Sony 2006 Annual Report Download - page 39

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FINANCIAL SERVICES
http://www.sonyfh.co.jp/money/english/
Sony Financial Holdings
Sony Financial Holdings Inc. (SFH) is the financial holding company
for Sony Life Insurance Co., Ltd. (Sony Life), Sony Assurance Inc.
(Sony Assurance) and Sony Bank Inc. (Sony Bank). Since its
establishment in April 2004, SFH has coordinated the overall
operations of the SFH Group, maximizing the opportunities for
synergy and strengthening the ties between operating companies
while facilitating the joint provision of products and services by
SFH Group companies.
Sony Life’s Lifeplanner* life insurance sales professionals sell
Sony Assurance’s automobile insurance products and introduce
Sony Bank’s mortgage loans to their own customers. Similarly,
Sony Bank sells Sony Life’s individual annuities, Sony Life under-
writes group credit life insurance products and Sony Assurance
underwrites fire insurance to Sony Bank mortgage holders. During
the fiscal year ended March 31, 2006, SFH continued to strengthen
these intragroup ties. As an example, Sony Life’s Lifeplanner sales
force generated approximately 10% of the new automobile
insurance policies at Sony Assurance.
SFH shareholdings in Sony Bank rose during the period, from
84.2% at the start to 88.0%, through the acquisition of Sony Bank
shares in September 2005 and the acceptance of newly issued
shares—for which it paid ¥2.5 billion—in February 2006 as a
measure to strengthen the bank’s financial soundness.
All three operating companies in the SFH Group scored well in
a neutral third-party evaluation of customer satisfaction and credit-
worthiness. Earnings for the period continued to grow steadily as
SFH’s preparations to list publicly proceeded on course. SFH will
continue to monitor its operating environment and choose the
optimal time for its initial public offering (IPO) in the fiscal year
ending March 31, 2008, or thereafter.
Sony Life
Sony Life provides individualized security and reassurance to its
customers with detailed consultation and follow-up services offered
by its Lifeplanner highly trained life insurance professionals and
Partners (independent agencies). Customers value Sony Life’s
unique consultation and follow-up services, as evidenced by its
low cancellation rates. Continued growth for the period under
review was further evidence. Despite the fact that the total value of
policies in force is shrinking for the industry in Japan, as of March 31,
2006, the total value of Sony Life’s policy amount in force totaled
¥29,084.5 billion, up 4.5% from a year earlier. Operating income
jumped sharply, reflecting an increase in income from insurance
premiums and the solid performance of existing investment assets,
which was further fortified by valuation gains due to robust
markets. Sony Life maintained a sound financial position with a
solvency margin ratio** of 1,547.0% as of March 31, 2006. The
company also continued to enhance disclosure, adding such
important indicators as Embedded Value (EV)**, a measure used
to evaluate a life insurance company’s operational earnings and
corporate value.
Over the medium term, competition in the Japanese life
insurance market is expected to intensify further as privatization
of the country’s postal service and the lifting of restrictions on
insurance sales by banks combine with demographic trends,
notably declining birthrates and the rapid aging of Japan’s society.
In this climate, Sony Life will continue to differentiate itself by
offering individually tailored life insurance products that provide
unique “Lifeplanner Value*”, as well as extensive follow-up services
through its Lifeplanner sales force, thereby ensuring the satisfaction
of life-long customers.
** “Lifeplanner” and “Lifeplanner Value” are registered trademarks of Sony Life
Insurance Co., Ltd.
** Sony Life’s solvency margin ratio and EV figures are calculated and disclosed
on the basis of Japanese statutory accounting standards.
Sony Financial Holdings Group