html
▶P49 Environmental Protection
With the highest level of ethics and a strong sense of purpose, SFG seeks to become the most trusted financial services
group by invoking emotion through the power of technology and high-value-added products and services that meet every
customer’s needs. SFG reflects opinions obtained through communication with stakeholders in operational improvement an
quality enhancement of products and services to achieve sustainable growth and corporate value improvement.
Initiatives for Stakeholder Engagement
For constructive dialogue with shareholders and other investors, SFH has formulated the “Investor Relations (IR) Policy,”
established the department in charge of IR activities and assigned a corporate executive to oversee IR activities. The depa
ment in charge of IR strives to disclose corporate information in a timely, accurate and fair manner to shareholders and oth
investors, as well as to facilitate sufficient dialogue with them, while sharing information appropriately with SFH’s business
execution departments and Group companies.
・ Earnings briefings (teleconferences with institutional investors
and analysts) �������������������� Four times
・ Corporate strategy meeting ��������������� One time
・ Individual meetings with institutional investors and analysts��Approx. 130
(ESG meetings������������������� Two times)
・ Overseas IR meetings (UK, USA, Hong Kong, Singapore)
������������������������Total Three times
・ Briefings for individual investors ������������� Six times
・ Small meetings for institutional investors and analysts ��� Three times
Investor Relations (IR) Initiatives in Fiscal 2019
・ Early dispatch of the Notice of Convocation for the
General Meeting of Shareholders
・ Setting the date of the General Meeting of Shareholders
to avoid dates on which other companies’ General
Meetings of Shareholders are concentrated
・ Use of an electronic voting platform
・ Providing a partial translation of the Notice of
Convocation in English
・ Utilizing the SFH website to disclose the Notice of
Convocation for General Meeting of Shareholders and
final shareholder voting results
Facilitating the Exercise of Voting Rights
▶ “Approach to Sustainability” on SFH’s website, https://www.sonyfh.co.jp/en/sustainability/approach.html
Dialogue with Shareholders and Investors
Communication with Stakeholders
Initiatives to Strengthen Our Foundation for Creating Value
Sony Financial Holdings Inc.Annual Report202048
Use of Green Power
Sony Life became the first Japanese life insurance company to introduce a “Green Power Certification System,”
which enables companies to use green power in their business activities and thus reduce CO2 emissions. Sony
Assurance and Sony Bank adopt the “Green Certification (Heat) System*” to help reduce CO2 emissions. Sony
Bank offsets 100% of CO2 emissions caused by its power usage (excluding the portion of power usage in
outsourced operations) as a “Carbon Offset Bank.”
In this way, each Group company contributes to the wider use of natural sources of power such as solar and wind power,
geothermal power, and biomass. In fiscal 2019, SFG as a whole purchased green certificates (heat) and green certificates
(biomass) equivalent to 1,444t-CO2.
* The “Green Certification (Heat) System” is a system certified by the government whereby a company can issue certificates for the environmental value of heat
generated from renewable energy with the approval of a third-party institution (Green Energy Certification Center), and trade these as “green certificates (heat)”
Acquisition of ISO14001 Certification
Sony Life, Sony Assurance and Sony Bank* have acquired ISO14001 certification, the international standard for environmental
management systems. All three companies promote energy-saving and natural resource-saving activities such as targets for re-
duced energy and photocopier paper usage, and green procurement to raise the percentage of eco-products used in office suppl
* Includes the head offices of Sony Life , Sony Assurance and Sony Bank, and CONSULTING PLAZA
They conduct regular internal environmental audits of ISO14001-certified offices, and the audit results are reported to top management
Reducing CO2 Emissions by Switching to Paperless Contract Procedures and Electronic
Issuance of Documents
SFG has been striving to conserve paper resources and cut down on CO2 emissions related to postal mailings by shifting to
paperless documentation for certain contract procedures and transactions.
Sony Life has adopted paperless application procedures that enable customers to use electronic signatures to complete
contract application procedures as well as various post-contract procedures. In addition, Sony Life has reduced the use of
paper through the promotion of online guidance of contract term and conditions.
Sony Assurance has made it possible to apply for automobile insurance policies, medical insurance policies, fire insurance
policies and overseas travel insurance policies online, thereby avoiding the need for printing and mailing of insurance appli
tion forms and other documents. Also of note, Sony Assurance promotes reduction in the use of paper resources, exempli-
fied by a “paperless insurance certificate discount” of up to ¥500 on automobile and fire insurance premiums when
customers who buy a policy online opt not to have certificates of insurance and other documents printed and mailed.
As an Internet bank, Sony Bank promotes paperless transactions by principally providing information on web pages and using
electronic document delivery for delivering transaction slips, passbooks, explanations of products and delivery of forms to custome
SFG recognizes that humankind faces a critical challenge in protecting the global environment. The major subsidiaries have
each established environmental policies, and through everyday business activities, they carry out initiatives that give due
consideration to environmental protection.
SFG’s Policy on Environmental Initiatives
SFG strives to provide value to stakeholders through our business activities, and to take actions in consideration of protect
the global environment, in all aspects of its corporate activities as a member of the Sony Group, by observing the Sony Gro
Environmental Vision for realizing a sustainable society.
Initiatives for the “One Blue Ocean Project”
SFG participates in the “One Blue Ocean Project,” a project involving the whole Sony Group to continually address the issue
of ocean plastics pollution, and is engaged in the following activities.
For reference: SFG’s electricity consumption and CO2 emissions*
* Includes the head office of Sony Life, Sony Assurance, head office of Sony Bank, and CONSULTING PLAZA
Total electricity consumptionFY2019 4,903.0MWh Total CO2 emissions (equivalent value)FY2019 880.80t-CO2
・ Reduce or eliminate the use of disposable plastics at kiosks, automatic vending
machines and meeting rooms on the company premises
・ Reduce the use of plastic products in offices, and actively use recycled materials
Usage reduction
・ Clean-up activities at rivers, coastlines and
in the community
Collection and cleaning
Environmental Protection
Sony Financial Holdings Inc.Annual Report2020 49
Sony Life became the first Japanese life insurance company to introduce a “Green Power Certification System,”
which enables companies to use green power in their business activities and thus reduce CO2 emissions. Sony
Assurance and Sony Bank adopt the “Green Certification (Heat) System*” to help reduce CO2 emissions. Sony
Bank offsets 100% of CO2 emissions caused by its power usage (excluding the portion of power usage in
outsourced operations) as a “Carbon Offset Bank.”
In this way, each Group company contributes to the wider use of natural sources of power such as solar and wind power,
geothermal power, and biomass. In fiscal 2019, SFG as a whole purchased green certificates (heat) and green certificates
(biomass) equivalent to 1,444t-CO2.
* The “Green Certification (Heat) System” is a system certified by the government whereby a company can issue certificates for the environmental value of heat
generated from renewable energy with the approval of a third-party institution (Green Energy Certification Center), and trade these as “green certificates (heat)”
Acquisition of ISO14001 Certification
Sony Life, Sony Assurance and Sony Bank* have acquired ISO14001 certification, the international standard for environmental
management systems. All three companies promote energy-saving and natural resource-saving activities such as targets for re-
duced energy and photocopier paper usage, and green procurement to raise the percentage of eco-products used in office suppl
* Includes the head offices of Sony Life , Sony Assurance and Sony Bank, and CONSULTING PLAZA
They conduct regular internal environmental audits of ISO14001-certified offices, and the audit results are reported to top management
Reducing CO2 Emissions by Switching to Paperless Contract Procedures and Electronic
Issuance of Documents
SFG has been striving to conserve paper resources and cut down on CO2 emissions related to postal mailings by shifting to
paperless documentation for certain contract procedures and transactions.
Sony Life has adopted paperless application procedures that enable customers to use electronic signatures to complete
contract application procedures as well as various post-contract procedures. In addition, Sony Life has reduced the use of
paper through the promotion of online guidance of contract term and conditions.
Sony Assurance has made it possible to apply for automobile insurance policies, medical insurance policies, fire insurance
policies and overseas travel insurance policies online, thereby avoiding the need for printing and mailing of insurance appli
tion forms and other documents. Also of note, Sony Assurance promotes reduction in the use of paper resources, exempli-
fied by a “paperless insurance certificate discount” of up to ¥500 on automobile and fire insurance premiums when
customers who buy a policy online opt not to have certificates of insurance and other documents printed and mailed.
As an Internet bank, Sony Bank promotes paperless transactions by principally providing information on web pages and using
electronic document delivery for delivering transaction slips, passbooks, explanations of products and delivery of forms to custome
SFG recognizes that humankind faces a critical challenge in protecting the global environment. The major subsidiaries have
each established environmental policies, and through everyday business activities, they carry out initiatives that give due
consideration to environmental protection.
SFG’s Policy on Environmental Initiatives
SFG strives to provide value to stakeholders through our business activities, and to take actions in consideration of protect
the global environment, in all aspects of its corporate activities as a member of the Sony Group, by observing the Sony Gro
Environmental Vision for realizing a sustainable society.
Initiatives for the “One Blue Ocean Project”
SFG participates in the “One Blue Ocean Project,” a project involving the whole Sony Group to continually address the issue
of ocean plastics pollution, and is engaged in the following activities.
For reference: SFG’s electricity consumption and CO2 emissions*
* Includes the head office of Sony Life, Sony Assurance, head office of Sony Bank, and CONSULTING PLAZA
Total electricity consumptionFY2019 4,903.0MWh Total CO2 emissions (equivalent value)FY2019 880.80t-CO2
・ Reduce or eliminate the use of disposable plastics at kiosks, automatic vending
machines and meeting rooms on the company premises
・ Reduce the use of plastic products in offices, and actively use recycled materials
Usage reduction
・ Clean-up activities at rivers, coastlines and
in the community
Collection and cleaning
Environmental Protection
Sony Financial Holdings Inc.Annual Report2020 49
Name Sony Financial Holdings Inc.
Established April 1, 2004
Head office 1-9-2, Otemachi, Chiyoda-ku, Tokyo, Japan
Business
Management control of subsidiaries (life insurance companies, non-life insurance companies, banks and
others) specified by the Insurance Business Act of Japan and the Banking Act of Japan and all duties
incidental to that role
Number of
employees
SFH: 84
(Consolidated: 11,487, Life insurance business: 8,739, Non-life insurance business: 1,347,
Banking business: 644, Others: 690, Parent: 67)
Common
stock ¥19,994 million
Notes: 1. The number of employees of SFH includes 9 belonging to the life insurance business, 1 belonging to the non-life insurance business, 7 belonging to the
banking business, and 67 belonging to the parent
2. The number of employees stated in “Others” is the number of employees belonging to the nursing care business and venture capital business at subsidiar
Organizational Chart
and other Group subsidiaries
Sony Life Sony Assurance Sony Bank Sony Lifecare Sony Financial
Ventures
Sony Financial Holdings
General Meeting of Shareholders
Board of Directors
Executive Committee
Business Execution Departments
Audit Department
Audit & Supervisory Board
Corporate Section
Corporate Profile(As of March 31, 2020)
Sony Financial Holdings Inc.Annual Report202050
Established April 1, 2004
Head office 1-9-2, Otemachi, Chiyoda-ku, Tokyo, Japan
Business
Management control of subsidiaries (life insurance companies, non-life insurance companies, banks and
others) specified by the Insurance Business Act of Japan and the Banking Act of Japan and all duties
incidental to that role
Number of
employees
SFH: 84
(Consolidated: 11,487, Life insurance business: 8,739, Non-life insurance business: 1,347,
Banking business: 644, Others: 690, Parent: 67)
Common
stock ¥19,994 million
Notes: 1. The number of employees of SFH includes 9 belonging to the life insurance business, 1 belonging to the non-life insurance business, 7 belonging to the
banking business, and 67 belonging to the parent
2. The number of employees stated in “Others” is the number of employees belonging to the nursing care business and venture capital business at subsidiar
Organizational Chart
and other Group subsidiaries
Sony Life Sony Assurance Sony Bank Sony Lifecare Sony Financial
Ventures
Sony Financial Holdings
General Meeting of Shareholders
Board of Directors
Executive Committee
Business Execution Departments
Audit Department
Audit & Supervisory Board
Corporate Section
Corporate Profile(As of March 31, 2020)
Sony Financial Holdings Inc.Annual Report202050
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■ Non-life Insurance Business
Name Established Head office Business Common stock
(Millions of yen) Share ownership
Sony Assurance Inc. June 10,
1998
Ota-ku, Tokyo,
Japan
Non-life insurance
business
20,000 Sony Financial Holdings Inc. 100%
Name Established Head office Business Common stock
(Millions of yen) Share ownership
Sony Life Insurance Co., Ltd. August 10,
1979
Chiyoda-ku,
Tokyo, Japan
Life insurance
business
70,000 Sony Financial Holdings Inc. 100%
Sony Life With Insurance
Co.,Ltd.
August 29,
2007
Shibuya-ku,
Tokyo, Japan
Life insurance
business
21,500 Sony Life Insurance Co., Ltd. 100%
SA Reinsurance Ltd. October 29,
2009
British BermudaReinsurance
business
15,900 Sony Life Insurance Co., Ltd. 100%
■ Life Insurance Business
Name Established Head office Business Common stock
(Millions of yen) Share ownership
Sony Lifecare Inc. April 1,
2014
Shibuya-ku,
Tokyo, Japan
Management control of
companies handling the
nursing care business, and
other duties incidental to
that role
2,625 Sony Financial Holdings Inc. 100%
Lifecare Design Inc.October 5,
1999
Shibuya-ku,
Tokyo, Japan
Planning, development
and operation of
nursing care homes
2,295 Sony Lifecare Inc. 100%
Proud Life Inc. July 3,
2006
Yokohama,
Kanagawa
Prefecture, Japan
Management, opera-
tion and planning of
nursing care homes
3 Sony Lifecare Inc. 100%
■ Nursing Care Business
■ Other (Venture Capital Business)
Name Established Head office Business Common stock
(Millions of yen) Share ownership
Sony Financial Ventures Inc. July 10,
2018
Chiyoda-ku,
Tokyo, Japan
Venture capital
business
10 Sony Financial Holdings Inc. 100%
■ Banking Business
Name Established Head office Business Common stock
(Millions of yen) Share ownership
Sony Bank Inc. April 2,
2001
Chiyoda-ku,
Tokyo, Japan
Banking business 31,000 Sony Financial Holdings Inc. 100%
Sony Payment Services
Inc.
September 1,
2006
Minato-ku,
Tokyo, Japan
Credit card settlement
services
488 Sony Bank Inc. 57%,
Four other companies
SmartLink Network
Hong Kong Limited
February 27,
2013
Hong Kong,
China
Credit card settlement
services
13 Sony Payment Services Inc. 100%
SmartLink Network
Europe B.V.
August 1,
2019
Netherlands Credit card settlement
services
10 Sony Payment Services Inc. 100%
Profiles of Group Companies (Main subsidiaries)(As of July 1, 2020)
Sony Financial Holdings Inc.Annual Report2020 51
Name Established Head office Business Common stock
(Millions of yen) Share ownership
Sony Assurance Inc. June 10,
1998
Ota-ku, Tokyo,
Japan
Non-life insurance
business
20,000 Sony Financial Holdings Inc. 100%
Name Established Head office Business Common stock
(Millions of yen) Share ownership
Sony Life Insurance Co., Ltd. August 10,
1979
Chiyoda-ku,
Tokyo, Japan
Life insurance
business
70,000 Sony Financial Holdings Inc. 100%
Sony Life With Insurance
Co.,Ltd.
August 29,
2007
Shibuya-ku,
Tokyo, Japan
Life insurance
business
21,500 Sony Life Insurance Co., Ltd. 100%
SA Reinsurance Ltd. October 29,
2009
British BermudaReinsurance
business
15,900 Sony Life Insurance Co., Ltd. 100%
■ Life Insurance Business
Name Established Head office Business Common stock
(Millions of yen) Share ownership
Sony Lifecare Inc. April 1,
2014
Shibuya-ku,
Tokyo, Japan
Management control of
companies handling the
nursing care business, and
other duties incidental to
that role
2,625 Sony Financial Holdings Inc. 100%
Lifecare Design Inc.October 5,
1999
Shibuya-ku,
Tokyo, Japan
Planning, development
and operation of
nursing care homes
2,295 Sony Lifecare Inc. 100%
Proud Life Inc. July 3,
2006
Yokohama,
Kanagawa
Prefecture, Japan
Management, opera-
tion and planning of
nursing care homes
3 Sony Lifecare Inc. 100%
■ Nursing Care Business
■ Other (Venture Capital Business)
Name Established Head office Business Common stock
(Millions of yen) Share ownership
Sony Financial Ventures Inc. July 10,
2018
Chiyoda-ku,
Tokyo, Japan
Venture capital
business
10 Sony Financial Holdings Inc. 100%
■ Banking Business
Name Established Head office Business Common stock
(Millions of yen) Share ownership
Sony Bank Inc. April 2,
2001
Chiyoda-ku,
Tokyo, Japan
Banking business 31,000 Sony Financial Holdings Inc. 100%
Sony Payment Services
Inc.
September 1,
2006
Minato-ku,
Tokyo, Japan
Credit card settlement
services
488 Sony Bank Inc. 57%,
Four other companies
SmartLink Network
Hong Kong Limited
February 27,
2013
Hong Kong,
China
Credit card settlement
services
13 Sony Payment Services Inc. 100%
SmartLink Network
Europe B.V.
August 1,
2019
Netherlands Credit card settlement
services
10 Sony Payment Services Inc. 100%
Profiles of Group Companies (Main subsidiaries)(As of July 1, 2020)
Sony Financial Holdings Inc.Annual Report2020 51
Shareholding by Shareholder Type(As of March 31, 2020)
22.50%
Foreign investors
9.36%
Financial institutions
2.23%
Individuals and others
0.72%
Financial instruments firms
65.19%
Corporations
Total number of shares issued
435,087,405
Stock Exchange Listing(As of March 31, 2020)
The First Section of the Tokyo Stock Exchange (Securities code: 8729)
Name Number of Shares Held
Percentage of Ownership
(excluding treasury
stocks) (%)
Sony Corporation 283,050,000 65.06
JP MORGAN CHASE BANK 385632 21,698,728 4.98
The Master Trust Bank of Japan, Ltd. (Trust Account) 14,255,200 3.27
SSBTC CLIENT OMNIBUS ACCOUNT 9,483,551 2.18
Japan Trustee Services Bank, Ltd. (Trust Account) 9,172,500 2.10
JP MORGAN CHASE BANK 385635 3,996,708 0.91
GOLDMAN, SACHS & CO. REG 3,545,322 0.81
THE BANK OF NEW YORK MELLON 140042 3,356,149 0.77
Japan Trustee Services Bank, Ltd. (Trust Account 5) 3,301,400 0.75
JP MORGAN CHASE BANK 385151 2,730,852 0.62
Major Shareholders(As of March 31, 2020)
Notes: 1.Capital Research & Management Company reported in the Change Report Pertaining to Report of Possession of Large Volume it submitted on August 22,
2019 that, as of August 15, 2019, it owned 29,047,200 shares of SFH (6.68% of total number of shares issued). However, we did not include the firm’s name
among the Major Shareholders above as we could not confirm the beneficial share ownership as of March 31, 2020
2. The tender offer for the shares and the stock acquisition rights of SFH as announced by Sony Corp. on May 19, 2020 was completed on July 13, 2020. As a
result, Sony Corp. holds 406,626,238 shares of SFH (ratio of the number of shares held to the total number of issued shares (excluding treasury shares):
93.47%) as of July 20, 2020
Date
Increase in
Issued Shares
Total Number
of Shares
Issued
Increase in
Common Stock
(Millions of yen)
Common Stock
(Millions of yen)
Increase in
Capital Surplus
(Millions of yen)
Capital Surplus
(Millions of yen)
April 1, 2019 – March 31, 2020 24,422 435,087,405 31 19,994 31 195,371
Information on Common Stock, Shares Outstanding
Note: Issue price and amount added to common stock for increases due to new shares issued as restricted stock compensation (third-party allocation) are as follows
Issue price: ¥2,564 per share
Amount added to common stock: ¥1,282 per share
▶ P85 Significant subsequent event
Stock Information
Sony Financial Holdings Inc.Annual Report202052
22.50%
Foreign investors
9.36%
Financial institutions
2.23%
Individuals and others
0.72%
Financial instruments firms
65.19%
Corporations
Total number of shares issued
435,087,405
Stock Exchange Listing(As of March 31, 2020)
The First Section of the Tokyo Stock Exchange (Securities code: 8729)
Name Number of Shares Held
Percentage of Ownership
(excluding treasury
stocks) (%)
Sony Corporation 283,050,000 65.06
JP MORGAN CHASE BANK 385632 21,698,728 4.98
The Master Trust Bank of Japan, Ltd. (Trust Account) 14,255,200 3.27
SSBTC CLIENT OMNIBUS ACCOUNT 9,483,551 2.18
Japan Trustee Services Bank, Ltd. (Trust Account) 9,172,500 2.10
JP MORGAN CHASE BANK 385635 3,996,708 0.91
GOLDMAN, SACHS & CO. REG 3,545,322 0.81
THE BANK OF NEW YORK MELLON 140042 3,356,149 0.77
Japan Trustee Services Bank, Ltd. (Trust Account 5) 3,301,400 0.75
JP MORGAN CHASE BANK 385151 2,730,852 0.62
Major Shareholders(As of March 31, 2020)
Notes: 1.Capital Research & Management Company reported in the Change Report Pertaining to Report of Possession of Large Volume it submitted on August 22,
2019 that, as of August 15, 2019, it owned 29,047,200 shares of SFH (6.68% of total number of shares issued). However, we did not include the firm’s name
among the Major Shareholders above as we could not confirm the beneficial share ownership as of March 31, 2020
2. The tender offer for the shares and the stock acquisition rights of SFH as announced by Sony Corp. on May 19, 2020 was completed on July 13, 2020. As a
result, Sony Corp. holds 406,626,238 shares of SFH (ratio of the number of shares held to the total number of issued shares (excluding treasury shares):
93.47%) as of July 20, 2020
Date
Increase in
Issued Shares
Total Number
of Shares
Issued
Increase in
Common Stock
(Millions of yen)
Common Stock
(Millions of yen)
Increase in
Capital Surplus
(Millions of yen)
Capital Surplus
(Millions of yen)
April 1, 2019 – March 31, 2020 24,422 435,087,405 31 19,994 31 195,371
Information on Common Stock, Shares Outstanding
Note: Issue price and amount added to common stock for increases due to new shares issued as restricted stock compensation (third-party allocation) are as follows
Issue price: ¥2,564 per share
Amount added to common stock: ¥1,282 per share
▶ P85 Significant subsequent event
Stock Information
Sony Financial Holdings Inc.Annual Report202052
20.0 20.0
30.0
40.0
60.0 62.5
25.0
55.0 55.0
FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 FY2019
70.0yen
Dividend per Share
Dividends(As of June 23, 2020)
Yen
2015 2016 2017 2018 2019 2020
0
500
1,000
1,500
2,000
2,500
3,000
Share Price(As of June 30, 2020)
Total Shareholder Return
(%)
FY2015 FY2016 FY2017 FY2018 FY2019
SFH 77.3 98.3 109.0 120.1 110.2
<Comparative indicator: TOPIX><87.3> <98.0> <111.2> <103.1> <90.9>
Notes: 1. Although a stock split was conducted during fiscal 2011, the dividend per share figures are calculated assuming that the stock split was conducted at the
beginning of fiscal 2010
2. SFH resolved at the meeting of its board of directors held on May 19, 2020 not to declare a dividend for the fiscal year ending March 2021 on the condition
the completion of the tender offer for the common shares and the stock acquisition rights of SFH conducted by Sony Corp. (the “Tender Offer”). As stated in
the “Announcement Regarding the Result of Tender Offer for Shares, Etc. in Sony Financial Holdings Inc. by Sony Corporation, the Controlling Shareholder”,
dated July 14, 2020, SFH will not declare a dividend for the fiscal year ending March 2021 due to the completion of the Tender Offer on July 13, 2020
Sony Financial Holdings Inc.Annual Report2020 53
30.0
40.0
60.0 62.5
25.0
55.0 55.0
FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 FY2019
70.0yen
Dividend per Share
Dividends(As of June 23, 2020)
Yen
2015 2016 2017 2018 2019 2020
0
500
1,000
1,500
2,000
2,500
3,000
Share Price(As of June 30, 2020)
Total Shareholder Return
(%)
FY2015 FY2016 FY2017 FY2018 FY2019
SFH 77.3 98.3 109.0 120.1 110.2
<Comparative indicator: TOPIX><87.3> <98.0> <111.2> <103.1> <90.9>
Notes: 1. Although a stock split was conducted during fiscal 2011, the dividend per share figures are calculated assuming that the stock split was conducted at the
beginning of fiscal 2010
2. SFH resolved at the meeting of its board of directors held on May 19, 2020 not to declare a dividend for the fiscal year ending March 2021 on the condition
the completion of the tender offer for the common shares and the stock acquisition rights of SFH conducted by Sony Corp. (the “Tender Offer”). As stated in
the “Announcement Regarding the Result of Tender Offer for Shares, Etc. in Sony Financial Holdings Inc. by Sony Corporation, the Controlling Shareholder”,
dated July 14, 2020, SFH will not declare a dividend for the fiscal year ending March 2021 due to the completion of the Tender Offer on July 13, 2020
Sony Financial Holdings Inc.Annual Report2020 53
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Sony Financial Holdings Inc.Annual Report202054
Non-life Insurance
Business
Sony Assurance Inc.
Banking Business
Sony Bank Inc.
Sony Financial
Holdings Inc.
Sony Corporation
(Parent Company)
Banking Business
Sony Payment
Services Inc.
Nursing Care Business
Lifecare Design Inc.
Life Insurance Business
Sony Life With Insurance Co.,Ltd.
Life Insurance Business
SA Reinsurance Ltd.
Nursing Care Business
Proud Life Inc.
Banking Business
SmartLink Network
Hong Kong Limited
Banking Business
SmartLink Network
Europe B.V.
Venture Capital Business
Sony Financial Ventures Inc.
Venture Capital Business
SFV · GB L.P.
Consolidated subsidiaries
Sales and referrals of the others’ products
Shareholding
Nursing Care
Business
Sony Lifecare Inc.
Life Insurance Business
Sony Life Insurance Co., Ltd.
Sony Financial Group Organizational Chart of Business Operations(As of July 1, 2020)
Review of Operations
On a consolidated basis, ordinary revenues increased 9.3% year on year, to ¥1,781.4 billion, owing to increases
in ordinary revenues from all the businesses: life insurance, non-life insurance and banking businesses. Ordinar
profit increased 19.2% year on year, to ¥111.8 billion, owing to increases in ordinary profit from all the above
businesses. Profit attributable to owners of the parent was up 19.9% year on year, to ¥74.4 billion.
Segment results are described below.
Life Insurance Business
Ordinary revenues increased 9.6% year on year, to ¥1,604.7 billion, due primarily to higher insurance premium
revenue, mainly from single premium insurance. Ordinary profit rose 20.7% year on year, to ¥94.3 billion, due
chiefly to a decrease in costs related to the acquisition of new policies and a rise in profit in tandam with expan
sion of the policy amount in force, which more than offset higer operating expenses.
Non-life Insurance Business
Ordinary revenues increased 5.8% year on year, to ¥121.7 billion, due mainly to an increase in net premiums w
ten for mainstay automobile insurance. Ordinary profit increased 17.0% year on year, to ¥8.0 billion, due mainl
to a reversal of a portion of reserves for some products that made provisions in the fiscal year ended March 31,
2019 and in addition that reversal of catastrophe reserves were recorded in the fiscal year ended March 31, 20
Banking Business
Ordinary revenues expanded 9.2% year on year, to ¥50.2 billion, and ordinary profit was up 11.4% year on year
to ¥10.6 billion, due to increases in such income as interest on loans in line with a growing number of newly exe
cuted mortgage loans.
Review of Operations / Organizational Chart of Business Operations
Reference Materials
Non-life Insurance
Business
Sony Assurance Inc.
Banking Business
Sony Bank Inc.
Sony Financial
Holdings Inc.
Sony Corporation
(Parent Company)
Banking Business
Sony Payment
Services Inc.
Nursing Care Business
Lifecare Design Inc.
Life Insurance Business
Sony Life With Insurance Co.,Ltd.
Life Insurance Business
SA Reinsurance Ltd.
Nursing Care Business
Proud Life Inc.
Banking Business
SmartLink Network
Hong Kong Limited
Banking Business
SmartLink Network
Europe B.V.
Venture Capital Business
Sony Financial Ventures Inc.
Venture Capital Business
SFV · GB L.P.
Consolidated subsidiaries
Sales and referrals of the others’ products
Shareholding
Nursing Care
Business
Sony Lifecare Inc.
Life Insurance Business
Sony Life Insurance Co., Ltd.
Sony Financial Group Organizational Chart of Business Operations(As of July 1, 2020)
Review of Operations
On a consolidated basis, ordinary revenues increased 9.3% year on year, to ¥1,781.4 billion, owing to increases
in ordinary revenues from all the businesses: life insurance, non-life insurance and banking businesses. Ordinar
profit increased 19.2% year on year, to ¥111.8 billion, owing to increases in ordinary profit from all the above
businesses. Profit attributable to owners of the parent was up 19.9% year on year, to ¥74.4 billion.
Segment results are described below.
Life Insurance Business
Ordinary revenues increased 9.6% year on year, to ¥1,604.7 billion, due primarily to higher insurance premium
revenue, mainly from single premium insurance. Ordinary profit rose 20.7% year on year, to ¥94.3 billion, due
chiefly to a decrease in costs related to the acquisition of new policies and a rise in profit in tandam with expan
sion of the policy amount in force, which more than offset higer operating expenses.
Non-life Insurance Business
Ordinary revenues increased 5.8% year on year, to ¥121.7 billion, due mainly to an increase in net premiums w
ten for mainstay automobile insurance. Ordinary profit increased 17.0% year on year, to ¥8.0 billion, due mainl
to a reversal of a portion of reserves for some products that made provisions in the fiscal year ended March 31,
2019 and in addition that reversal of catastrophe reserves were recorded in the fiscal year ended March 31, 20
Banking Business
Ordinary revenues expanded 9.2% year on year, to ¥50.2 billion, and ordinary profit was up 11.4% year on year
to ¥10.6 billion, due to increases in such income as interest on loans in line with a growing number of newly exe
cuted mortgage loans.
Review of Operations / Organizational Chart of Business Operations
Reference Materials
Millions of yen
2016 2017 2018 2019 2020
Ordinary revenues 1,362,044 1,381,667 1,503,630 1,629,182 1,781,420
Ordinary profit 71,103 66,326 66,843 93,856 111,880
Profit attributable to owners of the parent 43,355 41,621 51,895 62,074 74,429
Comprehensive income 71,105 21,433 52,207 57,415 62,192
Total assets 10,352,114 11,471,845 12,401,446 13,468,215 15,125,710
Net assets 604,377 601,139 625,406 656,846 691,978
Consolidated capital adequacy ratio
(Domestic standard)*1 *2
10.70% 14.39% 17.18% 16.50% 16.28%
Consolidated solvency margin ratio*1 *3 1,637.1% 1,632.9% 1,748.7% 1,726.3% 1,680.3%
■ Sony Financial Holdings (Consolidated)
Millions of yen
2016 2017 2018 2019 2020
Ordinary revenues 1,230,141 1,243,739 1,351,076 1,464,218 1,580,117
Ordinary profit 60,792 60,180 56,338 79,812 88,720
Net income 37,096 35,185 45,134 49,602 56,743
Total assets 8,035,408 8,873,613 9,567,689 10,380,148 11,237,124
Net assets 482,195 473,589 492,787 513,930 539,582
Non-consolidated solvency margin ratio*1 *3 2,722.8% 2,568.8% 2,624.3% 2,590.5% 2,476.3%
■ Sony Life (Non-consolidated)
Millions of yen
2016 2017 2018 2019 2020
Ordinary revenues 96,905 102,333 110,092 115,102 121,728
Ordinary profit 4,680 4,996 6,574 6,897 8,072
Net income 2,586 3,515 4,821 4,999 5,808
Total assets 172,323 186,537 204,362 219,643 234,870
Net assets 28,305 29,409 33,189 34,798 37,785
Non-consolidated solvency margin ratio*1 *3 693.5% 730.8% 782.1% 813.0% 872.3%
■ Sony Assurance
Millions of yen
2016 2017 2018 2019 2020
Ordinary revenues 34,892 35,105 36,270 41,707 45,383
Ordinary profit 5,857 4,634 6,557 8,698 9,589
Net income 3,912 3,176 4,474 6,025 6,642
Total assets 2,126,564 2,424,236 2,635,028 2,860,925 3,079,472
Net assets 77,428 81,332 85,729 87,279 77,338
Non-consolidated capital adequacy ratio (Domestic
standard)*1 *2 *3
9.89% 9.75% 10.45% 9.58% 8.85%
■ Sony Bank (Non-consolidated)
*1 Calculated based on rules in force at the respective dates.
*2 Capital adequacy ratio has been calculated by applying foundation internal ratings-based (FIRB) approach from March 31, 2017.
*3 Figures less than the indicated unit in this material have been truncated.
Sony Financial Holdings Inc.Annual Report2020 55
Financial Highlights
711
2016 2017 2018 2019 2020
Ordinary revenues 1,362,044 1,381,667 1,503,630 1,629,182 1,781,420
Ordinary profit 71,103 66,326 66,843 93,856 111,880
Profit attributable to owners of the parent 43,355 41,621 51,895 62,074 74,429
Comprehensive income 71,105 21,433 52,207 57,415 62,192
Total assets 10,352,114 11,471,845 12,401,446 13,468,215 15,125,710
Net assets 604,377 601,139 625,406 656,846 691,978
Consolidated capital adequacy ratio
(Domestic standard)*1 *2
10.70% 14.39% 17.18% 16.50% 16.28%
Consolidated solvency margin ratio*1 *3 1,637.1% 1,632.9% 1,748.7% 1,726.3% 1,680.3%
■ Sony Financial Holdings (Consolidated)
Millions of yen
2016 2017 2018 2019 2020
Ordinary revenues 1,230,141 1,243,739 1,351,076 1,464,218 1,580,117
Ordinary profit 60,792 60,180 56,338 79,812 88,720
Net income 37,096 35,185 45,134 49,602 56,743
Total assets 8,035,408 8,873,613 9,567,689 10,380,148 11,237,124
Net assets 482,195 473,589 492,787 513,930 539,582
Non-consolidated solvency margin ratio*1 *3 2,722.8% 2,568.8% 2,624.3% 2,590.5% 2,476.3%
■ Sony Life (Non-consolidated)
Millions of yen
2016 2017 2018 2019 2020
Ordinary revenues 96,905 102,333 110,092 115,102 121,728
Ordinary profit 4,680 4,996 6,574 6,897 8,072
Net income 2,586 3,515 4,821 4,999 5,808
Total assets 172,323 186,537 204,362 219,643 234,870
Net assets 28,305 29,409 33,189 34,798 37,785
Non-consolidated solvency margin ratio*1 *3 693.5% 730.8% 782.1% 813.0% 872.3%
■ Sony Assurance
Millions of yen
2016 2017 2018 2019 2020
Ordinary revenues 34,892 35,105 36,270 41,707 45,383
Ordinary profit 5,857 4,634 6,557 8,698 9,589
Net income 3,912 3,176 4,474 6,025 6,642
Total assets 2,126,564 2,424,236 2,635,028 2,860,925 3,079,472
Net assets 77,428 81,332 85,729 87,279 77,338
Non-consolidated capital adequacy ratio (Domestic
standard)*1 *2 *3
9.89% 9.75% 10.45% 9.58% 8.85%
■ Sony Bank (Non-consolidated)
*1 Calculated based on rules in force at the respective dates.
*2 Capital adequacy ratio has been calculated by applying foundation internal ratings-based (FIRB) approach from March 31, 2017.
*3 Figures less than the indicated unit in this material have been truncated.
Sony Financial Holdings Inc.Annual Report2020 55
Financial Highlights
711
Sony Financial Holdings Inc.
