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Investor Presentation Investor Presentation October 2020 Sumitomo Life at a Glance Company Overview Group Overview6 Established: May 1907 Life Insurance Insurance Outlets 1 Key Figures – FY2019 (as of Mar. 2020) Medicare Life c Insurance Premium income: JPY 2.44tn (USD 22.4bn) i t Sells simple and affordable (JPY 2.60tn in FY2018) es products through banks and m outlets Core business profit2: JPY 393.3bn (USD 3.6bn) o Izumi Life Designers / D 100% subsidiary (JPY 398.1bn in FY2018) INSURANCE DESIGN / Small-amount and Short-term Agent / Mycommunication Total assets: JPY 38.64tn (USD 355.0bn) Insurance AIARU Small Amount Also sell other insurers’ & Short Term Insurance products Annualized premiums from JPY 2.80tn (USD 25.7bn) Ownership: 100% / 95% / policies in force3: Owns 98.27% of the shares 44.83% / 43% Solvency margin ratio: 870.0% U.S. China Embedded value4 (EEV) : JPY 3.58tn (USD 32.9bn) Symetra Financial Corp PICC Life Number of sales 32,206 Life insurance group Life insurance JV with operating businesses PICC representatives: s across the U.S. Owns 10% of the 100% subsidiary since shares Insurer financial strength A+ [S&P], A1 [Moody’s], sea r rating5: AA- [R&I], AA- [JCR], A+ [Fitch] e February 2016 v O Vietnam Indonesia Singapore Source: Company disclosure Baoviet Holdings PT BNI Life Singlife 1. Consolidated figures. USD amounts in parentheses in this presentation (except as otherwise stated) are The largest financial / JV with BNI, a national Emerging company, translated from JPY using USD1 = JPY108.83, as of March 31, 2020. insurance group in bank harnessing cutting- 2. Adjusted core business profit of the group (see page 6 for details) Vietnam Owns 39.99% of the edge technology 3. Figures for individual life and individual annuity for domestic business (see page 5 for details) Owns 22.08% of the shares Owns 25.11% of the 4. Combined figures of Sumitomo Life’s EEV, Medicare Life’s EEV and Symetra’s EEV (see page 7 for details) shares shares 5. As of April 30, 2020. The rating from Fitch is unsolicited 6. As of March 31, 2020 on ownership 2 Key Highlights ◇ FY2019 Results Annualized premiums from policies in force remained at a stable level. ・・・ P.5 Annualized premiums from new policies decreased compared to FY2018. Core business profit remained at approximately the same level as ・・・ P.6 FY2018 EEV decreased from the end of the previous fiscal year due to negative ・・・ P.7 impacts from lower domestic super-long-term interest rate and fall in stock prices, despite the positive results of the insurance business Established a strong capital base consisting mainly of internal reserves ・・・ P.8 and surplus ◇ 1Q FY2020 Results Annualized premiums from new policies decreased from the previous ・・・ P.9 fiscal year, as a result of factors including refraining from sales activities due to the spread of COVID-19. Annualized premiums from policies in force and group core business profit remained at stable levels. 3 Ⅰ. Sumitomo Life Group’s Business Results Operating Performance Annualized premiums (AP) from policies in force remained at a stable level. AP from new policies decreased mainly due to fall in sales of single-premium whole life insurance products. Annualized Premiums from Policies in Force1 Annualized Premiums from New Policies1 (Group) (Group) JPY bn JPY bn 3,000 2,806.5 316.4 300 2,739.4 2,783.2 2,782.4 (USD 25.7bn) 57.2 2,583.5 250 387.0 419.7 419.4 462.4 215.0 202.7 2,500 (USD 4.2bn) 209.9 (USD 1.8bn) 368.4 200 173.5 75.9 77.0 150 211.4 87.6 (USD 0.8bn) 2,000 129.9 100 86.6 81.8 72.0 50 (USD 0.6bn) 43.0 1,500 43.6 47.8 52.4 51.0 1,799.3 1,790.4 1,779.1 1,753.9 0 (USD 0.3bn) 1,679.6 (USD 16.1bn) FY15 FY16 FY17 FY18 FY19 Third sector Excl. third sector Overseas (Symetra) 1,000 Persistency Rate2 (Non-consolidated) % 500 583.8 535.4 552.9 573.0 590.0 100 13th month (USD 5.4bn) 96.0 96.4 96.5 96.2 93.9 95 0 Mar 16 Mar 17 Mar 18 Mar 19 Mar 20 90 92.0 92.7 92.6 91.8 90.6 Third sector Excl. third sector Overseas (Symetra) 25th month 85 1. Figures for domestic business (Third sector + Excl. third sector) are individual life insurance and Timing Mar 16 Mar 17 Mar 18 Mar 19 Mar 20 individual