Sony 2001 Annual Report Download - page 68

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Sony Corporation Annual Report 2001
66
INSURANCE
Insurance revenue for the fiscal year ended March 31,
2001 increased by 46.6 billion yen, or 12.3%, to 426.9
billion yen compared with the previous year. Operating
income decreased by 3.0 billion yen, or 14.2%, to 17.9
billion yen and the operating margin decreased from
5.5% to 4.2%.
Regarding the results of Sony Life Insurance Co.,
Ltd., revenue increased and profit decreased compared
with the previous year. The revenue increase was due
to a net increase in life insurance-in-force from indi-
vidual life insurance products such as term-life and
medical expense coverage. However, reflecting the
weak Japanese stock market conditions during the
year, the revenue increase was partially offset by
revaluation losses from investments under separate
account for variable life insurance and variable annuity products. Regarding profit performance, operating profit
decreased primarily because reserves for the Life Insurance Policyholders Protection Corporation of Japan were
recorded, and because the amount accrued to policy reserves increased, reflecting a reduction in interest rates
related to the valuation of such reserves for newly acquired policies during the year. As the profit performance
from investments under the aforementioned separate account is solely for the account of policyholders while it
impacts revenues, it does not affect the profit performance of Sony.
Regarding the results of the non-life insurance business conducted by Sony Assurance Inc., although sales
increased due to a net increase in non-life insurance-in-force from automobile insurance, losses continued to
be recorded since expenses, including advertising expenses and payments for insurance benefits, were higher
than revenue.
Condensed insurance business financial statements
The Insurance business is included on a consolidated basis in Sony’s consolidated financial statements. The
following schedule shows unaudited condensed financial statements for the Insurance business and for all other
businesses excluding Insurance business as well as condensed consolidated financial statements. While these
presentations are not required under U.S. GAAP used in Sony’s consolidated financial statements, because the
Insurance business is different in nature from Sony’s other businesses such as Electronics, Game, Music, and
Pictures businesses, Sony believes that these types of comparative presentations help the understanding and
analysis of Sony’s consolidated financial statements. Transactions between the Insurance business and all other
businesses excluding Insurance business are eliminated in the consolidated figures shown below.
Policy reserves, included in future insurance policy benefits and other in the following condensed balance
sheets, are recorded under U.S. GAAP. As for the statutory books of account, Sony Life Insurance Co., Ltd. has
consistently satisfied a sufficient level of policy reserves as authorized by the Financial Services Agency in Japan
(the “FSA”), and in March 2001, aiming to further strengthen its financial condition, Sony Life Insurance Co., Ltd.
increased its capital through a 50.0 billion yen capital injection from Sony Corporation and achieved a more
conservative level of policy reserves as recommended by the FSA.
(Billion ¥)
Insurance revenue (left)
Operating margin
* Year ended March 31
Operating income (right)
(Billion ¥)
Insurance revenue and operating income in the
Insurance business
0
20
40
60
80
100
97 98 99 00 01
0
100
200
300
400
500
8.4%
4.2%
5.5%
5.3%
6.9%