As of March 31, 2019 and 2020
Millions of yen
2019 2020
Assets
Cash and due from banks 415,894 549,964
Call loans and bills bought 93,700 —
Monetary claims purchased 4,916 6,006
Money held in trust 291,324 38,067
Securities 10,373,188 11,909,172
Loans 1,942,546 2,187,792
Tangible fixed assets 104,128 109,372
Land 63,106 65,562
Buildings 30,899 30,072
Leased assets 6,536 10,669
Construction in progress 77 66
Other tangible fixed assets 3,508 3,002
Intangible fixed assets 43,909 54,590
Software 43,327 50,461
Goodwill 551 4,097
Other intangible fixed assets 30 32
Due from reinsurers 1,341 4,936
Foreign exchanges 8,471 3,019
Other assets 159,361 221,762
Net defined benefit asset 3,476 3,391
Deferred tax assets 27,556 39,210
Reserve for possible loan losses (1,602) (1,575)
Total Assets 13,468,215 15,125,710
Consolidated Balance Sheets
Sony Financial Holdings Inc.Annual Report202056
SFH Consolidated Financial Statements
As of March 31, 2019 and 2020
Millions of yen
2019 2020
Assets
Cash and due from banks 415,894 549,964
Call loans and bills bought 93,700 —
Monetary claims purchased 4,916 6,006
Money held in trust 291,324 38,067
Securities 10,373,188 11,909,172
Loans 1,942,546 2,187,792
Tangible fixed assets 104,128 109,372
Land 63,106 65,562
Buildings 30,899 30,072
Leased assets 6,536 10,669
Construction in progress 77 66
Other tangible fixed assets 3,508 3,002
Intangible fixed assets 43,909 54,590
Software 43,327 50,461
Goodwill 551 4,097
Other intangible fixed assets 30 32
Due from reinsurers 1,341 4,936
Foreign exchanges 8,471 3,019
Other assets 159,361 221,762
Net defined benefit asset 3,476 3,391
Deferred tax assets 27,556 39,210
Reserve for possible loan losses (1,602) (1,575)
Total Assets 13,468,215 15,125,710
Consolidated Balance Sheets
Sony Financial Holdings Inc.Annual Report202056
SFH Consolidated Financial Statements
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Millions of yen
2019 2020
Liabilities
Policy reserves and others 9,479,071 10,731,488
Reserve for outstanding claims 78,285 81,238
Policy reserves 9,396,241 10,645,842
Reserve for policyholders’ dividends 4,544 4,407
Due to agencies 2,073 2,471
Due to reinsurers 5,769 5,745
Deposits 2,302,313 2,440,783
Call money and bills sold 130,611 151,256
Borrowed money 203,871 241,826
Foreign exchanges 244 684
Bonds payable 20,000 20,000
Other liabilities 578,477 747,676
Reserve for employees’ bonuses 4,377 4,297
Net defined benefit liability 34,081 34,170
Reserve under the special laws 50,343 53,060
Reserve for price fluctuations 50,343 53,060
Deferred tax liabilities 24 160
Deferred tax liabilities on land revaluation 109 109
Total Liabilities 12,811,368 14,433,732
Net Assets
Shareholders’ equity
Common stock 19,963 19,994
Capital surplus 191,193 191,224
Retained earnings 319,886 367,127
Treasury stock (55) (55)
Total shareholders’ equity 530,987 578,291
Accumulated other comprehensive income
Net unrealized gains (losses) on available-for-sale securities, net of taxes 128,800 114,868
Net deferred gains (losses) on hedging instruments, net of taxes (1,077) (373)
Land revaluation, net of taxes (2,439) (2,439)
Remeasurements of defined benefit plans, net of taxes (1,470) (835)
Total accumulated other comprehensive income 123,812 111,221
Stock acquisition rights 149 215
Non-controlling interests 1,896 2,250
Total Net Assets 656,846 691,978
Total Liabilities and Net Assets 13,468,215 15,125,710
Sony Financial Holdings Inc.Annual Report2020 57
2019 2020
Liabilities
Policy reserves and others 9,479,071 10,731,488
Reserve for outstanding claims 78,285 81,238
Policy reserves 9,396,241 10,645,842
Reserve for policyholders’ dividends 4,544 4,407
Due to agencies 2,073 2,471
Due to reinsurers 5,769 5,745
Deposits 2,302,313 2,440,783
Call money and bills sold 130,611 151,256
Borrowed money 203,871 241,826
Foreign exchanges 244 684
Bonds payable 20,000 20,000
Other liabilities 578,477 747,676
Reserve for employees’ bonuses 4,377 4,297
Net defined benefit liability 34,081 34,170
Reserve under the special laws 50,343 53,060
Reserve for price fluctuations 50,343 53,060
Deferred tax liabilities 24 160
Deferred tax liabilities on land revaluation 109 109
Total Liabilities 12,811,368 14,433,732
Net Assets
Shareholders’ equity
Common stock 19,963 19,994
Capital surplus 191,193 191,224
Retained earnings 319,886 367,127
Treasury stock (55) (55)
Total shareholders’ equity 530,987 578,291
Accumulated other comprehensive income
Net unrealized gains (losses) on available-for-sale securities, net of taxes 128,800 114,868
Net deferred gains (losses) on hedging instruments, net of taxes (1,077) (373)
Land revaluation, net of taxes (2,439) (2,439)
Remeasurements of defined benefit plans, net of taxes (1,470) (835)
Total accumulated other comprehensive income 123,812 111,221
Stock acquisition rights 149 215
Non-controlling interests 1,896 2,250
Total Net Assets 656,846 691,978
Total Liabilities and Net Assets 13,468,215 15,125,710
Sony Financial Holdings Inc.Annual Report2020 57
Sony Financial Holdings Inc.
For the years ended March 31, 2019 and 2020
Millions of yen
(1) Consolidated Statements of Income 2019 2020
Ordinary Revenues 1,629,182 1,781,420
Ordinary Revenues from the Life Insurance Business 1,461,632 1,602,154
Income from insurance premiums 1,134,048 1,338,848
Insurance premiums 1,130,676 1,331,441
Ceded reinsurance commissions 3,372 7,407
Investment income 278,950 208,620
Interest income and dividends 166,953 181,812
Income from money held in trust, net 4,490 4,086
Gains on trading securities, net — 317
Gains on sale of securities 6,107 3,637
Gains on derivatives, net — 18,766
Foreign exchange gains, net 13,455 —
Other investment income — 1
Gains on separate accounts, net 87,943 —
Other ordinary income 48,633 54,685
Ordinary Revenues from the Non-life Insurance Business 115,101 121,727
Underwriting income 113,173 119,746
Net premiums written 113,101 119,352
Interest and dividends on deposits of premiums 72 74
Reversal of reserve for outstanding losses and claims — 320
Investment income 1,857 1,935
Interest income and dividends 1,372 1,337
Gains on sale of securities 557 672
Transfer to interest and dividends on deposits of premiums (72) (74)
Other ordinary income 69 44
Ordinary Revenues from the Banking Business 45,766 49,997
Interest income 31,926 33,950
Interest income on loans 17,473 18,729
Interest income and dividends on securities 14,382 15,148
Interest income on call loans and bills bought 1 0
Interest income on deposits with banks 62 61
Other interest income 7 10
fees and commissions received 9,398 12,101
Other operating income 3,926 3,515
Gains on foreign exchange transactions, net 3,599 3,258
Others 326 256
Other ordinary income 515 430
Other 6,681 7,541
Other ordinary income 6,681 7,541
Consolidated Statements of Income and Consolidated Statements of Comprehensive Income
Sony Financial Holdings Inc.Annual Report202058
For the years ended March 31, 2019 and 2020
Millions of yen
(1) Consolidated Statements of Income 2019 2020
Ordinary Revenues 1,629,182 1,781,420
Ordinary Revenues from the Life Insurance Business 1,461,632 1,602,154
Income from insurance premiums 1,134,048 1,338,848
Insurance premiums 1,130,676 1,331,441
Ceded reinsurance commissions 3,372 7,407
Investment income 278,950 208,620
Interest income and dividends 166,953 181,812
Income from money held in trust, net 4,490 4,086
Gains on trading securities, net — 317
Gains on sale of securities 6,107 3,637
Gains on derivatives, net — 18,766
Foreign exchange gains, net 13,455 —
Other investment income — 1
Gains on separate accounts, net 87,943 —
Other ordinary income 48,633 54,685
Ordinary Revenues from the Non-life Insurance Business 115,101 121,727
Underwriting income 113,173 119,746
Net premiums written 113,101 119,352
Interest and dividends on deposits of premiums 72 74
Reversal of reserve for outstanding losses and claims — 320
Investment income 1,857 1,935
Interest income and dividends 1,372 1,337
Gains on sale of securities 557 672
Transfer to interest and dividends on deposits of premiums (72) (74)
Other ordinary income 69 44
Ordinary Revenues from the Banking Business 45,766 49,997
Interest income 31,926 33,950
Interest income on loans 17,473 18,729
Interest income and dividends on securities 14,382 15,148
Interest income on call loans and bills bought 1 0
Interest income on deposits with banks 62 61
Other interest income 7 10
fees and commissions received 9,398 12,101
Other operating income 3,926 3,515
Gains on foreign exchange transactions, net 3,599 3,258
Others 326 256
Other ordinary income 515 430
Other 6,681 7,541
Other ordinary income 6,681 7,541
Consolidated Statements of Income and Consolidated Statements of Comprehensive Income
Sony Financial Holdings Inc.Annual Report202058
Millions of yen
2019 2020
Ordinary Expenses 1,535,325 1,669,540
Ordinary Expenses from the Life Insurance Business 1,386,074 1,510,288
Insurance claims and other payments 457,252 521,198
Insurance claims 92,997 98,533
Annuity payments 13,489 15,036
Insurance benefits 131,824 157,074
Surrender payments 204,351 231,772
Other payments 3,659 3,732
Reinsurance premiums 10,929 15,048
Provision for policy reserves and others 704,780 678,724
Provision for reserve for outstanding claims 2,433 2,444
Provision for policy reserves 702,346 676,280
Interest portion of reserve for policyholders’ dividends 0 0
Investment expenses 24,650 91,944
Interest expenses 1,604 5,064
Losses on trading securities, net 126 —
Losses on sale of securities 34 50
Losses on valuation of securities 4,026 6,316
Losses on derivatives, net 13,925 —
Foreign exchange losses, net — 4,884
Provision for reserve for possible loan losses 329 43
Depreciation of real estate for rent and others 1,599 1,637
Other investment expenses 3,003 2,812
Losses on separate accounts, net — 71,133
Operating expenses 146,776 157,537
Other ordinary expenses 52,614 60,883
Ordinary Expenses from the Non-life Insurance Business 107,413 112,785
Underwriting expenses 77,925 81,797
Net losses paid 56,608 60,315
Loss adjustment expenses 8,220 9,001
Net commission and brokerage fees 1,214 1,141
Provision for reserve for outstanding losses and claims 1,139 —
Provision for underwriting reserves 10,741 11,338
Investment expenses 1 0
Losses on sale of securities 0 —
Other investment expenses 1 0
Operating, general and administrative expenses 29,482 30,983
Other ordinary expenses 4 5
(Continued on next page)
Sony Financial Holdings Inc.Annual Report2020 59
2019 2020
Ordinary Expenses 1,535,325 1,669,540
Ordinary Expenses from the Life Insurance Business 1,386,074 1,510,288
Insurance claims and other payments 457,252 521,198
Insurance claims 92,997 98,533
Annuity payments 13,489 15,036
Insurance benefits 131,824 157,074
Surrender payments 204,351 231,772
Other payments 3,659 3,732
Reinsurance premiums 10,929 15,048
Provision for policy reserves and others 704,780 678,724
Provision for reserve for outstanding claims 2,433 2,444
Provision for policy reserves 702,346 676,280
Interest portion of reserve for policyholders’ dividends 0 0
Investment expenses 24,650 91,944
Interest expenses 1,604 5,064
Losses on trading securities, net 126 —
Losses on sale of securities 34 50
Losses on valuation of securities 4,026 6,316
Losses on derivatives, net 13,925 —
Foreign exchange losses, net — 4,884
Provision for reserve for possible loan losses 329 43
Depreciation of real estate for rent and others 1,599 1,637
Other investment expenses 3,003 2,812
Losses on separate accounts, net — 71,133
Operating expenses 146,776 157,537
Other ordinary expenses 52,614 60,883
Ordinary Expenses from the Non-life Insurance Business 107,413 112,785
Underwriting expenses 77,925 81,797
Net losses paid 56,608 60,315
Loss adjustment expenses 8,220 9,001
Net commission and brokerage fees 1,214 1,141
Provision for reserve for outstanding losses and claims 1,139 —
Provision for underwriting reserves 10,741 11,338
Investment expenses 1 0
Losses on sale of securities 0 —
Other investment expenses 1 0
Operating, general and administrative expenses 29,482 30,983
Other ordinary expenses 4 5
(Continued on next page)
Sony Financial Holdings Inc.Annual Report2020 59
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Consolidated Statements of Income (Continued) Millions of yen
2019 2020
Ordinary Expenses from Banking Business 34,135 37,483
Interest expenses 8,566 9,194
Interest expenses on deposits 6,744 7,274
Interest expenses on call money and bills sold 88 268
Interest on payables under repurchase agreements 312 348
Interest on borrowed money 0 2
Interest expenses on bonds 12 13
Interest expenses on interest rate swaps 1,400 1,280
Other interest expenses 7 6
Fees and commissions 5,883 7,077
Other operating expenses 485 126
General and administrative expenses 18,786 20,902
Other ordinary expenses 414 181
Other 7,702 8,982
Other ordinary expenses 7,702 8,982
Ordinary profit 93,856 111,880
Extraordinary Gains 0 264
Gains on disposal of fixed assets 0 0
Gains on step acquisitions − 248
Other extraordinary gains − 16
Extraordinary Losses 2,367 3,139
Losses on disposal of fixed assets 92 120
Impairment losses 67 21
Provision for reserve under the special laws 2,207 2,695
Provision for reserve for price fluctuations 2,207 2,695
Other extraordinary losses − 301
Provision for Reserve for Policyholders’ Dividends 2,146 2,422
Income Before Income Taxes 89,343 106,583
Income Taxes-Current 31,871 37,747
Income Taxes-Deferred (4,853) (5,925)
Total Income Taxes 27,018 31,822
Profit 62,325 74,761
Profit Attributable to Non-controlling Interests 250 331
Profit Attributable to Owners of the Parent 62,074 74,429
Millions of yen
(2) Consolidated Statements of Comprehensive Income 2019 2020
Profit 62,325 74,761
Other Comprehensive Income
Net unrealized gains (losses) on available-for-sale securities, net of taxes (5,215) (13,907)
Net deferred gains (losses) on hedging instruments, net of taxes (174) 703
Remeasurements of defined benefit plans, net of taxes 456 658
Share of other comprehensive income of affiliates accounted for using equity method 23 (23)
Total other comprehensive income (4,909) (12,569)
Comprehensive Income 57,415 62,192
Details:
Comprehensive income attributable to owners of the parent 57,167 61,838
Comprehensive income attributable to non-controlling interests 248 353
Sony Financial Holdings Inc.Annual Report202060
2019 2020
Ordinary Expenses from Banking Business 34,135 37,483
Interest expenses 8,566 9,194
Interest expenses on deposits 6,744 7,274
Interest expenses on call money and bills sold 88 268
Interest on payables under repurchase agreements 312 348
Interest on borrowed money 0 2
Interest expenses on bonds 12 13
Interest expenses on interest rate swaps 1,400 1,280
Other interest expenses 7 6
Fees and commissions 5,883 7,077
Other operating expenses 485 126
General and administrative expenses 18,786 20,902
Other ordinary expenses 414 181
Other 7,702 8,982
Other ordinary expenses 7,702 8,982
Ordinary profit 93,856 111,880
Extraordinary Gains 0 264
Gains on disposal of fixed assets 0 0
Gains on step acquisitions − 248
Other extraordinary gains − 16
Extraordinary Losses 2,367 3,139
Losses on disposal of fixed assets 92 120
Impairment losses 67 21
Provision for reserve under the special laws 2,207 2,695
Provision for reserve for price fluctuations 2,207 2,695
Other extraordinary losses − 301
Provision for Reserve for Policyholders’ Dividends 2,146 2,422
Income Before Income Taxes 89,343 106,583
Income Taxes-Current 31,871 37,747
Income Taxes-Deferred (4,853) (5,925)
Total Income Taxes 27,018 31,822
Profit 62,325 74,761
Profit Attributable to Non-controlling Interests 250 331
Profit Attributable to Owners of the Parent 62,074 74,429
Millions of yen
(2) Consolidated Statements of Comprehensive Income 2019 2020
Profit 62,325 74,761
Other Comprehensive Income
Net unrealized gains (losses) on available-for-sale securities, net of taxes (5,215) (13,907)
Net deferred gains (losses) on hedging instruments, net of taxes (174) 703
Remeasurements of defined benefit plans, net of taxes 456 658
Share of other comprehensive income of affiliates accounted for using equity method 23 (23)
Total other comprehensive income (4,909) (12,569)
Comprehensive Income 57,415 62,192
Details:
Comprehensive income attributable to owners of the parent 57,167 61,838
Comprehensive income attributable to non-controlling interests 248 353
Sony Financial Holdings Inc.Annual Report202060
Sony Financial Holdings Inc.
For the years ended March 31, 2019 and 2020
Millions of yen
2019
Shareholders’ equity
Common
stock
Capital
surplus
Retained
earnings
Treasury
stock
Total
shareholders’
equity
Balance at the beginning of the period 19,927 191,157 283,911 (55) 494,941
Changes during the period
Issuance of new shares 35 35 — — 71
Dividends from surplus — — (26,099) — (26,099)
Purchase of treasury stock — — — — —
Profit attributable to owners of the parent — — 62,074 — 62,074
Net changes of items other than shareholders’ equity — — — — —
Total changes during the period 35 35 35,975 — 36,046
Balance at the end of the period 19,963 191,193 319,886 (55) 530,987
Millions of yen
2019
Accumulated other comprehensive income
Net
unrealized
gains (losses)
on available-
for-sale
securities,
net of taxes
Net deferred
gains (losses)
on hedging
instruments,
net of taxes
Land
revaluation,
net of taxes
Remeasure-
ments of
defined
benefit plans,
net of taxes
Total
accumulated
other
comprehensive
income
Stock
acquisition
rights
Non-
controlling
interests
Total net
assets
Balance at the beginning of
the period 133,991 (902) (2,439) (1,929) 128,719 97 1,648 625,406
Changes during the period
Issuance of new shares — — — — — — — 71
Dividends from surplus — — — — — — — (26,099)
Purchase of treasury stock — — — — — — — —
Profit attributable to
owners of the parent — — — — — — — 62,074
Net changes of items other
than shareholders’ equity (5,191) (174) — 458 (4,907) 52 248 (4,606)
Total changes during the period (5,191) (174) — 458 (4,907) 52 248 31,439
Balance at the end of the period128,800 (1,077) (2,439) (1,470) 123,812 149 1,896 656,846
(Continued on next page)
Consolidated Statements of Changes in Net Assets
Sony Financial Holdings Inc.Annual Report2020 61
For the years ended March 31, 2019 and 2020
Millions of yen
2019
Shareholders’ equity
Common
stock
Capital
surplus
Retained
earnings
Treasury
stock
Total
shareholders’
equity
Balance at the beginning of the period 19,927 191,157 283,911 (55) 494,941
Changes during the period
Issuance of new shares 35 35 — — 71
Dividends from surplus — — (26,099) — (26,099)
Purchase of treasury stock — — — — —
Profit attributable to owners of the parent — — 62,074 — 62,074
Net changes of items other than shareholders’ equity — — — — —
Total changes during the period 35 35 35,975 — 36,046
Balance at the end of the period 19,963 191,193 319,886 (55) 530,987
Millions of yen
2019
Accumulated other comprehensive income
Net
unrealized
gains (losses)
on available-
for-sale
securities,
net of taxes
Net deferred
gains (losses)
on hedging
instruments,
net of taxes
Land
revaluation,
net of taxes
Remeasure-
ments of
defined
benefit plans,
net of taxes
Total
accumulated
other
comprehensive
income
Stock
acquisition
rights
Non-
controlling
interests
Total net
assets
Balance at the beginning of
the period 133,991 (902) (2,439) (1,929) 128,719 97 1,648 625,406
Changes during the period
Issuance of new shares — — — — — — — 71
Dividends from surplus — — — — — — — (26,099)
Purchase of treasury stock — — — — — — — —
Profit attributable to
owners of the parent — — — — — — — 62,074
Net changes of items other
than shareholders’ equity (5,191) (174) — 458 (4,907) 52 248 (4,606)
Total changes during the period (5,191) (174) — 458 (4,907) 52 248 31,439
Balance at the end of the period128,800 (1,077) (2,439) (1,470) 123,812 149 1,896 656,846
(Continued on next page)
Consolidated Statements of Changes in Net Assets
Sony Financial Holdings Inc.Annual Report2020 61
Consolidated Statements of Changes in Net Assets (Continued) Millions of yen
2020
Shareholders’ equity
Common
stock
Capital
surplus
Retained
earnings
Treasury
stock
Total
shareholders’
equity
Balance at the beginning of the period 19,963 191,193 319,886 (55) 530,987
Changes during the period
Issuance of new shares 31 31 — — 62
Dividends from surplus — — (27,189) — (27,189)
Purchase of treasury stock — — — (0) (0)
Profit attributable to owners of the parent — — 74,429 — 74,429
Net changes of items other than shareholders’ equity — — — — —
Total changes during the period 31 31 47,240 (0) 47,303
Balance at the end of the period 19,994 191,224 367,127 (55) 578,291
Millions of yen
2020
Accumulated other comprehensive income
Net
unrealized
gains (losses)
on available-
for-sale
securities,
net of taxes
Net deferred
gains (losses)
on hedging
instruments,
net of taxes
Land
revaluation,
net of taxes
Remeasure-
ments of
defined
benefit plans,
net of taxes
Total
accumulated
other
comprehensive
income
Stock
acquisition
rights
Non-
controlling
interests
Total net
assets
Balance at the beginning of the
period 128,800 (1,077) (2,439) (1,470) 123,812 149 1,896 656,846
Changes during the period
Issuance of new shares — — — — — — — 62
Dividends from surplus — — — — — — — (27,189)
Purchase of treasury stock — — — — — — — (0)
Profit attributable to
owners of the parent — — — — — — — 74,429
Net changes of items other
than shareholders’ equity (13,931) 703 — 635 (12,591) 65 353 (12,171)
Total changes during the period(13,931) 703 — 635 (12,591) 65 353 35,131
Balance at the end of the period114,868 (373) (2,439) (835) 111,221 215 2,250 691,978
Sony Financial Holdings Inc.Annual Report202062
2020
Shareholders’ equity
Common
stock
Capital
surplus
Retained
earnings
Treasury
stock
Total
shareholders’
equity
Balance at the beginning of the period 19,963 191,193 319,886 (55) 530,987
Changes during the period
Issuance of new shares 31 31 — — 62
Dividends from surplus — — (27,189) — (27,189)
Purchase of treasury stock — — — (0) (0)
Profit attributable to owners of the parent — — 74,429 — 74,429
Net changes of items other than shareholders’ equity — — — — —
Total changes during the period 31 31 47,240 (0) 47,303
Balance at the end of the period 19,994 191,224 367,127 (55) 578,291
Millions of yen
2020
Accumulated other comprehensive income
Net
unrealized
gains (losses)
on available-
for-sale
securities,
net of taxes
Net deferred
gains (losses)
on hedging
instruments,
net of taxes
Land
revaluation,
net of taxes
Remeasure-
ments of
defined
benefit plans,
net of taxes
Total
accumulated
other
comprehensive
income
Stock
acquisition
rights
Non-
controlling
interests
Total net
assets
Balance at the beginning of the
period 128,800 (1,077) (2,439) (1,470) 123,812 149 1,896 656,846
Changes during the period
Issuance of new shares — — — — — — — 62
Dividends from surplus — — — — — — — (27,189)
Purchase of treasury stock — — — — — — — (0)
Profit attributable to
owners of the parent — — — — — — — 74,429
Net changes of items other
than shareholders’ equity (13,931) 703 — 635 (12,591) 65 353 (12,171)
Total changes during the period(13,931) 703 — 635 (12,591) 65 353 35,131
Balance at the end of the period114,868 (373) (2,439) (835) 111,221 215 2,250 691,978
Sony Financial Holdings Inc.Annual Report202062
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Sony Financial Holdings Inc.
For the years ended March 31, 2019 and 2020
Millions of yen
2019 2020
Cash flows from operating activities
Income before income taxes 89,343 106,583
Depreciation of real estate for rent and others 1,599 1,637
Depreciation and amortization 11,297 12,986
Impairment losses 67 21
Amortization of goodwill 32 62
Increase (decrease) in reserve for outstanding claims 3,573 2,105
Increase (decrease) in policy reserve 713,088 687,618
Interest portion of reserve for policyholders’ dividends 0 0
Provision for (reversal of) reserve for policyholders’ dividends 2,146 2,422
Increase (decrease) in reserve for possible loan losses 449 (26)
Increase (decrease) in net defined benefit liability 1,630 1,735
Increase (decrease) in reserve for price fluctuations 2,207 2,695
Interest income and dividends (200,253) (217,102)
(Gains) losses on securities (94,790) 54,681
Interest expenses 10,698 14,984
Losses (gains) on derivatives 13,925 (18,766)
Exchange (gains) losses (17,258) 26,169
(Gains) losses on disposal of tangible fixed assets 78 124
Losses (gains) on step acquisitions − (248)
Equity in (gains) losses of affiliates 1,748 11
Net (increase) decrease in loans (147,727) (235,023)
Net increase (decrease) in deposits 143,031 140,591
Net increase (decrease) in borrowed money (excluding subordinated borrowings) 30,000 37,923
Net increase (decrease) in call money and bills sold 54,902 41,448
Net (increase) decrease in call loans and bills bought 461 (1,090)
Net (increase) decrease in foreign exchange (assets) 874 5,452
Net increase (decrease) in foreign exchange (liabilities) 16 440
Others, net 21,467 48,385
Subtotal 642,611 715,825
Interest and dividends received 205,869 217,591
Interest paid (10,221) (15,689)
Policyholders’ dividends paid (3,086) (2,558)
Income taxes paid (32,251) (36,441)
Net cash provided by (used in) operating activities 802,921 878,726
Cash flows from investing activities
Investments in money held in trust (1,044) (1,284)
Proceeds from money held in trust 4,522 4,047
Purchases of securities (1,219,208) (1,360,076)
Proceeds from sale and redemption of securities 526,015 489,737
Investments in loans (63,716) (71,794)
Collections of loans 30,341 35,463
Net increase (decrease) in payables under repurchase agreements 48,140 188,364
Net gains (losses) from the settlement of derivative financial instruments 7,389 (2,378)
Net increase (decrease) in collateral for securities lending transactions 27,166 (73,475)
Others, net 124 421
Total of net cash provided by (used in) investment transactions (640,270) (790,973)
Total of net cash provided by (used in) operating activities and investment transactions 162,651 87,752
Purchases of tangible fixed assets (1,255) (4,357)
Proceeds from sales of tangible fixed assets 1 0
Purchases of intangible fixed assets (17,794) (18,799)
Purchase of securities of non-consolidated subsidiaries (50) (1,900)
Proceeds from purchases of shares of subsidiaries resulting in change in scope of consolidation − 8,537
Purchase of securities of affiliates (300) (2,750)
Others, net (147) (200)
Net cash provided by (used in) investing activities (659,815) (810,444)
Cash flows from financing activities
Proceeds from debt borrowing 4,640 6,400
Repayments of debt (4,712) (6,367)
Cash dividends paid (26,095) (27,187)
Purchases of treasury stock − (0)
Others, net (476) (551)
Net cash provided by (used in) financing activities (26,645) (27,707)
Effect of exchange rate changes on cash and cash equivalents 0 (204)
Net increase (decrease) in cash and cash equivalents 116,461 40,370
Cash and cash equivalents at the beginning of the period 393,133 509,594
Cash and cash equivalents at the end of the period 509,594 549,964
Note: The above Consolidated Statements of Cash Flows have been prepared based on Article 210-10 of Ordinance for Enforcement of the Insurance Business Act
of Japan.
Consolidated Statements of Cash Flows
Sony Financial Holdings Inc.Annual Report2020 63
For the years ended March 31, 2019 and 2020
Millions of yen
2019 2020
Cash flows from operating activities
Income before income taxes 89,343 106,583
Depreciation of real estate for rent and others 1,599 1,637
Depreciation and amortization 11,297 12,986
Impairment losses 67 21
Amortization of goodwill 32 62
Increase (decrease) in reserve for outstanding claims 3,573 2,105
Increase (decrease) in policy reserve 713,088 687,618
Interest portion of reserve for policyholders’ dividends 0 0
Provision for (reversal of) reserve for policyholders’ dividends 2,146 2,422
Increase (decrease) in reserve for possible loan losses 449 (26)
Increase (decrease) in net defined benefit liability 1,630 1,735
Increase (decrease) in reserve for price fluctuations 2,207 2,695
Interest income and dividends (200,253) (217,102)
(Gains) losses on securities (94,790) 54,681
Interest expenses 10,698 14,984
Losses (gains) on derivatives 13,925 (18,766)
Exchange (gains) losses (17,258) 26,169
(Gains) losses on disposal of tangible fixed assets 78 124
Losses (gains) on step acquisitions − (248)
Equity in (gains) losses of affiliates 1,748 11
Net (increase) decrease in loans (147,727) (235,023)
Net increase (decrease) in deposits 143,031 140,591
Net increase (decrease) in borrowed money (excluding subordinated borrowings) 30,000 37,923
Net increase (decrease) in call money and bills sold 54,902 41,448
Net (increase) decrease in call loans and bills bought 461 (1,090)
Net (increase) decrease in foreign exchange (assets) 874 5,452
Net increase (decrease) in foreign exchange (liabilities) 16 440
Others, net 21,467 48,385
Subtotal 642,611 715,825
Interest and dividends received 205,869 217,591
Interest paid (10,221) (15,689)
Policyholders’ dividends paid (3,086) (2,558)
Income taxes paid (32,251) (36,441)
Net cash provided by (used in) operating activities 802,921 878,726
Cash flows from investing activities
Investments in money held in trust (1,044) (1,284)
Proceeds from money held in trust 4,522 4,047
Purchases of securities (1,219,208) (1,360,076)
Proceeds from sale and redemption of securities 526,015 489,737
Investments in loans (63,716) (71,794)
Collections of loans 30,341 35,463
Net increase (decrease) in payables under repurchase agreements 48,140 188,364
Net gains (losses) from the settlement of derivative financial instruments 7,389 (2,378)
Net increase (decrease) in collateral for securities lending transactions 27,166 (73,475)
Others, net 124 421
Total of net cash provided by (used in) investment transactions (640,270) (790,973)
Total of net cash provided by (used in) operating activities and investment transactions 162,651 87,752
Purchases of tangible fixed assets (1,255) (4,357)
Proceeds from sales of tangible fixed assets 1 0
Purchases of intangible fixed assets (17,794) (18,799)
Purchase of securities of non-consolidated subsidiaries (50) (1,900)
Proceeds from purchases of shares of subsidiaries resulting in change in scope of consolidation − 8,537
Purchase of securities of affiliates (300) (2,750)
Others, net (147) (200)
Net cash provided by (used in) investing activities (659,815) (810,444)
Cash flows from financing activities
Proceeds from debt borrowing 4,640 6,400
Repayments of debt (4,712) (6,367)
Cash dividends paid (26,095) (27,187)
Purchases of treasury stock − (0)
Others, net (476) (551)
Net cash provided by (used in) financing activities (26,645) (27,707)
Effect of exchange rate changes on cash and cash equivalents 0 (204)
Net increase (decrease) in cash and cash equivalents 116,461 40,370
Cash and cash equivalents at the beginning of the period 393,133 509,594
Cash and cash equivalents at the end of the period 509,594 549,964
Note: The above Consolidated Statements of Cash Flows have been prepared based on Article 210-10 of Ordinance for Enforcement of the Insurance Business Act
of Japan.
Consolidated Statements of Cash Flows
Sony Financial Holdings Inc.Annual Report2020 63
(1) Scope of consolidation
Consolidated subsidiaries: 13 companies
Company names
Sony Life Insurance Co., Ltd.
Sony Life With Insurance Co.,Ltd.*
SA Reinsurance Ltd.
Sony Assurance Inc.
Sony Bank Inc.
Sony Payment Services Inc.
SmartLink Network Hong Kong Limited
SmartLink Network Europe B.V.
Sony Lifecare Inc.
Lifecare Design Inc.
Proud Life Inc.
Sony Financial Ventures Inc.
SFV·GB L.P.
Non-consolidated subsidiaries:
There are no main non-consolidated subsidiaries. Non-consolidated subsidiaries are excluded from the scope of consolidation for the current
year because they are immaterial in light of the total assets, ordinary revenues, net income or loss (amounts equivalent to the Group’s interests
in these companies), retained earnings (amounts equivalent to the Group’s interests in these companies) and accumulated other comprehensiv
income (amounts equivalent to the Group’s interests in these companies) and their exclusion from the scope of consolidation does not hinder a
rational judgment of the Sony Financial Group’s financial position and results of operations.
Change in the scope of consolidation:
The credit card settlement services company SmartLink Network Europe B.V. was newly established and included in the scope of consolidation
from the fiscal year ended March 31, 2020. The business performance of this company is included under “Banking business” in the consolidat-
ed statements of income.
In addition, Sony Life With Insurance Co.,Ltd.* and SA Reinsurance Ltd., which had been affiliates accounted for by the equity method in the
previous fiscal year, became wholly-owned subsidiaries through an additional acquisition of shares, and have been included in the scope of con
solidation for the fiscal year ended March 31, 2020. The business performance of both companies is included under “Life insurance business” in
the consolidated statements of income.
(2) Application of the equity method
Affiliates accounted for by the equity method:
Not applicable
Non-consolidated subsidiaries and affiliates that are not accounted for by the equity method:
There are no main non-consolidated subsidiaries or affiliates.
Non-consolidated subsidiaries and affiliates are not accounted for by the equity method because they are immaterial in light of the net incom
or loss (amounts equivalent to the Group’s interests in these companies) and retained earnings (amounts equivalent to the Group’s interests in
these companies) and their exclusion does not hinder a rational judgment of the Sony Financial Group’s financial position and results of operatio
Change in the scope of application of the equity method:
Sony Life With Insurance Co.,Ltd.* and SA Reinsurance Ltd., which had been affiliates accounted for by the equity method in the previous fiscal
year, became wholly-owned subsidiaries through an additional acquisition of shares, and have been excluded from the scope of application of
the equity method for the fiscal year ended March 31, 2020.
(3) Fiscal year-end of consolidated subsidiaries
Fiscal year-end of all consolidated subsidiaries is March 31, the same date as the consolidated financial statements of SFH.
(4) Accounting standards for overseas subsidiaries
Practical Issues Task Force No. 18 “Practical Solution on Unification of Accounting Policies Applied to Foreign Subsidiaries, etc. for
Consolidated Financial Statements” (September 14, 2018) has been applied, and necessary adjustments have been made concerning overseas
subsidiaries in preparing the consolidated financial statements.
(5) Amortization of goodwill
Goodwill is equally amortized using the straight-line method over a period of up to 20 years.
* The trade name was changed from AEGON Sony Life Insurance Co., Ltd. to Sony Life With Insurance Co.,Ltd. on April 1, 2020.
1 Principles of Consolidation
There is no related information to be reported.
2 Note on Going Concerns
Sony Financial Holdings Inc.Annual Report202064
Significant Basic Items for the Preparation of the Consolidated Financial Statem
(For the year ended March 31, 2020)
Consolidated subsidiaries: 13 companies
Company names
Sony Life Insurance Co., Ltd.
Sony Life With Insurance Co.,Ltd.*
SA Reinsurance Ltd.
Sony Assurance Inc.
Sony Bank Inc.
Sony Payment Services Inc.
SmartLink Network Hong Kong Limited
SmartLink Network Europe B.V.
Sony Lifecare Inc.
Lifecare Design Inc.
Proud Life Inc.
Sony Financial Ventures Inc.
SFV·GB L.P.
Non-consolidated subsidiaries:
There are no main non-consolidated subsidiaries. Non-consolidated subsidiaries are excluded from the scope of consolidation for the current
year because they are immaterial in light of the total assets, ordinary revenues, net income or loss (amounts equivalent to the Group’s interests
in these companies), retained earnings (amounts equivalent to the Group’s interests in these companies) and accumulated other comprehensiv
income (amounts equivalent to the Group’s interests in these companies) and their exclusion from the scope of consolidation does not hinder a
rational judgment of the Sony Financial Group’s financial position and results of operations.
Change in the scope of consolidation:
The credit card settlement services company SmartLink Network Europe B.V. was newly established and included in the scope of consolidation
from the fiscal year ended March 31, 2020. The business performance of this company is included under “Banking business” in the consolidat-
ed statements of income.
In addition, Sony Life With Insurance Co.,Ltd.* and SA Reinsurance Ltd., which had been affiliates accounted for by the equity method in the
previous fiscal year, became wholly-owned subsidiaries through an additional acquisition of shares, and have been included in the scope of con
solidation for the fiscal year ended March 31, 2020. The business performance of both companies is included under “Life insurance business” in
the consolidated statements of income.
(2) Application of the equity method
Affiliates accounted for by the equity method:
Not applicable
Non-consolidated subsidiaries and affiliates that are not accounted for by the equity method:
There are no main non-consolidated subsidiaries or affiliates.
Non-consolidated subsidiaries and affiliates are not accounted for by the equity method because they are immaterial in light of the net incom
or loss (amounts equivalent to the Group’s interests in these companies) and retained earnings (amounts equivalent to the Group’s interests in
these companies) and their exclusion does not hinder a rational judgment of the Sony Financial Group’s financial position and results of operatio
Change in the scope of application of the equity method:
Sony Life With Insurance Co.,Ltd.* and SA Reinsurance Ltd., which had been affiliates accounted for by the equity method in the previous fiscal
year, became wholly-owned subsidiaries through an additional acquisition of shares, and have been excluded from the scope of application of
the equity method for the fiscal year ended March 31, 2020.
(3) Fiscal year-end of consolidated subsidiaries
Fiscal year-end of all consolidated subsidiaries is March 31, the same date as the consolidated financial statements of SFH.