annuities. Figures for Symetra are included since February 2016 2. Figures are based on annualized premiums for products sold by sales representatives 5 Profit Trend Core business profit remained at approximately the same level as FY2018. Core Business Profit (Group) Three Surplus Factors (Non-consolidated) JPY bn Group core business JPY bn 1 profit 397.6 392.5 Expense (USD 3.6bn) 400 400 63.7 21.7 16.1 savings 363.6 34.7 (USD 0.1bn) 333.0 350 38.4 309.0 300 300 250 Mortality 314.4 312.8 304.5 309.5 289.0 gain 200 (USD 2.6bn) 200 325.2 331.2 361.7 398.1 393.3 150 (USD 3.6bn) 100 96.3 Interest 50 gain 56.7 64.2 76.4 (USD 0.8bn) 100 0 22.7 Adjusted group core business profit2 FY15 FY16 FY17 FY18 FY19 <Average Assumed Yield and Investment Yield3> % (Non-consolidated) 0 2.90 FY15 FY16 FY17 FY18 FY19 Investment yield3 2.70 2.57 2.55 2.44 2.41 2.42 1. Group core business profit is calculated by combining core business profit of Sumitomo Life and 2.50 Medicare Life, and profit before tax of Symetra, Baoviet Holdings, BNI Life, Singlife and PICC Life 2.30 2.17 attributable to Sumitomo Life’s equity stake in each company, with adjustments made to some 2.46 2.10 2.03 internal transactions 2.10 2.30 2. Adjusted group core business profit indicates group core business profit excluding provision / 1.90 Average assumed yield reversal of standard policy reserve relating to variable annuities FY15 FY16 FY17 FY18 FY19 3. Related to core business profit 6 EEV Trend EEV decreased from the end of the previous fiscal year due to negative impacts from lower domestic super-long-term interest rate and fall in stock prices, despite the positive results of the insurance business. EEV (Group) EEV Growth Factors JPY bn JPY bn 4,000 3,778.9 3,699.0 3,584.1 4,000 3,523.8 (USD 32.9bn) Income from Economic insurance variances businesses +387.9 (502.8) 3,000 2,936.6 3,500 ＜Reference＞ 2,000 Mar 19 Mar 20 30yr JGB 0.495% 0.420% 3,699.0 20yr JGB 0.330% 0.310% 3,584.1 10yr JGB (0.095)% 0.010% 1,000 [(114.8)] TOPIX 1591.64 1403.04 0 Mar 16 Mar 17 Mar 18 Mar 19 Mar 20 Mar 19 Mar 20 （Restated） 1. The ultimate forward rate (UFR) has been applied for EEV since FY 2017, and the EEV as of March 31, 2016 is restated based on the same method 2. See “Disclosure of European Embedded Value (summary) as of March 31, 2020” on the website for details 7 Capital Base Established a strong capital base consisting mainly of internal reserves and surplus. Solvency margin ratio remains at a stable level. Trend of Capital (Non-consolidated) Solvency Margin Ratio (Consolidated) JPY bn % 2,508.5 1,000 2,500 2,462.6 (USD 23.0bn) 2,402.8 JPY50.0bn 915.6 Financing through 881.7 870.0 subordinated loan 499.9 External 2,141.5 499.9 JPY50.0bn ⑥ Capital 813.2 499.9 Redemption of JPY 499.9bn 798.6 subordinated bond 800 2,000 ⑤ 354.4 50.0 1,777.8 100.0 JPY50.0bn Redemption of 417.1 ④ 149.4 170.0 364.3 foundation 349.4 fund 600 1,500 200.0 333.7 322.6 787.5 ③ 656.9 744.4 1,000 502.3 Internal 400 352.1 reserves and surplus JPY 2,008.6bn ② 165.0 165.0 165.0 165.0 165.0 500 200 Regulatory minimum threshold of 200% 588.6 616.0 631.6 639.0 639.0 ① 0 0 Mar 16 Mar 17 Mar 18 Mar 19 Mar 20 Mar 16 Mar 17 Mar 18 Mar 19 Mar 20 ① Reserve for fund redemption + ② Fund for price ③ Reserve for price Reserve for redemption of fluctuation allowance fluctuation foundation funds1 ④ Contingency reserve ⑤ Foundation funds ⑥ Subordinated loans / bonds 1 Figures are after appropriation of surplus 8 1Q FY2020 Highlights Annualized premiums from new policies decreased from the previous fiscal year, as a result of factors including refraining from sales activities due to the spread of COVID-19. However, annualized premiums from policies in force and group core business profit remained at stable levels. Annualized Premiums from New Policies2 Annualized Premiums from (Group) Policies in Force2 (Group) JPY bn JPY bn 2,797.0 80 52.2 (USD 25.9bn) 70.5 (Decreased 0.3% (USD 0.4bn) 3,000 2,806.5 from March 2020) 60 (Decreased 26.0% from 1Q FY2019) 2,500 462.4 463.3 40.0 2,000 40 36.5 1,500 1,753.9 1,774.1 20 19.0 1,000 9.3 11.5 500 0 6.4 590.0 589.6 FY19 FY20 1Q 1Q Mar 20 Jun 20 Third sector Excl.
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