Sony 2015 Annual Report Download - page 36

Sony Life competes not only with traditional insurance companies in Japan but also with other companies
including online insurance companies, foreign-owned life insurance companies and a number of Japanese
cooperative associations.
Sony Assurance competes against insurers that sell their policies through sales agents as well as insurers
that, like Sony Assurance, primarily sell their policies through direct marketing via the telephone and the
Internet. Competition in Japan’s non-life insurance industry has intensified in recent years, in part due to a
number of new market entrants, including foreign-owned insurers.
Some of the competitors in the life insurance and non-life insurance businesses have advantages over Sony
including:
• greater financial resources and financial strength ratings;
• greater brand awareness;
• more extensive marketing and sales networks, including through tie-ups with other types of financial
institutions;
• more competitive pricing;
• larger customer bases; and
• a wider range of products and services.
Sony Bank has focused on providing retail asset management and mortgage services for individuals, and
faces significant competition in Japan’s retail financial services market. Sony Bank competes with traditional
banking institutions, regional banks, trust banks, non-bank companies, and newer financial groups providing
online full-services of bank and brokerage in Japan.
In the Financial Services segment, it is important to maintain a strong and healthy financial foundation for
the business as well as to meet diversifying customer needs. Sony Life and Sony Assurance have maintained a
high solvency margin ratio, relative to the Japanese domestic minimum solvency margin ratio requirements.
Sony Bank has maintained a sufficient capital adequacy ratio relative to the Japanese domestic criteria.
All Other
Sony DADC is facing intense price competition as well as contraction of worldwide physical media
markets, as storage of digital content shifts from physical media to online servers. In such an environment, Sony
DADC is focused on operating efficiency and service quality.
Government Regulations
Sony’s business activities are subject to various governmental regulations in different countries in which it
operates, including regulations relating to: various business/investment approvals; trade affairs, including
customs, import and export control; competition and antitrust; anti-bribery; advertising and promotion;
intellectual property; broadcasting, consumer and business taxation; foreign exchange controls; personal
information protection; product safety; labor; human rights; conflict; occupational health and safety;
environmental; and recycling requirements.
In Japan, Sony’s insurance businesses are subject to the Insurance Business Act and approvals and oversight
from the Financial Services Agency (“FSA”). The primary purpose of the Insurance Business Act and related
regulations is to protect policyholders, not shareholders. The Insurance Business Act specifies the types of
businesses insurance companies may engage in, imposes limits on the types and amounts of investments that can
be made and requires insurance companies to maintain specified reserves and a minimum solvency margin ratio.
In particular, life insurance companies must maintain a premium reserve (for the portion of their portfolio other
than unearned premiums), an unearned premium reserve, a reserve for refunds with respect to certain insurance
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