(4) Accounting standards for overseas subsidiaries
Practical Issues Task Force No. 18 “Practical Solution on Unification of Accounting Policies Applied to Foreign Subsidiaries, etc. for
Consolidated Financial Statements” (September 14, 2018) has been applied, and necessary adjustments have been made concerning overseas
subsidiaries in preparing the consolidated financial statements.
(5) Amortization of goodwill
Goodwill is equally amortized using the straight-line method over a period of up to 20 years.
* The trade name was changed from AEGON Sony Life Insurance Co., Ltd. to Sony Life With Insurance Co.,Ltd. on April 1, 2020.
1 Principles of Consolidation
There is no related information to be reported.
2 Note on Going Concerns
Sony Financial Holdings Inc.Annual Report202064
Significant Basic Items for the Preparation of the Consolidated Financial Statem
(For the year ended March 31, 2020)
(1) Securities
Securities, including cash and due from banks, monetary claims purchased which are equivalent to securities, and securities managed as asset
of money held in trust, are stated in the following manner: Securities held for trading purposes (“trading securities”) are stated at fair value with
unrealized gains and losses charged to income. The cost of such securities sold is determined by the moving-average method. Held-to-maturity
securities and policy-reserve-matching bonds held in accordance with the “Temporary Treatment of Accounting and Auditing concerning Policy-
Reserve-Matching Bonds in the Insurance Industry” (The Japanese Institute of Certified Public Accounts Industry Audit Committee Report No.
21, issued on November 16, 2000; hereinafter “the Industry Audit Committee Report No. 21”) are stated at amortized cost (straight-line method
using the moving-average method. Available-for-sale securities whose fair values are readily determinable are stated at fair value in the consol
dated balance sheets based on market prices prevailing at each balance sheet date, with unrealized gains (losses), net of taxes, included in net
assets and acquisition costs calculated using the moving-average method. Available-for-sale securities whose fair values are deemed extremely
difficult to determine are stated at acquisition cost based on the moving-average method.
Net unrealized gains (losses) on available-for-sale securities, net of taxes, are recorded as a separate component of net assets. However, for
foreign currency-denominated bonds held by some consolidated subsidiaries, foreign currency translation differences related to changes in fair
values in original currencies are recognized into net assets as net unrealized gains (losses) on available-for-sale securities, net of taxes, while th
remaining changes are recognized in foreign exchange gains (losses).
The overview of risk management policies of policy-reserve-matching bonds is as follows:
Among the bonds corresponding to sub-segments (according to insurance class, years to maturity, etc.) for individual life insurance and
individual annuity sold by domestic life insurance subsidiaries, SFH records those held with the purpose of controlling the duration of insurance
liabilities as policy-reserve-matching bonds, in accordance with the Industry Audit Committee Report No. 21.
(2) Derivative financial instruments
Derivative financial instruments are stated at fair value, with changes in fair value included in income for the period in which they arise, except
derivatives that are designated by SFH and its consolidated subsidiaries (the “Companies”) as “hedging instruments.”
(3) Tangible fixed assets (excluding leased assets)
All tangible fixed assets, including real estate for lease, are initially recorded at cost. Subsequent expenses related to asset improvements are
capitalized or are recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the
item will flow to the Companies and the cost of the item can be measured reliably. All other repairs and maintenance charges are charged to
income when incurred. Depreciation is computed by the straight-line method over the estimated useful lives of the assets as follows:
• Buildings: 3 to 50 years
• Other tangible fixed assets: 2 to 20 years
(4) Intangible fixed assets (excluding leased assets)
Intangible fixed assets are amortized using the straight-line method. Software for internal use is amortized using the straight-line method gener
ally over 5 years, its estimated useful life.
(5) Leased assets
All leased assets with respect to non-ownership-transfer finance leases are amortized by the straight-line method over the lease term, without
any residual value.
(6) Reserve for possible loan losses
The reserve for possible loan losses is provided as follows for losses from bad debts mainly in accordance with self-assessment guidelines and
write-off and reserve guidelines.
With respect to receivables such as loans to borrowers subject to bankruptcy, court-guided rehabilitation or similar legal or formal proceed-
ings (the “Bankrupt Borrowers”), loans to borrowers that are substantially in the same condition as the Bankrupt Borrowers (the “Substantially
Bankrupt Borrowers”) and money on deposits whose market value declined significantly, the Companies provide a reserve in the amount
expected to be uncollectible after deducting amounts expected to be collectible from collateral, guarantees and other means. For loans to bor-
rowers that are not yet bankrupt but are highly likely to be bankrupt in the future (the “potentially bankrupt borrowers”), the Companies provid
a reserve in the amount deemed necessary by comprehensively considering the borrowers’ solvency of the remaining amount after deducting
amounts expected to be collectible from collateral, guarantees and other means. For other loans, the Companies provide a reserve in the
amount calculated by multiplying the loans by a historical loan loss ratio determined over certain periods.
All loans are subject to asset assessment by the related operational departments in accordance with self-assessment guidelines, and the
assessment results are reviewed by the departments responsible for asset inspection that are independent from the operational departments.
The amount of reserve is provided based upon the above results.
(7) Reserve for employees’ bonuses
The reserve for employees’ bonuses is provided for the estimated amount of bonuses the Companies are required to pay for services provided
during the current fiscal year.
(8) Reserve for price fluctuations
Pursuant to requirements under Article 115 of the Insurance Business Act of Japan, the reserve for price fluctuations is provided for price fluctu-
ations primarily related to stocks, bonds and foreign currency-denominated assets that are exposed to losses due to market price fluctuations.
This reserve is only used to reduce losses arising from price fluctuations on those assets.
(9) Accounting for retirement benefits
1) Method of attributing projected retirement benefits
In the calculation of retirement benefit obligations, the Companies mainly apply the benefit formula basis in attributing projected retirement be
fits to the periods until the end of the current fiscal year.
3 Summary of Significant Accounting Policies
Sony Financial Holdings Inc.Annual Report2020 65
Securities, including cash and due from banks, monetary claims purchased which are equivalent to securities, and securities managed as asset
of money held in trust, are stated in the following manner: Securities held for trading purposes (“trading securities”) are stated at fair value with
unrealized gains and losses charged to income. The cost of such securities sold is determined by the moving-average method. Held-to-maturity
securities and policy-reserve-matching bonds held in accordance with the “Temporary Treatment of Accounting and Auditing concerning Policy-
Reserve-Matching Bonds in the Insurance Industry” (The Japanese Institute of Certified Public Accounts Industry Audit Committee Report No.
21, issued on November 16, 2000; hereinafter “the Industry Audit Committee Report No. 21”) are stated at amortized cost (straight-line method
using the moving-average method. Available-for-sale securities whose fair values are readily determinable are stated at fair value in the consol
dated balance sheets based on market prices prevailing at each balance sheet date, with unrealized gains (losses), net of taxes, included in net
assets and acquisition costs calculated using the moving-average method. Available-for-sale securities whose fair values are deemed extremely
difficult to determine are stated at acquisition cost based on the moving-average method.
Net unrealized gains (losses) on available-for-sale securities, net of taxes, are recorded as a separate component of net assets. However, for
foreign currency-denominated bonds held by some consolidated subsidiaries, foreign currency translation differences related to changes in fair
values in original currencies are recognized into net assets as net unrealized gains (losses) on available-for-sale securities, net of taxes, while th
remaining changes are recognized in foreign exchange gains (losses).
The overview of risk management policies of policy-reserve-matching bonds is as follows:
Among the bonds corresponding to sub-segments (according to insurance class, years to maturity, etc.) for individual life insurance and
individual annuity sold by domestic life insurance subsidiaries, SFH records those held with the purpose of controlling the duration of insurance
liabilities as policy-reserve-matching bonds, in accordance with the Industry Audit Committee Report No. 21.
(2) Derivative financial instruments
Derivative financial instruments are stated at fair value, with changes in fair value included in income for the period in which they arise, except
derivatives that are designated by SFH and its consolidated subsidiaries (the “Companies”) as “hedging instruments.”
(3) Tangible fixed assets (excluding leased assets)
All tangible fixed assets, including real estate for lease, are initially recorded at cost. Subsequent expenses related to asset improvements are
capitalized or are recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the
item will flow to the Companies and the cost of the item can be measured reliably. All other repairs and maintenance charges are charged to
income when incurred. Depreciation is computed by the straight-line method over the estimated useful lives of the assets as follows:
• Buildings: 3 to 50 years
• Other tangible fixed assets: 2 to 20 years
(4) Intangible fixed assets (excluding leased assets)
Intangible fixed assets are amortized using the straight-line method. Software for internal use is amortized using the straight-line method gener
ally over 5 years, its estimated useful life.
(5) Leased assets
All leased assets with respect to non-ownership-transfer finance leases are amortized by the straight-line method over the lease term, without
any residual value.
(6) Reserve for possible loan losses
The reserve for possible loan losses is provided as follows for losses from bad debts mainly in accordance with self-assessment guidelines and
write-off and reserve guidelines.
With respect to receivables such as loans to borrowers subject to bankruptcy, court-guided rehabilitation or similar legal or formal proceed-
ings (the “Bankrupt Borrowers”), loans to borrowers that are substantially in the same condition as the Bankrupt Borrowers (the “Substantially
Bankrupt Borrowers”) and money on deposits whose market value declined significantly, the Companies provide a reserve in the amount
expected to be uncollectible after deducting amounts expected to be collectible from collateral, guarantees and other means. For loans to bor-
rowers that are not yet bankrupt but are highly likely to be bankrupt in the future (the “potentially bankrupt borrowers”), the Companies provid
a reserve in the amount deemed necessary by comprehensively considering the borrowers’ solvency of the remaining amount after deducting
amounts expected to be collectible from collateral, guarantees and other means. For other loans, the Companies provide a reserve in the
amount calculated by multiplying the loans by a historical loan loss ratio determined over certain periods.
All loans are subject to asset assessment by the related operational departments in accordance with self-assessment guidelines, and the
assessment results are reviewed by the departments responsible for asset inspection that are independent from the operational departments.
The amount of reserve is provided based upon the above results.
(7) Reserve for employees’ bonuses
The reserve for employees’ bonuses is provided for the estimated amount of bonuses the Companies are required to pay for services provided
during the current fiscal year.
(8) Reserve for price fluctuations
Pursuant to requirements under Article 115 of the Insurance Business Act of Japan, the reserve for price fluctuations is provided for price fluctu-
ations primarily related to stocks, bonds and foreign currency-denominated assets that are exposed to losses due to market price fluctuations.
This reserve is only used to reduce losses arising from price fluctuations on those assets.
(9) Accounting for retirement benefits
1) Method of attributing projected retirement benefits
In the calculation of retirement benefit obligations, the Companies mainly apply the benefit formula basis in attributing projected retirement be
fits to the periods until the end of the current fiscal year.
3 Summary of Significant Accounting Policies
Sony Financial Holdings Inc.Annual Report2020 65
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2) Amortization method of prior service cost and net actuarial gain or loss
Unrecognized prior service cost is generally amortized using the straight-line method within the employees’ average remaining service period a
incurrence.
Unrecognized net actuarial gain or loss is generally amortized using the straight-line method over 7 to 16 years within the employees’ aver-
age remaining service period, commencing from the fiscal year immediately following incurrence.
3) Adoption of a simplified method at small enterprises, etc.
For calculating net retirement benefit liabilities and retirement benefit expenses, the parent company and some consolidated subsidiaries apply
simplified method that treats amounts required for voluntary resignation at fiscal year-end as retirement benefit obligations.
(Additional information)
From October 1, 2019, pursuant to a revision of defined benefit pension plans by SFH and some of its consolidated subsidiaries, all employees,
excluding those who had retired prior to the revision, were transferred to defined contribution pension plans. ASBJ Guidance No. 1 “Accounting
for Transfer between Retirement Benefit Plans” (December 16, 2016) and Practical Issues Task Force No. 2 “Practical Solution on Accounting for
Transfer between Retirement Benefit Plans” (February 7, 2007) were applied in accounting for the transfer between plans, and partial terminati
processing was carried out for the portion transferred to defined contribution pension plans.
As a result, others under extraordinary gains of ¥16 million were recorded for the fiscal year ended March 31, 2020.
(10) Translation of foreign assets or liabilities
Assets and liabilities denominated in foreign currencies are translated into Japanese yen at the foreign exchange rates in effect at each bal-
ance sheet date, whereas components of net assets denominated in foreign currencies are translated at historical rates. The current year’s net
income and loss accounts are translated into yen using the average exchange rate for the fiscal year.
(11) Hedge accounting
The banking subsidiary applies either deferred hedge accounting or fair value hedge accounting to its transactions for hedging interest rate risk
on financial assets and liabilities. With regard to hedging that offsets fluctuating interest rates on fixed-rate loans, the subsidiary identifies the
hedged items that are grouped on the basis of a certain period of their remaining maturity and designates interest rate swaps as a hedging inst
ment, in accordance with “Accounting and Auditing Treatments on Application of Accounting Standard for Financial Instruments in the Banking
Industry” (Industry Audit Committee of the Japanese Institute of Certified Public Accountants (the “Industry Audit Committee”) Statement No. 2
February 13, 2002). With regard to hedging that fixes the cash flow of a forecasted transaction of a short-term fixed-rate deposit, the subsidiary
identifies the hedged items that are grouped on the basis of a certain period of their interest rate revision and designates interest rate swaps a
hedging instrument, in accordance with the Industry Audit Committee, Statement No. 24. With regard to hedging that offsets fluctuations in the
fair value of fixed-rate bonds that are classified as available-for-sale securities, the subsidiary identifies the hedged items individually and desig
nates interest rate swaps and others as a hedging instrument. With regard to hedging that offsets exchange rate fluctuations of securities deno
inated in foreign currencies, the subsidiary identifies the hedged items individually and designates currency swaps as a hedging instrument. Th
above-mentioned hedging instruments are designated with almost identical significant terms and conditions for both the hedging items and the
hedged instruments. Accordingly, such hedges are considered highly effective, allowing the banking subsidiary to ensure hedging effectiveness
(12) Cash and cash equivalents in the Consolidated Statements of Cash Flows
Cash equivalents consist of highly liquid investments without significant market risks, such as demand deposits and short-term investments wit
an original maturity of 3 months or less.
(13) Accounting for consumption taxes
National and local consumption taxes (the “consumption taxes”) received and paid by the Companies, excluding loss adjustment expenses
and operating, general and administrative expenses of SFH’s non-life insurance subsidiary, are not included in income and expenses. Under
the Consumption Tax Act of Japan, the consumption taxes paid on property and equipment are not deductible from the consumption taxes
received; they are recorded as “other assets” and amortized on a straight-line basis over 5 years. Other non-deductible consumption taxes are
charged to income as incurred.
(14) Policy reserves
Pursuant to Article 116 of the Insurance Business Act of Japan, SFH’s life insurance subsidiary maintains a policy reserve for the fulfillment of
future obligations under life insurance contracts. The policy reserve is established by the net level premium reserve method, which assumes a
constant or level amount of net insurance premiums over the term of the relevant policy when calculating the amount of the reserve required
to fund all future policy claims. The net insurance premium is a portion of the premium covering insurance underwriting risk, which is estimated
based on factors such as mortality rates, investment yield, surrender rates and other factors. The net level premium reserve for individual insur
ance contracts underwritten from fiscal 1996 is calculated using mortality and interest rates set by the Financial Services Agency of Japan as
standard policy reserve. Additionally, the net level premium reserve for individual insurance contracts underwritten before fiscal 1996 is calcula
ed using mortality and interest rates approved by the supervisor of insurance business in Japan.
(15) Accounting standards, etc. not yet applied
(Accounting standards, etc. concerning the calculation of fair value)
• ASBJ Statement No. 30 “Accounting Standard for Fair Value Measurement” (July 4, 2019)
• ASBJ Guidance No. 31 “Implementation Guidance on Accounting Standard for Fair Value Measurement” (July 4, 2019)
1) Overview
The International Accounting Standards Board (IASB) and the United States Financial Accounting Standards Board (FASB) have developed
accounting standards concerning the measurement of fair value. In May 2011, they announced “Fair Value Measurement” (published as IFRS
13 by the IASB, and as Topic 820 by the FASB). IFRS 13 is applicable to fiscal years commencing on or after January 1, 2013, and Topic 820 is
applicable to fiscal years beginning on or after December 15, 2011. In view of this situation, the Accounting Standards Board of Japan (ASBJ)
developed the Accounting Standard for Fair Value Measurement, which was published together with the Implementation Guidance.
The basic policy of the ASBJ when developing the Accounting Standard for Fair Value Measurement was to adopt, as a rule, all the provi-
sions of IFRS 13. This approach was taken from the perspective of enhancing the comparability of financial statements of companies in Japan
Sony Financial Holdings Inc.Annual Report202066
Unrecognized prior service cost is generally amortized using the straight-line method within the employees’ average remaining service period a
incurrence.
Unrecognized net actuarial gain or loss is generally amortized using the straight-line method over 7 to 16 years within the employees’ aver-
age remaining service period, commencing from the fiscal year immediately following incurrence.
3) Adoption of a simplified method at small enterprises, etc.
For calculating net retirement benefit liabilities and retirement benefit expenses, the parent company and some consolidated subsidiaries apply
simplified method that treats amounts required for voluntary resignation at fiscal year-end as retirement benefit obligations.
(Additional information)
From October 1, 2019, pursuant to a revision of defined benefit pension plans by SFH and some of its consolidated subsidiaries, all employees,
excluding those who had retired prior to the revision, were transferred to defined contribution pension plans. ASBJ Guidance No. 1 “Accounting
for Transfer between Retirement Benefit Plans” (December 16, 2016) and Practical Issues Task Force No. 2 “Practical Solution on Accounting for
Transfer between Retirement Benefit Plans” (February 7, 2007) were applied in accounting for the transfer between plans, and partial terminati
processing was carried out for the portion transferred to defined contribution pension plans.
As a result, others under extraordinary gains of ¥16 million were recorded for the fiscal year ended March 31, 2020.
(10) Translation of foreign assets or liabilities
Assets and liabilities denominated in foreign currencies are translated into Japanese yen at the foreign exchange rates in effect at each bal-
ance sheet date, whereas components of net assets denominated in foreign currencies are translated at historical rates. The current year’s net
income and loss accounts are translated into yen using the average exchange rate for the fiscal year.
(11) Hedge accounting
The banking subsidiary applies either deferred hedge accounting or fair value hedge accounting to its transactions for hedging interest rate risk
on financial assets and liabilities. With regard to hedging that offsets fluctuating interest rates on fixed-rate loans, the subsidiary identifies the
hedged items that are grouped on the basis of a certain period of their remaining maturity and designates interest rate swaps as a hedging inst
ment, in accordance with “Accounting and Auditing Treatments on Application of Accounting Standard for Financial Instruments in the Banking
Industry” (Industry Audit Committee of the Japanese Institute of Certified Public Accountants (the “Industry Audit Committee”) Statement No. 2
February 13, 2002). With regard to hedging that fixes the cash flow of a forecasted transaction of a short-term fixed-rate deposit, the subsidiary
identifies the hedged items that are grouped on the basis of a certain period of their interest rate revision and designates interest rate swaps a
hedging instrument, in accordance with the Industry Audit Committee, Statement No. 24. With regard to hedging that offsets fluctuations in the
fair value of fixed-rate bonds that are classified as available-for-sale securities, the subsidiary identifies the hedged items individually and desig
nates interest rate swaps and others as a hedging instrument. With regard to hedging that offsets exchange rate fluctuations of securities deno
inated in foreign currencies, the subsidiary identifies the hedged items individually and designates currency swaps as a hedging instrument. Th
above-mentioned hedging instruments are designated with almost identical significant terms and conditions for both the hedging items and the
hedged instruments. Accordingly, such hedges are considered highly effective, allowing the banking subsidiary to ensure hedging effectiveness
(12) Cash and cash equivalents in the Consolidated Statements of Cash Flows
Cash equivalents consist of highly liquid investments without significant market risks, such as demand deposits and short-term investments wit
an original maturity of 3 months or less.
(13) Accounting for consumption taxes
National and local consumption taxes (the “consumption taxes”) received and paid by the Companies, excluding loss adjustment expenses
and operating, general and administrative expenses of SFH’s non-life insurance subsidiary, are not included in income and expenses. Under
the Consumption Tax Act of Japan, the consumption taxes paid on property and equipment are not deductible from the consumption taxes
received; they are recorded as “other assets” and amortized on a straight-line basis over 5 years. Other non-deductible consumption taxes are
charged to income as incurred.
(14) Policy reserves
Pursuant to Article 116 of the Insurance Business Act of Japan, SFH’s life insurance subsidiary maintains a policy reserve for the fulfillment of
future obligations under life insurance contracts. The policy reserve is established by the net level premium reserve method, which assumes a
constant or level amount of net insurance premiums over the term of the relevant policy when calculating the amount of the reserve required
to fund all future policy claims. The net insurance premium is a portion of the premium covering insurance underwriting risk, which is estimated
based on factors such as mortality rates, investment yield, surrender rates and other factors. The net level premium reserve for individual insur
ance contracts underwritten from fiscal 1996 is calculated using mortality and interest rates set by the Financial Services Agency of Japan as
standard policy reserve. Additionally, the net level premium reserve for individual insurance contracts underwritten before fiscal 1996 is calcula
ed using mortality and interest rates approved by the supervisor of insurance business in Japan.
(15) Accounting standards, etc. not yet applied
(Accounting standards, etc. concerning the calculation of fair value)
• ASBJ Statement No. 30 “Accounting Standard for Fair Value Measurement” (July 4, 2019)
• ASBJ Guidance No. 31 “Implementation Guidance on Accounting Standard for Fair Value Measurement” (July 4, 2019)
1) Overview
The International Accounting Standards Board (IASB) and the United States Financial Accounting Standards Board (FASB) have developed
accounting standards concerning the measurement of fair value. In May 2011, they announced “Fair Value Measurement” (published as IFRS
13 by the IASB, and as Topic 820 by the FASB). IFRS 13 is applicable to fiscal years commencing on or after January 1, 2013, and Topic 820 is
applicable to fiscal years beginning on or after December 15, 2011. In view of this situation, the Accounting Standards Board of Japan (ASBJ)
developed the Accounting Standard for Fair Value Measurement, which was published together with the Implementation Guidance.
The basic policy of the ASBJ when developing the Accounting Standard for Fair Value Measurement was to adopt, as a rule, all the provi-
sions of IFRS 13. This approach was taken from the perspective of enhancing the comparability of financial statements of companies in Japan
Sony Financial Holdings Inc.Annual Report202066
and overseas, by adopting a unified calculation method.
However, in consideration of the methods practiced in Japan until that time, provisions were made for alternative treatment of individual
items, where this did not significantly impair the comparability of the financial statements.
2) Scheduled date of adoption
Scheduled for adoption from the beginning of the fiscal year ending March 31, 2022.
3) Effect of the adoption of this accounting standard
SFH is currently evaluating the effect of adopting Accounting Standard for Fair Value Measurement, etc. on the consolidated financial state-
ments.
4 Change in Presentation Method
(Notes to the Consolidated Statements of Cash Flows)
Net increase (decrease) in payables under repurchase agreements, which was included in “total of net cash provided by (used in) investment
transactions: others, net,” within “cash flows from investing activities” for the previous fiscal year, has increased in quantitative materiality, and
thus presented as a separate item for the fiscal year ended March 31, 2020. The consolidated financial statements for the previous fiscal year
have been restated in order to reflect this change in presentation method.
As a result, “total of net cash provided by (used in) investment transactions: others, net” of ¥48,264 million, within “cash flows from investin
activities” in the Consolidated Statements of Cash Flows for the previous fiscal year, has been restated as net increase (decrease) in payables
under repurchase agreements of ¥48,140 million, and others, net of ¥124 million.
Sony Financial Holdings Inc.Annual Report2020 67
However, in consideration of the methods practiced in Japan until that time, provisions were made for alternative treatment of individual
items, where this did not significantly impair the comparability of the financial statements.
2) Scheduled date of adoption
Scheduled for adoption from the beginning of the fiscal year ending March 31, 2022.
3) Effect of the adoption of this accounting standard
SFH is currently evaluating the effect of adopting Accounting Standard for Fair Value Measurement, etc. on the consolidated financial state-
ments.
4 Change in Presentation Method
(Notes to the Consolidated Statements of Cash Flows)
Net increase (decrease) in payables under repurchase agreements, which was included in “total of net cash provided by (used in) investment
transactions: others, net,” within “cash flows from investing activities” for the previous fiscal year, has increased in quantitative materiality, and
thus presented as a separate item for the fiscal year ended March 31, 2020. The consolidated financial statements for the previous fiscal year
have been restated in order to reflect this change in presentation method.
As a result, “total of net cash provided by (used in) investment transactions: others, net” of ¥48,264 million, within “cash flows from investin
activities” in the Consolidated Statements of Cash Flows for the previous fiscal year, has been restated as net increase (decrease) in payables
under repurchase agreements of ¥48,140 million, and others, net of ¥124 million.
Sony Financial Holdings Inc.Annual Report2020 67
1. Securities with a book value of ¥576,357 million and loans of ¥378,240 million were pledged as collateral for the ¥257,580 million of collateral
for securities lending transactions, ¥39,000 million of call money and bills sold, the ¥237,923 million of borrowed money and payables under re-
purchase agreements of ¥309,613 million at March 31, 2020. In addition to the assets described above, securities with a book value of ¥14,451
million, cash collateral paid for financial instruments of ¥37,975 million and initial margins of futures markets of ¥17,820 million were pledged a
collateral for cash settlements, variation margins of futures markets and certain other purposes at March 31, 2020.
2.The consolidated balance sheet amount of securities loaned for consumption under the loan agreement was ¥201,717 million.
3. Securities include shares in non-consolidated subsidiaries and affiliates worth ¥2,091 million. These do not include any investments in jointly
controlled companies.
4.The balance of loans includes ¥187 million in loans to bankrupt borrowers (before deductions for reserve for possible loan losses) and ¥1,116
million in non-accrual delinquent loans (before deductions for reserve for possible loan losses). Loans to bankrupt borrowers include loans that
have been in arrears on principal or interest payments for a considerably long period of time or loans (before deductions for reserve for possible
loan losses) on which principal or interest payments are considered unlikely to occur in the future for other reasons and on which interest incom
is not recognized. These loans are with reasons defined under Article 96, Paragraph 1, Item 3, i through v of the Order for Enforcement of the
Corporation Tax Act (Enforcement Order 97 of 1965) or Article 96, Paragraph 1, Item 4 of the same guidelines. Non-accrual delinquent loans
are loans on which accrued interest income is not recognized, excluding loans to bankrupt borrowers and loans on which interest payments are
deferred in order to support the borrowers’ recovery from financial difficulties.
5.The balance of loans does not include past due loans (3 months or more). Past due loans (3 months or more) are loans on which principal or
interest payments are delayed for 3 months or more from the date following the due date, excluding loans to bankrupt borrowers and non-ac-
crual delinquent loans.
6.The balance of loans includes ¥814 million in restructured loans (before deductions for reserve for possible loan losses). Restructured loans are
loans on which terms and conditions have been amended in favor of the borrowers (e.g., reduction of the original interest rate, deferral of inter-
est payments, extension of principal repayments or debt waiver) in order to support the borrowers’ recovery from financial difficulties, excluding
loans to bankrupt borrowers, non-accrual delinquent loans and past due loans (3 months or more).
7.The total amount of loans to bankrupt borrowers, non-accrual delinquent loans and restructured loans was ¥2,117 million (before deductions for
reserve for possible loan losses).
8. In terms of loan participation, the participating principals that were accounted for as loans to the original obligor in accordance with “Accountin
and Presentation of Loan Participation” (Accounting Standards Committee of the Japanese Institute of Certified Public Accountants, Statement
No. 3, November 28, 2014) include the consolidated balance sheet amount of ¥5,601 million.
9.Accumulated depreciation of tangible fixed assets as of March 31, 2020 was ¥43,582 million.
10.The balance sheet includes ¥1,792,190 million in assets and liabilities in equal amounts related to separate accounts as stipulated in Article 118
of the Insurance Business Act of Japan as of March 31, 2020, at SFH’s life insurance subsidiary.
11.There are no monetary claims against directors or audit & supervisory board members arising from transactions with directors or audit & superv
sory board members of the insurance holding company.
12.There are no monetary obligations to directors or audit & supervisory board members arising from transactions with directors or audit & supervi
sory board members of the insurance holding company.
13.Changes in the reserve for policyholders’ dividends at SFH’s life insurance subsidiary for the fiscal year ended March 31, 2020 are as follows:
Balance at the beginning of the period ¥4,544 million
Policyholders’ dividends during the period ¥2,558 million
Increase in interest ¥0 million
Provision for reserve for policyholders’ dividends ¥2,422 million
Balance at the end of the period ¥4,407 million
14.On March 31, 2002, SFH’s life insurance subsidiary revalued its land for operating purposes, as permitted by the Act on Revaluation of Land
(Act No. 34, enacted March 31, 1998 — the “Law”). The tax effect of the revaluation difference is accounted for differently, depending on wheth
er there are gains or losses; when there is a loss, a valuation allowance is fully provided for the tax effect of the loss, and when there is a gain,
the tax effect is recorded in “deferred tax liabilities on land revaluation.” After excluding these amounts, the net revaluation difference is report
as “land revaluation” in net assets. The revaluation method stipulated by Article 3, Paragraph 3 of the Law was based on the land appraisal in
conformity with Article 2, Item 5 of the Order for Enforcement Related to the Law (Cabinet Order No. 119, effective from March 31, 1998).
1 Notes to the Consolidated Balance Sheets
Sony Financial Holdings Inc.Annual Report202068
Notes to the Consolidated Financial Statements(For the year ended March 31, 2020)
for securities lending transactions, ¥39,000 million of call money and bills sold, the ¥237,923 million of borrowed money and payables under re-
purchase agreements of ¥309,613 million at March 31, 2020. In addition to the assets described above, securities with a book value of ¥14,451
million, cash collateral paid for financial instruments of ¥37,975 million and initial margins of futures markets of ¥17,820 million were pledged a
collateral for cash settlements, variation margins of futures markets and certain other purposes at March 31, 2020.
2.The consolidated balance sheet amount of securities loaned for consumption under the loan agreement was ¥201,717 million.
3. Securities include shares in non-consolidated subsidiaries and affiliates worth ¥2,091 million. These do not include any investments in jointly
controlled companies.
4.The balance of loans includes ¥187 million in loans to bankrupt borrowers (before deductions for reserve for possible loan losses) and ¥1,116
million in non-accrual delinquent loans (before deductions for reserve for possible loan losses). Loans to bankrupt borrowers include loans that
have been in arrears on principal or interest payments for a considerably long period of time or loans (before deductions for reserve for possible
loan losses) on which principal or interest payments are considered unlikely to occur in the future for other reasons and on which interest incom
is not recognized. These loans are with reasons defined under Article 96, Paragraph 1, Item 3, i through v of the Order for Enforcement of the
Corporation Tax Act (Enforcement Order 97 of 1965) or Article 96, Paragraph 1, Item 4 of the same guidelines. Non-accrual delinquent loans
are loans on which accrued interest income is not recognized, excluding loans to bankrupt borrowers and loans on which interest payments are
deferred in order to support the borrowers’ recovery from financial difficulties.
5.The balance of loans does not include past due loans (3 months or more). Past due loans (3 months or more) are loans on which principal or
interest payments are delayed for 3 months or more from the date following the due date, excluding loans to bankrupt borrowers and non-ac-
crual delinquent loans.
6.The balance of loans includes ¥814 million in restructured loans (before deductions for reserve for possible loan losses). Restructured loans are
loans on which terms and conditions have been amended in favor of the borrowers (e.g., reduction of the original interest rate, deferral of inter-
est payments, extension of principal repayments or debt waiver) in order to support the borrowers’ recovery from financial difficulties, excluding
loans to bankrupt borrowers, non-accrual delinquent loans and past due loans (3 months or more).
7.The total amount of loans to bankrupt borrowers, non-accrual delinquent loans and restructured loans was ¥2,117 million (before deductions for
reserve for possible loan losses).
8. In terms of loan participation, the participating principals that were accounted for as loans to the original obligor in accordance with “Accountin
and Presentation of Loan Participation” (Accounting Standards Committee of the Japanese Institute of Certified Public Accountants, Statement
No. 3, November 28, 2014) include the consolidated balance sheet amount of ¥5,601 million.
9.Accumulated depreciation of tangible fixed assets as of March 31, 2020 was ¥43,582 million.
10.The balance sheet includes ¥1,792,190 million in assets and liabilities in equal amounts related to separate accounts as stipulated in Article 118
of the Insurance Business Act of Japan as of March 31, 2020, at SFH’s life insurance subsidiary.
11.There are no monetary claims against directors or audit & supervisory board members arising from transactions with directors or audit & superv
sory board members of the insurance holding company.
12.There are no monetary obligations to directors or audit & supervisory board members arising from transactions with directors or audit & supervi
sory board members of the insurance holding company.
13.Changes in the reserve for policyholders’ dividends at SFH’s life insurance subsidiary for the fiscal year ended March 31, 2020 are as follows:
Balance at the beginning of the period ¥4,544 million
Policyholders’ dividends during the period ¥2,558 million
Increase in interest ¥0 million
Provision for reserve for policyholders’ dividends ¥2,422 million
Balance at the end of the period ¥4,407 million
14.On March 31, 2002, SFH’s life insurance subsidiary revalued its land for operating purposes, as permitted by the Act on Revaluation of Land
(Act No. 34, enacted March 31, 1998 — the “Law”). The tax effect of the revaluation difference is accounted for differently, depending on wheth
er there are gains or losses; when there is a loss, a valuation allowance is fully provided for the tax effect of the loss, and when there is a gain,
the tax effect is recorded in “deferred tax liabilities on land revaluation.” After excluding these amounts, the net revaluation difference is report
as “land revaluation” in net assets. The revaluation method stipulated by Article 3, Paragraph 3 of the Law was based on the land appraisal in
conformity with Article 2, Item 5 of the Order for Enforcement Related to the Law (Cabinet Order No. 119, effective from March 31, 1998).
1 Notes to the Consolidated Balance Sheets
Sony Financial Holdings Inc.Annual Report202068
Notes to the Consolidated Financial Statements(For the year ended March 31, 2020)
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15.Contracts for commitments to provide credit lines and overdrafts of the life insurance subsidiary and the banking subsidiary are agreements to
lend to customers, up to a prescribed amount, as long as there is no violation of the conditions stipulated in the contracts. The amount of un-
used commitments at March 31, 2020 was ¥18,228 million, and the amount of unused commitments whose original contract terms are within 1
year at March 31, 2020 was ¥18,228 million.
16.Expected future losses of the life insurance subsidiary under the life insurance policyholder protection structure stipulated under Article 259 of
the Insurance Business Act of Japan amounted to ¥11,665 million. Such losses are recognized as expenses during the fiscal year in which they
are contributed.
17.Net assets per share were ¥1,584.90.
18.Financial instruments:
(1) Description of financial instruments
1) Policy on financial instruments
Group companies conduct the life insurance, non-life insurance and banking businesses, etc., in accordance with the provisions of the Insurance
Business Act of Japan, the Banking Act of Japan and other relevant provisions. With regard to financial assets (except for assets in separate ac-
counts as stipulated in Item 1, Article 118 of the Insurance Business Act of Japan in the life insurance business), to ensure steady investment incom
the Companies hold various investment assets, including Japanese government and corporate bonds, stocks and loans. Deposits from individual
customers in the banking business account for nearly all of the Companies’ financial liabilities. Although Group companies hold financial assets as
well as financial liabilities, which are subject to the risk of interest rate and exchange rate fluctuations, they strive to protect themselves from the-
tive effects of these fluctuations by maintaining an appropriate balance between assets and liabilities by conducting asset-liability management (A
in each of the businesses. Furthermore, derivative transactions are used to control risks in the life insurance business and banking business.
2) Financial instruments and related risks
Securities, loans, deposits and derivative transactions constitute the majority of Group companies’ financial instruments. They are subject to
market risk, which is the risk of incurring losses when their values change due to fluctuations in interest rates, foreign exchange rates, stock
prices, etc., as well as credit risk, which is the risk of incurring losses when the value of assets declines or disappears due to a deterioration in
financial or other conditions of an entity to which credit is provided. In addition, they are subject to market liquidity risk, which is the risk of loss
due to an inability to conduct market transactions, as well as the risk of loss if the companies are forced to complete transactions under unfavor
able market conditions, in each case due to market turmoil or other factors.
Most of the securities holdings are in Japanese and foreign government bonds and Japanese and foreign corporate bonds. Other holdings
include Japanese and foreign stocks, and investments in partnership.
The majority of loans are policy loans in the life insurance business, and individual mortgage loans in the banking business. However, policy loa
are limited to the amount of surrender payments, and mortgage loans are backed by real estate. Consequently, loan-related risks are relatively low
Deposits are mainly those from individual customers, some of which are denominated in foreign currencies.
The life insurance business uses several derivative transactions such as interest rate swap transactions, currency futures trading, forward
foreign exchange transactions, stock index futures trading, total return swap transactions for stocks, bond futures trading and commodity
futures trading, mainly to hedge the market risk for financial assets and liabilities and, as a matter of policy, does not use derivative transaction
for speculative purposes. Hedge accounting is not applied to derivative transactions used in the life insurance business.
The banking business uses several derivative transactions, and it uses interest rate swaps, etc., to hedge the market risk for financial assets an
liabilities. In this category, hedge accounting is applied. Interest rate swaps, etc., are used to hedge against the interest rate risk of fixed-rate loan
and deposits. Currency swaps are used to hedge against the exchange rate risk of bonds denominated in foreign currencies. In hedge accounting,
hedge effectiveness is assessed based on the requirements stipulated in the “Accounting Standards for Financial Instruments” and other standard
3) Risk management of financial instruments
SFH formulates fundamental principles for risk management and manages risks specific to its subsidiaries’ scale, business content and other
attributes.
Our Risk Management Guidelines establish specific conditions for managing Group risks, while each of the subsidiaries manages risks on its
own. SFH’s Corporate Control Department submits periodic reports to SFH’s Board of Directors and Executive Committee on subsidiaries’ risk
management conditions recognized through monitoring or by holding Risk Management Meetings.
(i) Credit risk
Group companies use the following methods to manage the credit risk of principal subsidiaries:
(a) At the life insurance subsidiary, the risk management division manages issuer credit risk on securities and counterparty risks by specify
ing details such as risk management methods and procedures in regulations. The risk management division periodically reports such
information to the Board of Directors and the Executive Committee.
(b) The non-life insurance subsidiary ascertains issuer credit information and market values on securities in line with various regulations for as
management risk. The risk management division reports on the situation regularly to the Board of Directors and the Executive Committee.
(c) The banking subsidiary has formulated and conformed to various regulations for managing credit risks, and controls credit risk depend-
ing on the nature of each type of financial asset. In respect of individual loans, the subsidiary has developed a framework for managing
individual credit, including credit screenings, management of credit information, setting of collateral and the handling of problem assets
on a case-by-case basis.
In respect of corporate loans or bonds payable, the subsidiary has developed a framework for managing corporate credit and mar-
ket credit, including credit screenings, credit limit control, the management of credit information, credit ratings, the setting of guarantee
or collateral and handling of problem assets on a case-by-case basis.
The subsidiary manages market credit risk, such as securities issuer credit risk and, on derivative transactions, counterparty risk, by
periodically assessing market value information.
Sony Financial Holdings Inc.Annual Report2020 69
lend to customers, up to a prescribed amount, as long as there is no violation of the conditions stipulated in the contracts. The amount of un-
used commitments at March 31, 2020 was ¥18,228 million, and the amount of unused commitments whose original contract terms are within 1
year at March 31, 2020 was ¥18,228 million.
16.Expected future losses of the life insurance subsidiary under the life insurance policyholder protection structure stipulated under Article 259 of
the Insurance Business Act of Japan amounted to ¥11,665 million. Such losses are recognized as expenses during the fiscal year in which they
are contributed.
17.Net assets per share were ¥1,584.90.
18.Financial instruments:
(1) Description of financial instruments
1) Policy on financial instruments
Group companies conduct the life insurance, non-life insurance and banking businesses, etc., in accordance with the provisions of the Insurance
Business Act of Japan, the Banking Act of Japan and other relevant provisions. With regard to financial assets (except for assets in separate ac-
counts as stipulated in Item 1, Article 118 of the Insurance Business Act of Japan in the life insurance business), to ensure steady investment incom
the Companies hold various investment assets, including Japanese government and corporate bonds, stocks and loans. Deposits from individual
customers in the banking business account for nearly all of the Companies’ financial liabilities. Although Group companies hold financial assets as
well as financial liabilities, which are subject to the risk of interest rate and exchange rate fluctuations, they strive to protect themselves from the-
tive effects of these fluctuations by maintaining an appropriate balance between assets and liabilities by conducting asset-liability management (A
in each of the businesses. Furthermore, derivative transactions are used to control risks in the life insurance business and banking business.
2) Financial instruments and related risks
Securities, loans, deposits and derivative transactions constitute the majority of Group companies’ financial instruments. They are subject to
market risk, which is the risk of incurring losses when their values change due to fluctuations in interest rates, foreign exchange rates, stock
prices, etc., as well as credit risk, which is the risk of incurring losses when the value of assets declines or disappears due to a deterioration in
financial or other conditions of an entity to which credit is provided. In addition, they are subject to market liquidity risk, which is the risk of loss
due to an inability to conduct market transactions, as well as the risk of loss if the companies are forced to complete transactions under unfavor
able market conditions, in each case due to market turmoil or other factors.
Most of the securities holdings are in Japanese and foreign government bonds and Japanese and foreign corporate bonds. Other holdings
include Japanese and foreign stocks, and investments in partnership.
The majority of loans are policy loans in the life insurance business, and individual mortgage loans in the banking business. However, policy loa
are limited to the amount of surrender payments, and mortgage loans are backed by real estate. Consequently, loan-related risks are relatively low
Deposits are mainly those from individual customers, some of which are denominated in foreign currencies.
The life insurance business uses several derivative transactions such as interest rate swap transactions, currency futures trading, forward
foreign exchange transactions, stock index futures trading, total return swap transactions for stocks, bond futures trading and commodity
futures trading, mainly to hedge the market risk for financial assets and liabilities and, as a matter of policy, does not use derivative transaction
for speculative purposes. Hedge accounting is not applied to derivative transactions used in the life insurance business.
The banking business uses several derivative transactions, and it uses interest rate swaps, etc., to hedge the market risk for financial assets an
liabilities. In this category, hedge accounting is applied. Interest rate swaps, etc., are used to hedge against the interest rate risk of fixed-rate loan
and deposits. Currency swaps are used to hedge against the exchange rate risk of bonds denominated in foreign currencies. In hedge accounting,
hedge effectiveness is assessed based on the requirements stipulated in the “Accounting Standards for Financial Instruments” and other standard
3) Risk management of financial instruments
SFH formulates fundamental principles for risk management and manages risks specific to its subsidiaries’ scale, business content and other
attributes.
Our Risk Management Guidelines establish specific conditions for managing Group risks, while each of the subsidiaries manages risks on its
own. SFH’s Corporate Control Department submits periodic reports to SFH’s Board of Directors and Executive Committee on subsidiaries’ risk
management conditions recognized through monitoring or by holding Risk Management Meetings.
(i) Credit risk
Group companies use the following methods to manage the credit risk of principal subsidiaries:
(a) At the life insurance subsidiary, the risk management division manages issuer credit risk on securities and counterparty risks by specify
ing details such as risk management methods and procedures in regulations. The risk management division periodically reports such
information to the Board of Directors and the Executive Committee.
(b) The non-life insurance subsidiary ascertains issuer credit information and market values on securities in line with various regulations for as
management risk. The risk management division reports on the situation regularly to the Board of Directors and the Executive Committee.
(c) The banking subsidiary has formulated and conformed to various regulations for managing credit risks, and controls credit risk depend-
ing on the nature of each type of financial asset. In respect of individual loans, the subsidiary has developed a framework for managing
individual credit, including credit screenings, management of credit information, setting of collateral and the handling of problem assets
on a case-by-case basis.
In respect of corporate loans or bonds payable, the subsidiary has developed a framework for managing corporate credit and mar-
ket credit, including credit screenings, credit limit control, the management of credit information, credit ratings, the setting of guarantee
or collateral and handling of problem assets on a case-by-case basis.
The subsidiary manages market credit risk, such as securities issuer credit risk and, on derivative transactions, counterparty risk, by
periodically assessing market value information.
Sony Financial Holdings Inc.Annual Report2020 69
The aforementioned credit risk management is carried out by the risk management division and the screening division. These
divisions periodically report risk management conditions to management via the Board of Directors and the Executive Committee. In
addition, the internal audit division conducts regular audits.
(ii) Market risk
Group companies use the following methods to manage the market risk of principal subsidiaries:
(a) The life insurance subsidiary manages various market-related risks in the following manner:
• Interest rate risk
Interest rate risk is managed by the risk management division based on the regulations for interest rate risk management that specify deta
such as risk management methods and procedures. Based on ALM policies that are determined through such methods as deliberation by
the Executive Committee, the subsidiary determines and confirms actual risk conditions with the Board of Directors. The division maintains
an overall understanding of the interest rates and durations of financial instruments, and monitors them based on the analysis of the quant
of risk using value at risk (“VaR”), and it periodically reports such information to the Board of Directors and the Executive Committee.
• Exchange rate risk
Exchange rate risk is managed by the risk management division based on the regulations for exchange rate risk management that
specify details such as risk management methods and procedures. The division periodically reports such information to the Board of
Directors and the Executive Committee.
• Equity market price fluctuation risk
Equity market price fluctuation risk is managed by the risk management division based on the regulations for equity market price fluc-
tuation risk management that specify details such as risk management methods and procedures. The division periodically reports such
information to the Board of Directors and the Executive Committee.
• Derivative transactions
Derivative transactions are managed by the risk management division based on the regulations for derivative transactions that specify
details such as risk management methods and procedures. The division periodically reports such information to the Board of Directors
and the Executive Committee.
(b) The non-life insurance subsidiary manages various market-related risks in the following manner:
• Interest rate risk
Regulations on asset management risk specify the details such as risk management methods and procedures based on risk manage-
ment policies determined by the Board of Directors. The risk management division monitors individual risks and reports on the situation
regularly to the Board of Directors and the Executive Committee.
• Price fluctuation risk
Equity securities are held for strategic investments for the purpose of enhancing business partnerships. In accordance with regulations
on asset management risk, the risk management division monitors the market environment and financial conditions, and reports on the
situation regularly to the Board of Directors and the Executive Committee.
(c) The banking subsidiary manages various market-related risks in the following manner. The risk management division handles each of
these risks and periodically reports risk management conditions to the Board of Directors and the Executive Committee. In addition, the
internal audit division conducts regular audits.
• Interest rate and exchange rate risk
By formulating and conforming with market risk management regulations, the subsidiary manages the risk of loss from changes in the
value of assets and liabilities (including off-balance-sheet items) as well as from changes in income from assets and liabilities, owing to
fluctuations in various market risk factors, such as interest rates, exchange rates and stock prices. Market risk management regulations
specify details such as risk management methods and procedures. Based on ALM and risk management policies that are determined
through such methods as deliberation by the Board of Directors, an ALM committee and a risk management committee meet—typically
once each month—to understand and confirm actual conditions and deliberate future responses and risk conditions. On a daily basis,
the risk management division maintains an overall understanding of interest and exchange rates on financial assets and liabilities, as
well as their durations, conducts monitoring that includes VaR and interest rate sensitivity analysis and ensures regulatory conformance
The subsidiary also conducts interest rate swaps, currency swaps, foreign exchange and other derivative transactions to hedge against
interest and exchange rate fluctuation risks.
• Market price fluctuation risk
The subsidiary manages the holding of investment products, including securities, in accordance with market risk management regu-
lations as well as market credit risk. The investment division purchases securities externally, and risks associated with changes in the
market price of such securities are managed through prior screening by the screening division, the setting and control of investment
limits by the risk management division, and continuous monitoring by each responsible division.
• Derivative transactions
Derivative transactions are executed in accordance with regulations on market risk. The subsidiary also separates and conducts internal
checks of individual departments’ execution of transactions, evaluation of hedge effectiveness and operations management.
• Quantitative information on market risk
The principal financial instruments affected by the major risk parameters of interest rate risk and exchange rate fluctuation risk are loan
securities, deposits in the banking business and derivative transactions.
The impact of such risks on these financial assets and liabilities was calculated using the historical simulation method to determine
gains or losses over a given period of 20 business days, assuming the fluctuation of interest and exchange rates within a rational
forecast band determined over an observation period of 250 business days. The Companies then employed quantitative analysis to
manage interest rate and exchange rate fluctuation risks. The resulting risk amount with a 99% confidence interval was ¥2,523 million
as of the end of this fiscal year.
This amount of impact is based on the assumption that risk parameters other than interest rates and exchange rates are fixed. In
the event that fluctuations exceed the rational forecast band for interest and exchange rates, the risk impact may exceed the amount
calculated. The aforementioned market risk management is carried out primarily by the risk management division. The division periodi-
cally reports risk management conditions to the Board of Directors and the Executive Committee. In addition, the internal audit division
conducts regular audits.
Sony Financial Holdings Inc.Annual Report202070
divisions periodically report risk management conditions to management via the Board of Directors and the Executive Committee. In
addition, the internal audit division conducts regular audits.
(ii) Market risk
Group companies use the following methods to manage the market risk of principal subsidiaries:
(a) The life insurance subsidiary manages various market-related risks in the following manner:
• Interest rate risk
Interest rate risk is managed by the risk management division based on the regulations for interest rate risk management that specify deta
such as risk management methods and procedures. Based on ALM policies that are determined through such methods as deliberation by
the Executive Committee, the subsidiary determines and confirms actual risk conditions with the Board of Directors. The division maintains
an overall understanding of the interest rates and durations of financial instruments, and monitors them based on the analysis of the quant
of risk using value at risk (“VaR”), and it periodically reports such information to the Board of Directors and the Executive Committee.
• Exchange rate risk
Exchange rate risk is managed by the risk management division based on the regulations for exchange rate risk management that
specify details such as risk management methods and procedures. The division periodically reports such information to the Board of
Directors and the Executive Committee.
• Equity market price fluctuation risk
Equity market price fluctuation risk is managed by the risk management division based on the regulations for equity market price fluc-
tuation risk management that specify details such as risk management methods and procedures. The division periodically reports such
information to the Board of Directors and the Executive Committee.
• Derivative transactions
Derivative transactions are managed by the risk management division based on the regulations for derivative transactions that specify
details such as risk management methods and procedures. The division periodically reports such information to the Board of Directors
and the Executive Committee.
(b) The non-life insurance subsidiary manages various market-related risks in the following manner:
• Interest rate risk
Regulations on asset management risk specify the details such as risk management methods and procedures based on risk manage-
ment policies determined by the Board of Directors. The risk management division monitors individual risks and reports on the situation
regularly to the Board of Directors and the Executive Committee.
• Price fluctuation risk
Equity securities are held for strategic investments for the purpose of enhancing business partnerships. In accordance with regulations
on asset management risk, the risk management division monitors the market environment and financial conditions, and reports on the
situation regularly to the Board of Directors and the Executive Committee.
(c) The banking subsidiary manages various market-related risks in the following manner. The risk management division handles each of
these risks and periodically reports risk management conditions to the Board of Directors and the Executive Committee. In addition, the
internal audit division conducts regular audits.
• Interest rate and exchange rate risk
By formulating and conforming with market risk management regulations, the subsidiary manages the risk of loss from changes in the
value of assets and liabilities (including off-balance-sheet items) as well as from changes in income from assets and liabilities, owing to
fluctuations in various market risk factors, such as interest rates, exchange rates and stock prices. Market risk management regulations
specify details such as risk management methods and procedures. Based on ALM and risk management policies that are determined
through such methods as deliberation by the Board of Directors, an ALM committee and a risk management committee meet—typically
once each month—to understand and confirm actual conditions and deliberate future responses and risk conditions. On a daily basis,
the risk management division maintains an overall understanding of interest and exchange rates on financial assets and liabilities, as
well as their durations, conducts monitoring that includes VaR and interest rate sensitivity analysis and ensures regulatory conformance
The subsidiary also conducts interest rate swaps, currency swaps, foreign exchange and other derivative transactions to hedge against
interest and exchange rate fluctuation risks.
• Market price fluctuation risk
The subsidiary manages the holding of investment products, including securities, in accordance with market risk management regu-
lations as well as market credit risk. The investment division purchases securities externally, and risks associated with changes in the
market price of such securities are managed through prior screening by the screening division, the setting and control of investment
limits by the risk management division, and continuous monitoring by each responsible division.
• Derivative transactions
Derivative transactions are executed in accordance with regulations on market risk. The subsidiary also separates and conducts internal
checks of individual departments’ execution of transactions, evaluation of hedge effectiveness and operations management.
• Quantitative information on market risk
The principal financial instruments affected by the major risk parameters of interest rate risk and exchange rate fluctuation risk are loan
securities, deposits in the banking business and derivative transactions.
The impact of such risks on these financial assets and liabilities was calculated using the historical simulation method to determine
gains or losses over a given period of 20 business days, assuming the fluctuation of interest and exchange rates within a rational
forecast band determined over an observation period of 250 business days. The Companies then employed quantitative analysis to
manage interest rate and exchange rate fluctuation risks. The resulting risk amount with a 99% confidence interval was ¥2,523 million
as of the end of this fiscal year.
This amount of impact is based on the assumption that risk parameters other than interest rates and exchange rates are fixed. In
the event that fluctuations exceed the rational forecast band for interest and exchange rates, the risk impact may exceed the amount
calculated. The aforementioned market risk management is carried out primarily by the risk management division. The division periodi-
cally reports risk management conditions to the Board of Directors and the Executive Committee. In addition, the internal audit division
conducts regular audits.
Sony Financial Holdings Inc.Annual Report202070
(iii) Liquidity risk
Group companies use the following methods to manage the liquidity risk of principal subsidiaries.
(a) At the life insurance subsidiary, in line with liquidity risk management regulations, the accounting division prepares and updates cash fl
plans in a timely manner based on the reports from departments and manages cash flows, and the risk management division manages
the liquidity risk. The accounting division and risk management division periodically or as needed report such information to the Board of
Directors and the Executive Committee.
(b) The non-life insurance subsidiary establishes regulations related to liquidity risk. Its cash flow management division prepares and
updates cash flow plans. The risk management division manages liquidity risk by monitoring the situations and reports on the situations
regularly to the Board of Directors and the Executive Committee.
(c) The banking subsidiary has formulated and conformed with regulations for managing liquidity risk and manages a variety of liquidity ris
Concerning the management of cash flow risks, cash flows are classified into phases based on the degree of pressure, and methods for
risk management and reporting are set out for each phase, while guidelines are formulated and reviewed as necessary. To manage
market liquidity risk, the subsidiary works to understand market liquidity conditions that pertain to the types of products it handles. The
subsidiary formulates and revises guidelines on a product-by-product basis, as necessary. The aforementioned liquidity risk manage-
ment is carried out by the risk management division. The division periodically reports risk management conditions to the Board of
Directors and the Executive Committee. In addition, the internal audit division conducts regular audits.
4) Supplementary explanation of the fair value of financial instruments
Market prices of financial instruments are considered to indicate their fair values, unless market prices are not available. In this case, rational
methods are used to measure their fair values. Although these measurements use assumptions that are believed to be reasonable under the
circumstances, the resulting values may differ if measured using different assumptions.
(2) Fair value information on financial instruments
Below is fair value information on financial instruments as of March 31, 2020, excluding securities whose fair values are deemed extremely
difficult to determine (see Note 2).
Millions of yen
2020
As of March 31,
Consolidated
balance sheet
amount Fair value Difference
1) Cash and due from banks 549,964 549,964 —
2) Money held in trust
Other money held in trust 38,067 38,067 —
3) Securities
Trading securities 1,704,731 1,704,731 —
Held-to-maturity securities 7,432,871 9,874,634 2,441,763
Policy-reserve-matching bonds 855,937 997,896 141,958
Available-for-sale securities 1,902,844 1,902,844 —
4) Loans 2,187,792
Reserve for possible loan losses*1 (838)
Loans (after deduction for reserve for possible loan losses) 2,186,953 2,439,250 252,297
Total Financial Assets 14,671,370 17,507,390 2,836,019
1) Deposits 2,440,783 2,442,709 1,926
2) Call money and bills sold 151,256 151,256 —
3) Borrowed money 241,826 242,053 226
4) Bonds payable 20,000 19,957 (43)
5) Payables under repurchase agreements 309,613 309,613 —
6) Collateral for securities lending transactions 257,580 257,580 —
Total Financial Liabilities 3,421,060 3,423,170 2,110
Derivative financial instruments*2
Hedge accounting not applied 18,267 18,267 —
Hedge accounting applied [18,406] [18,406] —
Total Derivative Financial Instruments [139] [139] —
*1 Excludes general and specific reserves for possible loan losses.
*2 Figures are totals resulting from derivative transactions, which are accounted for as other assets and liabilities on the consolidated balance sheets. If the
total is a debt amount, the above figure is shown in [ ].
Sony Financial Holdings Inc.Annual Report2020 71
Group companies use the following methods to manage the liquidity risk of principal subsidiaries.
(a) At the life insurance subsidiary, in line with liquidity risk management regulations, the accounting division prepares and updates cash fl
plans in a timely manner based on the reports from departments and manages cash flows, and the risk management division manages
the liquidity risk. The accounting division and risk management division periodically or as needed report such information to the Board of
Directors and the Executive Committee.
(b) The non-life insurance subsidiary establishes regulations related to liquidity risk. Its cash flow management division prepares and
updates cash flow plans. The risk management division manages liquidity risk by monitoring the situations and reports on the situations
regularly to the Board of Directors and the Executive Committee.
(c) The banking subsidiary has formulated and conformed with regulations for managing liquidity risk and manages a variety of liquidity ris
Concerning the management of cash flow risks, cash flows are classified into phases based on the degree of pressure, and methods for
risk management and reporting are set out for each phase, while guidelines are formulated and reviewed as necessary. To manage
market liquidity risk, the subsidiary works to understand market liquidity conditions that pertain to the types of products it handles. The
subsidiary formulates and revises guidelines on a product-by-product basis, as necessary. The aforementioned liquidity risk manage-
ment is carried out by the risk management division. The division periodically reports risk management conditions to the Board of
Directors and the Executive Committee. In addition, the internal audit division conducts regular audits.
4) Supplementary explanation of the fair value of financial instruments
Market prices of financial instruments are considered to indicate their fair values, unless market prices are not available. In this case, rational
methods are used to measure their fair values. Although these measurements use assumptions that are believed to be reasonable under the
circumstances, the resulting values may differ if measured using different assumptions.
(2) Fair value information on financial instruments
Below is fair value information on financial instruments as of March 31, 2020, excluding securities whose fair values are deemed extremely
difficult to determine (see Note 2).
Millions of yen
2020
As of March 31,
Consolidated
balance sheet
amount Fair value Difference
1) Cash and due from banks 549,964 549,964 —
2) Money held in trust
Other money held in trust 38,067 38,067 —
3) Securities
Trading securities 1,704,731 1,704,731 —
Held-to-maturity securities 7,432,871 9,874,634 2,441,763
Policy-reserve-matching bonds 855,937 997,896 141,958
Available-for-sale securities 1,902,844 1,902,844 —
4) Loans 2,187,792
Reserve for possible loan losses*1 (838)
Loans (after deduction for reserve for possible loan losses) 2,186,953 2,439,250 252,297
Total Financial Assets 14,671,370 17,507,390 2,836,019
1) Deposits 2,440,783 2,442,709 1,926
2) Call money and bills sold 151,256 151,256 —
3) Borrowed money 241,826 242,053 226
4) Bonds payable 20,000 19,957 (43)
5) Payables under repurchase agreements 309,613 309,613 —
6) Collateral for securities lending transactions 257,580 257,580 —
Total Financial Liabilities 3,421,060 3,423,170 2,110
Derivative financial instruments*2
Hedge accounting not applied 18,267 18,267 —
Hedge accounting applied [18,406] [18,406] —
Total Derivative Financial Instruments [139] [139] —
*1 Excludes general and specific reserves for possible loan losses.
*2 Figures are totals resulting from derivative transactions, which are accounted for as other assets and liabilities on the consolidated balance sheets. If the
total is a debt amount, the above figure is shown in [ ].
Sony Financial Holdings Inc.Annual Report2020 71
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(Note 1) Calculation of the fair value of financial instruments
Financial Assets
1) Cash and due from banks
The fair value is regarded as the carrying amount, as they are approximately equal.
2) Money held in trust
In individual money held in trust mainly for investment purposes, the fair value of bonds is the market price on financial instrument exchange
or the price indicated by a financial institution.
Please see “20. Fair value information on money held in trust,” which indicates fair values by purpose.
3) Securities
The fair value of stocks is the market price on stock markets or financial instrument exchanges. The fair value of bonds and investment funds
is the market price or the price indicated by a financial institution.
Please see “19. Fair value information on securities,” which indicates fair values by purpose.
4) Loans
(i) Loans in the banking business
The fair value of these loans is calculated by type, by estimating their future cash flows and then applying a prescribed discount rate. The
discount rate is determined by adding to the LIBOR-based yield curve a premium corresponding to the allowance rate of general provision
for loan losses.
(ii) Policy loans in the life insurance business
The fair value of policyholder loans is valued by discounting future cash flows to their current value.
(iii) General loans
The fair value of general loans is regarded as the carrying amount, as they are approximately equal.
Financial Liabilities
1) Deposits
The fair value of deposits is calculated by type, by estimating their future cash flows and then applying a prescribed discount rate. The
discount rate is determined by adding to the LIBOR-based yield curve a premium corresponding to the banking subsidiary’s cumulative
default rate by rating.
2) Call money and bills sold
The fair value is regarded as the carrying amount, as they are approximately equal.
3) Borrowed money
The present value of borrowed money is calculated by discounting the future cash flows of the principal and interest with the LIBOR-based
yield curve.
4) Bonds payable
The fair value of bonds payable is the market price or the price indicated by a financial institution.
5) Payables under repurchase agreements
The fair value is regarded as the carrying amount, as they are approximately equal.
6) Collateral for securities lending transactions
The fair value is regarded as the carrying amount, as they are approximately equal.
Derivative Transactions
Please see “21. Derivative financial instruments,” which indicates measurement of fair value.
(Note 2) Securities whose fair values are deemed extremely difficult to determine are as follows. They are not included in “3) Securities” of Financial
Assets in (Note 1) above.
Millions of yen
2020
As of March 31,
Consolidated
balance sheet
amount
1) Unlisted stocks in non-consolidated subsidiaries and affiliates*1 2,091
2) Unlisted stocks other than those in 1) above*1 1,872
3) Investment in partnership*2 8,823
Total 12,787
*1 Unlisted stocks have no market prices and their fair values are deemed extremely difficult to determine.
*2 Assets included in “investment in partnership” are stocks in unlisted companies.
Note: Unlisted stocks and investment in partnership are considered impaired if their actual value decreases materially below the acquisition cost and such
decline is considered non-recoverable. Their actual value is recognized as the consolidated balance sheet amount and the write-down is accounted
for as a devaluation loss (hereinafter, “impairment”) for the fiscal year.
¥244 million of impairment losses for unlisted stocks, and ¥32 million of impairment losses for investment in partnership were recognized for the year
ended March 31, 2020.
Impairment losses are principally recorded when their actual value as of the end of the fiscal year has declined by 50% or more from the acquisition co
Sony Financial Holdings Inc.Annual Report202072
Financial Assets
1) Cash and due from banks
The fair value is regarded as the carrying amount, as they are approximately equal.
2) Money held in trust
In individual money held in trust mainly for investment purposes, the fair value of bonds is the market price on financial instrument exchange
or the price indicated by a financial institution.
Please see “20. Fair value information on money held in trust,” which indicates fair values by purpose.
3) Securities
The fair value of stocks is the market price on stock markets or financial instrument exchanges. The fair value of bonds and investment funds
is the market price or the price indicated by a financial institution.
Please see “19. Fair value information on securities,” which indicates fair values by purpose.
4) Loans
(i) Loans in the banking business
The fair value of these loans is calculated by type, by estimating their future cash flows and then applying a prescribed discount rate. The
discount rate is determined by adding to the LIBOR-based yield curve a premium corresponding to the allowance rate of general provision
for loan losses.
(ii) Policy loans in the life insurance business
The fair value of policyholder loans is valued by discounting future cash flows to their current value.
(iii) General loans
The fair value of general loans is regarded as the carrying amount, as they are approximately equal.
Financial Liabilities
1) Deposits
The fair value of deposits is calculated by type, by estimating their future cash flows and then applying a prescribed discount rate. The
discount rate is determined by adding to the LIBOR-based yield curve a premium corresponding to the banking subsidiary’s cumulative
default rate by rating.
2) Call money and bills sold
The fair value is regarded as the carrying amount, as they are approximately equal.
3) Borrowed money
The present value of borrowed money is calculated by discounting the future cash flows of the principal and interest with the LIBOR-based
yield curve.
4) Bonds payable
The fair value of bonds payable is the market price or the price indicated by a financial institution.
5) Payables under repurchase agreements
The fair value is regarded as the carrying amount, as they are approximately equal.
6) Collateral for securities lending transactions
The fair value is regarded as the carrying amount, as they are approximately equal.
Derivative Transactions
Please see “21. Derivative financial instruments,” which indicates measurement of fair value.
(Note 2) Securities whose fair values are deemed extremely difficult to determine are as follows. They are not included in “3) Securities” of Financial
Assets in (Note 1) above.
Millions of yen
2020
As of March 31,
Consolidated
balance sheet
amount
1) Unlisted stocks in non-consolidated subsidiaries and affiliates*1 2,091
2) Unlisted stocks other than those in 1) above*1 1,872
3) Investment in partnership*2 8,823
Total 12,787
*1 Unlisted stocks have no market prices and their fair values are deemed extremely difficult to determine.
*2 Assets included in “investment in partnership” are stocks in unlisted companies.
Note: Unlisted stocks and investment in partnership are considered impaired if their actual value decreases materially below the acquisition cost and such
decline is considered non-recoverable. Their actual value is recognized as the consolidated balance sheet amount and the write-down is accounted
for as a devaluation loss (hereinafter, “impairment”) for the fiscal year.
¥244 million of impairment losses for unlisted stocks, and ¥32 million of impairment losses for investment in partnership were recognized for the year
ended March 31, 2020.
Impairment losses are principally recorded when their actual value as of the end of the fiscal year has declined by 50% or more from the acquisition co
Sony Financial Holdings Inc.Annual Report202072
(Note 3) Future redemption schedule of monetary claims and securities with maturities
Millions of yen
2020
As of March 31, 1 year or less
More than 1 year
to 5 years
More than 5 years
to 10 years Over 10 years
Cash and due from banks 549,964 — — —
Securities
Held-to-maturity securities 6,069 199,050 243,310 7,652,770
Japanese government and corporate bonds 6,069 198,950 243,310 6,242,390
Japanese government and local government bonds 5,287 196,900 243,010 5,768,810
Japanese corporate bonds 782 2,050 300 473,580
Others — 100 — 1,410,380
Policy-reserve-matching bonds — — 3,220 948,749
Japanese government and corporate bonds — — 3,220 725,430
Japanese government and local government bonds — — — 610,630
Japanese corporate bonds — — 3,220 114,800
Others — — — 223,319
Available-for-sale securities 143,747 424,176 548,121 618,201
Japanese government and corporate bonds 47,034 195,118 491,702 331,650
Japanese government and local government bonds 32,274 134,031 491,202 331,650
Japanese corporate bonds 14,760 61,087 500 —
Others 96,713 229,057 56,419 286,551
Loans* 6,041 33,209 66,289 1,855,922
Total 705,824 656,436 860,941 11,075,643
* This figure excludes ¥208,069 million with no fixed redemption such as policyholder loans, and ¥17,394 million in overdrafts.
(Note 4)The future return schedule of deposits and other liabilities with interest
Millions of yen
2020
As of March 31, 1 year or less
More than
1 year to
2 years
More than
2 years to
3 years
More than
3 years to
4 years
More than
4 years to
5 years
More than
5 years
Deposits* 2,347,387 44,351 20,295 10,504 3,246 14,998
Call money and bills sold 151,256 — — — — —
Borrowed money 38,591 50,122 93,112 60,000 — —
Bonds payable — — 10,000 — 10,000 —
Payables under repurchase agreements 309,613 — — — — —
Collateral for securities lending transactions257,580 — — — — —
Total 3,104,428 94,474 123,407 70,504 13,246 14,998
* Demand deposits are included in “1 year or less.”
19.Fair value information on securities as of March 31, 2020:
* In addition to “Securities” on the consolidated balance sheets, the figures in the following tables include beneficiary certificates of investment
trust in “Monetary claims purchased.”
(1) Trading securities
Millions of yen
As of March 31, 2020
Valuation gains (losses) charged to income (127,385)
Sony Financial Holdings Inc.Annual Report2020 73
Millions of yen
2020
As of March 31, 1 year or less
More than 1 year
to 5 years
More than 5 years
to 10 years Over 10 years
Cash and due from banks 549,964 — — —
Securities
Held-to-maturity securities 6,069 199,050 243,310 7,652,770
Japanese government and corporate bonds 6,069 198,950 243,310 6,242,390
Japanese government and local government bonds 5,287 196,900 243,010 5,768,810
Japanese corporate bonds 782 2,050 300 473,580
Others — 100 — 1,410,380
Policy-reserve-matching bonds — — 3,220 948,749
Japanese government and corporate bonds — — 3,220 725,430
Japanese government and local government bonds — — — 610,630
Japanese corporate bonds — — 3,220 114,800
Others — — — 223,319
Available-for-sale securities 143,747 424,176 548,121 618,201
Japanese government and corporate bonds 47,034 195,118 491,702 331,650
Japanese government and local government bonds 32,274 134,031 491,202 331,650
Japanese corporate bonds 14,760 61,087 500 —
Others 96,713 229,057 56,419 286,551
Loans* 6,041 33,209 66,289 1,855,922
Total 705,824 656,436 860,941 11,075,643
* This figure excludes ¥208,069 million with no fixed redemption such as policyholder loans, and ¥17,394 million in overdrafts.
(Note 4)The future return schedule of deposits and other liabilities with interest
Millions of yen
2020
As of March 31, 1 year or less
More than
1 year to
2 years
More than
2 years to
3 years
More than
3 years to
4 years
More than
4 years to
5 years
More than
5 years
Deposits* 2,347,387 44,351 20,295 10,504 3,246 14,998
Call money and bills sold 151,256 — — — — —
Borrowed money 38,591 50,122 93,112 60,000 — —
Bonds payable — — 10,000 — 10,000 —
Payables under repurchase agreements 309,613 — — — — —
Collateral for securities lending transactions257,580 — — — — —
Total 3,104,428 94,474 123,407 70,504 13,246 14,998
* Demand deposits are included in “1 year or less.”
19.Fair value information on securities as of March 31, 2020:
* In addition to “Securities” on the consolidated balance sheets, the figures in the following tables include beneficiary certificates of investment
trust in “Monetary claims purchased.”
(1) Trading securities
Millions of yen
As of March 31, 2020
Valuation gains (losses) charged to income (127,385)
Sony Financial Holdings Inc.Annual Report2020 73
(2) Held-to-maturity securities
Millions of yen
2020
As of March 31,
Consolidated
balance sheet
amount Fair value Difference
Fair values exceeding the consolidated balance sheet amount
Japanese government and corporate bonds 6,445,701 8,607,080 2,161,378
Japanese government and local government bonds 6,070,344 8,170,507 2,100,163
Japanese corporate bonds 375,357 436,572 61,215
Others 739,398 1,026,338 286,939
Subtotal 7,185,100 9,633,419 2,448,318
Fair values not exceeding the consolidated balance sheet amount
Japanese government and corporate bonds 242,353 236,219 (6,134)
Japanese government and local government bonds 135,711 134,319 (1,391)
Japanese corporate bonds 106,642 101,899 (4,743)
Others 5,417 4,996 (420)
Subtotal 247,771 241,215 (6,555)
Total 7,432,871 9,874,634 2,441,763
(3) Policy-reserve-matching bonds
Millions of yen
2020
As of March 31,
Consolidated
balance sheet
amount Fair value Difference
Fair values exceeding the consolidated balance sheet amount
Japanese government and corporate bonds 718,722 812,955 94,232
Japanese government and local government bonds 616,023 691,191 75,168
Japanese corporate bonds 102,698 121,763 19,064
Others 109,078 157,243 48,165
Subtotal 827,801 970,198 142,397
Fair values not exceeding the consolidated balance sheet amount
Japanese government and corporate bonds 28,136 27,697 (438)
Japanese government and local government bonds 5,663 5,642 (20)
Japanese corporate bonds 22,473 22,054 (418)
Subtotal 28,136 27,697 (438)
Total 855,937 997,896 141,958
(4) Available-for-sale securities
Millions of yen
2020
As of March 31,
Consolidated
balance sheet
amount Acquisition cost Difference
Consolidated balance sheet amount exceeding the acquisition cost
Japanese government and corporate bonds 1,118,644 979,544 139,099
Japanese government and local government bonds 1,072,860 934,096 138,763
Japanese corporate bonds 45,783 45,448 335
Equity securities 10,458 4,666 5,792
Others 295,828 259,026 36,801
Subtotal 1,424,930 1,243,237 181,693
Consolidated balance sheet amount not exceeding the acquisition cost
Japanese government and corporate bonds 92,483 92,680 (196)
Japanese government and local government bonds 61,406 61,491 (84)
Japanese corporate bonds 31,077 31,189 (112)
Equity securities 323 361 (37)
Others 391,112 407,309 (16,196)
Subtotal 483,919 500,351 (16,431)
Total 1,908,850 1,743,589 165,261
Note: As the unlisted stocks of ¥1,872 million (consolidated balance sheet amount) and investment in partnership of ¥8,823 million (consolidated balance
sheet amount) have no market prices and their fair values are not readily determinable, they are not included in the table above.
(5) Held-to-maturity securities sold during the period
There is no related information to be reported.
(6) Policy-reserve-matching bonds sold during the period
There is no related information to be reported.
Sony Financial Holdings Inc.Annual Report202074
Millions of yen
2020
As of March 31,
Consolidated
balance sheet
amount Fair value Difference
Fair values exceeding the consolidated balance sheet amount
Japanese government and corporate bonds 6,445,701 8,607,080 2,161,378
Japanese government and local government bonds 6,070,344 8,170,507 2,100,163
Japanese corporate bonds 375,357 436,572 61,215
Others 739,398 1,026,338 286,939
Subtotal 7,185,100 9,633,419 2,448,318
Fair values not exceeding the consolidated balance sheet amount
Japanese government and corporate bonds 242,353 236,219 (6,134)
Japanese government and local government bonds 135,711 134,319 (1,391)
Japanese corporate bonds 106,642 101,899 (4,743)
Others 5,417 4,996 (420)
Subtotal 247,771 241,215 (6,555)
Total 7,432,871 9,874,634 2,441,763
(3) Policy-reserve-matching bonds
Millions of yen
2020
As of March 31,
Consolidated
balance sheet
amount Fair value Difference
Fair values exceeding the consolidated balance sheet amount
Japanese government and corporate bonds 718,722 812,955 94,232
Japanese government and local government bonds 616,023 691,191 75,168
Japanese corporate bonds 102,698 121,763 19,064
Others 109,078 157,243 48,165
Subtotal 827,801 970,198 142,397
Fair values not exceeding the consolidated balance sheet amount
Japanese government and corporate bonds 28,136 27,697 (438)
Japanese government and local government bonds 5,663 5,642 (20)
Japanese corporate bonds 22,473 22,054 (418)
Subtotal 28,136 27,697 (438)
Total 855,937 997,896 141,958
(4) Available-for-sale securities
Millions of yen
2020
As of March 31,
Consolidated
balance sheet
amount Acquisition cost Difference
Consolidated balance sheet amount exceeding the acquisition cost
Japanese government and corporate bonds 1,118,644 979,544 139,099
Japanese government and local government bonds 1,072,860 934,096 138,763
Japanese corporate bonds 45,783 45,448 335
Equity securities 10,458 4,666 5,792
Others 295,828 259,026 36,801
Subtotal 1,424,930 1,243,237 181,693
Consolidated balance sheet amount not exceeding the acquisition cost
Japanese government and corporate bonds 92,483 92,680 (196)
Japanese government and local government bonds 61,406 61,491 (84)
Japanese corporate bonds 31,077 31,189 (112)
Equity securities 323 361 (37)
Others 391,112 407,309 (16,196)
Subtotal 483,919 500,351 (16,431)
Total 1,908,850 1,743,589 165,261
Note: As the unlisted stocks of ¥1,872 million (consolidated balance sheet amount) and investment in partnership of ¥8,823 million (consolidated balance
sheet amount) have no market prices and their fair values are not readily determinable, they are not included in the table above.
(5) Held-to-maturity securities sold during the period
There is no related information to be reported.
(6) Policy-reserve-matching bonds sold during the period
There is no related information to be reported.
Sony Financial Holdings Inc.Annual Report202074
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(7) Available-for-sale securities sold during the period
Millions of yen
2020
For the year ended March 31, Sales
Total gains on
sales
Total losses on
sales
Japanese government and corporate bonds 9,081 138 2
Japanese government and local government bonds 6,582 137 —
Japanese corporate bonds 2,499 1 2
Equity securities 9,048 4,111 50
Others 26,801 266 123
Total 44,931 4,516 176
(8) Impairment of available-for-sale securities
Available-for-sale securities with fair value are considered impaired if the fair value decreases materially below the acquisition cost and such
decline is considered non-recoverable. The fair value is recognized as the consolidated balance sheet amount and the write-down is accounted
for as a devaluation loss for the fiscal year.
¥6,316 million of impairment losses for available-for-sale securities (including ¥6,316 million of foreign securities) was recognized for the yea
ended March 31, 2020.
“Material decline” is indicated when the fair value declines by 30% or more from the acquisition cost.
20.Fair value information on money held in trust as of March 31, 2020:
(1) Money held in trust for trading
There is no related information to be reported.
(2) Money held in trust for held-to-maturity and policy-reserve-matching
There is no related information to be reported.
(3) Other money held in trust (other than for trading, held-to-maturity or policy-reserve-matching)
Millions of yen
2020
As of March 31,
Consolidated
balance sheet
amount Acquisition cost Difference
Items whose consolidated
balance sheet amount
exceeds acquisition cost
Items whose consolidated
balance sheet amount does
not exceed acquisition cost
Other money held in trust 38,067 37,562 505 688 (183)
Notes: 1. The amount of jointly invested monetary trusts that is included in the table above as of March 31, 2020 is ¥40 million.
2. “Items whose consolidated balance sheet amount exceeds acquisition cost” and “Items whose consolidated balance sheet amount does not
exceed acquisition cost” are the breakdown of the difference.
(4) Impairment of other money held in trust
Securities with fair values that are included in other money held in trust are considered impaired if their fair value decreases materially below th
acquisition cost and such decline is considered non-recoverable.
No impairment loss was recognized for the year ended March 31, 2020.
“Material decline” is indicated when the fair value declines by 30% or more from the acquisition cost.
21.Derivative financial instruments:
(1) Hedge accounting not applied
Below is a summary of contractual or notional amounts, current market or fair values, valuation gains or losses, and the method of calculating
the fair values of derivatives, classified by transaction, to which hedge accounting is not applied. Notional amounts do not indicate exposure to
market risk.
1) Interest rate derivatives
As of March 31,
Millions of yen
2020
Notional amount
total
Notional amount
over 1 year Fair value
Valuation gains
(losses)
Over-the-counter
transactions
Interest rate swaps
Fixed-rate receivable /
Floating-rate payable 435,378 430,878 (1,093) (1,093)
Floating-rate receivable /
Fixed-rate payable 75,664 75,564 (124) (124)
Interest swaption
Sold 18,700 18,700 (56) 25
Total — — (1,273) (1,192)
Notes: 1. The above transactions are valued at market, and the valuation gains or losses are recorded in the consolidated statements of income.
2. Fair value is calculated using the discounted cash flow and option pricing models, and others.
Sony Financial Holdings Inc.Annual Report2020 75
Millions of yen
2020
For the year ended March 31, Sales
Total gains on
sales
Total losses on
sales
Japanese government and corporate bonds 9,081 138 2
Japanese government and local government bonds 6,582 137 —
Japanese corporate bonds 2,499 1 2
Equity securities 9,048 4,111 50
Others 26,801 266 123
Total 44,931 4,516 176
(8) Impairment of available-for-sale securities
Available-for-sale securities with fair value are considered impaired if the fair value decreases materially below the acquisition cost and such
decline is considered non-recoverable. The fair value is recognized as the consolidated balance sheet amount and the write-down is accounted
for as a devaluation loss for the fiscal year.
¥6,316 million of impairment losses for available-for-sale securities (including ¥6,316 million of foreign securities) was recognized for the yea
ended March 31, 2020.
“Material decline” is indicated when the fair value declines by 30% or more from the acquisition cost.
20.Fair value information on money held in trust as of March 31, 2020:
(1) Money held in trust for trading
There is no related information to be reported.
(2) Money held in trust for held-to-maturity and policy-reserve-matching
There is no related information to be reported.
(3) Other money held in trust (other than for trading, held-to-maturity or policy-reserve-matching)
Millions of yen
2020
As of March 31,
Consolidated
balance sheet
amount Acquisition cost Difference
Items whose consolidated
balance sheet amount
exceeds acquisition cost
Items whose consolidated
balance sheet amount does
not exceed acquisition cost
Other money held in trust 38,067 37,562 505 688 (183)
Notes: 1. The amount of jointly invested monetary trusts that is included in the table above as of March 31, 2020 is ¥40 million.
2. “Items whose consolidated balance sheet amount exceeds acquisition cost” and “Items whose consolidated balance sheet amount does not
exceed acquisition cost” are the breakdown of the difference.
(4) Impairment of other money held in trust
Securities with fair values that are included in other money held in trust are considered impaired if their fair value decreases materially below th
acquisition cost and such decline is considered non-recoverable.
No impairment loss was recognized for the year ended March 31, 2020.
“Material decline” is indicated when the fair value declines by 30% or more from the acquisition cost.
21.Derivative financial instruments:
(1) Hedge accounting not applied
Below is a summary of contractual or notional amounts, current market or fair values, valuation gains or losses, and the method of calculating
the fair values of derivatives, classified by transaction, to which hedge accounting is not applied. Notional amounts do not indicate exposure to
market risk.
1) Interest rate derivatives
As of March 31,
Millions of yen
2020
Notional amount
total
Notional amount
over 1 year Fair value
Valuation gains
(losses)
Over-the-counter
transactions
Interest rate swaps
Fixed-rate receivable /
Floating-rate payable 435,378 430,878 (1,093) (1,093)
Floating-rate receivable /
Fixed-rate payable 75,664 75,564 (124) (124)
Interest swaption
Sold 18,700 18,700 (56) 25
Total — — (1,273) (1,192)
Notes: 1. The above transactions are valued at market, and the valuation gains or losses are recorded in the consolidated statements of income.
2. Fair value is calculated using the discounted cash flow and option pricing models, and others.
Sony Financial Holdings Inc.Annual Report2020 75
2) Currency derivatives
Millions of yen
As of March 31,
2020
Notional amount
total
Notional amount
over 1 year Fair value
Valuation gains
(losses)
Listed Currency futures Sold 18,428 — 13 13
Bought 66,325 — 74 74
Over-the-counter
transactions
Forward foreign exchangesSold 81,901 — 91 91
Bought 168,750 — 497 497
Foreign exchange margin
transaction
Sold 43,373 — 2,215 2,215
Bought 18,706 — 755 755
Currency options Sold 459 — (4) (0)
Bought 473 — 6 4
Currency forward contractsBought 10,652 — (1,534) (1,534)
Total — — 2,115 2,118
Notes: 1. The above transactions are valued at market, and the valuation gains or losses are recorded in the consolidated statements of income.
2. The fair value for exchange-traded transactions is the closing price on the Exchange at the end of the fiscal year.
The fair value for over-the-counter transactions is calculated using the discounted cash flow and option pricing models.
3) Stock derivatives
Millions of yen
As of March 31,
2020
Notional amount
total
Notional amount
over 1 year Fair value
Valuation gains
(losses)
Listed Stock index futures Sold 63,354 — (871) (871)
Over-the-counter
transactions
Total return swap Sold 103,408 — 18,280 18,280
Total — — 17,409 17,409
Notes: 1. The above transactions are valued at market, and the valuation gains or losses are recorded in the consolidated statements of income.
2. The fair value for exchange-traded transactions is the closing price on the Exchange at the end of the fiscal year.
The fair value for the over-the-counter transactions is stated at the share prices at the end of the fiscal year and other methods.
4) Bond derivatives
Millions of yen
As of March 31,
2020
Notional amount
total
Notional amount
over 1 year Fair value
Valuation gains
(losses)
Listed Bond futures Sold 56,546 — 15 15
Total — — 15 15
Notes: 1. The above transactions are valued at market, and the valuation gains or losses are recorded in the consolidated statements of income.
2. The fair value is the closing price on the Exchange at the end of the fiscal year.
5) Commodity derivatives
Millions of yen
As of March 31,
2020
Notional amount
total
Notional amount
over 1 year Fair value
Valuation gains
(losses)
Listed Commodity futures Sold 1,465 — 0 0
Total — — 0 0
Notes: 1. The above transactions are valued at market, and the valuation gains or losses are recorded in the consolidated statements of income.
2. The fair value is the closing price on the Exchange at the end of the fiscal year.
Sony Financial Holdings Inc.Annual Report202076
Millions of yen
As of March 31,
2020
Notional amount
total
Notional amount
over 1 year Fair value
Valuation gains
(losses)
Listed Currency futures Sold 18,428 — 13 13
Bought 66,325 — 74 74
Over-the-counter
transactions
Forward foreign exchangesSold 81,901 — 91 91
Bought 168,750 — 497 497
Foreign exchange margin
transaction
Sold 43,373 — 2,215 2,215
Bought 18,706 — 755 755
Currency options Sold 459 — (4) (0)
Bought 473 — 6 4
Currency forward contractsBought 10,652 — (1,534) (1,534)
Total — — 2,115 2,118
Notes: 1. The above transactions are valued at market, and the valuation gains or losses are recorded in the consolidated statements of income.
2. The fair value for exchange-traded transactions is the closing price on the Exchange at the end of the fiscal year.
The fair value for over-the-counter transactions is calculated using the discounted cash flow and option pricing models.
3) Stock derivatives
Millions of yen
As of March 31,
2020
Notional amount
total
Notional amount
over 1 year Fair value
Valuation gains
(losses)
Listed Stock index futures Sold 63,354 — (871) (871)
Over-the-counter
transactions
Total return swap Sold 103,408 — 18,280 18,280
Total — — 17,409 17,409
Notes: 1. The above transactions are valued at market, and the valuation gains or losses are recorded in the consolidated statements of income.
2. The fair value for exchange-traded transactions is the closing price on the Exchange at the end of the fiscal year.
The fair value for the over-the-counter transactions is stated at the share prices at the end of the fiscal year and other methods.
4) Bond derivatives
Millions of yen
As of March 31,
2020
Notional amount
total
Notional amount
over 1 year Fair value
Valuation gains
(losses)
Listed Bond futures Sold 56,546 — 15 15
Total — — 15 15
Notes: 1. The above transactions are valued at market, and the valuation gains or losses are recorded in the consolidated statements of income.
2. The fair value is the closing price on the Exchange at the end of the fiscal year.
5) Commodity derivatives
Millions of yen
As of March 31,
2020
Notional amount
total
Notional amount
over 1 year Fair value
Valuation gains
(losses)
Listed Commodity futures Sold 1,465 — 0 0
Total — — 0 0
Notes: 1. The above transactions are valued at market, and the valuation gains or losses are recorded in the consolidated statements of income.
2. The fair value is the closing price on the Exchange at the end of the fiscal year.
Sony Financial Holdings Inc.Annual Report202076
(2) Hedge accounting is applied
The following provides a summary of contractual or notional amounts, current market or fair values, valuation gains or losses, and the method
of calculating the fair values of derivatives, classified by transactions, to which hedge accounting is applied Notional amounts do not indicate
exposure to credit loss.
1) Interest rate derivatives
Millions of yen
2020
As of March 31,
Hedge accounting Hedged item
Notional
amount total
Notional
amount over
1 year Fair value
Deferred hedge accounting Interest rate swaps
Floating-rate receivable /
Fixed-rate payable
Deposits, loans 260,075 201,539 (50)
Fair value hedge accounting Interest rate swaps
Floating-rate receivable /
Fixed-rate payable
Available-for-sale
securities (bonds) 223,013 184,346 (14,849)
Total — — (14,900)
Notes: 1.Deferred hedge accounting is applied in accordance with the Industry Audit Committee, Statement No. 24, along with fair value hedge accounting
2. Fair value is calculated using the discounted cash flow and other methods.
2) Currency derivatives
Millions of yen
2020
As of March 31,
Hedge accounting Hedged item
Notional
amount total
Notional
amount over
1 year Fair value
Deferred hedge accounting Currency swaps Available-for-sale securities (bonds) 22,753 — (352)
Fair value hedge accounting Currency swaps Available-for-sale securities (bonds) 31,000 21,000 (3,154)
Total — — (3,506)
Notes: 1. Deferred hedge accounting is applied in accordance with the Industry Audit Committee No. 25, along with fair value hedge accounting.
2. Fair value is calculated using the discounted cash flow and other methods.
22.Information about retirement benefit obligations as of March 31, 2020:
(1) Overview of retirement benefit plans
The life insurance subsidiary provides a lump-sum retirement benefit plan to sales staff and a defined benefit corporate pension plan and define
contribution pension plan to internal office staff. The non-life insurance subsidiary provides a lump-sum retirement benefit plan and a defined
contribution pension plan. SFH and its banking subsidiary mainly provide a lump-sum retirement benefit plan. SFH and some consolidated
subsidiaries calculate retirement benefit obligations based on the simplified method.
(2) Defined benefit plans
1) Reconciliation of beginning and ending balances of retirement benefit obligations (excluding those listed in 9)
Millions of yen
For the year ended March 31, 2020
Balance at the beginning of the period of retirement benefit obligations 46,893
Service cost 5,051
Interest cost 78
Net actuarial gain arising during the period (769)
Retirement benefits paid (3,595)
Effect of the transfer between plans (316)
Balance at the end of the period of retirement benefit obligations 47,342
2) Reconciliation of beginning and ending balances of plan assets (excluding those listed in 9))
Millions of yen
For the year ended March 31, 2020
Balance at the beginning of the period of plan assets 16,445
Expected return on plan assets 165
Net actuarial gain arising during the period (674)
Employer contribution 1,470
Retirement benefits paid (422)
Effect of the transfer between plans (247)
Balance at the end of the period of plan assets 16,737
Sony Financial Holdings Inc.Annual Report2020 77
The following provides a summary of contractual or notional amounts, current market or fair values, valuation gains or losses, and the method
of calculating the fair values of derivatives, classified by transactions, to which hedge accounting is applied Notional amounts do not indicate
exposure to credit loss.
1) Interest rate derivatives
Millions of yen
2020
As of March 31,
Hedge accounting Hedged item
Notional
amount total
Notional
amount over
1 year Fair value
Deferred hedge accounting Interest rate swaps
Floating-rate receivable /
Fixed-rate payable
Deposits, loans 260,075 201,539 (50)
Fair value hedge accounting Interest rate swaps
Floating-rate receivable /
Fixed-rate payable
Available-for-sale
securities (bonds) 223,013 184,346 (14,849)
Total — — (14,900)
Notes: 1.Deferred hedge accounting is applied in accordance with the Industry Audit Committee, Statement No. 24, along with fair value hedge accounting
2. Fair value is calculated using the discounted cash flow and other methods.
2) Currency derivatives
Millions of yen
2020
As of March 31,
Hedge accounting Hedged item
Notional
amount total
Notional
amount over
1 year Fair value
Deferred hedge accounting Currency swaps Available-for-sale securities (bonds) 22,753 — (352)
Fair value hedge accounting Currency swaps Available-for-sale securities (bonds) 31,000 21,000 (3,154)
Total — — (3,506)
Notes: 1. Deferred hedge accounting is applied in accordance with the Industry Audit Committee No. 25, along with fair value hedge accounting.
2. Fair value is calculated using the discounted cash flow and other methods.
22.Information about retirement benefit obligations as of March 31, 2020:
(1) Overview of retirement benefit plans
The life insurance subsidiary provides a lump-sum retirement benefit plan to sales staff and a defined benefit corporate pension plan and define
contribution pension plan to internal office staff. The non-life insurance subsidiary provides a lump-sum retirement benefit plan and a defined
contribution pension plan. SFH and its banking subsidiary mainly provide a lump-sum retirement benefit plan. SFH and some consolidated
subsidiaries calculate retirement benefit obligations based on the simplified method.
(2) Defined benefit plans
1) Reconciliation of beginning and ending balances of retirement benefit obligations (excluding those listed in 9)
Millions of yen
For the year ended March 31, 2020
Balance at the beginning of the period of retirement benefit obligations 46,893
Service cost 5,051
Interest cost 78
Net actuarial gain arising during the period (769)
Retirement benefits paid (3,595)
Effect of the transfer between plans (316)
Balance at the end of the period of retirement benefit obligations 47,342
2) Reconciliation of beginning and ending balances of plan assets (excluding those listed in 9))
Millions of yen
For the year ended March 31, 2020
Balance at the beginning of the period of plan assets 16,445
Expected return on plan assets 165
Net actuarial gain arising during the period (674)
Employer contribution 1,470
Retirement benefits paid (422)
Effect of the transfer between plans (247)
Balance at the end of the period of plan assets 16,737
Sony Financial Holdings Inc.Annual Report2020 77
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3) Reconciliation of the ending balances of retirement benefit obligations and plan assets, and net defined benefit liability and net
defined benefit asset recorded on the consolidated balance sheets.
Millions of yen
As of March 31, 2020
Funded retirement benefit obligations 13,190
Plan assets (16,737)
(3,546)
Unfunded retirement benefit obligations 34,326
Net liabilities and assets recorded on the consolidated balance sheets 30,779
Net defined benefit liability 34,170
Net defined benefit asset (3,391)
Net liabilities and assets recorded on the consolidated balance sheets 30,779
4) Components and amounts of retirement benefit expenses
Millions of yen
For the year ended March 31, 2020
Service cost 5,051
Interest cost 78
Expected return on plan assets (165)
Amortization of net actuarial gain 769
Others 88
Retirement benefit expenses related to defined benefit plans 5,822
Gains (losses) on transfer to a defined contribution pension plan 16
Note: SFH includes retirement benefit expenses in “Others” based on the simplified method.
5) Remeasurements of defined benefit plans (before tax deductions)
The breakdown of items recorded as remeasurements of defined benefit plans (before tax deductions) is as follows:
Millions of yen
For the year ended March 31, 2020
Net actuarial gain 918
Total 918
6) Accumulated remeasurements of defined benefit plans (before tax deductions)
The breakdown of items recorded as accumulated remeasurements of defined benefit plans (before tax deductions) is as follows:
Millions of yen
As of March 31, 2020
Unrecognized net actuarial gain (1,172)
Total (1,172)
7) Plan assets
(i) Main components of plan assets
The percentage share of components by main asset class out of total plan assets is as follows:
%
As of March 31, 2020
Bonds 70
Equity securities 26
Others 4
Total 100
(ii) Method of setting the long-term rate of expected return on plan assets
The long-term rate of expected return on plan assets is determined by taking into account the current and expected allocation of plan assets
and the current long-term return rate and the long-term return rate that is expected in the future based on the various assets that comprise the
plan assets.
8) Basis for calculating actuarial gain or loss
Main basis for calculating actuarial gain or loss as of March 31, 2020
Discount rate 0.1%–0.6%
Long-term rate of expected return on plan assets1.0%–2.6%
Sony Financial Holdings Inc.Annual Report202078
defined benefit asset recorded on the consolidated balance sheets.
Millions of yen
As of March 31, 2020
Funded retirement benefit obligations 13,190
Plan assets (16,737)
(3,546)
Unfunded retirement benefit obligations 34,326
Net liabilities and assets recorded on the consolidated balance sheets 30,779
Net defined benefit liability 34,170
Net defined benefit asset (3,391)
Net liabilities and assets recorded on the consolidated balance sheets 30,779
4) Components and amounts of retirement benefit expenses
Millions of yen
For the year ended March 31, 2020
Service cost 5,051
Interest cost 78
Expected return on plan assets (165)
Amortization of net actuarial gain 769
Others 88
Retirement benefit expenses related to defined benefit plans 5,822
Gains (losses) on transfer to a defined contribution pension plan 16
Note: SFH includes retirement benefit expenses in “Others” based on the simplified method.
5) Remeasurements of defined benefit plans (before tax deductions)
The breakdown of items recorded as remeasurements of defined benefit plans (before tax deductions) is as follows:
Millions of yen
For the year ended March 31, 2020
Net actuarial gain 918
Total 918
6) Accumulated remeasurements of defined benefit plans (before tax deductions)
The breakdown of items recorded as accumulated remeasurements of defined benefit plans (before tax deductions) is as follows:
Millions of yen
As of March 31, 2020
Unrecognized net actuarial gain (1,172)
Total (1,172)
7) Plan assets
(i) Main components of plan assets
The percentage share of components by main asset class out of total plan assets is as follows:
%
As of March 31, 2020
Bonds 70
Equity securities 26
Others 4
Total 100
(ii) Method of setting the long-term rate of expected return on plan assets
The long-term rate of expected return on plan assets is determined by taking into account the current and expected allocation of plan assets
and the current long-term return rate and the long-term return rate that is expected in the future based on the various assets that comprise the
plan assets.
8) Basis for calculating actuarial gain or loss
Main basis for calculating actuarial gain or loss as of March 31, 2020
Discount rate 0.1%–0.6%
Long-term rate of expected return on plan assets1.0%–2.6%
Sony Financial Holdings Inc.Annual Report202078
9) Reconciliation of beginning and ending balances of net defined benefit liability of the plan based on the simplified method
Millions of yen
For the year ended March 31, 2020
Balance at the beginning of the period of net defined benefit liability 156
Retirement benefit expenses 16
Retirement benefits paid (0)
Contribution to the plan (3)
Others 5
Balance at the end of the period of net defined benefit liability 174
(3) Defined contribution plans
The amount of contribution required for defined contribution plans by the Companies was ¥398 million.
23.Information on stock options, etc., as of March 31, 2020:
(1) Expenses and line items associated with stock options, etc.
Operating expenses, etc. ¥126 million
(2) Description and volume of stock options as well as their changes
1) Description of stock options
The first series of stock acquisition rights of SFH
Category and number of eligible
recipients 4 executive directors of SFH
Number of stock options granted
by type of share* Common stock 52,900 shares
Grant date August 8, 2016
Vesting conditions
Options rights are to be vested upon grant.
However, if the recipient loses the position of executive director of the Company prior to the Ordinary
General Meeting of Shareholders in 2017, he/she can exercise the number of stock options calculated by
multiplying the number of stock options granted, by the number of months he/she serves as executive
director from July 2016 up to the month of losing his/her position, and dividing the value by 12. The rest of
the stock options granted shall no longer be exercisable on or after the date of the recipient losing his/her
position, and is cancelled.
Eligible period of service From June 24, 2016 to the date of the Ordinary General Meeting of Shareholders in 2017
Exercise period
From August 9, 2016 to August 8, 2046
However, eligible recipients of stock acquisition rights may exercise all (but not part) of the stock acquisi-
tion rights held by him/her only during the period from the day immediately following the date on which
such holder loses any and all of his/her office(s) as executive director of SFH and its subsidiaries up to ten
days (in the event that the tenth day is a holiday, the following business day) thereafter.
The second series of stock acquisition rights of SFH
Category and number of eligible
recipients
3 executive directors of SFH
7 executive directors of SFH subsidiaries
Number of stock options granted
by type of share* Common stock 41,700 shares
Grant date August 7, 2017
Vesting conditions
Options rights are to be vested upon grant.
However, if the recipient loses the position of executive director of the Company and its subsidiaries prior
to the Ordinary General Meeting of Shareholders in 2018, he/she can exercise the number of stock
options calculated by multiplying the number of stock options granted, by the number of months he/she
serves as executive director from July 2017 up to the month of losing his/ her position, and dividing the
value by 12. The rest of the stock options granted shall no longer be exercisable on or after the date of the
recipient losing his/her position, and is cancelled.
Eligible period of service From June 21, 2017 to the date of the Ordinary General Meeting of Shareholders in 2018
Exercise period
From August 8, 2017 to August 7, 2047
However, eligible recipients of stock acquisition rights may exercise all (but not part) of the stock acquisi-
tion rights held by him/her only during the period from the day immediately following the date on which
such holder loses any and all of his/her office(s) as executive director of SFH and its subsidiaries up to ten
days (in the event that the tenth day is a holiday, the following business day) thereafter.
Sony Financial Holdings Inc.Annual Report2020 79
Millions of yen
For the year ended March 31, 2020
Balance at the beginning of the period of net defined benefit liability 156
Retirement benefit expenses 16
Retirement benefits paid (0)
Contribution to the plan (3)
Others 5
Balance at the end of the period of net defined benefit liability 174
(3) Defined contribution plans
The amount of contribution required for defined contribution plans by the Companies was ¥398 million.
23.Information on stock options, etc., as of March 31, 2020:
(1) Expenses and line items associated with stock options, etc.
Operating expenses, etc. ¥126 million
(2) Description and volume of stock options as well as their changes
1) Description of stock options
The first series of stock acquisition rights of SFH
Category and number of eligible
recipients 4 executive directors of SFH
Number of stock options granted
by type of share* Common stock 52,900 shares
Grant date August 8, 2016
Vesting conditions
Options rights are to be vested upon grant.
However, if the recipient loses the position of executive director of the Company prior to the Ordinary
General Meeting of Shareholders in 2017, he/she can exercise the number of stock options calculated by
multiplying the number of stock options granted, by the number of months he/she serves as executive
director from July 2016 up to the month of losing his/her position, and dividing the value by 12. The rest of
the stock options granted shall no longer be exercisable on or after the date of the recipient losing his/her
position, and is cancelled.
Eligible period of service From June 24, 2016 to the date of the Ordinary General Meeting of Shareholders in 2017
Exercise period
From August 9, 2016 to August 8, 2046
However, eligible recipients of stock acquisition rights may exercise all (but not part) of the stock acquisi-
tion rights held by him/her only during the period from the day immediately following the date on which
such holder loses any and all of his/her office(s) as executive director of SFH and its subsidiaries up to ten
days (in the event that the tenth day is a holiday, the following business day) thereafter.
The second series of stock acquisition rights of SFH
Category and number of eligible
recipients
3 executive directors of SFH
7 executive directors of SFH subsidiaries
Number of stock options granted
by type of share* Common stock 41,700 shares
Grant date August 7, 2017
Vesting conditions
Options rights are to be vested upon grant.
However, if the recipient loses the position of executive director of the Company and its subsidiaries prior
to the Ordinary General Meeting of Shareholders in 2018, he/she can exercise the number of stock
options calculated by multiplying the number of stock options granted, by the number of months he/she
serves as executive director from July 2017 up to the month of losing his/ her position, and dividing the
value by 12. The rest of the stock options granted shall no longer be exercisable on or after the date of the
recipient losing his/her position, and is cancelled.
Eligible period of service From June 21, 2017 to the date of the Ordinary General Meeting of Shareholders in 2018
Exercise period
From August 8, 2017 to August 7, 2047
However, eligible recipients of stock acquisition rights may exercise all (but not part) of the stock acquisi-
tion rights held by him/her only during the period from the day immediately following the date on which
such holder loses any and all of his/her office(s) as executive director of SFH and its subsidiaries up to ten
days (in the event that the tenth day is a holiday, the following business day) thereafter.
Sony Financial Holdings Inc.Annual Report2020 79
The third series of stock acquisition rights of SFH
Category and number of eligible
recipients
3 executive directors of SFH
6 executive directors of SFH subsidiaries
Number of stock options granted
by type of share* Common stock 31,600 shares
Grant date August 7, 2018
Vesting conditions
Options rights are to be vested upon grant.
However, if the recipient loses the position of executive director of the Company and its subsidiaries prior
to the Ordinary General Meeting of Shareholders in 2019, he/she can exercise the number of stock
options calculated by multiplying the number of stock options granted, by the number of months he/she
serves as executive director from July 2018 up to the month of losing his/ her position, and dividing the
value by 12. The rest of the stock options granted shall no longer be exercisable on or after the date of the
recipient losing his/her position, and is cancelled.
Eligible period of service From June 22, 2018 to the date of the Ordinary General Meeting of Shareholders in 2019
Exercise period
From August 8, 2018 to August 7, 2048
However, eligible recipients of stock acquisition rights may exercise all (but not part) of the stock acquisi-
tion rights held by him/her only during the period from the day immediately following the date on which
such holder loses any and all of his/her office(s) as executive director of SFH and its subsidiaries up to ten
days (in the event that the tenth day is a holiday, the following business day) thereafter.
The fourth series of stock acquisition rights of SFH
Category and number of eligible
recipients
3 executive directors of SFH
8 executive directors of SFH subsidiaries
Number of stock options granted
by type of share* Common stock 28,800 shares
Grant date August 6, 2019
Vesting conditions
Options rights are to be vested upon grant.
However, if the recipient loses the position of executive director of the Company and its subsidiaries prior
to the Ordinary General Meeting of Shareholders in 2020, he/she can exercise the number of stock
options calculated by multiplying the number of stock options granted, by the number of months he/she
serves as executive director from July 2019 up to the month of losing his/her position, and dividing the
value by 12. The rest of the stock options granted shall no longer be exercisable on or after the date of the
recipient losing his/her position, and is cancelled.
Eligible period of service From June 21, 2019 to the date of the Ordinary General Meeting of Shareholders in 2020
Exercise period
From August 7, 2019 to August 6, 2049
However, eligible recipients of stock acquisition rights may exercise all (but not part) of the stock acquisi-
tion rights held by him/her only during the period from the day immediately following the date on which
such holder loses any and all of his/her office(s) as executive director of SFH and its subsidiaries up to ten
days (in the event that the tenth day is a holiday, the following business day) thereafter.
* Stock options have been converted and stated as number of shares.
2) Volume of stock options and their changes
Stock options that existed in the year ended March 31, 2020, are presented as follows, and have been converted and stated as number of share
(i) Number of stock options
The first series of stock
acquisition rights of
SFH
The second series of
stock acquisition rights
of SFH
The third series of stock
acquisition rights of
SFH
The fourth series of
stock acquisition rights
of SFH
Before vesting (shares)
At the end of the previous year — — — —
Granted — — — 28,800
Lapsed — — — —
Vested — — — 28,800
Number of unvested stock options — — — —
After vesting (shares)
At the end of the previous year 35,700 34,000 31,600 —
Vested — — — 28,800
Exercised — — — —
Lapsed — — — —
Number of unexercised stock options 35,700 34,000 31,600 28,800
Sony Financial Holdings Inc.Annual Report202080
Category and number of eligible
recipients
3 executive directors of SFH
6 executive directors of SFH subsidiaries
Number of stock options granted
by type of share* Common stock 31,600 shares
Grant date August 7, 2018
Vesting conditions
Options rights are to be vested upon grant.
However, if the recipient loses the position of executive director of the Company and its subsidiaries prior
to the Ordinary General Meeting of Shareholders in 2019, he/she can exercise the number of stock
options calculated by multiplying the number of stock options granted, by the number of months he/she
serves as executive director from July 2018 up to the month of losing his/ her position, and dividing the
value by 12. The rest of the stock options granted shall no longer be exercisable on or after the date of the
recipient losing his/her position, and is cancelled.
Eligible period of service From June 22, 2018 to the date of the Ordinary General Meeting of Shareholders in 2019
Exercise period
From August 8, 2018 to August 7, 2048
However, eligible recipients of stock acquisition rights may exercise all (but not part) of the stock acquisi-
tion rights held by him/her only during the period from the day immediately following the date on which
such holder loses any and all of his/her office(s) as executive director of SFH and its subsidiaries up to ten
days (in the event that the tenth day is a holiday, the following business day) thereafter.
The fourth series of stock acquisition rights of SFH
Category and number of eligible
recipients
3 executive directors of SFH
8 executive directors of SFH subsidiaries
Number of stock options granted
by type of share* Common stock 28,800 shares
Grant date August 6, 2019
Vesting conditions
Options rights are to be vested upon grant.
However, if the recipient loses the position of executive director of the Company and its subsidiaries prior
to the Ordinary General Meeting of Shareholders in 2020, he/she can exercise the number of stock
options calculated by multiplying the number of stock options granted, by the number of months he/she
serves as executive director from July 2019 up to the month of losing his/her position, and dividing the
value by 12. The rest of the stock options granted shall no longer be exercisable on or after the date of the
recipient losing his/her position, and is cancelled.
Eligible period of service From June 21, 2019 to the date of the Ordinary General Meeting of Shareholders in 2020
Exercise period
From August 7, 2019 to August 6, 2049
However, eligible recipients of stock acquisition rights may exercise all (but not part) of the stock acquisi-
tion rights held by him/her only during the period from the day immediately following the date on which
such holder loses any and all of his/her office(s) as executive director of SFH and its subsidiaries up to ten
days (in the event that the tenth day is a holiday, the following business day) thereafter.
* Stock options have been converted and stated as number of shares.
2) Volume of stock options and their changes
Stock options that existed in the year ended March 31, 2020, are presented as follows, and have been converted and stated as number of share
(i) Number of stock options
The first series of stock
acquisition rights of
SFH
The second series of
stock acquisition rights
of SFH
The third series of stock
acquisition rights of
SFH
The fourth series of
stock acquisition rights
of SFH
Before vesting (shares)
At the end of the previous year — — — —
Granted — — — 28,800
Lapsed — — — —
Vested — — — 28,800
Number of unvested stock options — — — —
After vesting (shares)
At the end of the previous year 35,700 34,000 31,600 —
Vested — — — 28,800
Exercised — — — —
Lapsed — — — —
Number of unexercised stock options 35,700 34,000 31,600 28,800
Sony Financial Holdings Inc.Annual Report202080
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(ii) Unit price information
The first series of stock
acquisition rights of
SFH
The second series of
stock acquisition rights
of SFH
The third series of stock
acquisition rights of
SFH
The fourth series of
stock acquisition rights
of SFH
Exercise price ¥ 1 ¥ 1 ¥ 1 ¥ 1
Average share price at the time of exercise — — — —
Fairly assessed value on the grant date ¥1,236 ¥1,695 ¥2,003 ¥2,316
(3) Method for estimating the fair value of stock options
The method for estimating the fair value of stock options that were granted in the year ended March 31, 2020 is as follows:
1) Assessment method used
Black-Scholes model
2) Main basic values and their estimation method
The fourth series of stock
acquisition rights of SFH
Volatility of share price*1 30.377%
Expected remaining period*2 3.9 years
Expected dividend*3 ¥62/share
Risk-free rate*4 (0.267%)
*1 Calculated based on the past share prices during the period corresponding to the expected remaining period of 3.9 years in *2.
*2 Calculated by weighting and averaging the expected period of service by the amount to be granted.
*3 Based on the actual dividends for the fiscal year ended March 31, 2019.
*4 Calculated using the average compound yield of long-term JGB with the remaining period approximate to the expected remaining period of 3.9 years in *2.
(4) Method for estimating the number of stock options vested
As it is difficult, as a general rule, to reasonably estimate the number of stock options to lapse in the future, SFH adopts a method that only
reflects the actual number lapsed.
(5) Description of restricted stock compensation
The first series of restricted stock compensation of SFH
Category and number of
eligible recipients
3 executive directors of SFH
4 executive officers of SFH
7 executive directors of SFH subsidiaries
30 executive officers of SFH subsidiaries
Number of shares granted Common stock 27,513 shares
Grant date August 7, 2017
Transfer restriction period From August 7, 2017 to August 7, 2020
Cancellation conditions
On the condition that the recipient has maintained his/her position of executive director, etc., of SFH continu-
ously during the transfer restriction period, the transfer restriction shall be cancelled at the expiration of the
transfer restriction period.
If the recipient loses his/her position of executive director, etc., prior to the expiration of the transfer restriction
period for reasons that the Board of Directors of SFH deems justifiable, he/she can cancel the transfer restriction
for the number of allocated stock calculated by multiplying the number of allocated stock by the number of
months he/she serves as executive director, etc., from the month of the appointment of his/her respective
position up to the month of losing his/her position, and dividing the value by 12. SFH shall acquire the allocated
stock not subject to the cancellation of the transfer restriction free of charge immediately after the cancellation.
Fairly assessed value on the
grant date ¥2,020
The second series of restricted stock compensation of SFH
Category and number of
eligible recipients
3 executive directors of SFH
4 executive officers of SFH
6 executive directors of SFH subsidiaries
33 executive officers of SFH subsidiaries
Number of shares granted Common stock 27,770 shares
Grant date August 7, 2018
Transfer restriction period From August 7, 2018 to August 7, 2021
Cancellation conditions
On the condition that the recipient has maintained his/her position of executive director, etc., of SFH continu-
ously during the transfer restriction period, the transfer restriction shall be cancelled at the expiration of the
transfer restriction period.
If the recipient loses his/her position of executive director, etc., prior to the expiration of the transfer restriction
period for reasons that the Board of Directors of SFH deems justifiable, he/she can cancel the transfer restriction
for the number of allocated stock calculated by multiplying the number of allocated stock by the number of
months he/she serves as executive director, etc., from the month of the appointment of his/her respective
position up to the month of losing his/her position, and dividing the value by 12. SFH shall acquire the allocated
stock not subject to the cancellation of the transfer restriction free of charge immediately after the cancellation.
Fairly assessed value on the
grant date ¥2,091
Sony Financial Holdings Inc.Annual Report2020 81
The first series of stock
acquisition rights of
SFH
The second series of
stock acquisition rights
of SFH
The third series of stock
acquisition rights of
SFH
The fourth series of
stock acquisition rights
of SFH
Exercise price ¥ 1 ¥ 1 ¥ 1 ¥ 1
Average share price at the time of exercise — — — —
Fairly assessed value on the grant date ¥1,236 ¥1,695 ¥2,003 ¥2,316
(3) Method for estimating the fair value of stock options
The method for estimating the fair value of stock options that were granted in the year ended March 31, 2020 is as follows:
1) Assessment method used
Black-Scholes model
2) Main basic values and their estimation method
The fourth series of stock
acquisition rights of SFH
Volatility of share price*1 30.377%
Expected remaining period*2 3.9 years
Expected dividend*3 ¥62/share
Risk-free rate*4 (0.267%)
*1 Calculated based on the past share prices during the period corresponding to the expected remaining period of 3.9 years in *2.
*2 Calculated by weighting and averaging the expected period of service by the amount to be granted.
*3 Based on the actual dividends for the fiscal year ended March 31, 2019.
*4 Calculated using the average compound yield of long-term JGB with the remaining period approximate to the expected remaining period of 3.9 years in *2.
(4) Method for estimating the number of stock options vested
As it is difficult, as a general rule, to reasonably estimate the number of stock options to lapse in the future, SFH adopts a method that only
reflects the actual number lapsed.
(5) Description of restricted stock compensation
The first series of restricted stock compensation of SFH
Category and number of
eligible recipients
3 executive directors of SFH
4 executive officers of SFH
7 executive directors of SFH subsidiaries
30 executive officers of SFH subsidiaries
Number of shares granted Common stock 27,513 shares
Grant date August 7, 2017
Transfer restriction period From August 7, 2017 to August 7, 2020
Cancellation conditions
On the condition that the recipient has maintained his/her position of executive director, etc., of SFH continu-
ously during the transfer restriction period, the transfer restriction shall be cancelled at the expiration of the
transfer restriction period.
If the recipient loses his/her position of executive director, etc., prior to the expiration of the transfer restriction
period for reasons that the Board of Directors of SFH deems justifiable, he/she can cancel the transfer restriction
for the number of allocated stock calculated by multiplying the number of allocated stock by the number of
months he/she serves as executive director, etc., from the month of the appointment of his/her respective
position up to the month of losing his/her position, and dividing the value by 12. SFH shall acquire the allocated
stock not subject to the cancellation of the transfer restriction free of charge immediately after the cancellation.
Fairly assessed value on the
grant date ¥2,020
The second series of restricted stock compensation of SFH
Category and number of
eligible recipients
3 executive directors of SFH
4 executive officers of SFH
6 executive directors of SFH subsidiaries
33 executive officers of SFH subsidiaries
Number of shares granted Common stock 27,770 shares
Grant date August 7, 2018
Transfer restriction period From August 7, 2018 to August 7, 2021
Cancellation conditions
On the condition that the recipient has maintained his/her position of executive director, etc., of SFH continu-
ously during the transfer restriction period, the transfer restriction shall be cancelled at the expiration of the
transfer restriction period.
If the recipient loses his/her position of executive director, etc., prior to the expiration of the transfer restriction
period for reasons that the Board of Directors of SFH deems justifiable, he/she can cancel the transfer restriction
for the number of allocated stock calculated by multiplying the number of allocated stock by the number of
months he/she serves as executive director, etc., from the month of the appointment of his/her respective
position up to the month of losing his/her position, and dividing the value by 12. SFH shall acquire the allocated
stock not subject to the cancellation of the transfer restriction free of charge immediately after the cancellation.
Fairly assessed value on the
grant date ¥2,091
Sony Financial Holdings Inc.Annual Report2020 81
The third series of restricted stock compensation of SFH
Category and number of
eligible recipients
3 executive directors of SFH
5 executive officers of SFH
8 executive directors of SFH subsidiaries
31 executive officers of SFH subsidiaries
Number of shares granted Common stock 24,422 shares
Grant date August 6, 2019
Transfer restriction period From August 6, 2019 to August 6, 2022
Cancellation conditions
On the condition that the recipient has maintained his/her position of executive director, etc., of SFH continu-
ously during the transfer restriction period, the transfer restriction shall be cancelled at the expiration of the
transfer restriction period.
If the recipient loses his/her position of executive director, etc., prior to the expiration of the transfer restriction
period for reasons that the Board of Directors of SFH deems justifiable, he/she can cancel the transfer restriction
for the number of allocated stock calculated by multiplying the number of allocated stock by the number of
months he/she serves as executive director, etc., from the month of the appointment of his/her respective
position up to the month of losing his/her position, and dividing the value by 12. SFH shall acquire the allocated
stock not subject to the cancellation of the transfer restriction free of charge immediately after the cancellation.
Fairly assessed value on the
grant date ¥2,564
24.Information on tax effect accounting as of March 31, 2020:
(1) Breakdown of major factors giving rise to deferred tax assets and deferred tax liabilities
Millions of yen
As of March 31, 2020
Deferred tax assets
Tax loss carried forward*2 7,710
Policy reserves and others 49,051
Reserve for price fluctuations 14,856
Net defined benefit liability 8,656
Write-down of securities 4,113
Net unrealized gains (losses) on available-for-sale securities, net of taxes 5,369
Depreciation and amortization 4,735
Net deferred gains (losses) on hedging instruments, net of taxes 245
Others 8,875
Subtotal of deferred tax assets 103,615
Valuation allowance on tax loss carried forward*2 (7,710)
Valuation allowance on total deductible temporary differences (6,269)
Subtotal of valuation allowance*1 (13,979)
Total deferred tax assets 89,635
Deferred tax liabilities
Net unrealized gains (losses) on available-for-sale securities (48,539)
Others (2,047)
Total deferred tax liabilities (50,586)
Net deferred tax assets (liabilities) 39,049
*1 Valuation allowance increased mainly due to the change in the scope of consolidation and the additional recognition of valuation allowance for losses on
valuation of securities in Sony Life Insurance Co., Ltd., a subsidiary of the Company.
*2 Tax loss carried forward and the deferred tax assets by carry forward period.
Millions of yen
1 year or less
More than 1
year to 2
years
More than 2
years to 3
years
More than 3
years to 4
years
More than 4
years to 5
years
More than 5
years Total
As of March 31, 2020
Tax loss carried forward 920 1,020 1,132 589 488 3,559 7,710
Valuation allowance (920) (1,020) (1,132) (589) (488) (3,559) (7,710)
Deferred tax assets — — — — — — —
* Tax loss carried forward is calculated by multiplying statutory effective tax rate.
Sony Financial Holdings Inc.Annual Report202082
Category and number of
eligible recipients
3 executive directors of SFH
5 executive officers of SFH
8 executive directors of SFH subsidiaries
31 executive officers of SFH subsidiaries
Number of shares granted Common stock 24,422 shares
Grant date August 6, 2019
Transfer restriction period From August 6, 2019 to August 6, 2022
Cancellation conditions
On the condition that the recipient has maintained his/her position of executive director, etc., of SFH continu-
ously during the transfer restriction period, the transfer restriction shall be cancelled at the expiration of the
transfer restriction period.
If the recipient loses his/her position of executive director, etc., prior to the expiration of the transfer restriction
period for reasons that the Board of Directors of SFH deems justifiable, he/she can cancel the transfer restriction
for the number of allocated stock calculated by multiplying the number of allocated stock by the number of
months he/she serves as executive director, etc., from the month of the appointment of his/her respective
position up to the month of losing his/her position, and dividing the value by 12. SFH shall acquire the allocated
stock not subject to the cancellation of the transfer restriction free of charge immediately after the cancellation.
Fairly assessed value on the
grant date ¥2,564
24.Information on tax effect accounting as of March 31, 2020:
(1) Breakdown of major factors giving rise to deferred tax assets and deferred tax liabilities
Millions of yen
As of March 31, 2020
Deferred tax assets
Tax loss carried forward*2 7,710
Policy reserves and others 49,051
Reserve for price fluctuations 14,856
Net defined benefit liability 8,656
Write-down of securities 4,113
Net unrealized gains (losses) on available-for-sale securities, net of taxes 5,369
Depreciation and amortization 4,735
Net deferred gains (losses) on hedging instruments, net of taxes 245
Others 8,875
Subtotal of deferred tax assets 103,615
Valuation allowance on tax loss carried forward*2 (7,710)
Valuation allowance on total deductible temporary differences (6,269)
Subtotal of valuation allowance*1 (13,979)
Total deferred tax assets 89,635
Deferred tax liabilities
Net unrealized gains (losses) on available-for-sale securities (48,539)
Others (2,047)
Total deferred tax liabilities (50,586)
Net deferred tax assets (liabilities) 39,049
*1 Valuation allowance increased mainly due to the change in the scope of consolidation and the additional recognition of valuation allowance for losses on
valuation of securities in Sony Life Insurance Co., Ltd., a subsidiary of the Company.
*2 Tax loss carried forward and the deferred tax assets by carry forward period.
Millions of yen
1 year or less
More than 1
year to 2
years
More than 2
years to 3
years
More than 3
years to 4
years
More than 4
years to 5
years
More than 5
years Total
As of March 31, 2020
Tax loss carried forward 920 1,020 1,132 589 488 3,559 7,710
Valuation allowance (920) (1,020) (1,132) (589) (488) (3,559) (7,710)
Deferred tax assets — — — — — — —
* Tax loss carried forward is calculated by multiplying statutory effective tax rate.
Sony Financial Holdings Inc.Annual Report202082
(2)Breakdown of major factors giving rise to a significant difference between the statutory effective tax rate and the
effective income tax rate after application of tax effect accounting
%
As of March 31, 2020
Statutory effective tax rate 30.6
(Adjustments)
Difference in tax rate of subsidiaries (2.4)
Increase (decrease) in valuation allowance 2.1
Others (0.5)
Effective income tax rate after application of tax effect accounting 29.9
25.Information on business combinations, etc. as of March 31, 2020:
Sony Life Insurance Co., Ltd. (hereinafter “Sony Life”), a wholly-owned consolidated subsidiary of SFH, acquired 50% of the issued shares of
both Sony Life With Insurance Co.,Ltd.* (“Sony Life With”) and SA Reinsurance Ltd. (“SA Re”; the two acquirees are hereinafter collectively
referred to as “the two joint ventures”), and the two joint ventures became wholly-owned subsidiaries of SFH and Sony Life.
1. Overview of business combinations
(1) Names and businesses of acquirees
(i) Name of acquiree Sony Life With Insurance Co.,Ltd.*
Business Life insurance business
(ii) Name of acquiree SA Reinsurance Ltd.
Business Reinsurance business
(2) Main reason for business combination
The aim is to accelerate management decision making and streamline business operation by acquiring the two joint ventures as whol-
ly-owned subsidiaries.
(3) Date of business combinations
January 29, 2020
(4) Legal form of business combinations
Acquisition of shares for a monetary consideration
(5) Name of acquirees after the business combinations
(i) Sony Life With*
Sony Life With Insurance Co.,Ltd.*
(ii) SA Re
The company name remained unchanged after the business combination.
(6) Proportion of voting rights acquired
(i) Sony Life With*
Proportion of voting rights held immediately prior to acquisition 50.0%
Proportion of voting rights acquired on the date of the business combination50.0%
Proportion of voting rights held after acquisition 100.0%
(ii) SA Re
Proportion of voting rights held immediately prior to acquisition 50.0%
Proportion of voting rights acquired on the date of the business combination50.0%
Proportion of voting rights held after acquisition 100.0%
(7) Basis for determining the acquirer
The determination is based on the fact that Sony Life acquired all of the voting rights of the two joint ventures, which were affiliates
accounted for by the equity method, through the acquisition of shares for a monetary consideration.
* The trade name was changed from AEGON Sony Life Insurance Co., Ltd. to Sony Life With Insurance Co.,Ltd. on April 1, 2020.
2. Period for which the financial results of the acquirees are included in the consolidated statements of income
From February 1, 2020 to March 31, 2020
The gains and losses of the acquirees for the period from April 1, 2019 to January 31, 2020 are recorded on the consolidated statements of
income as equity in (gains) losses of affiliates.
3. Details of the acquisition cost and consideration paid for the acquirees (total for the two companies above) by type
Fair value of the equity interests before the business combinations, as of the date of the business combinations¥13,932 million
Fair value of the additional shares acquired on the date of the business combination ¥18,750 million
Acquisition cost ¥32,682 million
4. Details and amounts of main expenses associated with the acquisitions
Advisory cost, etc. ¥250 million
5. Difference between the acquisition cost of the acquirees and the total of the cost of each transaction leading up to
the acquisition
Gains on step acquisitions ¥248 million
Sony Financial Holdings Inc.Annual Report2020 83
effective income tax rate after application of tax effect accounting
%
As of March 31, 2020
Statutory effective tax rate 30.6
(Adjustments)
Difference in tax rate of subsidiaries (2.4)
Increase (decrease) in valuation allowance 2.1
Others (0.5)
Effective income tax rate after application of tax effect accounting 29.9
25.Information on business combinations, etc. as of March 31, 2020:
Sony Life Insurance Co., Ltd. (hereinafter “Sony Life”), a wholly-owned consolidated subsidiary of SFH, acquired 50% of the issued shares of
both Sony Life With Insurance Co.,Ltd.* (“Sony Life With”) and SA Reinsurance Ltd. (“SA Re”; the two acquirees are hereinafter collectively
referred to as “the two joint ventures”), and the two joint ventures became wholly-owned subsidiaries of SFH and Sony Life.
1. Overview of business combinations
(1) Names and businesses of acquirees
(i) Name of acquiree Sony Life With Insurance Co.,Ltd.*
Business Life insurance business
(ii) Name of acquiree SA Reinsurance Ltd.
Business Reinsurance business
(2) Main reason for business combination
The aim is to accelerate management decision making and streamline business operation by acquiring the two joint ventures as whol-
ly-owned subsidiaries.
(3) Date of business combinations
January 29, 2020
(4) Legal form of business combinations
Acquisition of shares for a monetary consideration
(5) Name of acquirees after the business combinations
(i) Sony Life With*
Sony Life With Insurance Co.,Ltd.*
(ii) SA Re
The company name remained unchanged after the business combination.
(6) Proportion of voting rights acquired
(i) Sony Life With*
Proportion of voting rights held immediately prior to acquisition 50.0%
Proportion of voting rights acquired on the date of the business combination50.0%
Proportion of voting rights held after acquisition 100.0%
(ii) SA Re
Proportion of voting rights held immediately prior to acquisition 50.0%
Proportion of voting rights acquired on the date of the business combination50.0%
Proportion of voting rights held after acquisition 100.0%
(7) Basis for determining the acquirer
The determination is based on the fact that Sony Life acquired all of the voting rights of the two joint ventures, which were affiliates
accounted for by the equity method, through the acquisition of shares for a monetary consideration.
* The trade name was changed from AEGON Sony Life Insurance Co., Ltd. to Sony Life With Insurance Co.,Ltd. on April 1, 2020.
2. Period for which the financial results of the acquirees are included in the consolidated statements of income
From February 1, 2020 to March 31, 2020
The gains and losses of the acquirees for the period from April 1, 2019 to January 31, 2020 are recorded on the consolidated statements of
income as equity in (gains) losses of affiliates.
3. Details of the acquisition cost and consideration paid for the acquirees (total for the two companies above) by type
Fair value of the equity interests before the business combinations, as of the date of the business combinations¥13,932 million
Fair value of the additional shares acquired on the date of the business combination ¥18,750 million
Acquisition cost ¥32,682 million
4. Details and amounts of main expenses associated with the acquisitions
Advisory cost, etc. ¥250 million
5. Difference between the acquisition cost of the acquirees and the total of the cost of each transaction leading up to
the acquisition
Gains on step acquisitions ¥248 million
Sony Financial Holdings Inc.Annual Report2020 83
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6. Amount of goodwill arising from the acquisitions, reason for the goodwill, and method and period of amortization
(i) Amount of goodwill
¥3,609 million
(ii) Reason for the goodwill
Expected profitability improvements from accelerating management decision making and streamlining business operation.
(iii) Method and period of amortization
Straight-line amortization over 20 years
7. Assets acquired and liabilities assumed on the date of the business combinations, and their main components
Total assets ¥600,480 million
[including cash and due from banks¥27,287 million]
[including securities ¥530,851 million]
Total liabilities ¥572,354 million
[including policy reserves and others ¥567,173 million]
8. Approximate amounts and calculation method of the effect of the business combinations on the consolidated
statements of income for the fiscal year ended March 31, 2020, if the business combinations had been completed
on the first day of the said fiscal year
Ordinary revenues ¥90,909 million
The effect on ordinary profit and profit attributable to owners of the parent is immaterial.
(Calculation method of the approximate amount)
The approximate amount has been calculated as the difference between the ordinary revenues, ordinary profit and profit attributable to
owners of the parent for the fiscal year ended March 31, 2020, if the business combinations had been completed on the first day of the said
fiscal year, and the amounts of ordinary revenues, ordinary profit and profit attributable to owners of the parent presented in the consolidate
statements of income. In addition, the approximated amount includes the amortization of goodwill recognized at the time of the business
combinations, as if the business combinations had been completed on the first day of the fiscal year ended March 31, 2020.
Audit attestation has not been obtained for these amounts.
26.Asset retirement obligations:
Asset retirement obligations recorded on the consolidated balance sheets
(1) Overview of asset retirement obligations
The reserve for asset retirement obligations is provided for the obligation to restore sites to their original states under the lease agreement of commercial
properties, as well as the estimated amount of asbestos removal cost associated with investment and rental property in accordance with Ordinance on
Prevention of Health Impairment due to Asbestos and others.
(2) Basis of measurement for asset retirement obligations
The amount of asset retirement obligations is calculated by estimating the usable period to be 15 to 50 years from acquisition and then applying a 0.1% to
2.3% discount rate.
(3) Changes in the balance of asset retirement obligations
Millions of yen
For the year ended March 31, 2020
Balance at the beginning of the period 2,176
Increase due to purchase of tangible fixed assets 155
Changes resulting from the passage of time 16
Decrease due to performance of asset retirement obligations (34)
Increase due to a change in the scope of consolidation 30
Other increases (decreases)* (69)
Balance at the end of the period 2,273
* Other increases (decreases) consist of a decrease due to the cancellation of a lease agreement, as a result of the purchase of a building that was leased
by a consolidated subsidiary.
27.Fair value information on investment and rental property:
Some consolidated subsidiaries own rental office buildings in Tokyo and other areas. Income related to investment and rental property amount-
ed to ¥5,823 million for the year ended March 31, 2020. Below is the consolidated balance sheet amount, net of changes during the period,
and the fair value at the end of the current period.
Millions of yen
For the year ended March 31, 2020
Consolidated balance sheet amount
Balance at the beginning of the period 83,991
Changes during the period (293)
Balance at the end of the period 83,698
Fair value at the end of the period 201,714
Notes: 1. The consolidated balance sheet amount is the acquisition cost less accumulated depreciation and impairment losses.
2. The fair value at the end of the period is primarily determined by a licensed third-party real estate appraisal agent.
Sony Financial Holdings Inc.Annual Report202084
(i) Amount of goodwill
¥3,609 million
(ii) Reason for the goodwill
Expected profitability improvements from accelerating management decision making and streamlining business operation.
(iii) Method and period of amortization
Straight-line amortization over 20 years
7. Assets acquired and liabilities assumed on the date of the business combinations, and their main components
Total assets ¥600,480 million
[including cash and due from banks¥27,287 million]
[including securities ¥530,851 million]
Total liabilities ¥572,354 million
[including policy reserves and others ¥567,173 million]
8. Approximate amounts and calculation method of the effect of the business combinations on the consolidated
statements of income for the fiscal year ended March 31, 2020, if the business combinations had been completed
on the first day of the said fiscal year
Ordinary revenues ¥90,909 million
The effect on ordinary profit and profit attributable to owners of the parent is immaterial.
(Calculation method of the approximate amount)
The approximate amount has been calculated as the difference between the ordinary revenues, ordinary profit and profit attributable to
owners of the parent for the fiscal year ended March 31, 2020, if the business combinations had been completed on the first day of the said
fiscal year, and the amounts of ordinary revenues, ordinary profit and profit attributable to owners of the parent presented in the consolidate
statements of income. In addition, the approximated amount includes the amortization of goodwill recognized at the time of the business
combinations, as if the business combinations had been completed on the first day of the fiscal year ended March 31, 2020.
Audit attestation has not been obtained for these amounts.
26.Asset retirement obligations:
Asset retirement obligations recorded on the consolidated balance sheets
(1) Overview of asset retirement obligations
The reserve for asset retirement obligations is provided for the obligation to restore sites to their original states under the lease agreement of commercial
properties, as well as the estimated amount of asbestos removal cost associated with investment and rental property in accordance with Ordinance on
Prevention of Health Impairment due to Asbestos and others.
(2) Basis of measurement for asset retirement obligations
The amount of asset retirement obligations is calculated by estimating the usable period to be 15 to 50 years from acquisition and then applying a 0.1% to
2.3% discount rate.
(3) Changes in the balance of asset retirement obligations
Millions of yen
For the year ended March 31, 2020
Balance at the beginning of the period 2,176
Increase due to purchase of tangible fixed assets 155
Changes resulting from the passage of time 16
Decrease due to performance of asset retirement obligations (34)
Increase due to a change in the scope of consolidation 30
Other increases (decreases)* (69)
Balance at the end of the period 2,273
* Other increases (decreases) consist of a decrease due to the cancellation of a lease agreement, as a result of the purchase of a building that was leased
by a consolidated subsidiary.
27.Fair value information on investment and rental property:
Some consolidated subsidiaries own rental office buildings in Tokyo and other areas. Income related to investment and rental property amount-
ed to ¥5,823 million for the year ended March 31, 2020. Below is the consolidated balance sheet amount, net of changes during the period,
and the fair value at the end of the current period.
Millions of yen
For the year ended March 31, 2020
Consolidated balance sheet amount
Balance at the beginning of the period 83,991
Changes during the period (293)
Balance at the end of the period 83,698
Fair value at the end of the period 201,714
Notes: 1. The consolidated balance sheet amount is the acquisition cost less accumulated depreciation and impairment losses.
2. The fair value at the end of the period is primarily determined by a licensed third-party real estate appraisal agent.
Sony Financial Holdings Inc.Annual Report202084
28.A subsequent event is as follows:
(Tender offer for the shares, etc. of SFH by Sony Corporation)
SFH resolved at the meeting of its Board of Directors held on May 19, 2020 to express its opinion in support of the tender offer for SFH’s
common shares (the “Company’s Common Shares”) and stock acquisition rights to be conducted by Sony Corporation (the “Tender Offeror”),
the controlling shareholder (parent company) of SFH (the “Tender Offer”), and to recommend that the shareholders and the holders of the stock
acquisition rights of SFH tender the SFH’s common shares and the stock acquisition rights in the Tender Offer. The resolution of the Board of
Directors stated above was made on the assumption that the Tender Offeror intends to make SFH its wholly-owned subsidiary through the
Tender Offer and a series of subsequent procedures and that SFH’s Common Shares will be delisted.
1. Outline of Tender Offeror
(1) Name Sony Corporation
(2) Head office 7-1 Konan 1-chome, Minato-ku, Tokyo
(3) Name and title of representativeKenichiro Yoshida, Representative Corporate Executive Officer
(4) Description of business Game & Network Services, Music, Pictures, Electronic Products & Solutions (Mobile Communications/
Imaging Products & Solutions/Home Entertainment & Sound), Imaging & Sensing Solutions, Financial
Services, and All Other businesses
(5) Common stock ¥880,213 million (As of March 31, 2020)
(6) Date of incorporation May 7, 1946
(7) Major shareholders and share holding ratios (as of December 31, 2019)
Citibank As Depositary Bank For Depositary Receipt Holders (Standing proxy: MUFG Bank, Ltd.) 10.07%
The Master Trust Bank of Japan, Ltd. (Trust Account) 6.85%
Japan Trustee Services Bank, Ltd. (Trust Account) 5.61%
JP Morgan Chase Bank 380055 (Standing proxy: Mizuho Bank, Ltd.) 2.30%
Japan Trustee Services Bank, Ltd. (Trust Account 5) 2.09%
State Street Bank West Client - Treaty 505234 (Standing proxy: Mizuho Bank, Ltd.) 1.99%
Japan Trustee Services Bank, Ltd. (Trust Account 7) 1.99%
GIC Private Limited - C (Standing proxy: MUFG Bank, Ltd.) 1.87%
SSBTC Client Omnibus Account (Standing proxy: The Hongkong and Shanghai Banking Corporation Limited) 1.86%
J.P. Morgan Bank Luxembourg S.A. 1300000 (Standing proxy: Mizuho Bank, Ltd.) 1.84%
(8) Relationship between the Tender Offeror and SFH
• Capital relationship: The Tender Offeror holds 283,050,000 Company’s Common Shares (share holding ratio: 65.04%).
• Personnel relationship: Three of the Company’s ten directors hold positions as director, corporate executive officer or executive officer
of the Tender Offeror and other two of them worked at the Tender Offeror. Also, one of the Company’s three audit & supervisory board
members holds a position as an employee of the Tender Offeror. In addition to the above, three employees of Group companies
(Note 1) are seconded to Other Tender Offeror Group Companies (Note 2), and 16 employees of Other Tender Offeror Group Compa-
nies are seconded to Group companies as of March 31, 2020.
• Business relationship: Group companies have executed trade name and trademark license agreements with the Tender Offeror
regarding the use of the trademarks, etc. in which “Sony” is used. Under those agreements, Group companies pay brand royalties to
the Tender Offeror. In addition, Sony Life Insurance Co., Ltd. leases its headquarters building to the Tender Offeror as part of its asset
management, and receives the rent based on the real estate appraisal.
• Status as related party: The Tender Offeror is the Company’s parent company, and therefore a related party of the Company.
Notes: 1. “Group companies” means the Company and its 13 consolidated companies (as of March 31, 2020).
Notes: 2. “Other Tender Offeror Group Companies” means companies which constitute the Tender Offeror Group, excluding the
companies which constitute Group companies. “Tender Offeror Group” means the Tender Offeror, its 1,529 subsidiaries, and
its 155 affiliates, out of which there are 1,490 consolidated subsidiaries (including variable interest entities) and 140 equity
method affiliates (as of March 31, 2020).
2. Outline of the Tender Offer
(1) Period of the tender offer, etc.
From Wednesday, May 20, 2020, to Monday, July 13, 2020 (39 business days)
(2) Price for purchase, etc.
1) ¥2,600 per common share
2) Stock acquisition rights
• Stock acquisition rights issued pursuant to the resolution approved at the meeting of the Company’s Board of Directors held on July
22, 2016 (partially amended by the resolution approved at the meeting of the Company’s Board of Directors held on May 31, 2017):
¥259,900 per unit
• Stock acquisition rights issued pursuant to the resolution approved at the meeting of the Company’s Board of Directors held on July
13, 2017: ¥259,900 per unit
• Stock acquisition rights issued pursuant to the resolution approved at the meeting of the Company’s Board of Directors held on July
17, 2018: ¥259,900 per unit
• Stock acquisition rights issued pursuant to the resolution approved at the meeting of the Company’s Board of Directors held on July
18, 2019: ¥259,900 per unit
(3) Number of shares to be purchased under the tender offer
Number of shares to be purchased: 152,130,036
Minimum number of shares to be purchased:7,070,000
Maximum number of shares to be purchased: -
(4) Date of commencement of the tender offer
Wednesday, May 20, 2020
Sony Financial Holdings Inc.Annual Report2020 85
(Tender offer for the shares, etc. of SFH by Sony Corporation)
SFH resolved at the meeting of its Board of Directors held on May 19, 2020 to express its opinion in support of the tender offer for SFH’s
common shares (the “Company’s Common Shares”) and stock acquisition rights to be conducted by Sony Corporation (the “Tender Offeror”),
the controlling shareholder (parent company) of SFH (the “Tender Offer”), and to recommend that the shareholders and the holders of the stock
acquisition rights of SFH tender the SFH’s common shares and the stock acquisition rights in the Tender Offer. The resolution of the Board of
Directors stated above was made on the assumption that the Tender Offeror intends to make SFH its wholly-owned subsidiary through the
Tender Offer and a series of subsequent procedures and that SFH’s Common Shares will be delisted.
1. Outline of Tender Offeror
(1) Name Sony Corporation
(2) Head office 7-1 Konan 1-chome, Minato-ku, Tokyo
(3) Name and title of representativeKenichiro Yoshida, Representative Corporate Executive Officer
(4) Description of business Game & Network Services, Music, Pictures, Electronic Products & Solutions (Mobile Communications/
Imaging Products & Solutions/Home Entertainment & Sound), Imaging & Sensing Solutions, Financial
Services, and All Other businesses
(5) Common stock ¥880,213 million (As of March 31, 2020)
(6) Date of incorporation May 7, 1946
(7) Major shareholders and share holding ratios (as of December 31, 2019)
Citibank As Depositary Bank For Depositary Receipt Holders (Standing proxy: MUFG Bank, Ltd.) 10.07%
The Master Trust Bank of Japan, Ltd. (Trust Account) 6.85%
Japan Trustee Services Bank, Ltd. (Trust Account) 5.61%
JP Morgan Chase Bank 380055 (Standing proxy: Mizuho Bank, Ltd.) 2.30%
Japan Trustee Services Bank, Ltd. (Trust Account 5) 2.09%
State Street Bank West Client - Treaty 505234 (Standing proxy: Mizuho Bank, Ltd.) 1.99%
Japan Trustee Services Bank, Ltd. (Trust Account 7) 1.99%
GIC Private Limited - C (Standing proxy: MUFG Bank, Ltd.) 1.87%
SSBTC Client Omnibus Account (Standing proxy: The Hongkong and Shanghai Banking Corporation Limited) 1.86%
J.P. Morgan Bank Luxembourg S.A. 1300000 (Standing proxy: Mizuho Bank, Ltd.) 1.84%
(8) Relationship between the Tender Offeror and SFH
• Capital relationship: The Tender Offeror holds 283,050,000 Company’s Common Shares (share holding ratio: 65.04%).
• Personnel relationship: Three of the Company’s ten directors hold positions as director, corporate executive officer or executive officer
of the Tender Offeror and other two of them worked at the Tender Offeror. Also, one of the Company’s three audit & supervisory board
members holds a position as an employee of the Tender Offeror. In addition to the above, three employees of Group companies
(Note 1) are seconded to Other Tender Offeror Group Companies (Note 2), and 16 employees of Other Tender Offeror Group Compa-
nies are seconded to Group companies as of March 31, 2020.
• Business relationship: Group companies have executed trade name and trademark license agreements with the Tender Offeror
regarding the use of the trademarks, etc. in which “Sony” is used. Under those agreements, Group companies pay brand royalties to
the Tender Offeror. In addition, Sony Life Insurance Co., Ltd. leases its headquarters building to the Tender Offeror as part of its asset
management, and receives the rent based on the real estate appraisal.
• Status as related party: The Tender Offeror is the Company’s parent company, and therefore a related party of the Company.
Notes: 1. “Group companies” means the Company and its 13 consolidated companies (as of March 31, 2020).
Notes: 2. “Other Tender Offeror Group Companies” means companies which constitute the Tender Offeror Group, excluding the
companies which constitute Group companies. “Tender Offeror Group” means the Tender Offeror, its 1,529 subsidiaries, and
its 155 affiliates, out of which there are 1,490 consolidated subsidiaries (including variable interest entities) and 140 equity
method affiliates (as of March 31, 2020).
2. Outline of the Tender Offer
(1) Period of the tender offer, etc.
From Wednesday, May 20, 2020, to Monday, July 13, 2020 (39 business days)
(2) Price for purchase, etc.
1) ¥2,600 per common share
2) Stock acquisition rights
• Stock acquisition rights issued pursuant to the resolution approved at the meeting of the Company’s Board of Directors held on July
22, 2016 (partially amended by the resolution approved at the meeting of the Company’s Board of Directors held on May 31, 2017):
¥259,900 per unit
• Stock acquisition rights issued pursuant to the resolution approved at the meeting of the Company’s Board of Directors held on July
13, 2017: ¥259,900 per unit
• Stock acquisition rights issued pursuant to the resolution approved at the meeting of the Company’s Board of Directors held on July
17, 2018: ¥259,900 per unit
• Stock acquisition rights issued pursuant to the resolution approved at the meeting of the Company’s Board of Directors held on July
18, 2019: ¥259,900 per unit
(3) Number of shares to be purchased under the tender offer
Number of shares to be purchased: 152,130,036
Minimum number of shares to be purchased:7,070,000
Maximum number of shares to be purchased: -
(4) Date of commencement of the tender offer
Wednesday, May 20, 2020
Sony Financial Holdings Inc.Annual Report2020 85
Reclassification adjustments and income tax benefit (expense) on components of other comprehensive income for the year ended March 31,
2020 are as follows:
Millions of yen
For the year ended March 31, 2020
Net unrealized gains (losses) on available-for-sale securities, net of taxes:
Gains (losses) arising during the period (20,899)
Reclassification adjustments 535
Pre-tax amount (20,364)
Income tax benefit (expense) 6,457
Net unrealized gains (losses) on available-for-sale securities, net of taxes (13,907)
Net deferred gains (losses) on hedging instruments, net of taxes:
Gains (losses) arising during the period 2,086
Reclassification adjustments (1,071)
Pre-tax amount 1,014
Income tax benefit (expense) (310)
Net deferred gains (losses) on hedging instruments, net of taxes 703
Remeasurements of defined benefit plans, net of taxes:
Gains (losses) arising during the period 148
Reclassification adjustments 769
Pre-tax amount 918
Income tax benefit (expense) (259)
Remeasurements of defined benefit plans, net of taxes 658
Share of other comprehensive income of affiliates accounted for using equity method
Reclassification adjustments (23)
Total other comprehensive income (12,569)
3 Notes to the Consolidated Statements of Comprehensive Income
1.Types and numbers of shares issued are as follows
Thousands of shares
2020
For the year ended March 31,
Number of shares
as of April 1, 2019
Number of shares
increased during
the period
Number of shares
decreased during
the period
Number of shares
as of March 31,
2020
Issued shares
Common stock 435,062 24 — 435,087
Total 435,062 24 — 435,087
Treasury stock
Common stock 37 0 — 37
Total 37 0 — 37
Notes: 1.The increase of 24 thousand shares in common stock (of shares outstanding) was due to allocation of restricted stock by resolution of the
Board of Directors.
2. The increase of 0 thousand shares in common stock (of treasury stock) was due to repurchase of fractional shares constituting less than one
trading unit.
4 Notes to the Consolidated Statements of Changes in Net Assets
Profit attributable to owners of the parent per share is calculated based on the weighted-average number of shares of common stock outstandin
during the period. Profit attributable to owners of the parent per share for the year ended March 31, 2020 was ¥171.09. The basis for this calcul
tion for the year ended March 31, 2020 is profit attributable to owners of the parent of ¥74,429 million, the entire amount of which is applicable
common stock. The weighted-average number of shares outstanding for the year ended March 31, 2020 was 435,041 thousand shares.
Diluted net income per share attributable to owners of the parent was ¥171.04. There was no adjustment to profit attributable to owners of
the parent for a basis for calculation, and common stock reflecting the dilutive shares increased by 115 thousand shares.
2 Notes to the Consolidated Statements of Income
Sony Financial Holdings Inc.Annual Report202086
2020 are as follows:
Millions of yen
For the year ended March 31, 2020
Net unrealized gains (losses) on available-for-sale securities, net of taxes:
Gains (losses) arising during the period (20,899)
Reclassification adjustments 535
Pre-tax amount (20,364)
Income tax benefit (expense) 6,457
Net unrealized gains (losses) on available-for-sale securities, net of taxes (13,907)
Net deferred gains (losses) on hedging instruments, net of taxes:
Gains (losses) arising during the period 2,086
Reclassification adjustments (1,071)
Pre-tax amount 1,014
Income tax benefit (expense) (310)
Net deferred gains (losses) on hedging instruments, net of taxes 703
Remeasurements of defined benefit plans, net of taxes:
Gains (losses) arising during the period 148
Reclassification adjustments 769
Pre-tax amount 918
Income tax benefit (expense) (259)
Remeasurements of defined benefit plans, net of taxes 658
Share of other comprehensive income of affiliates accounted for using equity method
Reclassification adjustments (23)
Total other comprehensive income (12,569)
3 Notes to the Consolidated Statements of Comprehensive Income
1.Types and numbers of shares issued are as follows
Thousands of shares
2020
For the year ended March 31,
Number of shares
as of April 1, 2019
Number of shares
increased during
the period
Number of shares
decreased during
the period
Number of shares
as of March 31,
2020
Issued shares
Common stock 435,062 24 — 435,087
Total 435,062 24 — 435,087
Treasury stock
Common stock 37 0 — 37
Total 37 0 — 37
Notes: 1.The increase of 24 thousand shares in common stock (of shares outstanding) was due to allocation of restricted stock by resolution of the
Board of Directors.
2. The increase of 0 thousand shares in common stock (of treasury stock) was due to repurchase of fractional shares constituting less than one
trading unit.
4 Notes to the Consolidated Statements of Changes in Net Assets
Profit attributable to owners of the parent per share is calculated based on the weighted-average number of shares of common stock outstandin
during the period. Profit attributable to owners of the parent per share for the year ended March 31, 2020 was ¥171.09. The basis for this calcul
tion for the year ended March 31, 2020 is profit attributable to owners of the parent of ¥74,429 million, the entire amount of which is applicable
common stock. The weighted-average number of shares outstanding for the year ended March 31, 2020 was 435,041 thousand shares.
Diluted net income per share attributable to owners of the parent was ¥171.04. There was no adjustment to profit attributable to owners of
the parent for a basis for calculation, and common stock reflecting the dilutive shares increased by 115 thousand shares.
2 Notes to the Consolidated Statements of Income
Sony Financial Holdings Inc.Annual Report202086
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1. Cash and cash equivalents in the statement of cash flows is equal to cash and due from banks as stated in the consolidated balance sheet as
of March 31, 2020.
Millions of yen
For the year ended March 31, 2020
Cash and due from banks 549,964
Cash and cash equivalents 549,964
2. Details of assets and liabilities of companies newly included in the scope of consolidation through the acquisition of shares
Details of the assets acquired and liabilities assumed through the acquisition of Sony Life With Insurance Co.,Ltd.* and SA Reinsurance Ltd. (her
inafter collectively referred to as “the two joint ventures”) as consolidated subsidiaries through the acquisition of shares, at the time of consolid
and the relationship between the amount paid for acquisition of the two joint ventures and the net inflow due to their acquisition, are as follows
* The trade name was changed from AEGON Sony Life Insurance Co., Ltd. to Sony Life With Insurance Co.,Ltd. on April 1, 2020.
Millions of yen
Assets 600,480
[Including cash and due from banks] [27,287]
[Including securities] [530,851]
Goodwill 3,609
Liabilities (572,354)
[Including policy reserves and others] [(567,173)]
Other 946
Amount paid to acquire shares of the two joint ventures 32,682
Amount paid prior to gaining control (29,450)
Equity method valuation prior to gaining control 15,766
Gains on step acquisitions (248)
Cash and cash equivalents held by the two joint ventures (27,287)
Difference: inflow from the acquisition of the two joint ventures 8,537
3. Cash flows from investing activities include cash flows from lending operations of the insurance business.
5 Notes to the Consolidated Statements of Cash Flows
2. Information on stock acquisition rights is as follows:
Detail of stock acquisition rights
Balance as of March 31, 2020
(Millions of yen)
SFH Stock acquisition rights as stock options 215
3. Information on dividends is as follows:
(1) Dividends paid
Resolution Type of shares
Aggregate amount
of dividends
Cash dividends
per share Record date Effective date
Ordinary General
Meeting of Shareholders
held on June 21, 2019 Common stock ¥27,189 million ¥62.5 March 31, 2019 June 24, 2019
(2) Dividends to be paid in the next fiscal year
Resolution Type of shares
Aggregate amount
of dividends
Source of
dividends
Cash dividends
per share Record date Effective date
Ordinary General
Meeting of Shareholders
held on June 23, 2020 Common stock ¥30,453 million Retained earnings ¥70.0 March 31, 2020 June 24, 2020
Sony Financial Holdings Inc.Annual Report2020 87
of March 31, 2020.
Millions of yen
For the year ended March 31, 2020
Cash and due from banks 549,964
Cash and cash equivalents 549,964
2. Details of assets and liabilities of companies newly included in the scope of consolidation through the acquisition of shares
Details of the assets acquired and liabilities assumed through the acquisition of Sony Life With Insurance Co.,Ltd.* and SA Reinsurance Ltd. (her
inafter collectively referred to as “the two joint ventures”) as consolidated subsidiaries through the acquisition of shares, at the time of consolid
and the relationship between the amount paid for acquisition of the two joint ventures and the net inflow due to their acquisition, are as follows
* The trade name was changed from AEGON Sony Life Insurance Co., Ltd. to Sony Life With Insurance Co.,Ltd. on April 1, 2020.
Millions of yen
Assets 600,480
[Including cash and due from banks] [27,287]
[Including securities] [530,851]
Goodwill 3,609
Liabilities (572,354)
[Including policy reserves and others] [(567,173)]
Other 946
Amount paid to acquire shares of the two joint ventures 32,682
Amount paid prior to gaining control (29,450)
Equity method valuation prior to gaining control 15,766
Gains on step acquisitions (248)
Cash and cash equivalents held by the two joint ventures (27,287)
Difference: inflow from the acquisition of the two joint ventures 8,537
3. Cash flows from investing activities include cash flows from lending operations of the insurance business.
5 Notes to the Consolidated Statements of Cash Flows
2. Information on stock acquisition rights is as follows:
Detail of stock acquisition rights
Balance as of March 31, 2020
(Millions of yen)
SFH Stock acquisition rights as stock options 215
3. Information on dividends is as follows:
(1) Dividends paid
Resolution Type of shares
Aggregate amount
of dividends
Cash dividends
per share Record date Effective date
Ordinary General
Meeting of Shareholders
held on June 21, 2019 Common stock ¥27,189 million ¥62.5 March 31, 2019 June 24, 2019
(2) Dividends to be paid in the next fiscal year
Resolution Type of shares
Aggregate amount
of dividends
Source of
dividends
Cash dividends
per share Record date Effective date
Ordinary General
Meeting of Shareholders
held on June 23, 2020 Common stock ¥30,453 million Retained earnings ¥70.0 March 31, 2020 June 24, 2020
Sony Financial Holdings Inc.Annual Report2020 87
1 Outline of Reportable Segments
The Sony Financial Group’s reportable segments are components of the Group whose operating results are regularly reviewed by the Board of
Directors to make decisions about resources to be allocated to the segments and assess their performance, for which discrete financial information
is available.
SFH is the financial holding company of Sony Life Insurance Co., Ltd., Sony Assurance Inc., Sony Bank Inc., Sony Lifecare Inc., and Sony
Financial Ventures Inc., and pursues financial group strategies. The subsidiaries make their own business plans and engage in business activities fr
which they may earn revenues and incur expenses, under the Insurance Business Law of Japan, the Banking Law of Japan, and other regulations.
The Sony Financial Group consists of three reportable segments: the life insurance business, the non-life insurance business and the banking
business.
• The life insurance business consists of Sony Life Insurance Co., Ltd., Sony Life With Insurance Co.,Ltd.* and SA Reinsurance Ltd.
• The non-life insurance business consists of Sony Assurance Inc.
• The banking business consists of Sony Bank Inc., Sony Payment Services Inc., SmartLink Network Hong Kong Limited, and
SmartLink Network Europe B.V.
*The trade name was changed from AEGON Sony Life Insurance Co., Ltd. to Sony Life With Insurance Co.,Ltd. on April 1, 2020.
2 Calculation Method for Amounts of Ordinary Revenues, Income, Assets, Liabilities and Other Items by Each
Reportable Segment
Accounting of reported business segments is roughly the same as described in page 64 through page 67 “Significant Basic Items for the
Preparation of the Consolidated Financial Statements” of this report.
Intersegment ordinary revenues are based on third-party transaction prices.
3 Information on Amounts of Ordinary Revenues, Income, Assets, Liabilities and Other Items by Each
Reportable Segment
Millions of yen
2019
Reportable Segments
Other*1 Total
Life insurance
business
Non-life insurance
business Banking business Total
Ordinary revenues*2
(1) External customers 1,461,632 115,101 45,766 1,622,500 6,681 1,629,182
(2) Intersegment 2,735 1 252 2,988 — 2,988
Total 1,464,367 115,102 46,018 1,625,488 6,681 1,632,170
Segment profit 78,213 6,897 9,597 94,708 (1,021) 93,687
Segment assets 10,380,274 219,672 2,878,879 13,478,825 22,636 13,501,462
Other
Depreciation*3 7,847 2,457 2,489 12,794 631 13,425
Interest income and dividends 166,953 1,372 31,926 200,252 2 200,255
Interest expenses 1,604 — 8,643 10,248 507 10,755
Equity in earnings (losses) of affiliates(1,748) — — (1,748) — (1,748)
Investments in affiliates 10,969 — — 10,969 — 10,969
Increase in tangible fixed assets and
intangible fixed assets*4 9,496 5,790 3,977 19,264 1,141 20,406
*1 “Other” represents the nursing care business and the venture capital business, which are business segments not included in reportable segments.
*2 Ordinary revenues stated herein are equivalent to net sales of a regular entity.
*3 Depreciation includes amortization of long-term prepaid expenses, etc.
*4 Increase in tangible fixed assets and intangible fixed assets includes an increase in long-term prepaid expenses, etc.
Sony Financial Holdings Inc.Annual Report202088
Segment Information
The Sony Financial Group’s reportable segments are components of the Group whose operating results are regularly reviewed by the Board of
Directors to make decisions about resources to be allocated to the segments and assess their performance, for which discrete financial information
is available.
SFH is the financial holding company of Sony Life Insurance Co., Ltd., Sony Assurance Inc., Sony Bank Inc., Sony Lifecare Inc., and Sony
Financial Ventures Inc., and pursues financial group strategies. The subsidiaries make their own business plans and engage in business activities fr
which they may earn revenues and incur expenses, under the Insurance Business Law of Japan, the Banking Law of Japan, and other regulations.
The Sony Financial Group consists of three reportable segments: the life insurance business, the non-life insurance business and the banking
business.
• The life insurance business consists of Sony Life Insurance Co., Ltd., Sony Life With Insurance Co.,Ltd.* and SA Reinsurance Ltd.
• The non-life insurance business consists of Sony Assurance Inc.
• The banking business consists of Sony Bank Inc., Sony Payment Services Inc., SmartLink Network Hong Kong Limited, and
SmartLink Network Europe B.V.
*The trade name was changed from AEGON Sony Life Insurance Co., Ltd. to Sony Life With Insurance Co.,Ltd. on April 1, 2020.
2 Calculation Method for Amounts of Ordinary Revenues, Income, Assets, Liabilities and Other Items by Each
Reportable Segment
Accounting of reported business segments is roughly the same as described in page 64 through page 67 “Significant Basic Items for the
Preparation of the Consolidated Financial Statements” of this report.
Intersegment ordinary revenues are based on third-party transaction prices.
3 Information on Amounts of Ordinary Revenues, Income, Assets, Liabilities and Other Items by Each
Reportable Segment
Millions of yen
2019
Reportable Segments
Other*1 Total
Life insurance
business
Non-life insurance
business Banking business Total
Ordinary revenues*2
(1) External customers 1,461,632 115,101 45,766 1,622,500 6,681 1,629,182
(2) Intersegment 2,735 1 252 2,988 — 2,988
Total 1,464,367 115,102 46,018 1,625,488 6,681 1,632,170
Segment profit 78,213 6,897 9,597 94,708 (1,021) 93,687
Segment assets 10,380,274 219,672 2,878,879 13,478,825 22,636 13,501,462
Other
Depreciation*3 7,847 2,457 2,489 12,794 631 13,425
Interest income and dividends 166,953 1,372 31,926 200,252 2 200,255
Interest expenses 1,604 — 8,643 10,248 507 10,755
Equity in earnings (losses) of affiliates(1,748) — — (1,748) — (1,748)
Investments in affiliates 10,969 — — 10,969 — 10,969
Increase in tangible fixed assets and
intangible fixed assets*4 9,496 5,790 3,977 19,264 1,141 20,406
*1 “Other” represents the nursing care business and the venture capital business, which are business segments not included in reportable segments.
*2 Ordinary revenues stated herein are equivalent to net sales of a regular entity.
*3 Depreciation includes amortization of long-term prepaid expenses, etc.
*4 Increase in tangible fixed assets and intangible fixed assets includes an increase in long-term prepaid expenses, etc.
Sony Financial Holdings Inc.Annual Report202088
Segment Information
Millions of yen
2020
Reportable Segments
Other*1 Total
Life insurance
business
Non-life insurance
business Banking business Total
Ordinary revenues*2
(1) External customers 1,602,154 121,727 49,997 1,773,879 7,541 1,781,420
(2) Intersegment 2,601 1 275 2,877 — 2,877
Total 1,604,756 121,728 50,272 1,776,757 7,541 1,784,298
Segment profit 94,382 8,072 10,690 113,145 (1,441) 111,704
Segment assets 11,796,918 234,884 3,096,574 15,128,377 25,188 15,153,565
Other
Depreciation*3 9,174 2,476 2,765 14,416 726 15,142
Interest income and dividends 181,812 1,337 33,950 217,100 3 217,103
Interest expenses 5,064 — 9,270 14,334 705 15,040
Equity in earnings (losses) of affiliates (11) — — (11) — (11)
Increase in tangible fixed assets and
intangible fixed assets*4 17,216 7,143 2,715 27,075 4,652 31,727
*1 “Other” represents the nursing care business and the venture capital business, which are business segments not included in reportable segments.
*2 Ordinary revenues stated herein are equivalent to net sales of a regular entity.
*3 Depreciation includes amortization of long-term prepaid expenses, etc.
*4 Increase in tangible fixed assets and intangible fixed assets includes an increase in long-term prepaid expenses, etc.
4 Differences between the Reportable Segments Total and the Amount in the Consolidated Financial
Statements, and the Main Components of Such Differences (Matters Related to Reconciliation)
1 Total ordinary revenues of reportable segments and ordinary revenues in the consolidated statements of income
Millions of yen
2019 2020
Totals of reportable segments 1,625,488 1,776,757
Other 6,681 7,541
Adjustments for intersegment transactions (2,988) (2,877)
Ordinary revenues in statement of income 1,629,182 1,781,420
2 Total income of reportable segments and ordinary profit in the consolidated statements of income
Millions of yen
2019 2020
Totals of reportable segments 94,708 113,145
Other (1,021) (1,441)
Amount not allocated to reportable segments 169 176
Ordinary profit in statement of income 93,856 111,880
3 Total assets of reportable segments and the amount of assets in the consolidated balance sheets
Millions of yen
2019 2020
Totals of reportable segments 13,478,825 15,128,377
Other 22,636 25,188
Adjustments for intersegment transactions (66,653) (72,023)
Amount not allocated to reportable segments 33,406 44,168
Assets in balance sheets 13,468,215 15,125,710
4 Total other items of reportable segments and the amount of the items equivalent thereto in the consolidated
financial statements
Millions of yen
Reportable Segments Total Other Reconciliation
Amounts in the Consolidated
Financial Statements
2019 2020 2019 2020 2019 2020 2019 2020
Depreciation 12,794 14,416 631 726 40 49 13,466 15,191
Interest income and dividends 200,252 217,100 2 3 (0) (0) 200,255 217,103
Interest expenses 10,248 14,334 507 705 (77) (75) 10,678 14,964
Equity in earnings (losses) of affiliates(1,748) (11) — — — — (1,748) (11)
Investments in equity-method affiliates10,969 — — — — — 10,969 —
Increase in tangible fixed assets and
intangible fixed assets 19,264 27,075 1,141 4,652 69 94 20,475 31,822
Sony Financial Holdings Inc.Annual Report2020 89
2020
Reportable Segments
Other*1 Total
Life insurance
business
Non-life insurance
business Banking business Total
Ordinary revenues*2
(1) External customers 1,602,154 121,727 49,997 1,773,879 7,541 1,781,420
(2) Intersegment 2,601 1 275 2,877 — 2,877
Total 1,604,756 121,728 50,272 1,776,757 7,541 1,784,298
Segment profit 94,382 8,072 10,690 113,145 (1,441) 111,704
Segment assets 11,796,918 234,884 3,096,574 15,128,377 25,188 15,153,565
Other
Depreciation*3 9,174 2,476 2,765 14,416 726 15,142
Interest income and dividends 181,812 1,337 33,950 217,100 3 217,103
Interest expenses 5,064 — 9,270 14,334 705 15,040
Equity in earnings (losses) of affiliates (11) — — (11) — (11)
Increase in tangible fixed assets and
intangible fixed assets*4 17,216 7,143 2,715 27,075 4,652 31,727
*1 “Other” represents the nursing care business and the venture capital business, which are business segments not included in reportable segments.
*2 Ordinary revenues stated herein are equivalent to net sales of a regular entity.
*3 Depreciation includes amortization of long-term prepaid expenses, etc.
*4 Increase in tangible fixed assets and intangible fixed assets includes an increase in long-term prepaid expenses, etc.
4 Differences between the Reportable Segments Total and the Amount in the Consolidated Financial
Statements, and the Main Components of Such Differences (Matters Related to Reconciliation)
1 Total ordinary revenues of reportable segments and ordinary revenues in the consolidated statements of income
Millions of yen
2019 2020
Totals of reportable segments 1,625,488 1,776,757
Other 6,681 7,541
Adjustments for intersegment transactions (2,988) (2,877)
Ordinary revenues in statement of income 1,629,182 1,781,420
2 Total income of reportable segments and ordinary profit in the consolidated statements of income
Millions of yen
2019 2020
Totals of reportable segments 94,708 113,145
Other (1,021) (1,441)
Amount not allocated to reportable segments 169 176
Ordinary profit in statement of income 93,856 111,880
3 Total assets of reportable segments and the amount of assets in the consolidated balance sheets
Millions of yen
2019 2020
Totals of reportable segments 13,478,825 15,128,377
Other 22,636 25,188
Adjustments for intersegment transactions (66,653) (72,023)
Amount not allocated to reportable segments 33,406 44,168
Assets in balance sheets 13,468,215 15,125,710
4 Total other items of reportable segments and the amount of the items equivalent thereto in the consolidated
financial statements
Millions of yen
Reportable Segments Total Other Reconciliation
Amounts in the Consolidated
Financial Statements
2019 2020 2019 2020 2019 2020 2019 2020
Depreciation 12,794 14,416 631 726 40 49 13,466 15,191
Interest income and dividends 200,252 217,100 2 3 (0) (0) 200,255 217,103
Interest expenses 10,248 14,334 507 705 (77) (75) 10,678 14,964
Equity in earnings (losses) of affiliates(1,748) (11) — — — — (1,748) (11)
Investments in equity-method affiliates10,969 — — — — — 10,969 —
Increase in tangible fixed assets and
intangible fixed assets 19,264 27,075 1,141 4,652 69 94 20,475 31,822
Sony Financial Holdings Inc.Annual Report2020 89
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■ Sony Financial Holdings (Consolidated)
Risk-monitored Loans
Millions of yen
As of March 31, 2019 2020
Category
Bankrupt loans 180 187
Non-accrual delinquent loans 1,220 1,116
Past-due loans (3 months or more) — —
Restructured loans 800 814
Total 2,201 2,117
Consolidated Solvency Margin Ratio
Millions of yen
As of March 31, 2019 2020
(A) Total consolidated solvency margin 1,481,117 1,60
Common stock, etc. 505,148 546,010
Reserve for price fluctuations 50,343 53,060
Contingency reserve 98,736 110,973
Catastrophe reserve 24,636 27,860
General reserve for possible loan losses 483 507
Net unrealized gains (losses) on available-for-sale securities and net deferred gains or losses on
hedging instruments, net of taxes (before tax deductions) x 90% (100% if losses) 157,692 1
Net unrealized gains (losses) on real estate x 85% (100% if losses) 51,154 65,673
Total amount of unrecognized net actuarial gain (loss) and unrecognized prior service cost (before
subtracting tax effects) (2,090) (1,172)
Amount excluded from deferred tax assets — —
Unallotted portion of reserve for policyholders’ dividends 245 152
Deferred tax assets (after deducting amount excluded) 95,400 105,303
Subordinated debt and surplus components of premium reserve 510,406 550,766
Total solvency margin of small-amount short-term insurers — —
Deductible items (11,040) (45)
(B) Total consolidated risk [{(R1
2+R5
2)+R8+R9}2+(R2+R3+R7)2]+R4+R6 171,586 191,526
Insurance risk (R1) 24,574 24,564
Ordinary insurance risk (R5) 13,181 13,711
Major catastrophe risk (R6) 1,105 1,100
Third-sector insurance risk (R8) 8,527 8,459
Insurance risk of small-amount short-term insurers (R9) — —
Assumed interest rate risk (R2) 34,186 36,769
Minimum guarantee risk (R7) 22,141 24,069
Asset management risk (R3) 103,438 118,623
Business management risk (R4) 6,618 7,271
Consolidated solvency margin ratio (A)/{(1/2)x(B)} x 100 1,726.3% 1,680.3%
Notes: 1.Figures are calculated in accordance with Article 210, Paragraph 11-3 and Paragraph 11-4 of the Ordinance of Enforcement of the Insurance Business
Act of Japan, and FSA Notification No. 23 (2011).
2. Minimum guarantee risk is calculated based on the standardized method.
Sony Financial Holdings Inc.Annual Report202090
Other Financial Data
160,3
41,225
711
Risk-monitored Loans
Millions of yen
As of March 31, 2019 2020
Category
Bankrupt loans 180 187
Non-accrual delinquent loans 1,220 1,116
Past-due loans (3 months or more) — —
Restructured loans 800 814
Total 2,201 2,117
Consolidated Solvency Margin Ratio
Millions of yen
As of March 31, 2019 2020
(A) Total consolidated solvency margin 1,481,117 1,60
Common stock, etc. 505,148 546,010
Reserve for price fluctuations 50,343 53,060
Contingency reserve 98,736 110,973
Catastrophe reserve 24,636 27,860
General reserve for possible loan losses 483 507
Net unrealized gains (losses) on available-for-sale securities and net deferred gains or losses on
hedging instruments, net of taxes (before tax deductions) x 90% (100% if losses) 157,692 1
Net unrealized gains (losses) on real estate x 85% (100% if losses) 51,154 65,673
Total amount of unrecognized net actuarial gain (loss) and unrecognized prior service cost (before
subtracting tax effects) (2,090) (1,172)
Amount excluded from deferred tax assets — —
Unallotted portion of reserve for policyholders’ dividends 245 152
Deferred tax assets (after deducting amount excluded) 95,400 105,303
Subordinated debt and surplus components of premium reserve 510,406 550,766
Total solvency margin of small-amount short-term insurers — —
Deductible items (11,040) (45)
(B) Total consolidated risk [{(R1
2+R5
2)+R8+R9}2+(R2+R3+R7)2]+R4+R6 171,586 191,526
Insurance risk (R1) 24,574 24,564
Ordinary insurance risk (R5) 13,181 13,711
Major catastrophe risk (R6) 1,105 1,100
Third-sector insurance risk (R8) 8,527 8,459
Insurance risk of small-amount short-term insurers (R9) — —
Assumed interest rate risk (R2) 34,186 36,769
Minimum guarantee risk (R7) 22,141 24,069
Asset management risk (R3) 103,438 118,623
Business management risk (R4) 6,618 7,271
Consolidated solvency margin ratio (A)/{(1/2)x(B)} x 100 1,726.3% 1,680.3%
Notes: 1.Figures are calculated in accordance with Article 210, Paragraph 11-3 and Paragraph 11-4 of the Ordinance of Enforcement of the Insurance Business
Act of Japan, and FSA Notification No. 23 (2011).
2. Minimum guarantee risk is calculated based on the standardized method.
Sony Financial Holdings Inc.Annual Report202090
Other Financial Data
160,3
41,225
711
■ Sony Life (Non-consolidated)
Risk-monitored Loans
Billions of yen
As of March 31, 2019 2020
Category
Bankrupt loans — 0.0
Non-accrual delinquent loans 0.0 0.0
Past-due loans (3 months or more) — —
Restructured loans — —
Total 0.0 0.0
■ Sony Bank (Non-consolidated)
Risk-monitored Loans
Billions of yen
As of March 31, 2019 2020
Category
Bankrupt loans 0.1 0.1
Non-accrual delinquent loans 1.2 1.1
Past-due loans (3 months or more) ― —
Restructured loans 0.8 0.8
Total 2.2 2.1
■ Sony Assurance
Risk-monitored Loans
The company does not have any risk-monitored loans (loans for which repayment conditions are not ordinary).
Sony Financial Holdings Inc.Annual Report2020 91
Risk-monitored Loans
Billions of yen
As of March 31, 2019 2020
Category
Bankrupt loans — 0.0
Non-accrual delinquent loans 0.0 0.0
Past-due loans (3 months or more) — —
Restructured loans — —
Total 0.0 0.0
■ Sony Bank (Non-consolidated)
Risk-monitored Loans
Billions of yen
As of March 31, 2019 2020
Category
Bankrupt loans 0.1 0.1
Non-accrual delinquent loans 1.2 1.1
Past-due loans (3 months or more) ― —
Restructured loans 0.8 0.8
Total 2.2 2.1
■ Sony Assurance
Risk-monitored Loans
The company does not have any risk-monitored loans (loans for which repayment conditions are not ordinary).
Sony Financial Holdings Inc.Annual Report2020 91
The relationship between SFH and its parent company, Sony Corp., is as described below.
●Capital Relationship
SFH is a financial holding company, established in April 2004
as a corporate spin-off from Sony Corp. In October 2007,
SFH’s shares were listed on the First Section of the Tokyo
Stock Exchange with the initial public offering conducted in
Japan and overseas. Sony Corp. later made additional
purchases of SFH shares, bringing its shareholding to
65.06% (excluding treasury stocks) as of March 31, 2020. As
a result, regardless of the intentions and interests of other
shareholders, Sony Corp. may have an impact on all matters
requiring shareholder approval such as the appointment and
dismissal of SFH directors and audit & supervisory board
members, mergers and other organizational restructuring,
material asset and business transfers, amendments to the
Articles of Incorporation and the payment of dividends.
Sony Corp. announced on May 19, 2020 that it would
conduct a tender offer for the shares and the stock acquisi-
tion rights of SFH, with the intention of making SFH its
wholly-owned subsidiary. The board of directors of SFH
determined that becoming a wholly-owned subsidiary of
Sony Corp. would create synergies, thereby contributing to
increasing its corporate value and shareholders’ interests,
and therefore expressed its opinion in support of the Tender
Offer and recommended that the shareholders and the
holders of the stock acquisition rights tender their shares and
stock acquisition rights in the Tender Offer. The Tender Offer
was completed on July 13, 2020. As a result, Sony Corp.
holds 406,626,238 shares of SFH (share holding ratio:
93.47% (excluding treasury shares)) as of July 20, 2020.
Accordingly, Sony Corp. will conduct procedures for acquiring
all of SFH’s shares (excluding SFH’s shares held by Sony
Corp. and the treasury shares held by SFH).
●Ensuring Independence in Business Activities
Because SFG’s business operations have a tenuous connec-
tion with the Sony Group’s business domains except for
Financial Services, and because SFG operates its business
primarily in accordance with the Insurance Business Act and
the Banking Act of Japan, under the supervision of the
Financial Services Agency (FSA) of Japan, SFH believes that
SFG conducts its business with a certain degree of indepen-
dence from the Sony Group. In addition, Sony Corp., which
has obtained approval from FSA to remain a major SFH
shareholder, recognizes and respects SFH’s corporate
philosophy.
●Personnel Relationship
SFH’s three directors and one audit & supervisory board
member serve concurrently as directors, corporate executive
officers or senior vice presidents of Sony Corp. Moreover,
Sony Corp. has seconded six employees to SFH. Based on
the above-stated Ensuring Independence in Business Activi-
ties, SFH believes that concurrent directors and audit &
supervisory board member are positioned to make indepen-
dent management decisions. From the standpoint of further
enhancing independence from the parent company, SFH has
appointed four outside directors and two outside audit &
supervisory board members who have no special relationship
with the Sony Group and designated them as independent
directors and/or independent audit & supervisory board
members based on rules set forth by the Tokyo Stock
Exchange regulations, respectively.
● Using the “Sony” Trade Name and Trademark
SFH and Group companies have entered into royalty agree-
ments with Sony Corp. for the use of the “Sony” trade name
and trademark, etc. However, these agreements can be
rescinded by Sony Corp. under certain conditions, such as its
share of voting rights in SFH falling below a majority, or SFH’s
percentage ownership of the voting rights of SFG companies
dropping. Furthermore, SFG pays royalty fees to Sony Corp.
based on these agreements. The amount paid in fiscal 2019
was ¥3,164 million and the amount of these royalty fees has
no material impact on the management base of SFG.
SFG believes that the use of the “Sony” trade name and
trademark confers certain advantages, including stronger
brand recognition, enhanced trustworthiness and higher
employee motivation and awareness.
●Transactions with Sony Corp.
SFH is a listed subsidiary of Sony Corp. For this reason, SFH
has set out a Policy Concerning Measures to Protect Minority
Shareholders in Transactions with the Controlling Shareholder
to protect the interests of minority shareholders.
Sony Financial Holdings Inc.Annual Report202092
Relationship with Parent Company, Sony Corp.(As of July 1, 2020)
●Capital Relationship
SFH is a financial holding company, established in April 2004
as a corporate spin-off from Sony Corp. In October 2007,
SFH’s shares were listed on the First Section of the Tokyo
Stock Exchange with the initial public offering conducted in
Japan and overseas. Sony Corp. later made additional
purchases of SFH shares, bringing its shareholding to
65.06% (excluding treasury stocks) as of March 31, 2020. As
a result, regardless of the intentions and interests of other
shareholders, Sony Corp. may have an impact on all matters
requiring shareholder approval such as the appointment and
dismissal of SFH directors and audit & supervisory board
members, mergers and other organizational restructuring,
material asset and business transfers, amendments to the
Articles of Incorporation and the payment of dividends.
Sony Corp. announced on May 19, 2020 that it would
conduct a tender offer for the shares and the stock acquisi-
tion rights of SFH, with the intention of making SFH its
wholly-owned subsidiary. The board of directors of SFH
determined that becoming a wholly-owned subsidiary of
Sony Corp. would create synergies, thereby contributing to
increasing its corporate value and shareholders’ interests,
and therefore expressed its opinion in support of the Tender
Offer and recommended that the shareholders and the
holders of the stock acquisition rights tender their shares and
stock acquisition rights in the Tender Offer. The Tender Offer
was completed on July 13, 2020. As a result, Sony Corp.
holds 406,626,238 shares of SFH (share holding ratio:
93.47% (excluding treasury shares)) as of July 20, 2020.
Accordingly, Sony Corp. will conduct procedures for acquiring
all of SFH’s shares (excluding SFH’s shares held by Sony
Corp. and the treasury shares held by SFH).
●Ensuring Independence in Business Activities
Because SFG’s business operations have a tenuous connec-
tion with the Sony Group’s business domains except for
Financial Services, and because SFG operates its business
primarily in accordance with the Insurance Business Act and
the Banking Act of Japan, under the supervision of the
Financial Services Agency (FSA) of Japan, SFH believes that
SFG conducts its business with a certain degree of indepen-
dence from the Sony Group. In addition, Sony Corp., which
has obtained approval from FSA to remain a major SFH
shareholder, recognizes and respects SFH’s corporate
philosophy.
●Personnel Relationship
SFH’s three directors and one audit & supervisory board
member serve concurrently as directors, corporate executive
officers or senior vice presidents of Sony Corp. Moreover,
Sony Corp. has seconded six employees to SFH. Based on
the above-stated Ensuring Independence in Business Activi-
ties, SFH believes that concurrent directors and audit &
supervisory board member are positioned to make indepen-
dent management decisions. From the standpoint of further
enhancing independence from the parent company, SFH has
appointed four outside directors and two outside audit &
supervisory board members who have no special relationship
with the Sony Group and designated them as independent
directors and/or independent audit & supervisory board
members based on rules set forth by the Tokyo Stock
Exchange regulations, respectively.
● Using the “Sony” Trade Name and Trademark
SFH and Group companies have entered into royalty agree-
ments with Sony Corp. for the use of the “Sony” trade name
and trademark, etc. However, these agreements can be
rescinded by Sony Corp. under certain conditions, such as its
share of voting rights in SFH falling below a majority, or SFH’s
percentage ownership of the voting rights of SFG companies
dropping. Furthermore, SFG pays royalty fees to Sony Corp.
based on these agreements. The amount paid in fiscal 2019
was ¥3,164 million and the amount of these royalty fees has
no material impact on the management base of SFG.
SFG believes that the use of the “Sony” trade name and
trademark confers certain advantages, including stronger
brand recognition, enhanced trustworthiness and higher
employee motivation and awareness.
●Transactions with Sony Corp.
SFH is a listed subsidiary of Sony Corp. For this reason, SFH
has set out a Policy Concerning Measures to Protect Minority
Shareholders in Transactions with the Controlling Shareholder
to protect the interests of minority shareholders.
Sony Financial Holdings Inc.Annual Report202092
Relationship with Parent Company, Sony Corp.(As of July 1, 2020)
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A
ALM (asset liability management)
A method for maximizing and stabilizing net
asset value, which is calculated by deduct-
ing the value of liabilities from the value of
assets, through the comprehensive grasp
and management of assets and liabilities in
consideration of their special characteristics.
Annualized insurance premiums
An indicator of the approximate annual
premium income from existing policies,
which is used as a performance indicator.
Annualized insurance premiums are calcu-
lated by adjusting differences in the payment
methods since insurance premiums can be
paid monthly, annually or in a lump sum, and
by assuming that average payments will be
made over the term of the policy.
Assumed interest rate
Insurance companies anticipate a certain
return on invested assets in advance and
discount insurance premiums only by this
amount. This discount rate is called the
assumed interest rate.
Assumed mortality rate
The mortality rate is the percentage of peo-
ple who die in a single year for a given large
population. The assumed mortality rate is
the mortality rate used when calculating
the amount of insurance premiums need-
ed to cover future benefit payments, and
represents a projection of the number of
deaths by gender and age based on past
statistics.
Assumed rate of expense
In operating their businesses, insurance
companies forecast their expenses, and
then incorporate this amount in their insur-
ance premiums. This expense rate is called
the assumed rate of expense.
C
Capital adequacy ratio
The ratio of capital to total assets. An indi-
cator of whether a bank has enough capital,
including common stock, versus credit
risk assets (of total assets, those which
could become non-performing). If a bank is
unable to recover a large amount of loans,
it can draw on capital and write off these
loans. A sharp decrease in capital creates
difficulties in bank management.
Capital adequacy ratio regulations ensure
that banks are soundly managed by keep-
ing the capital adequacy ratio above a cer-
tain level. This ratio is therefore an important
indicator to show financial soundness. For
banks possessing business bases over-
seas, the internationally standardized regu-
lations to preserve financial soundness are
a capital adequacy ratio of over 8%, and
for banks not possessing business bases
overseas, in Japan a capital adequacy ratio
of 4% is required.
Catastrophe reserve
A type of policy reserve, under which,
pursuant to the provisions of the Insurance
Business Act of Japan, non-life insurance
companies are required to accumulate each
fiscal year as an amount calculated based
on premium income to cover losses due
to catastrophic events. In consideration of
the special need for the non-life insurance
business to cover a wide range of risks, the
catastrophe reserve acts as a provision
against the risk of large insurance claims
resulting from earthquakes, typhoons and
other disaster occurs. It is structured to be
accumulated over the course of multiple
fiscal years, and reversed during the fiscal
year in which a disaster occurs.
Combined ratio
The sum of a net loss ratio and net expense
ratio. Indicator of non-life insurance com-
pany’s profitability in the primary business
operations.
Compulsory automobile liability
insurance
Compulsory automobile liability insurance is
legally required for all vehicles and provides
protection for victims of traffic accidents
resulting in injury or death. Compulsory au-
tomobile liability mutual aid is similar. With
compulsory automobile liability insurance
(mutual aid), indemnity payments per per-
son per accident are capped at ¥30 million
for death, ¥40 million for serious residual
disability and ¥1.2 million for injury. Benefits
are not paid for vehicle or property damage.
Contingency reserve
Reserve to prepare for possible contingen-
cies, including insurance risk and assumed
interest rate risk.
Core profit
An indicator of profit (loss) in the primary life
insurance business over a one-year period.
It is derived by subtracting from ordinary
profit any income earned from operations
other than the primary life insurance
business. Profit categories subtracted from
ordinary profit include gains (losses) on the
sale of securities and one-time gains (loss-
es), such as profit from the sale of assets
owned by the life insurance company.
D
Direct premiums written
Premiums received from policyholders,
calculated by subtracting direct surrender
payments and other direct payments from
direct premiums.
Duration
A sensitivity index indicating the extent to
which the present value of future cash flow
(interest income, repayment of principal,
receipt of premiums, payment of insurance
benefits and dividends, etc.) from eligible
assets (managed assets) and liabilities
(policy liabilities) will be affected by interest
rate fluctuations. While a variety of types
and methods for calculating duration exists,
a method expressing the weighted average
maturity of the cash flow in question is
relatively widely used.
E
Earned/incurred (E.I.) loss ratio
An indicator that represents the loss ratio
incurred during the current period that
takes into account the provision and rever-
sal of reserve for outstanding losses and
ordinary underwriting reserves calculated
using the following formula:
Earned/incurred (E.I.) loss ratio = (Net loss-
es paid + Provision for reserve for outstand-
ing losses + Loss adjustment expenses) /
Earned premiums (excluding earthquake
insurance and compulsory automobile
liability insurance)
Endowment insurance
Endowment insurance entitles a beneficiary
to receive death or serious disability benefits
upon the death or serious disability of the
insured within an insurance period specified
when the policy is purchased, or to receive
maturity benefits upon policy maturity.
ERM (enterprise risk management)
An approach to accomplishing corporate
strategic goals and sustainable growth in
corporate value by conducting integrated
recognition and control of all risks a com-
pany faces and seeking to optimize the risk
from a company-wide perspective.
ESR (economic solvency ratio)
ESR is one of the financial soundness
indicators, which measures whether an
organization possesses sufficient capital in
relation to its risks. Sony Life computes its
ESR by dividing MCEV by the risk amount
based on economic value. For details on
MCEV and the risk amount based on eco-
nomic value, please see “Sony Life MCEV”
in the Financial Data Book.
EV (embedded value)
An indicator of the corporate value of a life
insurance company. Sony Life discloses
MCEV (market consistent embedded value)
in conformity with the MCEV Principles. For
details on MCEV, please see “Sony Life
MCEV” in the Financial Data Book.
Expense ratio
The ratio of expenses to insurance premi-
ums. Used as an indicator of business effi-
ciency at insurance companies. Expenses
are used for soliciting, maintaining and
managing insurance as well as for payment
of insurance claims.
F
Foreign currency-denominated
insurance
Insurance product in which insurance
premiums are invested in foreign currency.
Sony Financial Holdings Inc.Annual Report2020 93
Glossary (in Alphabetical Order)
ALM (asset liability management)
A method for maximizing and stabilizing net
asset value, which is calculated by deduct-
ing the value of liabilities from the value of
assets, through the comprehensive grasp
and management of assets and liabilities in
consideration of their special characteristics.
Annualized insurance premiums
An indicator of the approximate annual
premium income from existing policies,
which is used as a performance indicator.
Annualized insurance premiums are calcu-
lated by adjusting differences in the payment
methods since insurance premiums can be
paid monthly, annually or in a lump sum, and
by assuming that average payments will be
made over the term of the policy.
Assumed interest rate
Insurance companies anticipate a certain
return on invested assets in advance and
discount insurance premiums only by this
amount. This discount rate is called the
assumed interest rate.
Assumed mortality rate
The mortality rate is the percentage of peo-
ple who die in a single year for a given large
population. The assumed mortality rate is
the mortality rate used when calculating
the amount of insurance premiums need-
ed to cover future benefit payments, and
represents a projection of the number of
deaths by gender and age based on past
statistics.
Assumed rate of expense
In operating their businesses, insurance
companies forecast their expenses, and
then incorporate this amount in their insur-
ance premiums. This expense rate is called
the assumed rate of expense.
C
Capital adequacy ratio
The ratio of capital to total assets. An indi-
cator of whether a bank has enough capital,
including common stock, versus credit
risk assets (of total assets, those which
could become non-performing). If a bank is
unable to recover a large amount of loans,
it can draw on capital and write off these
loans. A sharp decrease in capital creates
difficulties in bank management.
Capital adequacy ratio regulations ensure
that banks are soundly managed by keep-
ing the capital adequacy ratio above a cer-
tain level. This ratio is therefore an important
indicator to show financial soundness. For
banks possessing business bases over-
seas, the internationally standardized regu-
lations to preserve financial soundness are
a capital adequacy ratio of over 8%, and
for banks not possessing business bases
overseas, in Japan a capital adequacy ratio
of 4% is required.
Catastrophe reserve
A type of policy reserve, under which,
pursuant to the provisions of the Insurance
Business Act of Japan, non-life insurance
companies are required to accumulate each
fiscal year as an amount calculated based
on premium income to cover losses due
to catastrophic events. In consideration of
the special need for the non-life insurance
business to cover a wide range of risks, the
catastrophe reserve acts as a provision
against the risk of large insurance claims
resulting from earthquakes, typhoons and
other disaster occurs. It is structured to be
accumulated over the course of multiple
fiscal years, and reversed during the fiscal
year in which a disaster occurs.
Combined ratio
The sum of a net loss ratio and net expense
ratio. Indicator of non-life insurance com-
pany’s profitability in the primary business
operations.
Compulsory automobile liability
insurance
Compulsory automobile liability insurance is
legally required for all vehicles and provides
protection for victims of traffic accidents
resulting in injury or death. Compulsory au-
tomobile liability mutual aid is similar. With
compulsory automobile liability insurance
(mutual aid), indemnity payments per per-
son per accident are capped at ¥30 million
for death, ¥40 million for serious residual
disability and ¥1.2 million for injury. Benefits
are not paid for vehicle or property damage.
Contingency reserve
Reserve to prepare for possible contingen-
cies, including insurance risk and assumed
interest rate risk.
Core profit
An indicator of profit (loss) in the primary life
insurance business over a one-year period.
It is derived by subtracting from ordinary
profit any income earned from operations
other than the primary life insurance
business. Profit categories subtracted from
ordinary profit include gains (losses) on the
sale of securities and one-time gains (loss-
es), such as profit from the sale of assets
owned by the life insurance company.
D
Direct premiums written
Premiums received from policyholders,
calculated by subtracting direct surrender
payments and other direct payments from
direct premiums.
Duration
A sensitivity index indicating the extent to
which the present value of future cash flow
(interest income, repayment of principal,
receipt of premiums, payment of insurance
benefits and dividends, etc.) from eligible
assets (managed assets) and liabilities
(policy liabilities) will be affected by interest
rate fluctuations. While a variety of types
and methods for calculating duration exists,
a method expressing the weighted average
maturity of the cash flow in question is
relatively widely used.
E
Earned/incurred (E.I.) loss ratio
An indicator that represents the loss ratio
incurred during the current period that
takes into account the provision and rever-
sal of reserve for outstanding losses and
ordinary underwriting reserves calculated
using the following formula:
Earned/incurred (E.I.) loss ratio = (Net loss-
es paid + Provision for reserve for outstand-
ing losses + Loss adjustment expenses) /
Earned premiums (excluding earthquake
insurance and compulsory automobile
liability insurance)
Endowment insurance
Endowment insurance entitles a beneficiary
to receive death or serious disability benefits
upon the death or serious disability of the
insured within an insurance period specified
when the policy is purchased, or to receive
maturity benefits upon policy maturity.
ERM (enterprise risk management)
An approach to accomplishing corporate
strategic goals and sustainable growth in
corporate value by conducting integrated
recognition and control of all risks a com-
pany faces and seeking to optimize the risk
from a company-wide perspective.
ESR (economic solvency ratio)
ESR is one of the financial soundness
indicators, which measures whether an
organization possesses sufficient capital in
relation to its risks. Sony Life computes its
ESR by dividing MCEV by the risk amount
based on economic value. For details on
MCEV and the risk amount based on eco-
nomic value, please see “Sony Life MCEV”
in the Financial Data Book.
EV (embedded value)
An indicator of the corporate value of a life
insurance company. Sony Life discloses
MCEV (market consistent embedded value)
in conformity with the MCEV Principles. For
details on MCEV, please see “Sony Life
MCEV” in the Financial Data Book.
Expense ratio
The ratio of expenses to insurance premi-
ums. Used as an indicator of business effi-
ciency at insurance companies. Expenses
are used for soliciting, maintaining and
managing insurance as well as for payment
of insurance claims.
F
Foreign currency-denominated
insurance
Insurance product in which insurance
premiums are invested in foreign currency.
Sony Financial Holdings Inc.Annual Report2020 93
Glossary (in Alphabetical Order)
Sony Life sells U.S. dollar-denominated
insurance, in which policyholders pay
the Japanese yen equivalent of the U.S.
dollar-denominated insurance premiums
and select the Japanese yen or U.S. dollar
when they receive insurance claims.
Foundation internal ratings-based
approach
The amount of credit risk assets is calculat-
ed mainly by the standard approach or in-
ternal rating based approach for computing
the capital adequacy ratio. The standard
approach calculates the amount of credit
risk assets by using the risk weight set by
authorities. On the other hand, the inter-
nal rating based approach calculates the
amount of credit risk assets by using the
default rate, etc. as estimated internally by
financial institutions that practice advanced
risk management. This approach includes a
fundamental internal rating based approach
that partly uses the values set by authorities
for loss rates at the time of default, and an
advanced internal rating based approach
that uses the values estimated internally by
financial institutions in every situation.
G
General accounts
Accounts for managing financial assets not
included in separate accounts. This account
guarantees policyholders a certain assumed
interest rate, while the life insurance compa-
ny bears the asset management risk.
Gross operating profit
The total income from the four components
of banking services income: net interest
income, net fees and commissions, net
trading income and net other operating
income. Equivalent to gross profit (sales
minus purchases) and an indicator of the
amount of profits a bank generates from its
main services.
I
Individual annuities
Policyholders are eligible for receiving
annuity payments from funds accumulated
by paid insurance premiums at a certain
age prescribed in the policy. There are a
variety of types depending on the period for
receiving the annuity, structure of the annu-
ity, method for paying premiums and death
protection prior to receiving the annuity.
Individual variable annuities
Individual annuity product in which assets
are invested mainly in stocks and bonds,
and annuity and surrender payments
increase or decrease depending on invest-
ment returns. The individual policyholder
bears the asset management risk.
Insurance premiums
Money paid by policyholders to an insur-
ance company based on the insurance
policy. Even after submitting an insurance
policy application, no protection or compen-
sation is provided unless premiums are paid.
Investment crowd funding
Investment crowd funding is an arrangement
that uses the Internet to link venture com-
panies’ fund-raising needs for their projects
with investors’ money management needs.
Unlike donation-type and purchase-type
crowd funding, which do not involve mone-
tary return, investors can receive dividends.
Meanwhile, investment crowd funding has
the feature of investment products associat-
ed with risks, whereby dividends may not be
paid or the investment value may fall below
the amount invested due to the performance
of venture companies, etc.
L
Lapse and surrender rate
Surrender refers to the cancellation of an
insurance policy at some point in the future.
Upon surrender, the policy is terminated,
and from that point protection or coverage
is lost. On the other hand, a lapse is when
a policyholder fails to pay premiums within
the payment grace period, causing the
policy to lapse, from which point the policy
will no longer provide protection.
The lapse and surrender rate is the ratio
of lapses and surrenders to policies in
force at the beginning of the fiscal year. It
is calculated by adding the total of lapses
and surrenders for the year in question, and
then dividing by the amount of policies in
force at the beginning of the fiscal year.
Living benefit insurance
This insurance provides a lump-sum benefit
payment when the insured is diagnosed
with a disease such as one of the three ma-
jor diseases (cancer, heart attack or stroke).
Loss adjustment expenses
Expenses incurred by an insurance
company in examining an insured event.
These include personnel and non-personnel
expenses.
Loss ratio
The ratio of insurance claims paid to premi-
um income. Used in analyzing the business
of an insurance company and in calculating
insurance premium rates. The net loss ratio
is the ratio derived by adding loss adjust-
ment expenses to net losses paid, then
dividing by net premiums written.
M
MDRT (Million Dollar Round Table)
A global, independent association of the
world’s leading life insurance and financial
services professionals with 72,000 members
from 70 countries and territories. MDRT
members demonstrate exceptional profes-
sional knowledge and strict ethical conduct.
Through their outstanding client services,
MDRT members are recognized as leaders
of the business and local communities. They
are also internationally recognized as pro-
fessionals in the life insurance and financial
services business.
N
Net fees and commissions
Fees and commissions charged for provid-
ing services. These refer to income gener-
ated by providing services, such as bank
transfer fees and investment trust sales
commissions, less the costs associated
with providing these services.
Net interest income
Net interest income accounts for the largest
percentage of the four income components
of gross operating profit. Banks generally
use the deposits received from individuals
and the funds raised in interbank markets
to provide loans to individuals and compa-
nies and to invest in securities. Net interest
income is the difference between the total
interest received from loans and other
items (interest income) and the total interest
paid for deposits and other items (interest
expenses). Net interest income is affected
by changes in interest rates (e.g., if deposit
interest rates rise while loan interest rates
stay at the same levels, net interest income
will decrease), and by deposit and loan
balances.
Net other operating income
Net other operating income is derived from
services other than the primary banking
services income categories of net interest
income, net fees and commissions, and net
trading income. One example is buying and
selling in dollars and other foreign curren-
cies. In this case, after purchasing foreign
currency at a certain price, any gain from
a subsequent sale at a price higher than
the purchase price would be recorded in
other operating income, and any loss from
a subsequent sale at a price lower than the
purchase price would be recorded in other
operating expenses.
Net premiums written
Premiums received directly from policyhold-
ers (direct premiums written), adjusting for
reinsurance premiums (subtracting rein-
surance premiums paid and adding direct
reinsurance premiums received).
Non-performing assets
Non-performing assets are claims against
parties in bankruptcy, claims against parties
in effective bankruptcy due to poor business
or other reasons, and claims against parties
at risk of bankruptcy. Non-performing assets
also include loans for which principal or inter-
est payments are past due by three months
or more, and loans for which repayment on
initial terms is impossible and interest has
been reduced or exempted and the repay-
ment of principal has been extended.
Sony Financial Holdings Inc.Annual Report202094
insurance, in which policyholders pay
the Japanese yen equivalent of the U.S.
dollar-denominated insurance premiums
and select the Japanese yen or U.S. dollar
when they receive insurance claims.
Foundation internal ratings-based
approach
The amount of credit risk assets is calculat-
ed mainly by the standard approach or in-
ternal rating based approach for computing
the capital adequacy ratio. The standard
approach calculates the amount of credit
risk assets by using the risk weight set by
authorities. On the other hand, the inter-
nal rating based approach calculates the
amount of credit risk assets by using the
default rate, etc. as estimated internally by
financial institutions that practice advanced
risk management. This approach includes a
fundamental internal rating based approach
that partly uses the values set by authorities
for loss rates at the time of default, and an
advanced internal rating based approach
that uses the values estimated internally by
financial institutions in every situation.
G
General accounts
Accounts for managing financial assets not
included in separate accounts. This account
guarantees policyholders a certain assumed
interest rate, while the life insurance compa-
ny bears the asset management risk.
Gross operating profit
The total income from the four components
of banking services income: net interest
income, net fees and commissions, net
trading income and net other operating
income. Equivalent to gross profit (sales
minus purchases) and an indicator of the
amount of profits a bank generates from its
main services.
I
Individual annuities
Policyholders are eligible for receiving
annuity payments from funds accumulated
by paid insurance premiums at a certain
age prescribed in the policy. There are a
variety of types depending on the period for
receiving the annuity, structure of the annu-
ity, method for paying premiums and death
protection prior to receiving the annuity.
Individual variable annuities
Individual annuity product in which assets
are invested mainly in stocks and bonds,
and annuity and surrender payments
increase or decrease depending on invest-
ment returns. The individual policyholder
bears the asset management risk.
Insurance premiums
Money paid by policyholders to an insur-
ance company based on the insurance
policy. Even after submitting an insurance
policy application, no protection or compen-
sation is provided unless premiums are paid.
Investment crowd funding
Investment crowd funding is an arrangement
that uses the Internet to link venture com-
panies’ fund-raising needs for their projects
with investors’ money management needs.
Unlike donation-type and purchase-type
crowd funding, which do not involve mone-
tary return, investors can receive dividends.
Meanwhile, investment crowd funding has
the feature of investment products associat-
ed with risks, whereby dividends may not be
paid or the investment value may fall below
the amount invested due to the performance
of venture companies, etc.
L
Lapse and surrender rate
Surrender refers to the cancellation of an
insurance policy at some point in the future.
Upon surrender, the policy is terminated,
and from that point protection or coverage
is lost. On the other hand, a lapse is when
a policyholder fails to pay premiums within
the payment grace period, causing the
policy to lapse, from which point the policy
will no longer provide protection.
The lapse and surrender rate is the ratio
of lapses and surrenders to policies in
force at the beginning of the fiscal year. It
is calculated by adding the total of lapses
and surrenders for the year in question, and
then dividing by the amount of policies in
force at the beginning of the fiscal year.
Living benefit insurance
This insurance provides a lump-sum benefit
payment when the insured is diagnosed
with a disease such as one of the three ma-
jor diseases (cancer, heart attack or stroke).
Loss adjustment expenses
Expenses incurred by an insurance
company in examining an insured event.
These include personnel and non-personnel
expenses.
Loss ratio
The ratio of insurance claims paid to premi-
um income. Used in analyzing the business
of an insurance company and in calculating
insurance premium rates. The net loss ratio
is the ratio derived by adding loss adjust-
ment expenses to net losses paid, then
dividing by net premiums written.
M
MDRT (Million Dollar Round Table)
A global, independent association of the
world’s leading life insurance and financial
services professionals with 72,000 members
from 70 countries and territories. MDRT
members demonstrate exceptional profes-
sional knowledge and strict ethical conduct.
Through their outstanding client services,
MDRT members are recognized as leaders
of the business and local communities. They
are also internationally recognized as pro-
fessionals in the life insurance and financial
services business.
N
Net fees and commissions
Fees and commissions charged for provid-
ing services. These refer to income gener-
ated by providing services, such as bank
transfer fees and investment trust sales
commissions, less the costs associated
with providing these services.
Net interest income
Net interest income accounts for the largest
percentage of the four income components
of gross operating profit. Banks generally
use the deposits received from individuals
and the funds raised in interbank markets
to provide loans to individuals and compa-
nies and to invest in securities. Net interest
income is the difference between the total
interest received from loans and other
items (interest income) and the total interest
paid for deposits and other items (interest
expenses). Net interest income is affected
by changes in interest rates (e.g., if deposit
interest rates rise while loan interest rates
stay at the same levels, net interest income
will decrease), and by deposit and loan
balances.
Net other operating income
Net other operating income is derived from
services other than the primary banking
services income categories of net interest
income, net fees and commissions, and net
trading income. One example is buying and
selling in dollars and other foreign curren-
cies. In this case, after purchasing foreign
currency at a certain price, any gain from
a subsequent sale at a price higher than
the purchase price would be recorded in
other operating income, and any loss from
a subsequent sale at a price lower than the
purchase price would be recorded in other
operating expenses.
Net premiums written
Premiums received directly from policyhold-
ers (direct premiums written), adjusting for
reinsurance premiums (subtracting rein-
surance premiums paid and adding direct
reinsurance premiums received).
Non-performing assets
Non-performing assets are claims against
parties in bankruptcy, claims against parties
in effective bankruptcy due to poor business
or other reasons, and claims against parties
at risk of bankruptcy. Non-performing assets
also include loans for which principal or inter-
est payments are past due by three months
or more, and loans for which repayment on
initial terms is impossible and interest has
been reduced or exempted and the repay-
ment of principal has been extended.
Sony Financial Holdings Inc.Annual Report202094
O
Over-the-counter (OTC) sales of
insurance products at banks
A bank serves as an insurance agency to
solicit insurance.
P
Policy amount in force
Total amount of protection provided by life
insurance companies to individual poli-
cyholders. This is different from the total
amount of premiums paid by policyholders
(premium income).
Policy reserves
(Underwriting reserves)
Reserves that insurance companies accu-
mulate in advance, funded by premiums,
investment income, and other sources, to
prepare for future liabilities resulting from
insurance policies, including payments of
claims, annuities and benefits.
Policy reserves and others
(Underwriting reserves)
Reserves recorded in the liabilities section
of the balance sheets for which insurance
companies are required in the Insurance
Business Act of Japan to accumulate to
prepare for the payment of future claims
and other items to fulfill their obligations for
paying claims and other actions based on
insurance policies. Policy reserves and oth-
ers include “reserve for outstanding claims”
and “policy reserves.”
Policyholder loans
As one of the asset management opera-
tions of life insurance companies, loans pro-
vided up to a certain level of the surrender
payment on life insurance policies. In gener-
al, policyholders retain insurance protection
and rights to receive dividends during the
period of the policyholder loan. However,
policyholder loans may not be available
depending on the type of insurance.
Policyholders’ dividend reserve
A reserve accumulated to fund dividend
payments to policyholders pursuant to the pro-
visions of the Insurance Business Act of Japan.
Positive spread
The amount by which the actual investment
income is higher than the expected invest-
ment income from the assumed interest rate.
R
Reference loss cost rates
Non-life insurance premium rates comprise
net insurance premium rates used for pay-
ing insurance claims and loading insurance
premium rates used for operating insurance
businesses. Net insurance premium rates
calculated by the General Insurance Rating
Organization of Japan are called reference
loss cost rates. Member insurers of the
organization can use the rates as the basis
for calculating their own insurance premium
rates.
Reinsurance
The insurance agreement that insurance
companies conclude with domestic and
overseas reinsurance companies for some
of the insurance policies they underwrite in
order to diversify risks on insurance policies.
Reserve for outstanding claims
(Reserve for outstanding losses)
Reserve for the estimated amount of
unfixed insurance payments and unpaid in-
surance claims at the end of the fiscal year,
among payment obligations for insurance
claims, surrender value and other benefits.
Reserve for price fluctuations
This reserve is set aside to prepare for
losses caused by price fluctuations in
stocks, bonds and other assets held by an
insurance company.
Riders
Riders can enlarge the scope of protection
in the primary policy by adding provisions
to the primary coverage. Riders do not
constitute a policy by themselves. Multiple
riders can be added to the primary policy.
Riders are canceled when the primary poli-
cy is canceled due to maturity, surrender or
other reasons.
ROEV (return on embedded value)
ROEV is an indicator that refers to the growth
potential of corporate value. The amount of
increase of EV (embedded value), an indicator
of a life insurance company’s corporate
value, is deemed to be profit that takes into
account the unique aspects of life insurance
accounting. Core ROEV is the growth rate of
EV that excludes any fluctuation effects of the
investment yield and discounted rate.
S
Separate accounts
Separate accounts are used for variable
life insurance, variable annuities and other
insurance products to invest assets sepa-
rately from the other financial assets owned
by an insurance company in order to pay
investment returns directly to policyholders.
Solvency margin
The solvency margin indicates payment
ability. Insurance companies accumulate
policy reserves to prepare for the payment
of future claims, allowing them to ade-
quately respond to risks within a normally
anticipated range. However, unforeseen
events can occur due to changes in the
environment such as major disasters and
substantial declines in stock prices. The
solvency margin ratio is one measure used
by regulatory authorities to determine how
much an insurance company is able to pay
in response to the risk of such unpredict-
able events.
Standard Mortality Table
The Institute of Actuaries of Japan prepares
a table that compiles data including mortal-
ity rates and average life expectancies by
gender and age. Of these data, mortality
rates are verified by the Commissioner of
Financial Services Agency of Japan, and
then used as the assumed mortality rates in
calculating standard policy reserves required
under the Insurance Business Act of Japan.
Standard yield
The standard yield is the calculating rate
insurance companies are required to use
when accumulating policy reserves for
future insurance payments.
Surrender payments
Money refunded to the policyholder in the
event that the insurance policy is surren-
dered or cancelled. Surrender payment
amounts vary depending on several factors,
including the type of insurance, insurance
period and years elapsed.
T
Term insurance
Term insurance entitles a beneficiary to
receive benefits in the event of death or
serious disability of the insured within an
insurance period specified when the policy
is purchased.
U
Underwriting profit
Underwriting profit is calculated by sub-
tracting any underwriting expenses (net
losses paid and loss adjustment expenses,
etc.) and operating, general and administra-
tive expenses associated with underwriting
from underwriting income (net premiums
written, etc.), then adding or subtracting
other income and expenses (income taxes
associated with compulsory automobile
liability insurance, etc.)
V
Variable life insurance
Insurance product in which assets are
invested mainly in stocks and bonds, and
claims and surrender payments increase or
decrease depending on investment returns.
The individual policyholder bears the asset
management risk. The minimum insurance
payment is guaranteed, regardless of
investment performance.
W
Whole life insurance
Insurance that pays benefits in the event
the insured dies or is disabled. Unlike term
life insurance, protection continues for an
entire life.
Sony Financial Holdings Inc.Annual Report2020 95
Over-the-counter (OTC) sales of
insurance products at banks
A bank serves as an insurance agency to
solicit insurance.
P
Policy amount in force
Total amount of protection provided by life
insurance companies to individual poli-
cyholders. This is different from the total
amount of premiums paid by policyholders
(premium income).
Policy reserves
(Underwriting reserves)
Reserves that insurance companies accu-
mulate in advance, funded by premiums,
investment income, and other sources, to
prepare for future liabilities resulting from
insurance policies, including payments of
claims, annuities and benefits.
Policy reserves and others
(Underwriting reserves)
Reserves recorded in the liabilities section
of the balance sheets for which insurance
companies are required in the Insurance
Business Act of Japan to accumulate to
prepare for the payment of future claims
and other items to fulfill their obligations for
paying claims and other actions based on
insurance policies. Policy reserves and oth-
ers include “reserve for outstanding claims”
and “policy reserves.”
Policyholder loans
As one of the asset management opera-
tions of life insurance companies, loans pro-
vided up to a certain level of the surrender
payment on life insurance policies. In gener-
al, policyholders retain insurance protection
and rights to receive dividends during the
period of the policyholder loan. However,
policyholder loans may not be available
depending on the type of insurance.
Policyholders’ dividend reserve
A reserve accumulated to fund dividend
payments to policyholders pursuant to the pro-
visions of the Insurance Business Act of Japan.
Positive spread
The amount by which the actual investment
income is higher than the expected invest-
ment income from the assumed interest rate.
R
Reference loss cost rates
Non-life insurance premium rates comprise
net insurance premium rates used for pay-
ing insurance claims and loading insurance
premium rates used for operating insurance
businesses. Net insurance premium rates
calculated by the General Insurance Rating
Organization of Japan are called reference
loss cost rates. Member insurers of the
organization can use the rates as the basis
for calculating their own insurance premium
rates.
Reinsurance
The insurance agreement that insurance
companies conclude with domestic and
overseas reinsurance companies for some
of the insurance policies they underwrite in
order to diversify risks on insurance policies.
Reserve for outstanding claims
(Reserve for outstanding losses)
Reserve for the estimated amount of
unfixed insurance payments and unpaid in-
surance claims at the end of the fiscal year,
among payment obligations for insurance
claims, surrender value and other benefits.
Reserve for price fluctuations
This reserve is set aside to prepare for
losses caused by price fluctuations in
stocks, bonds and other assets held by an
insurance company.
Riders
Riders can enlarge the scope of protection
in the primary policy by adding provisions
to the primary coverage. Riders do not
constitute a policy by themselves. Multiple
riders can be added to the primary policy.
Riders are canceled when the primary poli-
cy is canceled due to maturity, surrender or
other reasons.
ROEV (return on embedded value)
ROEV is an indicator that refers to the growth
potential of corporate value. The amount of
increase of EV (embedded value), an indicator
of a life insurance company’s corporate
value, is deemed to be profit that takes into
account the unique aspects of life insurance
accounting. Core ROEV is the growth rate of
EV that excludes any fluctuation effects of the
investment yield and discounted rate.
S
Separate accounts
Separate accounts are used for variable
life insurance, variable annuities and other
insurance products to invest assets sepa-
rately from the other financial assets owned
by an insurance company in order to pay
investment returns directly to policyholders.
Solvency margin
The solvency margin indicates payment
ability. Insurance companies accumulate
policy reserves to prepare for the payment
of future claims, allowing them to ade-
quately respond to risks within a normally
anticipated range. However, unforeseen
events can occur due to changes in the
environment such as major disasters and
substantial declines in stock prices. The
solvency margin ratio is one measure used
by regulatory authorities to determine how
much an insurance company is able to pay
in response to the risk of such unpredict-
able events.
Standard Mortality Table
The Institute of Actuaries of Japan prepares
a table that compiles data including mortal-
ity rates and average life expectancies by
gender and age. Of these data, mortality
rates are verified by the Commissioner of
Financial Services Agency of Japan, and
then used as the assumed mortality rates in
calculating standard policy reserves required
under the Insurance Business Act of Japan.
Standard yield
The standard yield is the calculating rate
insurance companies are required to use
when accumulating policy reserves for
future insurance payments.
Surrender payments
Money refunded to the policyholder in the
event that the insurance policy is surren-
dered or cancelled. Surrender payment
amounts vary depending on several factors,
including the type of insurance, insurance
period and years elapsed.
T
Term insurance
Term insurance entitles a beneficiary to
receive benefits in the event of death or
serious disability of the insured within an
insurance period specified when the policy
is purchased.
U
Underwriting profit
Underwriting profit is calculated by sub-
tracting any underwriting expenses (net
losses paid and loss adjustment expenses,
etc.) and operating, general and administra-
tive expenses associated with underwriting
from underwriting income (net premiums
written, etc.), then adding or subtracting
other income and expenses (income taxes
associated with compulsory automobile
liability insurance, etc.)
V
Variable life insurance
Insurance product in which assets are
invested mainly in stocks and bonds, and
claims and surrender payments increase or
decrease depending on investment returns.
The individual policyholder bears the asset
management risk. The minimum insurance
payment is guaranteed, regardless of
investment performance.
W
Whole life insurance
Insurance that pays benefits in the event
the insured dies or is disabled. Unlike term
life insurance, protection continues for an
entire life.
Sony Financial Holdings Inc.Annual Report2020 95
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2020Financial Data Book
April 1, 2 019March 31, 2020
005_0344787452008.indd 2 2020/09/24 19:09:06
Please visit SFH’s website to view the Financial Data Book.
Detailed financial data for each operating company is presented in the
Financial Data Book and it is only disclosed on the website.
https://www.sonyfh.co.jp/en/financial_info/annualreport
SFH Financial Data (Consolidated)
Principal Indicators of Operating Performance
Consolidated Balance Sheets
Consolidated Statements of Income and Consolidated Statements
of Comprehensive Income
Consolidated Statements of Changes in Net Assets
Consolidated Statements of Cash Flows
Sony Life Financial Data (Non-consolidated)
Balance Sheets
Statements of Income
Statements of Changes in Net Assets
1. Loans by Borrower Category
2. Risk-monitored Loans
3. Accounting Indicators
4. Reconciliation to Core Profit and Non-consolidated Ordinary Profit
5. Fair Value Information on Securities (General Account)
6. Fair Value Information on Securities (Company Total)
Sony Life Financial Data (Consolidated)
Consolidated Balance Sheet
Consolidated Statement of Income
Sony Life Performance Indicators (Non-consolidated)
1. Key Performance Indicators for Past Five Years
2. Key Performance Indicators
3. Indicators for Insurance Policies
4. Indicators Related to Asset Management (General Account)
5. Status of Insurance Claims Paying Ability
6. Balance of Separate Account Assets
7. Investment Progress of Separate Account Assets in Individual
Variable Life Insurance and Individual Variable Annuities
8. Status of Individual Variable Life Insurance and Individual Variable
Annuities
9. Number of Agencies
10. Number of Employees and Recruits
11. Average Salary
Sony Assurance Financial Data
Balance Sheets
Statements of Income
Statements of Changes in Net Assets
Statements of Cash Flows
1. Loans by Borrower Category
2. Risk-monitored Loans
3. Assets and Liabilities
4. Profit and Loss
5. Fair Value Information, etc.
Sony Assurance Performance Indicators
1. Principal Indicators of Operating Performance
2. Underwriting Performance
3. Asset Management
4. Non-consolidated Solvency Margin Ratio
Sony Bank Financial Data (Consolidated)
Consolidated Balance Sheets
Consolidated Statements of Income
Consolidated Statements of Comprehensive Income
Consolidated Statements of Changes in Net Assets
Consolidated Statements of Cash Flows
Sony Bank Financial Data (Non-consolidated)
Balance Sheets
Statements of Income
Statements of Changes in Net Assets
1. Loans by Borrower Category
2. Risk-monitored Loans
3. Profit and Loss
4. Fair Value Information
Sony Bank Performance Indicators (Non-consolidated)
1. Key Performance Indicators
2. Status of Operations (Deposits)
3. Status of Operations (Loans)
4. Status of Operations (Securities)
Sony Life MCEV
MCEV Results for Sony Life as of March 31, 2020
Sony Financial Holdings Inc.Annual Report202096
Financial Data Book Contents
April 1, 2 019March 31, 2020
005_0344787452008.indd 2 2020/09/24 19:09:06
Please visit SFH’s website to view the Financial Data Book.
Detailed financial data for each operating company is presented in the
Financial Data Book and it is only disclosed on the website.
https://www.sonyfh.co.jp/en/financial_info/annualreport
SFH Financial Data (Consolidated)
Principal Indicators of Operating Performance
Consolidated Balance Sheets
Consolidated Statements of Income and Consolidated Statements
of Comprehensive Income
Consolidated Statements of Changes in Net Assets
Consolidated Statements of Cash Flows
Sony Life Financial Data (Non-consolidated)
Balance Sheets
Statements of Income
Statements of Changes in Net Assets
1. Loans by Borrower Category
2. Risk-monitored Loans
3. Accounting Indicators
4. Reconciliation to Core Profit and Non-consolidated Ordinary Profit
5. Fair Value Information on Securities (General Account)
6. Fair Value Information on Securities (Company Total)
Sony Life Financial Data (Consolidated)
Consolidated Balance Sheet
Consolidated Statement of Income
Sony Life Performance Indicators (Non-consolidated)
1. Key Performance Indicators for Past Five Years
2. Key Performance Indicators
3. Indicators for Insurance Policies
4. Indicators Related to Asset Management (General Account)
5. Status of Insurance Claims Paying Ability
6. Balance of Separate Account Assets
7. Investment Progress of Separate Account Assets in Individual
Variable Life Insurance and Individual Variable Annuities
8. Status of Individual Variable Life Insurance and Individual Variable
Annuities
9. Number of Agencies
10. Number of Employees and Recruits
11. Average Salary
Sony Assurance Financial Data
Balance Sheets
Statements of Income
Statements of Changes in Net Assets
Statements of Cash Flows
1. Loans by Borrower Category
2. Risk-monitored Loans
3. Assets and Liabilities
4. Profit and Loss
5. Fair Value Information, etc.
Sony Assurance Performance Indicators
1. Principal Indicators of Operating Performance
2. Underwriting Performance
3. Asset Management
4. Non-consolidated Solvency Margin Ratio
Sony Bank Financial Data (Consolidated)
Consolidated Balance Sheets
Consolidated Statements of Income
Consolidated Statements of Comprehensive Income
Consolidated Statements of Changes in Net Assets
Consolidated Statements of Cash Flows
Sony Bank Financial Data (Non-consolidated)
Balance Sheets
Statements of Income
Statements of Changes in Net Assets
1. Loans by Borrower Category
2. Risk-monitored Loans
3. Profit and Loss
4. Fair Value Information
Sony Bank Performance Indicators (Non-consolidated)
1. Key Performance Indicators
2. Status of Operations (Deposits)
3. Status of Operations (Loans)
4. Status of Operations (Securities)
Sony Life MCEV
MCEV Results for Sony Life as of March 31, 2020
Sony Financial Holdings Inc.Annual Report202096
Financial Data Book Contents
Sony Financial Group
1 out of 100
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